Vol 1, No. 59, Part I, 24 June1997

Vol 1, No. 59, Part I, 24 June1997

This is Part I of Radio Free Europe/Radio Liberty's Newsline.
Part I is a compilation of news concerning Russia, Transcaucasia and
Central Asia. Part II, covering Central, Eastern, and Southeastern
Europe, is distributed simultaneously as a second document.  Back
issues of RFE/RL NewsLine are available through RFE/RL's WWW
pages: http://www.rferl.org/newsline/search/

Back  issues of the OMRI Daily Digest are available through OMRI's
WWW pages: http://www.omri.cz/

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Headlines, Part I

* DUMA REJECTS PROPOSALS TO CUT BUDGET SPENDING

* TWO SUSPECTED KIDNAPPERS ARRESTED IN CHECHNYA

* GEORGIAN PRESIDENT HAILS MOSCOW TALKS ON ABKHAZIA

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RUSSIA

DUMA REJECTS PROPOSALS TO CUT BUDGET SPENDING. On the penultimate day of its
spring session, the State Duma voted by 112 to 220 to reject the government's
plan to cut 108 trillion rubles ($19 billion) from 1997 budget spending,
RFE/RL's Moscow bureau reported on 23 June. Deputies also rejected by 137 to
195 a bill proposing other spending reductions totaling 39 trillion rubles.
The second bill was backed by Economic Policy Committee Chairman Yurii
Maslyukov, a Communist (see "RFE/RL Newsline," 20 June 1997). Although no law
authorizing the budget cuts has been passed, First Deputy Finance Minister
Vladimir Petrov on 23 June confirmed that current expenditures are in line
with the government's plan. Various government officials have argued that a
spending reduction of 108 trillion rubles, some 20% of all planned 1997
expenditures, is required because of severe revenue shortfalls.

DUMA PASSES LAW RESTRICTING RELIGIOUS GROUPS. Also on 23 June, the Duma
approved by 300 votes to eight a controversial law on freedom of conscience
and religious associations, Russian and Western news agencies reported. The
law, strongly backed by the Russian Orthodox Church, includes
government-proposed provisions that would make it more difficult for foreign
and some minority religious groups--including Catholics and most Protestant
denominations--to operate in Russia. Only religious groups that have been
active in the country for at least 50 years and have branches in at least half
of Russia's 89 regions could be granted the status of "all-Russian
organizations" by the government. Religious groups that have been operating in
Russia for less than 15 years would be denied the rights of legal entities,
including property rights. Defrocked Orthodox priest Gleb Yakunin blasted the
law as "blatantly discriminatory" and "oriented toward reinstating Soviet
religious policy," Interfax reported.

PRODUCTION-SHARING LIST APPROVED. The Duma has approved a list of seven
authorized sites that could be developed in accordance with the law on
production-sharing, ITAR-TASS reported on 24 June. Deputies approved the list
of five oil fields, one gold mine, and an iron ore deposit by 245 to 109 with
three abstentions. The law on production-sharing allows foreign companies to
invest in natural deposits in exchange for a portion of the resources
extracted. However, the law cannot be applied until a list of authorized sites
is approved (see "RFE/RL Newsline," 19 May 1997). The list now goes to the
Federation Council for consideration.

DUMA AGAINST WITHDRAWAL OF PEACEKEEPERS FROM ABKHAZIA. The Duma on 23 June
adopted a resolution requesting that President Boris Yeltsin recommend the CIS
leaders extend the Russian peacekeepers' mandate in Abkhazia, ITAR-TASS
reported. The resolution said a withdrawal of the peacekeepers might lead to
the resumption of war in Georgia's breakaway region, which, it stressed, would
"inevitably" involve the peoples of Russia's North Caucasus. According to the
Duma, such a scenario would endanger Russia's territorial integrity. Georgia
has repeatedly accused the peacekeepers of not implementing the CIS summit's
decision to give them a mandate to provide for the return of some 200,000
Georgian refugees. Tbilisi recently threatened not to prolong the
peacekeepers' mandate, which is due to expire on 31 July, unless they comply
with the CIS summit's decision.

DUMA DENOUNCES PLANS TO BURY LENIN. Also on 23 June, the Duma passed a
non-binding resolution by 232 to eight calling on the authorities and Russian
citizens to "prevent an act of political revenge against Vladimir Lenin and to
preserve the historic architectural image of Red Square," Russian news
agencies reported. Yeltsin recently called for a referendum on whether Lenin
should be buried in St. Petersburg. The Duma passed a similar non-binding
resolution in April and a law on protecting Red Square on 4 June, but the
Federation Council rejected that law the following week. Meanwhile, Valentin
Pokrovskii, the president of the Academy of Medical Sciences, told Interfax
that burying Lenin would be "stupid," as such a move would ruin "a unique
biological experiment in preserving human tissue."

TWO SUSPECTED KIDNAPPERS ARRESTED IN CHECHNYA. First Chechen Deputy Prime
Minister Movladi Udugov told Interfax on 23 June that two more persons
suspected of kidnapping Russian journalists have recently been arrested.
According to Udugov, the arrests were made during the "third stage" of the
Chechen police's operation "Shield of Law and Order," in which 27 people have
so far been detained on suspicion of hostage-taking. Udugov said police have
confiscated large amounts of weapons and broken up several armed gangs.
Meanwhile, Chechen Interior Minister Kazbek Makhashev has said the authorities
are conducting an around-the-clock search for the five Russian TV journalists
who are still kept in captivity.

DUMA ENDORSES FOREIGN LOAN PLANS. The Duma on 23 June approved the
government's 1997 program for foreign borrowing and lending, Russian news
agencies reported. Russia will borrow $2.5 billion this year in loans tied to
specific projects and $7.3 billion in other loans, including $2.8 billion from
the IMF and $1.1 billion from the World Bank. Russia will also sell $3.4
billion worth of bonds on international financial markets. As for lending
plans, Russia will extend $400 million in credits to foreign countries, with
the largest loans going to Slovakia ($49 million), China ($34.5 million), and
Bulgaria ($21 million).

RUSSIA BEGINS REPAYING TSARIST-ERA DEBT. Deputy Finance Minister Mikhail
Kasyanov announced on 23 June that Russia has paid the first of eight
semi-annual installments of $50 million to holders of tsarist-era bonds issued
in France, Russian news agencies reported (see "RFE/RL Newsline," 2 June
1997). Now that Russia has agreed to repay the old debt, the French Treasury
has allowed French investors to purchase Russian state bonds. Kasyanov said
investors in France purchased about 10% of the ten-year, $2 billion eurobond
Russia floated earlier this month. He added that foreign demand for the
eurobond--the third issued by Russia--was $4 billion, which, he said, was a
sign that foreign investors' trust in Russia is growing. Russia issued a $1
billion, five-year eurobond in November 1996 and a DM 2 billion ($1.2
billion), seven-year eurobond in March of this year.

NEMTSOV DISMISSES RUMORS ON YELTSIN'S HEALTH. Speaking at a press conference
marking his 100th day in the government, First Deputy Prime Minister Boris
Nemtsov dismissed rumors about Yeltsin's poor health, RFE/RL's Moscow bureau
reported. Nemtsov, who met with Yeltsin on 23 June, said the president had
"risen like a phoenix" following his lengthy bout with heart problems and was
now "as energetic and active as I saw him in 1991." Yeltsin did not turn up
for a 21 June concert attended by the other leaders of industrialized nations
at the recent summit in Denver. At the time, presidential spokesman Sergei
Yastrzhembskii said Yeltsin was suffering from fatigue. RFE/RL correspondents
in Denver reported on 23 June that of the eight leaders at the summit, Yeltsin
was the only one who did not give a press conference during or after the
proceedings.

ELECTRICITY RATES TO BE CUT FOR PAYING CUSTOMERS. Nemtsov also announced on 23
June that beginning on 1 July, electricity rates for enterprises that pay
their bills on time will be reduced by 30%, RFE/RL's Moscow bureau reported.
Yeltsin recently issued a decree cutting gas charges to some industrial
consumers by 40%. Charges for rail freight are also to be lowered by up to 50%
(see "RFE/RL Newsline," 20 June 1997). Nemtsov said the reduced charges for
energy and transportation, along with lower interest rates, will help lay the
groundwork for economic growth in Russia. He added that the government is very
close to solving the pension payments problem and will meet its pledge to pay
all pension arrears by 1 July.

GOVERNMENT RECOMMENDS FIRING JUSTICE MINISTER. The government has asked
Yeltsin to fire Justice Minister Valentin Kovalev following the publication of
an article in "Sovershenno sekretno" alleging that Kovalev has ties to
organized crime, ITAR-TASS reported on 24 June. Presidential spokesman Sergei
Yastrzhembskii said Yeltsin will make a final decision on Kovalev's fate in a
week. Kovalev has already asked Yeltsin to suspend him from the cabinet
temporarily until he can clear his name (see "RFE/RL Newsline," 23 June 1997).
Kovalev was appointed justice minister in January 1995. Meanwhile,
Procurator-General Yurii Skuratov told journalists on 23 June that no legal
action is currently planned against Kovalev. However, Skuratov called for an
investigation into Kovalev's ties to banker Arkadii Angelevich and into the
origin of a videotape at the center of the allegations against the justice
minister.

RUSSIA PLANS TO DOUBLE NUCLEAR EXPORTS. Atomic Energy Minister Viktor
Mikhailov says his ministry plans to double exports of nuclear materials and
technology by the year 2000, Russian news agencies reported on 23 June.
Mikhailov said Russia last year earned more than $2 billion from nuclear
exports, a 20% increase over 1995. Much of that money came from selling
uranium to the U.S. for use in nuclear power plants (see "RFE/RL Newsline," 28
April 1997). Mikhailov said Russia is looking for new buyers of its low-grade
uranium and is especially interested in Japan, which has 51 nuclear power
plants. He predicted that Moscow will soon conclude deals to build a nuclear
power station in India and complete construction of the Juragua plant in Cuba.
Russia also plans to finish construction of a 1,000 megawatt reactor in
Busher, Iran, despite U.S. opposition.

CONTAMINATED BUNKER IN NUCLEAR RESEARCH CENTER STILL SEALED. Officials at the
nuclear research center in Sarov, Nizhnii Novgorod (formerly Arzamas-16), have
still not opened the bunker where a senior researcher recently received a
lethal dose of radiation, Russian news agencies reported on 23 June. According
to Atomic Energy Minister Viktor Mikhailov, the bunker has been sealed since
the fatal experiment by Aleksandr Zakharov, which involved an incomplete
nuclear reaction (see "RFE/RL Newsline," 18 and 23 June 1997). Mikhailov told
journalists the building was still "cooling off." He said Zakharov's notes
have not yet been found but that the researcher admitted before his death that
the accident was caused by a "mistake in his calculations." Mikhailov said
Zakharov had not received written permission to carry out the experiment.

PRIMORE LEGISLATURE REJECTS EARLY GUBERNATORIAL ELECTIONS. The Primorskii Krai
Duma decided on 24 June not to call early gubernatorial elections in the krai,
Interfax reported. Governor Yevgenii Nazdratenko recently sent a message to
Yeltsin requesting a personal meeting with the president, RFE/RL's
correspondent in Vladivostok reported on 20 June. He argued that Yeltsin is
receiving "distorted information" from his associates about the situation in
Primore. Nazdratenko is a long-standing rival of First Deputy Prime Minister
Anatolii Chubais. In its latest edition, "Itogi" commented that the political
crisis in Primore now frightens federal authorities more than krai officials.
If Yeltsin sacks Nazdratenko, the governor could file a court appeal against
the presidential decree and potentially "create an undesirable precedent."
Also, if Moscow forces early elections and Nazdratenko is re-elected, it will
become almost impossible for Moscow to undermine his legitimacy.

LANDSLIDE VICTORY FOR COMMUNIST-BACKED CANDIDATE IN DUMA BY-ELECTION.
Communist-backed candidate Yelena Panina won the 22 June by-election for a
State Duma seat in Voronezh Oblast with 68% of the vote, Interfax reported the
next day. Although Panina is a Muscovite, she gained more than five times as
many votes as her nearest rival, local enterprise director Mikhail Tsymbalyuk,
who won only 13%. Turnout was about 44%. Panina replaces Aleksandr Merkulov,
who gave up his Duma seat to become deputy governor of Voronezh. Communist
candidates won by-elections for State Duma seats in Stavropol Krai in April
and in Rostov Oblast in June.

GUBERNATORIAL ELECTION SCHEDULED IN KEMEROVO. The Kemerovo Oblast Legislative
Assembly has scheduled a gubernatorial election in the oblast for 19 October,
RFE/RL's Moscow bureau reported on 20 June. Governor Mikhail Kislyuk recently
signed a regional electoral law, making it possible to set a date for the
vote, which was originally scheduled for last fall. Kislyuk is the last oblast
governor appointed by Yeltsin who has not faced popular election. CIS Affairs
Minister Aman Tuleev, former chairman of the Kemerovo legislature, and State
Duma deputy Viktor Medikov of the Russian Regions faction are considered the
leading contenders to replace Kislyuk. Citing Tuleev's press secretary, Radio
Rossii reported on 23 June that Tuleev intends to run for the post.

TRANSCAUCASUS AND CENTRAL ASIA

GEORGIAN PRESIDENT HAILS MOSCOW TALKS ON ABKHAZIA... Commenting on the recent
Georgian-Abkhaz talks in Moscow (see "RFE/RL Newsline," 23 June 1997), Eduard
Shevardnadze said the two sides reached agreement on unspecified "very
important points," Interfax and Western agencies reported on 23 June.
Shevardnadze, who was speaking during his weekly radio address, praised Russia
for mediating the talks and noted that progress on the most difficult issues
was made only through goodwill on the part of both Georgia and Abkhazia. But
he stressed there is still much work to be done and called for a larger role
for the UN in settling the Georgian-Abkhaz conflict.

...CRITICIZES HIS SECURITY MINISTER. Shevardnadze also said that if
allegations against Georgian Security Minister Shota Kviraia prove to be true,
he will take "appropriate" measures, ITAR-TASS reported on 23 June. A number
of politicians and journalists have accused Kviraia of tapping the telephones
of leading newspaper editors. Shevardnadze also criticized Kviraia for failing
to free his ministry of its Soviet-era legacy.

INFLATION IN TAJIKISTAN. The value of the Tajik ruble has dropped by 50% since
the end of April, Reuters reported on 23 June. The cause is an increase in the
amount of Tajik rubles printed this year. According to the Tajik State
Statistics Agency, some 5.4 billion rubles were printed in the first four
months of 1997, three times the amount for the same period last year. On 23
June, the exchange rate for the Tajik ruble had fallen to 600 to US $1. In
April, the rate was 400 Tajik rubles to $1.




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