Tot, kto ostavlyaet vse na volyu sluchaya, prevraschaet svoyu zhizn' v lotereyu. - T. Fuller

RFE/RL NEWSLINE Vol 1, No. 186, Part I, 29 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:

Note to readers: "RFE/RL Newsline" will not appear
on 31 December or 1 January, which are public
holidays in the Czech Republic, or on 2 January.

Headlines, Part I






State Duma approved the draft budget for 1998 in the
second reading on 25 December by a vote of 231 to 155 with
three abstentions, RFE/RL's Moscow bureau reported. The
previous day, deputies approved the document
provisionally, but then on two successive votes the budget
fell just short of the 226 votes needed for approval. The
Duma again failed by a small margin to pass the budget in
the second reading on the morning of 25 December, but later
in the day, after some lobbying in the corridors, the budget
was finally approved. The budget, which faces another two
readings in the Duma, calls for 367.5 billion new rubles ($62
billion) in revenues and 499.9 billion rubles in spending. The
planned budget deficit of 132 billion rubles totals 4.7
percent of estimated 1998 GDP. LB

PASSAGE. Although Communist deputy leader Valentin
Kuptsov announced on 23 December that his party would
vote against the budget, 35 Communist Duma deputies
supported the budget in the final, successful attempt to
approve the document in the second reading, RFE/RL's
Moscow bureau reported on 25 December. As on 5
December, when the Duma approved the budget in the first
reading with some Communist support, Communist Party
leaders including Gennadii Zyuganov voted against the
budget (see "RFE/RL Newsline," 8 December 1997). The Our
Home Is Russia, Liberal Democratic Party of Russia, and
Russian Regions factions voted nearly unanimously for the
budget on 25 December, as did most Agrarian deputies and
some members of the Popular Power faction. Grigorii
Yavlinskii's Yabloko faction voted unanimously against the
budget. LB

REFORM. Top officials in the executive and legislative
branches agreed on 26 December that the government and
parliament will revise the Land Code and submit it to the
president within three months, RFE/RL's Moscow bureau
reported. In his speech to open the roundtable talks in the
Kremlin, Yeltsin argued that the current version of the land
code, which he vetoed in July, must be amended. While not
explicitly prohibiting private land ownership, he said, the
code bans citizens from selling, giving away, or mortgaging
farmland. "What kind of private property is that?" he asked.
A protocol adopted by the roundtable participants and
signed by Yeltsin calls for strict state regulation of farmland
transactions, which, among other things, would ban
foreigners from buying farmland and would restrict new
owners from quickly re-selling such land or converting it
from agricultural use. LB

GOVERNMENT. The Duma on 25 December voted by 404 to
zero with one abstention to approve amendments to the law
on the government, RFE/RL's Moscow bureau and ITAR-
TASS reported. Before the vote, Prime Minister Viktor
Chernomyrdin urged deputies to pass the amendments.
Among other things, the amendments stipulate that the
president directs the work of the so-called "power
ministries" (defense, interior, and security services), as well
as ministries and agencies dealing with questions of security,
foreign affairs, and emergency situations. Yeltsin recently
signed the law on the government after Duma Speaker
Gennadii Seleznev promised that the Duma would approve
the amendments (see "RFE/RL Newsline," 18 December
1997). The Federation Council also passed the amendments
on 25 December, but the legislation was put to a vote three
times before the necessary three-fourths majority was
achieved, according to ITAR-TASS. LB

AMENDMENTS. While meeting with Deputy Presidential
Chief of Staff Mikhail Komissar on 25 December, Yeltsin said,
"As long as I am president, I will not allow any changes to
the constitution," Russian news agencies reported. Duma
Speaker Seleznev recently sent the president several
proposals on constitutional amendments, but Yeltsin argued
that "attempts to change [the constitution] can only lead to
the destabilization of the situation" in Russia. The Communist
Party, of which Seleznev is a member, has long advocated
constitutional amendments to reduce the power of the
presidency and increase the power of the legislative branch.

Prime Minister Boris Nemtsov on 25 December denied
rumors that Yeltsin is seriously ill, saying the president "is in
better shape than I am," RFE/RL's Moscow bureau reported.
On 24 December, exactly two weeks after he was brought to
the Barvikha clinic with a respiratory infection, Yeltsin
checked out of the clinic and held a partly-televised meeting
with Nemtsov at the Kremlin. He also made trips to the
Kremlin on 26 and 29 December. He has spent the rest of his
time at his residence at Gorky-9, outside Moscow. Aides
have not said when the president will return to work full-
time. LB

on 26 December passed a resolution calling for Yeltsin to fire
Nemtsov for making "irresponsible" comments during a visit
to Sweden earlier this month, Russian news agencies
reported. The resolution accused Nemtsov of trying to scare
potential foreign investors away from regions with "red
governors," who were elected with the backing of the
Communist opposition. Meanwhile, the Federation Council,
which is made up of regional executive and legislative
leaders, voted on 24 December to summon Nemtsov to
explain his comments in Sweden and his more recent
remarks on the drive to pay wage arrears to state
employees. Nemtsov has charged that regional governors--
not the federal government--will be to blame if the wage
debts are not cleared by the end of the year (see "RFE/RL
Newsline," 23 December 1997). LB

sent to the Duma and Federation Council on 25 December,
Nemtsov claimed the comments he made in Sweden have
been misinterpreted, Russian news agencies reported. He
denied having implied that "red governors" would
"liquidate" invested foreign capital. Rather, in reply to a
question about which regions were most promising for
foreign investors, he merely noted that regions in Russia's
"red belt" have seen less foreign investment than other
regions, such as Moscow and Moscow Oblast, St. Petersburg
and Leningrad Oblast, the republics of Karelia and Tatarstan,
Novgorod, Samara, Tyumen, Nizhnii Novgorod and Sakhalin
Oblasts. Nemtsov told the Duma and Federation Council that
such information is "confirmed by statistical data" and that
he hopes more regions will create an attractive environment
for both foreign and domestic investors. LB

LAWS. The Federation Council on 24 December approved six
out of nine draft laws aimed at increasing 1998 budget
revenues, ITAR-TASS reported. The legislation approved
includes a law outlining a new income tax scale, a law raising
the tax on foreign-currency purchases from 0.5 to 1 percent,
and laws establishing an excise duty on oil transports and
fees for alcohol production licenses (see "RFE/RL Newsline,"
22 December 1997). Also on 24 December, the Council
rejected proposed changes to the law on excise duties, on the
grounds that the high duties that law would set on alcohol
production would unintentionally encourage the black
market in alcoholic beverages. LB

PLAN. Yeltsin on 26 December signed a law amending the
1997 budget, ITAR-TASS reported. The changes, which were
approved by the Federation Council on 24 December, will
allow the government to borrow $1.1 billion less on the
domestic market this year and $1.1 billion more abroad (see
"RFE/RL Newsline," 22 December 1997). LB

The private network NTV will appeal to the Moscow
Arbitration Court against a decision to charge it higher fees
for using state-owned transmission facilities, RFE/RL's
Moscow bureau reported on 23 December. Under an
agreement with the Communications Ministry, NTV has paid
government rates for its transmissions since January 1996.
However, the State Anti-Monopoly Committee recently
ordered that NTV be charged the commercial rates paid by
other private electronic media. Igor Malashenko, the
president of NTV-holding, thinks the order violates Article 8
of the constitution, which guarantees equal conditions for all
enterprises, whether they are state-owned or private. Some
observers believe First Deputy Prime Minister Nemtsov, who
oversees the State Anti-Monopoly Committee, is behind the
decision to charge NTV higher rates. Since this summer, the
network's news coverage has frequently portrayed Nemtsov
and especially First Deputy Prime Minister Anatolii Chubais
in an unfavorable light. LB

VICE.' The Duma on 26 December approved a resolution
calling for the government to take legal action against NTV
and other Russian television companies that allegedly
broadcast "the propaganda of vice, sadism, blasphemy,
permissiveness and crime," Interfax reported. Such legal
action could include revoking the broadcast licenses of some
companies, the resolution said. It specifically condemned
NTV for broadcasting the film "The Last Temptation of
Christ" and declared the Duma's "complete solidarity" on this
issue with Patriarch of Moscow and All Russia Aleksii II, the
head of the Russian Orthodox Church. The Duma recently
passed a separate resolution calling for more regulation of
NTV and other private electronic media (see "RFE/RL
Newsline," 22 December 1997). LB

monopoly Gazprom has formed a subsidiary, Gazprom-
Media, to manage its media assets, Russian news agencies
reported on 27 December. Viktor Ilyushin, up to now
Gazprom's vice president in charge of public relations, was
elected chairman of the board of Gazprom-Media. Ilyushin, a
longtime aide to Yeltsin dating from Yeltsin's time as
secretary of the Communist Party committee in Sverdlovsk
Oblast, served as first presidential adviser from 1992 until
August 1996, when he was appointed first deputy prime
minister. He joined Gazprom soon after losing his
government job in a March 1997 cabinet reshuffle. Gazprom
owns shares in Russian Public Television, NTV, the Prometei
network of regional radio and television stations, and the
newspapers "Trud" and "Rabochaya tribuna." LB

Richard Bliss, who is being investigated on spy charges,
arrived in San Diego, California, on 25 December after
Russian authorities allowed him to go home for Christmas.
Bliss was arrested on 25 November while carrying out a land
survey using satellite technology for a cellular telephone
project involving his U.S. employer, Qualcomm. He was
released from custody on 6 December after promising not to
leave Rostov-na-Donu. Federal Security Service spokesman
Aleksandr Zdanovich told Interfax that the authorities may
summon Bliss back to Russia in January, depending on the
outcome of the investigation. U.S. officials including Vice
President Al Gore and Secretary of State Madeleine Albright
have called on Russian authorities to drop the charges
against Bliss. LB

A plane carrying 21 members of Vladimir Zhirinovsky's
Liberal Democratic Party of Russia landed in Baghdad on 25
December with a consignment of five tons of medical
supplies. The plane had been detained in Iran on 22
December as it lacked authorization from the U.N. Security
Council's Sanctions Commission to enter Iraqi air space, but
allowed to proceed after the Russian Foreign Ministry
requested permission from the U.N. Russian Foreign Ministry
spokesman Gennadii Tarasov on 24 December denied media
reports that the ministry had been informed in advance
about the LDPR's planned mission. LF


Prime Minister Mesut Yilmaz completed his three-day visit
to Turkmenistan on 28 December by overseeing the signing
of several agreements between the two countries, ITAR-
TASS reported. The most significant document was a
memorandum of understanding for a gas pipeline across the
bed of Caspian sea and via Azerbaijan and Georgia to Turkey
and further to Europe. Prior to Yilmaz' departure to Baku on
28 December, Iranian President Mohammad Khatami arrived
in the Turkmen capital, Ashgabat, and discussed with Yilmaz
and Turkmen President Saparmurat Niyazov the Turkmen-
Iran-Turkey-Europe pipeline. Khatami and Niyazov attended
the opening ceremony of the first stage of this route, the
200-kilometer Korpedzhe-Kurdkui pipeline, on 29 December.

DELAYS IN TAJIKISTAN. Tajikistan will hold a national
referendum on amendments to the constitution in the first
half of 1998, RFE/RL correspondents in Dushanbe reported.
Possible amendments are being discussed by the National
Reconciliation Commission but some members of the United
Tajik Opposition (UTO) favor waiting to name a date for the
referendum until its members have officially taken up
positions in the Tajik government. The announcement of
which positions the UTO representatives will receive is
already overdue. The last 650 fighters of the UTO still in
Afghanistan awaiting transportation back to Tajikistan also
have been delayed by weather, logistics and lack of finances,
and may not return before mid-January.  BP

SUMMIT. Azerbaijani Foreign Minister Hasan Hasanov told
Interfax on 22 December that he was satisfied with the
outcome of the Organization on Security and Cooperation in
Europe Foreign Ministers' meeting in Copenhagen, Interfax
reported. Hasanov said the meeting laid the foundation for
resolving the conflict via negotiations. In an interview with
the independent Armenian newspaper "Azg" on 23
December, Hasanov termed Armenia the instigator of the
conflict and called on Yerevan to "withdraw its forces from
Azerbaijani territory" and negotiate Karabakh's status. But
the Prime Minister of the unrecognized Nagorno-Karabakh
Republic, Leonard Petrossian, and the enclave's Foreign
Minister, Naira Melkumian, both complained that "nothing
was done" in Copenhagen to expedite the resumption of
negotiations, Interfax and Noyan Tapan reported.
Melkumian noted that the meeting also rejected Karabakh's
request to be recognized as a "conflict party" for the entire
duration of the negotiating process. LF

National Assembly on 27 December voted overwhelmingly
to pass the 1998 draft budget, RFE/RL's Yerevan bureau
reported.  Deputies agreed to the government's proposed
increase in excise tax on gasoline in return for a wage hike
for government employees and other provisions that had
figured in the1995 election program of the ruling
Hanrapetutyun coalition. The budget forecasts a 5.2 percent
increase in GDP and an annual inflation rate of 13 percent,
which will reduce the budget deficit to 5.5 percent from its
current level of 6.7 per cent.  LF

in Moscow under joint Russian and OSCE auspices between
Georgian and South Ossetian representatives on an interim
agreement on the breakaway region's political status within
Georgia have been cancelled because of the Ossetian side's
maximalist approach,  Interfax reported on 23 December
quoting Georgian presidential representative for resolving
conflicts, Irakli Machavariani. Machavariani said that the
South Ossetian leadership had reverted to its original
demand, modified three years ago, of independence from
Georgia and unification with North Ossetia within the
Russian Federation. Both Georgian President Eduard
Shevardnadze and his South Ossetian counterpart Lyudvig
Chibirov had expressed confidence that their meeting in
mid-November had given fresh impetus to the search for a
compromise settlement of the conflict. LF

AZERBAIJANI PM IN GEORGIA. Visiting Georgia on 26-27
December, Artur Rasi-Zade and the President of the
Azerbaijani state oil company, Natik Aliev, assessed progress
in reconstruction of the Baku-Supsa oil export pipeline,
which is scheduled for completion in late 1998. Aliev
subsequently told journalists that the choice between Russia
and Georgia as the main export route for Azerbaijan's
Caspian oil will depend on how those countries meet the
obligations they have signed to date. An agreement signed in
September between Russian, Chechen and Azerbaijani
officials on the transit of Azerbaijani oil via Chechnya is
valid only until 31 December. Following a brief meeting in
Baku on 28 December with Turkish Prime Minister Yilmaz,
Azerbaijani President Heidar Aliev again endorsed the
western export route via Turkey, ITAR-TASS reported. LF

approved further loans to Azerbaijan totalling
approximately $64 million, an RFE/RL correspondent in
Washington reported on 23 December. The loans are
intended to support the country's ongoing transition to a
market economy and to prepare for the anticipated influx of
revenues from offshore oil production. The IMF is
apprehensive that while increased oil revenues will relieve
constraints on growth, they may also drive up the value of
the manat and crowd out development in the non-oil sector.


By Paul Goble

        Six years after the collapse of the Soviet Union, the
communist party has largely disappeared in most of the
successor states. But one of its most unfortunate creations --
the nomenklatura -- continues to exist in most of them,
albeit in a somewhat modified form.
        In Soviet times, the communist party used a variety of
institutions to control society -- the army, the secret police,
and so on. But one of its most effective levers was a system
of control over personnel appointments in virtually all
aspects of public life.
        Party committees at various levels had the final word
over who could be appointed to this or that post and over
who would be pushed up the career ladder or be cast aside.
        Known as the nomenklatura, this group of people
selected by the party formed the real elite of the Soviet
Union. At each level, they tended to interact only with each
other. And they formed a ruling class every bit as tightly
defined as any other in history.
        Some of the members of this group were committed to
communist ideology, but by the end of Soviet times, most
were driven by careerist motives. And not surprisingly,
many of its members were largely indifferent to the fate of
communism at the end of the Soviet Union.
        Indeed, in their pursuit of individual and collective
self-interest, some of them viewed the demise of the Soviet
system as a golden opportunity to enrich themselves, to own
what they used to merely control. Or as one shrewd Estonian
observer of this situation once put it, "1991 was less about
democracy and freedom than about giving the nomenklatura
the retirement plan."
        The continuation of the nomenklatura class, if not the
nomenklatura system of appointments, has taken a variety
of forms which cast a shadow over the life of these
countries. The first and most important is simply the
continuity of individuals in office, people used to working
together and working together in the peculiar style of the
Soviet past.
        Ten of the 12 presidents of the countries in the
Commonwealth of Independent States were senior members
of the nomenklatura. And even one of the three Baltic
presidents -- Algirdas Brazauskas of Lithuania -- is as well.
On the one hand, that should come as no surprise: these
were the most politically active members of Soviet society,
and after only six years, these are the people one might
expect to be in power.
        But on the other hand, whatever they choose to call
themselves -- democrats, reformers, or something else --
their experiences of the hard school of the Soviet
nomenklatura are likely to dominate much of their
behaviour with each other and with the rest of society.
        Indeed, many things that are otherwise inexplicable
about the ways in which senior officials in these countries
interact with each other -- the kinds and extent of
corruption, the secrecy, the power of shadowy figures
occupying no clear post -- become clear considering the
positions these same people occupied in Soviet times.
        The continuing role of the nomenklatura even has an
impact on the way in which the governments of CIS states
deal with each other. Armenian officials have pointed out
that Russian President Boris Yeltsin, himself a senior
nomenklatura member, deals very differently with the
presidents of Georgia and Azerbaijan, both of whom share
that tie, than with the president of Armenia who does not.
        And this lack of nomenklatura ties, these officials
suggest, limits rather than enhances the special relationship
that exists between the Russian Federation and Armenia. At
the very least, they say, it colors the way in which the
Russian president receives the Armenian president when
the latter comes to Moscow.
        And yet a third example of the way in which the
nomenklatura works is its efforts to find and promote
politicians who can function in the more open democratic
marketplace but who are committed to defending the
interests of the nomenklatura class defined now, as often as
not, as the "new" Russians or the "new" generation of leaders
        One case of this very much on public view this month
is in Lithuania. There, Arturas Paulauskas, who led the first
round of voting for a new president, appears to be someone
the old nomenklatura hopes to use to defend or even
advance its privileges.
The son of a KGB colonel with close ties with many of the
former communist elite, Paulauskas, 44, presented himself
as a man of a new generation -- even as an appointee of
Vytautas Landsbergis, the man who led Lithuania's march to
the recovery of its independence.
        Like some other former members of the nomenklatura,
Paulauskas may be able to emancipate himself from its
claims and its habits. But his candidacy and the support the
old nomenklatura is giving it are yet another reminder that
communism may in fact be gone but one of communism's
most unfortunate creations is going to be around for a long
time to come.

               Copyright (c) 1997 RFE/RL, Inc.
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Natasha Bulashova,Greg Koul
Updated: 1998-11-

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