It matters if you don't just give up. - Stephen Hawking
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 248, Part I, 29 December 1998


________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 248, Part I, 29 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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YEAR IN REVIEW 1998
A roundup of articles examining major news events in
1998 in the RFE/RL broadcast region and beyond.
http://www.rferl.org/nca/special/yearend98/index.html

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Headlines, Part I

* MOSCOW WARNS U.S. ON IRAQ

* FYODOROV CALLS 1999 BUDGET UNREALISTIC

* ARMENIAN FOREIGN MINISTER IN MOSCOW

End Note: LUZHKOV'S "OTECHESTVO" HOLDS FOUNDING CONGRESS
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RUSSIA

MOSCOW WARNS U.S. ON IRAQ. The Russian Foreign Ministry
issued a statement on 28 December warning against
"actions that would not contribute to the creation of a
favorable atmosphere for resuming the search for a
political solution to the Iraq problem," Russian
agencies reported. Ministry officials told Interfax that
the statement was a response to the exchange of fire
between U.S. aircraft and Iraqi air defense units.
Earlier on 28 December, Foreign Minister Igor Ivanov
repeated Moscow's opposition to any use of force in Iraq
or in Kosova, and called for a rapid review by the UN of
Iraqi weapons programs. Ivanov also blamed the Kosovar
Albanians for the problems in Kosova and said that any
use of force against Serbia "would only exacerbate" the
situation. PG

YELTSIN PLEDGES TO PRESS AHEAD WITH DEMOCRATIC REFORMS.
In a letter to Moscow's "Kommersant-Daily" on 29
December, the Russian President acknowledged that 1998
had not been "easy for any of us," but said that "there
is no path for Russia except the one towards democracy,
towards a state based on the rule of law." He suggested
that "many people, especially 'Kommersant' readers, may
have thought that the country was moving backwards. It
is not so!" "As president, I affirm -- there is no way
back," Yeltsin said. PG

DUMA DEPUTY DENIES PROBLEMS IN RUSSIA'S NUCLEAR PROGRAM.
"Despite recent statements by US Energy Secretary Bill
Richardson, we are able to provide for absolute safety
in power engineering in Russia as well as in other
countries where we construct nuclear power plants,"
Vladimir Gusev told ITAR-TASS on 28 December. Gusev, who
is chairman of the Duma committee with oversight in this
area, said that the situation in Russia's nuclear power
engineering was "normal but not disastrous." PG

FYODOROV CALLS 1999 BUDGET UNREALISTIC ... Boris
Fyodorov, the former finance minister and deputy
premier, told a Moscow news conference on 28 December
that the state budget given preliminary approval by the
Duma on 25 December was based on "phoney" assumptions,
Interfax reported. He suggested that inflation would be
at least double what the budget assumed, that the ruble-
dollar exchange rate would fall much further than
projected, and that there is no reason to expect any
economic growth in 1999. And Fyodorov said that the
recent printing of "at least" 10,000 million rubles
meant that the situation could "get out of hand within
the next few months." The leader of the Forward Russia
political party said his group will issue a detailed
forecast in January 1999. PG

... AND SAYS TAX RECEIPTS MAY FALL BY HALF. Fyodorov,
who also served as head of the State Tax Service, added
at his 28 December news conference that he fears the
actual collection of taxes may fall 30 to 50 percent,
Interfax reported. Such declines, Fyodorov said, would
make it impossible for Moscow to fulfill its promises to
the international financial community and could lead to
Russia's economic and political "isolation." PG

YELTSIN CALLS FOR TIGHTER CIS. Pronouncing himself
satisfied with the performance of the country's foreign
ministry, President Yeltsin told Foreign Minister Ivanov
on 28 December that his priorities for the year ahead
include closer integration within the Commonwealth of
Independent States, the promotion of nuclear non-
proliferation, and solving the Iraq and Kosova problems,
ITAR-TASS reported. Yeltsin also said that he hopes to
expand Moscow's ties with Europe. To this end, Ivanov
said, Yeltsin plans to visit Paris in late January 1999.
PG

RUSSIA-BELARUS UNION PROPOSAL SPARKS DEBATE. Vladimir
Pokrovskii, the Russian official who has been
responsible for expanding ties between Moscow and Minsk
under the earlier union accords, told Reuters on 28
December that "nothing will happen or suddenly flower"
as a result of the documents signed on 25 December by
Presidents Yeltsin and Lukashenka. Pokrovskii said that
the process of bringing the two countries closer
together will be long and complex, with more than 2,000
issues still to be decided. But officials in Karelia,
Murmansk, and Belgorod all greeted the proposed union,
arguing that it reflects the combined will of the
Russian and Belarusian peoples. PG

RUSSIAN COMMUNISTS URGE CLOSER TIES WITH UKRAINE. In a
statement released following the ratification of the
Russia-Ukraine friendship treaty on 25 December, the
Communist faction in the Duma released a statement
calling for expanded ties between the Russian and
Ukrainian people, ITAR-TASS reported on 28 December. The
statement called on Kyiv to help ensure that Russia's
Black Sea fleet can operate on Ukrainian territory and
not to do anything that could "destroy the spiritual and
historic unity of both peoples." PG

IVANOV DENIES RUSSIA BEHIND CONFLICTS ON CIS TERRITORY.
Following a 28 December meeting with visiting Armenian
Foreign Minister Vartan Oskanian, Russian Foreign
Minister Ivanov said that "speculations about Russia's
alleged interest in the maintenance of tension in
various regions for the sake of preserving its presence
or its influence there are absolutely groundless," ITAR-
TASS reported. Instead, Ivanov continued, Moscow is
"interested in the full and final settlement" of all
such conflicts "because this is in line with our
national, strategic, long-term interests." PG

YELTSIN SAYS MILITARY REFORM GOING "SLOWLY." During a
meeting with Defense Minister Igor Sergeev on 28
December, the Russian president said that military
reform is taking place "but still slowly," ITAR-Tass
reported. He welcomed the reduction in the number of
troops to 1.2 million, congratulated Sergeev on the
introduction of the Topol-M missiles, and praised the
government for increasing its financial support for the
military. PG

RYZHKOV SAYS RUSSIANS HAVE NEVER BEEN NATIONALISTIC.
Speaking in Barnaul on 28 December, Vladimir Ryzhkov,
the first deputy speaker of the Duma, denounced recent
nationalistic statements by his colleagues. He called on
Siberians to voice their opposition to such statements.
And he argued that "nationalism has never been
characteristic of Russian people and never will be, as
this contradicts our entire history." PG

KARAGANOV PRAISES RUSSIA-INDIA-CHINA AXIS. Sergei
Karaganov, the head of the Foreign and Defense Policy
Council, told Interfax on 27 December that he welcomes
Prime Minister Primakov's plans for a Russia-India-China
axis. Not only would "we like to use our cooperation to
counterbalance the excessive power of the United
States," Karaganov said, the creation of such a
structure, along with a Russia-European Union accord
will promote stability at a time when the international
relations system "is very rapidly falling apart." PG

LUZHKOV SAYS HIS FATHERLAND MOVEMENT IS "FOREVER."
Moscow Mayor Yurii Luzhkov told Interfax-Moscow on 28
December that his new Fatherland Movement was not simply
a means for competing in the upcoming parliamentary and
presidential elections but rather had been created to
last "forever." He said that the movement is preparing a
program for discussion at its second congress in April
1999. And Luzhkov added that he has no interest in
forming "any alliances or unions" with former prime
minister and current Our Home is Russia leader Viktor
Chernomyrdin. (See also "End Note") PG

LEBED CALLS FOR REINSTATEMENT OF DEATH PENALTY. In order
to put the country in order, Krasnoyarsk Governor
Aleksandr Lebed said on 28 December that the country
should impose harsher penalties on criminals, including
the reinstatement of the death penalty, ITAR-TASS
reported. He said that the West would "greet" such a
step if it were effective, even though it would put
Moscow at odds with the requirements of the Council of
Europe. In other remarks, Lebed called for lifting
parliamentary immunity so that the courts could
prosecute legislators, and for giving the police
expanded freedom to shoot to kill. PG

SKURATOV URGES TOUGHER SENTENCES FOR CORRUPTION. Russian
Prosecutor General Yurii Skuratov on 28 December called
for tougher sentences to be handed out in corruption and
bribery cases, ITAR-TASS reported. He said that he is
surprised by the number of those convicted who are
sentenced to probation rather than prison. And he said
he is disappointed that the Swiss authorities have not
used evidence provided by Moscow to convict Sergei
Mikhailov, who is widely thought to be a Russian mafia
chieftain. PG

PUBLIC TV CHIEF SAYS YELTSIN LOAN WON'T AFFECT PROGRAMS.
ORT General Director Igor Shabdurasulov said on Ekho
Moskvy on 28 December that President Yeltsin's decision
to open a credit line for the hard-pressed network will
not affect its programming decisions, ITAR-TASS
reported. Shabdurasulov said that Yeltsin had made the
loan rather than the government because ORT had been
created by presidential decree, and he said that the
government is fully protected from any losses by ORT
assets. PG

MOSCOW TO RESTRICT MILITARY COOPERATION TO STATE-OWNED
FIRMS. Trade Minister Georgii Gabunia told Prime-Tass on
28 December that the Russian government planned to
prohibit any firm that is less than 50 percent owned by
the state from carrying out military-technical
cooperation with foreign countries. Such an arrangement
will allow the authorities to control the situation more
effectively as they seek to generate increased revenues
from such programs. PG

CUSTOMS TO CREATE "GREEN CORRIDOR" FOR LAW-ABIDING ...
State Customs Committee chairman Valerii Draganov told
ITAR-TASS on 28 December that he plans to crack down on
smuggling but will create special and easier border --
something he called the "green corridor" -- clearing
procedures for those businesses which have demonstrated
they obey the law. Draganov said that his committee is
compiling a list of approximately 100 to 150 such
companies. PG

... BUT TIGHTEN CONTROLS TO RAISE REVENUES. Draganov
added that the Russian Federation should increase
customs duties 2.5 times in 1999 in order to raise
revenue. He noted that the Customs Committee accounted
for 30 percent of budget revenues in 1998, a figure he
said would rise to 45 percent in 1999. And he added that
his committee is preparing a plan for self-financing of
its own activities. PG

FOUR OUT OF FIVE RUSSIANS SAY LIFE BECOMING HARDER. A
December poll of 1600 Russians found that 82 percent
believe that their lives have become more difficult over
the past year, Interfax reported on 28 December. Asked
by the Public Opinion Fund to name the three most
important events of 1998, 43 percent said the August
financial crisis, 32 percent volunteered the murder of
Duma Deputy Galina Starovoitova, and 30 percent
indicated the growing inflation. PG

HUMANITARIAN AID MATCHES FALL IN IMPORTS. Trade Minister
Gabunia told Prime-Tass on 28 December that humanitarian
assistance from abroad would not have any dramatic
effect on domestic producers because "the volume of
humanitarian deliveries is the same size as the
reduction of imports" following the August 1998
financial crisis. PG

BODIES OF SLAIN ENGINEERS FLOWN TO U.K. The remains of
one New Zealand and three British telephone enginers
executed in Chechnya three weeks ago were transported
from Chechnya via Dagestan to Baku on 28 December and
flown from there to London the following day. The
Chechen leadership had vetoed transporting the bodies to
Moscow. Chechen Deputy Prime Minister Kazbek Makhashev
told Interfax on 28 December that the investigation into
the murders "has advanced considerably." He said the
suspected murderers will be tried in a Shariah court and
executed if found guilty. LF

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN FOREIGN MINISTER IN MOSCOW. Vartan Oskanian
held talks in Moscow on 28 December with his Russian
counterpart Igor Ivanov, Russian First Deputy Prime
Minister Vadim Gustov, and the Russian co-chairman of
the OSCE Minsk Group, Yurii Yukalov, ITAR-TASS reported.
Speaking at a joint news conference, Oskanian and Ivanov
positively assessed cooperation and bilateral relations
in 1998. Ivanov said that he and Oskanian had discussed
the possibility of "direct talks" on resolving the
Karabakh conflict "with the assistance of the OSCE and
with Russia's participation." (Such talks would
presumably involve Armenia, Azerbaijan and the
unrecognized Nagorno-Karabakh Republic, although Ivanov
did not say so explicitly.) Ivanov said there are no
"ready formulae" for resolving the conflict, and the
"political will" to do so is essential. Both ministers
denied that Russian-Armenian military cooperation is
directed against any third country. Oskanian said that
cooperation is "absolutely transparent" and implemented
within the framework of the CFE treaty. LF

TOP ARMENIAN OFFICIALS RECEIVE SALARY INCREASE. The
Armenian parliament passed legislation on 28 December
quadrupling the salaries of leading government,
parliament and judiciary officials, RFE/RL's Yerevan
bureau reported. The president, prime minister,
ministers and their deputies, heads of government
departments and parliament leadership will in future
receive an average monthly salary of 187,500 drams
($370). Parliament also passed legislation requiring top
officials to complete an annual declaration of their
income and property, ITAR-TASS reported. LF

AZERBAIJANI PRESIDENTIAL ADVISOR CONDEMNS RUSSIAN 'NEO-
IMPERIALISM.' Vafa Gulu-zade told Turan on 28 December
that a statement by Duma deputy speaker Sergei Baburin
during last week's debate on ratification of the
Russian-Ukrainian Treaty is "a manifestation of the
imperial ambitions of Russia's political elite." Baburin
had recalled that Russia "ceded Kars and other Armenian
territories" to Turkey in the 1920s. Gulu-zade also
condemned deliveries to Armenia of Russian weaponry,
which he said included S-300 missiles. He equated the
Armenian-Azerbaijani conflict with "the long-drawn-out
Russian-Turkish conflict, in which Armenia implements
its master's will," and said that "the Azerbaijani
people have fallen victim to the Russian national idea
of world domination," according to Interfax. LF

AZERBAIJANI PARLIAMENT DELEGATION VISITS IRAN. An
Azerbaijani parliament delegation headed by chairman
Murtuz Alesqerov held talks in Tehran on 22-23 December
with Iranian parliament chairman Ali Akper Nateq Nouri
and former president Ali Akbar Hashemi Rafsanjani, Turan
reported. The talks focussed on improving bilateral
relations, regional conflicts and the status of the
Caspian Sea. The Azerbaijani delegation then travelled
to Meshed, where the possibility of beginning regular
flights between that city and Baku was discussed. On 25
December the delegation visited Tabriz, the second
largest city in Iran and the cultural center of that
country's large Azerbaijani minority. It was the first
visit to Tabriz by a delegation from the Azerbaijan
Republic. LF

AZERBAIJAN ANNOUNCES SELECTIVE AMNESTY. President Heidar
Aliev has submitted to the Azerbaijani parliament a bill
that would amnesty up to 12,000 prisoners, Turan
reported on 25 December. Those eligible include World
War II veterans, persons unjustly repressed in the
Stalinist period, refugees and internally displaced
persons, and persons over 60. But as Azerbaijan Popular
Front Party member Alimamed Nuriev pointed out to Turan,
persons convicted for slander, violating public order,
insulting the president and giving false evidence are
not eligible for amnesty. LF

CHEVRON REAFFIRS COMMITMENT TO KAZAKH DEVELOPMENT.
Senior Chevron Corporation official Kenneth Derr told
Kazakhstan's President Nursultan Nazarbayev at a 28
December meeting in Astana that his company will
increase production at the Tengiz field despite the fall
in world oil prices, Interfax and RFE/RL's Astana bureau
reported. Derr said the Tengizchevroil joint venture
plans to raise annual output from 8.6 million metric
tons in 1998 to 12 million tons by mid-2000. Derr told
journalists after the meeting that measures to scale
down production costs at Tengiz, including cutting
transportation costs, were also discussed. LF

KYRGYZ PREMIER'S POWERS TO BE BROADENED. Presidential
press secretary Kanybek Imanaliev said in Bishkek on 28
December that President Askar Akayev will shortly issue
a decree giving newly-appointed Prime Minister Jumabek
Ibraimov greater authority in appointing government
officials and regional leaders, RFE/RL's Bishkek bureau
reported. Hitherto all ministerial appointments have
been the exclusive prerogative of the president,
according to Interfax. But Imanaliev added that the
delegation of additional powers from the president to
prime minister will only be temporary, without
specifying for how long a time period. LF

TURKMENISTAN SHELVES TRANS-IRANIAN GAS PIPELINE. The
President of BP-Dutch Shell, Hank Dajkgraaf, told
journalists in Ashgabat on 24 December after meeting
with President Saparmurat Niyazov that plans to proceed
with construction of a gas export pipeline from
Turkmenistan to Turkey via Iran have been postponed
indefinitely, Interfax and Turan reported. Dijkgraaf
said that the Turkmen leadership prefers the alternative
Trans-Caspian route, and that "it is impossible to
implement simultaneously two large-scale gas pipeline
projects oriented towards the Turkish market." BP-Dutch
Shell holds the exclusive rights to create a consortium
to construct a gas export pipeline from Turkmenistan to
Turkey. LF

NEW POLITICAL PARTY FOUNDED IN UZBEKISTAN. The founding
congress of the Fidokorlar national democratic party was
held in Tashkent on 28 December, RFE/RL's bureau in the
Uzbek capital reported. Participants at the congress
elected the former deputy director of the Uzbekistan
Strategic Research Institute, Erkin Norbotaev, as party
general secretary, and approved the party program and
statutes and the founding of a party newspaper. Meeting
earlier this month with Uzbek President Islam Karimov,
the party's founders assured him of their "progressive
views" and ability "to assume responsibility for
democracy, justice and the happiness of the people,"
according to Interfax. LF

END NOTE

LUZHKOV'S "OTECHESTVO" HOLDS FOUNDING CONGRESS

by Floriana Fossato

	The registration deadline for political movements
wishing to contest Russia's next parliamentary
elections, scheduled for 19 December 1999, expired at
midnight on 19 December 1998. The last movement able to
meet that deadline was the newly formed "Otechestvo"
[Fatherland], which on the same day held its founding
congress and elected Moscow Mayor Yurii Luzhkov as its
leader.
	Russian media called the achievement "impressive."
Under Russian law, a political organization must submit
to the Justice Ministry both its charter and
documentation on its funding in order to obtain formal
registration. The ministry then has one month to examine
those documents and decide whether to register the
movement.
	In the case of "Otechestvo," just a few hours after
the necessary documents had been brought to the
ministry, Justice Minister Pavel Kresheninnikov told
Luzhkov that registration had been granted.
	Luzhkov, in turn, thanked Kresheninnikov for his
ministry's "business-like approach" and explained that
registration had been possible because 59 regional
branches of the movement, set up after Luzhkov launched
"Otechestvo" in November, had duly provided the
requested documentation. The protocol of the 19 December
founding congress was the only document still needed.
	At "Otechestovo"s founding congress, which took
place in the prestigious Column Hall in downtown Moscow,
Luzhkov received support from more than 1,100 delegates,
when he detailed his vision for Russia's future.
Observers present at the meeting were struck by the
organizational efforts, the wide range of the delegates'
backgrounds and the security measures. In all of those
respects, many thought the gathering reminiscent of
Communist Party congresses.
	Calling for a revival of the defense industry and
the country's nuclear forces, Luzhkov told delegates
that Russia needs "a modern army and a reliable nuclear
deterrence system" in order to restore its role as a
leading world power. This need, he said, was illustrated
by the U.S.-led attacks against Iraq, which Russia
strongly opposed but was unable to stop or influence.
Luzhkov also said that he wants to create a state system
"based on social democracy, strong state power, and a
combination of market-economy methods and social
policies." And he commented that to achieve these goals,
he wants to draw support from both the right and left of
the political spectrum.
	According to the daily "Vremya-MN," Luzhkov's
"declared centrist line" prompted him to use phrases
that "should appeal to many...and will probably become a
slogan textbook for his supporters."
	However, another daily,"Segodnya," said that
Luzhkov's words illustrate that the movement's election
campaigns "will be based on strong criticism of radical-
liberal reform and of the results of the activities of
governments led first by [Viktor] Chernomyrdin and then
by [Sergei] Kirienko."
	Without naming any names, Luzhkov lambasted reforms
carried out in Russia during the last seven years. He
commented that "for the second time in this century,"
Russia has been overtaken by doctrines that are "alien
to its culture." "If the situation in the country
remains as it was," Luzhkov added, "we will all be up
against some serious difficulties."
	According to Luzhkov, the implementation of reform,
which has enriched just a few and left the majority of
Russians struggling to make ends meet, has proved a
dangerous "experiment." He said that "vulgar monetarism
can be implemented, but for this one should choose a
country and a people one does not feel sorry for." He
concluded by telling delegates that "Now, dear sirs, the
experiment is over." Those words were greeted with warm
applause from the audience, composed of many
industrialists of the early perestroika period as well
as by regional bosses and politicians who had earlier
suppported President Boris Yeltsin.
	Luzkhov, who is seen as one of the leading
contenders to replace Yeltsin in an election set for the
year 2000, also called for "experienced managers" of the
Soviet-era to be reinstated in leading positions and for
property that had been privatized illegally to be
returned to the state.
	Luzhkov's message is one of patriotism and national
unity, both of which have been wounded by the many
political and economic crises of the last few years and,
in particular, by the fallout of the August financial
collapse. Luzhkov's critics, however, argue that it was
the very reforms that he now condemns that helped
Moscow's growth. Taxes on emerging businesses were
largely collected in Moscow to the benefit of the local
budget.
	Luzhkov is popular in the capital and enjoys
consistently strong ratings in opinion polls. But many
observers question whether there is support for the
Moscow mayor in Russia's regions. Over the past 12
months, Luzhkov has been cultivating a network of
supporters among regional leaders.
	The founding congress of "Otechestvo" was crowded
with regional bosses. Some, including Nizhnii Novgorod
Governor Ivan Sklyarov and his Novosibirsk colleague,
Vitalii Mukha, were sitting among presidium members.
Others said that Luzhkov has an "excellent chance" to
become Russia's next president, adding that they would
support "Otechestvo" back home.
	Still others were more cautious. "Vremya MN" quoted
an unnamed regional governor as saying he is waiting to
see how developments unfold and to find out whether
Prime Minister Yevgenii Primakov supports "Otechestvo"
	Primakov has so far made no public statement on
Luzhkov's movement. For his part, President Yeltsin did
not send any message to the congress. Kremlin aide Oleg
Sysuev, a member of Kirienko's former government, wished
the new movement well but distanced himself from
Luzhkov's criticism of reforms.
	Luzhkov responded by saying that Sysuev's comments
only show that the presidential administration does not
understand the real situation in the country.

The author is an RFE/RL correspondent based in Moscow.
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               Copyright (c) 1998 RFE/RL, Inc.
                     All rights reserved.
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