Absence makes the heart grow fonder. -
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 123, Part I, 23 September 1997



A daily report of developments in Eastern and Southeastern Europe,
Russia, the Caucasus and Central Asia prepared by the staff of Radio
Free Europe/Radio Liberty.

This is Part I, a compilation of news concerning Russia, Transcaucasia
and Central Asia. Part II covers Central, Eastern, and Southeastern
Europe and is distributed simultaneously as a second document.
Back issues of RFE/RL NewsLine and the OMRI Daily Digest are online
at RFE/RL's Web site:
http://www.rferl.org/newsline

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Headlines, Part I

* CHERNOMYRDIN, GORE MEET NEAR MOSCOW

* GORE EXPRESSES CONCERN OVER RELIGION LAW

* MINSK GROUP CO-CHAIRMEN IN ARMENIA

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RUSSIA

CHERNOMYRDIN, GORE MEET NEAR MOSCOW. U.S. Vice President Al
Gore told journalists on 22 September that during his first day of
talks with Russian Prime Minister Viktor Chernomyrdin, the main
topics were Iran, START-2, U.S. investments in the Russian oil sector,
and the "Mir" space station. Gore said the two sides pledged to
cooperate on preventing Iran from acquiring nuclear technology and
that the differences between them on that issue had "narrowed
considerably," Reuters reported. Gore also said Chernomyrdin
appears optimistic that the Russian parliament will ratify the START-
2 treaty. Several State Duma opposition factions, however, recently
said they will oppose ratification (see "RFE/RL Newsline," 17 and 18
September, 1997) Gore reaffirmed support for continued U.S.-
Russian space research but withheld judgment on whether the
planned seventh docking of a U.S. space shuttle with "Mir" should
proceed following the latest breakdown in the station's computer
system.

GORE EXPRESSES CONCERN OVER RELIGION LAW... During his talks
with Chernomyrdin, Gore expressed concern about the religion law
recently passed by the Duma, Reuters reported on 22 September.
Gore told journalists that amendments made since President Boris
Yeltsin vetoed an earlier version in July did not allay concerns that
some minority religions will face discrimination (see "RFE/RL
Newsline," 22 September 1997). He added, "I've tried hard to explain
exactly why we Americans feel so strongly about [the religion law]."
But while he said he hoped to persuade the Kremlin to seek further
changes in the religion law, Gore acknowledged that Chernomyrdin
gave him no reason to expect that Yeltsin will veto the revised
version.

...BUT KREMLIN DEFENDS ITS PROVISIONS. Ruslan Orekhov, head of
the presidential administration's Main State Legal Department, and
former presidential adviser Georgii Satarov told journalists on 22
September that the revised religion law fully complies with both
Russia's constitution and international law, ITAR-TASS reported.
Orekhov and Satarov specifically defended the most controversial
aspect of the law, which divides religions into two categories:
"religious organizations" (which can prove they have existed in
Russia for at least 15 years) and "religious groups" (which cannot
meet the 15-year requirement). Critics have charged that groups that
cannot pass the 15-year test will be denied equal rights and may
face persecution.

PRIMAKOV, CLINTON MEET. Russian Foreign Minister Yevgenii
Primakov and U.S. President Bill Clinton met in New York on 22
September during the UN General Assembly session. The agenda,
which was proposed by Clinton, included Bosnia-Herzegovina, the
Middle East, and disarmament. Primakov told Clinton that Russia will
not oppose President Biljana Plavsic's proposal to hold parliamentary
elections in October in the Republika Srpska. He also said Moscow has
made progress toward ratifying START-2, although "difficulties
remain." Agreement was reached on resuming the joint drafting of
START-3. Clinton expressed concern over Russia's reported assistance
to Iran in developing long-range nuclear weapons. Primakov told
journalists later that the U.S. regards Russia as a "serious, informed,
and capable partner" with whom it wishes to cooperate in resolving a
range of problems.

CHUBAIS UPBEAT ON RUSSIAN ECONOMY. First Deputy Prime
Minister Anatolii Chubais told the annual meeting of the World Bank
and IMF on 23 September that Russia's economic decline has been
halted and that economic growth will begin in 1998, RFE/RL's
correspondent in Hong Kong reported. Chubais predicted that the
ruble will remain stable and that inflation will fall to 5-7 percent
next year, compared with projected inflation of 13 percent in 1997.
At a press conference on 22 September, Chubais expressed
confidence that Russia will be able to keep the 1997 budget deficit to
3.5 percent of GDP. While he acknowledged that tax collection still
lags behind budget targets, Chubais said Russia will make up for
some of the shortfall by selling state property. He again called for the
parliament to pass the government's proposed new tax code.

RUSSIA ASKS FOR LARGER COAL LOAN. Following talks on 22
September with World Bank President James Wolfensohn, Chubais
told reporters that Russia hopes the bank will agree as early as
December on the terms of a second loan for restructuring the Russian
coal industry, Russian news agencies reported. Chubais said Moscow
is asking the bank to increase the second loan from $650 million to
$750 million. The bank's board of directors has not yet decided
whether to issue that credit; some funds from a $500 million coal
loan to Russia in 1996 are said to have been misused. A World Bank
delegation will arrive in Moscow soon to examine the Russian
proposals and settle problems connected to the first coal loan.
Chubais heads an interdepartmental government commission on the
socio-economic problems of the coal industry (see "RFE/RL Newsline,"
21 August 1997).

RUSSIA SEEKS TO USE YUAN IN TRADE WITH CHINA. Russian Central
Bank Chairman Sergei Dubinin took time out from the World Bank
and IMF annual meeting to hold talks with the head of China's state
bank, Dai Xianglung, Russian media reported on 22 September.
Dubinin raised the possibility of Russian deals with China being
conducted in yuan and of opening a Russian Central Bank office in
China. He said that both measures would facilitate growing economic
cooperation between the two countries. Dubinin will travel from
Hong Kong to Beijing after the World Bank-IMF meeting to further
discuss the two proposals.

1998 BUDGET HAS FEW FRIENDS IN PARLIAMENT. Representatives of
all seven Duma factions have called for rejecting the draft 1998
budget in the first reading, which is scheduled for 8 October,
"Kommersant-Daily" reported on 23 September. Even prominent
figures in the pro-government Our Home Is Russia faction, such as
Duma Privatization Committee Chairman Pavel Bunich and Duma
Budget Committee Deputy Chairman Aleksei Golovkov, have
demanded that the draft be amended, particularly the revenue
targets, Russian news agencies reported on 22 September. According
to "Kommersant-Daily," the Our Home Is Russia, Agrarian, and
Russian Regions factions favor sending the draft to a conciliatory
commission of government and parliamentary representatives. Duma
Budget Committee Chairman Mikhail Zadornov of Yabloko has also
advocated creating such a commission, RFE/RL's Moscow bureau
reported on 23 September. The Communist, Popular Power, and
Liberal Democratic Party of Russia factions favor returning the
budget directly to the government.

MORE REGIONAL LEADERS SPEAK OUT AGAINST BUDGET, TAX CODE.
"Finansovye izvestiya" reported on 23 September that the National
Economic Council, which is headed by Sverdlovsk Oblast Governor
Eduard Rossel, is dissatisfied with the draft budget. In an interview
with "Rabochaya tribuna" on 19 September, Samara Oblast Governor
Konstantin Titov sharply criticized the government's proposed tax
code, on which projected 1998 budget revenues are based. Titov
chairs the Federation Council's Budget Committee and is also deputy
chairman of the Our Home Is Russia movement. He told "Rabochaya
tribuna" that the tax code recognizes the obligations of the regions,
but not their rights. Moscow Mayor Yurii Luzhkov and Tatarstan
President Mintimer Shaimiev have already criticized the tax code
and 1998 budget (see "RFE/RL Newsline," 19 September 1997). Those
developments suggest that the government will have trouble
persuading the Federation Council to approve its main economic
policy initiatives.

WAS ONEKSIMBANK BEHIND AUDIT OF PRECIOUS METALS EXPORTS?
"Kommersant-Daily" on 20 September claimed that an Audit
Chamber report on exports of precious metals and gemstones is
intended to promote the business interests of Oneksimbank. The
Audit Chamber found that during the last two years, some $1 billion
earned from sales of precious metals and gemstones passed through
Finance Ministry accounts held by the commercial bank SBS-Agro
(formerly Stolichnyi Bank). Some of the proceeds are alleged to have
been misappropriated, and the Duma may demand changes at
Almazyuvelireksportom, Russia's largest exporter of precious metals
and gemstones. Citing an unnamed Duma source, the newspaper
claimed that Oneksimbank is behind the Audit Chamber's report,
because the bank is seeking more control over platinum exports.
Norilsk Nickel, in which Oneksimbank purchased a controlling stake
in August, produces most Russian platinum. SBS-Agro provides
financial support to "Kommersant-Daily."

LEADING BANKER ON "YOUNG REFORMERS." In an interview with
"Segodnya" on 20 September, Aleksandr Smolenskii, head of the
bank SBS-Agro, said the president should "listen to different groups
of the population" and not just the views of the government's "young
reformers" (meaning First Deputy Prime Ministers Anatolii Chubais
and Boris Nemtsov). Smolenskii attended the recent meeting at which
Yeltsin told six leading businessmen to stop "quarreling with the
government" (see "RFE/RL Newsline," 16-17 September 1997). In a
clear reference to Chubais, Smolenskii criticized an official who
claims to "know how to lead Russia to the bright future." He also
drew a parallel between reports that an oil company may be plotting
Chubais's assassination and the so-called "doctors' plot" against Josef
Stalin in 1952, which preceded a campaign of official persecution
against Soviet Jews. "Segodnya," owned by Vladimir Gusinskii's
company Media-Most, has repeatedly criticized Chubais and Nemtsov
in recent months.

ENVIRONMENTALIST SUPPORTS LEBED'S CLAIMS ON MISSING
BOMBS. Aleksei Yablokov, a former ecological advisor to Yeltsin, has
confirmed the existence of suitcase-sized nuclear bombs in an
interview with NTV on 22 September and in a letter published in
"Novaya gazeta" the same day. Yablokov said he had talked with
people who designed the bombs in the 1970s. Although he could not
confirm that any were missing, he pointed out that the bombs were
manufactured for terrorist purposes on KGB orders and therefore
would not have been registered by the Defense Ministry. Appearing
on the U.S. television network CBS on 8 September, former Security
Council Secretary Aleksandr Lebed claimed that more than 100
suitcase bombs were built and that most of them are currently
unaccounted for. The Russian Defense Ministry and Kremlin officials
have denied that any bombs are missing. Lebed repeated the claims
on 19 September, during a private visit to Japan.

TATARSTAN TO EXPORT PETROLEUM TO SLOVAKIA? A Slovak
government delegation headed by Deputy Economics Minister Jean
Kholton has expressed interest in buying petroleum from Tatarstan
and in the joint production of oil, RFE/RL's Kazan bureau reported on
23 September. The two sides also discussed an inter-governmental
agreement on cooperation. President Shaimiev may visit Slovakia in
November to witness the signing of this agreement.

TRANSCAUCASUS AND CENTRAL ASIA

MINSK GROUP CO-CHAIRMEN IN ARMENIA. Armenian Foreign
Ministry spokesman Arsen Gasparyan told journalists on 22
September that the three co-chairmen of the Organization for
Security and Cooperation in Europe's Minsk Group did not make any
new proposals during their talks with Armenian leaders two days
earlier, RFE/RL's Yerevan bureau reported. Gasparyan said the
discussions focused on the "methodology" of resolving the conflict.
The unrecognized Nagorno-Karabakh Republic advocates a "package"
solution whereby all contentious issues are resolved in a single
document, while Armenia prefers a step-by-step approach that
would postpone a decision on the future political status of Nagorno-
Karabakh. The co-chairmen also met with the Karabakh leadershipin
Yerevan on 22 September before leaving for Baku, according to
Interfax.

ARMENIAN LEADERS MEET AGAIN WITH DASHNAK PARTY.
Parliamentary speaker Babken Ararktsyan, Foreign Minister
Alexander Arzoumanian, and other senior officials met with
representatives of the Armenian Revolutionary Federation--
Dashnaktsutyun (HHD) on 20 September, Armenian agencies
reported. President Levon Ter-Petrossyan suspended the party in
December 1994, accusing its members of terrorist activities and
preparing a coup. In April 1997, he initiated contacts with the
Dashnak party to discuss its possible relegalization (see "RFE/RL
Newsline," 4 and 7 April, 1997). HHD bureau member Martun
Matevosyan told RFE/RL's Yerevan bureau on 22 September that the
talks focused on relegalizing the party in Armenia, its possible
contribution to resolving the Karabakh conflict, and domestic political
stability.

ARMENIA'S NATIONAL ACCORD DEFUNCT. National Democratic Union
leader Vazgen Manukyan told journalists on 22 September that the
National Accord bloc of opposition parties created last year to
support his presidential candidacy is "dead," RFE/RL's Yerevan
bureau reported. Manukyan said National Accord fell apart because
of unspecified differences of opinion between its constituent
members. Speculation about the bloc's imminent breakup has grown
since two of its member parties, the Union for Self-Determination
and the banned Dashnak party, recently embarked on a dialogue
with the Armenian leadership. Manukyan said the National
Democratic Union is currently increasing its membership and will
focus on improving living standards. He added that the authorities
are "retreating" from the platform of self-reliance in foreign policy,
democracy, and the protection of human rights on which the 1988
pro-democracy movement came to power.

AZERBAIJAN CONTINUES TO CRITICIZE ARMENIAN-RUSSIAN
COOPERATION. Presidential adviser Vafa Gulu-Zade told Interfax on
21 September that the 29 August Russian-Armenian treaty on
friendship, cooperation, and mutual assistance does not correspond to
the interests of Russia or the Russian people. He suggested that
Russian President Boris Yeltsin was unaware of the contents of the
treaty when he signed it and that it had been drafted by the Russian
Foreign Ministry, where, he claimed, Armenians are "strongly
represented." Gulu-Zade added that he hoped the Russian parliament
will refuse to ratify the treaty. Turan on 22 September claimed that
a group of Armenian officers is currently being trained in Smolensk
to use sophisticated anti-aircraft systems, including some technology
illegally supplied to Armenia by Russia since 1994.

AZERBAIJANI SOLDIER SENTENCED FOR ESPIONAGE. Azerbaijan's
Supreme Court on 22 September sentenced Tengiz Suleimanov to 12
years' imprisonment for espionage, Interfax and AFP reported.
Suleimanov was arrested earlier this year while attempting to pass
classified military information to the Iranian intelligence service. He
was also convicted of theft of state property from the military unit in
which he served.

GEORGIAN MILITARY UPDATE. Georgian Defense Minister Vardiko
Nadibaidze told journalists in Tbilisi on 22 September that Georgian,
NATO, and U.S officials are discussing the possibility of military
exercises in southeastern Georgia, possibly under the aegis of NATO's
Partnership for Peace program, Interfax reported. At the same time,
Nadibaidze, who is widely regarded by the Georgian opposition as
Moscow's stalking horse, affirmed that "Russia was and remains
Georgia's major partner in military cooperation," according to ITAR-
TASS. Meanwhile, the Georgian parliament has enacted legislation
whereby Georgians eligible for military service who live outside
Georgia may pay 2500 lari [$1,900] to avoid the draft. The law also
provides for deferment of induction for students under the age of 24
and for village doctors and teachers, "Nezavisimaya gazeta" reported
on 20 September.

UZBEKISTAN SAYS AFGHAN PROBLEMS ARE INTERNAL AFFAIR. The
Uzbek Foreign Ministry released a statement on 22 September calling
problems in Afghanistan "an internal affair" of that country, ITAR-
TASS reported. The statement also said the Uzbek government made
the correct decision in closing the bridge that connects the Uzbek city
of Termez to the Afghan town of Khairaton, which is currently under
siege by or in the hands of the Taliban religious movement. The
Uzbek Foreign Ministry also called for an international contact group
to be created that included representatives of the sides involved in
the conflict, neighboring states, the U.S., and Russia. Uzbekistan also
advocates negotiations aimed at forming a coalition government. It
proposes such discussions be held under the aegis of the UN, with the
participation of the Organization of the Islamic Conference.

KAZAKH PREMIER ABROAD FOR MEDICAL TREATMENT. Akezhan
Kazhegeldin is currently "abroad" for medical treatment, Russian
media and Reuters reported on 22 September. His duties will
temporarily taken over by First Deputy Prime Minister Akhmetzhan
Yesimov. According to Reuters, Kazhegeldin has been receiving
treatment for "traumatic phlebitis." Interfax reported that
Kazhegeldin is in Europe but did not specify where. Earlier this
month, he revealed he had worked for the KGB during the Soviet era.
Shortly after, parliamentary deputy Zamanbek Nurkadilov accused
Kazhegeldin of using his position to acquire large shares in the
Shymkent oil refinery. Yesimov said Kazhegeldin's trip does not
mean he is resigning and that "there will be no government
reshuffle."


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