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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 172, Part I, 4 December 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

* SERGEEV CONFIRMS YELTSIN'S PLEDGE TO REDUCE TROOPS
IN NORTHWEST

* CHUBAIS ASKS WESTERN BANKS FOR EMERGENCY LOAN

* MINSK GROUP CO-CHAIRMEN IN STEPANAKERT

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RUSSIA

SERGEEV CONFIRMS YELTSIN'S PLEDGE TO REDUCE TROOPS IN
NORTHWEST... Defense Minister Igor Sergeev has confirmed
President Boris Yeltsin's pledge to unilaterally cut by at least 40
percent ground and naval forces in northwestern Russia (see "RFE/RL
Newsline," 3 December 1997).  Sergeev said the reduction will be
part of an ongoing overhaul of Russia's armed forces aimed at
reducing the number of troops from 1.7 million to 1.2 million by 1
January 1999. He noted that the cuts will be made to ground forces
in Kaliningrad Oblast and the Leningrad Military District as well as
in the Baltic and northern fleets of the Russian Navy. The cuts were
made possible because of stability in the region, he explained.
Sergeev was speaking at a news conference following a meeting
with NATO defense ministers in Brussels. JG

...CLARIFIES YELTSIN'S OFFER OF UNILATERAL CUTS IN
NUCLEAR ARSENAL. Sergeev also clarified Yeltsin's  2 December
statement that he is ready to cut Russia's nuclear arsenal by one-
third. Sergeev said the proposed cuts will be discussed within the
context of talks planned with the U.S. on a START III treaty. He added
that Yeltsin was referring to prospective cuts "on a parity basis"
under such a treaty. Meanwhile, the State Duma, which has yet to
ratify the START II treaty, has invited Sergeev to attend its 5
December closed-door meeting to report on the state and combat-
readiness of the country's strategic nuclear forces, ITAR-TASS
reported. JG

PRIMAKOV ON YELTSIN'S OFFER. Foreign Minister Yevgenii
Primakov, who is with Yeltsin in Sweden, said on 3 December that
the president's pledge to reduce nuclear warheads by one-third
should be viewed within the context of Russian-U.S. negotiations on
a START III treaty. Primakov told reporters he wants Yeltsin's
statement "to be interpreted in the right way," Russian news
agencies reported. He noted that during talks in Helsinki in the
spring, Yeltsin and U.S. President Bill Clinton had agreed that under a
START III treaty, Russia and the U.S. would each have  2,000-2,500
warheads. Primakov said Russia has been raising the issue of
lowering this figure and that Yeltsin's statement "should be viewed
in this context." JG

RUSSIA, SWEDEN SIGN PROTOCOL ON GAS PIPELINE. Russian
First Deputy Prime Minister Boris Nemtsov and Swedish Economy
Minister Anders Sundstroem have signed a protocol on the
construction of gas pipeline that will link Russia and Western
Europe. Presidential spokesman Sergei Yastrzhembskii said the
protocol provides for Russian-Swedish consultations on Sweden's
possible participation in the project. He added that while an exact
route for the pipeline has not been agreed, it will most likely run
through Russia, Finland, Sweden, and Germany. Sundstroem made it
clear at the signing ceremony that Sweden's final decision on a
pipeline project will be based exclusively on economic, not political,
considerations. Nemtsov said economic considerations are also a top
priority for Russia and noted that if  the two sides fail to reach an
agreement, it "will be not be a disaster" for Moscow, ITAR-TASS
reported. JG

CHUBAIS ASKS WESTERN BANKS FOR EMERGENCY LOAN. First
Deputy Prime Minister Anatolii Chubais has met with the heads of at
least four Western banks and asked them to prepare an emergency
loan of up to $2 billion to cover the budget deficit and pay off
public-sector wage arrears, the "Financial Times" reported on 3
December.  None of the banks would comment on the report, the
newspaper added. Also on 2 December, Russian Central Bank
Chairman Sergei Dubinin summoned the heads of 10 leading Russian
commercial banks to discuss the country's financial situation . A
spokeswoman for the Central Bank said after the meeting that the
banks had pledged to jointly back the ruble. She said Dubinin
reassured the bank heads that he is ready to assist them, since "for
the Central Bank, the collapse of any of the largest banks would be
undesirable." JG

DUBININ SAYS CENTRAL BANK TO REVIEW INTEREST RATES
SOON.  Central Bank Chairman Dubinin said on 3 December that the
Central Bank will review its benchmark refinancing rate in the next
few days and is keeping a close watch over the government
securities market, Russian news agencies reported. Dubinin told a
Moscow conference on credit and investment in Russia that there
will be no devaluation of the ruble and that the Central Bank has
"adequate reserves" to handle capital outflows over the next several
months. He said total gold and foreign currency reserves now amount
to about $18 billion. Earlier, Dubinin had told reporters that, as of
21 November, Central Bank foreign currency reserves amounted to
$21.5 billion, Interfax reported. JG

DUMA WANTS REPORT ON GOVERNMENT MEASURES FOR
FINANCIAL STABILITY. The Duma on 3 December asked Central
Bank Chairman Dubinin and Finance Minister Mikhail Zadornov to
report  to the lower house on 5 December on measures taken by the
government to ensure the stability of Russia's financial market. The
Duma also intends to ask Yeltsin to put off the re-denomination of
the ruble by at least six months, until the financial market becomes
stable. A resolution to that effect was drafted on 3 December and
will be put to the vote at the 5 December closed-door  session,
ITAR-TASS reported. JG

DUMA GIVES INITIAL APPROVAL TO DRAFT AMNESTY. The Duma
on 3 December approved in the first reading a draft decree providing
for an amnesty of some 360,000 prisoners sentenced for less
serious crimes. Under the draft, which was proposed by Yeltsin,
some 35,000 inmates will be released from prison while the
sentences of the remainder will be commuted by as much as one-
third. In a 26 November letter to Duma Speaker Gennadii Seleznev,
Yeltsin said the amnesty would ease the burden on Russia's over-
crowded jails. JG

FSB CHIEF ON RELATIONS WITH WASHINGTON. Nikolai Kovalyov,
head of the Federal Security Service, said on 3 December that
Moscow does not want to aggravate relations with Washington over a
U.S. citizen detained on suspicion of espionage, Russian news
agencies reported. Kovalyov said Richard Bliss will be freed if it is
proven that he has committed no crime. At the same time, Kovalyov
said evidence available to the security service is sufficient to bring
espionage charges against him. Bliss was detained on 25 November
in Rostov Oblast while conducting land surveys with a global
positioning device.  The authorities have until 5 December to file
formal charges. JG

RYBKIN IN GROZNY.  Russian Security Council Secretary Ivan
Rybkin met with Chechen President Aslan Maskhadov and First
Deputy Prime Minister Movladi Udugov in Grozny on 3 December to
discuss President Yeltsin's proposed visit to Chechnya in January,
Russian agencies reported. Rybkin conceded later that "Russia is not
doing very well" in honoring earlier agreements signed with Grozny,
including pledges to provide economic assistance. Rybkin will return
to Grozny on 6 December, and Yeltsin and Maskhadov will discuss the
proposed visit by telephone within the next few days. LF

DUMA WANTS INVESTIGATION OF FAILED DUDAEV OUSTER. The
Duma on 3 December adopted a resolution condemning the creation in
fall 1994 of "illegal armed formations" aimed at ousting then
Chechen President Dzhokhar Dudaev. With Russian military backing,
the formations of the opposition Provisional Council launched an
abortive assaults on Grozny  (see "RFE/RL Daily Report," 17 October
and 28 November 1994). The second attack in November precipitated
the full-scale Russian military intervention on 11 December. The
Duma resolution called on the Prosecutor-General's Office to
identify and bring to justice those responsible for the creation of
the military units in question. LF

TRANSCAUCASUS AND CENTRAL ASIA

MINSK GROUP CO-CHAIRMEN IN STEPANAKERT. The U.S.,
Russian, and French co-chairmen of the Organization on Security and
Cooperation in Europe's Minsk Group were in Stepanakert on 3
December to meet with Naira Melkumian, foreign minister of the
self-proclaimed Republic of Nagorno-Karabakh, Prime Minister
Leonard Petrosian, and Defense Minister Samvel Babayan. President
Arkadii Ghukasyan, who is reportedly sick, did not attend the
meeting. A senior Nagorno-Karabakh diplomat told an RFE/RL
correspondent in Stepanakert that the Minsk Group's plan
"predetermines a status full of dubious ambiguities" for the disputed
region, adding that even the plan's authors cannot explain how it
would be implemented. In an interview with Turan on 3 December,
Azerbaijani Deputy Foreign Minister Tofik Zulfugarov condemned
what he termed "bellicose and unconstructive" statements by
unnamed Armenian and Karabakh officials. He also said the Karabakh
Armenians' position is "illogical." LF

ARMENIAN MEDIA STAGE ONE-DAY STRIKE. Almost all major
newspapers, nine news agencies, and one radio station staged a
strike on 3 December, RFE/RL's Yerevan bureau and ITAR-TASS
reported. Among the newspapers taking part was the state-owned
daily "Hayastani Hanrapetutyun." Editors issued a joint statement
demanding tax exemption for the press, the free-of-charge handover
of state-owned premises to the media currently leasing them, and
the restructuring of the state agency for newspaper distribution.
They also demanded a meeting with President Levon Ter-Petrossyan
and Prime Minister Robert Kocharyan.  The strike was precipitated
by the surprisingly high number of unsold newspapers in recent
weeks. The strikers blamed that development on the allegedly
inefficient work of the Haymamul state agency, which has a
monopoly on newspaper distribution. LF

GEORGIAN TERRORISM TRIAL AGAIN POSTPONED.  The trial of
Mkhedrioni leader Djaba Ioseliani and 14 of his subordinates has
again been postponed, Caucasus Press reported on 4 December.  The
reason  for this latest postponement is that one of the defense
lawyers is unwell. All 15 men  face charges related to the August
1995 attempt to assassinate parliamentary chairman Eduard
Shevardnadze. The trial was adjourned shortly after it began on 1
December because the defendants protested having to sit in steel
cages. National Security Council Deputy Secretary Rusudan Beridze
told Caucasus Press that the caged defendants "were not a pleasant
sight," but she insisted that the requirement does not violate the
prisoners' rights. LF

GEORGIANS PROTEST  RUSSIAN MILITARY PRESENCE. Some 100
members of the youth organization of the Union of Citizens of
Georgia, the majority party within the parliament, staged a
demonstration outside the Russian embassy in Tbilisi on 3 December
to demand the withdrawal of Russian troops from Georgia, Russian
and Georgian agencies reported. The UCG had staged a demonstration
on 29-30 November in protest at Russian border troops' unilateral
decision to move a control post from Russian to Georgian territory.
Also on 3 December, some 200 residents of the village of Muganlo,
southeast of Tbilisi, demonstrated outside the Russian military base
at Vaziani to protest the deaths of three villagers on 1 December.
The three, including a small child, were killed trying to dismantle a
mine they had found in a nearby field. LF

AZERBAIJANI PASSPORT SCANDAL CONTINUES. Jean-Luc Viala,
the head of the French national printing office, has denied
Azerbaijani Foreign Ministry claims that his office delivered 4
million passports to Baku, which the Azerbaijani authorities then
rejected as substandard (see "RFE/RL Newsline," 24 November 1997).
Viala told AFP on 3 December that his office signed a contract with
Azerbaijan in 1994  and delivered 19,000 specimen passports the
following year. Later, he said,  the contract "was broken for
commercial reasons." LF

AZERBAIJAN TO PRIVATIZE CONSTRUCTION INDUSTRY.
Azerbaijani President Heidar Aliev on 3 December issued a decree
privatizing six state-owned construction companies and another
three related enterprises, Interfax reported. The construction branch
is one of the last still under state ownership, along with the oil and
petro-chemical industry, road maintenance, and medical services
(see "End Note," in "RFE/RL Newsline," 25 November 1997). LF

UZBEK OPPOSITION PARTY ASKS PRESIDENT TO ALLOW
LEADER'S RETURN. At a plenary session in Tashkent at the end of
November, the banned opposition party "Erk"  drew up  a letter to
Uzbek President Islam Karimov asking that Erk chairman Muhammed
Salih be allowed to return from self-imposed exile in Turkey. Salih
told RFE/RL's Uzbek service on 2 December  that he would like to
return and that Erk Secretary-General Otanazar Oripov is discussing
with the U.S. Embassy in Tashkent on ways to facilitate that
process. Erk also asked the Uzbek president for permission to re-
register the party. BP

KARIMOV DECREES AMNESTY ON ANNIVERSARY OF
CONSTITUTION. Meanwhile, Uzbek President Karimov has decreed
an amnesty for some criminals, RFE/RL correspondents in Tashkent
reported on 3 December. The decree coincided with the fifth
anniversary of the adoption of the Uzbek Constitution. Women who
either have children or are expecting a child, people over 60 years of
age, and those convicted of some non-violent crimes are covered by
the amnesty. Those who do not qualify for may be eligible for a 25-
50 percent reduction in their sentences. A special commission has
been formed to decide who qualifies for the amnesty. The
commission's report is due within three months. BP

INFLATION IN KAZAKHSTAN LOWER THAN EXPECTED.
Kazakhstan's National Statistics Agency reports that annual
inflation for this year will be lower than predicted, Interfax
reported on 3 December. Monthly inflation stood at 1.5 percent in
November, up  from 1.2 percent the previous month. Consumer prices
increased by 9.8 percent from to January and November 1997,
compared with 24.8 percent in same period last year. The
government is now predicting annual  inflation will not exceed 12
percent. Earlier forecasts put the annual rate at 17 percent. BP

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