We are all apt to believe what the world believes about us. - George Eliot
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 109, Part I, 3 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

* SELEZNEV OUTLINES PRIORITIES FOR DUMA'S FALL SESSION

* YELTSIN WANTS ORT JOURNALISTS RELEASED BEFORE MEETING
LUKASHENKA

* REACTIONS TO KARABAKH PRESIDENTIAL ELECTION

End Note
RUSSIA, ARMENIA COMMITTED TO STRONG MILITARY TIES

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RUSSIA

SELEZNEV OUTLINES PRIORITIES FOR DUMA'S FALL SESSION... State
Duma Speaker Gennadii Seleznev says that the draft 1998 budget,
the tax code, and several bills on reducing social benefits will be the
most important items on the agenda of the State Duma's fall session,
RFE/RL's Moscow bureau reported on 2 September. The first reading
of the budget will take place sometime around 10 October. The
second reading of the tax code is unlikely to be held before
November, since the Duma's Budget Committee is considering more
than 1,000 amendments to the code. In September, deputies will
consider several laws vetoed by Yeltsin during the summer,
including the land code and the trophy art law. Seleznev and the
leaders of all seven registered Duma factions met with President
Boris Yeltsin on 2 September and invited him to open the Duma's fall
session the following day, but Yeltsin declined, saying his schedule
for 3 September was already full.

...SLAMS GOVERNMENT'S 1997 SPENDING AS "ILLEGAL." Speaking to
Ekho Moskvy on 2 September, Seleznev charged that the
government's 1997 spending policy has been "blatantly illegal."
Under the law on the budget, the government must propose a
sequester, or spending cuts, if revenues fall below 90 percent of
targets in any one quarter. The government submitted a draft law on
cutting 1997 expenditures by some 20 percent in the spring. The
Duma voted down that law in June, and a conciliatory commission of
government and parliamentary representatives ceased meeting
shortly thereafter without reaching agreement on the planned
spending cuts (see "RFE/RL Newsline," 23-24 June 1997).
Nonetheless, Seleznev noted, the government has continued to
allocate funds in accordance with its own proposed sequester.
Seleznev indicated that the Duma may call a no-confidence vote over
the issue during its fall session.

YAVLINSKII CRITICIZES 1998 "BUDGET OF STAGNATION." Yabloko
leader Grigorii Yavlinskii has described the government's draft
budget for 1998 as a "budget of stagnation," RFE/RL's Moscow bureau
reported on 2 September. Speaking to an RFE/RL correspondent after
top Duma leaders had met with Yeltsin, Yavlinskii said the budget is
"realistic" in the sense that projected revenues resemble what the
government is capable of collecting. However, he argued that the
planned revenues and expenditures are too small to create economic
growth or "provide the foundation for a new economic policy." The
Yabloko faction voted against the 1997 budget in all readings in the
Duma. Yabloko member Oksana Dmitrieva, who heads a Duma
subcommittee on the budget, recently gave a mixed review to the
government's proposed budget for 1998 (see "RFE/RL Newsline," 28
August 1997). Yavlinskii has also criticized the proposed tax code as
a "repressive" document.

YELTSIN CHIDES CHERNOMYRDIN OVER REVENUES, WAGE ARREARS.
In a partly-televised meeting on 2 September, Yeltsin told Prime
Minister Viktor Chernomyrdin that he is dissatisfied that "little
revenue came to the federal budget in August," Russian media
reported. He did not give any figures. The president also criticized
delays in transfers of federal funds to the regions and wage arrears
to state employees, which the government is supposed to pay by the
end of the year. Yeltsin noted that teachers' strikes have kept many
schools shut as the academic year begins. RFE/RL's Moscow bureau
on 2 September quoted the main trade union for education and
scientific workers as saying that some 1130 Russian schools are shut
because of strikes, including 262 in Altai Krai alone. In a recent radio
address, Yeltsin blamed regional leaders for persistent wage arrears
to teachers (see "RFE/RL Newsline," 1 September 1997).

GERMAN PRESIDENT ADDRESSES DUMA. Addressing the State Duma
on 3 September, Roman Herzog asked deputies to develop a
"partnership" with the West and help usher in a "new era of peaceful
coexistence, without walls or ideological trenches," according to
ITAR-TASS and dpa. Duma speaker Seleznev, however, commented
that deputies were displeased with a German decision not to grant
visas to 60 Russian deputies. The previous day, Herzog had met with
businessmen at the opening of a German-Russian business center and
had encouraged Russian businessmen to "go the way of market
integration." He had also visited the Constitutional Court and praised
the court's work in finding "judicial solutions to political problems."
Prior to becoming president, Herzog had been chairman of the
German Constitutional Court. Meanwhile, German Economics Minister
Gunther Rexrodt met with Russian First Deputy Prime Minister Boris
Nemtsov to discuss bilateral relations and the training of 100 Russian
managers in Germany annually.

YELTSIN WANTS ORT JOURNALISTS RELEASED BEFORE MEETING
LUKASHENKA. Yeltsin announced on 2 September that before he
meets with Belarusian President Alyaksandr Lukashenka in Moscow
on 6 September, "everything must be resolved" about the Russian
Public Television (ORT) journalists under arrest in Belarus, Russian
news agencies reported. Two ORT journalists who are Belarusian
citizens remain in detention on charges of illegally crossing the
Belarusian-Lithuanian border on 22 July. Several ORT journalists who
are Russian citizens were later arrested on similar charges but were
eventually released (see "RFE/RL Newsline," 22-29 August 1997).
Following a 28 August telephone conversation with Lukashenka,
Yeltsin said his Belarusian counterpart had agreed to release all ORT
journalists. However, Yeltsin acknowledged on 2 September that
Lukashenka has not given a specific date for the journalists' release.
He did not say whether he will call off his 6 September meeting with
Lukashenka if the journalists remain in detention.

RUSSIAN-CHECHEN TALKS RESUME. Russian and Chechen
representatives, meeting at the Black Sea resort of Dagomys on 2
September, resumed talks on drafting a bilateral treaty regulating
relations between Moscow and Grozny and setting down the terms
for the export of Azerbaijan's Caspian oil via the Baku-Grozny-
Tikhoretsk pipeline. Chechen chief negotiator Movladi Udugov told
Interfax later that the Russian delegation, which is headed by
Security Council Secretary Ivan Rybkin and also includes Deputy
Prime Minister Ramazan Abdulatipov, showed "lively interest" in
preserving a single economic space comprising both Russian and
Chechnya. Udugov also said that Rybkin proposed a compromise on
the dead-locked question of what tariffs Chechnya would receive for
the transit of Azerbaijan's oil. Chechen President Aslan Maskhadov
on 2 September accused Russia of "double-dealing" in offering tariffs
based on domestic rather than export rates.

CHUBAIS ON SEPARATING BUDGET FUNDS FROM PRIVATE BANKS.
Addressing a government commission on fiscal policy, First Deputy
Prime Minister Anatolii Chubais vowed that the government's policy
of separating budget funds from private commercial banks is
irreversible, ITAR-TASS reported on 2 September. The commission
passed a resolution to transfer all State Customs Committee accounts
to the Central Bank by 1 December. Chubais confirmed that the
Central Bank will be ready to handle those accounts, which are
currently held in Oneksimbank and Mosbiznesbank. At the regional
level, Chubais said, commercial banks will be permitted to handle
some customs accounts. However, he said those banks will have to
pay for the privilege of handling customs duties and will be selected
though open competitions. Some authorized commercial banks have
earned huge profits through transactions with state funds (see
"RFE/RL Newsline," 7 and 18 August 1997).

DEFENSE MINISTER CALLS FOR SWIFT RATIFICATION OF START-2.
Addressing officers of the Northern Fleet at Severovodsk on 2
September, Defense Minister Igor Sergeev affirmed that "it is
extremely important to ratify START-2 and immediately proceed to
preparing and signing START-3." He argued that implementation of
START-2 "without violations" will not be detrimental to Russia.
During the past four years, the communist faction within the State
Duma has blocked ratification of START-2. "Nezavisimaya gazeta" on
22 August published an article by Duma deputy Aleksei Podberezkin,
an influential foreign policy adviser to Communist Party leader
Gennadii Zyuganov, repeating the arguments against ratification,
including the financial costs. Podberezkin advocated a moratorium of
between five and 10 years on concluding any new agreement on
strategic offensive weapons.

NEW MINISTER ON RUSSIAN-CIS RELATIONS. Deputy Prime Minister
Valerii Serov on 2 September introduced newly appointed Minister
for Cooperation with CIS Countries Anatolii Adamishin to his
colleagues, ITAR-TASS reported. Serov said the former ambassador
to London and first deputy foreign minister was an "experienced
diplomat" whose nomination will give "a fresh impetus" to the work
of the ministry. Adamishin said that his main aim will be the
"adequate protection of Russia's national interests," RFE/RL's Moscow
bureau reported. He said the "era of romanticism" in Russia's
relations with other CIS states is over and that it is time to take a
more pragmatic approach, particularly in economic relations.
Adamishin conceded that the vast majority of the 1,300 inter-CIS
agreements have not been implemented but added that Russia is not
entirely to blame for this.

SHOKHIN TO QUIT DUMA COUNCIL. Aleksandr Shokhin, nominated to
become the leader of the Our Home Is Russia (NDR) Duma faction, will
give up his position as Duma first deputy speaker, "Kommersant-
Daily" reported on 3 September. Shokhin is to be confirmed as NDR
Duma leader at a 3 September meeting of the pro-government
movement's Duma faction. Meanwhile, an unnamed source in the NDR
denied reports that Nikolai Travkin is quitting the party's faction
along with former leader Sergei Belyaev (see "RFE/RL Newsline," 1
September 1997), ITAR-TASS reported on 2 September. "Izvestiya"
commented the next day that nearly three-quarters of NDR Duma
deputies have influential committee posts thanks to their
membership in the faction. They are unlikely to give up those
positions "in the name of Belyaev and some hypothetical pro-Chubais
[Duma] faction," the newspaper added.

MORE RESTRICTIONS ON JOURNALISTS IN DUMA. The Duma has
introduced stricter regulations on journalists' access to deputies,
ITAR-TASS and "Moskovskii komsomolets" reported on 2 September.
Journalists are prohibited from entering the hall adjacent to the
Duma's chamber. When the Duma holds plenary sessions, most
interviews given to journalists by Duma deputies take place in that
hall. Duma Speaker Seleznev said the new restriction was imposed
because it is difficult for Duma deputies to work when journalists
seeking interviews are crowding the hall next to the chamber.
Seleznev recently announced that the number of journalists given
permanent accreditation at the Duma will be cut sharply (see
"RFE/RL Newsline," 27 August 1997). Journalists attending press
conferences at the Kremlin (presidential administration) or at the
White House (government headquarters) are already restricted to
certain areas.

EARTHQUAKE CAUSED SEISMIC ACTIVITY NEAR NOVAYA ZEMLYA.
Vladimir Strakhov, the director of the Institute of Earth Physics, says
a small earthquake caused the seismic activity recorded on 16
August near the Arctic site of Novaya Zemlya, a former Soviet
nuclear test site, ITAR-TASS reported on 2 September. Vitalii
Adushkin, the director of the Institute of the Dynamics of
Geospheres, said some 30 minor earthquakes affect the area each
year. U.S., Norwegian, and Finnish officials recently asked Russia for
an explanation of the 16 August seismic occurrence. Russian officials
have said Moscow continues to observe the moratorium on nuclear
testing that it imposed in 1992 (see "RFE/RL Newsline," 29 August
and 1 September 1997). Meanwhile, Pentagon spokesman Kenneth
Bacon on 2 September said the U.S. Defense Department still regards
the seismic event recorded near Novaya Zemlya as a "mystery," dpa
reported.

NOTORIOUS PYRAMID FUND DECLARED BANKRUPT. An arbitration
court in Moscow has declared the MMM investment fund bankrupt,
Russian news agencies reported on 2 September. The fund, set up by
Sergei Mavrodi, operated as a pyramid scheme. According to
Interfax, MMM attracted some 10 trillion rubles ($1.7 billion at the
current exchange rate) from tens of thousands of investors before it
stopped paying dividends in August 1994. Two investors brought the
court case against MMM, claiming they are owed more than 5 billion
rubles ($857,000). Mavrodi long escaped prosecution after being
elected to the Duma in November 1994, which gave him
parliamentary immunity. He was eventually expelled from the Duma
in October 1995 and failed to win a seat in the December 1995
parliamentary elections. Mavrodi's current whereabouts are
unknown. He is under investigation on charges of fraud and tax
evasion.

"MIR" COSMONAUTS TO BE FINED? A commission of experts
investigating why a supply ship and the "Mir" space station coincided
in late June has concluded that the collision was caused by "human
error," the Russian press reported. Valerii Ryumin, the director of
Russia's Energiya corporation and Russian coordinator of the "Mir"-
NASA program, is quoted in "Kommersant-Daily" on 3 September as
saying the crew was at fault and that a fine will be taken out of their
wages. An official announcement on the mishap and the role played
by cosmonauts Vasilii Tsibliev and Pavel Lazutkin is to be made on 4
September. Both cosmonauts say they are being used as scapegoats.
Tsibliev is quoted by "Kommersant-Daily" as saying, in an apparent
reference to Russian space command, that "many on Earth clearly
wanted us to return as corpses."

TRANSCAUCASUS AND CENTRAL ASIA

REACTIONS TO KARABAKH PRESIDENTIAL ELECTION. Armenian
President Levon Ter-Petrossyan has congratulated Arkadii
Ghukasyan on his election as president of the unrecognized Nagorno-
Karabakh Republic, RFE/RL's Stepanakert correspondent reported on
2 September. Ter-Petrossyan expressed confidence that Ghukasyan
will continue to defend the rights of the Karabakh population. The
NKR Central Electoral Commission announced that Ghukasyan polled
89.3 percent of the vote, Artur Tovmasyan 5.35 percent, and Boris
Aroushanyan 5.33 percent. Azerbaijani State Foreign Policy adviser
Vafa Gulu-Zade condemned the election as "absolutely unlawful,"
according to Interfax. The German government likewise issued a
statement on 2 September expressing "regret" at the election and
concern that it could adversely affect the mediation in the conflict of
the Organization for Security and Cooperation in Europe Minsk Group,
of which Bonn is a member, Noyan Tapan reported.

ARMENIA PREDICTS NEW MINSK GROUP INITIATIVE. Levon
Zurabian, Ter-Petrossyan's press secretary, told journalists on 2
September that the three Minsk Group co-chairmen -- France, Russia,
and the U.S. -- are likely to make new proposals on resolving the
Karabakh conflict that will be acceptable to all three sides, Noyan
Tapan reported. The co-chairmen are scheduled to visit Baku,
Stepanakert and Yerevan in mid-September, according to
"Nezavisimaya gazeta" on 3 September. But Azerbaijani State Foreign
Policy adviser Gulu-Zade told Turan on 2 September that he believes
that "sooner or later" the Armenian side will agree to the peace plan
proposed by the Minsk Group in late May. Ghukasyan has rejected
that plan out of hand, while Zurabian has said that Armenia cannot
accept certain unspecified provisions, RFE/RL's Yerevan bureau
reported.

GEORGIAN DEFENSE MINISTER CHANGES TACK OVER BLACK SEA
FLEET. "Nezavisimaya gazeta" on 2 September quoted Georgian
Defense Minister Vardiko Nadibaidze as declaring 1997 the year in
which the Georgian navy will be created. He said that to accomplish
this goal, Georgia would step up negotiations with Russia and Ukraine
to demand a share in the Black Sea Fleet. During his visit to Kyiv in
late August, Nadibaidze reportedly said that Georgia is no longer
insisting on a share of the fleet's assets. Russian presidential press
spokesman Sergei Yastrzhembskii had said in June that such
demands are without any foundation.

END NOTE

Russia, Armenia Committed to Strong Military Ties

by Harry Tamrazian

        On 29 August, Russia and Armenia signed a landmark treaty
"on friendship, cooperation, and mutual assistance," which Russian
President Boris Yeltsin said "marks a qualitatively new stage of
Russian-Armenian relations" on the level of "strategic partnership."
The treaty is unique among agreements signed by the Russian
Federation and other former Soviet republics because it is the first
time Moscow has committed itself in an accord to defend an ally
militarily in the event that the ally is attacked by a foreign country.
        Under such a treaty signed by the former Soviet Union and one
of its allies, an attack on one of the signatories would have been
considered an attack on the other. The 29 August treaty uses the
Soviet term "mutual assistance," which can be understood to mean
"mutual defense." The Soviet Union concluded such treaties with its
East European allies as well as with some countries in the Middle
East, including Syria.
        The new treaty supersedes an agreement signed in December
1991, only days after the demise of the Soviet Union. Armenian
President Levon Ter-Petrossyan said on 30 August that he "thanks
God" that the 1991 treaty was never ratified, since he considers it
"inadequate" under current conditions. The August 1997 treaty still
has to be ratified by both countries' parliaments, but no obstacles to
its ratification are anticipated. Armenia and Russia had already
signed a series of bilateral agreements last year boosting military
cooperation.
        The August 1997 treaty states that each party will
immediately contact the other in the event of the threat of military
invasion. If either country is attacked by a third party, the other will
make available its military facilities and equipment for joint use. The
treaty also states that military-technical policy will be coordinated,
defense industries developed in tandem, military hardware
standardized, and military projects jointly financed.
        Another important provision of the treaty covers Russian-
Armenian cooperation in foreign policy. The Armenian and Russian
presidents both pledged not to participate in any action or initiative,
or join any defense treaty or alliance, that violates the sovereignty or
territorial integrity of the other country. The treaty specifies that
Russia and Armenia will continue to cooperate closely in foreign
policy aimed at strengthening peace and stability in the
Transcaucasus as well as throughout the world.
        With regard to the economy, Russia and Armenia agreed to
create favorable conditions for the convertibility of their national
currencies, take action to maintain the stability of those currencies,
and coordinate in setting hard-currency exchange rates. Both
countries agreed to expand cooperation in trade, transportation,
communications, energy, science, and other areas.
        On 28 August, one day before the treaty was signed, Ter-
Petrossyan met with Russian State Duma Speaker Gennadii Seleznev
and Federation Council Chairman Yegor Stroev, both of whom are
strong advocates of widening the Russian-Belarusian union. The
Russian Duma had unanimously approved a resolution in May urging
Armenia to join the Russian-Belarusian Union. Since then, the
National Initiative for Union with Russia, an Armenian group
supported by Russian politicians, has collected signatures seeking a
referendum on the issue. Armenian Communists also are also
collecting signatures; and according to pro-Russian Armenian groups,
800,000 signatures have been collected so far.
        The campaign, however, has been discredited somewhat by
aggressive competition between the National Initiative and the
Communist Party and by disclosures that the National Initiative pays
its activists the equivalent of 10 U.S. cents for each signature they
collect (although it is unclear who is providing the funding).
Moreover, the Armenian Constitution prohibits holding a referendum
on any issue that infringes on the country's sovereignty.
        Speaking to journalists on 30 August, Ter-Petrossyan said he
had not seen the signatures in support of Armenia's accession to the
Russia-Belarus Union. He also said that the issue of Armenia's joining
the Russian-Belarusian union was not included in the agenda of his
visit to Moscow. If implemented, the new treaty will lead to a closer
degree of integration between the two countries than is possible in
the case of the Russian-Belarusian union, he argued. Similarly, Stroev
told reporters that he believes a Russian-Armenian union already
exists..
        The new Russian-Armenian treaty contains few of the routine
phrases characteristic of this kind of document. It uses precise
wording that is binding on the two countries militarily and
politically. And it is this wording that makes clear Moscow's intention
to maintain its influence -- undiminished -- in the Transcaucasus.

The author is the deputy head of RFE/RL's Armenian service.




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