If we are to live together in peace, we must first come to know each other better. - Lyndon B. Johnson
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 233, Part I, 4 December 1998


________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 233, Part I, 4 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

* RUBLE CONTINUES TO PLUNGE

* RUSSIA WANTS NEW CFE BEFORE NATO EXPANSION

* OSCE CALLS FOR POSTPONEMENT OF KAZAKH ELECTIONS

End Note: THE STATE OF ECONOMIC EMERGENCY IN BELARUS
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RUSSIA

RUBLE CONTINUES TO PLUNGE. The ruble fell for the sixth
consecutive day on 4 December to 19.57 rubles per
dollar, losing almost four percent of its value from the
previous day. The rate was one of the lowest in three
months but remained above the post-devaluation nadir of
20.82 rubles to the dollar recorded on 9 September. The
ruble has dropped about 15 percent since 1 November.
Bloomberg attributed the decline to the Central Bank's
loosening of restrictions imposed on exporters and
commercial banks access to foreign currency, while the
"Moscow Times" on 3 December quoted traders as saying
that continuing uncertainty over the restructuring of
Russia's domestic debt is behind the plunge. The Central
Bank set the ruble's official exchange for 4 December at
18.83 rubles per dollar. JAC

RUSSIA WANTS NEW CFE BEFORE NATO EXPANSION... Foreign
Minister Igor Ivanov said on 3 December that an updated
version of the Conventional Forces in Europe (CFE)
Treaty must be ratified before NATO admits any former
Warsaw Pact countries. Poland, Hungary, and the Czech
Republic are scheduled to join NATO in April. JAC

...KALININGRAD CALLED DETERRENT, WEAK LINK. Meanwhile,
Deputy Defense Minister Nikolai Mikhailov told reporters
on 2 December that troops in Kaliningrad Oblast will
play the role of a "deterrent" in response to the
possibility of Lithuania and Poland joining NATO.
However, he noted that the deployment of those troops is
not intended to "intimidate." "Poland is joining NATO,
and we've got to put up with this...whether we like it
or not," he commented. The same day, "Nezavisimaya
gazeta" labeled Kaliningrad as one of most unstable
regions in Russia. The newspaper noted that the prospect
of the Baltic States joining NATO puts the region in a
complex geopolitical situation. In addition, the oblast
is isolated territorially from the rest of Russia and
depends on imported goods for 80 percent of its
consumption. Moreover, a quarter of its population is
unemployed. "Nezavisimaya gazeta" receives financial
support from Boris Berezovskii's LogoVAZ group. JAC

YELTSIN SENDS BACK REGIONAL ECONOMIC LAW. President
Boris Yeltsin described a draft law on the organization
of economic associations of Russian regions as
"unconstitutional," Interfax reported on 3 December. The
president recommended further work on the bill, which
was passed by the State Duma in the first reading on 21
October. The next day, "Izvestiya," commenting at length
on Prime Minister Yevgenii Primakov's recent call for a
strengthening of vertical authority, concluded that the
restoration of vertical power in which all levels are
elected will require changes to the Russian
Constitution. The newspaper also noted that while "the
governors want to abolish the institution of
presidential representatives in the regions," Moscow
will still demand some means of influencing the
governors. LUKoil and Oneksimbank are major investors in
"Izvestiya." JAC

LUZHKOV SAYS NO TO KIRIENKO, YES TO NDR? Moscow Mayor
Yurii Luzkov ruled out an alliance with former Prime
Minister Sergei Kirienko on 3 December after
"Kommersant-Daily" carried a report the previous day
that negotiations were taking place between them (see
"RFE/RL Newsline," 2 December 1998). Luzhkov declared
that he has no intention of uniting with those who were
responsible for the events of 17 August. Meanwhile, in
an interview with "Segodnya" on 3 December, "Our Home is
Russia" (NDR) faction leader Aleksandr Shokhin said that
the NDR is ready to sign a "non-aggression pact" with
Luzhkov's movement in which both groups would unite to
take away votes from leftist organizations. In response
to the question of whether former Prime Minister Viktor
Chernomyrdin would remain the NDR's future presidential
candidate, Shokhin avoided answering directly, saying
only that the NDR has the "right to claim the post of
prime minister" in the coalition. JAC

SBERBANK PAYS OUT FOR SOME CUSTOMERS. After missing its
original deadline of 30 November, Sberbank offered
customers access to savings transferred from Menatep,
Most Bank, Mosbiznesbank, and Promstroibank on 3
December. Customers from Inkombank and SBS Agro still
have no access. A Sberbank spokesman said a statement on
the SBS Agro accounts will be issued later. The fate of
Inkombank customers' accounts remains uncertain, since
the bank failed to complete necessary paperwork and no
longer has a license (see "RFE/RL Newsline," 1 December
1998). Earlier, the Central Bank had promised to cover
all savings accounts transferred to Sberbank. JAC

ANOTHER ST. PETERSBURG CANDIDATE ARRESTED. Another
would-be participant in the already scandal-ridden St.
Petersburg elections was arrested on 3 December. Sergei
Nirov, a member of the Honor and Motherland political
movement, led by Krasnoyarsk Krai Governor Aleksandr
Lebed, was picked up on suspicion of making false
charges against a police investigator, Russian
Television reported. ITAR-TASS reported that "libelous
flyers" with a forged imprimatur of the Central Election
Committee have been circulating in the city. Those
flyers make false claims about the past criminal records
and drug habits of certain candidates. Meanwhile, some
candidates have found that opponents with the same name
are running against them in their own districts, and
local individuals have been offering their votes for
sale on the Internet, Reuters reported on 4 December.
Elections for the local assembly are scheduled for 6
December. JAC

WORKERS LAUNCH NEW PROTESTS. Civilian defense workers in
Rostov na Donu staged a work stoppage on 3 December to
protest unpaid wages, NTV reported. In Khabarovsk Krai,
43 hospital workers began a hunger strike on 2 December
to protest a growing backlog of unpaid wages, ITAR-TASS
reported. Personnel at a nearby emergency medical aid
service are also on strike. According to a local health
workers' union, unpaid wages amount to more than 260
million rubles ($14 billion). Meanwhile, around 1,500
mourners gathered in Ulyanovsk for the funeral of the
43-year-old teacher who died while on a hunger strike,
AFP reported. JAC

GLASNOST ENDS IN STAVROPOL? Stavropol Krai Governor
Aleksandr Chernogorov has signed a new, vaguely worded
document on official secrets, "Izvestiya" reported on 3
December. According to the newspaper, local officials
are broadly interpreting that document in order to
deflect a variety of media inquiries. The krai
government finance minister said that the question of
how much budget money was spent on celebrating the
anniversary of the Komsomol in the region has been
declared an official secret. JAC

RUSSIAN SMOKERS WOULD RATHER SWITCH. Russian-made
cigarettes are enjoying new popularity as the price
differential between a pack of Marlboros and a pack of
Russian Yava cigarettes has increased almost 200 percent
since early August, the "Moscow Times" reported on 4
December. Because of import tariffs and the devaluation
of the ruble, a pack of Marlboros now sells for 18.50
rubles ($1), compared with 7 rubles previously. Russian
cigarette production soared 25 percent in October,
compared with the previous month. JAC

FORMER VOLOGDA OBLAST GOVERNOR SENTENCED. Nikolai
Podgornov has been sentenced to a one-year suspended
jail term for using public funds to buy parts for his
jeep, AFP reported on 3 December. The local prosecutor
had accused Podgornov of embezzling public funds, but
the charges were dismissed for lack of evidence. JAC

FOREIGN PEACE GROUPS LABELED CORRUPTERS OF YOUTH.
"Nezavisimaya gazeta" reported on 2 December that a
three-day conference organized by the Westminster
Democracy Foundation in Novgorod was "teaching Novgorod
youths how to escape conscription and avoid criminal
responsibility." According to the daily, two
international organizations, the Peacekeeping and Social
Development Center and the Movement Against Violence,
were joined by representatives from the Soldiers'
Mothers Committee, the Human Rights Protection Center,
and "pacifists from Finland, Great Britain, and the
U.S." JAC

TATAR OPPOSITION OUTLINES OBJECTIVES. Speaking at a news
conference in Kazan on 2 December, the recently elected
chairman of the All-Tatar Public Center, Zali Zainullin,
said that organization's priorities are to "gain true
independence for Tatarstan and eliminate the bureaucracy
in both the Tatarstan and Russian governments," RFE/RL's
Kazan bureau reported. Zainullin, a retired colonel, is
known as the "Tatar Dudaev" for his radical views, which
until recently have not enjoyed wide support. The center
is also campaigning for multi-candidate presidential
elections and for the cancellation of what it terms
grandiose and unnecessary construction projects,
including the Kazan subway. The center has accused the
Russian federal authorities of igniting ethnic and
religious conflicts in Tatarstan, according to
"Nezavisimaya gazeta" on 4 December. LF

CHECHEN PRESIDENT WILL RUN FOR SECOND TERM. In an
interview with Interfax on 3 December, Aslan Maskhadov
conceded that the Chechen opposition "has influence on a
certain category of the population" but said that its
systematic attempts to sabotage his policies, including
those aimed at combating crime, will not succeed.
Maskhadov said that most of Chechnya's population
supports him and that he intends to run for a second
presidential terms in January 2002. Maskhadov also spoke
highly of Russian Premier Primakov's role in resuming a
dialogue between Moscow and Grozny and his efforts to
implement the agreements on financial aid for Chechnya
reached at their talks Vladikavkaz in late October (see
"RFE/RL Newsline," 30 October 1998). Also on 3 December,
Maskhadov's spokesman, Mairbek Vachagaev, said the
president will not attend an upcoming conference in
Nalchik of Muslim leaders of Russian regions. LF

TRANSCAUCASUS AND CENTRAL ASIA

OSCE CALLS FOR POSTPONEMENT OF KAZAKH ELECTIONS... The
OSCE on 3 December warned Kazakhstan that if the country
goes ahead with planned early presidential elections
next month, it "could severely damage its reputation as
a country committed to democratization," an RFE/RL
correspondent in Almaty reported. The OSCE criticized
the decision of the country's Central Elections
Committee to exclude two candidates from the elections
"because of minor administrative convictions." It also
warned that the OSCE will not consider the election
results valid if the ballot is held, as planned, on 10
January. The October decision of Kazakhstan's parliament
to hold elections within the following three months
"does not allow for adequate preparations to ensure a
democratic election," the OSCE argued. The organization
added that there was no equal media access for those
taking part in the elections and that voters are being
intimidated "to force their support" for incumbent
President Nursultan Nazarbayev. BP

...WHILE KAZAKH FOREIGN MINISTER PRAISES OSCE. Kazakh
Foreign Minister Kasymjomart Tokayev, addressing the
OSCE foreign ministers' conference in Oslo on 3
December, focused his comments on positive developments
in his country, RFE/RL correspondents reported. Tokayev
spoke of the "progress achieved by Kazakhstan in
cooperation with the world, including European states."
He also said the opening of an OSCE center in his
country will promote civil society. And he praised OSCE
activities in Central Asia as having "given strong
impetus to the advancement of democracy in the region,"
Interfax reported. BP

KAZAKH OPPOSITION MEETS IN MOSCOW TO MAP OUT STRATEGY.
Leaders from some of Kazakhstan's opposition groups met
in Moscow on 3-4 December to discuss strategy, RFE/RL
correspondents reported. The meeting was chaired by
former Kazakh Prime Minister Akezhan Kazhegeldin. The
group discussed a common approach in the struggle
against the "totalitarian regime" in Kazakhstan and in
seeking to establish democracy in the country. The group
said it was forced to meet in Moscow owing to the
"oppressive measures of the Kazakh government against
them and the impossibility of holding such a meeting on
Kazakh territory." It also adopted an address to be
distributed among the Kazakh nation. BP

TURKMENISTAN TO INTRODUCE MORATORIUM ON DEATH SENTENCE.
At the OSCE conference in Oslo on 3 December, Turkmen
Foreign Minister Boris Shikhmuradov announced his
country's intention to impose a moratorium on the death
sentence, "Nezavisimaya gazeta" reported. Shikhmuradov
said legislation will be introduced that will reduce the
number of crimes punishable by the death penalty. He
also commented that "by taking this step, Turkmenistan
proved in practice its principled loyalty to humanistic
values and OSCE ideals." Turkmenistan's decision comes
at a time when many human rights organizations have been
complaining about the fate of two people found guilty of
attempting to kill the Turkmen president. Khoshaly
Garaev and Muhhametguly Aimuradov had been expected to
have death sentences handed down at a 30 November court
session "behind closed doors." The two allegedly had
been plotting to overthrow the government while in
prison on other charges. The 30 November session,
however, was postponed. BP

TAJIK OPPOSITION GRANTED MORE GOVERNMENT POSTS. The
United Tajik Opposition has been granted five more
government positions, ITAR-TASS reported on 3 December.
The post of first deputy chairman of the country's Tax
Committee was given to Aslidin Sohibnazarov. Alijan
Latifi will take over the Ministry of Environmental
Protection, Mirzomuhammed Mirzohodi the Ministry of
Culture, and Hukmiddin Saaddin the Ministry of
Communications. Zayd Saidov has been named deputy
chairman of the Committee for Precious Stones. BP

KILLERS OF OTAKHON LATIFI ARRESTED. Tajik law
enforcement authorities say they have caught the persons
responsible for murdering leading opposition figure
Otakhon Latifi, ITAR-TASS reported on 3 December. Tajik
President Imomali Rakhmonov said he believes the murder
was politically motivated and that he is "99 percent
sure" those in custody are responsible. The search
continues for those who ordered Latifi killed. The
murder took place outside his Dushanbe home on 22
September. BP

UZBEK-TAJIK BORDER REMAINS CLOSED. The Uzbek-Tajik
border has been closed for the past two weeks, the
"Izvestiya" reported on 4 December. Uzbekistan closed
the border when relations with Tajikistan grew
increasingly strained following a rebellion in northern
Tajikistan in early November. The Tajik government
claims that uprising was made possible in part by Uzbek
support, but Uzbekistan continues to deny those charges.
The article claims that occupants of the few cars with
Tajik license plates that are allowed to cross the
border are forced to pay a $260 fee. BP

OSCE CALLS FOR RESUMPTION OF KARABAKH TALKS. Speaking in
Oslo on 3 December at the OSCE foreign ministers'
meeting, Chairman-in-Office Bronislaw Geremek called for
a speedy resumption of negotiations on resolving the
Karabakh conflict, an RFE/RL correspondent reported.
Geremek said he hopes that the conflict parties will
demonstrate the political resolve and willingness to
consider all legitimate interests and concerns. Armenian
Foreign Minister Vartan Oskanian had said at that
meeting that Azerbaijan's rejection of the most recent
OSCE Minsk Group peace plan demonstrates Baku's
inability or unwillingness to seek a solution to the
conflict based on mutual compromises. His Azerbaijani
counterpart, Tofik Zulfugarov, told Reuters he believes
the mediators will abandon the concept of a "common
state," which is contained in the latest peace plan, in
the light of growing international opposition.
Zulfugarov repeated Baku's willingness to grant the
unrecognized Nagorno-Karabakh Republic "a high degree of
self-rule." LF

ARMENIA WANTS IMPROVED RELATIONS WITH TURKEY. Speaking
in Oslo on 3 December, Oskanian also said that Yerevan
is ready to start "a productive dialogue" with the new
Turkish government once it is formed, RFE/RL reported.
Oskanian said that Armenia's withdrawal of its previous
objections to Istanbul as the venue for the next OSCE
summit, now scheduled for 14-15 November 1999, is
intended to promote better bilateral and regional
cooperation (see "RFE/RL Newsline," 25 May and 30
November 1998). LF

GEORGIAN CURRENCY LOSES VALUE. The Georgian lari fell
from 1.48 to $1 on 25 November to 1.62 on 3 December,
despite intervention by the National Bank on 30 November
on the recommendation of the IMF, Interfax reported. One
month ago, the lari was trading at 1.35 to $1.
"Nezavisimaya gazeta" on 4 December quoted unnamed
experts as describing Georgia's financial situation as
catastrophic and attributing the deteriorating economic
situation to the huge budget deficit, endemic corruption
and tax evasion, and industrial stagnation. In his
weekly radio address on 30 November, President Eduard
Shevardnadze had said that international financial
organizations are prepared to provide emergency
assistance but that IMF recommendations will necessitate
"difficult and painful" decisions. LF

GEORGIAN PRESIDENT DEPLORES DEFILEMENT OF JEWISH
CEMETERY. President Shevardnadze on 3 December condemned
as "barbaric and inexplicable" the destruction by
vandals of some 50 gravestones in Tbilisi's Jewish
cemetery the previous day, Interfax reported.
Shevardnadze said that the attack, for which no one has
yet claimed responsibility, will not affect Georgians'
traditionally good relations with the country's Jewish
minority. LF

ARE AZERBAIJANI CONSCRIPTS DYING OF MALNUTRITION? Naval
Captain Janmirza Mirzoev told journalists in Baku on 3
December that hundreds of servicemen in the Azerbaijani
army suffer from malnutrition and that some have died as
a result, Turan reported. Mirzoev also commented that
Academician Zia Buniatov, whose February 1997 murder has
not been solved, was in possession of documents proving
embezzlement within the country's Defense Ministry at
the time of his death. Those documents later vanished,
Mirzoev claimed. LF

END NOTE

THE STATE OF ECONOMIC EMERGENCY IN BELARUS

by Jan Maksymiuk

	It seems as if suddenly things have started going
wrong for Belarusian President Alyaksandr Lukashenka .
At least, that is the impression one gains from
Belarusian official propaganda. As recently as in
August, the Statistics Ministry reported a remarkable 12
percent growth in the country's GDP. When the financial
crisis hit Russia that month, Lukashenka boasted that
Belarus was the only oasis of economic stability on
post-Soviet territory.
	In September, Lukashenka vowed to organize
"centralized food supplies" to stave off famine in
Russia and even offered to act as economic adviser to
Russian President Boris Yeltsin. One month later, in
October, with Belarus facing serious food shortages,
Lukashenka's self-assuredness began to subside. And by
November, Lukashenka himself began needing advice. "Why
are our people becoming poorer and poorer every month
while we are so dynamically developing industry and
agriculture?" he asked his ministers at a televised
cabinet meeting. None was able to provide an answer.
	Signs of a looming calamity in Belarus's Soviet-
style economy began to appear in early September, when
Belarusians launched a run on shops in a bid to use up
their meager savings before they became completely
worthless. Although the National Bank maintained the
official dollar exchange rate below 50,000 Belarusian
rubles, the street exchange rate plummeted to 120,000.
And in noncash transactions between Russian and
Belarusian companies, one dollar was equal to 220,000
Belarusian rubles. By the beginning of December, those
figures had nearly doubled.
	Owing to the de facto insolvency of Russia, which
accounted for 70 percent of Belarusian exports before
the current economic crisis, Belarusian enterprises have
been forced to reduce output and/or hoard products in
storehouses. Experts estimate that Belarus's industrial
production will continue to slump by up to 12 percent
monthly at least for the next four months. Every month,
Belarusian revenues fall short by some $100 million
because of reduced exports to Russia.
	The acute shortage of foodstuffs, which has led to
rationing in many regions, may be attributed to several
factors. First, Belarus's grain harvest this year was
down by 1 million tons, compared with 1997. Second,
state-controlled food prices are too low to make food
production profitable. Third, Belarus has to supply food
to Russia to repay its $250 million gas debt. And
fourth, it cannot be ruled out that, owing to much lower
food prices in Belarus, some goods are smuggled into
Russia and Ukraine, particularly since there are no
customs controls on the border with those countries.
	To deal with the crisis, the Belarusian president
in November set up a "national headquarters"--an
emergency task force headed by his administration chief,
Mikhail Myasnikovich. In this way, Lukashenka has
prevented the cabinet from managing the economy. Prime
Minister Syarhey Linh has been subordinated to
Myasnikovich and charged with the task of normalizing
food provisions in the Minsk region.
	None of the administrative measures taken by the
authorities to improve food supplies--including the
introduction of police and customs patrols on the
Belarusian-Russian border--has proven effective,
however. In November, the government was forced to
increase food prices by an average of 30-40 percent. The
price of vodka--which in the former Soviet Union
continues to affect political and social trends among
the electorate--went up by 75 percent in one fell swoop.
Lukashenka publicly blamed the prime minister for that
hike, accusing him of "hating the people." The president
did not, however, reduce the price.
	In addition to price increases, the government has
made some other moves toward liberalizing financial
policies. National Bank Chairman Pyotr Prakapovich once
again pledged to introduce a single exchange rate (to
replace the current four) and limited the devaluation
rate of the Belarusian ruble to 1,500 rubles per
interbank currency-exchange session. Commercial banks
have been allowed to sell and buy hard currency at rates
exceeding the official one by up to 50 percent. And
according to some reports, the National Bank promised
the IMF in mid-November to considerably limit money
emissions, until now the most popular method of
stimulating production in Belarus. In other words,
Belarus has tentatively resorted to some market economy
tools.
	However, it is too early to say that Belarus has
moved over to such an economy. Rather, it is the state
of economic emergency and the urgent need to obtain a
$100 million loan from the IMF that has prompted the
Belarusian leadership to take such unorthodox (by
Belarusian standards) and unpopular measures. At the
same time, facing the threat of trade union mass
protests, Lukashenka vowed to control prices after the
November hike and not to increase them by more than 3-4
percent a month. And in a successful bid to avert a
trade union rally on 2 December, the "national
headquarters" pledged to increase wages. Since Belarus
does not have large hard-currency revenues, that pledge
can only mean printing more inflationary money.
	This week, the authorities were able to make the
trade unions back down and thereby extinguish the
incipient social unrest. But it is hardly conceivable
that the government will be able to substantially
increase the living standards of Belarusian workers,
whose average monthly wage is equal to some $35. It is
only a matter of time until workers start making demands
again. The authorities, for their part, are finding it
increasingly difficult to meet such demands as they
continue to shy away from radically reforming Belarus's
ineffectual and antiquated economy.

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