RFE/RL NEWSLINE Vol 2, No. 38, Part I, 25 February 1998

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RFE/RL NEWSLINE Vol 2, No. 38, Part I, 25 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
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Headlines, Part I

* CHERNOMYRDIN CRITICIZES ENERGY POLICY

* ZVIADISTS RELEASE ANOTHER UN HOSTAGE

* UKRAINIAN PRESIDENT SAYS RELATIONS WITH RUSSIA IMPROVING

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RUSSIA

CHERNOMYRDIN CRITICIZES ENERGY POLICY. Prime Minister Viktor Chernomyrdin
on 24 February criticized the Fuel and Energy Ministry for failing to
reverse "negative trends" in the energy sector in 1997, ITAR-TASS reported.
Addressing a meeting of ministry employees, Chernomyrdin noted production
fell by 3.2 percent in the energy sector, which, he said, accounts for 50
percent of Russian export revenues and 40 percent of budget revenues. He
noted that rising output in the oil industry did not match the growth of
oil reserves in 1997, and he criticized state management of the electricity
sector. Chernomyrdin said the government will introduce an energy
conservation program and stricter controls over state-funded energy
consumers in order to tackle the non-payments problem in the sector. Fuel
and Energy Minister Sergei Kirienko and Boris Brevnov, the chief executive
of the electricity giant Unified Energy System, are both considered close
to First Deputy Prime Minister Boris Nemtsov. LB

NEMTSOV SAYS GOVERNMENT MAY BLOCK SOME MERGERS. Nemtsov announced at the 24
February meeting of Fuel and Energy Ministry employees that the government
will not support mergers that would give new companies more than a 30
percent share of the domestic oil or gas market, Russian news agencies
reported. Nemtsov did not name any specific firms. The State Anti-Monopoly
Committee has yet to approve the recent merger of the Yukos and Sibneft oil
companies to form the Yuksi firm. Chernomyrdin attended the Yuksi signing
ceremony and praised the merger, but Nemtsov is charged with overseeing the
work of the State Anti-Monopoly Committee (see "RFE/RL Newsline," 20 and 21
January 1998). Last month, a redistribution of duties in the government
gave Chernomyrdin the authority to supervise energy policy, but Nemtsov has
vowed to stay involved in forming government policies in that area. LB

MINISTRY REPORTS ON MISAPPROPRIATION OF WAGE FUNDS. Government spokesman
Igor Shabdurasulov announced on 24 February that the Finance Ministry has
handed over to Chernomyrdin its report on how funds earmarked for wage
payments were allocated in late 1997, Interfax reported. Shabdurasulov said
the report shows how some federal funds went astray in the regions. He
added that Chernomyrdin will make the report's conclusions public at a 26
February cabinet session, to be attended by President Boris Yeltsin.
Government ministers have repeatedly blamed regional officials for the fact
that not all wage arrears to state employees were settled by the end of
1997. The Prosecutor-General's Office announced on 24 February that 69
officials have been convicted of embezzling a total of 2.96 billion old
rubles ($490,000) in federal funds since 1996, ITAR-TASS reported on 24
February. Meanwhile, "Trud-7" reported on 24 February that 6-8 million
state employees are still owed back wages. LB

GOVERNMENT SLASHES BENEFITS TO AREAS AFFECTED BY CHORNOBYL. The government
has significantly reduced or eliminated benefits paid to some 900,000
people living in areas affected by radiation from the 1986 Chornobyl
disaster, "Trud-7" reported on 24 February. A directive issued last
December changed the status of 3,271 towns and villages in 14 Russian
regions. Workers and pensioners living in those areas now receive less
money in compensation from the government and will no longer be allowed to
begin to receive pensions five years earlier than the ordinary retirement
age. Child benefits have also been reduced. The newspaper argued that the
government's policy of "saving money on anyone possible" runs counter to
Yeltsin's declaration of 1998 as the "year of human rights" in Russia. LB

BANKS DISAPPOINTED BY NEW RULES ON GOLD, SILVER EXPORTS. Commercial banks
are not pleased with a new government directive outlining the rules for
gold and silver exports, "Kommersant-Daily" reported on 21 February. The
directive deals with the implementation of a July 1997 presidential decree
on procedures for selling and exporting gold (see "RFE/RL Newsline," 24
July 1997). It was originally expected to have been issued last summer,
soon after a government directive allowed banks to sell gold to and buy
gold from private citizens. Banks wishing to export gold may receive
licenses for a maximum of one year, and the licensing procedure, which
involves the Central Bank and the Foreign Trade Ministry, is expected to
take at least two to three months. "Kommersant-Daily" argued that although
the July 1997 decree prohibited the government from establishing quotas on
gold exports, the licensing system will have the effect of limiting such
exports by banks. LB

CHERNOMYRDIN TO GAIN MORE MEDIA EXPOSURE. Chernomyrdin will soon begin
weekly appearances on a live call-in television show on fully state-owned
Russian Television (RTR), ITAR-TASS reported on 24 February. RTR has been
considered close to First Deputy Prime Minister Anatolii Chubais.
Meanwhile, in an interview with the 22 February-1 March edition of
"Moskovskie novosti," former Security Council Deputy Secretary Boris
Berezovskii said that of the leading presidential contenders, Chernomyrdin
is most likely to keep the government's "fundamental policies on track" and
prevent "score-settling." Berezovskii finances many media outlets and
wields considerable influence at 51 percent state-owned Russian Public
Television (ORT). Chernomyrdin can count on support from Gazprom's media
assets, which include the Moscow-based newspapers "Trud" and "Rabochaya
tribuna" and some 100 local newspapers, "Kommersant-Daily" reported on 24
February. Gazprom also owns shares in ORT and the private network NTV. LB

BATURIN TO FLY TO 'MIR.' Yuri Baturin, former Defense Council secretary and
presidential security adviser, is to be a member of one of the last crews
to work on Russia's "Mir" space station, ITAR-TASS reported on 24 February.
Baturin is scheduled fly to the station on 2 August, along with Gennadii
Padalka and Sergei Avdeev. Two more crews will follow in 1999, before the
station is closed down at the end of that year. Baturin, who was dismissed
as security adviser earlier this month (see "RFE/RL Newsline" 13 February
1998), said he is glad the space agency's decision came now as he could
"fully devote himself to preparing for the flight." BP

FEW VETERANS LEFT IN PRESIDENTIAL ADMINISTRATION. Yet another Kremlin
veteran is on the way out. Mikhail Krasnov, who joined the presidential
administration in 1993 and has been Yeltsin's legal adviser since 1995,
announced on 18 February that he will soon resign. Although Krasnov
portrayed his departure as his own decision, "Kommersant-Daily" reported on
19 February that he was forced out because the president was dissatisfied
with his work on the first draft of Yeltsin's message to the parliament.
Several other longtime presidential advisers were fired recently (see
"RFE/RL Newsline," 13 February 1998). "Izvestiya" commented on 20 February
that economic adviser Aleksandr Livshits is now the "last of the Mohicans"
in the Kremlin. "Nezavisimaya gazeta" reported the same day that the only
officials in the administration who have direct access to Yeltsin are his
Chief of Staff Valentin Yumashev, his daughter Tatyana Dyachenko, and his
spokesman Sergei Yastrzhembskii. LB

YELTSIN STILL WANTS TO SCRAP PROPORTIONAL REPRESENTATION... Aleksandr
Kotenkov, the president's representative in the State Duma, told the
official newspaper "Rossiiskaya gazeta" on 21 February that Yeltsin still
wants to eliminate the proportional representation system currently used to
elect half the Duma. Kotenkov said electing all 450 Duma deputies in
single-member districts would be "more democratic." He noted that in the
1995 Duma elections, the four groups that were eligible to receive seats
distributed proportionally gained a combined total of only 50 percent of
the vote. (He did not mention that less than 5 percent of the 225 deputies
elected in single-member districts in 1995 gained more than 50 percent of
the vote in their districts.) At the same time, Kotenkov said some "very
interesting compromises" on the electoral law have been proposed. This
suggests Yeltsin's position may be flexible. LB

...BUT NDR CONSIDERS THAT CHANGE 'PREMATURE.' The pro-government Our Home
Is Russia (NDR) faction believes that it would be "premature" to eliminate
proportional representation in the Duma elections, Duma First Deputy
Speaker Vladimir Ryzhkov told ITAR-TASS on 17 February. He said switching
to a system in which all 450 Duma deputies are elected in single-member
districts will be possible once Russia has developed strong political
parties. But if such a change is enacted now, Ryzhkov said, "the young
multi-party system will perish" and the Duma will come to reflect mainly
regional rather than nationwide interests. LB

ANOTHER COMPROMISE PROPOSED ON ELECTORAL LAW. Duma Deputy Vladimir Lysenko
has joined the ranks of those offering compromise proposals on the
electoral law (see "RFE/RL Newsline," 10 February 1998). Lysenko, whose
bloc won less than 2 percent of the vote in the 1995 parliamentary
elections, spoke out on 16 February against electing the Duma exclusively
in single-member districts, ITAR-TASS reported. Instead, Lysenko favors a
"floating barrier" for electoral blocs. Under his proposal, the current 5
percent barrier would be lowered if necessary to ensure that the groups
eligible to receive Duma seats distributed proportionally have won a
combined total of at least 90 percent of the vote. LB

TOP OFFICIAL FACES CORRUPTION CHARGES IN TVER. Tver Oblast Deputy Governor
Viktor Vokov was arrested on 20 February on bribery charges,
"Kommersant-Daily" reported four days later. Oblast prosecutors have
provided few details about the case, but Volkov, who was in charge of
supervising the agrarian and food production sectors in the oblast, is
believed to be accused of taking $250,000 in bribes. Sources in the oblast
administration say Volkov's arrest is politically motivated and connected
to a long-running conflict between Governor Vladimir Platov and Tver
Prosecutor Vladimir Parchevskii, whom Platov has tried to replace,
"Kommersant-Daily" reported on 25 February. Former Tver Deputy Governor
Ibragim Gulaev was arrested in January. LB

RUSSIAN FOREIGN MINISTRY DEFENDS DUMA DEPUTIES' KARABAKH TRIP. Foreign
Ministry spokesman Gennadii Tarasov on 24 February rejected Azerbaijan's
objections to the participation by some 30 Russian State Duma deputies in
the 20 February celebrations of the 10th anniversary of the campaign for
Nagorno-Karabakh's unification with Armenia, Interfax and Turan reported.
One of those deputies was former Russian Security Council Secretary
Aleksandr Lebed. The Azerbaijani Foreign Ministry had argued that the visit
"damages Russia's image" and "runs counter to Azerbaijani-Russian
relations." But Tarasov rejected that argument on the grounds that the
deputies' visit had been private, not official. Tarasov added that Russia's
position on resolving the Karabakh conflict "remains unchanged." LF

WHEREABOUTS OF FRENCH HOSTAGE STILL UNCLEAR. Senior Chechen and North
Ossetian government representatives have both denied that UNHCR official
Vincent Cochetel is being held hostage on their territory, Russian agencies
reported. Cochetel, a French citizen, was abducted in the North Ossetian
capital, Vladikavkaz, late last month (see "RFE/RL Newsline," 30 January
1998). Chechen Deputy Prime Minister Kazbek Makhashev told ITAR-TASS on 24
February that he believes Cochetel is still in North Ossetia. But North
Ossetian Prime Minister Taimuraz Mamsurov told French diplomats the same
day that Cochetel is "safe and sound" in Chechnya.  Mamsurov added that
North Ossetian President Aleksandr Dzasokhov has set up a special task
force to locate and free Cochetel. So far, no ransom has been demanded for
Cochetel's release. LF


TRANSCAUCASUS AND CENTRAL ASIA

ZVIADISTS RELEASE ANOTHER UN HOSTAGE. Supporters of former Georgian
President Zviad Gamsakhurdia who abducted four UN observers in western
Georgia on 19 February have released a second hostage, Swedish Major
Maarten Moelgaard. The abductors said Moelgaard's release, which took place
late on 24 February, was a "gesture of good will." Earlier that day in
Moscow,  meeting a demand by the kidnappers, Georgian Ambassador to Russia
Vazha Lortkipanidze held talks with Nemo Burchuladze, who was deputy
parliamentary speaker under Gamsakhurdia in 1990- 1991. Burchuladze
stressed he has no links with the hostage-takers but agreed to their demand
that he travel to Tbilisi on 25 February to continue talks on the remaining
hostages' release under the aegis of the UN. Burchuladze said the abductors
now demand a "halt to repression" in Georgia and international condemnation
of Gamsakhurdia's violent ouster by two Georgian warlords in January 1992,
Caucasus Press reported. LF

RUSSIAN FOREIGN MINISTRY CONDEMNS GEORGIAN ALLEGATIONS. Foreign Ministry
spokesman Gennadii Tarasov on 24 February said that recent statements by
various Georgian officials claiming unnamed Russian circles were behind the
failed 9 February attempt to assassinate Georgian President Eduard
Shevardnadze are "unacceptable" and "not conducive" to improving bilateral
understanding. The previous day, Tarasov summoned Georgian ambassador
Lortkipanidze to inform him that "excessively emotional statements by the
Georgian side" are unhelpful. Addressing  a congress of the majority Union
of Citizens of Georgia on 22 February, Shevardnadze implied there had been
Russian participation in the attempt on his life, but he ruled out the
involvement of President Yeltsin.  Two days later, the Russian Defense
Ministry announced that Defense Minister Igor Sergeev's planned visit to
Georgia on 27-28 February has been postponed, ITAR-TASS  reported. LF

JAPAN TO PARTICIPATE IN ANOTHER CASPIAN OIL CONSORTIUM. On the first day of
his official visit to Japan,  Azerbaijani President Heidar Aliev met with
representatives of the Mitsui Corporation, AFP and Turan reported on 24
February. An agreement was reached whereby Azerbaijan's state oil company
SOCAR will cede to Mitsui a 15 percent share in the consortium that was set
up last fall to exploit the Kyurdashi Caspian oil field. Under the original
agreement, SOCAR and Italy's Agip originally each had a 50 percent stake in
the consortium; later, SOCAR ceded 25 percent to Agip. Kyurdashi has
estimated oil reserves totaling 350 million barrels. Japan's Itochu has
shares in two other Azerbaijani Caspian oil consortia. LF

IRANIAN 'SPIES' DETAINED IN KAZAKHSTAN. Kazakh security services have
detained three Iranian nationals and one Kazakh citizen, RFE/RL's Kazakh
Service reported on 25 February. The Kazakh citizen was allegedly passing
"secret information" to the Iranians when they were apprehended by the
security agents. Kazakhstan's security service "had identified the Iranian
spies long ago," according to Interfax. ITAR-TASS, meanwhile, reported that
the Kazakh citizen had been passing information on political, economic, and
social issues as well as "data on some people in power." BP

TAJIK FIELD COMMANDER SEIZES HUMANITARIAN AID. The Tajik Interior Ministry
on 24 February confirmed that, three days earlier, a group loyal to field
commander Mullo Abdullo hijacked two trucks carrying humanitarian aid from
Dushanbe to Komsomolabad, Interfax reported. The group took control over a
check point in an area some 90 kilometers east of Dushanbe, stopped the
trucks, beat the police escort, took the policemen hostage and drove off in
the trucks. They later released seven of the 10 policemen. They also
returned one of the trucks after unloading its cargo. A unit of 40 troops
from the Interior Ministry was sent to the area on 22 February. BP

KYRGYZ, KAZAKH MUFTIS CALL FOR BAN ON "NEW ISLAMIC SECTS." Absatar Agy and
Raatbek Agi have called on the presidents of the five Central Asian states
to issue a ban on the activities of "new Islamic sects,"  including
Wahhabism, RFE/RL's Bishkek bureau reported. The two religious leaders
convened an international conference in the Kyrgyz capital on 21 February
entitled "Integration of the Central Asian Muslim Community." Participants
debated restoring cooperation between Muslim religious communities in the
CIS strengthening "inter-ethnic stability,"  and combatting "religious
extremism." Kyrgyz President Askar Akaev, Prime Minister Apas Jumagulov,
parliamentary speaker Andygany Erkebaev, and Pakistani ambassador Nazar
Abbas attended the conference, together with religious leaders from the
five Central Asian states, Russia, and Azerbaijan, according to
"Nezavisimaya gazeta." LF

KYRGYZSTAN'S BID FOR WTO MEMBERSHIP STALLED.  Kyrgyzstan's membership in
the CIS Customs Union is the main obstacle to that country joining the
World Trade Organization, an unnamed Kyrgyz government official told
RFE/RL's Bishkek bureau on 23 February. President Akaev met with WTO
officials at the Davos Economic Forum in January to discuss his country's
bid for membership of that organization. He failed, however, to receive
assurances that Kyrgyzstan would be invited to join. LF

REGIONAL AFFAIRS

UKRAINIAN PRESIDENT SAYS RELATIONS WITH RUSSIA IMPROVING. On the eve of his
trip to Moscow, Leonid Kuchma said in an interview published by "Izvestiya"
on 24 February that relations between Kyiv and Moscow have greatly improved
but are only at "B-minus" level. Kuchma said that  he recently would have
rated relations as a "C" but now the "toughest knots" in bilateral
relations have been "unraveled." He  compared Russia and Ukraine to a
divorced couple that "only remember problems." Kuchma complained of low
Russian investment in Ukraine, saying that its total was equal to
investment from Cyprus. Acknowledging the economic and social problems in
his country, Kuchma said he hoped a more reform-minded parliament would be
elected when legislative elections are held on 29 March. Kuchma meets with
President Yeltsin in Moscow on 26 February. PB

IS KUCHMA GETTING COLD FEET OVER GUAM? Asked by "Izvestiya" to elucidate
his reservations over the CIS, Kuchma said Ukraine has not succeeded in
resolving any of its major problems within the framework of the CIS,  whose
members, he added, have concluded numerous agreements that remain on paper.
For that reason, Kuchma said, Ukraine considers bilateral ties more
productive. He  nonetheless said Kyiv  believes the CIS should be preserved
but "we are against groups of two or four inside the Commonwealth." It is
unclear whether Kuchma was referring to the Russia-Belarus union,  the CIS
Customs Union between Russia, Belarus, Kazakhstan, and Kyrgyzstan, or the
Georgia-Ukraine-Azerbaijan-Moldova alignment that emerged last fall. LF

RUSSIAN DEPUTY PREMIER IN KYIV. Yakov Urinson and several prominent Russian
businessmen held talks with Ukrainian Prime Minister Valery Pustovoytenko
on 24 February, ITAR-TASS reported. Among those joining Urinson were
Vladimir Gusinksii of the Media-Most conglomerate and Mikhail
Khodorkovskii, head of the oil giant Yuksi. Urinson said he would discuss
economic topics and issues related to President Kuchma's upcoming visit to
Moscow. Pustovoytenko said before a gathering of Russian and Ukrainian
businessmen that an economic agreement expected to be signed by the
countries' presidents in Moscow would double trade between the two
countries over the next several years. He also called on Russian companies
to take part in the construction of additional nuclear reactors in Ukraine.
PB


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