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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 2, No. 141 Part I, 24 July 1998


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RFE/RL NEWSLINE Vol. 2, No. 141  Part I, 24 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

* TRADE ISSUES HIGH ON AGENDA FOR GORE-KIRIENKO TALKS

* COMMUNIST JOINS GOVERNMENT AFTER ALL

* TENSION REMAINS HIGH OVER ABKHAZIA

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RUSSIA

TRADE ISSUES HIGH ON AGENDA FOR GORE-KIRIENKO TALKS. Before
talks with US Vice President Albert Gore on 24 July, Prime
Minister Sergei Kirienko called for the U.S. to grant Russia
most-favored-nation trade status, Russian news agencies
reported. "The classification of Russia as a country with a
non-market economy does not meet current realities and leads
to the imposition of unjustifiably high anti-dumping duties
on a number of key export items," Kirienko said. ITAR-TASS
quoted an unidentified source in the Russian-U.S. Commission
on Economic and Technological Cooperation as saying that Gore
has agreed to support Russia's demand for permanent MFN
status.  Meanwhile, Gore told the Russian delegation that he
and President Bill Clinton are "absolutely committed to
deepening [U.S.-Russian] relationships."  Gore arrived in
Moscow on 23 July and will leave late on 24 July. Instead of
flying to Karelia to meet with vacationing President Boris
Yeltsin, as some Russian media speculated, he is to speak to
Yeltsin by telephone on 24 July. BT

PRIMAKOV IN BEIJING. Russian Foreign Minister Yevgenii
Primakov gave a press conference in Beijing on 23 July, ITAR-
TASS and China's Xinhua news service reported. Primakov said
after talks with his Chinese counterpart, Tang Jiaxuan, that
neither country would impose sanctions on India or Pakistan
for conducting nuclear weapons tests. But he added that
Moscow and Beijing want all countries possessing or close to
possessing nuclear weapons to sign the Nuclear Non-
Proliferation Treaty. Primakov also said independence for
Kosova "cannot even be discussed," adding that "the Contact
Group's integrity should guarantee success in settling the
Kosova problem." Primakov noted that China shares his
country's view on this point. The Russian official also met
briefly with Chinese President Jiang Zemin. ITAR-TASS
reported only that Primakov expressed his country's
condolences over the loss of life in recent flooding in
China. BP

RUSSIAN MILITARY DELEGATION ARRIVES IN CHINA. A Russian
military delegation led by first deputy chief of the general
staff, General Valerii Manilov, arrived in China on 23 July,
ITAR-TASS and Xinhua reported. Manilov held talks with
Lieutenant-General Xiong Guangkai, the deputy chief of staff
of the Chinese People's Liberation Army. The two sides
discussed the regional and international situations and,
according to Xinhua, "reached extensive consensus." They also
discussed military cooperation, confidence-building measures,
and the current reform of both armies. Manilov and the
delegation are on a six-day visit. BP

CHECHEN PRESIDENT SAYS FOREIGN SPECIAL SERVICES BEHIND
ATTACK. Chechen President Aslan Maskhadov said on 23 July
that the attack against him may have been  the "joint work of
several special services" who were able to enlist local
allies "craving for power and money," Interfax reported. (The
Russian Federal Security Service said it has no information
about the possible involvement of any security service.)
Acknowledging that he was slightly injured in the attack,
which killed one of his bodyguard, Maskhadov said that he had
expected even worse things when he became president.
"Explosions and incidents are inevitable in a country that
has gone through such a grave war."  But he suggested that
those counting on playing one resistance leader against
another or using Islam to topple his government "will not
succeed." PG

FIVE SCENARIOS BEHIND ATTACK ON MASKHADOV.  Chechen Deputy
Prosecutor-General Magomed Magomadov told Interfax on 23 July
that he had identified five scenarios for the assassination
attack: foreign special services, local opposition
politicians, officials who lost their positions as a result
of the Gudermes controversy, religious extremists, and a
fifth column of Chechens supported by Moscow.  One possible
suspect has already been cleared. On 24 July, the Supreme
Shariat Court concluded that former Chechen President
Zelimkhan Yandarbiev had no involvement in the attack.  But
despite the attack, Chechen officials have played down the
security problems in Grozny. On 23 July, Chechen military
commander Aslambek Ismailov said  he sees no need to increase
security measures there, ITAR-TASS reported.  PG

YELTSIN, OTHERS DECRY ATTACK ON MASKHADOV.  Russian President
Yeltsin sent Maskhadov a telegram to express his "profound
concern and indignation" over the assassination attempt. He
also ordered Russia's security services to investigate the
crime, Interfax reported on 23 July.  Among other Russian
officials who denounced the attack on the Chechen president
were  Yeltsin's personal envoy for Chechnya, Ivan Rybkin,
Krasnoyarsk Krai Governor Aleksandr Lebed, CIS Executive
Secretary Boris Berezovskii, and National and Regional Policy
Minister Yevgenii Sapiro, Russian news agencies reported.
Other leaders who have condemned the attack include Dagestani
leader Magomedali Magomedov and Georgian President Eduard
Shevardnadze. PG

COMMUNIST JOINS GOVERNMENT AFTER ALL... State Duma Economic
Policy Committee Chairman Yurii Maslyukov, a member of the
Communist Party's Central Committee, defied party discipline
on 23 July to accept the post of industry and trade minister.
The ministry was created during the April cabinet reshuffle,
when the Foreign Trade Ministry was abolished. Until now,
Georgii Gabuniya has served as acting minister. Although the
Central Committee's Presidium spoke out against Maslyukov
joining the government (see "RFE/RL Newsline," 23 July 1998)
Maslyukov told journalists that half the members of the
Communist faction in the State Duma supported his decision,
RFE/RL's Moscow bureau reported. Maslyukov held various
positions in the Soviet defense industry and the economic
planning agency Gosplan, which he headed during the late
Gorbachev period. LB

...SEEKS OVERSIGHT OF DEFENSE INDUSTRY AND SCIENCE POLICY.
Maslyukov told journalists on 23 July that Prime Minister
Kirienko supports his vision for the Industry and Trade
Ministry, which includes giving that ministry oversight of
the defense industry and the arms trade, Russian news
agencies reported. The Economics Ministry, headed by Yakov
Urinson, currently supervises those matters. "Kommersant-
Daily" claimed on 24 July that "influential forces" in the
presidential administration support keeping defense industry-
related matters under the purview of the Economics Ministry,
and that Kirienko will let Urinson and Maslyukov do battle in
the coming months before making a final decision. Urinson
worked under Maslyukov in Gosplan, the newspaper said.
Maslyukov also wants science policy to fall under the control
of the Industry and Trade Ministry, which would be a blow to
Science and Technology Minister Vladimir Bulgak. LB

PRIMORE GOVERNOR TO STAY OUT OF CABINET. Primorskii Krai
Governor Yevgenii Nazdratenko told Interfax on 23 July that
it would not be "desirable" for him to join the federal
government now (see "RFE/RL Newsline," 23 July 1998). He
praised Kirienko as "an intelligent man of integrity" but
said future socioeconomic developments will demonstrate
whether the government should include new members from among
regional leaders. In an interview published in "Vremya-MN" on
20 July, Nazdratenko argued that "social tension is
inevitable," adding that "the government simply has no
mechanism to stop people" if they march on Moscow. Relations
between Nazdratenko and previous federal governments have
been strained, in part because of the long-standing enmity
between the governor and former First Deputy Prime Minister
Anatolii Chubais. In recent weeks, Samara Oblast Governor
Konstantin Titov and Novgorod Oblast Governor Mikhail Prusak
have also reportedly turned down invitations to join the
cabinet. LB

DUMA SPEAKER SAYS SPECIAL SESSION NO SURE THING... Gennadii
Seleznev told journalists on 23 July that the Duma may not
convene a special session in August to consider laws in the
government's anti-crisis program, Russian news agencies
reported. Seleznev argued that such a session would be "a
very expensive treat." He noted that some of the draft laws
have not yet been submitted to the Duma, and also argued that
consideration of some laws can wait until the Duma is
scheduled to reconvene in September. However, Seleznev said a
special session between 17 and 22 August is still possible.
He repeated his belief that a new IMF stabilization loan will
provide only short-term help for Russia. He also charged that
the government's move to triple individual contributions to
the Pension Fund is unconstitutional (see "RFE/RL Newsline,"
22 and 23 July 1998). LB

...AGREES WITH OIL COMPANIES' WARNING. Speaking to
journalists on 23 July, Seleznev also agreed with a recent
statement by oil companies warning that the government's
policies are influenced by international financial
organizations and could lead to social unrest (see "RFE/RL
Newsline," 22 and 23 July 1998). He said leading oil industry
executives "understand perfectly" that loans from the IMF
will not solve Russia's long-term problems, Interfax
reported. He also argued that heads of oil companies know
better than the president, prime minister, or "anyone else
what state the Russian economy is in." However, Seleznev
added that Russian policy should be shaped by the legislative
and executive branches, not by oligarchs, Interfax reported.
LB

'NEZAVISIMAYA' AGAIN ADVOCATES TEMPORARY STATE COUNCIL.
Vitalii Tretyakov, the editor-in-chief of "Nezavisimaya
gazeta," on 24 July repeated his call for the formation of a
Temporary State Council to preside over early presidential
and parliamentary elections (see "RFE/RL Newsline," 13 July
1998). He blasted Yeltsin's governing style and characterized
the president as Russia's main "oligarch." Tretyakov
concluded that only two possible scenarios, if accompanied by
the creation of a Temporary State Council, would stave off
both social unrest and dictatorship: the return of Viktor
Chernomyrdin to the post of prime minister or the appointment
of a "new government." The leading candidate to head a new
government would be Yabloko leader Grigorii Yavlinskii,
Tretyakov argued, although he listed other possibilities as
well, including Alfa Bank head Petr Aven or "someone else
among the oligarchs" who has already held a state post.
"Nezavisimaya gazeta" is financed by CIS Executive Secretary
Boris Berezovskii's LogoVAZ group. LB

CENTRAL BANK LOWERS REFINANCING RATE. The Central Bank on 24
July reduced its annual refinancing rate from 80 percent to
60 percent. ITAR-TASS noted that it is the ninth change in
the benchmark rate since the beginning of the year. In an
effort to protect the ruble, the Central Bank raised the
refinancing rate from 28 percent to 42 percent in February,
then lowered it three times before recurring instability on
financial markets prompted two rate hikes in May, bringing
the refinancing rate to 150 percent. The bank lowered the
rate to 60 percent in early June but raised it to 80 percent
three weeks later as the sell-off of Russian securities
continued. The first $4.8 billion tranche of an $11.2 billion
IMF loan will be used to bolster the Central Bank's hard-
currency reserves, which stood at $13.6 billion as of 17
July. LB

GOVERNMENT SLASHES LIST OF 'STRATEGICALLY IMPORTANT'
COMPANIES. The government has cut the list of state-owned
companies that may not be privatized in the near future from
some 3,000 to 697, ITAR-TASS reported on 23 July. The 2,300
companies removed from the list of firms that produce goods
of "strategic importance" are to be sold, but no time frame
for their sale has been announced. The 697 enterprises that
remain on the list span a wide variety of industries and
sectors, such as nuclear facilities, weapons producers,
health and medical facilities, metallurgy, oil and chemical
companies, communications enterprises, airports, shipping
lines and seaports, and Russian Public Television, the
Channel 1 broadcaster that is only 51 percent state-owned.
Opposition deputies in the Duma have denounced plans to
shorten the list of strategically important companies. LB

PRIVATIZATION REVENUES BELOW TARGET IN FIRST HALF OF 1998.
The State Property Ministry announced on 22 July that federal
budget revenues from the sale or management of state-owned
property totaled some 1.6 billion rubles ($257 million)
during the first half of 1998, "Kommersant-Daily" and
"Nezavisimaya gazeta" reported on 23 July. That figure is
less than 20 percent of 1998 budget targets for such
revenues. The two biggest privatization auctions planned for
later this year involve 75 percent plus one share in the oil
company Rosneft and 25 percent minus two shares in the
telecommunications giant Svyazinvest. An attempt to sell the
Rosneft sale failed in May, and in early July the government
extended by another three months the deadline for submitting
bids for the oil company (see "RFE/RL Newsline," 10 July
1998). LB

RUSSIA, EU FORMALIZE TEXTILE AGREEMENT. Officials from Russia
and the EU on 23 July signed an agreement reached in March on
textile trade, Reuters reported. Russia agreed to lift import
quotas on carpets from the EU (see "RFE/RL Newsline," 1 April
1998). The European Commission says the value of annual EU
carpet sales to Russia exceeds 200 million Ecu ($220
million). In exchange, the EU agreed not to renew its quotas
on more than 30 types of Russian textiles after 1 May. In
April, the EU stopped considering Russia a "non-market
economy," allowing Russian industries to be considered on a
case-by-case basis in disputes over anti-dumping duties. LB

NUCLEAR WEAPONS WORKERS STAGE WARNING STRIKE IN NIZHNII
NOVGOROD. Some 3,500 workers at the Federal Nuclear Center in
Sarov (former Arzamas-16), Nizhnii Novgorod Oblast, stopped
work for three hours on 23 July to protest non-payment of
wages, media reported.  The workers threaten an indefinite
strike if their demands for the payment of wages totaling 90
million rubles ($14.5 million) from 1997-1998 and for wage
hikes are not met, RFE/RL's correspondent in Nizhnii Novgorod
reported.  The strike committee kept workers in radiation-
sensitive areas on the job, but a representative of the
complex's management warned "there are elements of danger in
any case."  In May, Prime Minister Kirienko visited the
nuclear-weapons research center and promised that "money will
always be found" for its operations.  The Atomic Energy
Ministry  has so far received 30 percent of what it is due
from the 1998 budget, "Nezavisimaya gazeta" reported on 24
July. BT

TWO REGIONS AIM TO INTRODUCE ALTERNATIVE SERVICE. St.
Petersburg and the Republic of Tatarstan are aiming to
introduce alternative service, "Kommersant-Daily" reported on
23 July.  Article 59 of the Russian Constitution provides for
forms of service other than  military in cases where personal
convictions or religious beliefs prevent military activity.
However, a federal law on alternative service has been held
up in the Duma since 1994 owing to on-going opposition from
the Duma Defense Committee (see "RFE/RL Newsline," 8 January
and 5 May 1998). The daily reported that "the silence of the
Duma and the many appeals of conscripts' parents forced" the
Tatarstan legislature to introduce its own law, which has
passed in the first reading.  Instead of introducing a
regional law, St. Petersburg Governor Vladimir Yakovlev has
proposed that Yeltsin issue a presidential decree allowing
alternative service in St. Petersburg. BT

TRANSCAUCASUS AND CENTRAL ASIA

TENSION REMAINS HIGH OVER ABKHAZIA.  Liviu Bota, the UN
secretary-general's special representative for Georgia, told
a meeting of Georgian, Abkhaz, and Russian officials in
Geneva on 23 July that "the potential for a new outbreak of
hostilities is real," AP reported. Meanwhile, the Georgian
Foreign Ministry condemned Abkhazia for the hostage-taking of
five people in the Zugdidi region, an action that the Abkhaz
officials have denied being involved in, ITAR-TASS reported.
And in the wake of the 22 July mine explosion in which nine
Russian soldiers were wounded,  the Russian Defense Ministry
warned Georgia against supporting anyone who attacks Russian
peacekeepers in Abkhazia, the Russian agency said.  The local
commander of CIS peacekeeping forces, General Sergei Korobko,
said that unless conditions improved, he will seek additional
forces from other CIS countries to control the situation. PG

TALBOTT PLEDGES U.S. SUPPORT FOR GEORGIA.  Deputy Secretary
of State Strobe Talbott told Georgian President Eduard
Shevardnadze and other senior officials in Tbilisi on 23 July
that Washington seeks to support the development of a
democratic, prosperous, and independent Georgia, ITAR-TASS
reported.  According to Georgian parliamentary speaker Zurab
Zhvania, Talbott also said the U.S. will provide special
assistance to help Georgia protect its borders and support
refugees from Abkhazia.  PG

ALIEV SIGNS NEW OIL AGREEMENTS IN LONDON.  Azerbaijani
President Heidar Aliev completed his five-day visit to London
on 23 July by signing three new agreements on the
exploitation of Caspian basin oil, Interfax reported.  PG

UN MOURNS EMPLOYEES KILLED IN TAJIKISTAN. A ceremony was held
at the UN compound in Dushanbe on 24 July in honor of the
three UN employees who, along with their driver, were killed
by unknown assailants on 20 July, ITAR-TASS reported. The
bodies of military observers Richard Shevchek (Poland) and
Adolfo Sherpegi (Uruguay) as well as civilian affairs
observer Yukata Akino lay in state outside the compound's
main building. Their Tajik driver/translator Jurajon Mahramov
was buried in accordance with Islamic tradition on 22 July.
Meanwhile, field commanders from the United Tajik Opposition
based in the Pripamirye area, where the UN workers were
killed, have joined efforts to locate the perpetrators of the
crime. BP

EBRD EXTENDS LOAN TO KAZAKHSTAN. The European Bank for
Reconstruction and Development on 23 July announced it will
grant Kazakhstan a $40 million loan, Interfax reported.  The
loan will be released in two tranches of $20 million and used
to finance medium- and long-term transportation,
construction, industrial, and public sector projects. The
EBRD has the option of using funds from the first tranche to
buy shares in the Kazakh bank to which it releases the money.
BP

LOOMING CRISIS IN KAZAKH OIL SECTOR? Kazakh Prime Minister
Nurlan Balgimbayev told a meeting of senior officials of the
country's oil industry on 22 July that the situation in the
oil sector is "very serious," Interfax reported. Balgimbayev
said that "production is not competitive" and  that
refineries in Pavlodar and Chimkent are "on the verge of
grinding to a halt." A government commission, headed by First
Deputy Prime Minister Uraz Jandosov, has been charged with
helping the country out of "its pre-crisis situation." BP

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