RFE/RL NEWSLINE Vol 3, No. 50, Part I, 12 March 1999

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RFE/RL NEWSLINE Vol 3, No. 50, Part I, 12 March 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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NATO MARKS 50TH YEAR
Special reports from NATO's London conference as well as
coverage of the ceremony inducting Poland, Hungary, and
the Czech Republic into the military alliance are available
online:
http://www.rferl.org/nca/special/madrid-nato/index.html

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Headlines, Part I

* IMF TO ASK FOR NEW BUDGET?

* PRIMAKOV, MASKHADOV MEETING PLANNED, WHILE REPORTS ON
SHPIGUN'S WHEREABOUTS DIVERGE

* AZERBAIJANI OIL REACHES GEORGIAN BLACK SEA TERMINAL
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RUSSIA

IMF TO ASK FOR NEW BUDGET? Shortly before new talks started
with the IMF mission in Moscow on 12 March, Russian Prime
Minister Yevgenii Primakov told reporters that Russia "needs
an agreement with the IMF, but that does not mean that this
will be the main pillar of support for the domestic economy."
Primakov also called for stronger central control over local
spending. Meanwhile, sources at the IMF told RFE/RL's
Washington bureau that Russia will have to get an amended
budget through the State Duma if there is to be any chance of
reopening the fund's lending programs. The Duma, however, is
likely to oppose such an effort. Ekho Moskvy reported that
legislators passed in the third reading a bill reducing
value-added tax as of 1 July just one day after Prime
Minister Primakov asked legislators to refrain from making
any decision on when the cut would take effect. JAC

PRIMAKOV, MASKHADOV MEETING PLANNED... Russian First Deputy
Prime Minister Vadim Gustov told Interfax on 11 March that
preparations are under way for a meeting between Prime
Minister Primakov and Chechen President Aslan Maskhadov.
Yeltsin's press secretary, Dmitrii Yakushkin, said the
meeting "must be thoroughly planned and prepared" in order to
achieve tangible results, but Ingushetia's President Ruslan
Aushev urged that it take place "immediately." Aushev added
that the 5 March abduction in Grozny of Russian Interior
Ministry Major-General Gennadii Shpigun was "not a criminal
kidnapping, it was committed for purely political objectives
to weaken" Maskhadov. LF

...WHILE REPORTS ON SHPIGUN'S WHEREABOUTS DIVERGE. A senior
Chechen official in charge of one of the groups investigating
Shpigun's abduction told journalists in Grozny on 11 March
that Shpigun is no longer in Chechnya, but the official
declined to divulge the major-general's whereabouts. He added
that the identity of the abductors is known. But Radio Mayak
on 11 March quoted a Russian Interior Ministry official in
the North Caucasus as stating that Shpigun is still in
Chechnya. That official, too, claimed that the identity of
the kidnappers has been established. In Grozny, Maskhadov
issued a decree merging all existing security and special
services into a new ministry for state security, of which
Deputy Prime Minister Turpal Atgeriev was named head,
Interfax reported. Meanwhile, two convicted murderers were
executed by firing squad in Grozny on 11 March, Reuters and
AP reported. LF

U.S. FOOD AID ARRIVES. The first batch of U.S. food
assistance--48 containers of green-pea seeds intended for
farmers in the northern and central areas of Russia--
arrived in St. Petersburg on 11 March, ITAR-TASS reported.
According to "Trud" the same day, a special Russian
government decree lays out how the food will be distributed
to each federation subject. For example, Moscow will
receive 360,000 tons of wheat, 10,000 tons of rice, and
40,000 tons of beef. Most of the food assistance from the
U.S. and EU will go to Komi Republic, Primorskii and
Khabarovsk Krais, and Kemerovo, Kamchatka, and Smolensk
Oblasts, the newspaper reported. JAC

RUSSIA SUGGESTS BARTER TO REDUCE FOREIGN DEBT. Deputy
Finance Minister Mikhail Kasyanov told ITAR-TASS on 12
March that Russia wants to pay off part of its foreign debt
with goods. According to Kasyanov, the government of Italy
has already expressed "a general interest in the plan,"
while similar proposals were discussed with the German
government during Chancellor Gerhard Schroeder's visit to
Moscow and during the meeting of deputy finance ministers
of G-7 and G-25 countries in Bonn on 11 March. Kasyanov
added that "the talk is not about raw materials. We want
Russian equipment to be bought." JAC

STOCKS FLOAT UPWARD, AS MARKET REGULATOR FACES THREAT.
Russian share prices on 11 March rose to their highest
level since the onset of the economic crisis last August,
with the benchmark RTS index soaring 7.55 percent. Analysts
suggest the increase is due to optimism about upcoming IMF
talks and upward trends in oil prices, the "Moscow Times"
reported on 12 March. According to the newspaper, the
market's regulator, the Federal Securities Commission, is
facing new legal challenges to its authority. On 11 March,
a Moscow court ruled that the commission exceeded its
powers when it ruled last August to ban the Moscow
Interbank Currency Exchange from trading in derivatives.
Next week, the Moscow Central Stock Exchange will appeal to
the Supreme Court, asking it to declare all the
commission's rulings since 1 July 1996 invalid because they
were not published in an official newspaper, as required by
a 1996 presidential decree. JAC

YELTSIN TRIP TO PARIS POSTPONED. President Boris Yeltsin's
trip to Paris scheduled for the second half of March has
been postponed, presidential spokesman Yakushkin announced
on 11 March. Yeltsin is currently slated to leave the
hospital on 20 March, but Yakushkin emphasized that his
release will depend on how his medical treatment proceeds.
Yeltsin met with Yabloko leader Grigorii Yavlinskii on 10
March. Yavlinskii told NTV the next day that the two men
discussed the Russian Constitution, the IMF, the foreign
debt, and corruption. Yavlinskii also revealed that
following news reports of his meeting with Yeltsin, 11
governors contacted him by phone. According to Interfax,
Yeltsin may meet with Moscow Mayor Yurii Luzhkov "in the
near future." JAC

MORE HARSH WORDS ABOUT NATO. Yeltsin "was and remains
negative" about NATO's eastward expansion, presidential
spokesman Yakushkin told reporters on 12 March. Foreign
Minister Igor Ivanov said the landmark event of three
former Warsaw Pact countries--the Czech Republic, Hungary,
and Poland--joining the alliance is "rather sad" and a
"movement in the wrong direction." Colonel-General Leonid
Ivashov, head of the Defense Ministry's Department for
International Military Cooperation, told Interfax that
Russia is not planning any new military measures but
"NATO's further enlargement, which is diminishing Russia's
geopolitical and military-strategic space, may force Russia
to take responsive measures." Colonel-General Leontii
Shevtsov, commander of the Moscow military district,
suggested that Russia needs more soldiers. He told
reporters on 12 March that at their current strength
Russian ground forces would be incapable of countering a
NATO attack. JAC

RUSSIAN REGIONS VULNERABLE TO MILLENIUM BUG. While playing
down fears about the ability of large Russian companies
such as Gazprom or managers of the country's nuclear
missile system to cope with problems associated with the
millennium bug, computer specialist and Director-General of
Lanit-Tercom Andrei Terekhov told Reuters on 11 March that
local governments in Russia are dangerously unprepared. The
breakdown of local computers could trigger interruptions in
the provision of social services, heat, and electricity.
Meanwhile, in Khabarovsk representatives from 10 krais and
oblasts gathered with a group of information technology
specialists from Moscow to discuss the problem at a session
of a subcommittee of the Far East and Trans-Baikal
Association, ITAR-TASS reported. One official noted that to
resolve the YK2 problem, it is essential for local
officials to first recognize that they have one. JAC

RUSSIA, CHINA CONSULTING ON ABM. Russian and Chinese
officials are "more or less continuously" discussing
possible steps to counter U.S. plans to set up a tactical
anti-ballistic missile system in Asia, Russian "military
and diplomatic sources" told Interfax on 11 March.
According to these sources, the issue is likely to be
raised again when Defense Minister Igor Sergeev visits
India in the spring and his Chinese counterparts visit
Moscow in April. JAC

FINANCE MINISTRY CONTINUING TO SPOTLIGHT REGIONAL
MISSPENDING. First Deputy Finance Minister Viktor
Khristenko told reporters on 11 March that while the
central government has paid wages to state workers financed
from its budget in February in full, most regions are
continuing to have problems meeting the payrolls of their
workers, although there has been some overall progress. For
example, as of 1 February 1999, the debt to workers paid by
local budgets had dropped 9 percent from 1 January to 11.6
billion rubles ($516 million). But in only six regions have
wages been paid in full with no accumulated debt. According
to "Izvestiya" on 12 March, the poorest regions tend to
have the biggest government staffs, whose wages are "not
bad." Union leaders complain, according to the daily, that
information about transfers from Moscow is not reported in
the local press and therefore it is hard to track how money
is being spent or, in many cases, wasted. JAC

KRASNOYARSK PLAGUED BY TAX EVASION. A top Interior Ministry
official in Krasnoyarsk Krai announced that he has
uncovered evidence of tax evasion in some of the
territory's key cities, such as Achinsk, Nazarov, and
Divnogorsk, "EWI Russian Regional Report" reported on 11
March. With growing export volumes and declining tax
revenues, krai officials are naturally suspicious. Large
enterprises, such as Krasugol, the Nazarovskii and
Berezovskii coal mines, the Krasenergo power utility, and
the Achinsk Alumina Combine, owe large tax bills to all
levels of government. Their total debt is some 3 billion
rubles ($134 million), tax agencies estimate, according to
the report. JAC

IRANIAN DELEGATION SIZES UP MILITARY-INDUSTRIAL COMPLEX IN
KIROV. Headed by Iran's ambassador and plenipotentiary to
Russia Medhi Safari, an Iranian delegation has arrived in
Kirov Oblast for a two-day official visit, "Izvestiya"
reported on 11 March. Featuring prominently on the itinerary
of the group, which includes the Iranian military and defense
attaches, are visits to the oblast's military-industrial
complex. According to the daily, Kirov Governor Vladimir
Sergeenkov favors promoting arms exports and using the
revenues for dual-purpose high-technology production. JC

TATARSTAN'S PRESIDENT ADDRESSES PARLIAMENT. In his annual
address to the State Council on 11 March, Mintimer Shaimiev
said his republic's primary objective in 1999 is to "overcome
the consequences of the financial crisis in Russia," RFE/RL's
Kazan bureau reported the following day. Shaimiev said the
current negotiations on prolonging the intergovernmental
treaty between Tatarstan and Russian Federation, which
expired last month, focus on defining future inter-budget
relations between Russia's donor regions and the federal
center. He confirmed that the republican government will
continue to support and develop domestic industry by
"bringing the system of financial institutions and the
taxation system in the Tatarstan Republic into order."
Shaimiev also advocated reprofiling former Russian defense
industry plants in Tatarstan to produce consumer goods. LF

CONFUSION OVER BEREZOVSKII'S STATUS CONTINUES. Boris
Berezovskii told Interfax on 11 March that reports he has
resigned as CIS executive secretary are "a lie and a
provocation." Earlier that day, ITAR-TASS and Caucasus Press
quoted the Georgian presidential press service as stating
that President Yeltsin had informed his Georgian counterpart,
Eduard Shevardnadze, the previous day that Berezovskii
submitted his resignation on 9 March. Berezovskii said that
he merely requested Yeltsin's permission to take vacation. He
added that only the Council of CIS Heads of State , which
appointed him as executive secretary, is empowered to remove
him from that post. LF

TRANSCAUCASUS AND CENTRAL ASIA

AMENDMENTS TO ARMENIAN CONSTITUTION PROPOSED. Meeting on 10
March, the presidential Commission on Constitutional Reform
proposed making it more difficult for the parliament to
overturn a presidential veto on legislation, RFE/RL's Yerevan
bureau reported the following day. The commission proposed
that the parliament need a two-thirds majority--instead of
the current simple majority--to override a presidential veto.
It also proposed that the president be empowered to dissolve
parliament only in the event of its "inactivity." The
constitution currently enables the president to dissolve the
legislature virtually at will, except during the first year
of its tenure and his last six months in office. The
commission moved to remove the latter constraint. Commission
chairman and presidential adviser Paruyr Hayrikian was quoted
as saying that the proposed changes give the parliament more
powers and "create a real balance" between the executive and
legislative branches. LF

ARMENIA DENIES INVOLVEMENT IN FORMER ENVOY'S TRIP TO BAKU. An
Armenian Foreign Ministry spokesman told RFE/RL's Yerevan
bureau on 11 March that a planned visit to Baku by Jirair
Libaridian, Armenia's former chief negotiator on Nagorno-
Karabakh, was not endorsed by the Armenian leadership.
"Libaridian is not authorized to speak on behalf of Armenia,"
the spokesman said. The Azerbaijani news agency Turan
reported the previous day that Libaridian, who is a U.S.
citizen, will arrive in Baku from Paris on 12 March as a
"private guest" of President Heidar Aliev's chief foreign
policy aide, Vafa Guluzade. The Azerbaijani agency quoted
Guluzade as saying that Libaridian will be visiting
Azerbaijan "on his own initiative" to "see Baku" and discuss
the unresolved Nagorno-Karabakh conflict. Liparitian and
Guluzade met face to face on several occasions in 1994-1996
in an attempt to find a solution to the Karabakh conflict. LF

EUROPEAN PARLIAMENT BACKS OSCE KARABAKH PEACE PLAN... The
European Parliament passed a resolution on 11 March endorsing
the most recent Karabakh peace proposal by the OSCE Minsk
Group, which it characterized as constituting a basis for
discussion likely to end the negotiating deadlock. Noting
that the October 1998 Azerbaijani presidential elections were
"marked by fraud and irregularities that have been condemned
by international observers" and that irregularities were also
noted during the March 1998 Armenian presidential elections,
the resolution proposes that EU aid to both countries be
linked to "tangible progress in the areas of human rights and
democracy." LF

...WHILE U.S. BACKS DIRECT TALKS BETWEEN ARMENIA, AZERBAIJAN.
In a 10 March message to Azerbaijani President Heidar Aliev,
U.S. Secretary of State Madeleine Albright underscored the
intention of the U.S. to continue its efforts to resolve the
Karabakh conflict, adding that Washington "firmly backs"
direct dialogue between the Armenian and Azerbaijani
leaderships, Turan and AFP reported. Albright also expressed
satisfaction that Aliev plans to attend the NATO summit next
month. Aliev will meet with U.S. leaders during his U.S.
visit to discuss security issues in the Caucasus. LF

AZERBAIJANI OIL REACHES GEORGIAN BLACK SEA TERMINAL. The
first Azerbaijani off-shore Caspian oil to be exported via
the western export pipeline via Georgia reached Supsa on 11
March, three months after it was pumped into the pipeline at
Baku, AP and Interfax reported. The 812 kilometer pipeline
has a throughput capacity of 5 million metric tons annually.
Caucasus Press on11 March quoted Georgian Deputy Foreign
Minister Valerii Chechelashvili as saying that disagreements
over financing are delaying a decision on construction of the
so-called Main Export Pipeline from Baku to the Turkish
terminal at Ceyhan. Chechelashvili added that the precise
route of that pipeline through Georgia has not yet been
decided and that it may run from Baku to Supsa and from there
to Ceyhan. LF

FORMER AZERBAIJANI PARLIAMNET SPEAKER DENIES PLANNING
ASSASSINATION. In a statement summarized on 11 March by
Turan, Rasul Guliev rejects allegations by Azerbaijan's
National Security Ministry that he enlisted the advice of a
former CIA employee to plan the assassination of former
Azerbaijani President Abulfaz Elchibey (see "RFE/RL
Newsline," 3 and 8 March 1999). Guliev termed the charges
part of "a series of threats and intimidation" directed
against the Azerbaijani opposition as a whole. He added that
he and Elchibey are "united in [their] refusal to recognize
the results" of the 1998 presidential poll, in which
incumbent Heidar Aliev was re-elected for a second term.
Guliev and Elchibey were among five prominent opposition
leaders who boycotted the poll. LF

KYRGYZSTAN TO REINFORCE ITS SOUTHERN BORDERS. First Deputy
Defense Minister Major-General Ismail Isakov announced on 11
March that Kyrgyzstan will send additional troops to its
borders with Tajikistan and Uzbekistan, Interfax reported.
Isakov said the situation there "compels us to come to grips
with border reinforcement," but he did not elaborate. With
regard to the recent decision to withdraw the Kyrgyz
battalion from the CIS peacekeeping force in Tajikistan,
Isakov said it has "become economically difficult" to
unilaterally maintain the unit along the Tajik-Afghan border.
It is unclear whether the unit that guarded the Tajik-Afghan
border will be sent to the Tajik-Kyrgyz border. BP

KYRGYZ PARLIAMENT DISCUSSES BORDER WITH UZBEKISTAN. Lawmakers
met behind closed doors on 12 March to discuss claims that
Uzbekistan has been advancing its borders into Kyrgyz
territory, RFE/RL correspondents in Bishkek reported. Defense
Minister General Myrzakan Subanov told the parliament that
since 1996 Uzbekistan has built 27 new fortified border posts
along the Uzbek-Kyrgyz border. Also, Uzbekistan has deployed
a special unit to guard the Kempirabad reservoir, which
straddles the countries' common border. Subanov added that
Uzbekistan's national army has 130,000 troops, making it the
largest army in CIS Central Asia. The parliament decided to
appeal to President Askar Akayev to set up a special
commission to investigate the issue. BP

AKAYEV COMMENTS ON GREAT SILK ROAD. Kyrgyz President Askar
Akayev, in an article published in "Nezavisimaya gazeta" on
10 March, wrote about the "diplomacy of the Silk Road,"
noting that international community supports the revival of
the ancient route and that Kyrgyzstan lies at the center of
it. But, he said, dynamic development is necessary but is
impossible without friendly ties between the countries
located on the route. His country foresees development in
three directions--toward immediate neighbors, toward Europe,
and toward East and Southeast Asia. He said the principles of
cooperation and "equal partnership" with regard to the new
Silk Road should be "mutual dependence, mutual advantage, and
development of long-term perspectives." Akayev noted that at
the end of the 20th century, "globalization" is an
indisputable fact. No country, regardless of "military or
economic power," can exist in isolation, he commented. BP

KYRGYZ NATIONAL CURRENCY LOSING VALUE... Kyrgyzstan's
national currency, the som, was trading on 11 March at 32.7
to $1, RFE/RL correspondents in Bishkek reported. The som was
exchanged at 30.5 to $1 at the start of March and has slowly
decreased in value since then. BP

...WHILE GOLD PRODUCTION DWINDLING. Kyrgyzstan's biggest gold
company, Kyrgyzaltyn, said gold production dropped in the
first two months of 1999, Interfax reported on 11 March. The
company noted an 8.3 percent drop, compared with the same
period last year. The major reason is a decrease in
production at the country's largest mining project, Kumtor.
The Kumtor Gold Company, in which Canada's Cameco Corp. is a
partner, reported a 9.4 percent decline in production in
January-February. Kumtor produced 19.2 tons of gold in 1998,
up 25 percent on the previous year. Kyrgyzaltyn reported it
produced 21.311 tons of gold last year. BP

UZBEK TERRORISTS DETAINED IN KYRGYZSTAN? ITAR-TASS reported
on 11 March that up to 10 Uzbek citizens have been arrested
on the outskirts of Bishkek on suspicion of involvement in
the 16 February bombings in Tashkent. The 10 reportedly
resisted arrest. The same source later reported that the
officials in the Kyrgyz Security Ministry could not confirm
the report. The spokesman for the Kyrgyz Interior Ministry,
Joldoshbek Busurmankulov, told an RFE/RL correspondent in
Bishkek that his ministry has no information on the arrests.
BP

KAZAKH ENVIRONMENTALIST FAVORS CAVIAR OVER OIL. Ibragim
Kushenov, the leader of Kazakhstan's Kaspi Tabigaty
environmental organization, told a press conference in Almaty
on 10 March that the extraction of oil from the Caspian Sea
could cause an environmental disaster, Interfax reported.
Kushenov said that under the Law on Specially Protected
Territories, adopted in 1997, the northern section of the
Caspian Sea and the Ural River have the status of nature
preserve, which gives fishing priority over oil extraction.
Kushenov pointed out that sturgeon live in the north part of
the Caspian and that "1 ton of black caviar produced by the
Atyraubalyk company costs an average of $1.2 million on the
world market. 1 ton of oil costs only $60." BP

IRANIAN OFFICIAL CRITICIZES CASPIAN PIPELINE PROJECT. Iranian
Deputy Oil Minister Ali Majedi was in Ashgabat on 11 March to
attend the Oil and Gas Exhibit-1999, ITAR-TASS reported.
Speaking at the exhibit, Majedi said an Iranian pipeline
route carrying Turkmen natural gas to Turkey would save $700
million, compared with the construction of the Trans-Caspian
pipeline. The previous day, Majedi had said in Tehran that
his country opposes Turkmenistan's plan to lay a natural gas
pipeline across the bed of the Caspian Sea to Azerbaijan.
Majedi said "Iran has a common border with Turkmenistan--it
is the best and cheapest route for Turkmen gas." Majedi
criticized the decision to begin construction of the pipeline
before the legal status of the Caspian has been defined.
Majedi added that Turkmenistan's "ignoring of Tehran's
rightful misgivings are unacceptable." BP

FOREIGN COMPANIES CUT PRODUCTION AT TURKMEN OIL FIELDS.
According to London's International Oil Exchange, the U.S.'s
Mobil, Britain's Monument Oil, and Ireland's Dragon Oil will
cut the volume of work at Turkmen deposits by 50 percent,
ITAR-TASS reported on 12 March. The reason for that move is
reportedly the high cost of the extraction and transportation
of the oil from the east coast of the Caspian Sea. The same
agency cites London brokers as saying Mobil and Monument
wantthe Turkmen government to change the terms of development
at the Garashyzlyk field and offer a more advantageous tax
regime. Dragon Oil also wants the terms revised for work at
the Chelken field. BP

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