RFE/RL NEWSLINE Vol 3, No. 22, Part I, 2 February 1999

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RFE/RL NEWSLINE Vol 3, No. 22, Part I, 2 February 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

* DUMA TO REJECT PRIME MINISTER'S PEACE PROPOSAL

* GOVERNORS BLOC ATTRACTING MORE FOLLOWERS

* AZERBAIJANI PRESIDENT'S BROTHER ACCUSES OPPOSITION OF
ESPIONAGE

End Note: PRIMAKOV'S AMBITIONS
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RUSSIA

DUMA TO REJECT PRIME MINISTER'S PEACE PROPOSAL. Prime
Minister Yevgenii Primakov met with State Duma Chairman
Gennadii Seleznev on 2 February to discuss Primakov's
proposal for a political peace treaty between Russia's
executive and legislative branches. "Kommersant-Daily"
predicted on 30 January that Primakov's plan has little
chance of acceptance, citing the negative assessments of
the proposal by Seleznev, who had declared "we do not
intend to be a pushover for either the president or the
government chairman." RFE/RL's Moscow bureau reported on
2 February that the Communist party has already
expressed its dissatisfaction with Primakov's proposal
and that Yabloko is also unenthusiastic, according to
faction member and deputy Yelena Mizulina. JAC

PRIMAKOV OFFERS MINERS MORE CASH. Speaking at the All-
Russia Miners Congress in Moscow on 1 February, Prime
Minister Primakov pledged to double state subsidies to
the coal industry from the 5.8 billion rubles ($256
million) earmarked in the current version of the 1999
budget. Primakov acknowledged that wage arrears in the
industry typically build up for five months on average.
"While this is primarily the fault of the employers, the
state must also share some blame," he said. Primakov
also called on miners and their union representatives to
refrain from threatening the government and to work
together to modernize the industry. Independent Miners'
Union head Aleksandr Sergeev reacted favorably to
Primakov's speech, welcoming his commitment to be
flexible on the closure of unprofitable mines, Interfax
reported. However, he noted that discontent in the coal
regions of Rostov Oblast and Komi Republic remain high.
JAC

GOVERNORS BLOC ATTRACTING MORE FOLLOWERS... The election
bloc of regional leaders set up by Samara Oblast
Governor Konstantin Titov will have its official legal
status by 15 February, Titov told reporters on 2
February. Titov revealed that in addition to the
regional leaders previously reported as interested in
joining the new movement (see "RFE/RL Newsline," 29
January 1999), the governors of Sakhalin, Irkutsk and
Astrakhan Oblasts are taking part in talks. "Segodnya"
argued on 29 January that if the new regional bloc is
"not a political false start" and regional
"heavyweights" join the bloc in the future, "it may
become the force that determines both the formation of
the next Duma and Yeltsin's successor in the Kremlin."
Krasnoyarsk Governor Aleksandr Lebed told reporters on
30 January that he will steer clear of the new alliance,
saying "I will go it alone." JAC

...AS BORDER DISPUTES PREDICTED TO GATHER FORCE.
"Nezavisimaya gazeta" suggested on 29 January that "the
threat of separatism must be much more serious and
constant than it appears to certain Moscow observers"
since Prime Minister Primakov has suggested that a ban
be introduced on territorial agreements that lead to the
revision of regional borders (see "RFE/RL Newsline," 26
January 1999). According to the daily, there are many
more territorial claims than just "Ingushetia's claims
to the Prigorodnii district of North Ossetia." The
newspaper concluded that "it is possible that by 2000
conflicts between oblasts and autonomous okrugs may
acquire an open form, the more so if the central powers
continue to lose influence in the [Russian] Federation."
JAC

TATARSTAN, MOSCOW IN BUDGET DISPUTE. Meeting with
faculty members of the Kazan Institute of Economy and
Finance on 1 February, Tatarstan's Prime Minister Rustam
Minnikhanov said his government considers it expedient
to reduce payments to the federal center since the
federal budget was formed without taking into account
Tatarstan's needs and does not provide for "the minimum
of required allowances" for the Tatarstan Republic. "We
are a donor region", he said, "we are not asking for
federal subsidies, we are asking for our own money."
Minnikhanov did not indicate what percentage of its
proposed contribution to the federal budget Kazan would
withhold. LF

CHINA SUGGESTED TO JOIN DISCUSSION ON ABM TREATY. Igor
Sutyagin of the U.S.A. and Canada Institute has reacted
negatively to news of a U.S. government proposal to
compensate for the deployment of two anti-ballistic
missile systems by giving Russia permission to have
three warheads on its Topol-M missile system. Sutyagin
told ITAR-TASS that the U.S. is apparently trying to
find a way to alleviate Russia's concerns stemming from
the U.S.'s proposal to modify the ABM treaty. He said
that the idea of giving Russia permission to have
missiles with three warheads in exchange for "its
consent to deploy the ABM system looks very
attractiveŠ[but] only resolves the problem of Russia's
relations with the U.S.," not with China. Sutyagin
recommended that China be drawn into the discussion of
the problem of the creation of the U.S. anti-ballistic
missile system. JAC

RUSSIA SAYS NO INTERNATIONAL PEACE-KEEPING FORCE NEEDED
IN KOSOVA. "Russian diplomatic sources" told Interfax on
1 February that Moscow sees no sense in deploying an
international peacekeeping force in Kosova similar to
the one deployed in Bosnia. According to those sources,
an international force should be sent only after the
conflicting sides have worked out an agreement on Kosova
and Yugoslavia has given its consent for the deployment
of such a force. JAC

SIDANKO ON VERGE OF BANKRUPTCY... Russia's fifth-largest
oil company, Sidanko, announced on 29 January that it is
facing bankruptcy proceedings because of overdue loan
payments. Sidanko is controlled by so-called oligarch
Vladimir Potanin's Interros holding company, the core of
which is the now struggling Oneksimbank. Citing an
"industry source with ties to Sidanko," the "Moscow
Times" reported on 2 February that Interros is now
"bankrupting" Sidanko to set up a new company and has
transferred titles of the shares of its subsidiaries to
offshore companies. According to another anonymous
source, the newspaper reported, this is a bankruptcy in
the typical style of Boris Jordan, the controversial
banker who assumed the helm of Sidanko in November. Both
Sidanko and Interros deny the allegations, the daily
noted. JC

...AS SLAVNEFT, ONAKO SAY 'NO' TO MERGER. Two of the
three companies selected by the Russian government to be
merged into one company, which reportedly would be one
of the world's largest in terms of oil reserves, have
expressed their opposition to the plan (see "RFE/RL
Newsline," 26 January 1999). Onako would rather transfer
its government-controlled majority stake to Orenburg
Oblast, the "Moscow Times" reported on 2 February.
Slavneft President Vasilii Duma said after a
shareholders' meeting that Slavneft would be best left
untouched. The newspaper suggested that the Belarusian
Property Ministry, which owns 10 percent of Slavneft,
likely opposes the merger. The ministry, however, has so
far made no public statement. JAC

EXTREMIST GROUP MARCHES IN MOSCOW. Protestors from the
extremist National Bolshevik Party led by novelist
Eduard Limonov disrupted a meeting of the Democratic
Choice party in Moscow on 30 January by chanting the
names of "Stalin" and "Beria" and making Nazi salutes,
Ekho Moskvy reported. A fistfight eventually broke out
between members of the two parties, Interfax reported.
The next day, another group, Russian National Unity,
marched through Moscow. Presidential chief of staff
Nikolai Bordyuzha told "Izvestiya" that the march was a
provocation intended to stir trouble and that it is
"nonsense" that Russia has no clear law defining
political extremism. Justice Minister Pavel
Krasheninnikov told Interfax on 1 February that the
presidential commission for combating political
extremism will discuss the group at its next meeting.
JAC

SOUTH KOREA ASKS RUSSIA FOR HELP WITH MILLENNIUM BUG IN
NORTH KOREA. The military attaché of the South Korean
Embassy in Moscow has delivered a letter to "Russian
defense structures" asking Moscow to help North Korea
examine possible computer problems associated with the
Millennium Bug, ITAR-TASS reported on 2 February. Seoul
is worried that computer problems in North Korea
associated with the turn of the century could result in
the accidental firing of rockets. Seoul has requested
Moscow's help because most of North Korea's rocket and
computer technology was supplied by the former Soviet
Union. BP

YELTSIN LOOKING CHIPPER AT BIRTHDAY CELEBRATION. Russian
Public Television carried film footage of a small
celebration of President Boris Yeltsin's birthday on 1
February. Patriarch of Moscow and All Russia Aleksii II
and Prime Minister Primakov brought bouquets and hugged
Yeltsin, who appeared cheerful. The same day, the Duma's
impeachment commission held hearings on the last charge
against Yeltsin, genocide against the Russian people,
Interfax reported. "Kommersant-Daily" reported the next
day that following the signing of his most recent
decree, Yeltsin now has only three presidential
advisers, only two of which receive a salary: his
daughter Tatyana Dyachenko and Mikhail Zybarov (see
"RFE/RL Newsline, 1 February 1999). Valentin Yumashev
also acts as an adviser but does not draw a salary. JAC

CHECHEN FIELD COMMANDERS SEND MIXED SIGNALS? Meeting on
1 February, former Chechen acting President Zelimkhan
Yandarbiev, former Foreign Minister Movladi Udugov, and
leading field commanders Shamil Basaev and Ruslan Gilaev
adopted a formal petition to President Aslan Maskhadov
calling on him to introduce Shariah law throughout
Chechnya immediately, Interfax reported. Last week, they
had drafted a program of reform measures addressed to
Maskhadov that entailed curtailing the powers of the
president and the creation of a "state council," the
powers and functions of which are unclear, according to
"Izvestiya" on 28 January. But that program made no
mention of either Islam or Islamic law. LF

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIA PASSES LAW ON NUCLEAR ENERGY. The Armenian
parliament on 1 February passed a law outlining
procedures for the safe use of nuclear energy, including
the import, export, and storage of nuclear and
radioactive materials, Interfax reported. Ashot
Martirosian, head of the Armenian nuclear supervision
agency, said the law could serve as the basis for a
future nuclear code. LF

AZERBAIJANI PRESIDENT'S BROTHER ACCUSES OPPOSITION OF
ESPIONAGE. Addressing the parliament on 1 February,
Jalal Aliev described opposition politicians, including
Musavat Party chairman Isa Gambar, as "traitors," "spies
of foreign states," and "enemies," Turan reported. Aliev
demanded legal action against those politicians and
against media outlets that provided what he termed
inappropriate coverage to President Heidar Aliev's
recent illness. Information Minister Siruz Tabrizli
tried to persuade Jalal Aliev to refrain from statements
inappropriate for a member of the presidential family,
but speaker Murtuz Alesqerov repeated the charge that
unnamed deputies are agents of foreign intelligence. He
added that newspapers printing "non-objective"
information should be barred from covering parliamentary
proceedings. Gambar told Turan he is considering legal
action against Aliev. On 2 February, "Nezavisimaya
gazeta" claimed that the U.S. is increasing its
intelligence gathering operations in Azerbaijan,
including contacts with opposition political parties. LF

WESTERN CONSORTIUM TO CUT OIL EXPORTS VIA RUSSIA? The
Azerbaijan International Operating Company, the first
international consortium to export Azerbaijani Caspian
oil to international markets, may cut exports through
the Baku-Novorossiisk pipeline in 1999 as the tariffs
are far higher than for the alternative route via
Georgia, Reuters and Turan reported on 1 February.
Speaking at a press conference in Baku, AIOC President
David Woodward said that the company's budget has been
slashed by 20 percent as a result of the slump in world
oil prices, necessitating cuts in production and
operating costs. He said that the AIOC may ask
Transneft, the operator of the Russian segment of the
Baku-Novorossiisk pipeline, to reduce its tariffs from
the present rate of $15.67 per metric ton. The total
tariffs for the Baku-Supsa route are $3.10 per metric
ton. By mid-1999, the throughput capacity of that
pipeline is expected to rise from 100,000 to 130,000
barrels per day. LF

GEORGIA ASPIRES TO EU MEMBERSHIP. In his weekly radio
broadcast on 1 February, President Eduard Shevardnadze
said that the 28 January decision to admit Georgia to
full membership of the Council of Europe is not the
final stage in the process of the country's integration
into European structures, Interfax reported. Arguing
that "we are in fact Europeans," Shevardnadze said that
"the main task" is Georgian membership in the EU. But he
conceded that it will take years to achieve that
objective. Shevardnadze again said that Georgia's
admission to the Council of Europe will be a key factor
in promoting stability in the Caucasus. LF

NAZARBAYEV ORDERS CUTS IN GOVERNMENT COSTS. President of
Kazakhstan Nursultan Nazarbayev has taken measures aimed
at cutting the government's administrative expenses,
ITAR-TASS reported on 2 February. A presidential decree
bans government officials from buying vehicles or
expensive office equipment, renovating offices, or
holding conferences in the former capital, Almaty,
without the president's consent. The decree also limits
the number of officials authorized to use cellular
phones. Nazarbayev has ordered the government to
inventory administrative offices and official vehicles
and to reduce their number. The measures are expected to
save the government $120 million this year. BP

KAZAKHSTAN CONSIDERS MORE IMPORT QUOTAS. Kazakhstan's
Minister of Energy, Industry, and Trade Mukhtar Ablyazov
has said his country may impose limits on imports from
Kyrgyzstan and Uzbekistan, Interfax reported on 1
February. Ablyazov said such steps are necessary to
protect domestic producers but would not be as far-
reaching as those imposed on some Russian imports on 11
January. Ablyazov said that a committee will be formed
to review the prices of imported goods and that duties
of 100-200 percent will be imposed to stop dumping.
Ablyazov claimed the measures will not damage the CIS
Customs Union (Kazakhstan, Kyrgyzstan, Belarus, and
Russia) as Russia already "discriminates against Kazakh
goods." Moscow has separate tariff systems for producers
from Russia and Kazakhstan. He warned that his country's
industry "may grind to a halt [under] the currency
devaluations of nearly all our CIS neighbors" but added
that Kazakhstan will not devalue its currency. President
Nazarbayev had said at the World Economic Forum in
Davos, Switzerland, on 29 January that his country will
introduce measures to protect domestic manufacturers. BP

TURKMEN SECURITY FORCES BREAK UP JOURNALISTS' MEETING.
Officers of Turkmenistan's National Security Committee
broke up a gathering of journalists in Ashgabat on 29
January at which the participants were expected to
announce the formation of an Independent Journalists'
Association, RFE/RL correspondents in Ashgabat reported.
The officers took down the names of those in attendance
at the meeting and detained five people who had
organized the meeting. One journalist present, Galina
Shipotkina of the state-owned newspaper "Neitralny
Turkmenistan," was dismissed, but no reason for her
dismissal has been given. BP

END NOTE

PRIMAKOV'S AMBITIONS

By Floriana Fossato

	Russian Prime Minister Yevgenii Primakov may or may
not want to be a presidential candidate, but at the very
least he seems to view himself as the kingmaker of
Russian politics.
	Since his appointment as premier last September,
Primakov has studiously avoided showing any enthusiasm
for the idea of becoming a presidential candidate.
However, shortly after his appointment, Primakov, a
former diplomat and spymaster, started promoting former
security officials to sensitive media and government
jobs.
	Among those ex-security officials is Grigorii
Rapota, a career spy and former deputy secretary of the
Russian Security Council. Last November, Rapota was
named head of Russia's state-owned arms exporter,
Rosvooruzhenie. He replaced Yevgenii Ananev, considered
an associate of former Prime Minister Viktor
Chernomyrdin.
	Rapota has worked closely with Primakov in the
past. He was the deputy head of Russia's Foreign
Intelligence Service (SVR). Before his 1996 appointment
as foreign minister, Primakov had headed that agency.
According to Russian media reports, control over the
lucrative Rosvooruzhenie has been the subject of bitter
rivalry among senior politicians.
	In a rare interview, published in "Kommersant-
Daily" last week, Rapota said Rosvooruzhenie does not
expect to earn more than $2 billion in arms sales abroad
this year, owing to Russia's economic crisis and
increased competition in the world arms markets. The
figure, he said, is the same as that in 1998. (Before
the August financial meltdown, exports of Russian arms
had been estimated to earn some $3.5 billion this year.)
That helps explain the fierce competition for control
over the company, which in the past was reported to be
an important source of financing during election
campaigns.
	Recent unsuccessful moves to appoint a retiring
counter-intelligence general to a senior position at the
All-Russian State Television and Radio Company (VGTRK)
also drew attention. General Yurii Kobaladze is a former
public relations head at SVR, where he also served under
Primakov. His appointment had initially appeared to be
certain. But last week, he was named first deputy
director of the ITAR-TASS news agency. He filled the
post left vacant after Leonid Nevzlin, close to the
Rosprom-Yukos industrial group, quit in the wake of the
August financial meltdown.
	Before any decision had been formalized, Kobaladze
himself said that VGTRK chairman Mikhail Shvydkoi had
offered him the job. However, Shvydkoi's deputy, Mikhail
Lesin, had ruled out that possibility. Lesin is one of
the founders of Video International. That company has a
monopoly on advertising at VGTRK, which is the latter's
main source of revenue.
	VGTRK includes the second nationwide channel of
Russian Television, the channel Kultura, Radio Russia,
the RIA news agency, a network of radio and television
stations across Russia, as well as the national
transmission network. Despite serious financial
difficulties, VGTRK and other media holdings are
expected to play a key role in influencing the outcome
of presidential and parliamentary elections.
	Even if Kobaladze did not achieve his goal, other
former security service officials already working at
VGTRK now reportedly hold top jobs. In December, Lev
Koshlyakov, who until 1994 worked for the counter-
intelligence service, was named to head the news program
"Vesti." He coordinates the network of correspondents
both for the program and for the RIA news agency.
	Judging from a number of recent government
appointments, other officials who--unlike Rapota and
Kobaladze--never worked with Primakov but made their
careers in security organs have been promoted to top
positions in government agencies considered potential
key sources of campaign financing.
	In October, former First Deputy Interior Minister
Mikhail Yegorov was appointed first deputy head of the
Customs Committee. The same month, Aleksei Shestaperov,
formerly deputy head of the Federal Agency of Government
Communications and Information (FAPSI) was chosen to
head the state-owned company Rostek, which reportedly
has links with the Customs Committee since it deals with
customs payments.
	In November, a Defense Ministry officer, General
Vladimir Kovalev, became deputy transport minister. The
Transport Ministry, together with the power grid Unified
Energy Systems and the gas monopoly Gazprom, is one of
Russia's so-called natural monopolies. Most analysts in
Moscow expect those monopolies to be a source of
patronage and financing ahead of parliamentary elections
in December and presidential elections scheduled for
June 2000.
	This trend indicates that even if he does not
become a presidential candidate, Primakov, with his
extensive political and economic influence, will be one
of the country's most powerful kingmakers.

The author is a Moscow-based RFE/RL correspondent.
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