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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 3, No. 10, Part I, 15 January 1999


________________________________________________________
RFE/RL NEWSLINE Vol 3, No. 10, Part I, 15 January 1999

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

* IMF, RUSSIA ADVISED TO START FROM SCRATCH

* YELTSIN TAKES A SICK DAY?

* ARMENIAN PRO-PRESIDENTIAL PARTIES NOT TO FORM ELECTION
ALLIANCE
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RUSSIA

IMF, RUSSIA ADVISED TO START FROM SCRATCH... Russia and
the IMF should develop an entirely new Extended Fund
Facility (EFF) program in order to end their present
stalemate, former presidential economic adviser
Aleksandr Livshits argued in a memorandum obtained by
"Nezavisimaya gazeta" on 14 January. According to
Livshits, the Russian government needs to "recognize
that is impossible for it to fulfill the 'big loan'
program ratified last year." One advantage of a new EFF
program, which could be concluded by March according to
Livshits, would be that the IMF could make "a positive
assessment of the holding of preliminary consultations
with Russia by the Paris and London clubs." JAC

...AS FUND FINDS GOVERNMENT BUDGET TOO OPTIMISTIC. The
newspaper noted that it is not known whether First
Deputy Prime Minister Yurii Maslyukov, who met with IMF
Managing Director on 14 January, will put forward any
suggestion similar to Livshits's, but it concluded that
without this proposal, "the government will be powerless
to win over the Washington officials." After his
meeting, Maslyukov told reporters that the IMF believes
the government is too "optimistic" in its budget deficit
forecast, and that "we cannot agree with their opinion."
IMF Moscow office head Martin Gilman told Interfax that
the EFF program for 1996-1998 can no longer be
implemented, but "at this stage it is early to speak
about whether [a new credit] will be an EFF or another
possible form of credit." JAC

YELTSIN TAKES A SICK DAY? Russian President Boris
Yeltsin failed to appear for work on 14 January, but his
press spokesman Dmitrii Yakushkin declined to give a
specific reason, according to Reuters. Admitting that he
himself has not seen the president since the end of last
year, Yakushkin told Ekho Moskvy that Yeltsin's "voice
[over the telephone] was very lively and he is feeling
very energetic." Yakushkin added that a decree on
reorganizing the presidential administration will
probably appear next week. "Segodnya" reported the same
day that Pavel Borodin, head of the presidential affair
department, may be asked to leave. Borodin's department
has already been "re-subordinated" to head of the
presidential administration Nikolai Bordyuzha, the daily
noted. JAC

RUSSIA LABELS U.S. THREATS 'BLATANT BLACKMAIL.' Russian
Foreign Minister Igor Ivanov on 14 January said that
U.S. sanctions against Moscow for allegedly offering
sensitive missile technology to Iran are
"counterproductive," adding that "any threats or
allusions to sanctions are outdated instruments
contradicting the current [state] of our bilateral
relations." The next day, the official government
newspaper "Rossiiskaya gazeta" was less mild, calling
the U.S. threat to pull Russia's access to commercial
space launches "blatant blackmail." A spokesman for the
Khrunichev Space Center said that Russia could lose as
much as $280 million if launches were cancelled, and
Foreign Ministry spokesman Vladimir Rakhmanin noted that
curtailing the space launch program would negatively
affect not only Russian organizations but also U.S.
aerospace companies. Meanwhile, an Atomic Ministry
spokesman told Reuters that Russia is planning to triple
its staff of nuclear workers at Iran's Bushehr facility.
JAC

IS LEBED LOSING FAVOR? News reports about declining
political support for Krasnoyarsk Krai Governor
Aleksandr Lebed continue to appear. Members once loyal
to Lebed are leaving his party, complaining of "being
squeezed dry," "Izvestiya" reported on 14 January. The
paper also noted that "the absolute majority of the
parliament," which is said to back Lebed's former
backer, Krasnoyarsk Aluminum head Anatolii Bykov, "is
today in opposition to the governor." The next day, 24
legislators from the krai sent Lebed an open letter
accusing him of failing to effectively manage the
government as local industry flags, the agricultural
sector worsens, and living standards continue to fall,
according to ITAR-TASS. The legislators called on Lebed
to coordinate his personnel policy with the legislature.
"Izvestiya" noted that many of "Bykov's people" will
soon be dismissed from the krai's administration. JAC

GOVERNMENT TO IMPOSE PRICE CONTROLS ON DRUGS. Prime
Minister Yevgenii Primakov on 14 January pledged to
regulate the price of medicine, ITAR-TASS reported.
Primakov said the pharmaceutical industry is plagued by
crime and speculation and that an upper limit for drug
retail prices will be set. Primakov also noted that the
industry once created many new medicines of a high
quality but is now mostly producing Western analogues.
Minister of Health Vladimir Starodubov told reporters
the same day that his ministry will undertake a series
of measures, including the registration of prices for
domestic and imported medicines, designed to lower the
price of medicine by 25 percent. JAC

MORE DEFECTIONS FROM NDR... Another key member of the
Our Home is Russia (NDR) party is quitting. Duma Deputy
Valerii Grebennikov, who was also the party's treasurer,
has announced that he is leaving the NDR, "Izvestiya"
reported on 15 January. The newspaper called
Grebennikov's resignation "as significant an event as
[former NDR faction leader and Duma deputy Aleksandr]
Shokhin's departure" because "Grebennikov was considered
one of the most influential figures in the NDR and close
to [former Prime Minister Viktor] Chernomyrdin."
According to the daily, Grebennikov now believes that
the NDR resembles the Communist Party of the Soviet
Union during the 1960s and 1970s "with its conformism,
secrecy, and the indiscriminate power of its apparatus."
Citing a "reliable source," "Segodnya" reported the
previous day that Chernomyrdin considers [Duma deputy
speaker] Vladimir Ryzhkov the most suitable candidate
for leader of the party's Duma faction. JAC

...AS MIKHALKOV DECLINES TO RUN. Acclaimed film director
Nikita Mikhalkov said on 14 January that he will not run
as an NDR candidate in either parliamentary or
presidential elections, as Shohkin had earlier suggested
(see "RFE/RL Newsline," 23 November 1998). Mikhalkov
added that he will participate in presidential elections
"only as a voter." JAC

OTECHESTVO, BABURIN SLAM TREATY WITH UKRAINE. Moscow
Mayor Yurii Luzhkov's Otechestvo [Fatherland] movement
is calling for the Federation Council to reject
ratification of the treaty with Ukraine because the
document "rules out Russia's right to call Sevastopol a
Russian city," according to a statement by the
movement's political council on 14 January. When the
State Duma ratified the treaty, the document argues, it
acted "against the background of the policy of forced
Ukrainianization of 12 million Russians whose civil
rights continue to be disregarded." Duma Deputy Speaker
and member of People's Power Sergei Baburin wrote in
"Nezavisimaya gazeta" the same day that the treaty
"should not be ratified at any price" because the treaty
undermines the "future of close-knit Slavic peoples" and
"opens the way for Ukraine to join NATO." JAC

IRAQ GOES SHOPPING IN NIZHNII NOVGOROD. Iraq will spend
at least $2 billion on cars, and possibly ships and
planes as well, that are produced in Nizhnii Novgorod
Oblast, according to Interfax on 14 January. "Izvestiya"
the previous day noted that the "Russian White House was
extremely surprised by news of the [sale] agreement" but
added that "many companies sign documents on cooperation
with Iraq that both sides pledge to fulfill only after
[UN] embargo has been lifted." Also on 13 January,
Russian Foreign Minister Igor Ivanov and U.S. Secretary
of State Madeleine Albright discussed the idea of
sending another UN mission to Iraq to assess on-the-spot
developments there. Albright is scheduled to visit
Moscow on 25-27 January. JAC

RUSSIA TO REQUIRE TOURISTS TO SIGN UP FOR HEALTH
INSURANCE? The Russian Health Ministry announced on 14
January that tourists will soon be required to take out
medical insurance before receiving a visa, AFP reported.
The measure is still being drafted and would apply to
all visits of less than six months. JAC

CHECHEN SECURITY MINISTER ESCAPES ASSASSINATION...
Aslanbek Arsaev escaped uninjured when two men opened
fire on his car in Grozny on 14 January, Western
agencies reported. Arsaev's bodyguards apprehended the
two attackers. LF

...AS PRESIDENT DOWNPLAYS THREAT OF CIVIL WAR. Meeting
on 14 January with local administrators and imams of
rural mosques, Aslan Maskhadov again said that he will
not permit a civil war in Chechnya, ITAR-TASS reported.
At the same time, Maskhadov tasked local officials with
identifying reliable individuals who would be prepared
"to support law and order." On 13 January, former
Russian Security Council secretary Aleksandr Lebed
warned that Maskhadov's opponents may shortly attempt to
oust him, thereby unleashing a new war in the North
Caucasus (see "RFE/RL Newsline," 14 January 1999). LF

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN PRO-PRESIDENTIAL PARTIES NOT TO FORM ELECTION
ALLIANCE. The seven Armenian political parties that in
March 1998 formed the Justice and Unity bloc to back
Robert Kocharian's presidential candidacy are unlikely
to set up an electoral alliance for the May
parliamentary elections, RFE/RL's Yerevan bureau
reported on 14 January. Aleksandr Aghamalian, one of the
leaders of the Scientific-Industrial and Civic Union
(GAKM), told RFE/RL that the seven parties have "rather
different approaches" and that while some still support
the present Armenian leadership, others, including the
GAKM, are more critical. He predicted that Justice and
Unity will split into "two or three" electoral alliances
to contend the May poll. The Yerkrapah Union, seen as
the main pro-government force in Armenia, has already
said it will not form such an alliance. The Armenian
Revolutionary Federation is also likely to field its own
list of candidates. LF

U.S. AMBASSADOR ASSESSES ARMENIA'S ECONOMIC POTENTIAL...
Michael Lemmon told journalists in Yerevan on 14 January
that he believes Armenia can become the "economic engine
of the Caucasus" if it proceeds with economic and
political reform and establishes closer ties with
neighboring countries, RFE/RL's Yerevan bureau reported.
Lemmon said that the economic reform process is probably
more advanced in Armenia than elsewhere in the region,
adding that "I believe there is incredible wealth of
human talent in this country that is not being fully
utilized." But he also warned that "halting or reversing
the reform process is...no solution" to the country's
current economic difficulties. Lemmon emphasized the
importance of economic integration in the South Caucasus
and praised the expanding cooperation between Armenia
and Georgia as a first step in this direction. He added
that the U.S. has a "strong interest" in opening a
commercial route linking Azerbaijan to Turkey via
Armenia, which, he said, would bring "very, very real
economic benefits." LF

...CALLS FOR FREE, FAIR ELECTIONS. Lemmon also urged the
Armenian authorities to ensure that the May
parliamentary elections are free and fair, which, he
said "Armenia needs more than anything elseŠ. It is
absolutely necessary for the [electoral] process to be
free, fair, transparent, and acceptable in its conduct
to all the parties and voting public." International
observers termed the 1995 parliamentary elections "free
but not fair" and registered shortcomings in the conduct
of the 1996 and 1998 presidential polls. LF

AZERBAIJAN POSTS RECORD ECONOMIC GROWTH IN 1998.
Azerbaijani state counselor for economics Vakhid
Akhundov told a press conference in Baku on 14 January
that Azerbaijan's 10 percent GDP growth in 1998 was the
highest in the CIS and Eastern Europe, Interfax
reported. Akhundov said that industrial production
increased by 22 percent, agricultural output by 4
percent, and trade turnover by 12 percent. LF

TURKMENISTAN TEXTILE SECTOR STRENGTHENS. President
Saparmurat Niyazov told a recent government session that
Turkmenistan registered more than 5 percent GDP growth
in 1998, "Nezavisimaya gazeta" reported on 15 January.
Industrial production increased by 15 percent, primarily
in those sectors not related to oil and gas, and
agricultural output by 20 percent. Niyazov expressed
particular satisfaction at progress in the textile
industry, noting that the country now processes 35
percent of its cotton, compared with only 3 percent in
the early 1990s. Interfax reported on 13 January that
Niyazov has approved a program for the phased
privatization of agricultural, construction, and
processing enterprises in the agro-industrial complex.
Meanwhile, the Turkmenbashi Blue Jeans Plant has been
awarded an international certificate in recognition of
the outstanding quality of its output. LF

KAZAKHSTAN DENIES INTEREST IN JOINING RUSSIAN-BELARUS
UNION. Kazakhstan's Foreign Minister Qasymzhomart
Toqayev has issued a statement saying that while
Kazakhstan respects the decision by the presidents of
the Russian Federation and Belarus to create a union
with a joint currency, parliament, army, and
citizenship, Kazakhstan will never join such a union in
view of its geopolitical location and the present level
of integration with other CIS states, Interfax and
RFE/RL's Almaty bureau reported. Toqayev dismissed as
groundless rumors that Kazakhstan is planning to join
the Russia-Belarus Union. In his weekly radio broadcast
on 11 January, Georgian President Eduard Shevardnadze
likewise denied that Georgia would join that union,
according to Interfax. LF

ALMATY OBLAST GOVERNOR ISSUES DEBT ULTIMATUM. Zamanbek
Nurkadilov, governor of Kazakhstan's Almaty Oblast, has
warned local administration heads that failure to pay
overdue wages and pensions will be construed as actions
aimed at undermining recently re-elected President
Nursultan Nazarbayev, RFE/RL's Almaty bureau reported on
15 January. Nurkadilov said that about 20 percent of the
electorate in Almaty Oblast did not vote for Nazarbayev
in the 10 January presidential election because of wage
and pension arrears. LF

KYRGYZ PRIME MINISTER REPORTS ON MOSCOW VISIT.
Addressing a press conference in Bishkek on 14 January,
Jumabek Ibraimov assessed his visit to Moscow on 12-13
January as "very successful," Interfax reported. Three
inter-governmental agreements were signed during that
visit: on sharing information, cooperation in developing
small, and medium businesses, and avoiding dual
taxation, RFE/RL's Bishkek bureau reported. The two
sides also agreed that the conditions for repaying
Kyrgyzstan's $132 million debt to Russia will be
discussed in 2000 and that Bishkek will pay no interest
on that loan this year. Russia will give Kyrgyzstan new
IL-76 and AN-12 aircraft to replace 12 aircraft donated
in 1992. The Kyrgyz delegation also reached an agreement
with Moscow Mayor Yurii Luzhkov whereby Kyrgyzstan will
supply Moscow with ecologically pure foods (including
grain and honey). LF

KYRGYZSTAN INTENSIFIES CONTROL OVER DANGEROUS CHEMICALS.
The Ministry for Emergency Situations is to assume
control over the transportation of poisonous chemicals
on the territory of Kyrgyzstan, RFE/RL's Bishkek bureau
reported on 14 January, quoting Deputy Minister Tilekbay
Kyshtobaev. The Interior Ministry had previously been
responsible for that task. Kyshtobaev said that an
average of 16 tons of poisonous chemicals are imported
daily from China. Four people died and some 5,000 were
hospitalized last summer after the Canadian Kumtor
Operating Company spilled 2 tons of natrium cyanide near
Barskoon village in the region of Issyk-Kul (see "RFE/RL
Newsline," 12 June 1998). LF

UZBEKISTAN REFORMS MILITARY, UPGRADES BORDER GUARDS.
Uzbekistan has launched the restructuring of its armed
forces in a bid to create a mobile, well-equipped, and
well-trained army capable of defending the country's
independence, Interfax reported on 13 January, quoting
Defense Minister General Khikmatulla Tursunov. The
reform foresees cuts in personnel and improved training
of reservists. On 14 January, Uzbekistan's President
Islam Karimov issued a decree creating a new border
defense unit, Reuters reported. LF

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