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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 55 Part I, 20 March 1998


___________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 55 Part I, 20 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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ALL BROADCASTS FOR SIX SERVICES LIVE ONLINE
All programs of RFE/RL's Armenian, Azerbaijani, Bulgarian, Kyrgyz, Russian
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Headlines, Part I

* YELTSIN BACK IN KREMLIN

* GOVERNMENT ANNOUNCES TERMS OF ROSNEFT SALE

* KOCHARYAN ASSESSES ARMENIAN PRESIDENTIAL POLL

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RUSSIA

YELTSIN BACK IN KREMLIN. President Boris Yeltsin returned to his office in
the Kremlin on 20 March, Russian news agencies reported. The president held
telephone conversations with Prime Minister Viktor Chernomyrdin and Foreign
Minister Yevgenii Primakov, who is touring the former republics of
Yugoslavia (see Part Two). Yeltsin was also shown on television meeting
with his chief of staff, Valentin Yumashev, to discuss his summit with
French President Jacques Chirac and German Chancellor Helmut Kohl scheduled
for 25 and 26 March in Yekaterinburg. Yeltsin went to his Gorky-9 residence
outside Moscow on 13 March in order to recover from a respiratory
infection, and his illness forced the postponement of a CIS summit (see
"RFE/RL Newsline," 17 and 18 March 1998). LB

PRESIDENT CONCERNED ABOUT OFFICIALS' LOBBYING EFFORTS. Presidential
spokesman Sergei Yastrzhembskii announced on 19 March that Yeltsin has
instructed Chernomyrdin to investigate "disgraceful lobbying" by government
officials among parliamentary deputies and to punish those responsible,
RFE/RL's Moscow bureau reported. Yastrzhembskii named Deputy Defense
Minister Vladimir Toporov, First Deputy Labor Minister Yurii Lyublin,
Deputy Finance Minister Izosim Molchanov and Deputy Agriculture Minister
Sergei Kiselev, "Kommersant-Daily" reported on 20 March. "Russkii telegraf"
said Pension Fund Deputy Chairman Yevgenii Vasilev may also be dismissed.
The officials involved are accused of supporting either laws that exceed
the government's spending capacity (such as pension increases) or
legislation contradicting official policy. For instance, Kiselev is said to
have backed a law that would restrict land ownership rights, according to
"Kommersant-Daily." LB

YELTSIN TAKES BODYGUARDS AWAY FROM REGIONAL LEADERS. Also on 19 March,
Yeltsin issued a decree revoking the right of several dozen officials to
have federally funded bodyguards, RFE/RL's Moscow bureau reported. The
decree affects 41 regional leaders, including Moscow Mayor Yurii Luzhkov
and St. Petersburg Governor Vladimir Yakovlev. (Leaders of the other
Russian regions do not use federal funds to pay for their security.) The
decree also applies to former Soviet Prime Minister Nikolai Ryzhkov, who is
now the leader of the Popular Power faction in the State Duma.
"Kommersant-Daily" on 20 March quoted Yastrzhembskii as saying those
officials are free to hire bodyguards from local branches of the Interior
Ministry, as long as they pay for the service with regional funds. Yeltsin
recently stripped 12 senior officials, including First Deputy Prime
Ministers Anatolii Chubais and Boris Nemtsov, of their state-funded
bodyguards (see "RFE/RL Newsline," 3 March 1998). LB

GOVERNMENT ANNOUNCES TERMS OF ROSNEFT SALE. The government on 20 March
announced that Prime Minister Chernomyrdin has signed instructions on
selling a 75 percent plus one share in Rosneft, Russia's last major fully
state-owned oil company. The starting price for the stake will be 12.8
billion rubles ($2.1 billion), RFE/RL's Moscow bureau reported. The German
firm Dresdner Kleinwort Benson recently valued Rosneft at some $2.3 billion
and estimated that a 75 percent stake in the company would be worth
$1.6-1.7 billion, Interfax reported on 17 March. First Deputy Prime
Minister Anatolii Chubais on 19 March told journalists representing foreign
media organizations that there will be no restrictions on foreign
participation in the Rosneft auction. A plan to sell a stake of 50 percent
plus one share in Rosneft had also been under consideration by
Chernomyrdin, but potential investors criticized that proposal  (see
"RFE/RL Newsline," 23 January 1998). LB

AUCTION TERMS ARE BAD NEWS FOR YUKSI. The decision to allow foreign
companies to bid for the controlling stake in Rosneft is bad news for the
Yuksi oil company, recently formed from the Yukos and Sibneft oil companies
(see "RFE/RL Newsline," 20 and 21 January 1998). Yuksi president Mikhail
Khodorkovskii tried without success to recruit a foreign partner to submit
a joint bid for the Rosneft stake. It will be difficult for Yuksi to raise
enough funds to win the auction, "Kommersant-Daily" argued on 20 March. A
consortium involving LUKoil, Gazprom, and Royal Dutch Shell, and an
alliance of Sidanko and British Petroleum have announced plans to bid for
Rosneft. Boris Berezovskii, a major shareholder in Yuksi, argued repeatedly
in January and February that it is not in Russia's interest to allow
foreigners to make "strategic" investments in the energy sector. LB

DUMA REJECTS PROPOSAL TO RESCHEDULE GOVERNMENT REPORT. The State Duma on 20
March rejected a proposal to reschedule the government's report on its
implementation of the 1997 budget, RFE/RL's Moscow bureau reported. The
report is planned for 10 April, and Duma Speaker Gennadii Seleznev has
asked Prime Minister Chernomyrdin to deliver it to the Duma in person. The
Communist faction sought to move up the report for 31 March, so that it
will take place before a nationwide protest action the Communists and other
opposition groups are planning for 9 April. But the proposal fell short of
a majority when the Liberal Democratic Party of Russia declined to support
it. Meanwhile, the Duma has yet to vote on a final version of a resolution
calling for criminal cases to be opened against Chernomyrdin and First
Deputy Prime Minister Chubais for illegally reducing 1997 budget
expenditures (see "RFE/RL Newsline," 12 March 1998). LB

LUZHKOV SEEKS SHARES IN DEFENSE ENTERPRISES... Moscow Mayor Yurii Luzhkov
wants the federal government to pay its debt to the capital by transferring
50 percent stakes in some leading military enterprises to the Moscow city
government, an RFE/RL correspondent in Moscow reported. Luzhkov discussed
his proposal at an 18 March meeting attended by government officials,
including Deputy Prime Minister and Economics Minister Yakov Urinson,
Security Council Secretary Andrei Kokoshin, and Interior Minister Anatolii
Kulikov. Luzhkov's request applies to the aircraft design firm Sukhoi, the
Ilyushin and Antei aviation complexes, and the Aircraft Electronics and
Communications Systems company. "Russkii telegraf" on 19 March quoted
unnamed government sources as saying the share transfers are likely to be
approved, since the 1998 budget does not foresee sufficient spending to
revive defense enterprises. Output in the defense industry declined 16
percent in 1997 (see "RFE/RL Newsline," 16 February 1998). LB

...MAY REAP POLITICAL DIVIDENDS. Although many defense enterprises are
currently unprofitable, the plan to transfer shares in leading defense
enterprises to Moscow could yield significant political dividends for
Luzhkov, who is widely considered a strong presidential contender. "Russkii
telegraf" noted on 19 March that the enterprises that would be affected by
Luzhkov's proposal have networks of affiliates across Russia. For instance,
Sukhoi owns companies based in Bashkortostan, Khabarovsk Krai, and Irkutsk
and Novosibirsk Oblasts. Antei has affiliates in the republics of Tyva,
Marii-El, and Udmurtia, as well as Orenburg, Sverdlovsk, and Yaroslavl
Oblasts. Luzhkov has proposed offering tax breaks and reduced energy
charges for the defense industry. He has promised to use Moscow city funds
to help pay for those measures, but only if Moscow acquires controlling
stakes in some defense enterprises. If his plan is approved, Luzhkov could
gain more influence over elites in regions with a substantial defense
industry. LB

U.S. AMBASSADOR SAYS SOUTHERN KURILS ARE JAPANESE... U.S. Ambassador to
Russia James Collins said in Yuzhnosakhalinsk on 19 March that Washington
considers the Kuril Islands to be the property of Japan, Interfax reported.
Ownership of the four islands, which were occupied by the Soviet Union at
the end of World War Two, has proven an obstacle to signing a
Russian-Japanese peace treaty to officially end hostilities. The previous
day, Grigorii Yavlinskii, the leader of the Yabloko movement,  had said the
peace agreement should be based on the 1855 treaty between Russia and
Japan. That document gave Russia the northern Kuril Islands but left Japan
with the four southern ones, now at the center of the dispute between
Moscow and Tokyo. BP

...DRAWS CRITICISM FROM MOSCOW. Aleksandr Losyukov, the director of the
Russian Foreign Ministry's Department for Asia, commented that Collins's
statement is "untimely and incorrect," Interfax reported. Losyukov said
statements by representatives of third countries on the subject are
"inappropriate," especially "if they are done on our territory in the Far
East."  The Russian-Japanese subcommission on the new treaty ending wartime
hostilities is to meet for the first time in Tokyo on 26 March. President
Yeltsin is scheduled to have an informal meeting with Japanese Prime
Minister Ryutaro Hashimoto in Kawana, Japan, on 11-13 April. BP

MASKHADOV DENIES INCREASED TENSIONS IN CHECHNYA. Speaking at a press
conference in Grozny on 19 March, Chechen President Aslan Maskhadov said
that the situation in Chechnya is more stable than at any time since
September 1996, Interfax reported. Maskhadov rejected a statement made the
previous day by Khunkar-Pasha Israpilov, head of the Chechen anti-terrorist
squad. Israpilov  claimed that supporters of the abductors of a British
couple held hostage in Chechnya since July 1997 have seized a building in
Urus Martan and that tensions in the town are escalating. Chechen
intelligence agents recently failed to secure the release of the British
hostages (see "RFE/RL Newsline," 17 March 1998). LF

LEBED SAYS RUSSIA NEEDS NEW MARSHALL PLAN. Former Security Council
Secretary Aleksandr Lebed announced on 19 March that Russia needs massive
assistance modeled on the Marshall Plan, which the U.S. offered to many
European countries after World War Two, an RFE/RL correspondent in
Washington reported. Testifying before the National Security Subcommittee
of the U.S. House of Representatives, Lebed criticized current U.S. aid to
Russia, saying money is not going to the right people. The previous day,
Lebed met with U.S. Senator Richard Lugar and highly praised the Nunn-Lugar
program, under which U.S. funds have helped pay to dismantle some Russian
missiles. But he warned that chronic underfunding of the Russian military
continues, and Russia's nuclear specialists often receive only part of
their  wages with great delays. Lebed is running in the 26 April
gubernatorial election in Krasnoyarsk Krai. LB

KRASNOYARSK GOVERNOR CONFIDENT OF RE-ELECTION. During a 19 March press
conference in Moscow, Krasnoyarsk Krai Governor Valerii Zubov expressed
confidence that he will be re-elected this spring, RFE/RL's Moscow bureau
reported. Zubov said he does not consider Lebed his main rival in the race.
However, in thinly-veiled criticism of Lebed, he warned that Krasnoyarsk
residents should not "count on a miracle" by voting for a "magician" for
governor. Zubov portrayed himself as a person committed to working in
Krasnoyarsk in the long term (Lebed is widely believed to be planning a
presidential bid in 2000). "Kommersant-Daily" reported on 17 March that
many officials, both in the krai and in Moscow, believe Zubov's re-election
chances are slim. The newspaper said other regional leaders are already
negotiating as to who will replace Zubov as deputy speaker of the
Federation Council if he loses his post in Krasnoyarsk. LB

MORMON MISSIONARIES ABDUCTED IN SAMARA. Two Mormon missionaries have been
abducted in Samara Oblast, Reuters reported on 19 March, citing a statement
by the Church of Jesus Christ of Latter-Day Saints. The statement, which
was issued through the U.S. State Department, gave few details about the
disappearance of the missionaries and did not speculate about who might be
responsible for their abduction. The Church said it has taken measures to
protect others in its Samara mission. LB

TRANSCAUCASUS AND CENTRAL ASIA

KOCHARYAN ASSESSES ARMENIAN PRESIDENTIAL POLL. Armenian Prime Minister and
acting President Robert Kocharyan told journalists in Yerevan on 19 March
that "minor"  procedural violations during the presidential elections did
not significantly affect the final results (see "RFE/RL Newsline," 19 March
1998).  Kocharyan said he has informed the head of the Organization on
Security and Cooperation in Europe's observer mission that he disagrees
with three of the six points of criticism contained in the OSCE evaluation.
He pledged to ensure that the 30 March runoff will  be free of
infringements. Kocharyan also said  he is discussing a possible second
round alliance with defeated candidate Paruir Hairikyan, who polled 5.5
percent. He also appealed to Vazgen Manukyan, who came in third, "not to
burn bridges" for future cooperation, RFE/RL's Yerevan bureau reported. LF

NATIONAL DEMOCRATIC UNION  ON REPORTED VIOLATIONS. Seyran Avakyan, a
spokesman for Manukyan's National Democratic Union (NDU) said on 19 March
that the party has already lodged 30 formal protests with the Central
Electoral Commission and another 16 with local commissions, RFE/RL's
Yerevan bureau reported. Avakyan said Manukyan's campaign staff are still
receiving complaints of fraud and will seek legal action on 50 "criminal
cases" of violence against NDU activists. Avakyan added that whereas most
violations occurred during the vote count in 1996, the majority took place
during the actual voting this year. Four members of the Central Electoral
Commission, including Vova Hakhverdyan of the NDU, refused to sign the
final protocol on preliminary returns issued by the commission on 19 March,
Noyan Tapan reported. LF

FORMER GEORGIAN PARLIAMENT DEPUTY SPEAKER RELEASED.  Nemo Burchuladze, who
was Georgian deputy parliamentary speaker under ousted President Zviad
Gamsakhurdia, was released on bail by Russian police on 19 March after
being detained in Moscow for one day, Russian media reported. Senior
Georgian officials told Caucasus Press on 19 March that Tbilisi will not
demand Burchuladze's extradition because of the positive role he played in
securing the release of four UN observers abducted by Gamsakhurdia
sympathizers in western Georgia last month. Also on 19 March, Guram
Absandze, who was finance minister under Gamsakhurdia, was extradited to
Tbilisi and taken into detention on arrival, Russian media reported.
Absandze, who was arrested in Smolensk on 16 March, is suspected of
financing the 9 February assassination attempt against Georgian President
Eduard Shevardnadze. LF

KAZAKHSTAN EXPELS SUSPECTED IRANIAN SPIES. Kazakh Foreign Minister
Kasymjomart Tokayev announced on 19 March that the three Iranian nationals
arrested charged with espionage last month will be sent back to Iran,
ITAR-TASS reported. Tokayev told the Iranian ambassador to Kazakhstan that
Kazakh security agents had been able to establish that the Iranians had
gathered information and "infringed on the interests of Kazakhstan's
national security." Tokayev, who had been in Tehran on 13 March to discuss
the issue, added that "to show goodwill...[and] preserve friendly relations
between the two countries," the Kazakh authorities had decided to free the
suspected spies. There was no mention of the fate of the Kazakh citizen who
was charged alongside the three Iranians. BP

KYRGYZSTAN EXEMPTED FROM JACKSON-VANICK ACT. Kyrgyz presidential press
spokesman Kanybek Imanaliev said on 18 March that the U.S. has removed
Kyrgyzstan from the list of countries covered by the 1973 Jackson-Vanick
amendment, RFE/RL correspondents reported. That act placed severe
restrictions on trade with countries that have a poor human rights records.
Removal from the list means Kyrgyz exports are now officially freed from
the maximum customs duties that could be levied on listed countries.
However, since the 1992 agreement with the U.S. giving Kyrgyzstan
most-favored nation status, those duties have rarely been enforced. Last
November, President Askar Akayev sent a letter to the U.S. President Bill
Clinton requesting Kyrgyzstan be removed from the list. BP

OIL STORAGE FACILITY OPENS IN TURKMENBASHI. Mohammad Hasan Marikana, the
president of Malaysia's Petronas Oil Company, opened the oil tank storage
facility at the Turkmen Caspian port of Turkmenbashi on 19 March, Interfax
and ITAR-TASS reported. Petronas will invest between $60-70 million in
offshore oil-drilling projects this year in the Livanovo, Barinovo, and
Gubkino Caspian fields, which contain an estimated total of 500-660 million
tons of oil. Earlier the same day, Marikana met with Turkmen President
Saparmurat Niyazov in Ashgabat. BP

REGIONAL AFFAIRS

RUSSIA SENDS MIXED SIGNALS ON SANCTIONS AGAINST LATVIA. Presidential
spokesman Sergei Yastrzhembskii announced on 19 March that Russia is
considering "certain targeted economic counter-measures" against Latvia,
RFE/RL's Moscow bureau reported. Yastrzhembskii expressed concern about the
"silence" of other European countries over the recent march in Riga by
veterans of the Latvian SS Legion (see "RFE/RL Newsline," 17 March 1998).
Yastrzhembskii questioned whether the lack of condemnation of that march
indicates that the verdicts at the Nuremburg trials are no longer deemed
binding international law and whether Europe is willing to invite "a
country whose government panders to SS remnants" into the "zone of
democracy." In contrast, Russian Prime Minister Viktor Chernomyrdin
announced on 19 March that "Russia will not impose economic sanctions on
Latvia," ITAR-TASS reported. He added that "we do not support a 'tooth for
a tooth' position." LB

LATVIAN FOREIGN MINISTER CLAIMS "ANTI-LATVIAN CAMPAIGN." Addressing a
session of the UN Human Rights Committee in Geneva on 19 March, Valdis
Birkavs argued that Russia is conducting a "widespread anti-Latvian
campaign," BNS reported. Referring to the recent incident at the Latvian
Embassy in Moscow (see "RFE/RL Newsline," 18 March 1998),. Birkavs said
Latvian diplomatic personnel "have been threatened with physical violence."
He added that "Latvia has received threats of economic sanctions because,
it is said,  Latvia is not loyal enough to Russian interests." Birkavs was
responding to a proposal made by Russian Deputy Foreign Minister Yurii
Ushakhov in Geneva two days earlier that the committee adopt a resolution
condemning human rights violations in Latvia. The Latvian minister rejected
Ushakhov's accusation of applying "double standards" over the protection of
human rights, adding that he is ready to discuss those rights with Moscow.
JC

LATVIA ARRESTS RUSSIAN NATIONAL ON GENOCIDE CHARGE. The Latvian
Prosecutor-General's Office on 19 March arrested a Russian citizen and
former Soviet security official on charges of genocide, BNS reported. Ilya
Mashonkin is accused of involvement in the 1949 deportation of some 100
ethnic Latvian families. Many of the deportees reportedly died in exile. A
spokeswoman said that Mashonkin's arrest cannot be linked to the recent
activities of Latvia's Russian-speakers or SS Legion veterans because the
Prosecutor-General's Office has been working on the case for the past year
or so. Until now, Latvia had sentenced only one former Soviet security
official. Alfons Noviks, a Latvian citizen, was jailed for life in 1995 for
helping organize deportations. He died in prison the following year, aged
89. JC

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