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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 39, Part I, 26 February 1998


___________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 39, Part I, 26 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

* YELTSIN LEAVES CABINET SESSION WITHOUT SACKING MINISTERS

* CHERNOMYRDIN CALLS FOR MORE CUTS TO DRAFT BUDGET

* UN HOSTAGES FREED IN GEORGIA

* End Note: FLIRTING WITH MADNESS

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RUSSIA

YELTSIN LEAVES CABINET SESSION WITHOUT SACKING MINISTERS. President Boris
Yeltsin left a 26 February government session without announcing the
dismissal of several cabinet members, although he had been expected to do,
RFE/RL's Moscow bureau reported. Opening the meeting, Yeltsin said three
government ministers might no longer have their jobs by the end of the
session. However, he left during an interval, and aides said he returned to
the Kremlin to record his regular weekly radio address. During an hour-long
speech before Yeltsin's departure, Prime Minister Viktor Chernomyrdin
criticized various aspects of the government's performance in 1997,
especially efforts to boost foreign trade, cooperation with other CIS
states, and tax collection. The premier's remarks fueled speculation that
Foreign Trade Minister Mikhail Fradkov, Deputy Prime Minister Valerii
Serov, who is in charge of CIS issues, and State Tax Service chief
Aleksandr Pochinok would be fired by day's end. LB

CHERNOMYRDIN CALLS FOR MORE CUTS TO DRAFT BUDGET... Chernomyrdin announced
at the 26 February cabinet session that some 50 billion rubles ($8.2
billion) in spending cuts are needed to make the draft 1998 budget
realistic, Reuters reported. Minister without portfolio Yevgenii Yasin has
also said the budget as currently drafted contains a "hole" of 50 billion
rubles, RFE/RL's Moscow bureau reported on 25 February. A budget calling
for 500 billion rubles in spending has been passed in three readings in the
State Duma. After Yeltsin described that budget as unrealistic during a 17
February address to the parliament, the government proposed an amendment to
allow it to withhold expenditures totaling 27.9 billion rubles in the event
of revenue shortfalls. However, the Duma voted down that amendment (see
"RFE/RL Newsline," 18 and 23 February 1998). Deputies are likely to object
even more strongly to the larger cuts proposed by Chernomyrdin. LB

...AND TAX REFORM. Also, Chernomyrdin urged again that a new tax code must
be adopted this year, ITAR-TASS reported. He said the code recently
submitted by the government to the Duma would greatly simplify the tax
system since it envisages a total of only 30 taxes, including a reduced
profit tax, as well as a simpler tax procedure for small businesses. In
addition, he said, agricultural producers would pay a single land tax to
replace several taxes currently levied on farms. The Duma passed a
government-proposed tax code in the first reading last June, but it was
stalled as committees examined several thousand proposed amendments. This
year, the Duma may consider several alternative tax codes in addition to
the government's version (see "RFE/RL Newsline," 26 January 1998). LB

PREMIER RAPS SOME REGIONAL LEADERS. Addressing the 26 February cabinet
session, which was also attended by some regional leaders, Chernomyrdin
charged that federal funds often are not spent on the programs for which
they are earmarked, ITAR-TASS reported. He called for an end to that
practice. (Some regional officials have argued that because of chronic
underfunding from the federal government, they are occasionally forced to
spend money intended for wages or pensions on other vital needs, such as
fuel supplies.) Chernomyrdin criticized some regions for lagging behind on
Pension Fund payments. He singled out the leaders of the resource-rich
Khanty-Mansi and Yamal-Nenets Autonomous Okrugs and reminded them that
during the Soviet period, the whole country invested in developing those
regions. He said the government will in future make the allocation of some
federal funds conditional on regional contributions to the Pension Fund. LB

NEMTSOV SAYS YELTSIN HAS GOOD RE-ELECTION PROSPECTS. First Deputy Prime
Minister Boris Nemtsov says the "self-preservation instinct" of Russians
means Yeltsin has good prospects for re-election in 2000, if the
Constitutional Court decides he is eligible to serve another term. In an
interview published in "Nezavisimaya gazeta" on 25 February, Nemtsov argued
that Russians do not want any "shocks" and that their desire to "live in a
predictable country" is a strong factor in Yeltsin's favor. He added that
neither competing financial groups nor potential candidates from within the
"party of power" are likely to oppose Yeltsin if he decides to run again.
Last year some Russian commentators viewed Nemtsov as a strong presidential
contender. But Nemtsov has said he does not plan to run in 2000 and has
praised a possible Yeltsin candidacy as a "stabilizing factor" (see "RFE/RL
Newsline," 21 January 1998). LB

ILYUKHIN WANTS CRIMINAL CASES AGAINST CHUBAIS, CHERNOMYRDIN. Duma Security
Committee Chairman Viktor Ilyukhin, a prominent member of the Communist
Party,  has called on the Prosecutor-General's Office to open criminal
proceedings against Prime Minister Chernomyrdin and First Deputy Prime
Minister Anatolii Chubais, RFE/RL's Moscow bureau reported on 25 February.
Ilyukhin charged that Chernomyrdin and Chubais illegally cut budget
expenditures in the summer of 1997. The government reduced spending by some
65.8 trillion old rubles ($10.1 billion), he said, although the Duma never
passed a law authorizing the cuts. According to "Kommersant-Daily" on 26
February, Ilyukhin's accusations are based on an Audit Chamber report that
concluded the government broke the law by cutting the 1997 budget without
the Duma's approval. The newspaper also quoted unnamed Communist sources as
saying that the Communists will no longer separate Chernomyrdin from their
assessment of other government ministers. LB

PROSECUTORS EXAMINE CHUBAIS'S ACTIVITIES. Government sources say the
Prosecutor-General's Office is investigating some of Chubais's activities,
RFE/RL's Moscow bureau reported on 25 February. In addition to examining
last November's "book scandal," in which Chubais and several associates
each accepted a $90,000 honorarium from a publisher linked to Oneksimbank,
the Prosecutor-General's office is said to be checking documents related to
the activities of the State Property Committee since 1991. Also under
scrutiny are offers of apartments to those who moved to Moscow after
accepting official posts, a land purchase by Chubais, and a bank loan he
drew in order to build a dacha. And there is reportedly an inquiry into
whether Chubais gave the IMF information on the economic situation in
Russia, and if so, on what terms. LB

URINSON UNDER FIRE FOR ALLEGED FAVORS TO BANK. "Moskovskii komsomolets" on
25 February accused Economics Minister Yakov Urinson of using his
government post to promote the interests of Strategiya Bank, which is
headed by his brother. Among other things, the newspaper alleged that
Urinson helped the bank obtain a license to carry out certain hard-currency
transactions. Speaking to journalists on 25 February, minister without
portfolio Yevgenii Yasin characterized the article as part of a concerted
effort by some financial groups to "undermine" government ministers in
charge of economic matters, RFE/RL's Moscow bureau reported. He
acknowledged that he cannot characterize those ministers as "angels" but
claimed that "those who have paid for the [media] attacks" against them
have committed "far greater sins." LB

ALLEGATIONS AGAINST KULIKOV PROVOKE CONTROVERSY. Also on 25 February,
"Moskovskii komsomolets" charged that Interior Minister Anatolii Kulikov is
related to a formerly active member of an organized crime group who was
murdered in 1996. The Interior Ministry issued a statement denying the
accusations and denouncing the article as a "thoroughly planned action to
discredit" Kulikov and his ministry, ITAR-TASS reported. (The trial of the
men accused of the 1996 killing is scheduled to begin soon.)
"Kommersant-Daily" argued on 26 February that the "Moskovskii komsomolets"
report contains factual errors and unconfirmed information. LB

SEROV REJECTS ACCUSATIONS OVER UZBEK DEBT TO RUSSIA. Russian Deputy Prime
Minister Valerii Serov on 24 February refuted claims by "Moskovskii
Komsomolets" that he has reduced Uzbekistan's debt to Russia by $1.5
million, ITAR-TASS reported. Serov said the agreement to reduce the  Uzbek
debt was made "in line with all procedures" and that the relevant sum was
deducted from Russia's debt to Uzbekistan. "If we demand repayment from
other states, we should pay our own debts," he commented. The Russian
Interior Ministry, meanwhile, is investigating the allegations against
Serov. BP

IRANIAN FOREIGN MINISTER IN MOSCOW.  Kamal Kharrazi met with his Russian
counterpart, Yevgenii Primakov, in Moscow on 25 February to discuss
bilateral relations, economic cooperation, and regional issues, including
Iraq, Afghanistan, Tajikistan, and the Caspian Sea, Russian agencies
reported.  Primakov later told  journalists that bilateral relations are
developing "fruitfully" and without the interference of third countries.
Kharrazi said  both countries oppose on ecological grounds any project to
lay pipelines across the bed of the Caspian Sea. Kazakhstan and Azerbaijan
have discussed such a pipeline to export Kazakh oil via Baku. Interfax
cited unnamed Russian diplomatic sources as saying Moscow may go back on
its commitment not to sell more arms to Iran if the U.S. resorts to force
against Iraq. Tehran wants to purchase the latest generation of Russian
combat helicopters and high-speed warships, according to dpa.  LF

RUSSIA APPOINTS NEW ENVOY TO NATO. Yeltsin has appointed career diplomat
Sergei Kislyak as Russia's ambassador to Belgium and representative at NATO
headquarters, Russian news agencies reported on 25 February. Kislyak
replaces Vitalii Churkin, who is to be transferred to an unspecified new
post. Last year, there was some speculation in the Russian media that
Yeltsin would appoint former Defense Minister Pavel Grachev as Russia's
representative or military envoy to NATO. Meanwhile, AFP reported that at a
25 February meeting with diplomats from the NATO council, Russian diplomats
proposed setting up joint Russia-NATO anti-terrorism teams. LB

RUSSIA TO CONTINUE HELP BUILDING CUBAN NUCLEAR PLANT. Russian Minister for
Emergency Situations Sergei Shoigu has said his country will continue to
help Cuba build the Juragua nuclear power plant, Interfax reported on 24
February. Shoigu said that whereas earlier projects with Cuba were financed
entirely by the government in Moscow, future deals with that country will
be financed  by Russia's private sector. Cuba and Russia will continue to
exchange sugar for oil, but Shoigu said new arrangements are being made for
joint ventures to take over that trade. BP

TRANSFER OF RESPONSIBILITY FOR PRISON SYSTEM DELAYED... The transfer of
responsibility for  the penitentiary system from the Interior Ministry to
the Justice Ministry is unlikely to take place by the appointed time,
"Kommersant-Daily" reported on 25 February. Under an October 1997
presidential decree, the transfer should be completed by 1 June. But
according to the daily, the Interior Ministry is "in no rush" to complete
that process as it will lose up to 35 percent of its state funding. In the
meantime, the Justice Ministry says funds intended for improving conditions
in Russia's overcrowded jails are being spent by the Interior Ministry for
projects such as the construction of new barracks for its troops. The Duma
must approve some 20 legislative acts before the transfer can take place. BP

...AS PRISON CONDITIONS WORSEN. Meanwhile, reports show that prison
conditions are well below international standards, "Nezavisimaya gazeta"
reported on 25 February. Pre-trial detention centers and prisons are so
overcrowded that the minimum space per person currently amounts to 1.6
square meters, compared with the intenational standard of 2.5 square
meters. Amnesty International  said last year that overcrowding is so bad
in Russia that in itself it amounts to torture. Some prisoners have been
moved to penal structures built in the 18th and 19th centuries. Reuters on
24 February cited official figures showing one in 10 prisoners suffering
from tuberculosis. BP

TATAR PRESIDENT EXPLAINS  CITIZENSHIP LAW.  Mintimer Shaimiev told Interfax
on 25 February that Tatarstan's new draft law on citizenship is based on an
article of the republic's constitution that allows dual citizenship.
Shaimiev said an earlier draft that would have enabled citizens of
Tatarstan to renounce Russian citizenship was "too radical" and could have
led to "undesirable repercussions." But Russian presidential representative
for the Federation Council Anatolii Sliva told Interfax that it is
"inadmissible" for federation subjects to introduce their own citizenship,
given that the Russian Federation is in itself a subject of international
law. LF

RUSSIAN-TATAR DEFENSE INDUSTRY PROTOCOL SIGNED. Tatarstan Prime Minister
Farit Mukhametshin on 24 February signed a protocol with visiting Russian
Deputy Defense Minister Nikolai Mikhailov on intensifying cooperation
within the defense industry, RFE/RL's Kazan bureau reported. Tatarstan is
to produce electronic identification systems for Russian aircraft. LF

TRANSCAUCASUS AND CENTRAL ASIA

UN HOSTAGES FREED IN GEORGIA. The gunmen who abducted four UNOMIG observers
in western Georgia on 19 February released their remaining hostages
unharmed on 25 February. That move followed talks in Tbilisi between
members of the current Georgian leadership, including President Eduard
Shevardnadze, and Nemo Burchuladze, who was deputy parliamentary speaker
under former President Zviad Gamsakhurdia. The Georgian authorities, which
have demanded Burchuladze's extradition from Moscow on corruption charges,
granted him immunity for the duration of the talks. Most of the estimated
20 hostage-takers surrendered to Georgian security forces several hours
after their leader, Gocha Esebua, escaped with at least two accomplices.
Esebua is believed to have crossed the internal border into Abkhazia.  LF

GEORGIA, ABKHAZIA REACH AGREEMENT ON ECONOMIC ISSUES.  Meeting in Sukhumi
on 23-24 February, Georgian Minister of State Niko Lekishvili and Abkhaz
Prime Minister Sergei Bagapsh reached agreement on restoring the
high-voltage power line between Georgia's Inguri Hydro-electric power
station and the Russian Federation and on building a gas pipeline to
transport Russian gas to Georgia, Caucasus Press reported. The World Bank
is to provide $50 million for repairs to the Inguri station; and the power
it generates will be shared  between Georgia and Abkhazia at a ratio of
40:60. The agreements must still be endorsed by Russia, Bagapsh told
journalists on 24 February. Talks on restoring rail links were inconclusive
and will be resumed only after the repatriation to Abkhazia of Georgian
displaced persons. Lekishvili also met with Abkhaz President Vladislav
Ardzinba. LF

AZERBAIJANI DEFENSE MINISTER ON STATE OF ARMY. In an interview with Turan
on 24 February, Lieutenant-General Safar Abiev conceded that serious
problems exist within the Azerbaijani armed forces, including the theft of
state property by officers. But he denied charges that army personnel are
"starving." Abiev noted that the military is capable of guarding the
Baku-Supsa oil pipeline if President Aliev requests it to do so. Abiev
added that Azerbaijan has anti-missile systems capable of neutralizing the
"out-of-date, low-precision" Scud missiles that he claimed Russia  has
supplied to Armenia. He said that Russia has also supplied the unrecognized
Republic of Nagorno-Karabakh with Krug and Osa air-defense systems, but he
expressed doubts that they constitute part of the unified CIS air-defense
system. LF

IRAN DENIES SPYING ON KAZAKHSTAN. A spokesman for the Iranian Embassy in
Almaty has denied that three Iranian nationals taken into custody by
Kazakhstan's security service the previous day were spying on that country
(see "RFE/RL Newsline," 25 February 1998), Russia's NTV and AFP reported.
"We absolutely deny that there are any Iranian secret agents in
Kazakhstan," the spokesman said. The Iranian Embassy also informed the
Kazakh Foreign Ministry that the three Iranian nationals have no links to
the Iranian secret services.  But the Kazakh National Security Committee
said they "represent a threat to the country's security." Kazakh
authorities claim one of the Iranians is a special agent from the Iranian
Ministry of Information and Security and the other two are bodyguards. BP

RETURN OF TAJIK OPPOSITION LEADER DELAYED AGAIN. Ali Akbar Turajonzoda, the
deputy leader of the United Tajik Opposition,  told RFE/RL correspondents
that his planned return to Tajikistan on 25 February was held up owing to
conditions at Dushanbe airport. Turajonzoda and an 18-member delegation
from the UTO, including its leader Said Abdullo Nuri, were told at Tehran
airport that the Iranian 727 Boeing they were about to board was too large
to land at Dushanbe airport. This was disputed by Nuri. Later, Turajonzoda
was told that the runway at Dushanbe  airport had sustained damage in
recent earthquakes. RFE/RL correspondents in the Tajik capital say large
planes, including Russian military cargo aircraft, have been landing at the
airport. Nuri has appealed to UN special envoy to Tajikistan Gerd Merrem,
who likewise rejected the reasons for the flight's delay. BP

END NOTE

FLIRTING WITH MADNESS

by Liz Fuller

        When Armenian President Levon Ter-Petrossyan resigned on 3
February, he claimed that his departure from office constituted a victory
for the so-called "party of war." Western reaction to his resignation
largely seems to have given credence to that claim. Apocalyptic
headlines--such as "Armenia Flirts With Madness"--testify to widespread
apprehension that hostilities in Nagorno-Karabakh will inevitably break out
again in the near future. Yet Armenia's interim leadership remains
whole-heartedly committed to resuming negotiations on finding a peaceful
resolution of the Karabakh conflict under the aegis of the Organization for
Security and Cooperation in Europe's Minsk Group.  That commitment,
however,  does not preclude the possibility of another war erupting in the
near future.
        Meeting with an RFE/RL delegation in Yerevan just four days after
Ter-Petrossyan's resignation, Prime Minister and acting President Robert
Kocharyan explained his objections to the "phased" draft peace plan
proposed last year by the three Minsk Group co-chairmen and accepted by
Ter-Petrossyan as a basis for further peace talks. Kocharyan pointed out
that the international community had regarded Ter-Petrossyan's policy of
what Kocharyan called "concessions and exaggerated compromise" as the most
promising approach to resolving the conflict.
        In fact, Kocharyan reasoned, Ter-Petrossyan's overt pragmatism
alienated the Karabakh Armenian leadership, which, under the preliminary
agreements reached by the Minsk Group, does not have the right to
participate in negotiations on its future status and which felt abandoned
by its sole ally. (In all fairness, it should be noted that Armenia has
tried, albeit unsuccessfully, to persuade the Minsk Group to upgrade
Karabakh's status to a full party to the peace talks.) Moreover,
Ter-Petrossyan's conciliatory stance encouraged Azerbaijan in its obdurate
rejection of any direct talks with Stepanakert. It also buttressed Baku's
assumption that it would be easier to extract substantive concessions in
bilateral talks with Yerevan and that the international community would, in
turn, exert pressure on the Armenian leadership to persuade Stepanakert to
agree to the "phased" approach.
        Kocharyan said he hopes for the resumption of negotiations within
the framework of the OSCE Minsk Group. But he added that it would also be
"correct" for the Minsk Group co-chairmen to express their support for
parallel talks between the central Azerbaijani government and the
leadership of the unrecognized Nagorno-Karabakh Republic.
        Acting Foreign Minister Vartan Oskanian, for his part, told
"Hayastani Hanrapetutyun" on 11 February that he hoped the Minsk Group
co-chairmen would find a way at their 17 February meeting in Paris to amend
the existing draft peace proposal so that it would be acceptable to both
Yerevan and Stepanakert, although he conceded that it would not be easy for
them to do so. (The official statement issued after the Paris meeting
merely called for the resumption of negotiations and noted that the
co-chairmen will visit Armenia and Azerbaijan after the 16 March Armenian
presidential elections.)
        But even if the Minsk Group succeeds in drafting a revised peace
plan that addresses the security concerns of the Karabakh Armenian
leadership, the resumption of negotiations is largely contingent on
domestic political developments. To date, 13 candidates have announced
their intention of contending the Armenian presidential elections, although
it is unlikely that each will succeed in collecting the 25,000 signatures
necessary for registration. Moreover, some of those who do register may
ultimately withdraw their candidacy in order to endorse a rival candidate.
But given that Karabakh currently dominates Armenian domestic politics in
general and the presidential election campaign in particular, there is a
danger that candidates may vie with one another in adopting an increasingly
militant stance on the Karabakh issue and may commit themselves to policies
from which it would be difficult, if not well-nigh impossible, to retreat.
        Moreover, even if Armenia's next president initially proves to be
both moderate and flexible in his approach to the negotiating process, he
may be subject to pressure from more hard-line element such as Karabakh
Defense Minister Samvel Babayan. In a series of interviews last fall,
Babayan  hinted that he considered the resumption of hostilities virtually
inevitable in the light of Baku's refusal to compromise.
        And Azerbaijan, too, is  gearing up for presidential elections
scheduled for October. Azerbaijan's political opposition has consistently
taken a tougher position than the country's leadership on the Karabakh
issue; and last month, a group of pro-government parties broke ranks,
registering its displeasure with official policy and castigating the Minsk
Group for its alleged passivity in not taking "concrete steps to liberate
occupied Azerbaijani territories."  As in Armenia, presidential candidates
in Azerbaijan could conceivably yield to the temptation to exploit the
Karabakh issue in order to win votes and, having sown the wind, reap the
whirlwind. As Alcuin, abbot of Tours, wrote to his patron, the future
Emperor Charlemagne, some 12 centuries ago: "The tumultuousness of the
crowd is always close to madness."


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