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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 165, Part I, 21 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

ENERGY POLITICS IN THE CASPIAN AND RUSSIA: Oil has begun
flowing from the Caspian Sea, home to one of the biggest oilfields in
the world. RFE/RL provides continuing coverage of regional energy
developments on its Web site.
http://www.rferl.org/nca/special/caspian/index.html
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Headlines, Part I

*YELTSIN REPLACES NEMTSOV AS FUEL AND ENERGY MINISTER


*DUMA POSTPONES BUDGET DEBATE


*NAZARBAYEV GIVES CONFLICTING SIGNALS OVER IRAN PIPELINE


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RUSSIA

YELTSIN REPLACES NEMTSOV AS FUEL AND ENERGY MINISTER...
Following his approval of a plan to bar deputy prime ministers from
holding other posts, Russian President Boris Yeltsin replaced Boris
Nemtsov as fuel and energy minister on 20 November. Like Anatolii
Chubais, who earlier the same day was removed as finance minister
over a book payments scandal, Nemtsov will retain his post as first
deputy premier. Sergei Kirienko, who previously served as Nemtsov's
first deputy, was named as new fuel and energy minister. Kirienko
has been in charge of the day-to-day running of the Fuel and Energy
Ministry since he was appointed by Nemtsov, according to analysts.
AW

...PRAISES CHUBAIS FOR IMPROVING RUSSIA'S STANDING. After
stripping Chubais of the finance portfolio, Yeltsin commented on 20
November that the former finance minister "had done much for the
country and will be credited for that," Reuters reported. In remarks
broadcast on three Russian television networks, Yeltsin credited
Chubais for improving Russia's standing in the financial world, noting
Russia had achieved membership in the Paris and London Clubs." But
the president noted that the scandal had damaged the government's
reputation. "Of course things were done clumsily, badly, and in a way
that was unbecoming," he said. Yeltsin noted he has ordered the
Prosecutor-General's Office, the Federal Security Service, and the
Interior Ministry to probe further into the scandal. He added that a
plan to bar deputy prime ministers from holding ministerial
positions had been drafted long before the scandal broke. AW

YAVLINSKII NOT SURPRISED BY ZADORNOV'S DECISION. Grigorii
Yavlinksii, the outspoken leader of Yabloko, told RFE/RL's Moscow
Bureau on 20 November that he is not surprised by former bloc
member Mikhail Zadornov's decision to accept the post of finance
minister to replace Chubais. Yavlinskii said that "sooner or later," the
34-year-old Zadornov would have assumed a high-ranking position,
given his talents. However, he questioned why Zadornov had not
waited a few months, after which, Yavlinskii said, the "bankrupt"
policies of Chernomyrdin and Chubais had been doomed to crash.
Zadornov's 20 November decision to leave Yabloko was a significant
loss, he commented. Yavlinskii questioned whether Zadornov would
be able to act independently in the Finance Ministry, maintaining
that Chubais would still be responsible for economic matters and
would consult with Zadornov only when necessary. AW

NEMTSOV SAYS HE PROPOSED ZADORNOV AS CANDIDATE. First
Deputy Prime Minister Boris Nemtsov has taken credit for Zadornov's
appointment, saying he proposed him as finance minister, ITAR-
TASS reported on 21 November. Nemtsov said his acquaintance with
Zadornov dates back to 1991, when Nemtsov worked with Yabloko
members Zadornov, Yavlinskii, and Stanislav Shatalin in drafting the
"500 Days" plan, aimed at revamping the country's economy.
Nemtsov noted Zadornov played a role in devising economic reform
plans in Nizhnii Novgorod, which is showcased as a model of
successful Russian economic reform. He added that the government
can only benefit from bringing Zadornov into its ranks. AW

YELTSIN APPEALS TO DUMA TO ADOPT BUDGET, END ROW OVER
SCANDAL... Yeltsin on 20 November urged the State Duma to adopt
the 1998 budget and end the row with the government over the
Chubais affair. Yeltsin said he had appointed Zadornov as finance
minister in order to correct "insufficiencies that exist in the
government," AFP reported. "I ask the State Duma...to close this affair
and adopt the budget." The communist-dominated Duma had urged
Yeltsin to drop Chubais altogether, saying this was a condition for
adoption of the 1998 budget. But Yeltsin said he could not meet that
demand "in full." AW

...BUT DUMA POSTPONES BUDGET DEBATE. Apparently dissatisfied
with Yeltsin's reshuffle, the Duma voted by 258 to 44 to postpone
debate on the draft 1998 budget. On 21 November, the day the
debate was scheduled to begin, deputies decided to discuss the draft
budget on 5 December. Communist Party leader Gennadii Zyuganov,
along with other opposition figures, had welcomed Zadornov's
appointment, but Zyuganov said the communists would still oppose
passage of the budget, arguing it would be "premature" to approve
the draft in its current form. The Communist Party had said recently
that it would not debate the budget while Chubais remained in office.
However, it had then softened its stance and had allowed the budget
to be included on the 21 November agenda. AW

GOVERNMENT SPOKESMAN WARNS ON DUMA BUDGET DELAY. Igor
Shabdurasulov said on 20 November that the Duma's decision to
postpone its debate on the 1998 draft increases the likelihood that
Russia will start next year without a budget in place, ITAR-TASS
reported. The government began 1997 without a budget because of
the Duma's resistance. AW

YELTSIN APPOINTS NEW KREMLIN DEPUTY CHIEF OF
ADMINISTRATION. Yeltsin on 20 November appointed Viktoriya
Mitina as the Kremlin's deputy chief of administration, Interfax
reported. The relatively unknown Mitina replaces Aleksandr
Kazakov, who was sacked by Yeltsin on 14 November in the book
payments scandal involving Chubais. Mitina served as deputy prefect
in Moscow's Zelenograd district, where she had a wide-ranging
portfolio covering industry, science, and the media, according to
Interfax. She was also active in Yeltsin's re-election campaigns in
1991 and 1996. AW

RUSSIA TO ABOLISH STATE COAL COMPANY. Also on 20 November,
Yeltsin signed a decree abolishing the state-owned coal company
Rosugol in a government bid to tighten control over the coal industry,
Interfax reported on 20 November. Under the new structure, coal-
industry policy will be set by a special interagency commission,
Economics Minister Yakov Urinson announced. A unit within the Fuel
and Energy Ministry will be created to handle the closure of
unprofitable mines and another to deal with the social problems in
coal-mining regions. Urinson said the new system will eliminate the
current conflict of interest in which Rosugol was in charge of
distributing state subsidies while overseeing the restructuring of the
coal industry. Russia is seeking a loan from the World Bank to
support the restructuring of the coal sector. Government officials
have accused Rosugol of blocking such reforms. AW

YELTSIN HAILS IMPROVED TIES WITH UKRAINE. In a nationwide
radio address on 21 November, Yeltsin hailed improved bilateral ties
with Ukraine, which had soured after the collapse of the Soviet Union
in 1991 , ITAR-TASS and Reuters reported. Yeltsin said ties between
the two Slavic neighbors had been plagued over the past six years by
"mutual reproach and misunderstanding." He acknowledged
differences remain, namely over the division of the former Soviet
Black Sea Fleet, Ukraine's Crimean peninsula, and recent Ukrainian-
NATO military exercises in the Black Sea. Yeltsin also accused so-
called "demagogues" of fanning nationalistic feelings and warned that
Russian foreign policy is the domain of the president. Yeltsin,
however, said that "frank discussions" at a recent informal meeting
with Ukrainian President Leonid Kuchma had alleviated tensions and
paved the way for an official visit to Russia by Kuchma in February.
AW

RUSSIAN DIPLOMATS COMMENT ON IRAQ AGREEMENT. Russian First
Deputy Foreign Minister Igor Ivanov told Interfax on 20 November
that Baghdad's consent to allow UN weapons inspectors to return to
Iraq and resume their investigations was made unconditionally. He
termed the Iraqi decision a "very serious breakthrough" in resolving
the crisis. Russian Presidential Press Spokesman Sergei
Yastrzhembskii said the Russian-Iraqi agreement was a "most
spectacular triumph" for Yeltsin and Russian diplomacy, which he
attributed largely to the president's personal missive to Saddam
Hussein. Also on 20 November, an unnamed Russian diplomat told
Interfax that Moscow wants to bring forward the deadlines for UN
inspectors to submit to the Security Council their reports on the
destruction of Iraqi chemical and biological weapons. "Noviye
izvestiya" commented on 20 November that if sanctions on Iraq are
lifted to enable it to sell oil on world markets, the export of
Azerbaijan's Caspian oil may become unprofitable. LF

ANOTHER RUSSIAN MISSILE TEST FAILS. A intercontinental ballistic
missile blew up four seconds after it was launched from Arkhangelsk
on 19 November, Interfax reported. It was the third failed test of
such a missile aimed at a target in Kamchatka, some 8,000 kilometers
to the east. An unnamed Russian officer said the missile is intended
to be deployed aboard Russian nuclear submarines by the year 2000,
but he added this is unlikely to happen now. BP

"MIR" TO COME DOWN WHEN "ALPHA" GOES UP? Russian Space
Agency Director Yurii Koptev said on 20 November that if a crew on
the "Alpha" international space station can begin work before the
end of 1999, the "Mir" space station would be closed down the same
year, Interfax reported. BP


TRANSCAUCASUS AND CENTRAL ASIA

NAZARBAYEV GIVES CONFLICTING SIGNALS OVER IRAN PIPELINE.
Two days after saying he agrees with U.S. proposals that future
pipelines avoid Iran, Kazakh President Nursultan Nazarbayev said on
20 November that talks with Iran on a pipeline through its territory
will continue, Reuters and IRNA reported. In a speech at Rice
University in Texas, Nazarbayev said the Iranian government has
proposed building a Kazakhstan -Turkmenistan-Iran pipeline, adding
that "the Iranians are asking me about it constantly." He said his
country does not in "any way support terrorism or Islamic
fundamentalism," but he questioned whether a blockade was an
effective means to influence a country. Nazarbayev noted that the
Iranian pipeline proposal will be discussed at the Organization of the
Islamic Conference summit in Tehran in December. BP

FRENCH COUPLE STILL MISSING IN TAJIKISTAN. A French couple
believed to have been kidnapped in Dushanbe on 18 November is
still missing. ITAR-TASS reported on 21 November that the Tajik
office of TACIS, for which the missing man works, has received a
telephone call claiming Rezvon Sadirov's group kidnapped the couple
to press for the release of his brother, Bahrom Sadirov, from prison.
The Sadirov gang has kidnapped several foreigners since December
1996. However, when RFE/RL correspondents contacted the TACIS
office in Dushanbe, workers denied they had received such a call.
Meanwhile, the Red Cross has announced it will reduce its staff in
Tajikistan until this latest incident is over, Reuters reported on 20
November. BP

DID HILLARY CLINTON HELP IMPRISONED KYRGYZ OPPOSITION
LEADER? Topchubek Turgunaliev, the chairman of the Erkin
Kyrgyzstan Party, told RFE/RL's Kyrgyz service on 19 November that
he believes U.S. First Lady Hillary Clinton was instrumental in
securing his transfer to the capital. Turgunaliev was recently brought
back to Bishkek, where he is under house arrest, from a prison in
Leilek, near the Kyrgyz-Tajik border. He said he has been told that
Clinton raised his case in conversations with Kyrgyz President Askar
Akayev during her recent visit to the former Soviet republic.
Turgunaliev also claimed he had been sent to Leilek in attempt to
"isolate" him. BP

ARMENIAN JOURNALISTS BARRED FROM KARABAKH DISCUSSION.
Journalists were not permitted to attend a session of the majority
Hanrapetutyun parliamentary faction on 19 November at which
President Levon Ter-Petrossyan discussed the ongoing Karabakh
peace process, Armenian media reported the next day. Participants
at the meeting refused to reveal details, with the exception of the
chairman of the ruling Armenian Pan-National Movement, Vano
Siradeghian, who told the daily "Aravot" that Ter-Petrossyan
essentially repeated arguments he had made to that party on 10
November. "Aravot" also quoted Defense Minister Vazgen Sargsian as
denying reports that he disagrees with the president's Karabakh
policy. LF

ARMENIAN VOUCHER PRIVATIZATION TO BE COMPLETED IN 1998.
Newly appointed Privatization Minister Pavel Ghaltakchian told
journalists in Yerevan on 20 November that so-called voucher
privatization will be completed by the end of 1998, RFE/RL's Yerevan
bureau reported. Ghaltakhchian said that more than 90 percent of all
privatization certificates distributed to Armenian citizens in late
1994 have already been used, while the remaining 10 percent are
valid until December 1998. According to Ghaltakhchian, more than
1,200 state enterprises have been privatized to date, mainly using
vouchers. He said the government will adopt a "more flexible and
diverse approach" in selling off the remaining state property, noting
that auctions for cash will be the principal means of distributing such
property. LF

ARMENIA TO BEGIN FLIGHTS TO TURKEY. Representatives of the
Turkish Civil Aviation Department who were in Yerevan from 11-14
November reached agreement with the Armenian government on
regular flights between Yerevan and Erzerum, Noyan Tapan reported
on 20 November. On 21 November, a delegation from the Union of
Industrialists and Businessmen of Armenia will travel to Erzerum,
Kars, and Trebizond to discuss expanding bilateral economic contacts,
Armenpress reported. Turkey and Armenia do not have diplomatic
relations, but the indirect trade turnover between the two countries
via Iran and Georgia is estimated at between $120 and $150 million.
LF

NEW AGREEMENTS ON REGIONAL ELECTRICITY SALES. Turkish
Energy Minister Cumhur Ersumer told journalists on 20 November
that Turkey will buy 300 megawatts of electricity from Azerbaijan in
1998, AFP reported. The electricity will be transported via Georgia.
During bilateral talks in Tbilisi on 19 November, Armenian and
Georgian government officials reached a preliminary agreement on
the sale of electricity from Armenia to Georgia. The two countries'
power grids were linked on 1 November, according to ArmenPress.
LF

HUNDREDS POISONED IN GEORGIA BY CONTAMINATED DRINKING
WATER. Between 500 and 600 people in the Georgian industrial city
of Rustavi are suffering from poisoning after drinking water
contaminated by sewage. Thirty children are reported to have been
hospitalized. Georgian President Eduard Shevardnadze has set up a
commission to investigate the incident and decreed that all those
affected are to receive free medical treatment. LF

AZERBAIJANI-IRANIAN CONSULATE DISPUTE CONTINUES. Turan on
20 November quoted Azerbaijan's Ambassador to Tehran, Aliyar
Safarli, as saying that if Iran continues to block the opening of an
Azerbaijani consulate in the north Iranian city of Tebriz, Baku may
close the Iranian consulate in Nakhichevan. That consulate was
opened in 1992 following a visit to Tehran by Azerbaijani President
Heidar Aliev, who at that time was still Nakhichevan parliamentary
speaker. LF

HUMANITARIAN AID EMBEZZLED IN AZERBAIJAN. The state
commission for receipt, registration, storage, and distribution of
humanitarian aid has announced that executives of charity
organizations and local government officials have misappropriated
humanitarian aid worth several million dollars, Turan reported on 20
November. Part of the aid was destined for the estimated 800,000
displaced persons who fled their homes during the Karabakh conflict.
LF

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