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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 3, No. 82, Part I, 28 April 1999


___________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 82, Part I, 28 April 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
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Headlines, Part I

* YELTSIN DUMPS GUSTOV, PROMOTES STEPASHIN

* NEW MILITARY DOCTRINE TO BE READY IN THREE MONTHS

* POPULAR KYRGYZ MAYOR FORCED TO RESIGN

End Note: WORLD BANK PREDICTS ROUGH YEAR AHEAD FOR MOST EAST
EUROPEAN STATES
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RUSSIA

YELTSIN DUMPS GUSTOV, PROMOTES STEPASHIN... Russian President
Boris Yeltsin signed a decree on 27 April dismissing First
Deputy Prime Minister Vadim Gustov and promoting Interior
Minister Sergei Stepashin to that office. Stepashin will be
responsible for overseeing elections and conducting regional
policy, while continuing to head the Interior Ministry.
Presidential spokesman Dmitrii Yakushkin said that Yeltsin
believes the "segment of the cabinet supervising the regions
must be reinforced." Russian Television noted that "inasmuch
as the most problematic regions in Russia are Chechnya and
the North Caucasus as a whole, it is logical that Stepashin
has been appointed to this position, since he has been
intensely involved with Chechen problems for years." Gustov
is the first top member of Yevgenii Primakov's cabinet to be
dismissed. A former governor of Leningrad Oblast, Gustov told
Interfax that he will now run in elections, but declined to
specify where. JAC

...AS MEANS OF TIGHTENING CONTROL OVER REGIONS? The same day
that Yeltsin dismissed Gustov, he also met with the informal
leaders of two regional blocs, Tatarstan President Mintimer
Shaimiev of Vsya Rossiya and Samara Oblast Governor
Konstantin Titov of Golos Rossii. Titov told reporters after
the meeting that Yeltsin approves of the "platform of
liberalism" of Golos Rossii and is "impressed with the
composition of the bloc." The previous day, deputy head of
the presidential administration Oleg Sysuev said that the
merger of Vsya Rossiya and Moscow Mayor Yurii Luzhkov's
Otechestvo would be a "step in a constructive direction." The
leader of the Idel-Yort (Volga Is Our Home) faction in
Tatarstan's legislative assembly, Fandas Safiullin, told
RFE/RL's Kazan bureau on 27 April that once Vsya Rossiya and
Otechestvo have achieved their main goal of keeping
Communists out of the State Duma, they will likely go their
separate ways. Safiullin pointed out that Luzhkov supports
liquidating the national republics, while President Shaimiev
is a federalist who favors retaining the republics'
sovereignty. JAC

NEW MILITARY DOCTRINE TO BE READY IN THREE MONTHS. Talking to
journalists on 27 April, Defense Minister Igor Sergeev
expanded on his recent comments about the revision of
Russia's military doctrine. Sergeev said Moscow is
particularly concerned about two provisions of NATO's new
strategic concept that enable the alliance to use force
outside NATO's zone of responsibility and without the UN's
consent. He added that the possibility of Baltic States'
joining NATO "poses a serious threat to Russia" and "we will
never be able to agree." If the Baltic States join NATO,
Russia will have to take additional steps to minimize its
security risks, he said. In an interview published in
"Krasnaya Zvezda" the same day, Ivanov said that Russia's new
military doctrine will be finished in three months and
submitted to President Yeltsin for approval. Before NATO
began air strikes against Yugoslavia, Ivanov predicted that a
plan merging the armed forces strategic nuclear forces would
be ready by May (see "RFE/RL Newsline," 11 February 1999).
JAC

CHERNOMYRDIN, TALBOTT PLEDGE TO CONTINUE PEACE EFFORTS. U.S.
Deputy Secretary of State Strobe Talbott, after meeting with
Russian special envoy for Yugoslavia Viktor Chernomyrdin on
27 April, told Reuters that "there is no question that Russia
and the U.S. are working together on [solving the Kosova]
problem." He stressed that "it is important that our urgent
work continues, and it will continue." Talbot reaffirmed the
U.S. position that Serbian forces have to withdraw from
Kosova and that a peace-keeping force must include a NATO
chain of command. FS

KOSOVA TALKS FOCUS ON PEACE-FORCE "LABELING." Unnamed British
Foreign Office officials told "The Guardian" of 28 April that
current diplomatic efforts focus on "labeling" a possible de
facto NATO-led peace-keeping force as a UN entity. They added
that a UN resolution authorizing such a force would not have
to mention NATO explicitly. The daily also quoted unnamed
U.S. officials as saying that Chernomyrdin acknowledged
during his talk with Talbott that there is "no serious
prospect of diplomatic movement" from Belgrade. They added
that they are encouraged by Chernomyrdin, who, they said, is
negotiating seriously on details. And they noted that "there
was not much time spent on condemning the NATO air offensive"
during the Chernomyrdin-Talbott meeting. In Berlin, Talbott
briefed German Foreign Minister Joschka Fischer on 27 April
and UN Secretary-General Kofi Annan the following day. FS

WEST, UN INTENSIFY DIPLOMATIC EFFORTS IN MOSCOW. German
Defense Minister Rudolf Scharping began talks with his
Russian counterpart, Sergeev, and Foreign Minister Igor
Ivanov in Moscow on 28 April. He did not disclose details of
the talks but said that Chernomyrdin will continue the
discussions with German Chancellor Gerhard Schroeder in Bonn
the following day, Reuters reported. Also on 28 April, Greek
Foreign Minister George Papandreou arrived for separate talks
with Russian leaders. Annan and Canadian Foreign Minister
Lloyd Axworthy are scheduled to hold talks with Chernomyrdin,
Ivanov, and other Russian leaders in Moscow on 29 April.
Meanwhile, in a move underlining solidarity with Belgrade,
Yeltsin sent a telegram to Yugoslav President Slobodan
Milosevic on the occasion of Yugoslav National Day, 27 April,
saying that Russians "feel deeply for the fraternal people of
Yugoslavia," Reuters reported. FS

RUSSIAN, BELARUSIAN LEADERS DISCUSS UNION, TOUCH ON YUGOSLAV
ISSUE. President Yeltsin and President of Belarus Alyaksandr
Lukashenka met on 28 April to discuss a host of issues
related to the Union of Belarus and Russia. Prior to the
meeting, President Yeltsin said that the two leaders would
"touch on the issue of Yugoslavia but we will just be
exchanging opinions." He added that they will not be taking
any steps forward on the issue of that country joining the
union. At the meeting, Lukashenka and Yeltsin signed 11
agreements, most of them related to the union, Interfax
reported. The documents cover issues such as establishing a
single customs zone. The two leaders also discussed a joint
defense concept that envisions the two sides using the same
types of weapons and equipment in a future joint force,
according to the agency. An agreement on security will be
drafted and signed "at the next stage," ITAR-TASS quoted
Yeltsin as saying. JAC

RUSSIAN, IRAQI OIL MINISTERS MEET. Amir Rashid held talks in
Moscow on 27 April with his Russian counterpart, Sergei
Generalov, Foreign Minister Ivanov, and Deputy Prime Minister
Vladimir Bulgak. The two sides agreed that Russia will
purchase 40 percent of the $5.2 billion worth of oil that
Iraq plans to sell under the next stage of the UN oil-for-
food program. Ivanov informed Rashid of Russian proposals to
the UN Security Council to end economic sanctions against
that country and introduce a new system of international
monitoring, according to AP, citing a Foreign Ministry
statement. Also discussed was possible Russian participation
in exploration at Iraq's huge West Qurna field once UN
sanctions are lifted. Also on 27 April, a delegation of State
Duma deputies headed by Liberal Democratic Party chairman
Vladimir Zhirinovsky flew to Baghdad to deliver aid and
celebrate Saddam Hussein's 62nd birthday on 28 April. LF

NATURAL GAS PRODUCTION EDGES UP. Gazprom's production of
natural gas increased 4 percent in 1998 to 553.7 billion
cubic meters, compared with 533.7 billion cubic meters the
previous year, Interfax reported on 27 April. Three Gazprom
subsidiaries boosted their annual output: Nadymgazprom,
Yamburggasdobychi, and Astrakhangazprom. As of 1 January
1999, Russian consumers owed Gazprom 109.3 billion rubles
($4.5 billion), while other CIS countries owed the company
32.6 billion rubles. A top Gazprom official told "Izvestiya"
on 27 April that the company plans to cut its gas supply to
more than 3,000 debtor firms in the near future. JAC

PASKO WRAPS UP TESTIMONY. Military journalist Grigorii Pasko
has finished giving testimony in his trial for espionage and
treason, Interfax-Eurasia reported on 27 April. Pasko is
accused of handing over to Japanese media information on the
environmentally hazardous practices of the Pacific Fleet.
Pasko revealed that he had complained many times to the
Pacific Fleet commander about being harassed by the fleet's
security officers. One of Pasko's lawyers contends that his
client was framed by those officers because he refused to
collaborate with them. On 23 April, Pasko told the court that
only one classified document was in his apartment at the time
of his arrest and that he has no idea how prosecutors got
hold of nine others that they claim were in his possession.
ITAR-TASS reported the same day that one of the prosecution's
main witnesses, journalist Yurii Ralin, announced he will
soon make a statement explaining why he was forced to lie
during his tesimony. JAC

TWO MAYORS' RACES DECIDED. Nikolai Bulakin, mayor of Abakan
in the Republic of Khakassia, was re-elected for a second
four-year term on 25 April. In addition, more than two-thirds
of the members of the city's new legislative assembly, are
Bulakin's supporters, "Nezavisimaya gazeta" reported on 27
April. Also on 25 April, Yurii Link, director of Noyabrsk's
electricity network, was elected mayor of Noyabrsk in the
Yamalo-Nenets Autonomous Okrug, Interfax-Eurasia reported on
27 April. Some newspapers alleged that Link's campaign was
supported by business tycoon Boris Berezovskii. JAC

SWEDISH PREMIER CONCLUDES VISIT. Goran Persson completed a
two-day visit to Russia on 27 April by visiting Samara. The
previous day, Persson met with Prime Minister Yevgenii
Primakov, Deputy Prime Minister Bulgak, and First Deputy
Foreign Minister Aleksandr Avdeev. Persson stressed that
Stockholm continues to see Russia's economic potential as
huge, ITAR-TASS reported. Swedish investment in Russia
totaled $412.9 million in 1998, and Swedish companies plan to
invest an additional $250 million in various paper and wood-
pulp projects by the end of 2000, according to the Russian
Trade Ministry, Interfax reported. After their meeting,
Primakov said Russia is satisfied with the level of
cooperation with Sweden, both at bilateral and international
levels. The two officials signed an agreement on cooperation
in the areas of energy efficiency and renewable energy
resources. JAC

'MIR' BENEFACTOR WANTS FREE RIDE. British businessman Peter
Llewelyn told AP on 28 April that although he intends to
travel on the space station "Mir," he will not be paying for
the privilege (see "RFE/RL Newsline," 27 April 1999). He said
that the trip will be part of a fundraising effort for a
children's' hospital outside Moscow and that people will
sponsor him with so much money per mile. According to the
agency, Pittsburgh police described Llewelyn as a well-
dressed, smooth-talking con artist. Two years ago in the
U.S., Llewelyn was accused of swindling $38,000 from a
business partner. The charges were later dropped. JAC

TRANSCAUCASUS AND CENTRAL ASIA

NEW ARMENIAN CENTRAL ELECTORAL COMMISSION CHAIRMAN NAMED. At
its first session on 27 April, the new Central Electoral
Commission voted to elect as its chairman Artak Sahradian,
who is a senior Social Security Ministry official, RFE/RL's
Yerevan bureau reported. LF

CORRECTION: "RFE/RL Newsline" on 27 April incorrectly
reported that five political parties and blocs are
represented on the Central Electoral Commission. The correct
figure is 10, five representing the factions in the present
parliament and the remaining five by those parties and blocs
that collected the largest number of signatures in their
support.

ARMENIAN, AZERBAIJANI PRESIDENTS MEET. Robert Kocharian and
Heidar Aliev met for two hours at the U.S. State Department
on 26 April to discuss the Karabakh conflict, ITAR-TASS
reported. Kocharian subsequently said that the meeting was
"among the most useful in the recent period," as it gave the
two presidents a better understanding of each other's
motives. He said agreement was reached on further talks,
which he suggested should be held on the frontier between the
two countries. But Kocharian also owned that even such high
level contacts are unlikely to produce immediately a formula
for resolving the conflict. In an exclusive interview with
Turan, reprinted in the Armenian press on 28 April, Kocharian
ruled out any further concessions by Armenia but denied that
his country wishes to delay a solution to the conflict.
Aliev, for his part, again expressed his rejection of the
most recent Minsk Group draft peace proposal, which he said
contravenes international law. LF

AZERBAIJAN SIGNS NEW OIL CONTRACTS. President Aliev signed
production-sharing agreements with three U.S. oil companies
in Washington on 27 April, Reuters and the "Financial Times"
reported. Exxon acquired a 30 percent stake in the Zafar and
Mashal offshore fields, while Mobil acquired the rights to
the Savalan, Dalga, Lerik-Deniz, and Janub offshore deposits.
Those contracts are valued at $5 billion and $4.5 billion,
respectively, and the Azerbaijani state oil company SOCAR has
a 50 percent stake in each. Texas-based Moncrief Oil signed a
$500 million exploration and production-sharing contract for
a 410 square mile region of the lower Kura River. LF

GEORGIA BECOMES FULL MEMBER OF COUNCIL OF EUROPE. President
Eduard Shevardnadze attended an official ceremony in
Strasbourg on 27 April to mark Georgia's formal acceptance as
a full member of the Council of Europe, in which Armenia and
Azerbaijan still have only special guest status. Addressing
the parliament in Tbilisi the same day, speaker Zurab Zhvania
said that in admitting Georgia to full membership, the
Council of Europe acknowledges the country's compliance with
democratic standards, according to Caucasus Press. Meanwhile,
six members of the "Free Georgia--Future Generation" movement
began a hunger strike in Tbilisi on 26 April to demand the
release of 134 people imprisoned since 1992 whom they
consider political prisoners. LF

KAZAKH OPPOSITION PARTIES CRITICIZE DRAFT LEGISLATION ON
ELECTIONS... At a news conference in Almaty on 27 April,
representatives of the recently registered Birlesu political
movement criticized as "undemocratic" the draft law on
amendments to the presidential decree on the conduct of
elections, RFE/RL's Kazakh service reported. The Birlesu
members objected that the amendments do not make provision
for the popular election of regional governors, who are to be
appointed by regional councils. They also noted that the fee
to register as a parliamentary candidate is so high that very
few people can afford it. LF

...AND MEDIA. Also on 27 April, Orleu Movement chairman
Seydakhmet Quttyqadam and Republican People's Party of
Kazakhstan Deputy Chairman Amirzhan Qosanov told a news
conference in Almaty that they consider the draft media law
currently being considered by the parliament to be "very far
from democratic," RFE/RL correspondents reported from the
former capital. They claimed that the new legislation "would
increase state control over all periodicals, television
channels, and radio stations." LF

POPULAR KYRGYZ MAYOR FORCED TO RESIGN... Bishkek Mayor Feliks
Kulov told a press conference on 27 April that he wrote three
days earlier to President Askar Akaev submitting his
resignation, which the latter accepted on 26 April, RFE/RL's
Bishkek bureau reported. In his letter to the president,
Kulov said Akaev condones actions "that do not correspond to
democracy and the rule of law." Specifically, he charged that
rumors have been spread that he is preparing to undertake
unconstitutional action in order to oust Akaev and that he is
one of the most corrupt persons in the country. Also on 27
April, presidential press secretary Kanybek Imanaliev told
journalists that Kulov is not a competent economic manager
and that he intends to devote himself in the future to "pure
politics." Observers say that the personable and popular 51-
year-old Kulov, who as Interior Minister defied the
perpetrators of the August 1991 Moscow putsch, could pose a
serious challenge to Akaev in the 2000 presidential
elections. Kulov refused to say on 27 April whether he will
run in that poll. LF

...AS SECURITY MINISTRY IMPLICATED IN ILLICIT SURVEILLANCE.
Kyrgyz National Security Minister Misir Ashirkulov told
journalists in Bishkek on 27 April that an unspecified number
of members of his ministry's Kalkhan anti-terrorist squad,
which Kulov created when he was minister of security, have
been arrested following the discovery of surveillance
equipment in an apartment belonging to the ministry, Interfax
reported. The commander of the Kalkhan squad has also been
arrested. LF

EU EXPRESSES CONCERN OVER SLOWDOWN IN TAJIK PEACE PROCESS.
German Ambassador Matthias Mayer told journalists in Dushanbe
on 27 April that the EU, which his country currently chairs,
is concerned about "problems" in the Tajik peace process,
Interfax reported. Mayer said that the peace process could be
speeded up by success in the referendum and parliamentary
elections due this year. He also expressed regret at
President Imomali Rakhmonov's rejection of proposed
constitutional amendments drafted by the Committee for
National Reconciliation, which includes both government and
opposition representatives. Meyer said the EU considers those
amendments "a realistic step toward implementation of the
peace agreement." In a 23 April statement, the United Tajik
Opposition deplored Rakhmonov's rejection of the amendments
and appealed to the international community for support (see
"RFE/RL Newsline," 27 April 1999). LF

END NOTE

WORLD BANK PREDICTS ROUGH YEAR AHEAD FOR MOST EAST EUROPEAN
STATES

by Robert Lyle

	The World Bank's top official dealing with Russia and
the other transition states in Central and Eastern Europe
paints a sobering, even daunting, picture of what many in the
region will face over the next year or so.
	Johannes Linn, the bank's vice president for Europe and
Central Asia, says the region faces a protracted crisis of
economic, social, and, most recently, security problems,
especially over the next 12 months.
	Speaking to reporters in Washington on 25 April, before
the start of this week's annual meetings of the bank and the
International Monetary Fund (IMF), Linn said Russia and
Ukraine especially face serious economic difficulties
	"We continue to expect a decline in output and an
uncertain political outlook due to elections that are coming
up this year and next year," he said. "The social situation
in these countries is fragile since incomes are continuing to
decline and social support systems are continuing to weaken.
Poverty is on the rise, in Russia, for example, in our
estimate, almost 20 percent of the population is in extreme
poverty. And we of course also see a situation where
structural and social reforms are incomplete and proceeding
only very slowly and with limited political support."
	Hungary, Poland, and the Czech Republic are the good
news, he said, noting that these countries remain relatively
stable and unaffected by the ongoing Russian financial crisis
because of early reforms and strong policies.
	But for most former Soviet countries, the impact of that
crisis has been severe and will be felt for a long time to
come, according to Linn. The global economy won't make the
real difference among these nations, he says, it depends on
their own policies and their proximity to Russia.
	Asked about the lessons learned from the Asian and
Russian financial crises, Linn said there were many,
including the basics of strong domestic reforms. But one
lesson that was part of Russia's collapse last summer was its
strong defense of currency exchange rates. A major part of
the IMF's last loan drawing for Russia was eaten up in the
Central Bank's attempt to defend the exchange rate of the
ruble. Linn says it is clear now this can lead to severe
crises: "Ukraine is a good example where in fact a rather
sensible management of getting away entirely from a fixed
exchange rate in fact prevented the kind of meltdown we see
in Russia.
	"The weakness of banking systems and supervision,
linking this of course also with the exposure of short term
debts, in appropriate foreign exchange positions--again
Russia being a good example--are another important lesson
that we are drawing for much more work and attention has to
be given."
	Another significant lesson, according to Linn, is the
danger of a weak social safety net. Very weak social
protection systems are unable to deal with the fallout of
severe economic crisis, he argued, noting that the case of
Russia was particularly bad.
	"We had difficulty in engaging the Russians through 1996
in an active dialogue on social reforms," he noted, "and
still have difficulty in Ukraine today. Earlier attention to
social system reforms of social systems and then more
significant action also would have helped in crisis
response."
	Linn pointed out that Russia has still not dealt
adequately with its social safety net and the deepening
crisis only makes clearer that Russia cannot afford further
postponement of reform. He said that in a recent study of the
social system in Russia, the bank predicted that the worst of
the crisis is still ahead in the coming 12 months. Next
winter will be the hardest time, said Linn, far worse than
this year.
	The bank projects that real personal incomes in Russia
will fall an average of 13 percent through 1999, with the
extreme poverty rate rising to more than 18 percent of the
population, while social expenditures by the government will
fall by 15 percent.
	More broadly for the region, Linn said the major lesson
from the crisis has been the necessity of a political
consensus on reforms. He compares the examples of Bulgaria
and Romania:
	"Bulgaria has now in fact recovered from a severe
financial crisis only two years ago because in fact it has
pursued a consistent and comprehensive reform and
stabilization process based on a reasonably clear and
sustainable political consensus between the president, the
government, parliament, and wide segments in the population.
Romania, by contrast, has had considerable difficulties that
one can trace back to the lack of political consensus and
difficulty of forming a clear political underpinning for
reform and stabilization.
	"Now we're hopeful that in looking forward, Romania can
find a more consensus-oriented reform process, and indeed
Romania is one of the pilot countries for the comprehensive
development framework where we will focus very much with the
leadership and under the leadership of the president, on
trying to build this broader consensus."

The author is a Washington-based, senior RFE/RL
correspondent.

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