RFE/RL NEWSLINE Vol 2, No. 230, Part I, 1 December 1998

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RFE/RL NEWSLINE Vol 2, No. 230, Part I, 1 December 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

* BUDGET DEADLINE SLIPPING AWAY

* NEW THEORIES TOUTED IN STAROVOITOVA CASE

* AZERBAIJANI OIL CONSORTIUM TERMINATES OPERATIONS

End Note: REALIST LUZHKOV VERSUS POPULIST LUZHKOV
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RUSSIA

BUDGET DEADLINE SLIPPING AWAY... After announcing that
the government will postpone submitting the 1999 budget
to the State Duma from 1 December until 7 December,
First Deputy Prime Minister Yurii Maslyukov revealed on
30 November that the cabinet will now wait until 10
December to discuss that document and will finally
submit it two days later. According to Interfax, the
government needs additional time to make calculations.
For example, a proposal to lower value-added tax from 20
percent to 14 percent was approved on 27 November, but a
regional association has asked the government to raise
the 14 percent target to 15 percent and direct the
additional proceeds to agriculture and the coal
industry. "Kommersant-Daily" on 1 December published two
versions of the budget showing that the Finance Ministry
increased the deficit projection by 9.6 billion rubles
($537 million) to 104.5 billion rubles, 31.9 billion
rubles of which the Central Bank will provide. JAC

...AS IMF CHIEF ARRIVES FOR VISIT. The newspaper also
pointed out that these figures would have to be
recalculated again should the government manage to pry
any money out of IMF Managing Director Michel Camdessus,
who arrived in Moscow on 1 December, or win support
among creditors for restructuring external debt. The
daily concluded that Prime Minister Yevgenii Primakov
has to wage battle over the budget on three fronts: with
the IMF, legislators, and lobbyists within his own
government. Finance Minister Mikhail Zadornov told
reporters on 30 November that the government needs at
least another $10.3 billion from the fund for 1999.
"Izvestiya" on 1 December quoted "experts" as saying
that if the government does not receive new credits from
the fund during Camdessus's trip, then no new money can
be expected before the middle of next year. JAC

SBERBANK TELLS CUSTOMERS TO WAIT. On 30 November,
Russian bank customers were supposed to have finally
gained access to their savings after transferring their
accounts from failing commercial banks to Sberbank.
However, Sberbank announced that due to lack of cash and
other "technical difficulties," depositors will have to
wait until some future date, which will be announced by
the Central Bank. Sberbank President Andrei Kazmin said
during a radio broadcast, that his bank may never be
able to cover accounts transferred from Inkombank, the
"Moscow Times" reported on 1 December. The same day
"Izvestiya" reported that according to its sources,
Inkombank failed to fulfill several conditions for
transferring its deposits to Sberbank and therefore its
former customers should be "seriously" concerned. JAC

NEW THEORIES TOUTED IN STAROVOITOVA CASE. Moscow's TV-6
reported on 30 November that the St. Petersburg
prosecutor-general has announced that it is seeking
businessman Ruslan Kolyak on suspicion of involvement in
the murder of Duma deputy and liberal activist Galina
Starovoitova. Investigators believe that Starovoitova's
death may be connected with the commercial activity of
her son, who lives in Britain. Three days earlier,
"Noviye izvestiya" published a transcript of what it
alleged was a taped phone conversation that links St.
Petersburg Governor Vladimir Yakovlev with organized
crime. The paper reported that the tape had been in
Starovoitova's possession. Governor Yakovlev told ITAR-
TASS that the killing "is part of a large-scale effort
to provoke social conflict and discredit law-enforcement
agencies." On 27 November, Yakovlev appeared on
television visiting Starovoitova's grave. He did not
attend the funeral. JAC

DUMA FINDS YELTSIN NOT GUILTY OF ONE CHARGE. The Duma's
impeachment commission decided not to add a fourth
charge of destroying the country's defense capability to
the list of impeachable actions allegedly committed by
President Boris Yeltsin, Commission Deputy Chairwoman
Yelena Mizulina told reporters on 30 November. According
to Mizulina, a member of the Yabloko faction, Yeltsin
made mistakes but it is impossible to prove there was
criminal intent. Oleg Sysuev, deputy head of the
presidential administration, told reporters on 1
December that Yeltsin will return to his office "in the
near future" and that doctors are finding it difficult
to keep the president in the hospital. JAC

RUSSIA TO LIFT BAN ON DEATH PENALTY? Human rights
activists have expressed concern that Prime Minister
Primakov's recent remarks about "the physical
elimination of those who raise their hands against
society, the public, and children" indicate that the
government plans to lift its moratorium on the death
penalty imposed after Russia joined the Council of
Europe. Vladimir Kartashkin, chairman of the
presidential human rights commission, told ITAR-TASS on
1 December that "various people at the highest level and
also in the Prosecutor-General's Office, the Supreme
Court, and the Justice Ministry are saying that we ought
to lift the moratorium." Meanwhile, the Constitutional
Court will consider a complaint that hundreds of cases
in which the death-penalty was handed down should be
overturned because they were issued in trials without
juries, Interfax reported on 30 November. If the court
upholds the complaint, then the majority of death-
penalty cases in the country would be overturned. JAC

RUSSIA GATHERING FUNDS FOR WEAPON DESTRUCTION. Russia
has reduced its troops located in the northwest by more
than 40 percent, thus fulfilling a pledge that Russian
President Boris Yeltsin made to Sweden last year,
Interfax reported on 30 November. Foreign Minister Igor
Ivanov, who is visiting Stockholm and Oslo from 1-4
December, will raise the issue of Sweden and Norway's
following suit with their own troop reductions,
according to the agency. Meanwhile, Colonel-General
Stanislav Petrov, chief of radiation, chemical, and
biological protection forces at the Defense Ministry,
told ITAR-TASS that an agreement has been signed with
Germany for the provision of foreign aid to assist in
the destruction of chemical weapons. He said that
another agreement was about to be signed with The
Netherlands, while negotiations with Italy, Finland, and
Sweden are under way. The Federation Council will
discuss a bill to exempt such assistance from tax and
customs duties. JAC

GREENPEACE LABELS IRKUTSK AREA 'CHEMICAL CHERNOBYL.' The
environmental organization Greenpeace reported on 30
November that mercury leaks from a chemical factory in
Irkutsk have created an 18-mile ecological catastrophe
zone, AFP reported. A regional court shut the factory
down two months ago, but underground water poisoned by
the mercury still flows into the Angara River. A
Greenpeace spokesman said that the up to half a million
people in the area have been poisoned to some degree.
JAC

ELECTIONS IN TUVA FAIL AGAIN. On 29 November, voters in
the Republic of Tuva failed for the fourth time to turn
up in sufficient numbers to make elections to the local
legislature valid. A turnout of 50 percent of eligible
voters is required. Tuva officials explained that voters
are not apathetic but reluctant to venture out to
polling stations because the weather is -42 degrees
Celsius, Russian Public Television reported the next
day. JAC

KAMCHATKA, SVERDLOVSK RESIDENTS LEFT OUT IN COLD.
Despite media attention to the plight of regions in the
Far East, Kamchatka Oblast continues to suffer from a
severe shortage of energy supplies, Russian Radio
reported on 30 November. The nuclear power plant at
Petropavlosk-Kamchatkskii has only 24 hours' worth of
fuel. A tanker carrying three days' supplies was
expected to arrive on 1 December. Some residents are
expected to have electricity for only eight hours a day.
Meanwhile, "Izvestiya" reported on 28 November that
closer to Moscow, residents in Alapaevsk, Sverdlovsk
Oblast, have had neither gas nor heat for a week, while
temperatures outside dipped to -40 degree Celsius.
According to the daily, people with cars are keeping
their children warm in their vehicles, while almost all
schools and kindergartens are closed. JAC

NEW TATAR POLITICAL MOVEMENT FORMED. Representatives of
the nationalist Ittifak party and the Communist Party of
Tatarstan agreed on 28 November to form a united
political movement called Omet [Hope], RFE/RL's Kazan
bureau reported. Gabdulla Galiulla, one of the leaders
of Tatarstan's Muslims until February 1998, has been
chosen as head of the movement. Omet declared its
intention to propose joint candidates for the 1999
elections to the Russian State Duma and for the
Tatarstan presidential elections due in 2000. LF

RUSSIAN, ITALIAN FOREIGN MINISTERS DISCUSS OCALAN
PROBLEM. During their 30 November talks in Moscow, Igor
Ivanov and Lamberto Dini exchanged information on
Kurdistan Workers' Party leader Abdullah Ocalan, Reuters
and Interfax reported. Ocalan was apprehended in Rome
during the night of 12 -13 November on arrival from
Moscow and may be sent back to Russia if his request for
political asylum in Italy is refused and no other
country demands his extradition. According to
"Komsomolskaya pravda" of 1 December, Moscow opposes
that option because it would adversely affect its
relations with Turkey. Also on 30 November, some 50
Kurds staged a demonstration outside the U.S. embassy in
Moscow to demand that Washington intervene to prevent
Ocalan's "extermination" by Turkey, ITAR-TASS reported.
LF

CIS PREMIERS ENTHUSIASTIC OVER FREE ECONOMIC ZONE.
Meeting in Moscow on 25 November, CIS prime ministers
endorsed CIS Executive Secretary Boris Berezovskii's
proposal to implement an earlier decision on creating a
CIS free economic zone (see "End Note," "RFE/RL
Newsline," 24 November 1998). But they noted that Russia
will not be able to ensure conditions for such a zone
before 2000, according to Noyan Tapan. But several
participants, including the representatives of Ukraine,
Belarus, and Uzbekistan, rejected a further proposal by
Berezovskii to rationalize CIS executive structures by
merging the CIS Inter-State Economic Committee and the
Executive Secretariat. Russian Prime Minister Primakov
had sought to reassure his colleagues that the proposed
creation of a new CIS executive organ "will not in any
way be a supra-national government or an organ that
could take decisions on behalf of CIS heads of state,"
"Nezavisimaya gazeta" reported on 27 November. LF

FIVE RUSSIAN POLICEMEN KILLED IN DAGESTAN. Five OMON
(special police) officers were shot dead in an ambush on
the administrative border between Chechnya and Dagestan
late on 29 November, Russian agencies reported.
Dagestani police said that the killers then fled to
Chechnya, but Chechen Deputy Prime Minister Turpal
Atgeriev laid the blame for the shootings on members of
Dagestan's caviar mafia. LF

TRANSCAUCASUS AND CENTRAL ASIA

AZERBAIJANI OIL CONSORTIUM TERMINATES OPERATIONS. Cipco,
the second international consortium to be established to
exploit Azerbaijan's offshore oil reserves, announced on
30 November that it is terminating operations in
Azerbaijan following the failure of three trial wells to
yield the hoped-for reserves of oil, according to the
Dow Jones News Service. The consortium was set up in
November 1995 by Pennzoil, Agip, LUKoil and Azerbaijan's
state oil company SOCAR to develop the Karabakh field.
All three trial wells drilled in that field this year
have yielded gas condensate but only the third well
produced oil, though not in commercially viable
quantities. LF

GEORGIA ON TRACK FOR ADMISSION TO COUNCIL OF EUROPE. The
Political Committee of the Parliamentary Assembly of the
Council of Europe has drafted a proposal recommending
Georgia's acceptance as a full member of that body,
Reuters and ITAR-TASS reported on 30 November. The
proposal characterizes Georgia as a pluralistic,
democratic state but sets conditions for full
membership, including ratifying the European Human
Rights Convention and the framework convention on
national minorities, and taking measures to safeguard
the freedom of the press and improve the work of local
authorities. Georgian press reports had suggested that
Georgia's full membership might be contingent on
measures to expedite the repatriation of Meskhetians
deported from southern Georgia in 1944. LF

ARMENIAN PARTIES CONTINUE DISCUSSIONS OF ELECTION LAW.
At its 18th congress on 26 November, the Self-
Determination Union unanimously condemned as
undemocratic the election law passed by the parliament
on 16 November, Noyan Tapan reported. But congress
delegates also approved measures aimed at amending that
law, including an appeal to the Yerkrapah parliamentary
group that drafted it and an alliance with other
opposition groups. Parliamentary deputy speaker Albert
Bazeyan (Yerkrapah) rejected charges by the former
majority Hanrapetutiun faction that the vote on the law
was undemocratic. Bazeyan added that Yerkrapah is
currently holding talks with representatives of 16
parties, including the Communist Party of Armenia, that
have proposed amendments to the law. LF

UZBEK PRESIDENT DENIES ANY ROLE IN TAJIK REBELLION... At
a press conference in Tashkent on 30 November, Uzbek
President Islam Karimov denied his country had any role
in the rebellion in northern Tajikistan early last month
(see "RFE/RL Newsline," 30 November 1998), ITAR-TASS and
Interfax reported. Karimov said the fighting in
Tajikistan's Leninabad Oblast was the result of an
inter-clan struggle for power. He noted that while
"there is no alternative" to the peace agreement signed
in Moscow in June 1997, which, he pointed out, provides
for "dividing portfolios between the Kulyab clan [in
southern Tajikistan] led by [President Imomali]
Rakhmonov and the United Tajik Opposition." Karimov said
implicating his country in Tajikistan's problems is "an
attempt to steer toward inter-ethnic and inter-state
confrontation." He added "it's very convenient to find
an outside enemy." BP

...CRITICIZES TAJIK GOVERNMENT, RUSSIA'S FSB. Karimov
also said that drug-trafficking is conducted on a large
scale in Tajikistan and that tons of narcotics are
detained at the Uzbek and Kyrgyz borders with that
country. "Both governing and law-enforcement bodies are
involved in the drug business," he argued, warning that
the "Uzbek-Tajik frontier will be strengthened and a
visa regime introduced if necessary." The Uzbek
president then implicated Russia's Federal Security
Service (FSB) in the attempted rebellion, saying
"certain Russian special services" are seeking to
estrange Uzbekistan and Tajikistan. Karimov identified
the FSB's Colonel Rizo Tursunov as coordinating measures
to escalate tensions between Tajikistan and Uzbekistan.
And he also claimed he had all the evidence necessary to
prove Tursunov's role. The FSB released a statement
later the same day expressing surprise at Karimov's
comments and rejecting all accusations. BP

KYRGYZ PRESIDENT VISITS TASHKENT. Askar Akayev paid a
one-day visit to the Uzbek capital on 30 November to
meet with his Uzbek counterpart, Islam Karimov, RFE/RL
correspondents reported. The main aim of his visit was
reportedly to seek to ensure uninterrupted supplies of
Uzbek gas. Kyrgyzstan owes $3.3 million for supplies,
and Uzbekistan has threatened to stop all deliveries on
1 December. The two sides reached an agreement whereby
Kyrgyzstan will pay 70 percent of its gas debt by means
of goods and hydro-electric power. BP

KAZAKH PRESIDENTIAL CAMPAIGN BEGINS. Following the close
of registering for the 10 January presidential elections
and with the field narrowed to four candidates (see
"RFE/RL Newsline," 30 November 1998), incumbent
President Nursultan Nazarbayev told a group of foreign
diplomats the elections will be "just and democratic,"
Interfax reported on 30 November. Nazarbayev said he is
"pained" by U.S. criticism of the election process,
specifically the court decision barring former Prime
Minister Akezhan Kazhegeldin from participating because
of a minor offense. But he added that the U.S. statement
"mixes two separate problems--one is [related to]
specific election legislation, the second is the
practical implementation of the laws of a country,"
ITAR-TASS reported. Pensioner Karishal Assanov, told
RFE/RL correspondents on 29 November that he was
withdrawing his candidacy for the elections as he did
not wish to take part in the "farce" being organized in
Kazakhstan. BP

TAJIKISTAN UNPREPARED FOR WINTER. ITAR-TASS reported on
29 November that there is a critical shortage in
Tajikistan of supplies necessary for the winter.
Compared with 1997, Tajikistan's coal supplies are down
by half and domestic heating oil by 21 percent.
Industries purchased less than half the oil they did in
1997, when there were also shortages. The government
cannot afford to purchase additional supplies. Consumer
goods are also reported to be in short supply, but 98
percent of those goods are dealt with by the private
sector. Also, the government has already rationed
electricity supplies to homes and industries. BP

END NOTE

REALIST LUZHKOV VERSUS POPULIST LUZHKOV

by Floriana Fossato

	The Moscow city government's budget meeting last
week was dominated by two issues: how to maintain
services amid the deep economic turmoil in the country
and where to get the necessary funds to guarantee
existing city programs. For the populist mayor of
Moscow, Yurii Luzhkov, the realization that the Moscow
city government's once-bottomless coffers are running
dry poses several important challenges.
	The first of those challenges is economic. Until
recently, Moscow was considered an island of relative
prosperity in a sea of economic disarray. But as
Russia's economic crisis deepens, both the image of the
Moscow miracle and Luzhkov's reputation as one of the
few Russian political bosses who can get things done are
rapidly coming under threat. Political analysts say that
to preserve his image, Luzhkov the populist has to
transform himself into Luzhkov the realist.
	At the meeting of the Moscow city government on 24
November, deputy mayor Yurii Razlyak said that projected
budget revenues in 1999 will be the same or even less
than this year. Other city officials said the situation
is made worse by the fact that tax collection is
shrinking dramatically. And in order to service some
$1.5 billion in foreign debt, Moscow will have to pay
$120 million in 1999, which, according to city
officials, is equal to 45 percent of the city's hard-
currency reserves. One of Luzhkov's most persistent
critics, Aleksei Ulyukaev, deputy director of the
Institute for the Economy in Transition, told RFE/RL
that "Moscow's budget situation is very serious," adding
that "the real base of the budget is shrinking."
	Luzhkov's second challenge stems from the dilemma
over how to introduce unpopular measures without
damaging his position as one of the main contenders for
the Russian presidency. Political analysts say that
Luzhkov's launching in mid-November of a political
movement, Otechestvo [Fatherland], represents the
opening of his presidential campaign. Having decided to
abandon a short and largely unproductive flirtation with
the Communists, Luzhkov said his movement will "absorb
everything that is logical from the left and everything
that is logical from the right" but will "avoid all
radicalism either of the right or the left."
	Acutely aware of the need to maintain social
services despite Moscow's economic troubles, Luzhkov
told city officials at the 24 November city government
meeting that social programs, including plans to build
new schools and medical clinics in Moscow, should
continue. Financial officials replied that funds to make
up for the shortfall in tax revenues could come from new
Western credits, from increased revenue earned by
government-controlled alcohol sales, or from the
introduction of a new sales tax and other unpopular
fiscal measures. Saying that fresh Western credits
should be avoided, Luzhkov was forced to approve some
unpopular moves.
	Among those moves is an increase by one-third of
monthly Moscow city travel cards beginning in January.
Moscow apartment rents and utilities will rise by 30-50
percent over the next few months. And the cost of water
will increase 45 percent in December, while rents will
go up another 50 percent next April and heat and
electricity by 30 percent next July.
	According to Ulyukaev, unpopular measures have been
taken but "without too much publicity." He added that
Luzhkov's social program for Moscow is unrealistic and
"financing it will be difficult, but [for political
reasons] it must continue until the presidential
elections."
	At the city government meeting, Luzhkov also
introduced a new colleague, President Boris Yeltsin's
former spokesman, Sergei Yastrzhembskii, who was
abruptly fired in mid-September. Following much
speculation, Yastrzhembskii was appointed Luzhkov's
deputy in charge of public relations and regional and
international affairs. Yastrzhembskii, for his part, has
not denied Russian media reports that he was fired by
Yeltsin for promoting the Moscow mayor as a candidate
for prime minister over Yevgenii Primakov. (Other former
Yeltsin aides, including ex-Security Council chief
Andrei Kokoshin and former Interior Minister Anatolii
Kulikov have also joined forces with Luzhkov.)
	Russian media had suggested that Yastrzhembskii
would be brought into the Moscow government to promote
Luzhkov in his presidential bid. In the past, the former
presidential spokesman was widely credited with giving a
smooth, professional face to the Kremlin press service
and frequently rescuing Yeltsin from his own words and
actions.
	Attending his first city hall meeting last week,
Yastrzhembskii did not rule out the possibility of
assuming the role of Luzhkov's new image maker. He
warned journalists that the race for the presidency has
not yet officially started but said that if he were
asked to help Luzhkov, he would certainly do so. "If the
electoral trumpet sounds, I think I will take part in
this campaign," he commented.

The author is a Moscow-based RFE/RL correspondent.

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