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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 2, No. 129 Part I, 8 July 1998


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RFE/RL NEWSLINE Vol. 2, No. 129 Part I, 8 July 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

* OFFICIALS SAY NEARING AGREEMENT ON BAILOUT

* NEMTSOV CRITICIZES RUSH TO DEFEND GAZPROM

* AZERBAIJANI PRESIDENT CALLS FOR AMENDMENTS TO ELECTION LAW
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RUSSIA

OFFICIALS SAY NEARING AGREEMENT ON BAILOUT... Unified Energy
System chief executive Anatolii Chubais, who is leading
Russia's negotiations with international financial
organizations, told journalists on 7 July that Russia and
institutions that may provide a stabilization loan have
reached "an understanding in principle on the biggest
issues," Reuters reported. He was speaking after another
round of talks with officials from the IMF and the World
Bank. Martin Gilman, the IMF's representative in Moscow,
said that "all the major issues have been identified and
broad agreement has been reached on what needs to be done."
But he added that a final deal will depend on "some tough
political decisions that will have to be taken very soon."
He did not specify the nature of those decisions. LB

...AMID MORE BATTERING OF STOCK, BOND MARKETS. The
statements by Chubais and World Bank and IMF negotiators
came toward the end of a rough day on Russian financial
markets. Russian stocks fell by up to 10 percent in early
trading on 7 July but recovered slightly following reports
about the talks on the stabilization loan. The main index of
the Russian stock market closed down 4.5 percent. In trading
on the secondary bond market, government treasury bills
posted a steep decline, pushing yields up from roughly 90
percent to 120 percent. Aleksandr Pochinok, head of the
government's department on financial issues, warned that the
government will not sell treasury bills at interest rates of
120 percent. In an effort to avoid domestic borrowing at
such high rates, the Finance Ministry on 8 July canceled two
auctions for treasury bills. LB

NEMTSOV CRITICIZES RUSH TO DEFEND GAZPROM. Deputy Prime
Minister Boris Nemtsov has called on those "who are
enthusiastically defending Gazprom" to defend "pensioners,
mothers with many children, doctors, and teachers" instead,
Russian news agencies reported. Speaking to reporters in
Magadan on 7 July, Nemtsov argued that the government must
collect taxes if it is to meet its financial obligations.
Commenting on the "tremendous uproar" raised over the
conflict between the government and Gazprom, Nemtsov said
the reaction of unnamed "magnates"--who, he said, control
leading media outlets--suggests that they do not want Russia
to be a strong state. Reuters quoted Nemtsov as saying the
government will "sort it out with the [Gazprom] management,"
using "all possible measures" if necessary to force the
company to pay its taxes in full. An unnamed Gazprom
official told ITAR-TASS that Nemtsov's remarks will not aid
"constructive dialogue" between the company and the
government. LB

MEDIA TAKE DIFFERENT SIDES IN GAZPROM CONFLICT. Several
Russian newspapers have joined Gazprom-financed "Trud" and
"Tribuna" in criticizing the government's recent actions
vis-a-vis Gazprom. "Nezavisimaya gazeta" on 4 July charged
that the government's efforts to collect 4 billion rubles
($644 million) in monthly tax payments from Gazprom have
driven down the value of the ruble and cost Russia some $3
billion in lost privatization revenues and declines on stock
and bond markets. On 7 July, the newspaper accused Prime
Minister Sergei Kirienko of making numerous false and
misleading statements about Gazprom during a recent
interview on NTV (see "RFE/RL Newsline," 7 July 1998). CIS
Executive Secretary Boris Berezovskii is the main financial
backer of "Nezavisimaya gazeta." In contrast, newspapers
financed by Vladimir Potanin's Oneksimbank, such as "Russkii
telegraf" and "Izvestiya," have praised the government's
attempt to crack down on Gazprom. LB

GAZPROM STARTS SHUTTING OFF GAS TO CONSUMERS. Gazprom
subsidiaries in several regions have begun reducing gas
supplies to non-paying consumers, Reuters reported on 7
July. Mezhregiongaz has reduced gas supplies to Lenenergo,
the regional utility based in St. Petersburg, by 40 percent.
Lenenergo owes Mezhregiongaz some 59.2 million rubles ($9.5
million) for the period January-March 1998. Vladimir
Sokolov, the head of the Sverdlovsk Oblast unit of
Sverdlovsk Mezhregiongaz, told Reuters that gas supplies
have been reduced or cut off entirely to 170 enterprises in
the oblast, 60 of which are financed by the federal
government. He said non-paying consumers in Sverdlovsk
Oblast owe Gazprom 1.6 billion rubles, of which government-
funded organizations owe 94 million rubles. In Chelyabinsk
Oblast, where Gazprom is owed more than 3 billion rubles,
the Gazprom affiliate has cut off gas supplies to 14
companies and reduced supplies to 2,884 others. LB

OFFICIAL SAYS RUSSIA "NOT VIOLATING" CFE. Speaking at a
press conference in Moscow on 7 July, Russian Foreign
Ministry spokesman Vladimir Rakhmanin rejected U.S. claims
that Moscow has violated the 1990 Treaty on Conventional
Forces in Europe, Interfax reported. A U.S. government
report submitted recently to Congress claimed that  Russia
handed over to Armenia armaments covered by the treaty and
deployed forces in Moldova without the consent of the
Chisinau government. Rakhmanin argued that the CFE treaty
"does not limit or control exports of conventional
armaments." He added that Russia and Moldova have concluded
an agreement on the legal status of Russian forces at
present temporarily deployed in Moldova. That agreement has
not, however, been ratified by either parliament. The
Foreign Ministry also criticized as "one-sided" proposals
advanced by NATO last month relaxing limitations on force
deployments in Central Europe while retaining the existing
flank restrictions for Russia, Reuters reported. LF

DUMA NOT TO RUSH ON START-2 BEFORE SUMMIT OF PRESIDENTS.
State Duma Speaker Gennadii Seleznev announced on 7 July
that the Duma has no plans to speed up the process of
ratifying the START-2 arms control treaty ahead of the
upcoming summit between Russian President Boris Yeltsin and
his U.S. counterpart, Bill Clinton. U.S. and Russian
officials announced the previous day that Clinton will visit
Russia in early September. Moscow and Washington previously
said the next summit of the presidents would be postponed
until after ratification of START-2 by the Russian
parliament. Speaking to journalists in Copenhagen on 7 July,
Seleznev said the U.S. cannot insist that Russia ratify the
treaty before Clinton's visit. He added that he has warned
members of the U.S. Congress that the more people seek to
put conditions on Russia, "the longer the ratification
process will be." LB

SPY SCANDAL SPARKS SOUTH KOREAN RETALIATION. South Korea has
said it will expel diplomat Oleg Abramkin from Seoul in
retaliation for the explusion of a South Korean diplomat
from Russia for spying, Reuters reported on 8 July.  The
statement said Abramkin "has engaged in activities which
violate a diplomat's status."  Five days earlier, Cho Sung
Woo, a counselor at Moscow's South Korean Embassy, was asked
to leave Russia under suspicion of buying Russian state
secrets from Valentin Moiseev, deputy director of the
Foreign Ministry's First Asian Department, news agencies
reported. South Korea issued a statement protesting Woo's
detainment as a violation of the Vienna Convention and
expressing regret that  the scandal was leaked the mass
media, Interfax reported.  Meanwhile, the Federal Security
Service will bring charges of high treason against Moiseev
within the next few days.  Deputy Prime Minister Oleg Sysuev
has put off a diplomatic trip to Seoul that was scheduled to
begin on 5 July. BT

ROKHLIN'S ALLIES REGROUP. The Movement to Support the Army
convened an extraordinary congress in Moscow on 8 July to
elect a successor to leader Lev Rokhlin, who was shot dead
at his dacha on 3 July (see "RFE/RL Newsline," 3 and 7 July
1998). Delegates chose Duma Security Committee Chairman
Viktor Ilyukhin, an outspoken member of the Communist Party,
Russian news agencies reported. Rokhlin founded the Movement
to Support the Army last year and vowed to seek the ouster
of Yeltsin and his associates, whom Rokhlin accused of
destroying the armed forces. According to ITAR-TASS, Duma
deputy Albert Makashov and Vladislav Achalov, founder of the
All-Russian Officers' Assembly, were also in the running to
replace Rokhlin. Meanwhile, an estimated 10,000 people,
including many prominent opposition leaders, participated in
a funeral procession and memorial service for Rokhlin on 7
July, Interfax reported, citing police estimates. LB

MILITARY CORONERS PERFORMED AUTOPSY ON ROKHLIN. Interfax
reported on 7 July that the autopsy on Rokhlin was performed
at the Defense Ministry's central forensic laboratory. The
results of that autopsy have not been made public. Anatolii
Kapustin, deputy head of the Health Ministry's main forensic
center, told the news agency that  he was "bewildered" that
civilian coroners did not perform the autopsy. Rokhlin
retired from military service in January 1996, when he
became a State Duma deputy. Kapustin said Health Ministry
experts normally handle such cases, in light of the fact
that the Prosecutor-General's Office--not the Military
Prosecutor's Office--is investigating Rokhlin's murder. Some
of Rokhlin's allies believe he was killed because of his
outspoken criticism of Russia's political leaders and
military policy. LB

GOVERNMENT CONFIRMS DEFENSE ORDER. The government's defense
production order for 1998, which has been reduced twice
owing to insufficient funds, has been approved by a joint
meeting of the cabinet and the special Commission for
Military Reform, Economics Minister Yakov Urinson told a 7
July press conference.  Urinson said the order includes 15.3
billion rubles ( $2.5 billion) for arms production and
military research, although he declined to specify the
total value of the order. At the meeting, government
officials discussed plans to gradually pay state debts to
defense enterprises from 1994-1997, which, Urinson
estimated, amount to 16.5 billion rubles. They also
considered the rescheduling of defense enterprises' debts to
the federal budget, which amount to some 2 billion rubles.
Also on 7 July, Prime Minister Kirienko told reporters that
the government is determining the amount of the defense
production order so that people "won't get any illusions"
and "plants will not expect larger orders than the state can
afford to finance." BT

COURT AFFIRMS RIGHT TO APPEAL WHILE CRIMINAL CASE IS
PENDING... The Constitutional Court on 2 July struck down
two articles in the criminal-procedural code that barred
defendants from filing court appeals until after they have
been sentenced, ITAR-TASS reported. The newspaper "Vremya-
MN" argued on 6 July that the court's ruling lifts one of
the most "totalitarian" parts of the code, which has
prevented thousands of criminal suspects from appealing
against decisions to keep them in pre-trial detention
(rather than releasing them on bail) or to delay their
trials. One of those who filed the Constitutional Court
appeal spent nearly three years in pre-trial detention and
still has not been tried for the crime she allegedly
committed. "Vremya-MN" said some 275,000 people are being
held in Russian pre-trial detention cells. Criminal
investigations have been completed in an estimated 180,000
of those cases. LB

...SAYS RIGHT TO APPEAL APPLIES TO ALL CONVICTIONS. The
Constitutional Court on 6 July determined that convicted
criminals have the right to appeal Supreme Court rulings if
the Supreme Court was the first court in which they were
tried, ITAR-TASS reported. The judges ruled that federal law
may not restrict Article 50 of the constitution, which
guarantees convicted criminals the right to appeal.
Consequently, the court instructed the parliament to amend
the criminal-procedural code. LB

NEMTSOV SIGNS AGREEMENT WITH MAGADAN AUTHORITIES. Deputy
Prime Minister Nemtsov and the leadership of Magadan Oblast
have signed an agreement that may become a model in economic
relations between Russia's federal and regional authorities,
an RFE/RL correspondent in Magadan reported on 7 July. The
agreement gives officials in Magadan more leeway on the
distribution of funds. In return, the regional authorities
are obliged to forego the use of "authorized" commercial
banks in handling budget funds, renounce the use of offsets
to settle debts between the government and enterprises, and
introduce tough cost-cutting measures. Nemtsov rejected a
proposal by Magadan authorities to turn the oblast into a
free economic zone with customs exemptions. However, he said
the government may support giving gold-mining companies the
right to export gold. Magadan relies on the gold-extraction
industry for most regional revenues. LB

WHERE IS VLASOV? Ingushetian Presidential Press Spokesman
Manolis Chakhkiev has rejected as "misinformation" claims by
Chechen officials that abducted Russian Presidential Envoy
to Chechnya Valentin Vlasov has been transferred from
Chechen territory to the Malgobek Raion of Ingushetia,
Caucasus Press reported on 8 July. Chakhkiev said that the
Ingush authorities are certain that Vlasov is still in
Chechnya. A senior Chechen security official had told
journalists in Grozny the previous day that Vlasov had been
taken to neighboring Ingushetia, Russian agencies reported.
The Chechen official said that the state of emergency
imposed in Chechnya two weeks earlier forced Vlasov's
abductors to move him but that they are now seeking
intermediaries to negotiate his release for an undisclosed
ransom. Russian Interior Minister Sergei Stepashin predicted
on 4 July that Vlasov would soon be freed (see "RFE/RL
Newsline," 7 July 1998). LF

TRANSCAUCASUS AND CENTRAL ASIA

AZERBAIJANI PRESIDENT CALLS FOR AMENDMENTS TO ELECTION
LAW... Heidar Aliev on 6 July sent a special missive to the
parliament requesting amendments to the new law on the
presidential elections, RFE/RL's Baku bureau reported. Those
amendments provide for local observers to monitor the poll
and limit to 2.5 percent the number of signatures supporting
prospective presidential candidates that can be verified by
electoral commissions. (Numerous opposition candidates were
refused registration in the November 1995 parliamentary
elections because signatures collected in their support were
deemed to be forged.) The amendments did not, however,
include the opposition demands for the minimum turnout to be
reduced from 50 percent to 25 percent of registered voters
and for  50 percent of the members of the Central and local
electoral commissions to be nominated by the opposition,
according to Turan. LF

...BUT OPPOSITION ADAMANT ON BOYCOTT. The five main
prospective opposition presidential candidates issued a
statement on 7 July saying the changes proposed by Aliev are
inadequate to ensure that the 11 October poll will be free
and fair, Turan reported. Musavat Party chairman Isa Gambar
and Democratic Party of Azerbaijan chairman Ilyas Ismailov
both said that the five's decision is "final" and that they
will not recognize the legitimacy of the president elected
under current legislation. Also on 7 July, Ashraf Mekhtiev,
head of the virtually unknown Association for the Victims of
Illegal Political Repression, announced his intention to
contend the poll, raising to five the number of candidates
who have announced their intention to run. LF

AZERBAIJANI CENSORS BAN ARTICLE ON PKK. The 7 July issue of
the opposition Azerbaijani newspaper "Chag" was rejected for
publication by censors because it contained a half-page
article questioning whether the Azerbaijani authorities
support the Workers' Party of Kurdistan (PKK), Turan
reported, citing a statement by the paper's editorial
office. The Azerbaijani National Security Ministry has
denied any official PKK presence in Baku (see "RFE/RL
Newsline," 3 July 1998). LF

ABKHAZ-GEORGIAN TALKS BOGGED DOWN.  The 5 July talks in
Moscow between Georgian Ambassador Vazha Lortkipanidze and
Abkhaz Special Envoy Anri Djergenia failed to yield what
Caucasus Press called "principally new proposals." Interfax
quoted unnamed sources close to Abkhaz President Vladislav
Ardzinba as saying that the Abkhaz side offered "some
significant compromises" but that the Georgian leadership is
unwilling to make concessions.  Djergenia told Interfax that
documents have been prepared for signing at the proposed
meeting between Ardzinba and Georgian President Eduard
Shevardnadze. "The ball is now in the Georgian court," he
added. Shevardnadze has consistently said he will meet with
Ardzinba only to sign an agreement that defines how and when
ethnic Georgians forced to flee Abkhazia during fighting in
1992-1993 and in May 1998 will be repatriated. LF

GEORGIAN-ARMENIAN INTER-PARLIAMENTARY COMMISSION MEETS. A
Georgian parliamentary delegation was in Yerevan from 5-7
July for the first session of Armenian-Georgian inter-
parliamentary commission, Noyan Tapan and Caucasus Press
reported. The discussions focused on bilateral trade and
economic relations, the creation of regional bodies, and
cooperation among the three Transcaucasus states. The
Georgian delegation also met with Armenian government
officials, including Prime Minister Armen Darpinian, to
assess prospects for economic integration, specifically in
the energy as well as the tax and customs sectors. Armenia
has offered to supply electric power to Georgia to offset
part of its debts for rail transportation, according to
Caucasus Press on 7 July. LF

ARMENIA, RUSSIA SATISFIED WITH BORDER COOPERATION. Meeting
in Yerevan on 6 July with Russian Federal Border Service
Director Colonel-General Nikolai Bordyuzha, Armenian
President Robert Kocharian called for the continued presence
in Armenia of the Russian border-guard troops who, together
with the Armenian armed forces, are protecting Armenia's
frontiers with Turkey and Iran, RFE/RL's Yerevan bureau
reported.  Speaking to ITAR-TASS, Bordyuzha expressed
"satisfaction" over his talks with both Kocharian and
Armenian Interior Minister Serzh Sarkisian. Bordyuzha said
the talks focused on deepening cooperation and "streamlining
our structures." But he denied media reports that the
Russian presence in Armenia will be reduced. LF

UN OFFICIAL CONCLUDES VISIT TO TAJIKISTAN. UN
Undersecretary-General for Humanitarian Affairs Sergio Viera
de Mello wrapped up a three-day visit to Tajikistan on 6
July, ITAR-TASS reported. Meeting with Tajik President
Imomali Rakhmonov two days earlier, Viera de Mello said the
UN will continue to offer Tajikistan humanitarian aid and to
seek donor nations that are also willing to extend
assistance. Rakhmonov said that rebuilding more than 10,000
homes in Tajikistan's Khatlon region is "the greatest
problem," at present. Shortly before his departure, Viera de
Mello noted that the peace process in Tajikistan is gaining
momentum but that further success depends on the timeliness
and quality of international aid. BP

NIYAZOV IN IRAN. Turkmen President Saparmurat Niyazov
concluded a three-day visit to Iran on 8 July, IRNA and
ITAR-TASS reported. During their two meetings, Niyazov and
Iranian President Mohammad Khatami stressed that any
agreement on the legal status of the Caspian Sea must be
approved by all five littoral states. That statement
followed the signing of the Kazakh-Russian deal on the
division of the sea bed into sectors (see "RFE/RL Newsline,"
7 July 1998). Both Niyazov and Khatami praised the
development of Turkmen-Iranian ties and pointed to the joint
gas pipeline opened at the end of last year and the Meshed-
Sarakhs-Tedjen railroad as examples of success in bilateral
relations. Also during Niyazov's visit, agreement was
reached on setting up six joint commissions (on business,
oil and gas, health protection, transport and
telecommunications, finance, and power engineering). BP

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