RFE/RL NEWSLINE Vol 2, No. 40, Part I, 27 February 1998

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RFE/RL NEWSLINE Vol 2, No. 40, Part I, 27 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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POLITICIZATION AND SELF-CENSORSHIP IN THE RUSSIAN MEDIA
A new financial dependence on industrial or banking groups has led to a
noticeable erosion of media autonomy in Russia. This paper is available on
the RFE/RL Web site:
http://www.rferl.org/nca/special/rumediapaper/index.html

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Headlines, Part I

* RUSSIAN, UKRAINIAN PRESIDENTS MEET IN MOSCOW

* SELEZNEV IN DAMASCUS

* GEORGIA ASSESSES UNOMIG ABDUCTION

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REGIONAL AFFAIRS

RUSSIAN, UKRAINIAN PRESIDENTS MEET IN MOSCOW. Boris Yeltsin and Leonid
Kuchma, meeting at the Kremlin on 27 February, signed an agreement on
economic cooperation through the year 2007, RFE/RL correspondents in Moscow
reported. That accord is aimed at doubling trade turnover between the two
countries, which totaled $14 billion in 1997. The two leaders also agreed
to cooperate in the construction of military transport planes, to ensure
quick ratification of agreements on the Black Sea Fleet, and to further
develop equal partnership and cooperation among CIS members. A
Russian-Ukrainian commission on military-technical cooperation is to be
formed, and the two countries will seek to promote Russian and Ukrainian
weapons on world markets. Kuchma received support from Yeltsin to meet in
Odessa with the president of Moldova and an unspecified representative of
the Transdniester to discuss the breakaway region. Kuchma also stressed
that Ukraine will not join NATO. BP

BLACK SEA STATES TO DISCUSS CONFIDENCE-BUILDING MEASURES. Bulgaria,
Georgia, Romania, Russia, Turkey, and Ukraine have drafted guidelines for
talks on confidence-building measures related to the activities of their
naval forces in the Black Sea, the "Turkish Daily News" reported on 27
February, citing a Turkish Foreign Ministry statement. The measures are
intended to strengthen economic, political, and military cooperation
between the states bordering the Black Sea. LF

RUSSIA

SELEZNEV IN DAMASCUS. State Duma speaker Gennadii Seleznev met with Syrian
leaders, including Prime Minister Mahmoud al-Zoabi and President Hafez-
al-Assad, in the Syrian capital on 25-26 February. Seleznev told reporters
later that his talks were "very productive" and that Moscow to intends to
restore its relations with Syria to their level before the collapse of the
USSR. He added that Moscow is preparing to make "a strategic comeback" in
the Middle East but as a "guarantor of peace and for the sake of our
economic interests" rather than to impose its will on any of the states in
the region. Seleznev also argued that U.S. forces should withdraw from the
Persian Gulf as their presence there cannot be justified following the
UN-Iraq agreement allowing inspectors access to weapons sites. LF

KHARRAZI MEETS WITH CHERNOMYRDIN, RYBKIN. At the close of his three-day
official visit to Moscow, Iranian Foreign Minister Kamal Kharrazi met with
Russian Prime Minister Chernomyrdin to discuss expanding bilateral trade
and economic cooperation, in particular Russia's role in constructing the
Bushehr nuclear reactor, Russian agencies reported. Kharrazi also discussed
Tajikistan, Afghanistan, and the situation in the Caucasus with Russian
Security Council Secretary Ivan Rybkin. In an interview with
"Kommersant-Daily" published on 27 February, Kharrazi denied Russian press
reports that Tehran is interested in purchasing Russian attack helicopters
and high-speed warships (see "RFE/RL Newsline," 26 February 1998). Interfax
reported that Russia and Iran failed to agree on dividing the Caspian.
Russia advocates dividing the sea bed into national sectors, while Iran
wants both the sea bed and the waters of the Caspian to be exploited
jointly by all five littoral states. LF

FOREIGN MINISTRY DENIES RUSSIA DEVELOPING BIOLOGICAL WEAPONS. Foreign
Ministry spokesman Valerii Nesterushkin has denied reports in the Russian
and foreign press that Moscow is not complying with agreements prohibiting
the development of weapons for biological warfare. Nesterushkin said Russia
"strictly observes its obligations under the Convention on Banning
Biological Weapons." He also pointed out that Yeltsin signed that
convention after the demise of the USSR and later issued a decree banning
biological warfare programs. He added that newspapers that publish articles
claiming Russia is developing biological warfare "are apparently not
concerned about their reputation," and that "any honest reporter could
easily verify the facts." Former Soviet researcher Kanatzhan Alibekov, who
now lives in the U.S., claims that Russia continues to develop biological
weapons but conceals that activity through its defense research programs. BP

CONFUSING SIGNALS OVER CABINET RESHUFFLE. Presidential spokesman Sergei
Yastrzhembskii told ITAR-TASS on 27 February that Yeltsin is still
considering possible cabinet dismissals. Yastrzhembskii did not specify
when the president's decision will be announced. On 26 February, Yeltsin
said three cabinet members may lose their jobs, but he left a government
session without naming the victims. The same day, Yastrzhembskii told
Reuters that cabinet changes are likely to be announced on 27 February.
Meanwhile, ITAR-TASS quoted unnamed sources as saying the dismissals will
be announced sometime before 5 March. LB

CHERNOMYRDIN FAVORS VETO IF DUMA WON'T AMEND BUDGET. Prime Minister Viktor
Chernomyrdin told journalists on 26 February that if the State Duma does
not approve amendments to make the 1998 budget realistic, he will recommend
that Yeltsin veto the document, RFE/RL's Moscow bureau reported. The same
day, Communist Party leader Gennadii Zyuganov said his party will support
the budget when it is again put to a fourth reading in the Duma, ITAR-TASS
reported. He did not specify whether his party has revised its opposition
to a government-proposed amendment that is likely to lead to spending cuts
of 27.8 billion rubles ($4.6 billion). The Duma overwhelmingly rejected
that amendment on 20 February. LB

OFFICIALS UPBEAT ON TAX COLLECTION... While Chernomyrdin criticized the
government's poor tax collection during a 26 February cabinet session,
other officials claimed significant progress has been made in that area.
State Tax Service chief Aleksandr Pochinok announced that monthly tax
receipts have improved since 1997 and that the tax collection target of
12.3 billion rubles ($2 billion) for February has already been met, Russian
news agencies reported. He added that if the gas monopoly Gazprom settles
its debts to the budget, the February target will be overfulfilled. But
Pochinok acknowledged that executing the 1998 budget will require monthly
tax revenues of 15-18 billion rubles. Finance Minister Mikhail Zadornov
said in his report to the cabinet that taxes collected in cash rose by
30-35 percent in the first two months in 1998. Under a November 1997
presidential decree, the government is no longer allowed to offset taxes
against debts owed to enterprises. LB

...BUT PRESIDENTIAL ADVISER SKEPTICAL. Aleksandr Livshits, Yeltsin's
economic adviser and deputy head of the presidential administration, told
NTV on 26 February that he doubts the government's tax collection target
for February has been met. According to his figures, he said, at most 10
billion rubles ($1.6 billion) in taxes have been collected this month. LB

COMMISSION DEMANDS TAX PAYMENTS FROM 'NATURAL MONOPOLIES.' The Temporary
Emergency Commission on Tax and Budgetary Discipline held its first meeting
of the year on 24 February and demanded that "natural monopolies" clear
their debts to the federal budget, Interfax reported. Pochinok announced
after the meeting that by the end of February, the Railroad Ministry must
pay its debt of 600 million rubles ($99 million) and the electricity giant
Unified Energy System (EES) 1.4 billion rubles in back taxes. The gas
monopoly Gazprom is keeping up with its current tax payments but is
estimated to owe some 2 billion new rubles in debts carried over from the
end of 1997, Pochinok said. LB

CENTRAL BANK CUTS REFINANCING RATE AGAIN. The Central Bank's board of
directors on 27 February decided to reduce the annual refinancing rate from
39 percent to 36 percent, effective 2 March. The bank's move comes as
representatives of three major international credit rating agencies are in
Moscow to determine whether to downgrade Russia's sovereign debt rating
(see "RFE/RL Newsline," 24 February 1998). The Central Bank raised the
refinancing rate from 28 percent to 42 percent on 2 February but lowered it
to 39 percent on 17 February, saying the situation on Russian capital
markets has stabilized. The bank says it hopes that by the end of 1998 the
refinancing rate will be between 16-18 percent. Real interest rates remain
extremely high. Government projections call for an annual inflation rate of
5-7 percent this year. LB

YELTSIN PROMISES TO SUPPORT MIDDLE CLASS. Yeltsin on 27 February promised
to support Russia's emerging middle class, which he described as the most
"reliable foundation of stability" in the country. In a nationwide radio
address, the president said creating a large group of people who are "well
provided for and confident" is "the main goal of reforms." He praised Irina
Khakamada, who heads the State Committee for the Support and Development of
Small Businesses, and called on her committee to focus on "protecting
businessmen from the arbitrary actions of bureaucrats" and on simplifying
and reducing taxes. However, Yeltsin noted that given the current budget
crunch, the state will not be able to provide huge financial aid for small
businesses. Yeltsin cited figures showing that some 1 million small
businesses employ about 10 percent of the Russian work force and contribute
an estimated 12 percent of the country's GDP. LB

PROGRAM ON SMALL BUSINESSES RECEIVES PRELIMINARY APPROVAL. A government
commission on 24 February gave preliminary approval to a federal program
for supporting small businesses in 1998-1999. Khakamada announced the next
day that the program, which was drafted by the State Committee on the
Support and Development of Small Businesses, will be considered at a
cabinet session in late March, RFE/RL's Moscow bureau reported. The program
seeks to increase small businesses' contribution to the GDP to15 percent
and double the number of Russians employed by small businesses from some
7.5 million to 15 million. Khakamada claimed that reducing the tax burden
on small businesses will cause tax revenues to improve and the shadow
economy to decline. "Izvestiya" on 26 February quoted Khakamada as saying
the draft 1998 budget calls for 100 million rubles in spending on her
committee's program. LB

SECOND SUSPECT CHARGED IN JOURNALIST'S MURDER. The Prosecutor-General's
Office on 26 February charged Major Vladimir Morozov with helping organize
the October 1994 murder of journalist Dmitrii Kholodov, Interfax reported.
Morozov served in the Airborne Troops under Colonel Pavel Popovskikh, who
has also been charged in the case. Meanwhile, prosecutors say they have
made significant progress in the investigation of the March 1995 murder of
popular journalist Vladislav Listev, the head of the Russian Public
Television network. Prosecutor-General Yurii Skuratov is to report to
Yeltsin about that case on 2 March. Petr Triboi, who is heading the
investigation, told "Izvestiya" on 27 February that Listev's murder was
"not political." Speculation in the Russian media has focused on possible
economic motives for the crime. Shortly before his death, Listev ordered a
moratorium on advertising on the network. LB

AGRARIAN PARTY HOLDS CONGRESS. The Agrarian Party of Russia (APR) held its
sixth congress near Moscow on 26 February, ITAR-TASS reported. APR chairman
Mikhail Lapshin told delegates that the party, which inherited part of the
Communist Party's network when it was formed in 1993, has 300,000 members.
Lapshin lost his seat in the parliament after the APR failed to gain five
percent of the vote in December 1995, but he is competing in an upcoming
by-election for a State Duma seat from the Altai Republic. Lapshin told
RFE/RL's Moscow bureau on 24 February that his strongest rival is former
First Deputy Finance Minister Andrei Vavilov. He left the government last
April and is now a top executive in the Renaissance Capital investment
firm, part of the Oneksimbank empire. Vavilov is said to be on good terms
with Semen Zubakin, who vacated the Duma seat after being elected head of
Altai last December. LB

GAZPROM ACQUIRES SHARES IN REGIONAL COMPANIES. The gas monopoly Gazprom,
which is owed large debts by many of its consumers, is collecting payment
for some debts in property rather than cash, "Kommersant-Daily" reported on
26 February. Gazprom's chief executive Rem Vyakhirev recently visited
Tatarstan and Bashkortostan to negotiate methods for settling those
republics' debts to the company. Leaders in Bashkortostan agreed to
transfer to Gazprom the right to manage controlling stakes in three large
companies. In Kazan, a preliminary agreement was reached to pay Tatarstan's
debts to the gas monopoly partly in airplanes and partly in shares of
several large companies. Last month, First Deputy Finance Minister Aleksei
Kudrin, a member of the Gazprom board of directors, announced that in 1997
the company was able to collect only 38 percent of payments for gas
deliveries, "Rabochaya tribuna" reported on 9 January. LB

TRANSCAUCASUS AND CENTRAL ASIA

GEORGIA ASSESSES UNOMIG ABDUCTION. A Georgian Interior Ministry spokesman
on 26 February said that Gocha Esebua, leader of the group of former
President Zviad Gamsakhurdia supporters that abducted four UN observers in
western Georgia last week, is one of the prime suspects in the failed 9
February attempt to kill President Eduard Shevardnadze. In response to one
of the abductors' demands, Shevardnadze has proposed the creation of a
commission of historians, lawyers, and scholars to evaluate recent
political developments in Georgia. Shevardnadze has also proposed drafting
new principles to serve as the basis for national reconciliation,
"Nezavisimaya gazeta" reported on 27 February. Liviu Bota, the UN
secretary-general's special envoy to Georgia,  has expressed concern that
the unarmed UN observer force in western Georgia could be the target of
further attacks or hostage-takings, Reuters reported. LF

ARMENIAN DEFENSE MINISTER MEETS WITH PRESIDENTIAL CANDIDATES. Vazgen
Sarkisyan met with seven of the 12 Armenian presidential candidates at the
Central Electoral Commission on 26 February, RFE/RL's Yerevan bureau
reported. Sarkisyan subsequently said that an agreement was reached on the
participation of military personnel in the 16 March presidential election.
No details of that agreement were released. International observers who
monitored the 1995 and 1996 polls expressed suspicions that, on those
occasions, servicemen may have voted several times at different polling
stations.  In an interview with Noyan Tapan earlier this month, Sarkisyan
said that elections should be "absolutely fair." But on 25 February,
Liberal Democratic Party chairman and presidential candidate Vigen
Khachatryan told "Aravot" that Sarkisyan has been summoning various local
governors and members of electoral commissions to his office "to instruct
them how to act" during the poll. LF

ARMENIA, GEORGIA TO BROADEN COOPERATION WITH CHINA. Meeting on 25 February
with Aram Vardanian, chairman of the Union of Businessmen and
Industrialists of Armenia, Chinese Ambassador to Yerevan Yan Kejun
discussed expanding cooperation and possible joint ventures in the
electrical engineering, food-processing, and textile sectors, Noyan Tapan
reported. The same day, Georgian Minister of Transport Merab Adeishvili met
with Chinese Deputy Prime Minister Wu Bangguo in Beijing to discuss
broadening cooperation in the transportation sector. Such cooperation would
presumably take place within the framework of the TRACECA project to
develop rail, road, ferry links from China via Central Asia and the
Caucasus to Europe. LF

UZBEK DELEGATION VISITS BAKU. Visiting Uzbek First Deputy Prime Minister
Ismail Djurabekov and his Azerbaijani counterpart, Abbas Abbasov, also
discussed the benefits of the TRACECA during their talks in Baku on 25
February. That meeting took place within the framework of the first session
of the Azerbaijani-Uzbek intergovernmental cooperation commission,
ITAR-TASS and Turan reported. Djurabekov said that Uzbekistan  last year
saved $40 per ton by transporting goods from Tashkent via Turkmenbashi,
Baku, Poti, and Ilichevsk. He added that Uzbekistan plans  to double the
amount of goods shipped by this route this year from the 1997 volume of
200,000 tons. The two sides signed three inter-governmental economic
agreements on streamlining currency and export operations and combatting
financial and economic crime. LF

BISHKEK WORRIED ABOUT CITIZENS ARRESTED IN UZBEKISTAN. The Kyrgyz
parliamentary Committees on Foreign Affairs, Defense and Security, and
Human Rights convened a joint session on 26 February to discuss what to do
about two of its citizens currently held by Uzbek law enforcement
authorities, RFE/RL correspondents in Bishkek reported. The Kyrgyz
government has requested details about the reasons for the arrests but so
far has received no reply from the Uzbek authorities. Rustam Usmanov was
arrested in the Uzbek capital, Tashkent, on 13 February, while Zakirjan
Normatov was taken into custody by Uzbek police in the Kyrgyz city of Osh
in late January. Uzbek police sources told RFE/RL's Uzbek Service that
Usmanov is wanted on charges made four years ago, when he was an Uzbek
citizen. Normatov is wanted in connection with the December disturbances in
Namangan. BP

TAJIK PRESIDENT SAYS GOVERNMENT WILL REMAIN SECULAR. Imomali Rakhmonov has
responded to an article by Ali Akbar Turajonzoda, the deputy leader of the
United Tajik Opposition, arguing that the term "secular government" should
be struck from the Tajik Constitution and a referendum held on the issue.
The article appeared in the Iranian newspaper "Jumhuri-e-Eslami" on 14
February. Rakhmonov said at a meeting with political activists in Khujand
on 25 February there will be no revision of the relevant article of the
constitution, RFE/RL correspondents reported.  Mehmadsharif Himmatzade of
the Islamic Renaissance Party said his party will respect the law and leave
it to the people to decide which form of government they prefer. BP


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