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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 3, No. 34, Part I, 18 February 1999


___________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 34, Part I, 18 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

* YELTSIN WARNS CLINTON NOT TO ATTACK YUGOSLAVIA

* FEDERATION COUNCIL APPROVES 1999 BUDGET

* ARMENIAN PARLIAMENT LIFTS FORMER MINISTER'S IMMUNITY
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RUSSIA

YELTSIN WARNS CLINTON NOT TO ATTACK YUGOSLAVIA. President
Boris Yeltsin telephoned with his U.S. counterpart, Bill
Clinton, on 17 February to say, "We will not allow you to
touch Kosova," ITAR-TASS reported the next day. Yeltsin said
he has told the U.S. president both by telephone and letter
that NATO must not launch any airstrikes against Yugoslavia
even if Belgrade fails to meet the deadline for a truce with
the Kosovars. Such a bombing attack "won't happen," Yeltsin
said. Colonel-General Leonid Ivashov, the head of
international cooperation at the Russian Defense Ministry,
said NATO "has no diplomatic, legal, political, or economic
levers in its arsenal, only naked military force." He called
plans to send NATO troops to Kosova "a very crude and
simplistic" way of settling the conflict. PG/PB

FEDERATION COUNCIL APPROVES 1999 BUDGET. By a vote of 130 to
18, the Federation Council gave final approval to the
government's 1999 budget, Russian agencies reported. The
budget calls for expenditures of 575 billion rubles ($25
billion) and revenues of 474 billion rubles ($21 billion).
Prime Minister Yevgenii Primakov thanked the council for its
vote, adding that "you have paved the way for intensive work
in the economy," even though he conceded that the budget is
far from perfect and "cannot satisfy either us or you."
Moreover, he promised that the budget will not be
sequestered, as previous budgets have been. Finance Minister
Mikhail Zadornov said the government expects to gain
additional revenues by delaying the reduction in value-added
tax from 1 April to 1 July. But many observers suggested that
the budget's assumptions--30 percent inflation in 1999 and a
ruble exchange rate of 21.5 to the dollar--are so unrealistic
that the budget will never work or attract support from
Western financial institutions. PG

RUSSIA FACES NEW DIFFICULTIES IN SECURING MORE AID. Premier
Primakov said that Russia's positions in talks with
international lenders "could not be more flexible" than they
are at present, Interfax reported on 17 February. The IMF
technical adviser to the Federal Tax Service, Richard
Hifield, said that the IMF would like to see Russia work
harder to collect taxes, Interfax reported on 17 February.
His comments, which were echoed by the World Bank, other IMF
officials, and the U.S., came as the IMF delegation departed
Moscow without making a commitment for more assistance.
Meanwhile, German officials on the eve of Chancellor Gerhard
Schroeder's visit to Moscow said Bonn cannot extend any new
loans to Russia. But World Bank officials indicated that they
expect early agreement with Russia on extending three loans
that the Russian government has already factored into the
budget. In a related development, Russian First Deputy Prime
Minister Yurii Maslyukov said he will remain in place as the
chief Russian negotiator with the IMF. PG

RUSSIA FACES 10 MILLION TON GRAIN SHORTFALL. An official at
the Russian Ministry of Food and Agriculture said Russia will
face a grain shortfall of some 10 million tons during the
first half of 1999 as a result of last year's disastrous
harvest, Russian agencies reported. But the situation may
deteriorate even further. Farm Minister Viktor Semenov said
Russia will have only a 1 million ton reserve after the
winter season, down from the 20 million ton reserve a year
ago. He indicated that Russia must harvest at least 73
million tons of grain this year, up from 47.8 million in
1998, or be forced to purchase grain from abroad. That may
not happen. Deputy Prime Minister Gennadii Kulik said that
Russia is likely to experience another drought this year and
thus be unable to improve on the 1998 harvest. As a result,
Russia has satisfied requirements for food aid from the EU
and is considering asking Canada for food assistance as well,
Kulik said. PG

IVANOV SEES NO FUNDAMENTAL RIFT WITH U.S.... Despite
disagreements between Moscow and Washington over NATO
expansion, Kosova, and Iraq, Russian Foreign Minister Igor
Ivanov said on 17 February that there is no "fundamental
division" between the two governments, Interfax reported. He
suggested that the main achievement in bilateral relations is
that it is now "impossible" for the differences that do exist
"to degenerate into direct confrontation." PG

ŠBUT WARNS AGAINST NATO EXPANSIONŠ If NATO continues to
expand and especially if this process includes the Baltic
countries or CIS states, Ivanov said that "Russia will take
any steps it finds necessary to guarantee [Russian] national
security." He repeated Moscow's insistence that agreement
must be reached on modifications in the CFE treaty before the
formal admission of the three new NATO countries in March,
something he thought could be achieved during the visit to
Moscow later this week of U.S. Deputy Secretary of State
Strobe Talbott. PG

Š URGES UN SECURITY COUNCIL TO DEBATE KOSOVAŠ Ivanov said
that foreign troops--including Russian ones--could be
deployed on Yugoslav territory only with the agreement of the
Belgrade authorities. And he suggested that the UN Security
Council should take up the matter rather than leaving it to
unilateral NATO action, which Moscow continues to oppose.
Meanwhile, the State Duma voted 318 to zero to approve a
statement condemning any use of force in Kosova. And Colonel-
General Leonid Ivashov, the Defense Ministry's official
responsible for international cooperation, told Interfax that
the Western alliance has "no diplomatic, legal, political, or
economic levers in its arsenal, only naked military force,"
which, he said, the Russian government must oppose. PG

ŠAND CRITICIZES U.S., BRITAIN ON IRAQ. Arguing that the U.S.
and Britain have succeeded only "in making matters worse" by
their lack of patience in Iraq, Ivanov said the UN Security
Council should develop new approaches, including the
replacement of inspections with monitoring of Iraqi military
facilities. Without naming names, he denounced those who have
deliberately spread what he said were "lies" and
"provocations" about Russian involvement in Iraq, Iran, and
other Middle Eastern countries. PG

LUZHKOV, ZHIRINOVSKY CONDEMN UKRAINIAN PACT. Moscow Mayor
Yurii Luzhkov denounced the ratification of the Russian-
Ukrainian treaty as "shameful," Interfax reported on 17
February. He said that he will let Russian citizens know just
who voted for the "surrender" of Crimea and Sevastopol. And
he suggested that the ratification might be declared
"improper, immaterial, and unlawful" by Russian courts.
Meanwhile, Liberal Democratic Party of Russia leader Vladimir
Zhirinovsky described the ratification of the treaty as a
"black day in Russian history" and said that the Federation
Council acted as "a council of Russia's destroyers."
Krasnoyarsk Governor Aleksandr Lebed was also among those who
sharply criticized the ratification of the accord. PG

DUMA URGES NEW ANTI-CRISIS PROGRAM. By a vote of 261 to zero,
the Duma approved an appeal calling on President Yeltsin and
the government to work together with the parliament to
develop a new anti-crisis program, Interfax reported.
According to the resolution, the current crisis "cannot be
overcome while the main defects in market relations still
exist." PG

DOLLAR'S PURCHASING POWER IN RUSSIA DOUBLED SINCE AUGUST.
According to Interfax, the purchasing power of the U.S.
dollar in Russia has nearly doubled since the August 1998
financial crisis. The ruble has lost almost 73 percent of its
value, and inflation in the consumer sector has exceeded 90
percent during this period. As a result, holders of dollars
have seen their purchasing power increase twofold. PG

YELTSIN TEAM READY TO ATTEND IMPEACHMENT DEBATE. President
Boris Yeltsin's aide Oleg Sysuev said on Ekho Moskvy that the
presidential administration is quite prepared to take part in
any discussion of the findings of the commission considering
Yeltsin's impeachment, Interfax reported. The presidential
envoy to the Duma would lead any such participation, Sysuev
said. PG

COMMUNISTS OPPOSE SIMULTANEOUS ELECTIONS... The Communist
Party of Russia is opposed to simultaneous parliamentary and
presidential polls, Communist Party leader Gennadii Zyuganov
told Interfax on 17 February. He said the country's
constitution precludes such elections. PG

ŠDENOUNCE GOVERNMENT PROBE OF PARTY. Zyuganov also denounced
the plans of the Justice Ministry to examine whether the
Communist Party is complying with its charter. The party
chief said that Communists have "not the slightest reason to
worry about any objective probes," but he said that the
current probe is politically motivated and thus should be
dropped. If it is not, Zyuganov said, that will call into
question Communist participation "in the task group now
preparing an agreement on civil peace and reconciliation." PG

RUSSIAN CUSTOMS NOW DENOMINATED IN EUROS. Prime Minister
Primakov has signed a decree ordering that customs duties be
calculated in euros rather than ecus, Interfax reported on 17
February. PG

U.S. TEAM TO ADDRESS RUSSIAN MILITARY'S Y2K PROBLEMS. A U.S.
military team arrived in Moscow on 17 February to begin talks
with their Russian counterparts on how to cope with the
millennium bug problem. Aleksandr Krupnov, the head of the
State Communication Committee, said that Russia needs some $3
billion to overcome the problem in time but that Moscow does
not currently have the funds. PG

FOREIGN NUCLEAR FUEL REPROCESSING IN RUSSIA URGED. In order
to raise additional funds, Russian Atomic Energy Minister
Yevgenii Adamov has called for changing current regulations
in order to allow Moscow to import and reprocess foreign-
owned nuclear fuel, Interfax reported. on 17 February. He
said that the average world price for such reprocessing is
now approximately $1,000 per kilogram. PG

MOSCOW URGES FAIR TRIAL FOR KURDISH LEADER. Following a
meeting with visiting his Syrian counterpart, Farouq al-
Shara, Foreign Minister Ivanov said on 17 February that
Moscow hopes that any trial of Kurdish leader Abdullah Ocalan
will be both fair and attended by international observers.
But Moscow newspapers warned Russians against planning to
spend their holidays on Turkish beaches, Reuters reported. PG

DUMA VOTES TO BAN ALCOHOL IMPORTS UNTIL 2002. In the second
and third readings, the Duma approved a draft law banning
imports of alcohol until 1 January 2002, Interfax reported on
17 February. Duma members explained their vote as part of an
effort to "combat the illegal production and sale of ethyl
spirits and alcohol products." PG

DUMA SEEKS TO PUNISH EMPLOYERS WHO DON'T PAY WORKERS. The
Duma passed a bill that will hold employers criminally liable
for not paying wages to their employees because of "mercenary
or other personal interests," ITAR-TASS reported. If found
guilty, employers could be fined or sent to prison for up to
seven years. The bill now goes to the Federation Council. PG

ROSSIYA AIRLINE CHIEF SACKED FOR AIRPORT COLLISION. Prime
Minister Primakov has fired Vladimir Kachnov, head of the
state-owned Rossiya airline, holding him responsible for the
8 February ground collision at the Moscow airport between
Yeltsin's IL-96 and a plane that had brought Italian Prime
Minister Massimo D'Alema to the Russian capital, Interfax
reported. Yeltsin was returning from the funeral of King
Hussein in Jordan at the time of the collision. D'Alema was
not in his plane at the time. PG

RUSSIA, CYPRUS AGREE ON S-300 DEPLOYMENT ON CRETE. The
Cypriot embassy in Moscow issued a statement on 18 February
confirming that Cypriot and Russian officials have reached a
final agreement on the deployment on Crete of the S-300 air
defense missile complexes originally ordered by Cyprus for
deployment on that island, Reuters reported (see "RFE/RL
Newsline." 17 February 1999). It is unclear whether Cypriot
Defense Minister Yannakis Chrisostomis, who traveled to
Moscow to finalize the agreement with the Russian arms export
concern Rosvooruzhenie, met on 17 February, as planned, with
his Russian counterpart, Sergeev. LF

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN PARLIAMENT LIFTS FORMER MINISTER'S IMMUNITY.
Deputies voted by 102 to one on 17 February to lift the
parliamentary immunity of former Interior Minister Vano
Siradeghian, AP and RFE/RL's Yerevan bureau reported.
Addressing the parliament before the vote, Prosecutor-General
Aghvan Hovsepian said he has sufficient information to open
criminal proceedings against Siradeghian in three cases
involving five planned murders, according to Noyan Tapan.
Siradeghian fled abroad on 29 January, three days after
lawmakers had refused an earlier request by Hovsepian to
impeach him. He is currently believed to be in France (see
"RFE/RL Newsline," 26 January and 1 February, 1999). Interior
and National Security Minister Serzh Sarkisian said earlier
on 17 February that if Siradeghian's immunity is lifted, he
will seek his extradition. LF

U.S. EXPERTS TO HELP ARMENIAN MURDER INVESTIGATION. Two FBI
officials have arrived in Armenia at the request of the
country's leadership to participate in the ongoing
investigation into the murder earlier this month of Interior
Ministry troops commander Artsrun Markarian, ITAR-TASS
reported on 16 February. The same day, the former ruling
Armenian Pan-National Movement (HHSh) and the former majority
Hanrapetutiun parliamentary faction issued separate
statements saying that the initial hypothesis that
Markarian's death was suicide can be attributed to "cynicism"
and criticizing the alleged inability of Interior and
National Security Minister Sarkisian to prevent crime, Noyan
Tapan reported. LF

ARMENIA'S CHANCES OF WTO MEMBERSHIP ASSESSED. Ara Hakobian,
the Armenian official who presides over negotiations on
Armenia's acceptance into membership of the World Trade
Organization, told journalists in 15 February that the
favorable prospects for Armenia's joining that organization
has been jeopardized by the equivocal policy of the former
administration, Noyan Tapan reported on 17 February.
Armenia's new leadership has reaffirmed its eagerness to join
the WTO, Hakobian added. Prime Minister Armen Darpinian said
in November 1998 that he believes Armenia will join the
organization no later than July 1999. LF

RUSSIA TO STRENGTHEN AIR DEFENSES IN ARMENIA. Speaking on his
arrival in Yerevan on 17 February, Russian Air Force
Commander Colonel-General Anatolii Kornukov said Moscow has
begun delivering the components of S-300 air defense systems
to its military base at Gyumri, ITAR-TASS and Turan reported.
Kornukov said the air-defense system currently installed at
that facility is obsolete. He further characterized the
overall level of armaments in the South Caucasus as "in favor
of the states bordering Armenia, not Armenia itself." He said
Moscow "would be pleased" if Azerbaijan decided to join the
CIS unified air defense system. "Obshchaya gazeta" of 11-17
February claimed that the deployment of the S-300 systems and
additional MiG-29 aircraft is intended to protect Russia's
Armenian base from a possible attack by NATO missiles and
fighter aircraft stationed at the Incirlik base in eastern
Turkey. LF

TURKEY CONCERNED THAT CAUCASUS MAY BECOME 'MANEUVERING ZONE.'
Meeting on 16 February in Ankara with his Azerbaijani
counterpart Tofik Zulfugarov, Turkish Foreign Minister Ismail
Cem said "we are anxious about the recent arms proliferation
in the Caucasus. We don't want the region to become a
maneuvering zone for larger countries. The Caucasus belongs
to the Caucasian countries, and it should remain like that,"
according to the "Turkish Daily News" on 17 February. Cem
said the close relations between Turkey and Azerbaijan
constitute a base for peace and stability in the region.
Zulfugarov, on a two-day official visit to Turkey, was also
scheduled to meet with President Suleyman Demirel and Prime
Minister Bulent Ecevit to discuss the Karabakh conflict and
the planned Baku-Ceyhan export pipeline for Azerbaijan's
Caspian oil. LF

U.S. UPBEAT ON AZERBAIJAN EXPORT PIPELINE... Stanley
Escudero, the U.S. ambassador to Baku, told Turan on 17
February that "great progress" has been made in the past few
months toward an agreement on construction of the Baku-Ceyhan
oil export pipeline. Escudero said that talks between the
governments of Azerbaijan and Turkey and the oil companies
engaged in exploiting Caspian oil are continuing, and he
predicted that a final agreement on financing that pipeline
will be made by the end of the summer. Anatolia News Agency
reported on 17 February that two intergovernmental agreements
between Turkey and Azerbaijan related to that project are
expected to be signed in March and ratified within 90 days by
both parliaments. LF

...WHILE OIL COMPANIES UNENTHUSIASTIC. Richard Oliver,
managing director of BP Amoco, the senior partner in the
first and largest international consortium to begin
developing Azerbaijan's Caspian reserves, has said that the
Baku-Ceyhan project is not currently needed, given that two
pipelines for exporting Azerbaijan's oil already exist,
Bloomberg reported on 17 February. He added that there is "no
need" for an early decision to proceed with construction of
the Baku-Ceyhan pipeline. LF

AZERBAIJANI PRESIDENT ENDORSES PLANNED TRANS-CASPIAN GAS
PIPELINE. Heidar Aliev has agreed to a formal request by his
Turkmen counterpart, Saparmurat Niyazov, to route the planned
Trans-Caspian gas pipeline to Turkey via Azerbaijan, Reuters
and Turan reported on 17 February. Meeting with Aliev the
previous day, Yossef Maiman, chairman of the Israeli company
that is helping to form a consortium to build that pipeline,
said the U.S. Ex-Im Bank will contribute approximately $1
billion toward the estimated $3 billion construction costs.
LF

MORE AZERBAIJANI OPPOSITION ACTIVISTS SENTENCED. A Baku
district court on 17 February handed down sentences of two to
three years in prison to 15 opposition activists, AP and
RFE/RL's Baku bureau reported. The activists had participated
in a banned opposition rally in Baku on 8 November, which was
forcibly dispersed by police (see "RFE/RL Newsline," 9
November 1998). Several of those sentenced were found guilty
of resisting arrest. Also on 17 February, the newspaper
"Halq," which is published by the president's office,
reported that Azerbaijan Popular Front Party Chairman Abulfaz
Elchibey has announced his candidacy in the 2003 presidential
elections, according to Turan. LF

KARIMOV DECLARES DAY OF MOURNING... Uzbek President Islam
Karimov has declared 18 February a day of mourning for the
victims of the bombings in Tashkent two days earlier, RFE/RL
corespondents reported. ITAR-TASS reported on 18 February
that 45 of the more than 150 people hospitalized have
returned home, while 12 remain in critical condition
following "complicated" operations. Fifteen people were
killed in the explosions. Meanwhile, Halle Degn of the OSCE
told a news conference in Tashkent on 17 February that Uzbek
security agencies have apprehended five people in connection
with the terrorist act. Several news agencies quote Karimov
as saying that "if necessary, we will cut off the hands of
those responsible" for the bombings. BP

ŠREPORTS ECONOMIC FIGURES FOR 1998. President Karimov
addressing the cabinet on 17 February, said GDP increased by
4.4 percent last year, industrial output by 5.8 percent, and
agricultural production by 4 percent, Interfax reported.
Monthly inflation stood at 1.9 percent, and the Central
Bank's monthly refinancing rate stayed below 3 percent.
Retail trade was up by 14 percent and consumer goods output
by 7.2 percent. Foreign investment last year totaled $1.3
billion, a 22.6 percent increase over 1997. Karimov noted
that the government hopes that this figure will increase to
$2 billion in 1999. The foreign trade surplus reached $240
million, which contributed to augmenting foreign currency and
gold reserves. Karimov, however, did not give a figure for
hard currency reserves. BP

MYSTERY ILLNESS CLAIMS 350 LIVES NEAR TAJIK-AFGHAN BORDER. An
illness reported to be "unknown to modern medicine" has
claimed the lives of 350 people in the area along the Tajik-
Afghan border over the past two weeks, ITAR-TASS and Asia
Plus reported on 17 February. The illness has affected mainly
young children and the elderly. Since the start of 1999, 203
cases of typhoid have been reported in the southern Tajik
city of Kulyab. BP

KAZAKH COURT RULES AGAINST BRITISH COMPANY. Kazakhstan's
Supreme Court has ruled that Britain's Trans-World Group
caused "considerable damage to Kazakhstan's economic and
financial interests," Interfax reported on 17 February.
According to the court, the British company is responsible
for losses totaling $145 million at the Aksu Ferroalloy
Works, $102 million at Aluminum of Kazakhstan, more than $86
million at the Ferrokhrom ferroalloy works, and some $40
million at the Sokolov-Sarbai Mining Production Association,
Kazakhstan's leading producer of iron-ore products. The court
has already declared agreements with the British company to
be invalid. BP

KYRGYZ PRESIDENT SAYS ECONOMY NEEDS MORE FOREIGN INVESTMENT.
Askar Akayev told a 17 February meeting of the Advisory
Council on Investment Policy that the country's economic
stability this year depends on the level of foreign
investment, Interfax reported. Akayev listed five main goals
aimed at attracting foreign investment. First, improving tax
legislation for both local and foreign businesses and
establishing a special board at the Tax Inspectorate to
concentrate on deals with foreign companies. Second,
liberalizing legislation on foreign investment. Third,
reforming the judicial system to ensure the legality of deals
between state agencies and foreign producers (according to
Akayev, the country has too few lawyers with expertise in
interpreting the Civil Code). Fourth, limiting the
interference of administrative bodies in the activities of
foreign companies. And fifth, setting up free trade zones in
the country. BP

KYRGYZ INCREASE SECURITY ALONG BORDER WITH UZBEKISTAN. On the
orders of President Akayev, security measures along
Kyrgyzstan's border with Uzbekistan are being increased
following the terrorist bombings in Tashkent on 16 February,
RFE/RL correspondents in Bishkek reported. In some areas,
roads leading from Uzbekistan into Kyrgyzstan have been
closed. Akayev also ordered Kyrgyz security forces to
cooperate fully with their Uzbek counterparts. BP

KURDS DEMONSTRATE OUTSIDE GOVERNMENT BUILDING IN BISHKEK.
Some 150 Kurds demonstrated outside the government building
in the Kyrgyz capital to urge President Akayev to appeal to
Turkish leaders for clemency toward captured Kurdistan
Workers' Party leader Abdullah Ocalan, RFE/RL correspondents
reported. Sulhadin Kasymov, chairman of the Nyshtyman Kurdish
Association in Kyrgyzstan, said there are currently 30,000-
40,000 Kurds living in Kyrgyzstan. BP

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