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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 108, Part I, 2 September 1997



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

* RUSSIA, CHECHNYA FAIL TO REACH PIPELINE AGREEMENT

* GERMANY TO RETURN AMBER ROOM FRAGMENTS, IF GENUINE

* PRESIDENTIAL ELECTIONS IN NAGORNO-KARABAKH

End Note : A STATE OUTSIDE A BLOC
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RUSSIA

RUSSIA, CHECHNYA FAIL TO REACH PIPELINE AGREEMENT. Russian
and Chechen officials, meeting in Moscow on 31 August and 1
September, failed to sign five agreements on repairing the Chechen
sector of the Baku-Grozny-Tikhoretsk oil pipeline, Russian agencies
reported. According to NTV, the Chechen delegation refused to sign
the accords unless they receive $12 million granted in 1995 to the
pro-Moscow Chechen government of Doku Zavgaev. But Chechen state
oil company President Khozh-Akhmed Yarikhanov said the deadlock
was caused by Russia's refusal to pay more than $0.43 per metric ton
in tariffs. Russian First Deputy Fuel and Energy Minister Sergei
Kirienko told Interfax that if it proves impossible to have the
pipeline operational by 1 October, when the first "early" oil from
Azerbaijan is scheduled to be exported, Russia will "honor its
commitments" to Azerbaijan and transport the oil by barge to
Astrakhan and Volgograd for refining.

YELTSIN, CHERNOMYRDIN ALSO AT ODDS OVER PIPELINE. At a
meeting with Prime Minister Viktor Chernomyrdin in the Kremlin on
2 September, President Boris Yeltsin said he opposes construction of
an alternative pipeline that would run from Baku to the Black Sea
through the Russian Federation, bypassing Chechnya, Interfax
reported. Yeltsin said he promised Chechen President Aslan
Maskhadov that "we shall restore the Grozny oil refinery and
pipeline through common efforts." Chernomyrdin confirmed that
disagreement over tariffs was the primary cause of the breakdown
in talks but insisted that the rate Russia offered Grozny is in line
"with standard practice." Under an agreement concluded in
February1996 between the Azerbaijani state oil company SOCAR and
Russia's Transneft, Moscow will receive $15.67 per metric ton in
transit tariffs. The Chechens are demanding $4.27, according to
Interfax.

INTERIOR MINISTER ON LAW ENFORCEMENT IN NORTH CAUCASUS.
Anatolii Kulikov told a gathering of law enforcement officials in the
southern city of Pyatigorsk (Stavropol Krai) on 2 September that
worsening criminal activity in the troubled North Caucasus region
threatens all Russia, an RFE/RL correspondent in Pyatigorsk reported.
Kulikov told the conference that "local radical nationalist leaders"
were seeking to destabilize the region by fanning anti-Russian
sentiment in the region. He mentioned the 30-31 August clash in the
Dagestani town of Khasavyurt, which left one man dead and seven
wounded after Akkin Chechens tried to prevent the arrest of another
Chechen. Kulikov said Yeltsin will pay close attention to the results of
his meeting with the law enforcement officials, which is also being
attended by Russian Deputy Prime Minister Ramazan Abdulatipov.

GERMANY TO RETURN AMBER ROOM FRAGMENTS, IF GENUINE.
German President Roman Herzog has vowed his country will return
artifacts from the famous Amber Room if they are found to be
genuine. Herzog was speaking following a meeting with President
Yeltsin in the Kremlin on 1 September. Some 6,000 tons of amber
mosaics were carted off by Nazi soldiers during World War II from
the Summer Palace, outside St. Petersburg. Two pieces believed to be
part of the collection were discovered in Germany earlier this year. If
Germany returns the pieces to Russia, it could strengthen its case for
winning back German "trophy art" seized by the Soviet Red Army at
the end of the war. Yeltsin has twice vetoed a bill declaring the
seized artifacts to be Russian property.

YELTSIN ON TIES WITH GERMANY. Following his talks with Herzog,
Yeltsin called ties with Germany, Russia's leading trade partner and
creditor, a "top priority among top priorities." He noted that the
German president's five-day visit to Russia is another step toward
improving relations between the two peoples and states. Yeltsin said
he intends to invite German Chancellor Helmut Kohl to Russia
sometime in the fall for an "informal" visit. Herzog's visit is the first
by a German head of state to Russia since the 1990 unification of
Germany.

OPPOSITION WARNS OF PROTEST. Communist Party leader Gennadii
Zyuganov told journalists in Moscow that the opposition has already
collected 5 million signatures demanding Yeltsin's resignation,
changes in government policies, and the formation of a government
of national trust, RFE/RL's Moscow bureau reported on 1 September.
A joint statement issued by Zyuganov and the leaders of the
Agrarian and Popular Power Duma factions slammed the
government-proposed draft budget, which, it said, would "consolidate
destructive tendencies in the economy." The statement, published in
"Sovetskaya Rossiya" on 2 September, also warns that the opposition
will stage massive protests in the fall. But it suggests that those
protests could be called off if the authorities organize a "round table"
to find solutions to Russia's problems. Such discussions should
include representatives of the government, the presidential
administration, the legislature, the judiciary, the regions, the major
political parties, and the trade unions, the statement said.

COMMUNIST POSITION ON DRAFT BUDGET NOT YET DECIDED.
Although his joint statement with Agrarian faction leader Nikolai
Kharitonov and Popular Power leader Nikolai Ryzhkov sharply
criticized the proposed budget for 1998, Zyuganov told journalists on
1 September that the Communist Party has not yet determined its
stance on the draft budget, RFE/RL's Moscow bureau reported. The
Communist Duma faction is to meet on 2 September to decide its
tactics for parliamentary debate on the budget, according to Interfax.
Last year, most Communist Duma deputies voted for the 1997 budget
in all readings. At the time, Communist leaders said their support for
the budget would depend on whether the government met 11 key
opposition demands. However, the government ignored those
demands.

DUMA SPEAKER DEFENDS "IMPERATIVE MANDATE..." In an interview
published in "Vechernyaya Moskva" on 30 August, Duma Speaker
Gennadii Seleznev defended the proposal to allow Duma factions to
strip some deputies of their mandates. He argued that the 225 Duma
deputies elected to the parliament on party lists have an obligation
to work with their party's Duma faction. If a deputy wants to be
independent of a party, Seleznev said, he should run for the
parliament in one of the 225 single-member districts. If the
imperative mandate were introduced, Communist Party leaders
would likely use it to expel Duma deputy Vladimir Semago from the
lower house of the parliament. In recent weeks, Semago has been an
outspoken critic of Seleznev and the Communist leadership generally.
Liberal Democratic Party of Russia leader Vladimir Zhirinovsky,
whose Duma faction has suffered several high-profile defections, is
also an outspoken defender of the imperative mandate.

...WARNS YELTSIN ON CHECHEN INDEPENDENCE. In the same
interview, Seleznev warned that the Duma may move to initiate
impeachment proceedings against Yeltsin if Chechnya is recognized
as independent from Russia. He argued that such a move would
violate the presidential oath to defend the country's territorial
integrity and the constitution, which names Chechnya among the 89
regions of Russia. A Duma-sponsored impeachment motion would be
unlikely to succeed, since it would require not only the support of
two-thirds of Duma deputies but also a Supreme Court ruling
acknowledging evidence that the president had committed treason or
high crimes. The Constitutional Court would also have to rule that the
Duma had adhered to the constitutional procedure for accusing the
president of high crimes. Even if all those conditions were met, the
Federation Council would need a two-thirds majority vote to impeach
the president.

FIRST DEPUTY SPEAKER TO HEAD PRO-GOVERNMENT DUMA
FACTION? An unnamed source in the pro-government Our Home Is
Russia (NDR) movement told ITAR-TASS on 2 September that State
Duma First Deputy Speaker Aleksandr Shokhin is likely to be the
consensus candidate to replace Sergei Belyaev as leader of the NDR
Duma faction. Shokhin indicated the previous day that at a 3
September meeting with NDR Duma deputies, Prime Minister
Chernomyrdin will nominate one candidate to replace Belyaev. The
deputies will consider only the candidate picked by Chernomyrdin,
according to Shokhin. Meanwhile, Belyaev pledged not to exert
pressure on colleagues to quit the NDR faction, ITAR-TASS reported
on 1 September. Belyaev has said he plans to cooperate with Duma
deputies who are members of Yegor Gaidar's party, Russia's
Democratic Choice (see "RFE/RL Newsline," 29 August and 1
September 1997).

LUZHKOV DEFENDS CELEBRATION OF MOSCOW'S ANNIVERSARY...
Moscow Mayor Yurii Luzhkov has defended the lavish plans for
celebrations of the 850th anniversary of the founding of Moscow.
The festivities will last for several days and reach their peak on 5-7
September. In an interview published in the 2 September
"Nezavisimaya gazeta," Luzhkov was asked whether Moscow might
be spending too much money on the celebrations. He replied that "if
we missed this event, it would be a loss for all of Russia. By
celebrating the birthday of the capital, Russia is saying, we are sure
that we are building a better life." Luzhkov added that private
sponsors had contributed some 70 billion rubles ($12 million) toward
the festivities, which far exceeds the amount to come from the city
budget. He acknowledged that the city was spending more than
originally planned but blamed the federal government for allocating
only about one-fifth of its promised funding for the event.

...CRITICIZES ORT, BEREZOVSKII. Luzhkov has also complained that
the 51 percent state-owned Russian Public Television (ORT) network
is not planning to run enough live coverage of the Moscow festivities.
There have been conflicting reports on how much air time ORT will
devote to the events. In an interview with the 30 August "Izvestiya,"
Luzhkov said claims that the planned broadcasts have been cut back
because of financial difficulties are merely a pretext. Instead,
Luzhkov charged that Security Council Deputy Secretary Boris
Berezovskii, who is considered an extremely powerful figure at ORT,
routinely uses his influence over the network's financing to "settle
scores [and] discredit inconvenient politicians." He also said
Berezovskii has long been at odds with the Moscow authorities.
Luzhkov warned that if ORT coverage fails to provide an accurate
view of the Moscow celebrations, the network will be "spitting on
Russia's soul."

CENTRAL BANK CHAIRMAN ON STABILITY OF BANKING SYSTEM.
Sergei Dubinin told the 14th Congress of the Association of Asian
Banks in Moscow on 1 September that 52 percent of the country's
banks are "stable," Interfax and ITAR-TASS reported. He said that
only 25 percent of Russia's 1,800 or so banks can be considered
unsound and that those institutions account for only 5 percent of the
country's banking assets. (On 15 July, Dubinin had said Russia's 20
largest banks control 57.8 percent of the total assets in the banking
system.) Some 190 banks have had their licenses revoked so far this
year, while only four licenses have been issued to new banks.
Dubinin predicted a 5-8 percent rate of inflation for 1998, compared
with 13-14 percent estimated for this year and 22 percent recorded
for 1996.

CHERNOMYRDIN ON FOREIGN INVESTMENT. At the same banking
conference, Prime Minister Chernomyrdin said Russia hopes to
attract $10-15 billion in foreign investment by 2000, Interfax
reported. Chernomyrdin said that to achieve that goal, the main tasks
are reducing inflation to annual levels of 5-8 percent, stabilizing the
value of the ruble, lowering the cost of servicing the country's debt,
and making credit more accessible.

COMMUNISTS FARE BADLY IN SARATOV LEGISLATIVE ELECTIONS.
The Communist Party and other left opposition groups failed to win
any seats in the 31 August legislative elections in Saratov Oblast,
ITAR-TASS reported on 1 September. All the winning candidates
were supported by the Bloc of Popular Trust, which largely consists
of members of the oblast government and prominent local
businessmen. Directors of large local enterprises won 12 of the 33
seats in the legislature. The losers included the head of the regional
Communist Party committee, who had been deputy chairman of the
legislature during its last term. Turnout was 42 percent. Saratov
Governor Dmitrii Ayatskov said he was pleased with the results.
President Boris Yeltsin recently visited the oblast and praised its
leaders (see "RFE/RL Newsline," 27 August 1997). In the July 1996
presidential election, Communist Party leader Zyuganov gained 50
percent of the vote in Saratov and Yeltsin 44 percent.

HEPATITIS OUTBREAK IN LENINGRAD OBLAST. At least 55 people
have been hospitalized following a hepatitis outbreak in Leningrad
Oblast, near St. Petersburg, AFP and ITAR-TASS reported on 1
September. Lidiya Chudina, deputy head of the regional
epidemiological center, told the Western news agency that cases have
been detected in Lesogorsk and Svetogorsk, which are close to the
border with Finland. Chudina said contaminated springs and wells
were to blame for the outbreak. Schools in the affected areas have
been closed and residents advised to boil water before drinking.

TRANSCAUCASUS AND CENTRAL ASIA

PRESIDENTIAL ELECTIONS IN NAGORNO-KARABAKH. Arkadii
Ghukasyan, the 40-year-old foreign minister of the unrecognized
Nagorno-Karabakh Republic, was elected president on 1 September
with some 85 percent of the vote, defeating two rival candidates.
Voter turnout was estimated at 84.7 percent of the region's 89,000
eligible voters, according to RFE/RL's Stepanakert correspondent.
Some 40 international monitors, including a group of Russian State
Duma deputies, monitored the poll. No procedural violations were
reported, but a Karabakh army officer was shot dead in a clash with
Azerbaijani forces near the front-line town of Agdam, east of
Karabakh. Ghukasyan, a philologist and former journalist, was
appointed foreign minister in July 1993. His candidacy was endorsed
by the Armenian leadership. Robert Kocharyan, former Karabakh
president and now Armenian prime minister, told Noyan Tapan on 1
September that he would vote for Ghukasyan.

PEACE TALKS TO RESUME SOON? Armenian First Deputy Foreign
Minister Vartan Oskanian told Armenian State Television on 1
September that talks on resolving the Karabakh conflict will resume
only after the formation of a new government in the Nagorno-
Karabakh Republic, Interfax reported. Ghukasyan advocates direct
talks with the Azerbaijani leadership on a settlement of that includes
security guarantees for Nagorno-Karabakh but rules out autonomous
status for the enclave within Azerbaijan, saying he is committed to
the enclave's independence. Noyan Tapan on 1 September quoted
Armenian President Levon Ter-Petrossyan as saying he raised the
Karabakh issue at all his meetings with Russian officials in Moscow
on 29-30 August. Armenpress quoted Russian Prime Minister
Chernomyrdin as affirming that the 29 August Treaty on Friendship,
Cooperation, and Mutual Assistance, signed by Ter-Petrossyan and
Russian President Yeltsin, will contribute to the peaceful solution of
the conflict.

AZERBAIJAN "CONCERNED" ABOUT RUSSIAN-ARMENIAN TREATY.
During his 1 September meeting with Russian ambassador to Baku
Aleksandr Blokhin, Foreign Minister Hasan Hasanov expressed his
"concern" and "bewilderment" at the provisions of the Russian-
Armenian treaty, Interfax reported. The signatories pledge to assist
each other in the case of armed aggression by a third state.

RUSSIA MAY GRANT NEW LOAN TO YEREVAN. Russia may extend a
further 249 billion ruble ($42.7 million) loan to Armenia by the end
of 1997, provided Yerevan fulfills its commitments on repaying
earlier credits, Interfax reported on 1 September. The loan will
finance additional safety measures at the Medzamor nuclear power
station. As collateral, Armenia will give Russia a 10 percent share in
the Nairit chemical plant and a 7 percent stake in Medzamor. In
1994, Armenia pledged a 15 percent share in Medzamor, Nairit, the
Yerevan cognac distillery, and the Armelektromash electrical
engineering plant as collateral for a 110 billion ruble credit.

KIDNAPPED TAJIK MUFTI RELEASED. Tajik security forces on 2
September freed Amonullo Negmatzoda, the spiritual leader of the
country's Muslims, as well as his younger brother and two other
people, ITAR-TASS and AFP reported. The two men were taken
hostage on 27 August by field commander Rezvon Sadirov, who is
demanding the release of his brother Bakhrom, currently in custody
for his role in the kidnapping of eight UN and three Red Cross
representatives in February. Sadirov is still holding hostage two of
Negmatzoda's sons, whom he seized on 31 July. Also on 2 September,
Said Abdullo Nuri, the leader of the United Tajik Opposition, agreed
during a telephone conversation with President Imomali Rakhmonov
to be in Dushanbe by 9 September for celebrations marking the
anniversary of Tajikistan's independence, ITAR-TASS reported.

TURKMEN PRESIDENT UNDERGOES CARDIAC SURGERY. Saparmurad
Niyazov underwent a five-hour operation at a clinic near Munich,
Germany, on 1 September to repair vessels supplying blood to the
heart, Western agencies reported. A presidential spokesman said the
operation had gone according to plan and that surgeons considered
the 57-year-old president's condition satisfactory.

CORRECTION: "RFE/RL Newsline" on 29 August incorrectly reported
that the Russian and Armenian presidents had signed an agreement
on the transit of oil via Armenia. For information on the agreements
signed, see "RFE/RL Newsline," 1 September 1997.

END NOTE

A STATE OUTSIDE A BLOC

by Paul Goble

        Some fundamental shifts in the balance of power in Eastern
Europe have made it possible for Ukraine to become a "state outside
a bloc," as Ukrainian President Leonid Kuchma recently put it.
        Speaking in Kyiv on 28 August following a meeting with
visiting Russian Defense Minister Igor Sergeev, Kuchma announced
two major changes in the direction of Ukraine's security policy. He
said that "Ukraine does not intend to join NATO structures," even
though he would not rule out future cooperation with the Western
alliance. At the same time, he made clear that Kyiv no longer intends
to be bound by the provisions of the collective security treaty signed
in 1992 by seven members of the Commonwealth of Independent
States. Instead, he said, Ukraine will seek to improve relations with
individual countries, including Russia, as a means of promoting its
security and well-being.
        Kuchma's announcement that his country will not seek NATO
membership undercuts earlier statements by Ukrainian officials that
Kyiv's strategic objective is to join the Western alliance at some point
in the future. But, just like his declaration about the CIS, his remarks
about NATO reflect three broader changes across the region.
        First, Ukraine's shift represents a triumph, rather than a defeat,
for NATO's policy of expansion. It was no coincidence that Kuchma's
remarks came only one day after U.S. troops landed in Crimea as part
of a NATO-sponsored Partnership for Peace joint exercise. Much
criticized by Moscow, those maneuvers have reaffirmed Western
support for Ukraine but have also prompted the Russian government
to shift its position both rhetorically and in practice.
        Russian criticism of the maneuvers and of Ukraine's
participation have softened since the exercises began, and Russian
relations with Ukraine have continued to improve, with the two sides
announcing that Kuchma will make an official visit to Moscow early
next year. That shift, in turn. has allowed the Ukrainians to stake out
a position -- closer ties with NATO but no ultimate membership --
that allows them to seek to boost ties with Moscow without giving up
continuing support from the West.
        Second, Ukraine's shift reflects the collapse of the CIS as an
organization relevant to the security needs of Eastern Europe. On the
same day that Russian foreign policy expert Sergei Karaganov
declared the Organization for Security and Cooperation in Europe is
"dead" because of its failures in Bosnia-Herzegovina, Kuchma took a
step toward demonstrating that the CIS is close to its grave. He did so
not by withdrawing from the organization as a whole but rather by
underscoring that Ukraine will give preference to bilateral ties with
Russia rather than multilateral arrangements with other former
Soviet republics. Moscow will hardly object to improved relations
with Kyiv -- indeed, Sergeev welcomed them -- but Kyiv is the
winner in this round because its stance undermines Russian
pretensions to domination over the entire territory of a country that
no longer exists.
        Third, Ukraine's shift reflects a normalization of relations
between Kyiv and Moscow. It also highlights a growing willingness
on the part of the Russians to view Ukraine as an independent
country and on the part of Ukrainians to see Russia as something
other than an enemy.
        By staking out a position outside of any bloc, Ukraine is
reaffirming its position as an important country within Eastern
Europe, one that will act on its own interests rather than at the
behest of any other country. And as ever more Russian officials
accept Ukraine's new status -- something NATO's Partnership for
Peace program has helped promote -- Ukrainians will find it easier to
accept Russia as a potential partner rather than the inevitable
enemy.
        Obviously, a single speech, even one as important as Kuchma's
on 28 August, does not guarantee that the geopolitics of the region
will develop without serious problems. But as an indication of
fundamental shifts, Kuchma's remarks are an important milepost on
the road to a better future for Ukrainians, for Russians, and for the
region in which they live.


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