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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 29, Part I, 12 February 1998


___________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 29, Part I, 12 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

* RUSSIA DENIES ALLEGATIONS IN "WASHINGTON POST"

* GAZPROM TO FORM 'STRATEGIC ALLIANCE' WITH ITALIAN GIANT

* RUSSIA, U.S. TO HELP INVESTIGATE SHEVARDNADZE ASSASSINATION BID

* End Note: MOUNTING MOSCOW-GROZNY TENSIONS

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RUSSIA

RUSSIA DENIES ALLEGATIONS IN "WASHINGTON POST." The Foreign Ministry has
denied allegations in the "Washington Post" on 12 February that Russia has
sold to Iraq equipment that could be used for producing biological weapons,
Interfax reported. "Ministry sources" are quoted as saying that the Russian
government has concluded no agreements with Iraq and that there have been
no deliveries. The sources added this is "another attempt to shift the
blame from the guilty to the innocent." The "Washington Post" reported that
Russia signed a contract to deliver a 5,000-liter fermentation vat that is
ostensibly for manufacturing animal feed but has the potential to produce
biological weapons.  BP

RUSSIAN PLANE LANDS IN BAGHDAD. The Russian airplane carrying State Duma
deputies and humanitarian aid finally landed in Baghdad on 11 February. On
board were 12 tons of food and medical aid as well as seven Duma deputies,
15 journalists, and personnel to unload the cargo. Before the plane's
departure from Yerevan, Vladimir Zhirinovsky, the leader of the Liberal
Democratic Party of Russia, attempted to bring more than the 30 people
approved by the Duma on to the airplane. Russian Ambassador to Armenia
Andrei Urnov intervened, and a heated discussion broke out. Urnov denied,
however, that Zhirinovsky hit him in the face, as some media reported.
According to other reports, Zhirinovsky threw around drinking glasses in
the airport lobby. BP

U.S. SECRETARY OF DEFENSE IN MOSCOW. William Cohen, who arrived in Moscow
on 12 February, said his visit is not aimed at persuading the Russians "to
come around to the U.S. position" on the Iraqi situation. Cohen said that
his focus is the reduction of nuclear arms but that "if Iraq comes up, I
will certainly make our position as clear as possible." BP

GAZPROM TO FORM 'STRATEGIC ALLIANCE' WITH ITALIAN GIANT. The Russian gas
monopoly Gazprom and the leading Italian energy producer ENI on 11 February
signed a preliminary agreement on forming a "strategic alliance" to search
for oil and gas, an RFE/RL correspondent in Rome reported. The agreement is
estimated to be worth more than $3 billion. In addition, ENI is expected to
acquire a 3 percent stake in the Russian gas monopoly. (Total foreign
ownership of Gazprom shares is limited to 9 percent.) The Gazprom-ENI
agreement was the largest among more than a dozen business deals signed on
the last day of President Boris Yeltsin's visit to Italy. Gazprom head Rem
Vyakhirev recently announced plans for a three-way alliance between
Gazprom, ENI, and Royal Dutch Shell, but a representative from ENI told
journalists on 11 February that the deal signed in Rome was strictly a
bilateral agreement. LB

RUSSIAN, ITALIAN AUTO COMPANIES SIGN DEAL. Also on 11 February, final
documents were signed on an $850 million joint venture between the Russian
car manufacturer GAZ and the Italian firm Fiat, RFE/RL's correspondent in
Rome reported. The project will involve the assembly of 150,000 Fiat cars
annually at a GAZ plant in Nizhnii Novgorod and is expected to create
thousands of jobs (see "RFE/RL Newsline," 30 September 1997). The Fiat-GAZ
deal is among several projects involving Russian and foreign automobile
companies that will qualify for tax breaks under a 5 February presidential
decree. That decree applies to projects involving at least $250 million in
investment in the Russian automobile industry and in which the share of
Russian parts increases to at least 50 percent within five years. LB

YELTSIN WOOS ITALIAN BUSINESSES. Addressing a group of Italian business
leaders on 11 February, Yeltsin pledged to create "the most favorable
conditions" for Italian businesses in Russia, Russian news agencies
reported. The president also hailed the decision of a consortium of Italian
banks to open a new $260-million line of credit to Russia. Russian
officials have expressed the hope that following Yeltsin's Rome visit,
annual trade turnover between Russia and Italy will increase from $6
billion to $9 billion, RFE/RL's correspondent in Rome reported. LB

NEMTSOV WARNS OF DANGERS OF OLIGARCHY... First Deputy Prime Minister Boris
Nemtsov says it is "dangerous" when a handful of large companies make up a
large share of a country's GDP. In an interview published in "Russkii
telegraf" on 11 February, Nemtsov argued that the recent financial crisis
in Southeast Asia occurred because those countries developed "oligarchic"
economic systems, in which large financial-industrial groups had close ties
to the government. He argued against concentrating resources in a few large
Russian corporations, which, he said, currently account for too great a
proportion of GDP. During the last six months, Nemtsov has repeatedly
pledged that the government will enforce a level playing field for all
companies. He has also accused former Security Council Deputy Secretary
Boris Berezovskii of trying to use his government contacts to enrich
himself and his LogoVAZ business empire. LB

...SAYS YELTSIN AGREES WITH HIM. In the same interview, Nemtsov claimed
that Yeltsin "understands that Russia will never tolerate the arrogance of
the super-wealthy." He added that the president has increasingly recognized
the "danger of excessive closeness between business and the authorities"
since bankers "violated" an agreement reached with the president  last
fall. (In September 1997, Yeltsin summoned six top bankers to the Kremlin
and urged them to stop "slinging mud" at one another and at government
ministers.) Nemtsov also denied that the recent redistribution of duties
within the government had reduced his authority or that of First Deputy
Prime Minister Anatolii Chubais (see "RFE/RL Newsline," 16 and 19 January
1998). Oneksimbank fully owns "Russkii telegraf," which has provided
favorable coverage of Nemtsov and Chubais since it began publication last
September. LB

GOVERNMENT WANTS MORE SPENDING ON COAL INDUSTRY. First Deputy Prime
Minister Chubais has sent a letter to Duma Speaker Gennadii Seleznev
requesting that the 1998 budget be amended to include an additional 500
million rubles ($83 million) in spending for safety measures in the coal
industry, Russian news agencies reported on 11 February. The Duma rejected
such an amendment while debating the budget in the third reading, according
to "Segodnya" on 10 February. Chubais wants the Duma to cut other
unspecified spending programs in order to provide extra funds for the coal
industry while not increasing total planned 1998 expenditures. According to
data compiled by the Miners of Russia association, 277 coal miners died in
1997, up from 174 the previous year. Since the beginning of 1998, accidents
have claimed the lives of more than 40 miners. LB

ZYUGANOV DISMISSIVE ABOUT CHERNOMYRDIN'S PRESIDENTIAL PROSPECTS. Communist
Party leader Gennadii Zyuganov on 11 February said he thinks Prime Minister
Viktor Chernomyrdin has "no prospect" of winning the next presidential
election, Interfax reported. Zyuganov argued that the government will not
change its policies before the next election and that the premier will not
be helped by an endorsement from German Chancellor Helmut Kohl, whom
Zyuganov characterized as Chernomyrdin's "midwife." Zyuganov was the
leading challenger to Yeltsin in the 1996 presidential election and is
considered the Communist Party's likely nominee in the next election as
well. Some politicians, including Yabloko leader Grigorii Yavlinskii, and
media sympathetic to First Deputy Prime Minister Chubais have long alleged
that Zyuganov and Chernomyrdin have a secret alliance. LB

ARBITRATION COURT SUPPORTS NTV. The Moscow Arbitration Court on 11 February
upheld a lawsuit brought by the private network NTV against the State
Anti-Monopoly Committee, ITAR-TASS reported. Last December, the committee
instructed the Communications Ministry to charge NTV commercial rates for
using state-owned transmission facilities. Those rates would have more than
doubled transmissions costs for the company, which since January 1996 had
been charged government rates for transmission services. NTV's court case
was likely bolstered by a recent presidential decree adding the network to
the list of "all-Russian television and radio broadcasting organizations"
and ordering the government to treat all such organizations equally (see
"RFE/RL Newsline," 22 January 1998). NTV is 70 percent owned by Vladimir
Gusinkii's Media-Most company and 30 percent owned by Gazprom. LB

KULIKOV SAYS REMARKS ON MILITARY REFORM WERE MISINTERPRETED. Interior
Minister Anatolii Kulikov has denied that he and Yeltsin hold different
views on military reform, "Nezavisimaya gazeta" reported on 12 February.
Kulikov accused journalists of misinterpreting statements he made at a
recent meeting of the Academy of Military Sciences (see "RFE/RL Newsline,"
10 February 1998). Kulikov said that "as a military man, I fully share the
ideas of the commander-in-chief on reforming the Russian army." He added
that "certain forces" try to "distort" politicians' statements in order to
discredit them in the eyes of society and their colleagues in the
government. LB

FOLLOW-UP ON KHOLODOV CASE. The headquarters of the Airborne Troops on 11
February confirmed that retired Colonel Pavel Popovskikh has been detained
on suspicion that he participated in the October 1994 murder of journalist
Dmitrii Kholodov, ITAR-TASS reported. Meanwhile, the opposition newspaper
"Pravda-5" argued on 11 February that Popovskikh, who formerly headed the
intelligence department of the Airborne Troops, had nothing to do with
Kholodov's murder. The newspaper charged that Popovskikh was arrested in
order to deflect attention from those responsible for the crime. LB

LEBED TO RUN FOR GOVERNOR OF KRASNOYARSK. Former Security Council Secretary
Aleksandr Lebed on 11 February notified the Krasnoyarsk Krai Electoral
Commission that he plans to run for governor of the region in April,
ITAR-TASS reported. Of the 16 candidates who have announced their intention
to run, Lebed is considered the only serious challenger to the incumbent,
Valerii Zubov. According to "Kommersant-Daily" on 12 February, the
Sayanogorsk aluminum factory in the neighboring Republic of Khakassia has
founded a television station to broadcast to Krasnoyarsk during the
gubernatorial campaign. Lebed's younger brother, Aleksei, is the top
official in Khakassia. The Communist electorate in Krasnoyarsk is likely to
be divided between two candidates: Duma deputy Valerii Sergienko, and Duma
deputy Petr Romanov, former director of a chemical factory in the krai. The
Moscow leadership of the Communist Party is backing Romanov. LB

ABDULATIPOV FLOATS NEW SOLUTION FOR CHECHNYA'S STATUS. Speaking at a press
conference in Moscow on 11 February, Russian Deputy Prime Minister Ramazan
Abdulatipov proposed the adoption of a law on the temporary status of
Chechnya. That legislation, he said, would regulate the administrative
borders between Chechnya and the rest of the Russian Federation and the
interaction between federal and republican authorities, ITAR-TASS reported.
Abdulatipov argued that such a law would expedite the financing of
Chechnya's economic reconstruction, noting that no funds have been
allocated for Chechnya from the1998 state budget. In Grozny, Chechen
Foreign Minister Movladi Udugov again rejected Russian Security Council
Secretary Ivan Rybkin's offer of maximum autonomy for Chechnya as an
associate member of the Russian Federation.  "A chain remains a chain,
however long," Udugov commented. LF

TATAR PRESIDENT SACKS STATE RADIO, TV HEAD.  Addressing the State Council
on 11 February, Mintimer Shaimiev announced the sacking of State Radio and
Television Chairman Nail Khusutdinov, RFE/RL's Kazan bureau reported .
Shaimiev said he was outraged that state television coverage of his address
to the State Council the previous day had omitted remarks criticizing the
government in general and the industry department and economics ministry in
particular. LF


TRANSCAUCASUS AND CENTRAL ASIA

RUSSIA, U.S. TO HELP INVESTIGATE SHEVARDNADZE ASSASSINATION BID.  Georgian
Defense Minister Vardiko Nadibaidze told journalists in Tbilisi on 11
February that Russian military officials have agreed to allow Georgian
border guards to monitor all flights to and from Russia's military base at
Vaziani, near Tbilisi. Some Georgian parliamentary deputies believe
President Eduard Shevardnadze's attackers used that facility as a base.
Russia has also tightened security measures at its frontier posts with
Georgia. The U.S. has offered to send a team of experts to help in the
investigation of the failed 9 February attack on Shevardnadze's motorcade.
Two days later, on 11 February, Georgian police found the car and weapons
used in the assault. The same day, Georgian Prosecutor-General Djamlet
Babilashvili said he will again demand that Moscow extradite former
Georgian Security Minister Igor Giorgadze, who is suspected of
master-minding the failed attempt on Shevardnadze's life in August 1995. LF

ANKARA CONCERNED ABOUT SITUATION IN TRANSCAUCASUS. Turkish Minister of
State Ahat Andican has expressed concern that instability in the
Transcaucasus following the assassination attempt against President
Shevardnadze may adversely impact on plans to build a Baku-Ceyhan pipeline
for the export of Azerbaijani, Kazakh, and Turkmen Caspian oil, the
"Turkish Daily News" reported on 12 February.  "Russkii telegraf" had
reported  the previous day that the Azerbaijani International Operating
Committee may fail to meet its fall 1998 deadline for deciding whether to
proceed with that project.  Andican also said that the 3 February
resignation of Armenian President Levon Ter-Petrossyan will lead to a
deterioration in Turkish-Armenian relations. He charged that "radicals
headed by Prime Minister Robert Kocharyan do not want the Nagorno-Karabakh
conflict solved. These are not favorable developments for Turkey and
Azerbaijan." LF

ARMENIAN COMMUNIST LEADER LAUNCHES ELECTION CAMPAIGN. Sergei Badalian, who
polled 6.34 percent of the vote in the 1996 Armenian presidential
elections,  has unveiled his program for the 16 March poll, RFE/RL's
Yerevan bureau reported on 11 February. Badalian affirmed that, if elected,
his first move will be to commit Armenia to membership of the
Russia-Belarus union., which, he said, would help resolve the Karabakh
conflict. Badalian also pledged to restore local soviets, halt
privatization, and amend the constitution to curtail the power of the
president and increase that of the parliament. Meeting on 11 February with
members of the Fatherland parliamentary faction, Prime Minister and acting
President Kocharyan called for the adoption of a new election law and of a
statute differentiating between the status of a politician and that of a
state official, Noyan Tapan reported. LF

ARMENIAN SERVICEMAN SHOOTS DEAD SIX COLLEAGUES. A private serving with an
Armenian military unit at Armavir, 30 kilometers west of Yerevan, shot dead
five sleeping servicemen and an officer in the early morning of 11
February, Noyan Tapan reported. The private then fled the barracks. His
body was found in Yerevan the next day, RFE/RL's Yerevan bureau reported.
Defense Minister Vazgen Sargsian told journalists that the killer had
evaded military service for two years before he was drafted in late 1996. LF

AZERBAIJANI JOURNALISTS PROTEST HARASSMENT. Mass media representatives
protested to President Heidar Aliev on 11 February over the assault the
previous day on a journalist from the private ANS TV company, Turan
reported. The local administrator of Binagadi district had beaten up
journalist Eldaniz Aliev, who was investigating complaints by displaced
persons living temporarily in the district. LF

AGREEMENT REACHED ON NEW GOVERNMENT LINEUP IN TAJIKISTAN. At their 11
February meeting, Tajik President Imomali Rakhmonov and United Tajik
Opposition leader Said Abdullo Nuri agreed on the ministries that are to be
handed over to UTO representatives, RFE/RL correspondents in Dushanbe
reported. The peace agreement signed last year provided for 30 percent of
all posts to be allocated to the UTO. Representatives of the UTO will
become ministers of economics (Davlat Usmon), labor and employment
(Khudaberdy Kholiknazarov), water resources and land improvement (Davlatbek
Makhsudov), and the head of the customs committee (Rahim Karimov).  BP

FRENCH COMPANY SIGNS CONTRACT WITH TURKMENNEFT. The French company
Schlumberger  has signed a long-term contract with Turkmenistan's national
oil company, Turkmenneft,  Interfax and AFP reported on 11 February.
Schlumberger will service wells and provide equipment for three fields in
western Turkmenistan. No details have been released on the total value of
the contract. BP

END NOTE

MOUNTING MOSCOW-GROZNY TENSIONS

by Floriana Fossato

        Chechen President Aslan Maskhadov was sworn in one year ago, on 12
February 1997. His victory raised hopes that relations between Moscow and
the separatist North Caucasus republic would significantly improve
following some 20 months of bloody military conflict. However, one year
later, Chechen and Moscow officials are growing increasingly impatient with
the lack of progress in their talks.
        Earlier this week, Russian Deputy Prime Minister Ruslan Abdulatipov
said Moscow and Grozny are now beginning "real work" to overcome the
tragedy of the war, but he added that there are powerful forces in both
Moscow and Grozny opposed to any peace agreement.
        Abdulatipov said the first meeting of the Russian Security Council
inter-ministerial commission on Chechnya  would focus on guaranteeing
security along the Chechen-Russian border. Chechen border guards officials
have said the republic is reinforcing its borders with neighboring Russian
regions, particularly Dagestan. Chechen officials were not expected to take
part in that  meeting.
        Abdulatipov also said Moscow and Grozny should work out together a
"double compromise" on the status of Chechnya, but he did not elaborate.
        A cease-fire agreement in 1996 and a peace treaty signed last year
left the republic's status undecided. Since the withdrawal of Russian
troops in late 1996, Chechnya has considered itself independent, but Moscow
insists that the republic is--and will remain--part of the Russian
Federation.
        Maskhadov last week recalled all Chechen ministers and agency heads
from Moscow and banned all flights from Grozny to the Russian capital. He
accused the Kremlin of failing to meet its commitments under the peace
accord that he and President Boris Yeltsin signed last May, which included
agreements on customs and on direct international flights from Grozny.
        Maskhadov also said his government might be "obliged to review
whether to go on safeguarding" the 150 kilometers of pipeline delivering
oil from the Caspian Sea to the Russian Black Sea port of Novorossiisk "if
Russia does not honor its commitments under the 1996 Khasavyurt accord and
other agreements." More than 400 armed Chechens have guarded the pipeline
since November, when oil started flowing.
        Chechen Information Minister Akhmed Zakayev  has complained  that
the only agreement implemented by Moscow last year was on oil transit
across Chechnya. He added that the agreement was implemented only because
it was "advantageous for Russia."
        The oil-transit agreement expired at the end of last year and,
according to Russian reports, a new one has still to be worked out. The
daily "Russkii Telegraf" on 10 February quoted unnamed Russian oil
officials as saying negotiations between Moscow and Grozny at the beginning
of the year yielded no results and a date for new negotiations has yet to
be set.
        The problem lies in determining the oil-transit fee. So-called
early oil,  or limited production capacity, from the Caspian started
flowing on 12 November. Under the interim transit deal, a tariff of 43
cents a ton was established. Chechnya had demanded more than $2 a ton.
Moscow insisted that 43 cents per ton is the normal transit fee for oil
sent by pipeline across Russia. It thereby ignored Chechnya's request to be
treated as an independent partner in the deal, instead of one of the 89
"subjects" of the Russian Federation. "Russkii Telegraf" quoted the new
head of Chechnya's oil sector, Shirvani Basaev, as saying Chechnya expects
oil to start flowing again at a tariff of more than $4 a ton.
        Economic and political issues are closely linked in the strained
relationship between Moscow and Grozny. Chechen Foreign Minister Movladi
Udugov has said Chechnya's leadership "will be forced to take decisive
steps if there is no breakthrough in the negotiating process in the near
future." He has also insisted that a  Moscow-Grozny treaty making clear
Chechnya's status must be concluded this year. According to Udugov, if
Moscow and Grozny do not sign such a treaty  in 1998, "we will not be
allowed to  do so in 1999," when parliamentary elections are scheduled in
Russia. Russian presidential elections are due to take place in the year
2000.
        The failed assassination attempt against Georgia's President Eduard
Shevardnadze on 9 February seems likely further to strain Moscow-Grozny
relations.
        Udugov reacted angrily at initial reports that one of the attackers
was an ethnic Chechen from Dagestan. He blamed the attack on Russian secret
services, which, he claimed, wanted to isolate Chechnya and damage its
relations with Georgia. Udugov said he does not rule out that the
assassination attempt was linked to plans to transit Caspian oil through
Georgian territory, a route established as an alternative to the Chechen
one. According to Udugov, forces behind the attack "are trying to prove to
the world that the Caucasus is an unstable region and that the security of
pipelines cannot be assured."
        Like Shevardnadze and other Georgian officials, Udugov noted that
"it is unlikely a terrorist taking part in such an operation would carry
identification papers with him." Udugov said it seemed more likely that the
slain attacker was killed by his comrades and the passport planted on his
body.
        No Russian reaction has followed Udugov's comments. The press
secretary of Russia's Security Council, Igor Ignatev, declined comment in a
telephone interview with RFE/RL. But he did say that harsh rhetoric does
not help to create an atmosphere conducive for negotiations.

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


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