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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 2, No. 105 Part I, 3 June 1998


___________________________________________________________
RFE/RL NEWSLINE Vol. 2, No. 105 Part I, 3 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

xxxxxxxxxxxxxxxxxxx SPECIAL REPORT xxxxxxxxxxxxxxxxxxxxxx
RUSSIAN MEDIA EMPIRES III
A new prime minister has taken office, Boris Berezovsky's
now a CIS official, and the state plans to form a new media
holding company. See our updated media report.
http://www.rferl.org/nca/special/rumedia3/index.html
(English)
http://www.rferl.org/bd/ru/russian/content/reports/rumedia3/
index.html
(Russian)

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Headlines, Part I

* PRESIDENT, BUSINESS LEADERS AGREE TO COOPERATE

* STOCK MARKET GAINS SOME GROUND

* AZERBAIJAN SIGNS NEW OIL, GAS CONTRACTS
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RUSSIA

PRESIDENT, BUSINESS LEADERS AGREE TO COOPERATE. Anatolii
Chubais, the chief executive of the electricity giant
Unified Energy System, told journalists after a 2 June
meeting between President Boris Yeltsin and 10 business
leaders that "major Russian entrepreneurs are ready to lend
a hand to the authorities, and the authorities...are ready
to support the entrepreneurs," Russian media reported.
Yeltsin invited the founders of six major Russian banks and
chief executives of four leading companies in the energy
sector to discuss the current financial crisis, among other
issues. Presidential spokesman Sergei Yastrzhembskii told
journalists that Yeltsin promised to consider policies
proposed by the businessmen, but the spokesman declined to
specify the nature of those proposals. "Kommersant-Daily"
reported  that Vladimir Potanin, the founder of Oneksimbank
and now head of the Interros holding company, met separately
with Yeltsin and Prime Minister Sergei Kirienko. LB

STOCK MARKET GAINS SOME GROUND. Share values on the Russian
stock market rose on 2 June by more than 12 percent on
average  and prices for some of the most frequently traded
shares increased by up to 20 percent, Interfax reported. The
gains appear to reflect increasing confidence that Russia
will receive a major stabilization loan from foreign
governments, banks, or financial institutions. (Prime
Minister Kirienko is to fly to Paris on 3 June and will
reportedly hold talks on a possible bailout package.) The
auction of government treasury bills (GKOs) on 3 June will
be the next test of investor confidence. Massive selling of
GKOs by foreign and then Russian investors has nearly
tripled yields in recent weeks and has contributed to
pressure on the ruble. Central Bank First Deputy Chairman
Sergei Aleksashenko told "Vremya MN" on 29 May that foreign
investors took $500 million-$700 million out of the GKO
market last month. LB

IS GOVERNMENT KEEPING PROMISES TO COAL MINERS? Kemerovo
Oblast Governor Aman Tuleev on 1 June charged that the
government is not honoring the pledges it made to persuade
unpaid coal miners to end their blockade of the Trans-
Siberian railroad, Interfax reported. Tuleev said that at
the rate money is arriving in Kemerovo, debts to miners will
be settled 10 days later than the 1 June deadline to which
Deputy Prime Minister Oleg Sysuev agreed. Addressing a 2
June meeting in Moscow of the main Russian trade union for
coal industry workers, Deputy Prime Minister Boris Nemtsov
claimed that the government is fully meeting its obligations
toward miners. But he noted that the federal authorities do
not directly pay miners' wages. Once government assistance
has been sent to coal enterprises, it is the responsibility
of those companies' executives to pay their workers, Nemtsov
said. LB

MIDDLEMEN KEEP ONE-THIRD OF PROCEEDS FROM COAL SALES.
Moscow-based middlemen keep about one-third of the proceeds
earned from sales in the coal industry, according to Federal
Tax Police Deputy Director Andrei Przhezdomskii. He said
investigations of coal enterprises have revealed widespread
tax evasion and huge profits for middlemen, Russian news
agencies reported. For instance, company managers often
conclude barter agreements instead of selling coal for cash,
and the value of the goods received in exchange for the coal
is often far less than the market value of the coal. During
the recent blockades of major railroads by unpaid miners,
government officials repeatedly blamed coal enterprise
managers and middlemen for the persistent wage arrears in
the coal sector (see "RFE/RL Newsline," 21 May 1998). LB

ROUNDTABLE TALKS ON 'ANTI-CRISIS' MEASURES DELAYED. State
Duma Speaker Gennadii Seleznev on 2 June announced that
roundtable talks on the government's "anti-crisis program"
have been postponed from 5 June to 23 June, Interfax
reported. At the height of the recent wave of protests by
unpaid coal miners, Yeltsin agreed to hold such talks during
the first 10 days of June (see "RFE/RL Newsline," 22 May
1998). The delay may last longer than Seleznev suggested.
Presidential spokesman Yastrzhembskii says all Federation
Council members and some Duma deputies will be invited to
the Kremlin on 30 June for a "big discussion." Meanwhile,
the Duma has asked Prime Minister Sergei Kirienko to inform
the chamber on 10 June about the government's plans for
dealing with the economic crisis. Yeltsin is slated to
discuss the government's policies during a 14 June session
of the Federation Council, according to Council speaker
Yegor Stroev. LB

KREMLIN TO CHECK SOME INCOME DECLARATIONS. Yevgenii
Savostyanov, the deputy head of the presidential
administration, says the Kremlin is to establish a process
for checking the veracity of bureaucrats' income and
property declarations, Russian news agencies reported on 2
June. He said 1-2 percent of the more than 426,000
declarations submitted this year will be reviewed. The
targets will be selected on the basis of information
received from the tax police, law enforcement agencies, or
other sources such as media reports. Savostyanov said the
declarations show that most of Russia's "bureaucratic elite
is poor." Others have argued that it is easy for officials
to conceal the true size of their incomes and property
holdings. LB

CONSTITUTIONAL COURT IN NO HURRY ON TROPHY ART, ELECTORAL
LAWS. The Constitutional Court will not consider the trophy
art law and the law on parliamentary elections until late
1998, court Chairman Marat Baglai announced on 2 June,
following a meeting with Yeltsin. The court in April
instructed Yeltsin to sign the trophy art law, but the
president has questioned the constitutionality of provisions
that prohibit the transfer abroad of cultural valuables
seized by the Soviet Union during World War II. The
challenge to the electoral law questions the proportional
representation system currently used to elect half the State
Duma. Both cases highlight sharp controversies between
Yeltsin and his parliamentary opponents. But Baglai
estimated that of the cases considered by the Constitutional
Court, only 10 percent concern disputes between the
legislative and executive branches, while some 60 percent
concern individual rights and 30 percent deal with
federalism issues or the constitutionality of regional laws,
Interfax reported. LB

SUPREME COURT CHAIRMAN BEMOANS UNDERFUNDING OF COURTS.
Vyacheslav Lebedev has warned that "there can be no talk of
providing for the independence of the judicial system" given
current levels of funding for Russia's courts, RFE/RL's
Moscow bureau reported on 2 June. He said many raion courts
have been forced to cease functioning. According to Lebedev,
the Supreme Court requested 5.6 billion rubles ($909
million) in spending on the judicial system for this year.
But the 1998 budget projected only 3.4 billion rubles, and
the government later reduced that sum by more than 26
percent, Interfax reported. (Russia's Council of Judges has
asked Yeltsin to instruct the government to reverse the
planned spending cuts on the judiciary, ITAR-TASS reported
on 29 May.) The Supreme Court has asked the Constitutional
Court to consider the legality of budget targets that are
insufficient for safeguarding the independence of the
courts. LB

GOVERNMENT TO SIGN POWER-SHARING AGREEMENT WITH MOSCOW.
Yeltsin has instructed the government to sign a power-
sharing agreement this month between the federal authorities
and the Moscow city government, presidential spokesman
Yastrzhembskii announced on 2 June. Moscow Mayor Yurii
Luzhkov met with Prime Minister Kirienko for two hours on 30
May to discuss various policy issues. Among other things,
the mayor reminded Kirienko that the Moscow city government
would like to buy a controlling stake in the Sheremetevo
international airport, Russian news agencies reported. He
called for lowering electricity tariffs by at least 30
percent in order to stimulate industry. Luzhkov also lobbied
against plans to cut by nearly a third payments this year to
compensate Moscow for the cost of maintaining federal
facilities in the capital. LB

NIZHNII NOVGOROD MAKES MAYORAL RACES TWO-ROUND ELECTIONS.
The Nizhnii Novgorod Oblast legislature on 2 June amended
the law on local elections to introduce a two-round system
for electing city mayors, Interfax reported. Runoff
elections will be held if no candidate gains more than 50
percent of the vote in the first round. The new system will
make it more difficult for extreme or highly controversial
figures to win elections and was adopted in response to the
victory of businessman Andrei Klimentev in a March mayoral
race in Nizhnii Novgorod. If a two-round system had been in
place, Klimentev would most likely have lost in the runoff.
In any case, that election was quickly annulled, and
Klimentev has since been sentenced to six years in prison
(see "RFE/RL Newsline," 29 May 1998). LB

TRANSCAUCASUS AND CENTRAL ASIA

AZERBAIJAN SIGNS NEW OIL, GAS CONTRACTS. Azerbaijan's state
oil  company SOCAR on 2 June signed two contracts with
international consortia to explore and develop off-shore
Caspian oil fields. A $2.5 billion agreement provides for
production-sharing  at the Kyurdashi field, whose reserves
total an estimated 100 million metric tons. The participants
are SOCAR (50 percent), Italy's Agip (25 percent), Japan's
Mitsui (15 percent), Turkey's TPAO (5 percent), and Spain's
Repsol (5 percent). The other agreement applies to the
South-West Gobbustan field, with estimated reserves of 50
million metric tons. The partners are SOCAR (40 percent),
the British-Canadian Commonwealth Oil and Gas (40 percent),
and Union Texas Petroleum (20 percent). An accord was also
signed on exploration rights for the onshore Kyursangi and
Karabaghli oil and gas deposits. SOCAR has a 50 percent
stake in the undertaking, Frontera Resources 30 percent, and
the Saudi-U.S. Delta-Hess 20 percent. LF

ABKHAZ, GEORGIAN ENVOYS MEET. Abkhaz presidential envoy Anri
Djergenia and Georgian ambassador to Russia Vazha
Lortkipanidze began talks in Moscow on 2 June to prepare for
a meeting between President Eduard Shevardnadze and his
Abkhaz counterpart, Vladislav Ardzinba, Interfax reported.
The previous day,  Lortkipanidze said it is hoped such a
meeting could take place later this month. But this is
unlikely, since Tbilisi insists such a meeting is contingent
on the repatriation of the 30,000-40,000 ethnic Georgians
forced to flee Abkhazia's southernmost Gali Raion during
last month's fighting. LF

GEORGIAN ARMY  "NOT COMBAT-READY." Meeting with journalists
in Tbilisi on 2 June, President Shevardnadze said that the
Georgian armed forces are not combat-ready because Russia
has not yet fulfilled agreements on providing Georgia with
arms to replace those withdrawn from the country in 1991-
1993, Interfax reported. Shevardnadze said the low level of
combat-readiness was one of the reasons why the Georgian
armed forces were not sent into Abkhazia to protect the
Georgian population during last month's fighting. Georgian
human rights activists, however, claim that the reason for
the low level of combat-readiness within the Georgian army
are the appalling conditions under which conscripts serve. A
platoon of Georgian cadets left for the U.S. on 2 June to
participate in maneuvers within the framework of NATO's
Partnership for Peace program. LF

ARMENIAN PRESIDENT SAID TO OPPOSE PRE-TERM PARLIAMENTARY
ELECTIONS. Armenian parliamentary speaker Khosrov
Harutiunian told journalists on 2 June that President Robert
Kocharian is opposed to pre-term parliamentary elections and
wants the current National Assembly to complete its four-
year term, which expires in summer 1999, RFE/RL's Yerevan
bureau reported. Harutiunian said both he and Kocharian
believe that the parliament should be dissolved only if
there is a "political crisis" in the country.  He added that
it is unlikely the parliament will pass new a new election
law before the summer recess. The majority Yerkrapah group
wants a maximum of 40 seats in the 131-member parliament
allocated on the basis of proportional representation, but
other parties want the majority of seats allocated under
that system. LF

TAJIK COMMISSION FORMED TO DEAL WITH CONTROVERSIAL LAW.
Following a meeting with United Tajik Opposition leader Said
Abdullo Nuri on 2 June, President Imomali Rakhmonov signed a
decree forming a "conciliation commission" tasked with
resolving the problems arising from the passage last month
of  a law banning religious political parties, ITAR-TASS
reported. The commission has 20 days to find an acceptable
compromise after complaints by the UTO, the UN Security
Council, the Iranian and Russian Foreign Ministries, and the
U.S. State Department that the law contravenes the Tajik
peace accord signed last year. Nuri said that he hopes the
prohibition will be lifted and does not believe it will take
20 days to do so. Russian Ambassador to Tajikistan Yevgenii
Belov responded to the formation of the commission by saying
that "a light has appeared at the end of the tunnel." BP

RUSSIAN INTERIOR MINISTER SAYS FUNDAMENTALISM "A CIS
PROBLEM." Sergei Stepashin, attending a conference of CIS
interior ministers in the Uzbek capital of Tashkent, said
"expressions of fundamentalism...or Wahhabism...have become
a serious issue throughout the CIS," Interfax reported. He
said an agreement has already been reached with Azerbaijan
on "studying expressions of Wahhabism in Dagestan" and that
Uzbekistan has shown interest in participating in that
project.  He added that a data base has been set up that
lists criminal groups with connections in other countries.
He said the data base already has  250,000 entries.
Stepashin also stressed the need to cooperate in combating
drug trafficking. BP

WOMAN DIES FROM CYANIDE POISONING IN KYRGYZSTAN... A woman
on 3 June died in a hospital in the eastern town of Karakol
from cyanide poisoning, RFE/RL correspondents reported. She
is the first person to die as a result of the spill last
month of 1.7  tons of sodium cyanide into the Barskoon
River, which flows into the southern part of Lake Issyk-Kul.
More than 1,000 people have received medical treatment
following the accident. The full extent of the damage is
still unknown. RFE/RL correspondents report that  at the end
of May, tourists on the north shore of Issyk-Kul received
little, if any information, about the toxic spill and were
still swimming in Issyk-Kul. BP

...CAMECO PRESIDENT SAYS CONTAMINATION REPORTS EXAGGERATED.
Michel Bernard, the president of Canada's CAMECO Corp., said
on 3 June that the spill into the Barskoon River does not
pose a serious threat to residents of the area or nearby
Lake Issyk-Kul. CAMECO is the foreign partner of
Kyrgyzstan's Kumtor Gold Mining Company. Bernard said
reports in the Kyrgyz and CIS media have exaggerated the
seriousness of the spill. He argued that "well-respected
experts" say the leak will not endanger the Issyk-Kul
environment as most of the chemical has settled at the
bottom of the river which feeds into Issyk-Kul. A special
government commission supported Bernard's claim, saying the
amount of sodium cyanide in the lake does not exceed the
norm. BP

NEW UZBEK LAND LAW PUBLISHED. Uzbekistan's new land law was
published on 2 June, Reuters reported. According to that
legislation, land is the property of the state and cannot be
sold, bought, traded, presented as a gift, or used as
collateral. Land may be leased to Uzbek citizens engaged in
agriculture or wishing to construct a private house after
obtaining permission from the local authorities; foreigners,
however,  require special permission from the government to
lease land. Reuters quotes a World Bank official as saying
the free purchase and sale of land, as well as its use as
collateral, may still be "premature" issues for Uzbekistan.
The law takes effect on 1 July. BP

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