We are all apt to believe what the world believes about us. - George Eliot
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 2, No. 98 Part I, 25 May 1998


___________________________________________________________
RFE/RL NEWSLINE Vol. 2, No. 98 Part I, 25 May 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

xxxxxxxxxxxxxxxxxxx SPECIAL REPORT xxxxxxxxxxxxxxxxxxxxxx
CRISIS ON UKRAINIAN FARMS
The decline of Ukraine's agriculture sector has been
continuous since Kyiv declared independence from the Soviet
Union in 1991. This report includes articles and photos.
http://www.rferl.org/nca/special/ukraine-farms/index.html

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Headlines, Part I

* MINERS END BLOCKADE OF TRANS-SIBERIAN RAILROAD

* POLICE OFFICER KILLED IN DAGESTAN CLASH

* ABKHAZ FIGHTING CONTINUES
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RUSSIA

MINERS END BLOCKADE OF TRANS-SIBERIAN RAILROAD... Unpaid
coal miners on 24 May lifted their blockade of the Trans-
Siberian railroad, which began in Anzhero-Sudzhensk
(Kemerovo Oblast) 10 days earlier, Russian media reported.
The move followed several days of negotiations between
government representatives, led by Deputy Prime Minister
Oleg Sysuev, and Kemerovo miners. Sysuev told journalists
that the government has recognized the need to provide
greater social support for miners, ITAR-TASS reported. The
government has promised to spend 39 million rubles ($6.3
million) on creating new jobs for employees of mines slated
for closure, and the Railroad Ministry has also pledged to
allocate 53 million rubles toward helping miners find new
jobs. On 15 May, the government proposed some 526 million
rubles in spending cuts to free up extra funds for the coal
industry (see "RFE/RL Newsline," 18 and 21 May 1998). LB

...AND NORTH CAUCASUS RAILROAD. On 23 May, miners in Shakhty
(Rostov Oblast) ended their six-day blockade of the North
Caucasus Railroad. Deputy Prime Minister Boris Nemtsov held
two days of negotiations with miners, local officials, and
representatives of the mining company Rostovugol, NTV
reported. According to ITAR-TASS, during Nemtsov's visit
funds were found to pay three months of back wages to the
miners. Meanwhile, as of 25 May, miners in Komi Republic
continue to prevent freight trains from traveling on the
Moscow-Vorkuta railroad. Economics Minister Yakov Urinson
visited Komi but returned to Moscow on 23 May, having failed
to end the protest. He promised miners that by the end of
May, the government would find some 55 million rubles ($8.9
million) from various sources to help settle wage arrears.
However, he said the government could not immediately help
the miners receive all 172 million rubles that they are
owed. LB

YELTSIN URGED INVESTIGATION OF MINERS' PROTESTS. Prosecutor-
General Yurii Skuratov told journalists on 22 May that
President Boris Yeltsin considered it necessary to restore
order in the coal industry and to investigate the actions of
miners blocking railroads, ITAR-TASS reported. Following a
meeting with Yeltsin, Skuratov quoted the president as
saying that the miners had "gone too far" and that their
actions violated the constitution. Skuratov also said
Yeltsin believed that coal miners "have not yet learned to
work in a market economy." The Railroad Ministry announced
on 22 May that the stoppages had incurred 181.4 million
rubles ($29 million) in financial losses for Russia's
railroads. The blockades also hurt numerous industrial
enterprises that could not transport their goods to markets
or obtain vital supplies, such as fuel. LB

POLICE OFFICER KILLED IN DAGESTAN CLASH. A police officer
was shot dead on 23 May in the village of Karamakhi,
southwest of the Dagestani capital, Makhachkala, Russian
media reported. Some 25 police officers had converged on the
village to investigate an attack on a police post two days
earlier. The village inhabitants, most of whom are Wahhabis,
surrounded the policemen and demanded that they surrender
their weapons. The officers escaped, but shooting ensued in
which an unknown number of people were injured. Additional
policemen were brought to the district on 24 May but were
later withdrawn after an agreement was reached with the
villagers on investigating the previous day's killing. LF

FOREIGN, DEFENSE, INTERIOR MINISTERS JOIN GOVERNMENT
PRESIDIUM. A government resolution has named Foreign
Minister Yevgenii Primakov, Defense Minister Igor Sergeev,
and Interior Minister Sergei Stepashin to the cabinet's
presidium, ITAR-TASS reported on 23 May. The other eight
members of the presidium, named earlier this month, are
Prime Minister Sergei Kirienko, Deputy Prime Ministers
Nemtsov, Viktor Khristenko and Sysuev, Economics Minister
Yakov Urinson, State Property Minister Farit Gazizullin,
Finance Minister Mikhail Zadornov, and Science and
Technology Minister Vladimir Bulgak. The functions of the
presidium have not yet been clearly defined. LB

KIRIENKO PROMISES FUNDING FOR NUCLEAR FORCES. Kirienko told
ITAR-TASS on 23 May that the government will provide
financial support for Russia's military nuclear program. The
prime minister on 22-23 May visited the federal nuclear
research center in Sarov (formerly Arzamas-16, Nizhnii
Novgorod Oblast) in order to prepare for a June session of
the Security Council. That session will consider a
government program for developing Russia's strategic nuclear
forces, Kirienko said. Last July, on the eve of a
gubernatorial election in Nizhnii Novgorod, then Prime
Minister Viktor Chernomyrdin visited Sarov and promised that
the government would pay its debts to the center. However,
the Sarov center and nuclear research in general continued
to face chronic underfunding (see "RFE/RL Newsline," 16
September and 22 December 1997). LB

COMMUNISTS HOLD EXTRAORDINARY CONGRESS... The Communist
Party of the Russian Federation (KPRF) held an extraordinary
congress in Moscow on 23 May to adopt changes to the party
charter and discuss strategy, Russian news agencies
reported. The congress was closed to journalists, but
according to a KPRF press release on 25 May, the congress
adopted a statement calling for the president to step down,
early presidential elections, and constitutional amendments
to reduce presidential powers. Only a "massive popular
protest" can force Yeltsin to step down, the statement said.
The appeal also charged that unnamed "appeasers" in the
leadership of the Communist-led Popular-Patriotic Union of
Russia are "impeding the battle of the people for their
rights." That union was formed in August 1996 out of parties
and movements that supported Gennadii Zyuganov's
presidential bid earlier that year. LB

...TRY TO BLOCK FORMATION OF 'LENINIST-STALINIST PLATFORM.'
KPRF leader Gennadii Zyuganov told journalists on 23 May
that delegates to the party congress unanimously rejected an
attempt to change the party's charter to allow groups to
form "political platforms" within the KPRF, ITAR-TASS
reported. Some members of the KPRF's Central Committee are
trying to form a "Leninist-Stalinist platform," and State
Duma deputy Valentin Kuptsov, a high-ranking KPRF official,
told Interfax on 23 May that a Central Committee plenum in
June will involve a "detailed discussion" of that platform.
The Communist dissenters have released a statement saying
the formation of a Leninist-Stalinist platform is needed
because "the influence of national-reformist and religious-
democratic views within the [Communist] party leadership has
grown, and the deviation from Leninist ideological and
organizational principles of party-building has
strengthened," Interfax reported on 24 May. LB

DUMA ELECTS COMMUNIST AS HUMAN RIGHTS COMMISSIONER. The
State Duma on 22 May elected Communist legal expert Oleg
Mironov as Russia's human rights commissioner, RFE/RL's
Moscow bureau reported. Mironov ran unopposed in the second
round of balloting, because in the first round, he was the
only one of the 11 candidates for the job who received the
two-thirds majority needed to advance to the second round.
Mironov will give up his Duma seat, but he told NTV on 22
May that as human rights commissioner, he will retain his
immunity from criminal prosecution unless the Duma votes to
strip him of it. The Duma sacked Sergei Kovalev, an
outspoken critic of the war in Chechnya, as its human rights
commissioner in March 1995. LB

DEAL BETWEEN COMMUNISTS, NDR CLEARS PATH FOR NEW
COMMISSIONER. Although the federal constitutional law
outlining the duties of Russia's human rights commissioner
was adopted in March 1997, attempts to elect a commissioner
in April and September of that ended in stalemate. In each
attempt, Mironov gained more votes than any other candidate,
but no candidate received enough votes to advance to the
second round of balloting in the Duma. A deal between the
Our Home Is Russia (NDR) and Communist factions finally
broke the deadlock, RFE/RL's Moscow bureau reported on 22
May. The Communists agreed to allow the NDR to appoint Roman
Popkovich as Duma Defense Committee chairman, replacing Lev
Rokhlin (see "RFE/RL Newsline," 21 May 1998). In exchange,
the NDR agreed to support Mironov as human rights
commissioner. LB

DUMA TO CONSIDER IMPEACHMENT MOTION IN JUNE. Duma Speaker
Gennadii Seleznev says the lower house of the parliament
will on 2 June consider a Communist-backed motion to impeach
Yeltsin, Interfax reported. Many Russian commentators say
the Duma has no chance of forcing Yeltsin to end his term
and have described the impeachment effort as a publicity
stunt to shore up support within the Communist camp. The
constitution outlines an arduous procedure for removing the
president from office. First, at least two-thirds of Duma
deputies must support an impeachment motion. Second, the
Supreme Court must rule that there is evidence the president
committed high crimes or treason. The Constitutional Court
must then rule that no procedural violations were committed
during the adoption of the impeachment motion. Finally, at
least two-thirds of Federation Council deputies must vote to
remove the president from office. LB

DUMA URGES YELTSIN TO PRESERVE MINISTRY ON CIS. Also on 22
May, the Duma passed a resolution asking the president and
government to preserve the Ministry for Cooperation with CIS
States, ITAR-TASS reported. That ministry was created in
summer 1996, but Yeltsin recently ordered that it be
abolished and that its functions be transferred to the
Foreign Ministry. Boris Pastukhov was recently named first
deputy foreign minister in charge of relations with the CIS.
LB

RUSSIA, VIETNAM SIGN OIL REFINERY DEAL. Russian oil
exporting company Zarubezhneft and Vietnam's PetroVietnam on
22 May signed a deal to construct the first oil refinery in
Vietnam, ITAR-TASS reported. The refinery will be built in
Quang Ngai Province by 2001 and will have an annual capacity
of 6.5 million tons of oil. The estimated cost of the
project is $1.3 billion. Zarubezhneft expects that its
investment will be returned after five years of operation.
Russian Deputy Minister of Fuel and Power Anatoly Kozyrev
said it may be possible to "increase the status of the
agreement" and have it signed as a Russian-Vietnamese
governmental accord on cooperation in the fuel and energy
sector. BP

TRANSCAUCASUS AND CENTRAL ASIA

ABKHAZ FIGHTING CONTINUES... At a 22 May meeting in Tbilisi
of the UN-sponsored Coordinating Council, Georgian and
Abkhaz representatives signed a cease-fire agreement aimed
at ending sporadic clashes over the past several days
between Georgian guerrillas and Abkhaz police in Abkhazia's
southernmost Gali Raion. But the same day, four people were
killed in new fighting in the village of Tskhiri, and fierce
hostilities continued on 23-25 May. More than 20 Georgian
civilians, four Georgian guerillas and 40 Abkhaz troops have
been killed in the past few days, according to ITAR-TASS. On
23 May, Georgian officials denied Abkhaz claims that Georgia
has airlifted Interior Ministry forces to the region.
Meanwhile, Georgian guerrilla leader Zaur Samushia on 25 May
warned that his men will target the Russian peacekeeping
force deployed in Abkhazia unless that force stops supplying
the Abkhaz with artillery. Georgian Television reported that
some 15,000 Georgian repatriates to Gali have again been
force to flee fighting in the area. LF

...DESPITE DIPLOMATIC EFFORTS. The Georgian National
Security Council on 23 May adopted unspecified measures to
aid the Georgian fugitives from Abkhazia, Interfax reported.
Georgian parliamentary chairman Zurab Zhvania telephoned
twice with Abkhaz President Vladislav Ardzinba to discuss
how to "normalize" the situation in Gali. Georgia's
ambassador to Russia, Vazha Lortkipanidze, met with Ardzinba
on 24 May in Sukhumi and drafted a protocol aimed at ending
hostilities, Reuters reported. The Georgian Foreign Ministry
issued a statement the same day calling on the UN and the
Russian peacekeeping force to take all possible measures to
end the fighting. Addressing Georgian fugitives in Zugdidi,
close to the border with Abkhazia, Georgian Defense Minister
Davit Tevzadze warned that "we cannot unleash a full-scale
war." LF

ARMENIAN FOREIGN MINISTER ON KARABAKH-AZERBAIJANI RELATIONS.
Vartan Oskanian said on 21 May that Armenia currently
advocates neither complete independence for the unrecognized
Nagorno-Karabakh Republic nor its unification with Armenia.
He explained that Yerevan wants the relationship between the
region and the central Azerbaijani government to be one of
two equal entities, RFE/RL's Yerevan bureau reported. NKR
President Arkadii Ghukasian had told "Respublika Armeniya"
on 19 May that Nagorno-Karabakh is de facto an independent
state but is prepared to compromise on concluding "parity
and treaty relations" with Azerbaijan. Four days earlier,
Armenian parliamentary speaker Khosrov Harutiunian said the
agreement on bilateral cooperation concluded between the
parliaments of Armenia and the NKR constitutes "de facto but
not de jure" recognition by Armenia of the NKR's
independence from Azerbaijan, RFE/RL's Stepanakert
correspondent reported. LF

TURKEY, ARMENIA AT ODDS OVER OSCE SUMMIT VENUE. The Turkish
Foreign Ministry issued a statement on 23 May criticizing an
Armenian Foreign Ministry protest against plans to have
Istanbul as the venue of the next bi-annual summit of the
Organization for Security and Cooperation in Europe, the
"Turkish Daily News" reported on 25 May. That summit,
scheduled to take place in 1999, is to adopt a landmark
charter on a European security model for the 21st century.
An Armenian Foreign Ministry spokesman told journalists on
21 May that Foreign Minister Oskanian informed his OSCE
counterparts that Armenia will oppose the choice of Istanbul
as venue for the 1999 summit. The spokesman said Armenia
cannot agree to sign the OSCE charter in a country with
which it has no diplomatic relations and that has blockaded
Armenia for the past five years. The Turkish Foreign
Ministry expressed surprise at the Armenian protest, noting
that Armenian officials have attended summits of the Black
Sea Economic Cooperation in Turkey. LF

AZERBAIJANI RELIGIOUS LEADER CRITICIZES MISSIONARY
ACTIVITIES. Speaking at a press conference on 22 May,
Sheikh-ul-Islam Haji Allakh-Shukur Pashazade, the head of
the Spiritual Department of Muslims of Azerbaijan, claimed
that the activities of Hare Krishna, Wahhabi, and Christian
missionaries have created a "dangerous situation" and could
"split the country," Turan reported. Pashazade said his
department has written to heads of all Baku local councils
asking them for information on "illegal activities" by
religious bodies. He also said that using the terms "Allah"
and "Prophet" in addressing or greeting Azerbaijani
President Heidar Aliev constitutes a "sin." LF

TAJIK PARLIAMENT BANS RELIGIOUS, OTHER PARTIES... Lawmakers
on 23 May adopted a draft law banning religious parties and
parties that receive financing or "ideological guidance"
from other countries, RFE/RL correspondents reported. The
law also prohibits parties whose goals include the overthrow
of the constitutional system or inciting inter-ethnic,
social, or religious unrest. The leader of the United Tajik
Opposition (UTO), Said Abdullo Nuri, has requested that
President Imomali Rakhmonov veto the law. The backbone of
the UTO is the Islamic Renaissance Party, which was first
banned in 1993. Nuri said that such legislation must be
proposed by the National Reconciliation Commission, which he
heads. Under the new legislation, it appears that the
Communist Party's property will be nationalized. A member of
that party said the law will leave only the president's
party registered ahead of elections scheduled for next year.
BP

...FAILS TO VOTE ON OPPOSITION CANDIDATES. The debate on
political parties precluded a second vote on the candidacy
of UTO members Khoja Akbar Turajonzoda as first deputy prime
minister and Davlat Usmon as economics minister. The
parliament had voted against both on 21 May, and a second
vote had been expected to take place the following day,
after Rakhmonov returned from a donor conference in Paris.
Nonetheless, lawmakers did find time to adopt a law
defending the honor of the president, ITAR-TASS reported.
Insulting or slandering the president is now punishable by a
fine or prison sentence. Moreover, only the president of
Tajikistan can use the title "president." Heads of
enterprises and organizations must employ another
designation. Finally, a law on security agencies was adopted
that largely leaves the agencies' powers in tact. A number
of deputies had wanted those powers curtailed. BP

OFFICIALS CLAIM NO DAMAGE TO ISSIK-KUL... Following an
accident in which nearly two tons of sodium cyanide leaked
into a river close to Kyrgyzstan's biggest lake, Issik-Kul
(see "RFE/RL Newsline, 22 May 1998), Deputy Environmental
Minister Tilekbai Kyshtobayev said at the scene of the
accident that "there are no grounds for panic. No ecological
disaster is expected," ITAR-TASS reported. That viewpoint
was echoed by Gerhard Glates, the head of the nearby Kumtor
gold mine. Glates said there will be no serious
environmental consequences and that his company will cover
all expenses for the cleanup. BP

...BUT MEDIA REPORTS SUGGEST OTHERWISE. Both ITAR-TASS and
RFE/RL correspondents report that dead fish and cattle have
been found near the scene of the accident. They also say
that residents of the area have been warned against drinking
unboiled water or swimming in the river or lake. Minister of
Ecology Kulubek Bokonbayev told RFE/RL correspondents that
since the 20 May accident, some 250 residents of the Issik-
Kul region have sought medical help. Issik-Kul is a major
tourist attraction in Central Asia. BP

REGIONAL AFFAIRS

LUKASHENKA SIGNS COOPERATION AGREEMENT WITH RUSSIAN
REGIONS... Belarusian President Alyaksandr Lukashenka on 23
May signed an agreement on boosting economic cooperation
between Belarus and the Central Russia association, which is
composed of 12 oblasts, ITAR-TASS reported. Lukashenka, on a
visit to Russia's Yaroslavl Oblast, said at a meeting with
Russian regional leaders that direct contacts with Russian
regions will increase the economic integration of the two
states. But he commented that the "subjective will of
certain officials in Moscow" is an obstacle to integration
within the Russia-Belarus Union, Interfax reported. The
Belarusian leader added that he does not intend to create a
single state with Russia and denied rumors that he wants to
run for the Russian presidency in 2000. JM

...CALLS FOR "EASTERN SLAVS" TO UNITE. Speaking at a
conference entitled "The Slav World: Unity and Variety" in
Yaroslavl on 23 May, Lukashenka called for the consolidation
of "Eastern Slavs" and warned against Western attempts "to
impair the creation of any civilized association" on former
USSR territory. He said the Russia-Belarus union is "not a
closed society but the core of a multi-faceted and equal
unity of Slavs and other peoples." Belarus has now taken on
the role of a "unifier of Slavic territories," he commented.
At the same time, he said that Belarus wants to develop
"cooperation [with the West] in all spheres" but stressed
that this should be "equal cooperation rather than one-way
traffic," Interfax reported. JM

DUMA FAILS TO RATIFY ACCORD ON MILITARY WITHDRAWAL FROM
BELARUS. The Russian State Duma has voted by 209 to 51 with
three abstentions against ratifying the 1993 agreement
between the Belarusian and Russian governments on the
withdrawal of Russian troops from Belarus, ITAR-TASS
reported on 22 May. Duma Committee for CIS Affairs Chairman
Georgii Tikhonov said the pullout was illegal without the
Duma's ratification of the agreement. Duma deputies have
appealed to the Prosecutor-General's Office "to instigate
criminal proceedings regarding the illegitimate pullout of
Russian troops from the territory of Belarus." JM

END NOTE

DIFFICULTIES IN REFORMING TURKMENISTAN'S ECONOMY

by Michael Wyzan

	The leadership of Turkmenistan has chosen to move
slowly on economic reform. It is tempting to see that
attitude as indicative of the government's unwillingness to
jettison the command economy owing to a lack of interest in
establishing market institutions or its desire to keep on
the old guard at enterprises and in ministries.
	However, there are structural features of
Turkmenistan's economy that make reform unusually difficult.
Production and exports are dominated by gas, cotton, and
oil. In 1994, gas accounted for 66 percent of both GDP and
export revenues. Those percentages have declined enormously
since then (gas represented less than 21 percent of GDP in
1997), but that the decline is the result of falling gas
production and exports, rather than of increased output and
exports of other goods. Once pipeline issues are settled,
gas will undoubtedly resume its commanding position in the
economy.
	Turkmenistan's energy sector is dominated by five
monopolies. Since January 1996, the functions formerly
belonging to the Ministry of Oil and Gas have been performed
by five enterprises: gas exports are under Turkmenrosgaz,
which is 51 percent owned by Turkmengaz (the state monopoly
responsible for gas production), 45 percent by Gazprom, and
4 percent by a Russian trading company. The other four
monopolies are Turkmenneftegaz (oil and gas marketing),
Turkmenneft (oil production), Turkmenneftgazstroy
(construction), and Turkmengeologia (exploration).
	Countries are usually hesitant to privatize such
strategically important assets, and even when such companies
are privatized, they tend to wield enormous power both
domestically and abroad (as in the case of Gazprom). The
distribution and sale of gas are a natural monopoly; there
is always only one pipeline from a gas field to a given
destination The real question concerns the fate of the
revenues generated for the state by the energy sector: are
they used to diversify the economy and to allow the entire
population to share in the wealth?
	The other mainstay of the economy is agriculture,
especially cotton. Production and exports of the crop have
plummeted since the Soviet era, but it has accounted for as
much as 18.5 percent of GDP and almost 21 percent of exports
(both figures from 1995).
	Cotton production is another sector in which it is
difficult to employ conventional privatization methods.
Peasants continue to work on the large farms that are the
descendants of the Soviet kolkhoz. When growing an
industrial crop (that is, one intended for processing) under
desert conditions, the key issues are access to water and
the provision of credit and procurement activities.
	Those activities remain in the hands of the state.
Local branches of the Ministry of Water make all decisions
on water allocation; this is not surprising, given that once
again this activity is a natural monopoly. However, although
purchasing the cotton harvest and providing credits to
farmers are also large-scale activities, it is less clear
why they should be undertaken by the state.
	Moreover, agriculture has seen little reform. The
provincial authorities continue to own most of the land and
to set output targets for producers of cotton and wheat.
Under a December 1996 decree, land is leased to farmers free
of charge for 10-15 years; for the first two years, they are
required to grow and achieve target yields for specified
products. If at the end of this period performance is
acceptable, as judged by a local commission, the farmer
earns the right to grow whatever crops he sees fit, to lease
the land, and to use it as collateral; he may not sell it,
however.
	Banking remains specialized and noncompetitive. One
commercial bank, Investbank, is responsible for crediting
the gas sector, while 53 local branches of the Daykhan Bank
provide banking services to the former Soviet collective
farms.
	The reform approach has also been timid for industrial
enterprises that cannot be deemed natural monopolies. A
program in September 1994 listed 4,343 enterprises to be
privatized. Although the list contained all state firms
except those in various sectors, in practice only small
enterprises have been privatized, mostly through sale to
their employees.
	However, there has been some progress recently on
privatization. Legislation passed in March 1997 stipulates
that industrial enterprises will be privatized by auction
and that foreigners may participate in the auctions (and own
up to 50 percent of firms). In February, it was decided that
18 medium-sized enterprises would be turned into open joint-
stock companies and the stock sold to the public. Moreover,
Turkmenistan has been successful in forming joint ventures
with Turkey (and other Western countries) for producing
textiles. During his recent visit to the U.S., President
Saparmurat Niyazov said that there are such facilities in
the country.
	However, unless attempts are made to privatize the
energy and agricultural sectors, Turkmenistan will remain
one of the world's few economies with most of production in
the hands of the government.

The author is an economist living in Austria.

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