Be willing to have it so; acceptance of what has happened is the first step to overcoming the consequences of any misfortune. - William James
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 156, Part I, 10 November 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

News from the Armenian Service's Yerevan bureau is posted to RFE/RL's  Armenia
Report each weekday.

RFE/RL ARMENIA REPORT
http://www.rferl.org/bd/ar/index.html

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Headlines, Part I

* YELTSIN IN CHINA

* MOSCOW ANNOUNCES NEW EXCHANGE RATE POLICY

* AZERBAIJAN'S EARLY OIL FINALLY BEGINS TO FLOW

End Note
CHANGES AT RUSSIA'S TV NETWORKS

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RUSSIA

YELTSIN IN CHINA. President Boris Yeltsin, who is in Beijing for his
fifth summit with the Chinese leadership, met with his Chinese
counterpart, Jiang Zemin, on 10 November. They later released a joint
statement noting improving ties between the two countries and
respect for each other's independence and internal policy decisions,
ITAR-TASS reported. The statement confirmed regular meetings will
be held between government officials, including foreign ministers. It
also called for improving economic ties and noted that military-
technical cooperation between the two countries should not be seen
as a threat to any third party. The two leaders promised the
"responsible development" of resources along the border area so as
not to cause environmental damage in the neighboring country. BP

RUSSIA, CHINA SIGN BORDER AGREEMENT... Also on 10 November,
Yeltsin and Jiang signed a much-publicized border demarcation
agreement. Both sides expressed satisfaction at concluding an accord
that has complicated Russian-Chinese relations for more than 300
years. Clarification is still needed in some areas of the Amur, Argun,
and Ussuri Rivers. Yeltsin hailed the agreement as possibly setting an
example for other countries but quickly added that his remark did
not refer to the dispute with Japan over the southern Kuril Islands.
Jiang also accepted an invitation from Yeltsin to hold an informal
"meeting without coats." In early November, Yeltsin held informal
talks with Japanese Prime Minister Ryutaro Hashimoto in
Krasnoyarsk, Russia, in what was billed as a "meeting without
neckties." BP

...AND MEMORANDA. Russian First Deputy Prime Minister Boris
Nemtsov and Chinese Deputy Prime Minister Li Lanqing have signed
memoranda of understanding on cooperation between the Russian
government's regional administrations and the Chinese local
governments as well as on economic, scientific, and technical
cooperation. One memorandum deals with development of Russia's
Kovykta gas field and the construction of a pipeline planned to carry
gas to China, South Korea, and Japan. The Kovykta project will take
30 years to complete and cost about $12 billion. BP

MOSCOW ANNOUNCES NEW EXCHANGE RATE POLICY. In a joint
statement released on 10 November, the government and Central
Bank said they will support an average exchange rate of 6.1 rubles to
$1 during 1998 and an average rate of 6.2 rubles to the dollar from
1998-2000, Reuters and ITAR-TASS reported. Since mid-1995, the
exchange rate of the ruble to the dollar has floated within a
"corridor" that has periodically been revised to allow the gradual
depreciation of the ruble. From 1998-2000, the exchange rate will be
allowed to fluctuate no more than 15 percent in either direction of
the average rate, from 5.25-7.15 rubles to the dollar. According to
the current official exchange rate, $1 is worth 5,898 rubles. Three
zeroes will be removed from the ruble when the currency is
redenominated on 1 January. LB

CENTRAL BANK RAISES REFINANCING RATE. Also on 10 November,
the Central Bank raised the annual refinancing rate from 21 percent
to 28 percent, effective 11 November, ITAR-TASS reported. No
explanation for the move was given. The Central Bank has lowered
the refinancing rate four times this year, most recently on 6 October.
Officials have previously said that stable low inflation made the
interest rate reductions possible. The refinancing rate is the one at
which the Central Bank lends to commercial banks. Current
government projections call for an annual inflation rate of 12 percent
this year and 5.7 percent in 1998. LB

DECREE BANS TAX PAYMENTS THROUGH OFFSETS. Yeltsin on 8
November decreed that, as of 1 January 1998, the government is
prohibited from canceling debts to enterprises against tax arrears,
ITAR-TASS reported. The government will also be prohibited from
canceling debts to budget-funded organizations against payments
owed for goods or services provided by the government. Russian
officials have repeatedly promised to end the widespread practice
whereby tax arrears are canceled against government debts to
enterprises. In the past, such offsets have often been recorded as
taxes collected. Russia needs to improve tax collection in order to
secure the release of a $700 loan issue from the IMF (see "RFE/RL
Newsline," 3 November 1997). LB

MORE SHOOTING ON DAGESTANI-CHECHEN BORDER. A Dagestani police
official was shot dead on 9 November in Khasavyurt, close to
Dagestan's border with Chechnya, Russian agencies reported. A series
of killings and kidnappings have recently exacerbated Dagestani-
Chechen tensions. Chechen First Deputy Prime Minister Movladi
Udugov told Interfax the same day that he welcomes the Dagestani
authorities' decision to create armed militias to patrol the border
region. He also said Chechnya may introduce similar security
measures. Visiting the border region on 10 November, Dagestani
Security Council Secretary Magomed Tolboev said 5,000 Dagestanis
have already volunteered to serve in the local militias, RFE/RL's
North Caucasus correspondent reported. Tolboev refrained from
blaming Chechnya for the growing tensions, noting it is frequently
difficult to establish whether Chechens or Dagestanis committed a
crime. LF

YELTSIN CREATES ANOTHER COMMISSION FOR CHECHNYA. President
Yeltsin on 8 November issued a decree creating a new commission
intended to "stabilize and develop" Chechnya, AFP reported, citing
the Russian presidential press service. Russian Deputy Prime
Minister Ramazan Abdulatipov was named chairman of the
commission, whose precise functions and responsibilities remain
unclear. Meanwhile, Chechen President Aslan Maskhadov met in
Istanbul on 7-8 November with former Prime Minister and Welfare
Party Chairman Necmettin Erbakan and with the son of late
Nationalist Movement Party leader Alparslan Turkes, ITAR-TASS
reported. LF

YELTSIN REPLACES NAVY COMMANDER. Yeltsin on 8 November
appointed Vladimir Kuroedov as commander of the Navy. Kuroedov
replaces Admiral Feliks Gromov, who was simultaneously retired
from military service. The decree included neither a reason for the
change nor appreciation of Gromov's career, leading to speculation
that Gromov was sacked on corruption allegations or because of
explosions at naval arms depots in the Far East. (In the most recent
such explosion, 12 torpedoes exploded at a Pacific Fleet depot in
Primorskii Krai on 7 November.) However, a Defense Ministry
statement on 9 November denied such allegations, saying Gromov
was replaced because he recently reached the mandatory retirement
age of 60. Kuroedov, a former commander of the Pacific Fleet, had
served as first deputy Navy commander and chief of the Navy's
General Staff since July. LB

RADICALS CRITICIZE COMMUNIST PARTY STRATEGY. Representatives
of radical communist groups criticized the strategy of Gennadii
Zyuganov's Communist Party of the Russian Federation (KPRF) at 7
November rallies marking the 80th anniversary of the Bolshevik
Revolution. Workers' Russia leader Viktor Anpilov accused the KPRF
of pursuing a policy of "appeasement" and "making advances toward
the authorities," ITAR-TASS reported. Addressing tens of thousands
of demonstrators in St. Petersburg, Russian Communist Workers'
Party leader Viktor Tyulkin called Zyuganov a "traitor," RFE/RL's
correspondent in the city reported. At the same rally, Anatolii
Kryuchkov, who heads the Russian Party of Communists, called for a
massive uprising, arguing that changing the regime will be
impossible through elections and parliamentary means of struggle.
Zyuganov has recently drawn criticism from within the KPRF (see
"RFE/RL Newsline,"4 November 1997). LB

ROKHLIN SAYS RUSSIA LOSING 'WAR' ON ALL FRONTS. Duma Defense
Committee Chairman Lev Rokhlin told a 7 November rally in Moscow
that Russia is waging a "third world war" and "losing it on all fronts,"
RFE/RL's Moscow bureau reported. He cited the collapse of Russian
industry and large-scale capital flight since 1991, adding that the
Russian army is currently "unable to accomplish any serious tasks."
Rokhlin also vowed that his Movement in Support of the Army will
stage protests seeking to force the current regime to resign, Interfax
reported. Justice Minister Sergei Stepashin recently told journalists
that his ministry has returned the registration application of the
Movement in Support of the Army to Rokhlin, RFE/RL reported on 7
November. Stepashin said the application raised questions as to the
main goals of the movement. LB

PILOTS RETURN TO MOSCOW FROM CONGO. Nine Russian pilots
returned to Moscow on 10 November following three weeks of
captivity in the Republic of Congo, Russian news agencies reported.
Congolese authorities arrested 11 Russian pilots on 17 October on
charges that they had delivered weapons to former President Pascal
Lissouba. Following negotiations with Russian Foreign Ministry
officials, the Congolese authorities released four of the pilots on 6
November and the remaining seven three days later. However, two
Russian pilots decided to stay in Congo to work for a Belgian
company rather than return to Moscow. They signed a document
accepting "full responsibility" for that decision. LB

SOBCHAK TO RECEIVE MEDICAL TREATMENT ABROAD. Former St. Petersburg Mayor
Anatolii Sobchak has left Russia to seek treatment abroad for a heart ailment,
RFE/RL's correspondent in St. Petersburg reported on 10 November. There were
conflicting reports as to whether he flew to Paris or to New York. Sobchak was
hospitalized on 3 October after falling ill during questioning in a corruption
investigation against former associates. He was discharged from hospital on 7
November, but had reportedly agreed to an upcoming cardiogram and possible
heart surgery in St. Petersburg. Gennadii Khubulava, the deputy head of the
clinic where Sobchak was being treated, told journalists that Sobchak went
abroad because his doctors had received anonymous threats. However, some
observers believe that Sobchak deceived both his doctors and investigators in
order to flee Russia. Law enforcement authorities have been investigating
Sobchak, although no criminal charges have been filed against him. LB

DEMONSTRATORS PICKET NTV STUDIOS. Some 2,000 protesters,
including Orthodox priests, picketed the Ostankino television center,
where the private network NTV's studios are located, Reuters
reported on 9 November. Placards protesting plans to broadcast
Martin Scorsese's film "The Last Temptation of Christ," read, among
other things, "Satan controls NTV" and "Zionism will destroy Russia."
(Vladimir Gusinskii, whose Media-Most company owns NTV, is
president of the Russian Jewish Congress.) The 7 November issue of
the opposition newspaper "Sovetskaya Rossiya" also denounced plans
to show the film. NTV general producer Leonid Parfenov remarked in
a 9 November interview with RFE/RL's Moscow bureau that neither
the Russian Orthodox Church nor opposition groups objected when
NTV showed the films "Jesus of Montreal" and "Jesus Christ,
Superstar," which Parfenov described as equally "non-traditional"
approaches to the subject. LB

TATARSTAN BEGINS PAYING DEBTS TO GAZPROM. Deputy Prime
Minister Vladimir Shevtsov announced on 10 November that the
Tatar government has paid Gazprom 70 percent of the 210 billion
rubles ($35.6 million) owed for gas supplies in October, RFE/RL's
Kazan bureau reported. Gazprom cut supplies of gas to several
regions of Tatarstan the previous month because of non-payment of
debts. Senior Tatar government officials and Gazprom
representatives recently reached agreement on repaying 90 percent
of the republic's total 4.3 trillion ruble debt to Gazprom by year's
end. In November, enterprises in Tatarstan are required to pay 80
percent of the cost of gas supplied that month. In December, that
figure rises to 90 percent. LF

TRANSCAUCASUS AND CENTRAL ASIA

AZERBAIJAN'S EARLY OIL FINALLY BEGINS TO FLOW. The first oil
from the Chirag Caspian field that the Azerbaijan International
Operating Company (AIOC) is developing came on stream on 8
November, one year later than originally anticipated. An AIOC
spokesman told ITAR-TASS that output from the first well is
expected to reach 10,000 barrels a day. The Azerbaijani parliament
on 7 November ratified a $2 billion contract that the Mobil and
Azerbaijani state oil company SOCAR signed in August to explore the
Oguz Caspian field, Turan reported. Meanwhile, Azerbaijani oil
extracted on-shore by SOCAR has begun flowing through the Chechen
sector of the Baku-Grozny-Novorossiisk pipeline, Russian agencies
reported on 9 November. LF

MORE KARABAKH DIPLOMACY. The three OSCE Minsk Group co-
chairmen held "intensive" talks with the leadership of the
unrecognized Nagorno-Karabakh Republic in Stepanakert on 7-8
November, RFE/RL's Yerevan bureau reported. Karabakh Foreign
Minister Naira Melkumyan told Interfax on 8 November that the
enclave's leadership rejected unspecified "new proposals" by the co-
chairmen. Karabakh had rejected an earlier draft peace proposal in
October. Karabakh President Arkadii Ghukasyan, in an interview
with Interfax, said Azerbaijan plans to divide Nagorno-Karabakh into
Armenian and Azerbaijani sectors on the Cypriot model. No details
have been released of the scheduled talks in Yerevan on 8 November
between the Minsk Group co-chairmen and Armenian President
Levon Ter-Petrossyan. LF

BULGARIAN FOREIGN MINISTER IN YEREVAN, TBILISI. Nadezhda
Mikhailova met in Yerevan on 7 November with her Armenian
counterpart, Aleksander Arzoumanian, President Ter-Petrossyan and
other senior officials to discuss expanding bilateral ties within the
framework of the Black Sea Economic Cooperation, ARMENPRESS and
ITAR-TASS reported. Businessmen traveling with Mikhailova signed
an agreement on cooperation and mutual assistance with the Union
of Businessmen and Industrialists of Armenia. The next day in
Tbilisi, Mikhailova met with President Eduard Shevardnadze and
Foreign Minister Irakli Menagharishvili to discuss possible U.S. and
Japanese investment in the planned TRASECA transport corridor
linking Central Asia, the Transcaucasus, and Europe. Mikhailova
extended invitations to Ter-Petrossyan, Arzoumanian, and Prime
Minister Robert Kocharyan to visit Bulgaria next year. Shevardnadze
is scheduled to travel to Sofia in the near future. LF

GEORGIAN PRESIDENT DECLARES AMNESTY. Shevardnadze on 7
November signed two decrees pardoning a total of1,378 convicts,
including 420 first offenders, Interfax reported. Presidential press
secretary Vakhtang Abashidze said the amnesty is part of an ongoing
policy of reconciliation. Earlier this year, 50 prisoners who had been
sentenced to death were pardoned. LF

KAZAKH NATIONAL SYMBOLS TRANSFERRED TO NEW CAPITAL.
President Nursultan Nazarbayev was in Akmola on 8 November to
participate in a ceremony at which the national flag and presidential
standard that had hung in Almaty were hoisted in their new
surroundings, ITAR-TASS reported. Nazarbayev was accompanied by
newly appointed Prime Minister Nurlan Balgimbayev and members
of the cabinet. Despite the transfer of the national symbols, the
Kazakh parliament does not move to Akmola until 10 December in
accordance with a decree that Nazarbayev signed in October.
Nazarbayev will not take up residence in the new capital until spring
1998, when new government buildings are scheduled to be
completed. BP

END NOTE

CHANGES AT RUSSIA'S TV NETWORKS

by Floriana Fossato

        Changes are under way at Russian Television (RTR) and Russian
Public Television (ORT), the country's main nationwide networks.
        Kultura, a new cultural channel that is de-facto a department of
the fully state-owned RTR, began broadcasting on 1 November. It has
a potential audience of some 100 million in European Russia and uses
a frequency formerly used by St. Petersburg Channel 5. Unlike rival
channels (including RTR), "Kultura" does not have advertising,
Instead, it relies fully on state subsidies.
         The network's first broadcast was a recorded message from
President Boris Yeltsin, who chairs the network's board of trustees
and who signed a decree in August that ordered the launching of
Kultura. Yeltsin said hopes the channel will increase the profile of the
arts and the general level of culture in society. He added that the
new network will have to "fight for an audience, find its own style"
to attract a public that has grown accustomed to a wide choice of
televised entertainment.
The launching of Kultura, Yeltsin continued, fulfills the aspirations of
artists and many others "who have long been waiting" for a serious
approach to culture and discussions on "spiritual values, morality,
faith, education, and Russia's cultural and historical heritage."
                Oleg Poptsov, who chaired RTR from 1990 until his
dismissal in 1996, told RFE/RL that he is skeptical about Kultura's
prospects. Poptsov said it is "absurd" and "ignorant" to think that the
network will be able to survive purely on state funding. He predicted
that the network will soon be partly privatized, as was the Channel 1
network ORT two years ago. According to Poptsov, the focus on
cultural and educational programming is unlikely to continue, if
financial groups, at some stage, acquire shares in the new channel.
        In an implicit admission that problems could arise, Mikhail
Shvydkoi, the director of Kultura, said recently that the new channel
is a very ambitious project and could face financial difficulties.
        Mikhail Lesin, the recently appointed deputy chairman of RTR,
told "Kommersant daily" that "with respect to profitability,
everything is clear. Everybody knows culture has never been
profitable." Lesin was a founder of one of Russia's most successful
advertisement companies, Video International, which is reported to
be RTR's exclusive advertising agent. Moreover, the majority of RTR's
prime-time programs are produced by Video International. Some
observers have speculated that Video International has been playing
a growing role in financing RTR.
        First Deputy Prime Minister Boris Nemtsov told RFE/RL in
August that he is in favor of the state re-establishing control over
both the finances and the "ideological foundation" of ORT. He also
attacked tycoon-turned-politician Boris Berezovskii, whom Yeltsin
sacked as deputy secretary of the Security Council on 5 November.
An unnamed Kremlin official said the same day that Nemtsov and
First Deputy Prime Minister Anatolii Chubais were behind
Berezovskii's dismissal.
        Berezovskii's business interests include stakes in the giant car
dealer LogoVAZ and in the Aeroflot and Transaero airlines. Through
his business holdings, Berezovskii owns an eight percent stake of ORT
and is reported to maintains control over some top ORT managers,
who formerly were top LogoVAZ managers. Obedinennyi Bank, a
LogoVAZ affiliate, belongs to the four-bank consortium that owns 38
percent of ORT.
        Berezovskii was appointed to the Security Council following last
year's presidential election. In the electoral campaign, newspapers,
magazines, and particularly television channels linked to a group of
powerful bankers and businessmen played a key role in boosting
Yeltsin's ratings. Following his appointment, Berezovskii said he had
delegated all his business commitments, including his position on
ORT's board of directors. But Nemtsov said in August that "even if
formally Berezovskii has now delegated the running of his business,
he is de facto dealing only with this."
        Nemtsov also said that Berezovskii had "invented and
developed to the very end a peculiar privatization scheme" that was
applied at ORT, Aeroflot, and other companies. According to Nemtsov,
Berezovskii first "privatized" the company's top managers. Formally
the company belongs to the state, Nemtsov said, but "the money it
needs is being channeled through private companies."
        A 12-member council of government representatives at ORT
recently held its first meeting. State Property Minister Maksim Boiko
chaired the council, which also includes Yeltsin's daughter and
presidential adviser Tatyana Dyachenko, Yeltsin's spokesman and
deputy head of administration Sergei Yastrzhembskii, government
spokesman Igor Shabdurasulov, First Deputy Finance Minister
Aleksei Kudrin, ITAR-TASS director-general Vitalii Ignatenko, and
Mikhail Kommissar, another deputy head of the presidential
administration.
        Boiko said the board will work out and implement a policy
aimed at developing a "standard mechanism for managing
government stakes in strategically important companies." He said
similar councils have been set up in some of Russia's monopolies,
notably the gas giant Gazprom, the electricity monopoly Unified
Energy Systems, and in the pipeline monopoly Transneft. An ORT
shareholders' meeting, scheduled to take place on 13 November, is to
choose a director-general and a new board of directors. At that
meeting, ORT may become an open joint-stock company, which
Berezovskii has already said he opposes in principle.

The author is a Moscow-based RFE/RL correspondent.




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