The business of art lies just in this--to make that understood and felt which, in the form of an argument, might be incomprehensible and inaccessible. - Leo Tolstoy
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 2, No. 139 Part I, 22 July 1998


___________________________________________________________
RFE/RL NEWSLINE Vol. 2, No. 139  Part I, 22 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

* GOVERNMENT TO TRIPLE INDIVIDUAL CONTRIBUTIONS TO PENSION FUND

* GAZPROM, OIL COMPANIES DENOUNCE PRESSURE FROM ABROAD

* UN OBSERVERS MURDERED IN TAJIKISTAN

End Note: EU PUNISHES BELARUSIAN LEADERSHIP

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RUSSIA

GOVERNMENT TO TRIPLE INDIVIDUAL CONTRIBUTIONS TO PENSION
FUND. The government has issued a directive increasing
individual contributions to the Pension Fund from 1 percent
to 3 percent of wages, ITAR-TASS reported on 22 July. Deputy
Prime Minister Oleg Sysuev told journalists the directive was
issued in accordance with a presidential decree "on urgent
steps to fulfill the constitutional rights of Russian
Federation citizens to receive state pensions." President
Boris Yeltsin signed that decree on 21 July, ordering the
government to take steps by 1 August to secure additional
financing for the Pension Fund and to urge the parliament to
pass legislation to increase contributions to the fund. The
State Duma recently rejected a draft law to that effect and
expressed outrage over a telegram from Sysuev and Pension
Fund Chairman Vasilii Barchuk to regional leaders,
instructing them to reduce the size of pensions (see "RFE/RL
Newsline," 17 July 1998). LB

WORKING PENSIONERS TO KEEP PENSIONS FOR NOW. Sysuev told
journalists that in the near future, the government will not
eliminate pension payments to pensioners who continue to
work, ITAR-TASS reported. He said such proposals "have not
been studied in detail." Sysuev recently raised the
possibility of ending or reducing payments to working
pensioners (see "RFE/RL Newsline," 10 and 13 July 1998).
Meanwhile, "Russkii telegraf" reported on 18 July that Sysuev
and Labor Minister Oksana Dmitrieva are at odds over pension
policy. The newspaper said Dmitrieva strongly objected to the
proposal to reduce pension payments in light of the Pension
Fund's financial difficulties. LB

KIRIENKO CLAIMS VICTORY ON IMF LOAN. Prime Minister Sergei
Kirienko told journalists on 21 July that the Russian
government scored an important victory in securing a new
$11.2 billion stabilization loan from the IMF. Commenting on
the decision by the IMF board of directors to reduce the
first tranche of that loan by $800 million, Kirienko
emphasized that the overall size of the loan remains the
same, Interfax reported. The premier also claimed that recent
steps by the president, government, and parliament will help
Russia balance its budget by bringing in 105.2 billion rubles
($16.9 billion) in additional revenues next year, ITAR-TASS
reported. Presidential decrees and government directives were
used to implement some measures rejected by the State Duma
last week (see "RFE/RL Newsline," 20 and 21 July 1998).
Kirienko also said the government may introduce changes in
how income tax is levied, which would take effect on 1
September. LB

KREMLIN OFFICIAL SAYS DECREES, DIRECTIVES ONLY TEMPORARY.
Aleksandr Livshits, deputy head of the presidential
administration, says the presidential decrees and government
directives designed to increase budget revenues and cut
expenditures are only temporary measures. In an interview
with NTV on 22 July, Livshits said Russia "should live
according to laws" and acknowledged that decrees and
directives "are far from the best way out" of the current
economic situation. But he expressed the hope that the Duma
will pass government-backed anti-crisis legislation in
August. On 20 July, Duma Security Committee Chairman Viktor
Ilyukhin of the Communist faction called on Russian citizens
"not to pay any taxes which are not approved by the
parliament," Reuters reported. Ilyukhin argued that a decree
increasing land tax rates is a "serious abuse" of the
presidential powers. LB

SELEZNEV CRITICIZES PLAN TO INCREASE GOVERNMENT'S TAX POWERS.
Duma Speaker Gennadii Seleznev on 22 July argued against
giving the government the power to impose certain changes in
tax legislation, provided that the parliament does not reject
those changes within 10 days of when they were announced. A
draft law to give the government such power for one year is
to be submitted to the Duma for consideration in August (see
"RFE/RL Newsline," 20 and 21 July 1998). Speaking to
reporters in Istanbul, Seleznev said he has not seen the
draft but finds the proposal "unacceptable," ITAR-TASS
reported. "Nezavisimaya gazeta" argued on 22 July that giving
the government extra powers would come at the expense of
Yeltsin, not the parliament. The newspaper described the
proposal as an "attempted constitutional coup." LB

YAVLINSKII CALLS FOR COMPETENT USE OF IMF MONEY. Yabloko
leader Grigorii Yavlinskii on 22 July called on the
government to use the funds from the latest IMF loan
competently, ITAR-TASS reported. The IMF board of directors
recently approved the disbursement of $4.8 billion, which is
earmarked for bolstering the Central Bank's hard-currency
reserves. Yavlinskii said spending the IMF money reasonably
may improve the Russian economy but warned that "if the money
taken from the IMF is spent on eating and drinking, we will
get back to the same sad state in six or nine months."
Meanwhile, Duma Speaker Seleznev on 22 July repeated the
Duma's demand that the government make public the new loan
agreement with the IMF and the conditions on which the loan
was granted. LB

'NEZAVISIMAYA' WARNS ABOUT FALL IN LIVING STANDARDS.
"Nezavisimaya gazeta" on 22 July argued that policies adopted
in order to secure a new $11.2 billion loan from the IMF will
cause the standard of living in Russia to drop by nearly 20
percent. The newspaper argued that various measures in the
government's anti-crisis plan, such as the introduction of a
sales tax, will lead to price increases of 10-12 percent. In
addition, the government plans to save 6.5 billion rubles ($1
billion) through downsizing, which  will lead to job losses
for many employees of budget-funded organizations,
"Nezavisimaya gazeta" charged. The newspaper concluded that
the IMF loan saved Yeltsin, Prime Minister Kirienko, and
Central Bank Chairman Sergei Dubinin. CIS Executive Secretary
Boris Berezovskii is the main financial backer of
"Nezavisimaya gazeta." LB

GAZPROM, OIL COMPANIES DENOUNCE PRESSURE FROM ABROAD. The gas
monopoly Gazprom and six oil companies, which account for a
combined 90 percent of Russia's oil output, on 22 July warned
Yeltsin and the government that the government's policies
will worsen the economy and could spark a "social explosion"
within two to three months, Russian news agencies reported. A
statement issued by the companies argues that "the economic
policy of international financial organizations concerning
the key sectors of the [Russian] economy is unreasonable and
irresponsible." Shortly before the IMF board of directors met
to discuss a new loan for Russia, Yeltsin vetoed a law that
would have more than halved excise duties for oil (see
"RFE/RL Newsline," 20 July 1998). Interfax quoted Gazprom
head Rem Vyakhirev as denying his company signed the
statement. But a copy of the statement distributed at
LUKoil's headquarters included a signature on behalf of
Gazprom. LB

KIRIENKO DENIES GAZPROM DEBTS WILL BE SETTLED THROUGH
OFFSETS... Speaking to journalists on 21 July, Prime Minister
Kirienko denied that part of Gazprom's debts to the federal
budget will be canceled against the state's debts to the
company, RFE/RL's Moscow bureau reported. He said Gazprom
will pay its tax debts in cash, and budget-funded
organizations will settle their debts to the gas monopoly in
cash. "Kommersant-Daily" reported on 22 July that during his
recent meeting with Kirienko, Gazprom head  Vyakhirev agreed
that offsets will not be used to settle the company's debts.
However, the newspaper argued that the agreement between the
government and company (see "RFE/RL Newsline," 21 July 1998)
is likely to involve offsets in reality if not in name, at
least for Gazprom's tax debts from 1997. Kirienko has
suggested there may be "adjustment of debts and a
synchronized procedure of their restructuring," the newspaper
noted. LB

...SAYS GOVERNMENT WILL SELL MORE SHARES IN ELECTRICITY
GIANT. At the same press conference, Kirienko said the
government will sell some of its shares in the electricity
monopoly Unified Energy System (EES), Russian news agencies
reported on 21 July. The state currently owns 52.7 percent of
EES shares, and Kirienko said that the government's
privatization plan for this year involves reducing that stake
to 50 percent plus one share. He said the sale will be
consistent with a presidential decree requiring the state to
retain at least one share more than a 50 percent stake.
Kirienko did not mention a federal law on EES shares, which
was adopted earlier this year. That law sets the minimum
state-owned stake in the electricity giant at 51 percent.
Yeltsin was forced to sign the law in May after both houses
of the parliament overrode his veto. LB

TULEEV WANTS MORE POWERS FOR KEMEROVO. Prime Minister
Kirienko met with Kemerovo Oblast Governor Aman Tuleev on 21
July to discuss the region's socio-economic situation, ITAR-
TASS reported.  The same day, Tuleev said that during Deputy
Prime Minister Oleg Sysuev's 19 July negotiations with
officials and strikers in Kemerovo Oblast, Tuleev gave the
deputy premier a draft of a new power-sharing agreement that
would transfer large amounts of federal property to the
oblast's control, "Nezavisimaya gazeta" reported on 22 July.
"We also propose to keep 70 percent, instead of 10 percent,
of the earnings from the coal industry in [Kemerovo Oblast],"
Tuleev said.  The governor has consistently blamed the
federal government for recent protests by coal miners.
Meanwhile, coal miners' strike committees in Chelyabinsk
Oblast announced that they will block the Trans-Siberian
Railroad on 27 July to protest non-payment of wages, ITAR-
TASS reported. BT

CONTRACT KILLERS CONFESS TO MANEVICH'S MURDER. Four ethnic
Russians arrested earlier this month have confessed to the
August 1997 murder of St. Petersburg Deputy Governor and
privatization chief Mikhail Manevich, Russian news agencies
reported on 21 July. Three were arrested in the Osh region of
Kyrgyzstan and the fourth in Uzbekistan. Vladislav Selivanov,
the head of the Interior Ministry's crime-fighting division,
said the four have been charged with a series of contract
killings in numerous Russian cities from 1993-1997.  The
group was flown to Moscow on 21 July under tight security
conditions. In the Russian capital, Interior Ministry
investigators, the Prosecutor-General's Office, and the
Federal Security Service are preparing evidence, "Kommersant-
Daily" reported.  Selivanov told a press conference there is
"no objective evidence" suggesting the involvement of the
group in the March 1995 killing of influential television
journalist Vladislav Listev, but he added "there is a basis
for this supposition," "Nezavisimaya gazeta" reported on 22
July. BT

SUPREME COURT AFFIRMS RIGHT TO LIVE ANYWHERE IN RUSSIA. The
Supreme Court on 20 July upheld an appeal by Andrei
Inozemtsev, a native of Lipetsk Oblast, against the Moscow
law enforcement authorities' refusal to grant him long-term
residency, RFE/RL's Moscow bureau reported. The
Constitutional Court has ruled that local authorities may
register Russian citizens' addresses but may not grant or
deny citizens permission to live in a particular city (see
"RFE/RL Newsline," 3 February 1998). However, the Moscow
authorities sought to limit Inozemtsev's residency to six
months. A Moscow district court denied Inozemtsev's appeal,
upholding Interior Ministry regulations. The Moscow City
Court then delayed consideration of the case and even advised
Inozemtsev to take other steps to secure permission to live
permanently in Moscow (such as marry a Muscovite). The
Interior Ministry has since amended its rules in accordance
with the Constitutional Court ruling. LB

CHECHEN PROSECUTOR, MUFTI WARN YANDARBIEV... Speaking on
Chechen television on 20 July, Khavazh Serbiev warned former
Chechen acting President Zelimkhan Yandarbiev against
"spontaneous steps that could lead to bloodshed," Interfax
reported. Members of the disbanded Special Purpose Islamic
Regiment and Shariah guard had congregated near the village
of Starye Atagi (not Novye Atagi, as erroneously reported in
"RFE/RL Newsline" on 21 July) and had appealed to Yandarbiev
to lead an uprising against the current Chechen leadership.
Mufti Ahmat-Hadji Kadyrov likewise warned Yandarbiev, whom he
accused of propagating Wahhabism, to desist from "illegal
activities." The situation in Chechnya on 22 July is
"stable," according to RFE/RL's Grozny correspondent. LF

...AS RUSSIAN POLITICIANS PREDICT CIVIL WAR. Krasnoyarsk Krai
Governer Aleksandr Lebed told Interfax on 21 July that he
believes Chechnya is headed for a new civil war and that
Dagestan, North Ossetia, Ingushetia, and Stavropol Krai will
also be drawn into the conflict. Federal Security Service
Director Nikolai Kovalev said that "all the preconditions"
for a renewed conflict exist, but he expressed the hope that
tensions can be defused and that "common sense will prevail."
Kovalev said he is "confident" that former Chechen acting
Premier Shamil Basaev was not involved in the 1 May abduction
of Russian Presidential Envoy Valentin Vlasov, whose
whereabouts remain unknown. Russian Deputy Prime Minister
Ivan Rybkin argued that Chechnya's problems cannot be
resolved from a distance. He said the situation in the North
Caucasus should be monitored by "a person possessing special
abilities and the rank of deputy premier." Rybkin called for
mediation by neighboring republics in order to ensure
stability in Chechnya. LF

RUSSIAN BANK TO SPONSOR MISSION TO 'MIR'. The cosmonauts who
undertake the last trip to the 'Mir' space station will be
sponsored by Russia's Menatep Bank, ITAR-TASS reported. A
unidentified bank spokesman said "our bank decided to reach
for the stars in the literal sense of the word." Menatep has
close ties to the authorities. Fuel and Energy Minister
Sergei Generalov was deputy head of the bank before joining
the government in May. Leonid Nevzlin, deputy director of the
official news agency, ITAR-TASS, since last September, is a
former high-ranking executive in the Rosprom group, which
includes Menatep. The  bank official said the bank "hopes to
help a revival  of interest of Russians in the space theme."
There was no mention of how much money the bank will spend on
sponsorship.  LB/BP

TRANSCAUCASUS AND CENTRAL ASIA

UN OBSERVERS MURDERED IN TAJIKISTAN. Four members of the UN
observers mission in Tajikistan  have been found murdered in
a mountainous area about 170 kilometers from Dushanbe, RFE/RL
correspondents reported on 21 July. The two military
observers (from Poland and Uruguay), one civilian affairs
officer (from Japan), and their Tajik driver/translator had
last been heard from the previous day. Their car was found
overturned in a gorge, which prompted initial reports saying
that they died in an accident. However, an examination of
their bodies revealed gunshot wounds. Authorities have
launched a search for the perpetrators of the crime. All UN
personnel in Tajikistan have been recalled to Dushanbe. BP

REACTION TO MURDERS. Both Tajik President Imomali Rakhmonov
and the United Tajik Opposition branded the killing of the
four UN employees as "an act of terrorism," ITAR-TASS
reported on 22 July. Rakhmonov said those responsible are
"traitors." UN special envoy to Tajikistan Jan Kubis said the
murders are "a tragedy which is unmatched in the UN annals."
In New York, UN Secretary-General Kofi Annan said the four
"were ambushed and ruthlessly executed" in what he called a
"cold-blooded murder." Meanwhile, Rakhmonov has fired Deputy
Defense Ministers Abdullo Habibov and Sodik Bobojanov in the
wake of the murders.  Abdurakhmon Azimov, who heads the
government's power structures, and Defense Minister Sherali
Khairulloyev were reprimanded. Following the murders, both
the UN and the Japanese government have complained about
security for UN employees. BP

DRIVER IN KYRGYZ CYANIDE SPILL CHARGED. The driver of the
truck that spilled sodium cyanide into the Barskoon River on
20 May has been charged with violating rules for transporting
chemicals, Interfax reported on 22 July. He faces a maximum
of 10 years in prison if found guilty. All other drivers who
transported that chemical the same day as the accident have
been fired. The Kyrgyz parliamentary commission investigating
the spill  reports that the management of the Kumtor Gold
Mining project has not repaired bridges leading to the mining
site, which were built 20 years ago and are not intended for
cargoes exceeding 13 tons. The company's trucks regularly
transport 40 ton cargoes across such bridges. BP

AZERBAIJAN SIGNS NEW OIL CONTRACTS.  Azerbaijani President
Heidar Aliev, who is on an official visit to Britain, has
signed exploration and production-sharing agreements worth $5
billion with three British oil companies to develop separate
Caspian oil fields.  The companies in question are British
Petroleum, Ramco, and Monument Oil and Gas. Aliev also signed
an agreement with the European Bank for Reconstruction and
Development, which will provide $20 million for the
development of Azerbaijan's banking sector and private
businesses, according to ITAR-TASS on 21 July. LF

ALIEV'S PRESIDENTIAL CANDIDACY PROPOSED. The Central
Electoral Committee has registered an initiative group
composed of voters from four cities and seven raions, which
has proposed Aliev as a candidate for the 11 October
presidential elections, Caucasus Press reported on 22 July,
citing ANS. The previous day, Musavat Party chairman Isa
Gambar said that he and the other four opposition candidates
who have vowed to boycott the poll might reconsider that
decision if the opposition were allowed  to nominate  six of
the 24 members of the Central Electoral Commission, Turan
reported. Also on 21 July, a Turkish Foreign Ministry
spokesman denied that exiled former Azerbaijani parliamentary
speaker Rasul Guliev, who arrived in Istanbul on 13 July, has
been asked to leave Turkey. LF

ARMENIA, IRAN SIGN ECONOMIC COOPERATION AGREEMENT. Iranian
Minister of Finance and Economic Affairs Hussein Namazi and
Armenian Chief of Government Staff Shahen Karamanoukian
signed an economic cooperation agreement in Tehran on 20
July, IRNA reported.  The agreement includes a $5 million
credit from Iran's Export Promotion Bank for the purchase of
Iranian consumer goods and cooperation on expanding transport
arteries linking Iran, Armenia, Georgia, and Russia. Iran
also expressed an interest in purchasing molybdenum and
copper concentrate from Armenia. On 18 July, Karamanoukian
met with Iranian President Mohammad Khatami, to whom he
delivered a message from Armenian President Robert Kocharian.
LF

NEW ARMENIAN POLITICAL PARTY CREATES INFRASTRUCTURE. The
People's Party of Armenia, founded by former Communist Party
First Secretary and defeated presidential challenger Karen
Demirchian, has almost completed setting up  branches
throughout the country, RFE/RL's Yerevan bureau reported on
21 July. A spokesman for the party said local "organizing
committees" have already received thousands of membership
applications. The party will hold its founding congress in
the fall. LF

EU PUNISHES BELARUSIAN LEADERSHIP

by Jan Maksymiuk

	The EU Council on 13 July formally approved a decision
to ban EU visas for  Belarusian government officials.
President Alyaksandr Lukashenka topped a list of 130
Belarusian cabinet ministers, deputy ministers, presidential
administration officials, and state committee heads, all of
whom are now prohibited from traveling to the EU's 15 member
states.
	The decision was communicated to the Belarusian Foreign
Ministry  by charges d'affaires of five EU states--France,
Germany, Greece, Italy, and the U.K.--on 10 July, the fourth
anniversary of Lukashenka's presidency. A Russian newspaper
reported that Foreign Minister Ivan Antanovich was shocked to
receive such a note and tried to dismiss it on the pretext
that it was poorly prepared--the names of some officials were
misspelled or their official positions incorrectly
identified. Four days later, the US State Department followed
suit, imposing similar restrictions on Belarusian senior
officials wanting to travel to the U.S., except those
visiting the UN headquarters. Ten non-EU states in Europe
have also joined the visa ban.
	Minsk obviously did not expect such a turn of events in
the ongoing diplomatic scandal over the eviction of Western
ambassadors from the Drazdy residential compound, near Minsk.
In fact, Deputy Foreign Minister Uladzimir Herasimovich,
appointed by Lukashenka to negotiate a solution to the
conflict with Western diplomats, announced on 9 July that
Belarus had reached some kind of arrangement with Germany and
France on moving their ambassadors to other accommodation. He
also said Minsk had backed off from its ultimatum ordering
Western diplomats to remove their belongings from Drazdy.
	But the West seemed finally to realize that whatever the
Belarusian Foreign Ministry says need not correspond to what
Lukashenka does or intends to do. The EU visa ban was the
first serious setback suffered by Lukashenka in his six-week
battle to empty the diplomatic compound and to have it for
himself alone. The recalling of Western ambassadors for
consultations was not enough to shake Belarus's authoritarian
leader. "Let them know that they may return to Belarus only
following our permission," Lukashenka commented on the
withdrawal of Western diplomats. But the visa restrictions
have hit hard, for three reasons.
	First, by imposing the ban on Lukashenka and his
administration officials, the EU and the U.S. have
unmistakably demonstrated who is really responsible for the
infamous "sewer war."  Belarus has been generally portrayed
by international media as a country trying to find its way
"back to the USSR." Lukashenka's views of various economic
and political issues are presented as reflecting "the
people's will" or, at least, enjoying immense popular
support.
	The Drazdy conflict, however, shows this is not
necessarily the case. Protesting declining living standards
in Minsk on 15 July, some 5,000 workers adopted a resolution
saying that Lukashenka's policy "threatens the country with
political and economic isolation." The West appears to have
realized that it would be counterproductive to punish the
Belarusian people for the actions taken by its government.
	Second, the visa ban may help the fragmented and weak
Belarusian opposition to consolidate itself, assuming that it
is willing and able to do so. Lukashenka is vulnerable: that
is the main lesson that the opposition can learn from the
current diplomatic standoff. And  his regime will become more
vulnerable as Russia--Minsk's closest ally among the former
Soviet republics--continues to press for the repayment of
outstanding debts for gas and oil.
	Russia under Sergei Kirienko's government is becoming
more and more reluctant to provide its "sisterly republic"
with energy resources free of charge or in exchange for
Belarusian antiquated tractors and television sets. With no
international financial aid in sight, Lukashenka will find it
very hard to cope with mounting problems in the virtually
unreformed Soviet economy he controls. He will be forced to
make political concessions if his is not a suicidal case. And
it will be up to the Belarusian opposition to decide whether
and how to take advantage of that vulnerability.
	Third, by imposing visa restrictions and not severing
diplomatic relations with Belarus, the West has prudently
left room for diplomatic maneuvering. It has also confirmed
that it still sees Belarus as a sovereign country and wants
it to retain that status. With NATO's eastern border flanking
Belarus in six months or so, it is doubtless preferable to
have a stretch of non-Russian territory  between NATO and
Russian tanks. No European government, including the Kremlin,
wants to recreate the barbed-wire dividing line that
characterized Cold-War Europe.

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