RFE/RL NEWSLINE Vol 2, No. 240, Part I, 15 December 1998

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RFE/RL NEWSLINE Vol 2, No. 240, Part I, 15 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

* YELTSIN LOOKING ENERGIZED?

* DUMA TO SAVE BUDGET FOR LATER

* AZERBAIJAN NOT TO ATTEND COUNCIL OF EUROPE KARABAKH
HEARINGS
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RUSSIA

YELTSIN LOOKING ENERGIZED? President Boris Yeltsin may
have gotten "his political second wind," "Nezavisimaya
gazeta" reported on 15 December. Three days earlier,
Yeltsin not only delivered a radio address but also
appeared at a holiday reception at the Kremlin Palace's
banquet hall, looking "vastly better than usual,"
according to the newspaper. Yeltsin has made several
public appearances since his three hour stop-over in the
Kremlin on 7 December, when he dismissed the leadership
of his administration. "Nezavisimaya gazeta" receives
financial backing from Boris Berezovskii's LogoVAZ
group. JAC

EBRD TO PROVIDE BIG BUCKS IF BIG IMPROVEMENTS
FORTHCOMING... European Bank for Reconstruction and
Development President Horst Koehler held out the
prospect of $1 billion worth of new loans in 1999 for
Russia pending an improvement in its investment climate.
Speaking at a quarterly meeting of the Foreign
Investment Advisory Council in Moscow on 15 December,
Koehler said that the EBRD is closely monitoring
Russia's banking sector reforms. "Our concern is that
some insolvent banks are operating too long without
getting some substantive control from the Central Bank
or even being liquidated," he said. Koehler also called
for improvements in Russian corporate governance,
including strengthening minority shareholders' rights.
The EBRD will release approximately $150 million before
the end of 1998 to finance projects that had already
been agreed on. JAC

...AS GOVERNMENT PLEDGES TO IMPROVE INVESTMENT CLIMATE.
In his address to the council, Prime Minister Yevgenii
Primakov outlined a series of measures intended to lure
foreign investment to Russia. He spoke about creating a
"powerful state insurance agency" to protect foreign
investors and to streamline bureaucratic mechanisms that
hamper foreign investment. He also promised to introduce
changes in customs and tax regulations as well as
accelerate the adoption of a law on free economic zones.
He added that "none of the major foreign investors who
has made direct investments in the real sector of the
economy has withdrawn from our market." First Deputy
Prime Minister Yurii Maslyukov noted that Russia has
"already adopted a law on changes to the production-
sharing legislation, exempted foreign investors from the
profit tax until their enterprises reach estimated
capacity, and passed laws on foreign investment and
leasing." JAC

DUMA TO SAVE BUDGET FOR LATER. State Duma Chairman
Gennadii Seleznev said that the Duma will likely not
consider the government's 1999 budget until 23 December,
Interfax reported on 15 December. Seleznev pointed out
that the budget has 2,550 pages and that reading it will
take time. The government submitted the budget on 11
December after many delays (see "RFE/RL Newsline," 14
December 1998). The same day, the Duma passed a bill
banning all reconstruction work on Red Square that would
destroy its historical facade. The vote was 280 to one.
Aleksandr Kotenkov, presidential representative to the
Duma, said President Yeltsin might veto the measure
because it conflicts with UNESCO's guidelines for
maintaining places of historical or cultural value. JAC

RUSSIA RETURNS TO DEBT NEGOTIATING TABLE. Russia's
foreign debt has soared to 120 percent of GDP, up from
20 percent of GDP in 1992, Finance Minister Mikhail
Zadornov told Russian Television on 13 December. On 11
December, Deputy Finance Minister Mikhail Kasyanov said
that the government will continue talks with foreign
investors on a scheme for repayment of the government
short term defaulted treasury bonds. Earlier, foreign
holders of short-term treasury bonds rejected the
government's plan to start swapping new bonds for old
defaulted ones (see "RFE/RL Newsline," 11 December
1998). JAC

ARE TWO MAYORS BETTER THAN ONE? Primorskii Krai Governor
Yevgenii Nazdratenko named former Deputy Mayor Yurii
Kopylov acting mayor of Vladivostok on 14 December,
while former Mayor Viktor Cherepkov named Nikolai
Beletskii. Cherepkov, who was dismissed by presidential
decree on 11 December, had dismissed Kopylov from the
government, and Kopylov himself ran for mayor
unsuccessfully this summer, ITAR-TASS reported. Both
"mayors" held working meetings with municipal services
staff, the agency reported on 15 December. Meanwhile,
reporters from Russian Public Television, NTV and
Russian Television could not transmit their reports to
Moscow because of an order issued by a local television
and radio company. "Kommersant-Daily" reported on 15
December that several dozen Cherepkov supporters have
set up a 24- hour vigil outside the mayor's office. JAC

ANOTHER ANTI-SEMITIC INCIDENT IN KRASNODAR. Krasnodar
Krai, which has already been placed on the watch lists
of human rights organizations because of a growing
number of anti-Semitic incidents, experienced yet
another such incident on 11 December, "Kommersant-Daily"
reported on 15 December (see "RFE/RL Newsline," 3
December 1998). Dozens of residents received leaflets in
their mail boxes calling for the extermination of all
Jews in Krasnodar. The leaflets also called for
Krasnodar Governor Nikolai Kondratenko to run for
president of Russia in 2000. Kondratenko earlier had
expressed his support for Communist Party member and
Duma deputy Albert Makashov, who has been widely
criticized for anti-Semitic remarks. JAC

SUICIDE THINNING SOLDIERS' RANKS. The number of soldiers
in Defense Ministry units who died during service from
non-combat related causes rose 2 percent from 1996 to
1997, "Kommersant vlast" reported on 8 December. Forty-
six percent of the 1997 deaths were suicides. JAC

ZYUGANOV VISITS TRIPOLI. Communist Party leader Gennadii
Zyuganov met with Libyan leader Muammar Gaddafi in
Tripoli on 14 December to discuss bilateral and
international issues. In an address to the Libyan
parliament, Zyuganov said UN sanctions against Libya
contravene all international values and principle. He
called for a "world free of sanctions and aggressions in
the 21st century." JAC

RUSSIA DEBATES ASIAN ISLANDS. Viktor Ozerov, chairman of
the Legislative Duma of Khabarovsk Krai, said on 15
December that the idea of developing Bolshoi Ussuriiskii
and the Tarabarov Islands is "unacceptable," ITAR-TASS
reported. Ozerov said he and other officials in the krai
are concerned at Chinese moves to infringe on navigation
of Russian vessels in the Amur. He claimed that there is
no need to develop the islands as they are already used
for agriculture by Russians living nearby. Meanwhile,
Russian residents of Kunashir Island, which is one of
the Kuril chain, are debating renting plots of land to
Japan for a period of 99 years. Japanese Prime Minister
Keidzo Obuchi said on 9 December that in negotiations
with Moscow, his country will be "persistent" in
demanding that the Kuril islands are ceded to Japan. BP

NEW INSIGHT INTO PUSHKIN? One of only 30 known books
inscribed with a dedication from Russian writer
Aleksandr Pushkin appeared on public display and for
possible sale at a Moscow antiques gallery, the "Moscow
Times" reported on 15 December. The copy of "Eugene
Onegin" reads "To Her Highness the Princess Maria
Arkadyevna Golitsyna from Pushkin." The daily quoted
Petr Druzhinin, a rare books expert at the gallery, as
saying that "Absolutely everything has been said about
Pushkin.... [But] this short text is worth more than an
enormous amount of articles and speculations." JAC

CONFUSION OVER MOBILIZATION OF RESERVISTS IN CHECHNYA.
Meeting in emergency session on 14 December, the Chechen
parliament declared President Aslan Maskhadov's
mobilization of reservists "unconstitutional," arguing
that the Chechen Constitution provides for the call-up
of reservists only in the event of an external threat,
Interfax reported. But deputy speaker Selim Beshaev told
NTV that owing to the lack of a quorum, the parliament
was unable formally to condemn Maskhadov's action, which
it will continue debating on 15 December, Reuters
reported. Also on 14 December, Chechen Deputy Prime
Minister Yusup Soslambekov said that the reservists will
be deployed to crack down on terrorism only after the
parliament has set a date for the beginning of that
action, according to ITAR-TASS. Soslambekov predicted
that the Chechen anti-crime measures will be coordinated
with the Interior Ministries of Russia and the North
Caucasus republics. LF

TRANSCAUCASUS AND CENTRAL ASIA

AZERBAIJAN NOT TO ATTEND COUNCIL OF EUROPE KARABAKH
HEARINGS. Azerbaijani parliamentary speaker Murtuz
Alesqerov told deputies on 11 December that Azerbaijan
will not send a delegation to attend the 16 December
Paris hearings on the Karabakh conflict, Assa-Irada
reported. That meeting has been organized by the
Parliamentary Assembly of the Council of Europe. An
Armenian delegation headed by parliamentary speaker
Khosrov Harutiunian left Yerevan on 14 December to
participate in those hearings, RFE/RL's Yerevan bureau
reported. The hearings were originally scheduled for
early November but were postponed after Baku objected to
the participation of a separate delegation from the
unrecognized Nagorno-Karabakh Republic headed by
President Arkadii Ghukasian (see "RFE/RL Newsline," 26
and 27 October 1998). It was subsequently agreed that
the Azerbaijani delegation to the talks would include
representatives of the Azerbaijani community who were
forced to flee Karabakh during the war. LF

AZERBAIJANI OPPOSITION LEADER SUMMONED FOR QUESTIONING.
Former President and Azerbaijani Popular Front chairman
Abulfaz Elchibey was summoned to the Prosecutor-
General's office in Baku on 14 December in connection
with his 6 November statement that President Heidar
Aliev was instrumental in creating the Kurdistan
Workers' Party (PKK), Turan reported. Two days earlier,
Elchibey was required to give a written undertaking that
he will not try to leave the country. LF

INDEPENDENT AZERBAIJANI NEWSPAPER FINED. A Baku city
court handed down a $125,000 fine to "Azadlyg" on 14
December for publishing reports that members of
President Aliev's family had purchased expensive real
estate in the UK, AP reported. The newspaper was also
ordered to print a front-page retraction of those
allegations. Also on 14 December, editors of independent
newspapers voted to postpone indefinitely a resumption
of their suspended hunger strike after meeting with
presidential administration member Ali Hasanov. Some 20
editors began a hunger strike in November to protest
libel cases they believe are intended to bankrupt them.
LF

DEMOLITION OF ARMENIAN MONUMENTS REPORTEDLY HALTED. The
destruction and removal of Armenian stone crosses and
gravestones from a cemetery in the Azerbaijani exclave
of Nakhichevan has stopped, according to Groong on 14
December. Armenian observers in Iran had reported the
demolition earlier this month, eliciting protests from
Armenian officials (see "RFE/RL Newsline," 14 December
1998). LF

REWARD OFFERED IN ARMENIAN MURDER CASE. The Armenian
Defense Ministry has offered a $100,000 reward for
information leading to the clarification of the 10
December shooting of Deputy Defense Minister Vahram
Khorkhoruni, RFE/RL's Yerevan bureau reported on 14
December, citing the Prosecutor-General's Office.
Khorkhoruni was close to Defense Minister Vazgen
Sargsian, reputedly one of the most powerful men in
Armenia. LF

ARMENIAN GOVERNMENT TO REVIEW COGNAC FACTORY SALE.
Armenia has agreed to a request by Pernod-Ricard, the
purchaser of the Yerevan Cognac Factory, to review the
terms of the sale and extend for six months the deadline
for the main payment, Reuters reported on 14 December,
quoting Economy and Finance Minister Eduard Sandoyan.
Pernod-Ricard had requested the delay after the
financial crisis in Russia in effect wiped out demand
for Armenian brandy. Russia is the plant's main market.
Armenian opposition parties had protested the sale of
the plant to Pernod Ricard, arguing that the price of
$30 million was too low. LF

IMF EQUIVOCAL ON SUPPORT FOR GEORGIA. Hunter Munroe, the
IMF representative in Tbilisi, told journalists on 14
December that "Georgia will receive the support of
international financial organizations only if the
government adopts a stronger economic policy," Caucasus
Press reported. Munroe refused to predict how soon the
Georgian lari would stabilize, after losing almost 50
percent of its value since early December. He said the
IMF will take a decision on whether to release the next
tranche of an ESAF loan after a delegation visits
Georgia in January. Also on 14 December, Georgian
President Eduard Shevardnadze ruled out a monetary
emission to counter the lari's loss in value, Interfax
reported. The IMF and World Bank have earmarked $200
million to cover half the estimated $400 million budget
shortfall faced by six countries hardest hit by the
Russian financial crisis: Georgia, Armenia, Azerbaijan,
Kyrgyzstan, Moldova, and Tajikistan, Reuters reported on
11 December. LF

RUSSIANS, ABKHAZ ACCUSE GEORGIA OF MILITARY BUILDUP.
Nikolai Rusak, a senior officer of the Russian
peacekeeping contingent deployed along the border
between Abkhazia and the rest of Georgia, told Caucasus
Press on 15 December that Tbilisi has violated a
September 1998 agreement limiting the number of troops
either Georgia or Abkhazia may station in the border
zone. Rusak claimed that Georgia currently has 1,300
regular troops stationed in the region, as opposed to
the 365 permitted under the agreement. On 11 December,
Abkhaz Interior Minister Amazbei Kchach accused the
Georgian government of sending 300 troops into
Abkhazia's southernmost Gali Raion, AP reported. A
Georgian Foreign Ministry spokesman rejected that claim
as "a provocation." LF

KAZAKH OFFICIALS CRITICIZE OSCE ADVICE. Presidential
candidate and head of the Customs Committee Gani Kasymov
on 14 December commented on the OSCE'S 3 December call
to postpone the January presidential elections, Reuters
reported. Kasymov said that "as in every government, we
have our constitution, and to say how it should work and
moreover to give orders, right or not, is unsuitable."
Revealing something about his own political standpoint,
Kasymov commented that "democracy and a firm hand go
well together," adding that "the people demand it and it
is what they need." Senate speaker Omirbek Baigeldi also
criticized OSCE statements on the presidential
elections, Interfax reported on 14 December. Baigeldi
said the early October decision of the country's
parliament to hold elections in January 1999 "expresses
the will of the Kazakh people." He viewed the
participation of four candidates in the upcoming
election as "the best proof" that the vote will be
democratic. BP

RUSSIA INCREASES KAZAKH OIL QUOTA. Russia's Ministry of
Fuel and Energy has offered to pump via Russian
pipelines an additional 1.5 million tons of Kazakh oil
and gas to countries outside the CIS, ITAR-TASS reported
on 15 December. Kazakh Minister of Energy, Industry, and
Trade Mukhtar Ablyazov called the offer a "gesture of
goodwill," noting that 30 percent of his country's
budget is based on sales of hydrocarbon resources. As a
result, Kazakh oil exports to countries outside the CIS
will increase from 3.5 million tons annually to 5
million tons. The Russian offer was made last week when
Kazakh Foreign Minister Kasymjomart Tokayev was in
Washington to hold talks with U.S. oil and gas
companies. BP

NUCLEAR TESTING SITE NEEDS $43 MILLION FOR CLEANUP. A UN
official, speaking in Almaty on 14 December, said that
at least $43 million is needed to clean up the damage
caused at the Semipalatinsk nuclear testing site in
northern Kazakhstan during the Soviet era, Interfax
reported. The official said the UN General Assembly
discussed the issue in mid-November and agreed to submit
38 projects to the governments of donor countries.
Kazakh Minister for Natural Resources Serikbek Daukeyev
said his country cannot afford to clean up the
environmental disaster in Semipalatinsk on its own. He
added that negotiations are under way with a UN
nongovernmental organization that is to offer between
$5-7 million. BP

VOLSKII WRAPS UP VISIT TO KYRGYZSTAN. Arkadii Volskii,
the chairman of Russia's Union of Industrialists and
Entrepreneurs, ended his two-day visit to Kyrgyzstan on
14 December, ITAR-TASS reported. Volskii held meetings
with Kyrgyz government and business leaders, after which
he said trade between Russia and Kyrgyzstan can easily
be doubled. Volskii said if Kyrgyzstan exported rare
earth elements to Russia and if transportation and
energy tariffs were regulated, there would be "an
instantaneous effect" on bilateral trade. Volskii also
favored trade based on barter rather than hard currency.
BP

AKAYEV SAYS DRUGS NO. 1 PROBLEM. In an interview with
the Russian newspaper "Komsomolskaya pravda" published
on 15 December, President Askar Akayev said that drug-
trafficking is his country's number one problem,
followed by "the infiltration of Muslim fundamentalist
ideas into Kyrgyzstan." Akayev said the cyanide spill
near the popular lake resort of Issik Kul this summer
was not overly dangerous, "something immediately clear
to me as an engineer-physicist." He commented that he is
unsure whether he will run in the 2000 presidential
elections but added that if the situation in Kyrgyzstan
grows much worse, he will definitely not run. BP

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