RFE/RL NEWSLINE Vol 2, No. 238, Part I, 11 December 1998

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RFE/RL NEWSLINE Vol 2, No. 238, Part I, 11 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

* NEW REGIONAL FOOD RESTRICTIONS IMPOSED

* IMF SLAMS GOVERNMENT'S TAX PLANS

* AZERBAIJANI JOURNALISTS RESUME HUNGER STRIKE
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RUSSIA

NEW REGIONAL FOOD RESTRICTIONS IMPOSED. In a repetition
of events in the regions after the mid-August
devaluation of the ruble, the Vologda Oblast
administration announced on 10 December a ban on the
export of milk and meat outside the oblast, while
Krasnoyarsk Krai Governor Aleksandr Lebed issued an
instruction the next day limiting shipments of flour,
meat, pasta, butter, and other food products beyond the
krai's borders. Sergei Gromov, deputy governor of
Vologda Oblast, told ITAR-TASS that measures are
necessary in order to defend the interests of the local
food industry. Meanwhile, in Yaroslavl Oblast, Governor
Anatolii Lisitsyn slashed subsidies for collective farms
that sell their products to consumers outside the region
who are able to pay higher prices (see "RFE/RL
Newsline," 10 December 1998). JAC

IMF SLAMS GOVERNMENT'S TAX PLANS. IMF First Deputy
Managing Director Stanley Fischer told reporters in
Washington on 10 December that the IMF is "very worried
about cutting taxes without improvements in tax
collection." Fisher added that while Russia's tax system
is overly complicated and needs lower rates, a reduction
in value-added tax is ill-advised, Reuters reported. The
previous day, Federal Tax Service head Georgii Boos told
reporters that IMF Managing Director Michel Camdessus
believes that Russian taxes should be lowered and that
Camdessus "would be revising his position." He added
that the government's package of tax cuts is primarily
designed to boost economic growth and that tax
collection will likely not increase until 2000. Tax
policy will be a key issue at upcoming talks with the
IMF mission that is scheduled to arrive in Moscow in
January. JAC

GOVERNMENT TO SUBMIT BUDGET LATER... Finance Ministry
spokesman Oleg Zhukov told Reuters that the government
will probably not submit the budget to the State Duma on
11 December as had been previously scheduled. He cited
the need for additional calculations and said it would
most likely be submitted over the next few days. The
government approved the budget the previous day.
According to "Trud-7," the budget is based on an
exchange rate of 21.5 rubles per dollar, which is close
to the previous day's official exchange rate of 20.86
rubles per dollar. Annual inflation is estimated at 30
percent. The final figure for the budget deficit is
101.5 billion rubles ($4.9 billion), which is 3 billion
rubles lower than the budget deficit considered by the
Finance Ministry at the beginning of this month (see
"RFE/RL Newsline," 1 December 1998). JAC

...AS FOREIGN CREDITORS REJECT GKO PLAN. The deficit
will wind up even bigger should the government not be
able to arrange more than $7 billion in new loans from
foreign lenders, including the IMF and World Bank, and
limit its foreign debt repayments to $9.5 billion, as
the budget plan projects. Finance Minister Mikhail
Zadornov told reporters on 10 December that the
government is "counting on understanding by creditors
and investors in restructuring of both foreign and
domestic debts." Meanwhile, foreign holders of short-
term treasury bonds have rejected the government's plan
to start swapping new bonds for old defaulted ones as
early as next week. CS First Boston, which co-chairs a
committee of foreign banks, issued a statement saying
that Russia will "aggravate its financial isolation if
it unilaterally imposes unfair restructuring terms on
foreign investors." London Club creditors have not yet
responded to a government proposal to restructure debt
of the Soviet Union, Interfax reported on 11 December.
JAC

HOW THE MIGHTY BANKS HAVE FALLEN. Smaller regional banks
have displaced some of Russia's once powerful banks from
the rankings of the country's largest financial
institutions compiled by "Kommersant Dengi,"
"Kommersant-Daily" reported on 9 December. Menatep,
Inkombank, and Rossiiskii Kredit have plummeted from the
ranks of the top 10 based on capital, falling below even
the top 200 banks. Meanwhile, the "Moscow Times"
reported on 11 December that Gazprombank, Sobinbank,
Toribank, and the Bank of Moscow have boosted their
standing. The Bank of Moscow, in particular, soared from
32 to 8 on a ranking compiled by the Rating Information
Center, increasing its capital from July to October by
48.7 percent, the daily reported. Former customers of
Menatep, Most and Promstroibank have withdrawn only 33
percent of their accounts from Sberbank, ITAR-TASS
reported on 8 December. JAC

DUMA COMMITTEE FORMED TO INVESTIGATE STAROVOITOVA CASE.
The Duma on 9 December formed a committee to investigate
the murder of slain deputy Galina Starovoitova. Deputy
Valerii Vorotnikov (Communist Party) will chair the
committee and Nikolai Astafiev (Liberal Democrat Party)
will be his deputy, "Segodnya" reported. The committee
will report to the Duma after 20 January on the results
of its investigation and on how much money it has spent.
JAC

DUMA, FOREIGN MINISTER ENGAGE IN MORE NATO-BASHING. The
so-called Anti-NATO group within the Duma wants to link
ratification of START-II to a guarantee of no further
NATO expansion. Interfax reported on 10 December that
any recommendation adopted by the group would be non-
binding. Deputy speaker and member of the People's Power
faction Sergei Baburin, who heads the group, said NATO's
eastward expansion signifies "a systematic
destabilization" of Europe aimed at creating a new world
order that excludes Russia and Serbia. The same day,
Foreign Minister Igor Ivanov said that attempts to place
NATO at the center of a world collective security system
are "counter productive" and "extremely dangerous." JAC

CHECHEN BEHEADING SUSPECT ARRESTED. Chechen Deputy Prime
Minister Atgeriyev told ITAR-TASS on 11 December that
Grozny has arrested Apti Abitayev in connection with the
beheading of four Western hostages. Atgeriyev said that
the Chechen authorities are continuing the search for
others involved. The previous day, Grozny officials
indicated that they would be happy to have the
assistance of Britain's Scotland Yard for the
investigation. And they showed a seized film in which
the hostages were forced to confess to being agents of
Western and Israeli intelligence services. Also on 10
December, Chechnya's senior prosecutor, Mansur Tagirov,
was abducted on 10 December by as yet unidentified
individuals and then released the next day. PG

CHECHNYA TO EXPEL ARAB TERRORIST GROUP. Deputy Premier
Yusup Soslanbekov told the "Al-Hayat" newspaper on 10
December that Grozny intends to expel an Arab terrorist
group led by Hattab, a native of Jordan, ITAR-TASS
reported. Soslanbekov said that his government opposes
the republic being converted into a "terrorist morass."
But neighboring republics reportedly closed their
borders with Chechnya on 10 December in order to prevent
terrorists from moving to their territories. PG

YELTSIN BACK AT KREMLIN. President Boris Yeltsin
reported for work at the Kremlin on 11 December, two
days after leaving the hospital to recuperate at his
home in the country. On his agenda are meetings with
several top aides. JAC

RIGHTIST DEMOCRATS HOLD FOUNDING CONGRESS. The new
coalition of rightist democrats held a founding session
on 10 December in a Moscow hotel. According to
"Izvestiya," the question of leadership of the new
alliance was avoided by having Soviet President Mikhail
Gorbachev's adviser Aleksander Yakovlev give the opening
address and head the alliance's political commission.
Former First Deputy Prime Minister Boris Nemtsov will
chair the regional commission, former Federal Tax
Service head Boris Fedorov the economics commission,
former acting Premier Yegor Gaidar the program
commission, and former First Deputy Prime Minister
Anatolii Chubais the organization commission. Former
Prime Minister Sergei Kirienko, deputy chief of the
presidential administration Oleg Sysuev, and mayors of
several cities such as Abakan, Tolyatti, Tambov, and
Tver also participated in the conference. Fedorov told
reporters that he would not want to be in a party headed
by Gaidar or Chubais and that "people who have less
chance of attracting votes will be less visible." JAC

SOLZHENITSYN TURNS 80. Celebrated Russian writer and
Nobel Prize winner Aleksandr Solzhenitsyn turned 80 on
11 December. President Yeltsin signed a decree granting
Solzhenitsyn the order of Saint Andrei, according to
press spokesman Dmitrii Yakushin, Interfax reported.
"Kommersant-Daily" called Solzhenitsyn the only writer
living in Russia who can be called great without a
second thought. JAC

TRANSCAUCASUS AND CENTRAL ASIA

NO DETAILS YET ON MURDER OF ARMENIAN DEFENSE OFFICIAL.
Armenian authorities on 10 December announced they have
formed a special prosecution team to investigate the
murder of Deputy Defense Minister Vagram Khorkhoruni
earlier that day, ITAR-TASS reported. Yerevan has not
yet provided any further details on this latest of a
series of murders of Armenian officials. PG

AZERBAIJANI JOURNALISTS RESUME HUNGER STRIKE. Seven
newspaper editors on 10 December continued their hunger
strike to protest the government's crackdown on press
freedom, Turan reported. The protest began on 18
November but was interrupted for the previous 10 days as
a result of disagreements among the organizers. After
several days, the seven will be replaced by other
journalists, who will then be replaced by a third group.
The journalists say they will continue their protest
until the government ends its "pressure" on the press.
PG

SHEVARDNADZE URGES INTERNATIONAL GROUPS TO PROTECT
REFUGEES... Speaking on the 50th anniversary of the
adoption of the UN Universal Declaration of Human
Rights, Georgian President Eduard Shevardnadze called on
international groups to provide more help to protect
refugees from Abkhazia, ITAR-TASS reported on 10
December. Shevardnadze said that what is taking place in
Abkhazia is a form of "ethnic cleansing and genocide."
PG

...WHILE OPPOSITION PROTESTS ON HUMAN RIGHTS DAY. Some
400 opposition supporters staged a protest in Tbilisi on
10 December to call attention to what they say are human
rights abuses by President Shevardnadze, ITAR-TASS
reported. A few of the participants clashed briefly with
the police. The protesters called on the UN to
investigate and assess the events that led to the
overthrow of former President Zviad Gamsakhurdia. PG

GEORGIAN OFFICIAL SEEKS COOPERATION WITH RUSSIA.
Georgian State Minister Vazha Lordkipanidze told
Interfax on 10 December that his recent meetings with
Russian Prime Minister Yevgenii Primakov have convinced
him that there are no "objective obstacles" to improved
ties between the two countries. Lordkipanidze added that
Georgia's involvement in an East-West transport corridor
is not directed against Russia in any way. At the same
time, however, the Georgian leader said that Tbilisi is
not exploring "prospects for cooperation with NATO" at
the present time. PG

TAJIK GOVERNMENT OFFERS ZIYOYEV GOVERNMENT POST. The
government has offered UTO field commander Mirzo Ziyoyev
the post of deputy defense minister (see "RFE/RL
Newsline," 9 December 1998), Interfax reported on 11
December. The UTO nominated Ziyoyev as defense minister
several times but the government rejected that
nomination on each occasion. The head of the UTO press
service, Sulton Hamadov, said that if Ziyoyev accepts
the offer, he will likely be named chairman of the joint
chiefs of staff and have a seat on the Security Council.
BP

HUMAN RIGHTS IN KAZAKHSTAN CRITICIZED. At a 10 December
roundtable discussion in Almaty to mark the 50th
anniversary of the UN Declaration on Human Rights, the
deputy director of Kazakhstan's International Bureau on
Human Rights, Jemis Turmagambetova, criticized the
country's progress in this are, ITAR-TASS reported.
Turmagambetova said Kazakhstan has "only declared" the
right to freedom of speech but has done nothing to
implement it. She added that laws on elections are "not
fully developed" and do not meet internationally
recognized standards. BP

AZAMAT TO BECOME POLITICAL PARTY. Leaders of Azamat have
decided to turn the movement into a registered political
party, RFE/RL correspondents in Almaty reported. Petr
Svoik, Murat Auezov, and Galym Abelseitov said that the
first session of the new party will be held before
year's end. They also criticized the political
activities of former Prime Minister Akezhan Kazhegeldin,
who they say has become more concerned about his own
political agenda and is paying little attention to the
plight of the nation. Kazhegeldin intended to run in
presidential elections next month but is barred from
doing so because of misdemeanor charges. Auezov said
that since there is no way to stop the 10 January
presidential elections, it is all the more important to
form political parties that take "into consideration the
realities and current situation in the country." BP

OFFICIAL SAYS $160 BILLION NEEDED TO DEVELOP
KAZAKHSTAN'S CASPIAN OIL. Aidar Demeuov, the head of the
oil and gas department at the Ministry of Power
Engineering, said it will cost a whopping $160 billion
to develop oil fields in Kazakhstan's sector of the
Caspian Sea, Interfax reported on 10 December. Demeuov
said the initial development of the fields requires $10
billion, noting that Western companies have already
invested $2 billion. There is an estimated 12 billion
tons of oil in Kazakhstan's Caspian Sea sector. BP

KAZAKHSTAN HALTS SALES OF STOCK FOR TWO COMPANIES.
Finance Minister Sauat Mynbayev told the parliament on
10 December that the sale of state-owned stock in two
leading gas companies, Aktobemunaigaz and
Mangistaumunaigaz, has been stopped, Interfax reported.
Mynbayev said falling share prices prompted the
decision, adding that prices have dropped to one-tenth
what they were in August 1997. Kazakhstan has already
halted sales of state-owned stock in Kazakhtelekom and
the Ust-Kamenogorsk Titanium and Magnesium Plant. BP

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