Calmness of mind does not mean you should stop your activity. Real calmness should be found in activity itself. - Shunro Suzuki
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 43, Part I, 4 March 1998


___________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 43, Part I, 4 March 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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RFE/RL CAUCASUS REPORT: A WEEKLY REVIEW OF POLITICAL DEVELOPMENTS IN THE
NORTH CAUCASUS AND TRANSCAUCASIA FROM RADIO FREE EUROPE/RADIO LIBERTY
This new email weekly covers Armenia, Azerbaijan, Georgia and Russia's
North Caucasus. To subscribe, send an email message to
caucasus-report-request@list.rferl.org with the word "subscribe" in the subject
line or body of the message. The first issue (March 3, 1998) and all future
issues will be online at the RFE/RL Web site.
http://www.rferl.org/caucasus-report/

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Headlines, Part I

* DUMA APPROVES BUDGET IN FOURTH READING

* RUSSIA REASSURES ISRAEL OVER IRAN

* OSCE REGRETS ARMENIAN PARLIAMENT'S FAILURE TO AMEND ELECTION LAW

* End Note: FORMER COMMUNIST MAY HOLD KEY TO ARMENIAN PRESIDENTIAL RACE

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RUSSIA

DUMA APPROVES BUDGET IN FOURTH READING. The State Duma on 4 March approved
the 1998 budget in the fourth and final reading by 252 to 129 with two
abstentions, RFE/RL's Moscow bureau reported. Previously, deputies had
twice refused to pass the document in the fourth reading (see "RFE/RL
Newsline," 23 February 1998). Before the 4 March vote, acting Budget
Committee Chairman Aleksandr Zhukov of the Russian Regions faction
described the compromises reached in negotiations with the government. In
place of a government proposal to make expenditures totaling 27.9 billion
rubles ($4.6 billion) conditional on receiving enough revenues to cover
that sum, the budget contains an amendment allowing the government to cut
spending if the Duma is informed within three days and if all budget items
are cut proportionally. In 1997, the government cut funding for some
programs by more than 50 percent. LB

YELTSIN APPOINTS NEW ATOMIC ENERGY MINISTER. President Boris Yeltsin on 4
March appointed nuclear researcher Yevgenii Adamov to head the Atomic
Energy Ministry, Russian news agencies reported. Adamov was involved in the
Chornobyl cleanup and since then has been director of Russia's Power
Technologies Research Institute. He replaces Viktor Mikhailov, an
unexpected casualty of the recent cabinet reshuffle (see "RFE/RL Newsline,"
3 March 1998). After meeting with Yeltsin, Adamov told journalists that the
president has instructed him to preserve "parity" in nuclear weapons while
making it possible to reduce funds spent on Russia's nuclear arsenals.
Adamov also said Yeltsin told him to work on improving nuclear safety and
spoke "warmly" of Mikhailov. ITAR-TASS speculated that Mikhailov had
recommended Adamov as his successor. LB

KOKOSHIN NOT TO OVERHAUL SECURITY COUNCIL. In his first press conference as
Security Council secretary, Andrei Kokoshin announced on 3 March that he is
not planning any "revolutionary" changes, ITAR-TASS reported. He said he
does not intend to expand the Security Council staff, and he pledged to
cooperate with the government apparatus and the presidential
administration. Yeltsin has relieved Kokoshin of the post of chief military
inspector, and the State Military Inspectorate, which was created last
August, will now be subordinated to the Security Council. RFE/RL's Moscow
bureau reported that Kokoshin has a reputation for being flexible and not
antagonizing colleagues. Interfax quoted an unnamed source as saying that
Deputy Prime Minister Ivan Rybkin recommended that Yeltsin appoint Kokoshin
to succeed him as Security Council secretary. LB

NO MORE CABINET CHANGES FOR NOW? Presidential spokesman Sergei
Yastrzhembskii announced on 3 March that to his knowledge, no more
presidential decrees on personnel changes in the government are currently
being prepared, Russian news agencies reported. The same day, government
spokesman Igor Shabdurasulov told journalists that "personnel rotation is a
continuous process in the government." At the same time, Shabdurasulov said
no further cabinet changes are expected in the near future, adding that
dismissals "are possible only in the sense that they are always possible,"
Reuters reported. Meanwhile, Russian media are still speculating about who
was behind the recent government dismissals. "Russkii telegraf" reported on
3 March that First Deputy Prime Minister Anatolii Chubais was responsible
for the decision to sack Transportation Minister Nikolai Tsakh and Deputy
Prime Minister Valerii Serov. LB

RUSSIA REASSURES ISRAEL OVER IRAN. Russian Presidential Press spokesman
Sergei Yastrzhembskii told journalists on 3 March that Moscow has provided
Israeli Industry and Trade Minister Natan Sharansky with information that
should convince the Israeli government that Moscow  has not supplied
missile technology to Iran. Yastrzhembskii met with Sharansky in Moscow the
previous day. Sharansky told journalists that improving ties with Russia is
a "strategic goal" for Israel, Interfax reported. Following his meeting
with Sharansky on 3 March, newly appointed Russian Deputy Prime Minister
Rybkin underscored Israel's increasing importance in Russian foreign
policy. Economic cooperation and joint measures to combat international
terrorism were discussed at that meeting, ITAR-TASS reported.  Annual trade
turnover between Russia and Israel totals  $400 million, according to dpa.
LF

POSUVALYUK TO RETURN FROM IRAQ SOON. Viktor Posuvalyuk, the presidential
special envoy to Iraq,  is expected to return to Russia following one month
in Baghdad. The adoption of the UN Security Council resolution on Iraq
"will speed up his return," Foreign Ministry spokesman Gennadii Tarasov
said on 3 March.  But while praising Russian diplomacy for defusing
tensions over the Persian Gulf, Tarasov said Iraq must now fulfill its
obligations or face "the most severe consequences." Meanwhile, Vladimir
Lukin of the Yabloko faction,  who is chairman of the Duma Committee on
Foreign Affairs, has returned from Washington, where he met with UN
Secretary-General Kofi Annan and invited him to address the Duma in Moscow.
Lukin  hinted there was little agreement over Iraq in meetings he held with
U.S. congressmen. He added that differences also surfaced over ratification
of the START-2 treaty. BP

RUSSIA REGISTERS DISPLEASURE OVER ISTANBUL CASPIAN TALKS. Russian Foreign
Ministry spokesman Tarasov said on 3 March that Moscow has conveyed to
Ankara its "legitimate bewilderment" and dissatisfaction at not having
received an invitation to attend the 1-2 March talks in Istanbul between
the foreign ministers of Turkey, Georgia, Azerbaijan, Kazakhstan, and
Turkmenistan, Interfax reported. Iran was also not invited to send a
representative to the talks. Meanwhile, Russian Fuel and Energy Minister
Sergei Kirienko told journalists in Tokyo on 3 March that the route for the
main export pipeline for Caspian oil should be chosen exclusively on
economic grounds, according to the "Turkish Daily News." LF

FOREIGN INTELLIGENCE "MORE ACTIVE" IN RUSSIA. Aleksandr Tsarenko, the
deputy director of the Federal Security Service, said on 3 March that
foreign intelligence services have become "more active" in Russia recently,
ITAR-TASS reported. Tsarenko pointed to "traditional rivals" such as the
U.S., U.K., and France but added that Iran, China, and North Korea have
stepped up their foreign intelligence activities. He mentioned the case of
an Iranian intelligence agent who was expelled last year while attempting
to collect information on missiles. Tsarenko added that the large Chinese
and North Korean communities throughout Russia, but particularly in Moscow,
gave those countries an advantage in obtaining industrial and military
secrets. BP

DUMA DEPUTIES IN NO HURRY ON TREATY WITH UKRAINE. At State Duma hearings on
3 March, most Duma deputies spoke out against rapid ratification of the
Russian-Ukrainian friendship treaty, which was signed in May 1997, Interfax
reported. A group of deputies proposed delaying ratification until after
the new Ukrainian parliament ratifies agreements on dividing the Black Sea
Fleet. Ukrainian President Leonid Kuchma recently said he hopes Russia will
ratify the treaty before the Ukrainian parliamentary elections, scheduled
for 29 March. Russian First Deputy Foreign Minister Boris Pastukhov urged
Duma deputies to ratify the treaty as soon as possible, as did Vladimir
Yatsenko, the head of the Ukrainian parliamentary delegation at the
hearings. Yatsenko promised that the Ukrainian parliament "will never make
a choice in favor of NATO." Russian opponents of the treaty have charged
that it opens the door to NATO membership for Ukraine by renouncing any
Russian claim to Ukrainian territory. LB

GOVERNMENT NOT TO PAY FOR CIRCULATION OF UKRAINIAN MEDIA. Russian
government spokesman Shabdurasulov on 3 March denied reports that the
Russian government will fund the distribution of Ukrainian media on Russian
territory, ITAR-TASS reported. Shabdurasulov said Ukrainian Information
Minister Zinovy Kulik had erroneously claimed that during Ukrainian
President Kuchma's recent visit to Moscow, agreement was reached to have
the Russian budget fund Ukrainian radio and television broadcasts and the
circulation of some Ukrainian print media in Russia. Shabdurasulov added
that "one can hardly imagine anything more absurd." LB

ARMY OFFICER SENTENCED FOR BEATING RECRUIT TO DEATH. In Birobidzhan (in the
Jewish Autonomous Oblast), Lieutenant Valerii Mantulenko has been sentenced
to seven years in prison for "overstepping his authority," ITAR-TASS
reported on 4 March. Mantulenko was found guilty of beating a 19-year-old
recruit to death. Meanwhile, "Kommersant-Daily" on 3 March reported the
case of one such youth  who was fined 17,000 rubles (some $2,900) by a
federal court for refusing to serve in the army. The youth was amnestied
immediately because he claimed he wanted to carry out alternative service.
The law on alternative service, however, has not yet been approved by the
Duma. According to AFP, 40,000 youths dodged the draft last year. BP

CHERNOMYRDIN TO REOPEN INVESTIGATION INTO IRKUTSK CRASH. Government
spokesman Shabdurasulov announced on 3 March that Prime Minister Viktor
Chernomyrdin is to order further investigation into the causes of a
December plane crash in Irkutsk, ITAR-TASS reported. A military commission
concluded last month that engine problems caused the An-124 military cargo
plane to crash soon after takeoff (see "RFE/RL Newsline," 11 February
1998). However, representatives of the Motor-Sich company in Ukraine, which
produces engines for An-124 planes, disputed that conclusion. Shabdurasulov
said Chernomyrdin is to demand that civilian aviation officials and
representatives of the Motor-Sich factory be represented on the commission
that will continue to investigate the disaster. LB

CRIMINAL CASE OPENED AGAINST EX-KEMEROVO GOVERNOR. The Kemerovo Oblast
Prosecutor's Office has opened a criminal case against former Governor
Mikhail Kislyuk for allegedly misappropriating funds from a World Bank loan
in 1996-1997, RFE/RL's Moscow bureau reported on 3 March. Kislyuk is
accused of misusing some 17 billion old rubles ($2.8 million) from the
loan, which was earmarked for the coal industry. Officials from the
presidential administration have arrived in Kemerovo to look into the
charges against Kislyuk. Yeltsin replaced Kislyuk as governor with Aman
Tuleev last July. Kislyuk was appointed to head the Federal Service on
Regulating Natural Monopolies in the Transportation Sector the same month.
In an interview with "Kommersant-Daily" on 4 March, Kislyuk denied
wrongdoing and said the Finance Ministry was responsible for allocating
funds from the World Bank loan. LB

REGIONAL LEGISLATOR KILLED IN YEKATERINBURG. Georgii Stepanenko, a deputy
in the Sverdlovsk Oblast Legislative Assembly, was shot dead on 3 March
near his home in Yekaterinburg, an RFE/RL correspondent in Yekaterinburg
reported. Sverdlovsk is to hold legislative elections on 12 April, and
Stepanenko was campaigning for a seat. The Our Home-Our City movement,
which is headed by Yekaterinburg Mayor Arkadii Chernetskii, was backing his
candidacy. Our Home-Our City is the main political rival of the
Transformation of the Urals movement, headed by Sverdlovsk Governor Eduard
Rossel. Some observers believe Stepanenko's murder was connected not to his
political activities but to his work as a lawyer. One of his clients has
been fighting for control over several enterprises in the oblast.
Meanwhile, law enforcement agencies are still investigating a January
explosion that occurred near a car carrying Rossel. LB

RUTSKOI LOSES LIBEL SUIT. A Kursk district court on 3 March rejected Kursk
Oblast Governor Aleksandr Rutskoi's libel lawsuit against "Rossiiskie
vesti," the official newspaper of the presidential administration, and one
of its correspondents, ITAR-TASS reported. Rutskoi was demanding 10 million
old rubles ($1,700) in damages for an article published last November,
which alleged that mismanagement by the oblast administration had caused
part of the region's sugar beet crop to remain unharvested. The Kursk
verdict is unusual, since many regional leaders have won libel suits
against journalists who criticize their work. Ulyanovsk Governor Yurii
Goryachev, for example, has won several such lawsuits, even when the
articles allegedly defaming him did not mention his name. Last October, an
Ulyanovsk court fined an "Izvestiya" correspondent for allegedly libeling
Goryachev in an article questioning the allocation of agricultural
subsidies in the oblast. LB

TRANSCAUCASUS AND CENTRAL ASIA

OSCE REGRETS ARMENIAN PARLIAMENT'S FAILURE TO AMEND ELECTION LAW. The
Organization for Security and Cooperation in Europe's election monitoring
mission in Armenia released a statement on 3 March expressing regret at the
parliament's failure to include proposed amendments to the election law on
its agenda. Those amendments would  allow local Armenian observers to
monitor the poll and the vote count. The OSCE statement also called on the
Armenian authorities to ensure that all presidential candidates have equal
access to state media, that government officials do not interfere in the
voting,  and that the elections are as transparent as possible, RFE/RL's
Yerevan bureau reported. The OSCE also called on the Central Electoral
Commission to clarify procedures for Armenian citizens voting abroad. LF

ARMENIA TO RETHINK ITS POLICY ON OIL TRANSIT. Speaking at a news conference
in Yerevan on 3 March, acting Foreign Minister Vartan Oskanian said that
Armenia's next president will have to reconsider the impact of oil on the
country's foreign policy, Interfax reported. Oskanian described oil as a
key factor for stability in the Caucasus region, and predicted that
Armenian policy on oil transit will change after the 16 March presidential
poll.  Former President Levon Ter-Petrossyan had rejected linking a
solution to the Karabakh conflict to the routing of oil pipelines through
Armenia. In February, the Armenian parliament ratified the April 1996
agreement on the unrestricted transit of oil throughout the CIS. LF

KARABAKH FOREIGN MINISTER ASSESSES PEACE PROSPECTS.  Naira Melkoumian told
an RFE/RL correspondent in Washington on 3 March that she is "satisfied"
with talks she held with Lynn Pascoe, the U.S. co-chairman of the
Organization for Security and Cooperation in Europe's Minsk group, at the
U.S. State Department the previous day. Melkoumian predicted that a lasting
solution to the Karabakh conflict could be achieved relatively quickly
provided that the Azerbaijani leadership is prepared not only to demand but
also to make concessions. A U.S. State Department official told RFE/RL that
the financial benefits of  a peace agreement are more important than
concessions. "There is a lot of international willingness to help finance
development in this long-troubled region," he said. LF

ABKHAZIA INTERCEPTS GEORGIAN GUERRILLAS. Abkhaz Security Service head
Astamur Tarba told Interfax on 3 March that his men have detained four
Georgian guerrillas armed with explosives, anti-tank mines, and detonators
in a village in Abkhazia's Ochamchire Raion. To date, the Georgian "White
Legion" guerrilla organization has largely confined its activities to Gali
Raion, located between Ochamchire and Abkhazia's border with the rest of
Georgia. Tarba also said that an Abkhaz patrol boat opened fire on four
Georgian fishing vessels that refused to comply with a request to leave
Abkhaz territorial waters off Anaklia. The Georgian Border Guard Service
has condemned that incident as an "outright breach of the cease-fire
agreement" concluded in May 1994. LF

U.S.-AZERBAIJANI JOINT VENTURE IN JEOPARDY?  Reza Vaziri, president of RV
Investment Group Services, has expressed concern at the Azerbaijani
parliament's delay in ratifying an August 1997 contract between his company
and Azerbaijan's Azergyzyl, Turan reported on 3 March. The joint venture
would develop deposits in western Azerbaijan containing an estimated 400
tons of gold and 2,500 tons of silver. Vaziri said that the contract is
still being examined by the Azerbaijani presidential administration. In
January, the deputy head of Azerbaijan's State Precious Metals Institute
said that Azerbaijan may unilaterally cancel the contract because the U.S.
partner has not yet begun to implement it (see "RFE/RL Newsline," 25 August
1997 and 12 January 1998.) LF

KYRGYZ, UZBEK FOREIGN MINISTERS IN TAJIKISTAN. Muratbek Imanaliev and
Abdulaziz Kamilov, meeting with their Tajik counterpart, Talbak Nazarov, in
Dushanbe on 3 March,  expressed concern about the spread of religious
extremism in Central Asia, ITAR-TASS reported. They also  supported
maintaining a "secular" Tajik government. Kamilov said the three countries
will work together to "locate sources of this threat [of religious
extremism] and coordinate efforts to combat it." He declined, however, to
specify what those sources might be. Kyrgyzstan and Uzbekistan will support
Tajikistan's entry into the Central Asian Union (whose third member is
Kazakhstan) at the next meeting of that organization. BP

HEAD OF RADIO ALMAZ COMMENTS ON CLOSURE. Rustam Koshmuratov told RFE/RL's
Kyrgyz Service on 3 March that although he completed the process of
registering Radio Almaz last December, the National Agency of
Communications (NAS), which was established in October 1997, had demanded
additional documents. The station was also accused of piracy for
broadcasting in translation programs originally broadcast by the Voice of
America and RFE/RL's Russian Service. Koshmuratov, however, said he had
submitted copies of letters giving him permission to rebroadcast
programming from the two sources but was told by NAS officials that more
documents were required. Radio Almaz was closed down on 23 February. BP

KAZAKH OPPOSITION LEADER'S WHEREABOUTS UNKNOWN. Madel Ismailov of the
Almaty City Workers Movement has neither been seen nor heard from since he
was taken into police custody following the founding conference of the
opposition People's Front movement on 27 February, RFE/RL correspondents in
Almaty reported. Murat Auezov  co-chairman of the opposition movement
Azamat, said inquiries have been made at all Almaty's jails. Ismailov's
colleagues fear he is being detained at a National Security Committee
prison. BP

END NOTE

FORMER COMMUNIST MAY HOLD KEY TO ARMENIAN PRESIDENTIAL RACE

By Emil Danielyan

        The Armenian presidential race has taken a new twist. Former
Armenian Communist Party First Secretary Karen Demirchian is increasingly
gaining ground on the two front-runners, Prime Minister and acting
President Robert Kocharian and his main opposition challenger, Vazgen
Manukian. It is widely believed that Kocharian pressured Demirchian to run
for the presidency in a bid to weaken the chances of the other opposition
candidates. But  unofficial surveys suggest that Demirchian has good
chances of winning the 16 March presidential ballot because of widespread
popular nostalgia for the "good old days."  Thus Kocharian's and Manukian's
pre-election confidence may prove premature owing to the emergence of a new
heavyweight.
        Demirchian headed the Armenian Communist Party from 1974 to 1988, a
period of stability and relative prosperity for the former Soviet republic.
Since the end of Communist rule in Armenia in summer 1990, he has been
director of one of Armenia's largest state enterprises but has kept a low
public profile.
        Demirchian's growing popularity underscores public discontent with
the current socio-economic situation in Armenia. Many Armenians want the
former Communist boss to return to power in the hope that he will be able
to re-establish the living standards they enjoyed 10 years ago. Industrial
decline and war with neighboring Azerbaijan triggered  the economic
collapse of the early 1990s.
        As recently as two weeks ago, very few observers believed
Demirchian would constitute a serious threat to Kocharian or any other
leading candidate. At a closed-door meeting one day before Demirchian
announced his candidacy, the two were rumored to have struck a deal whereby
Demirchian would endorse Kocharian in an anticipated run-off election,
thereby securing what they expected to be a significant number of
additional votes for the acting president. Voters who had cast their
ballots in September 1996 for Manukian and his center-right National
Democratic Union (AZhM) to protest the policies of Levon Ter-Petrossyan now
have Demirchian as an alternative. The same holds true for former
supporters of current Communist leader Sergei Badalian, for whom
Demirchian's bid is likely to prove disastrous.
        Ironically, however, it is Prime Minister Kocharian who may
ultimately suffer the most from Demirchian's unexpected popularity.
Official opinion polls are notoriously misleading in Armenia. Thus, local
observers rely largely on  conversations with individual voters, which,
combined with impressions of campaign volunteers collecting signatures for
their candidates, suggest Demirchian and Manukian have the best chances of
reaching a second round (which will be necessary if no candidate wins 50
percent of the vote on 16 March).
        Demirchian told RFE/RL last weekend that, if elected,  he will
"consolidate all political forces" to establish democracy and a free market
economy. He said he  supports a "peaceful settlement" of the conflict with
Azerbaijan. And he added that Nagorno-Karabakh must never be regain the
status it had before1988, but he did not say what he would offer as an
alternative. Demirchian also denied having colluding with the authorities
over his decision to run in the elections. He gave the impression of being
self-confident and showed no signs of poor health, despite allegations to
the contrary.
        In the event of Demirchian's victory, Armenia would join the other
two Transcaucasian states in having returned a Brezhnev-era Communist to
power. Both Presidents Eduard Shevardnadze of Georgia and Heidar Aliev of
Azerbaijan are the linchpins of their countries' stability. Both know
Demirchian well, having ruled the region at a time when it was one of the
most well-to-do parts of the former USSR. Aliev and Shevardnadze rapidly
adjusted to the new post-Soviet realities, and their pragmatism and
flexibility helped them regain power. Whether Demirchian can do likewise
will become clear very soon. But it is nonetheless quite remarkable that
many Armenians are now turning to the former Communist boss after having
condemned him in 1988 for not sufficiently supporting Karabakh's drive for
secession from Azerbaijan.
        At the same time, Demirchian's conspicuous avoidance of the media
has fueled suspicions about his possible involvement in pre-election deals
with Kocharian. Some observers believe that the  Armenian leadership has
compromising information with which it could blackmail Demirchian into
withdrawing his candidacy if he appears to be on his way to winning
outright in the first round of voting. Those observers reason that
Demirchian's last-minute endorsement of Ter-Petrossyan's presidential
candidacy on the eve of the September 1996 election was highly suspicious
following his decade of silence. Some think he may have made that
endorsement under pressure from the then ruling party.
        Moreover, Demirchian lacks a credible political force on which he
can rely (he collected only 37,882 signatures in support of his
registration, as compared with Kocharian's 255,994 and Manukian's 303,096).
Undoubtedly, his rivals will make full use of their campaign mechanisms in
an attempt to bolster support for their candidacies.

The author is an RFE/RL freelance  correspondent based in Yerevan.

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