RFE/RL NEWSLINE Vol. 2, No. 126 Part I, 2 June 1998

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RFE/RL NEWSLINE Vol. 2, No. 126 Part I, 2 June 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

* GOVERNMENT THREATENS TO LOWER BOOM ON GAZPROM

* DUMA GIVES INITIAL APPROVAL TO PART OF ANTI-CRISIS PROGRAM

* GEORGIAN OPPOSITION LEADER WANTS LAND PLOTS FOR FUGITIVES
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RUSSIA

GOVERNMENT THREATENS TO LOWER BOOM ON GAZPROM... Prime
Minister Sergei Kirienko announced at a 2 July cabinet
session that he has asked Deputy Prime Minister Boris
Nemtsov to cancel the December 1997 agreement under which
Gazprom chief executive Rem Vyakhirev manages a 35 percent
state-owned stake in the gas monopoly, Russian news agencies
reported. Nemtsov will chair a meeting of the state's
representatives in Gazprom on 2 July. Kirienko also
announced plans to hold an extraordinary meeting of
Gazprom's board of directors and said the State Tax Service
is to seize some property belonging to the monopoly. Fuel
and Energy Minister Sergei Generalov told Interfax that the
measures were prompted by Gazprom's failure to make a 2.45
billion ruble ($395 million) payment to the federal budget
in June. During a recent meeting of Gazprom shareholders,
Nemtsov indicated that the government is satisfied with the
company's management (see "RFE/RL Newsline," 29 June 1998).
LB

...UNLESS GAS MONOPOLY PAYS TAXES IN FULL. Deputy Prime
Minister Nemtsov announced on 2 July that "if Gazprom pays
its taxes, everything will be all right," ITAR-TASS
reported. But Nemtsov confirmed that the government will
carry out the steps outlined by Kirienko if the company
fails to meet its financial obligations toward the budget.
ITAR-TASS quoted unnamed government sources as saying the
threats against Gazprom "may be directly related" to talks
between Russian and IMF official over a possible $10-15
billion stabilization loan. The IMF has long said that
further loans to Russia will depend in large part on the
government's success in improving tax collection. Finance
Minister Mikhail Zadornov told ITAR-TASS on 2 July that
Gazprom provides some 15-20 percent of all federal tax
revenues. LB

DUMA GIVES INITIAL APPROVAL TO PART OF ANTI-CRISIS
PROGRAM... The State Duma on 1 July gave at least initial
approval to several draft laws in the government's anti-
crisis program, Reuters and ITAR-TASS reported. In all three
required readings, deputies approved a law to exempt
imported industrial equipment from value-added tax this year
and a law reducing excise duties on carbonated alcoholic
beverages. Laws related to a plan to raise taxes on the
games industry (such as lotteries and casinos) were approved
in two readings. Several laws were passed in only the first
reading and are expected to undergo substantial amendments
before the Duma gives final approval: a law to reduce the
profit tax from 35 percent to 30 percent; laws simplifying
the taxation of small businesses; and a law that would allow
enterprises to sell goods below the cost of production. LB

...REJECTS LAW ON TAXING GOODS BEFORE COMPANIES ARE PAID. As
expected, the Duma on 1 July voted down by an overwhelming
margin the government's proposal to force companies to pay
value-added tax on goods at the time of shipment to
customers rather than when payments are received. Gazprom
was among those who lobbied against passage of that bill,
the only part of the government's anti-crisis program so far
that the Duma has rejected. Deputies on 1 July began
debating a draft law to charge a single rate of value-added
tax on almost all goods but postponed a vote. That law,
along with nearly a dozen other important parts of the
government's anti-crisis plan, will be considered either on
2 or 3 July. LB

DUMA RAISES CEILING FOR FOREIGN BORROWING. The Duma on 1
July approved the government's plans to raise allowable
foreign borrowing in 1998 from $6.6 billion to $9.068
billion, with no more than $400 million of that amount
coming from loans from foreign governments, Interfax
reported. But Duma Speaker Gennadii Seleznev noted that
deputies made several amendments to the program before
approving it. For example, he said the Duma took out
provisions that would have allowed funds borrowed from
abroad to be used to pay for foreign consultants. Duma First
Deputy Speaker Vladimir Ryzhkov of the Our Home Is Russia
faction named that provision as one of the "many stupid
things" the Duma removed from the foreign-borrowing program,
ITAR-TASS reported. LB

OFFICIAL WARNS PARTIES OVER EARLY DUMA ELECTIONS. Central
Electoral Commission Chairman Aleksandr Ivanchenko has
reminded politicians that current legislation would not
allow any of Russia's political parties to qualify for
elections to the State Duma if early elections were held in
the next few months, RFE/RL's Moscow bureau reported on 1
July. Under a 1997 law, political parties and movements must
amend their charters and re-register with the Justice
Ministry at least one year before parliamentary elections.
The next elections are scheduled for December 1999 but could
be held earlier if the Duma gave President Boris Yeltsin
grounds to dissolve the lower house (either by voting no
confidence in the government or by rejecting the president's
prime ministerial nominee three times). Ivanchenko's remarks
appear to be linked to recent speculation in some Russian
media that conflict over the government's anti-crisis
program could eventually lead to the Duma's dissolution. LB

COMMISSION ORDERS FOUR LARGE TAX DEBTORS TO PAY UP. Deputy
Prime Minister Viktor Khristenko announced on 1 July that an
extraordinary commission on tax and budgetary discipline has
given four companies until 1 August to pay their tax debts,
RFE/RL's Moscow bureau reported. The decision affects the
Severonikel nickel smelter (a unit of Norilsk Nickel that
owes some 250 million rubles or $40 million), the
Vostsibugol coal company (400 million rubles), the Chepetsk
Mechanical Works (175 million rubles), and the state-owned
Rosenergoatom nuclear energy company (329 million rubles),
according to Interfax. If they do not meet the 1 August
deadline, the first three companies face asset seizures and
the management of Rosenergoatom will be replaced, Khristenko
said. He also vowed that bankruptcy procedures will be
initiated against several companies that have not complied
with the commission's earlier order to pay their tax debts
(see "RFE/RL Newsline," 1 June 1998). LB

KIRIENKO PROMISES SOLDIERS A RAISE--NEXT YEAR. Prime
Minister Kirienko told journalists on 1 July that the
government plans to raise the wages of military personnel as
of 1 January 1999, Interfax reported. Last year, government
officials promised to give soldiers a pay raise in 1998. The
government's anti-crisis program calls for levying income
tax on several types of income that are not currently taxed,
including soldiers' wages. That proposal drew sharp
criticism from Communist deputy Yurii Voronin during a 29
June meeting of the Duma Budget Committee, RFE/RL's Moscow
bureau reported. But speaking to journalists on 1 July,
Kirienko said soldiers will not be forced to pay income tax
until after they have received pay raises. He did not
specify the size of the pay increase but claimed that it
will make up for the introduction of an income tax on
soldiers' salaries, ITAR-TASS reported. LB

TRADE UNION LEADER SLAMS ANTI-CRISIS PROGRAM. Mikhail
Shmakov, the leader of the Federation of Independent Trade
Unions (FNPR), says the government's anti-crisis program
will not solve the wage arrears problem but rather seeks to
increase the tax burden on ordinary citizens, RFE/RL's
Moscow bureau reported on 1 July. He told journalists that
wage arrears have increased by more than 20 percent since
the beginning of 1998 and continue to grow. Commenting on
official claims that the government is responsible for only
a small fraction of the wage arrears, Shmakov argued that
the government is responsible for helping ensure prompt wage
payments to all workers--not only to state employees. He
warned that if no steps are taken to solve the problem,
trade unions will cease to be the government's "social
partners" and will organize a nationwide strike in November.
LB

WILL BLOCKADE OF TRANS-SIBERIAN RESUME? Some 100 coal miners
from three towns in Kemerovo Oblast began picketing the
Trans-Siberian Railroad on 1 July to protest wage arrears,
ITAR-TASS reported. Trade unions claim that the region has
received only 65 percent of the 1 billion rubles ($160
million) promised by the federal government in a protocol
signed by Deputy Prime Minister Oleg Sysuev on 24 May. That
protocol ended a 10-day blockade of the railways (see
"RFE/RL Newsline," 25 May and 3 June 1998). Deputy Prime
Minister Nemtsov told journalists the government has
"fulfilled all its obligations" to miners, and he blamed the
coal sector's problems both on consumers, who allegedly owe
8.6 billion rubles ($1.4 billion) to mines nationwide, and
on the Federation Council. The upper house recently rejected
a bill that would have cut spending in several areas and
earmarked the funds saved for the coal industry. BT

RUSSIA EXPRESSES ANXIETY OVER U.S. MISSILE ATTACK IN IRAQ. A
1 July Foreign Ministry statement expressed concern over the
U.S. missile attack on a site in southern Iraq the previous
day , Russian news agencies reported. The statement mentions
U.S. reports of a "defensive" attack on a functional air-
defense radar in a no-fly zone and statements made by an
Iraqi official that the missile attack was against a
reservoir complex in the southern province of Basra, where
no radars operate. On 30 June, Foreign Minister Yevgenii
Primakov expressed hope to Prakash Shah, the UN secretary-
general's special envoy in Iraq, that the UN's disarmament
project will lead to the repeal of the UN oil embargo on
Iraq, Interfax reported. BT

YELTSIN URGES INDIA TO SIGN NON-PROLIFERATION TREATY. Boris
Yeltsin sent a letter to Indian Prime Minister Atal Behari
Vajpayee on 1 July urging him to sign the Nuclear Non-
Proliferation Treaty, ITAR-TASS and Interfax reported.
Yeltsin said such a step would "elicit a positive response
from the world community." However, Yeltsin's call is likely
directed not only at the international community as a whole
but also at Beijing. "Nezavisimaya gazeta" wrote on 30 June
that Beijing received an "unfavorable impression" when
Russia agreed last month to fulfill a contract for supplying
nuclear reactors to India signed 10 years ago. The newspaper
called India "China's worst enemy." BP

NEMTSOV, LEBED FAIL TO SIGN AGREEMENT ON FINANCES. Deputy
Prime Minister Nemtsov and Krasnoyarsk Krai Governor
Aleksandr Lebed met in Moscow on 1 July but failed to sign
an agreement between federal and krai authorities concerning
Krasnoyarsk's finances, Russian news agencies reported.
Lebed explained that the krai is not yet ready to sign a
comprehensive agreement with the federal government because
"we have too many sins to go to paradise." Nemtsov agreed to
give Krasnoyarsk officials more time to draft proposals
concerning the agreement. He noted that the krai is in
difficult financial straits, with large-scale wage arrears
and backlogs in child allowance payments. Earlier on 1 July,
Nemtsov and Aleksei Lebed, the leader of the Republic of
Khakassia and younger brother of Aleksandr Lebed, signed an
agreement on Khakassia's finances. LB

CHECHNYA WILL NOT SEND TROOPS TO KOSOVA. President Aslan
Maskhadov told journalists on 1 July that Chechnya has had
no contacts with the Kosova Albanian leadership and has not
dispatched any military units to fight on the side of the
Kosova Liberation Army, Interfax reported. Maskhadov
admitted that "we identify with [the Albanians'] bid for
independence" but said that Chechnya will not interfere in
the internal affairs of another country unless asked. If
such a request is made, Maskhadov continued, "the Chechen
president and no one else" will decide how to respond.
"Kommersant-Daily" on 26 June had quoted Chechen Foreign
Minister Movladi Udugov as saying Chechnya is prepared to
dispatch a peacekeeping contingent to Kosova if the
international community decides to finance a peacekeeping
operation there. He had denied allegations, however, that
Grozny is preparing to send 10,000 men to fight alongside
the UCK. LF

INGUSHETIAN EX-MINISTER RELEASED. Former acting Interior
Minister Daud Korigov was released from detention in Moscow
on 1 July as a result of pressure from the Ingushetian
leadership, an RFE/RL correspondent in Moscow reported the
following day. Korigov was arrested on 4 March and charged
with exceeding his authority (see "RFE/RL Newsline," 10 and
17 March 1998.) Duma deputy speaker Mikhail Gutseriev, also
an ethnic Ingush, has vouched that Korigov will not leave
Moscow and will continue to cooperate with investigators.
"Segodnya" reported on 14 May that the kidnappers of Russian
presidential envoy Valentin Vlasov offered to release him if
Korigov were freed from detention, but Ingushetian President
Ruslan Aushev subsequently denied that such an exchange was
being discussed. LF

NORTH OSSETIAN, INGUSHETIAN PRESIDENTS MEET. Meeting on 1
July on the administrative border between their respective
republics, Aleksandr Dzasokhov and Ruslan Aushev discussed
the recent rise in tensions in North Ossetia's disputed
Prigorodnyi Raion (see "RFE/RL Newsline," 29 June 1998),
Russian agencies reported. The Ingush population of that
district was forced to flee ethnic cleansing in November
1992, but most have since returned. Dzasokhov and Aushev
vowed to step up coordination between their Interior
Ministries and to resume joint Ingushetian-Ossetian patrols
in Prigorodnyi Raion in order to preclude any further
deterioration of the situation there, "Nezavisimaya gazeta"
reported. Also on 1 July, North Ossetians NGOs issued a
statement proposing that a congress of representatives of
all North Caucasus republics be convened to coordinate
efforts to ensure political stability and combat crime,
according to ITAR-TASS. LF

TRANSCAUCASUS AND CENTRAL ASIA

GEORGIAN OPPOSITION LEADER WANTS LAND PLOTS FOR FUGITIVES.
Speaking at a press conference in Tbilisi on 1 July, the
leader of the Laborist parliamentary group, Shalva
Natelashvili, called on the government to distribute plots
of land to the tens of thousands of Georgians who fled
Abkhazia in 1992-1993, Caucasus Press reported. Many of
those fugitives are still quartered in Tbilisi hotels.
Natelashvili also called on the government to regulate
payments of wages and pensions and to alleviate the tax
burden on small and medium-sized business. Natelashvili
expressed surprise at the Georgian leadership's negative
reaction to last week's congress in Batumi of the Revival
party, at which Adjar Supreme Council chairman Aslan
Abashidze harshly criticized the Georgian government's
policies. Praising Abashidze for having maintained political
stability in Adjaria, Natelashvili said the congress
constituted an attempt by various Georgian political forces
to seek solutions to the country's problems within the
framework of the constitution. LF

ARMENIA VALUES TIES WITH FRANCE... President Robert
Kocharian described France as "Armenia's strategic partner"
at a 1 July meeting with a group of visiting French
parliamentary deputies and businessmen, according to Noyan
Tapan. Kocharian also called for more French investment in
the Armenian economy, stressing that "all necessary
conditions for normal business" are being created in his
country, RFE/RL's Yerevan bureau reported. The two sides
also discussed the 29 May recognition by the lower house of
the French parliament of the 1915 Armenian genocide.
Delegation head Senator Jacques Oudin told Interfax that "an
overwhelming majority" in the Senate will support the
resolution when it is debated in the fall. LF

...AND RUSSIA. "Respublika Armeniya" on 1 July quoted
Armenian presidential adviser on foreign policy Aram
Sargsian as predicting that Russian-Armenian relations will
become more dynamic in the near future, given that "Moscow's
political beau monde realizes that Armenia plays an almost
pivotal role in the Transcaucasus," RFE/RL's Yerevan bureau
reported. Sargsian held talks in Moscow last week with
senior Russian Foreign Ministry and Security Council
officials. He noted that Yerevan is keen to "develop serious
relations not just with Russia but with Europe, the U.S.,
China, and Iran, because it is in our national interests."
And he stressed that Armenia is ready to resume talks with
Azerbaijan on a settlement of the Karabakh conflict but that
any agreement must include iron-clad security guarantees for
all parties to the conflict. LF

FORMER PREMIER, YEREVAN MAYOR TRADE ACCUSATIONS. Azatutiun,
the political party founded last year by former Prime
Minister Hrant Bagratian, has issued a statement
categorically denying allegations by Vano Siradeghian,
former Yerevan mayor and chairman of the board of the
Armenian Pan-National Movement, "Aravot" reported on 1 July.
Siradegian claimed that Bagratian secretly acquired 25
percent of the shares in the Ararat winery. The statement
charges that Siradeghian's accusations are an attempt to
avoid imprisonment for murders that he had plotted, to
safeguard the "unimaginable wealth" he has acquired, and to
escape responsibility for "setting the country's development
back 20 years," Noyan Tapan reported. Azatutiun says
Bagratian's return to active politics is inevitable. LF

DOES KYRGYZ PARLIAMENT HAVE SPEAKER? Usup Mukambaev told an
RFE/RL correspondent in Bishkek on 1 July that he has not
resigned his post. The daily "Vechernii Bishkek" wrote the
same day that Mukambaev had submitted his resignation at a
30 June closed session of the Legislative Assembly the
previous day. Mukambaev is at the center of a scandal
following a 22 June vote by the assembly to raise the
retirement age in Kyrgyzstan beginning 1 July. Although the
Assembly passed the draft law on 22 June, they approved a
final version on 26 June that changed the date it goes into
effect to 1 January 1999. Between 22 and 26 June, Mukambaev
met with Kyrgyz President Askar Akayev, who signed the draft
law into effect, but had not consulted the assembly about
that meeting. The Assembly harshly criticized Mukambaev at
the closing summer session on 30 June. BP

WAGES, PRICES GO UP IN UZBEKISTAN. President Islam Karimov
has issued a decree raising the average minimum monthly wage
in Uzbekistan from 750 som (about $9.5) to 1,100 som as of 1
July, ITAR-TASS and Interfax reported. Pensions and benefits
for the disabled have also been increased. However, the same
day the price of electricity and rents for housing doubled,
while municipal transportation fares rose by 50 percent,
bread by 42 percent, and gasoline by 25 percent. BP

TAJIK PRESIDENT PAYS ONE-DAY VISIT TO UZBEKISTAN. Tajik
President Imomali Rakhmonov was in Tashkent on 30 June to
take part in the "Tajikistan days" celebrations in the Uzbek
capital, Interfax reported. His Uzbek counterpart, Islam
Karimov, spoke of "how close our two peoples are," adding
that "Uzbeks and Tajiks are the same people speaking two
different languages." Karimov said his country will help
Tajikistan to restore normalcy after its five-year civil
war. Rakhmonov thanked Karimov, saying "We are starting a
new page in our relations." BP

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