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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 28, Part I, 11 February 1998


___________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 28, Part I, 11 February 1998

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

* UN APPROVES RUSSIAN FLIGHT TO BAGHDAD

* WORLD LEADERS CONDEMN SHEVARDNADZE ASSASSINATION BID

* DASHNAK PARTY LEADER RELEASED

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UN APPROVES RUSSIAN FLIGHT TO BAGHDAD... Following maneuvering by Russian
diplomats at the UN and the Russian State Duma's decision to limit the
number of passengers on a plane bound for Baghdad, the UN on 10 February
gave permission for the plane to continue its journey to the Iraqi capital.
Only 30 of the 207 Duma deputies and journalists who originally boarded the
plane will now make that journey. The aircraft, which is also carrying
humanitarian aid, had been sitting on a runway at Yerevan airport since 8
February waiting for UN clearance. BP

...BUT PLANE REMAINS IN YEREVAN. Despite UN clearance, the plane had still
not taken off from Yerevan airport by 1:00 p.m. CET on 11 February. Earlier
that day, Duma speaker Gennadii Seleznev blamed Vladimir Zhirinovsky, the
leader of Liberal Democratic Party of Russia, for further delays, ITAR-TASS
reported. On 10 February, Zhirinovsky had said that "we are ready to [cut
the number of passengers]" even though "it would be a humiliation." But on
11 February, Zhirinovsky attempted to bring 125 people on board, prompting
the Armenian Foreign Ministry to refuse the plane permission to take off.
ITAR-TASS reported that Zhirinovsky is insisting that all 125 people be
allowed to fly to Iraq. BP

YELTSIN, PRODI ON IRAQI CRISIS. Russian  President Boris Yeltsin and
Italian Prime Minster Romano Prodi released a joint statement on the Iraqi
situation following their talks in the Italian capital on 10 February,
ITAR-TASS reported. The two leaders said there are "indications that the
crisis can be resolved by diplomacy" but added that "it is mandatory that
Iraq fulfill the UN resolutions in allowing inspections of all its
territory." The statement called for intensifying diplomatic activity and
said that if UN Secretary-General Kofi Annan were to visit Iraq, he could
play a role in finding a solution to the crisis. BP

YELTSIN, POPE HOLD 'FRIENDLY MEETING'... Following his talks with Italian
Prime Minister Prodi, Yeltsin met with Pope John Paul II for nearly an hour
on 10 February, an RFE/RL correspondent in Rome reported. The Vatican's
press service said the meeting was held in a "very cordial atmosphere." The
two men met for the first, and only other, time in December 1991. Yeltsin's
spokesman Sergei Yastrzhembskii told reporters that Yeltsin and the pope
discussed the situation for Catholics in Russia and that John Paul thinks
Catholics "do not encounter any obstacles" in Russia. Last year, the
pontiff appealed to Yeltsin not to sign a controversial religion law (see
"RFE/RL Newsline," 18 July 1997). Yeltsin vetoed that law but signed a
revised version in September. LB

...BUT DON'T DISCUSS PROBLEMATIC CHURCH RELATIONS. Yastrzhembskii said
Yeltsin and Pope John Paul did not discuss problems in relations between
the Russian Orthodox and Roman Catholic Churches, RFE/RL's correspondent in
Rome reported on 10 February. He added that the two men also refrained from
discussing a possible trip to Russia by the pontiff. Before leaving for
Italy, Yeltsin told journalists that he planned to invite John Paul to
visit Russia. But a spokesman for the Russian Orthodox Church said on 6
February that no meeting between the pontiff and Patriarch Aleksii II can
take place until the two Churches settle outstanding disputes, such as
Russian concerns about the situation for Orthodox believers in western
Ukraine. The pontiff and Aleksii were scheduled to meet last June, but that
meeting was called off (see "RFE/RL Newsline," 13 June 1997). LB

ZADORNOV SAYS TIME RUNNING OUT FOR TAX CODE. Finance Minister Mikhail
Zadornov on 10 February warned that if the government's proposed tax code
is not adopted by mid-1998, tax reform will be delayed for another two
years, an RFE/RL correspondent in Moscow reported. Zadornov noted that
comprehensive tax reform is unlikely to be adopted in 1999 or 2000, when
parliamentary and presidential elections are scheduled. He added that the
new code "is a very big symbol for investors and failure to adopt it will
delay economic growth," AFP reported. Zadornov said the code would cut the
number of taxes from at least 50 to 29, simplify tax collection rules, and
"scrap taxes throttling industrial production." The profit tax would also
be reduced. LB

WOULD NEW CODE REDUCE TAX BURDEN? Deputy Finance Minister Mikhail Motorin
told journalists on 10 February that the proposed tax code would reduce the
overall tax burden on the economy by 60 billion rubles ($10 billion) or
some 2 percent of GDP, an RFE/RL correspondent in Moscow reported. But
"Kommersant-Daily" argued on 11 February that the proposed code would
increase the tax load on most individuals by 3-5 percent. The newspaper
noted that the code would maintain the value-added tax of 20 percent on
most goods and maintain or raise excise duties on alcohol and tobacco
products, gasoline, and some automobiles. (Unlike most taxes, VAT and
excise duties are virtually impossible to evade since they are included in
the prices of goods and paid at the same time as the goods are purchased.)
Furthermore, "Kommersant-Daily" added, the new code would not reduce income
tax rates. LB

NEWSPAPER CLAIMS YELTSIN CAMPAIGN USED FOREIGN MONEY. "Moskovskii
komsomolets" alleged on 11 February that U.S. money  helped finance
Yeltsin's expensive re-election campaign in 1996. The newspaper charged
that in March 1996, $500 million in $100 bank notes was sent as a
diplomatic shipment to the U.S. embassy in Moscow. Officials from the
embassy told the newspaper that the shipment was planned to ensure that
there were enough new $100 bank notes to meet demand in Russia. (The U.S.
changed the format of the $100 bills in late 1995.) But "Moskovskii
komsomolets" argued that if that were true, the money could have been
stored at the Russian Central Bank rather than at the embassy. It claimed
the $500 million was quickly "acquired by large Russian banks," which
"played an active role in the Yeltsin campaign." Russian law prohibits
candidates from accepting contributions from foreign donors. "Moskovskii
komsomolets" is considered close to Moscow Mayor Yurii Luzhkov. LB

DUMA DELAYS CONSIDERATION OF RUSSIAN-UKRAINIAN TREATY. The State Duma
Council on 10 February voted to delay consideration of the
Russian-Ukrainian friendship treaty signed last May, "Kommersant-Daily"
reported on 11 February. The Duma was scheduled to consider the treaty on 6
February, but Duma CIS Affairs Committee Chairman Georgii Tikhonov of the
Popular Power faction told the newspaper that the treaty will not be
debated in the lower house of the parliament before March.
"Kommersant-Daily" argued that the delay was inspired by the Russian
Foreign Ministry. Unnamed sources in the Duma Foreign Affairs and CIS
Affairs Committees told the newspaper that the Foreign Ministry supports
postponing ratification until after the Ukrainian parliament has ratified
the agreement on dividing the Black Sea Fleet. The Ukrainian parliament
ratified the friendship treaty last month but has yet to consider the
agreement on the fleet. LB

ENGINE FAILURE BLAMED FOR IRKUTSK PLANE CRASH. Air Force Commander Anatolii
Kornukov announced on 10 February that a commission investigating the 6
December crash of a military cargo plane in Irkutsk has concluded that
engine failure caused the disaster, Interfax reported. Nearly 70 people
were killed when the huge An-124 plane crashed into an apartment block
shortly after takeoff. Speculation initially focused on a poor mixture of
fuel as the possible cause of the disaster (see "RFE/RL Newsline," 10
December 1997). But Kornukov said three of the plane's four engines shut
down because of defective engine design and the failure of high-pressure
compressors. He added that engine failures had previously occurred in
An-124 planes but that such problems had not led to a crash. Kornukov said
the planes will be examined and equipped with new engines if necessary
before their use is resumed. LB

COMMANDER DISCUSSES MERGER OF AIR FORCE AND AIR DEFENSE TROOPS. Also on 10
February, Air Force Commander Kornukov announced that 122,000 military
personnel will be discharged as a result of the upcoming merger of the Air
Force and Air Defense Troops, "Izvestiya" and "Kommersant-Daily" reported
on 11 February. That figure amounts to 45 percent of the total personnel
and 40 percent of the troops currently serving in the Air Force and Air
Defense Troops. Those to be discharged include 24 generals in the Air Force
Command. Kornukov, who was recently appointed to head the Air Force (see
"RFE/RL Newsline," 21 and 23 January 1998), said the merger will be
completed by the end of this year and will save more than 40 billion rubles
($6.6 billion) by 2003. LB

CONFUSION SURROUNDS ARREST OF SUSPECT IN KHOLODOV CASE. The identity of the
suspect recently arrested in connection with the October 1994 murder of
journalist Dmitrii Kholodov remains unknown. While the Prosecutor-General's
Office declined to name the suspect, Interfax identified him as Yakov
Popovskikh, allegedly a former colonel in the Main Intelligence Department
(GRU) of the General Staff (see "RFE/RL Newsline," 10 February 1998).
However, both a GRU spokesman and the press service of the Defense Ministry
on 10 February denied that anyone named Yakov Popovskikh has been
discharged from the GRU. "Kommersant-Daily" on 11 February identified the
suspect as Pavel Popovskikh, a retired colonel who served as an
intelligence officer in the Airborne Troops. But "Nezavisimaya gazeta"
speculated the same day that all the reports about Popovskikh are false and
that the arrested suspect is, in fact, a high-ranking officer in the
General Staff. LB

GOVERNOR BLASTS 'DISCRIMINATION' AGAINST SOME REGIONS... Saratov Oblast
Governor Dmitrii Ayatskov says Russia's krais and oblasts currently enjoy
fewer rights than the country's republics. In an article published in
"Nezavisimaya gazeta" on 11 February, Ayatskov assailed various forms of
"discrimination" against geographically based krais and oblasts, as opposed
to republics, each of which has a titular nation and flag. He argued that
the constitution guarantees equal rights for all regions and accused the
Constitutional Court of "neglecting its duty" to interpret the
constitution. He also claimed that the law on parliamentary elections does
not guarantee equal rights for voters. Ayatskov expressed regret that
Federation Council Speaker Yegor Stroev "does not attach significance" to
the current discrimination against oblasts. In fact, Stroev has criticized
Russia's regional policy, in part because, he says, it creates inequalities
among regions (see "RFE/RL Newsline," 20 January 1998). LB

...WANTS TO LIMIT FEDERAL OFFICIALS' TRIPS TO REGION. Saratov Governor
Ayatskov announced on 10 February that the local airport will not accept
special flights carrying federal officials to Saratov unless those flights
have been cleared with him, ITAR-TASS reported. He said government
ministers, State Duma deputies, and other high-ranking federal officials
should coordinate with the governor in advance about visits to Saratov
Oblast. An unnamed official in Ayatskov's administration told ITAR-TASS
that "not all visits by bureaucrats are conducive to socio-economic
stability in the region, and often their statements go against the
activities of the oblast government." Last fall, Ayatskov issued an order
prohibiting heads of raions in the oblast from leaving the town without
notifying him, according to  a Saratov journalist taking part in the
November 1997 conference  in Seattle, Washington, of the American
Association for the Advancement of Slavic Studies. LB

TRANSCAUCASUS AND CENTRAL ASIA

WORLD LEADERS CONDEMN SHEVARDNADZE ASSASSINATION BID. Numerous world
leaders, including the U.S., Russian, Abkhaz, Turkish, Kazakh, and Armenian
acting presidents, have telephoned with Georgian President Eduard
Shevardnadze to express outrage over the 9 February attempt on his life.
The Russian, Armenian, and Chechen Foreign Ministries issued statements
condemning the assassination attempt. Shevardnadze himself said it was a
"miracle" that he survived the second attempt on his life. At the same
time, he confirmed his intention to serve Georgia "until the end." In a bid
to qualify his 9 February accusation that "the hand of Russia" may have
been involved, Shevardnadze said the attack was a "well planned and
prepared military operation" by forces that  "cannot forgive" the Soviet
invasion of Afghanistan and  the fall of the Berlin Wall" and are seeking
to prevent both the export of Caspian oil via Georgia and the
implementation of the TRACECA transport corridor project. LF

ASSAILANTS' IDENTITY REMAINS UNCLEAR.  Georgian Security Minister Djemal
Gakhokidze told Interfax on 10 February that the assassination attempt was
prepared outside Georgia but that some Georgian citizens participated.
Interior Minister Kakaha Targamadze said that the 10-15 attackers arrived
in Georgia separately and unarmed. The Georgian commission formed to
investigate the attack has established that Visamudin Djangaliev, the
Dagestani Chechen killed by one of Shevardnadze's bodyguards, was a member
of the Confederation of Peoples of the Caucasus and had fought as a
volunteer in the force that the confederation sent to support Abkhazia in
its war against Georgia in 1992-1993,  an RFE/RL correspondent reported
from Tbilisi on 11 February.  Meanwhile, Russian Foreign Ministry spokesman
Gennadii Tarasov has rejected speculation that the assault was launched
from the Russian military base at Vaziani,  30 kilometers outside Tbilisi,
AFP reported.  LF

DASHNAK PARTY LEADER RELEASED.  Vahan Hovanissian, a leader of the
opposition Armenian Revolutionary Federation (Dashnaktsutyun), was released
from prison on 10 February, Armenian and Russian media reported.
Hovanissian was sentenced in December 1997 to four years in prison on
charges of calling for the violent overthrow of the Armenian leadership
(see "RFE/RL Newsline,"  15 December 1997).  On 9 February, the Armenian
Ministry of Justice lifted the ban that former President Levon
Ter-Petrossyan imposed on the party in December 1994. Hovanissian told
journalists following his release that the political situation in Armenia
is "excellent [and] healthy" and added that his party will decide shortly
whether to propose him as its candidate for the 16 March presidential
elections, Noyan Tapan reported. But RFE/RL's Yerevan bureau reported on 10
February that the party is likely to back the candidacy of Prime Minister
and acting President Robert Kocharyan. LF

KAZAKHSTAN HALTS OIL, GAS PRIVATIZATION. Prime Minister Nurlan Balgimbayev
on 10 February announced that his country will suspend privatization in the
oil and gas industries, Interfax reported. Balgimbayev said the move is
necessary until the government has selected a "strategic partner" for the
national oil company. He denied that Kazakhstan is unable to fill quotas
for oil to the Caspian Pipeline Consortium project, noting that the country
last year produced a record 27 million tons of oil and expects that amount
to grow to 170 million tons by 2020. He admitted that there are differences
between the consortium's partners but said he hoped the 11-12 February
meeting in Moscow will resolve some of them. BP

KAZAKH GDP GREW 2 PERCENT LAST YEAR. Yeryan Utembayev, the chairman of the
Agency for Strategic Planning and Reform, said GDP grew 2 percent last year
to reach 1.68 trillion tenge (about $22 billion), Interfax reported. Food
production grew by 28 percent, ferrous metals by 24 percent, and natural
gas by 20 percent. Inflation last year reached 11.2 percent (17 percent had
been forecast). However, AFP reported on 2 February that the  Finance
Ministry released data showing production decreases of 17.5 percent in the
oil refining sector, 14.7 percent in electricity, 29.8 percent in
mechanical engineering, and 34.3 percent in the chemical industry.
According to the same data, 55 percent of the country's industries made no
profit in 1997. BP

TAJIK GOVERNMENT FREES OPPOSITION PRISONERS. The Tajik government on 11
February released from jail170 people, mostly opposition supporters, RFE/RL
correspondents in Dushanbe reported. The United Tajik Opposition claims
there are still more than 1,000 of its supporters in government jails. It
also stresses that it has released all its government captives.  Meanwhile
Tajik President Imomali Rakhmonov and UTO leader Said Abdullo Nuri met on
11 February in an attempt to finalize which ministries will be allocated to
UTO members. BP


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