Men stumble over the truth from time to time, but most pick themselves up and hurry off as if nothing happened. - Sir Winston Churchill
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 3, No. 96, Part I, 18 May 1999


________________________________________________________
RFE/RL NEWSLINE Vol 3, No. 96, Part I, 18 May 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

* GOVERNMENT SEARCHING FOR CASH TO PAY CREDITORS

* DUMA TO HAVE ONLY ONE CRACK AT STEPASHIN?

* UZBEK OFFICIAL IMPLICATES TAJIK LEADERSHIP IN DRUG-
SMUGGLING
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RUSSIA

GOVERNMENT SEARCHING FOR CASH TO PAY CREDITORS. The State
Duma's Budget Committee on 17 May approved amendments to the
1999 budget that would allow the government to borrow up to
$4.5 billion from the Central Bank in the first half of the
year, "The Moscow Times" reported on 18 May. The money would
cover the country's total debt payments for the first six
months of 1999, according to First Deputy Finance Minister
Mikhail Kasyanov. Disbursements from international financial
institutions such as the IMF are expected to be delayed owing
to the change in government, forcing the Finance Ministry to
scramble for cash to cover its debt payments. On 15 May,
Standard & Poor's lowered the rating on Russian Eurobonds
from CCC- minus to CC because of the possible postponement of
IMF loans to Russia following the dismissal of former Prime
Minister Yevgenii Primakov's cabinet. JAC

YELTSIN NO-SHOW RAISING NEW HEALTH FEARS. A meeting between
Russian President Boris Yeltsin and Spanish Prime Minister
Jose Maria Aznar scheduled for 18 May was cancelled for
unknown reasons. According to dpa, a Spanish radio station
quoted Russian diplomats as saying that ill health prevented
Yeltsin from attending the meeting. The same day, when asked
about the president's health, acting Prime Minister Sergei
Stepashin said "Everything is normal. We settled all
questions with the Spanish premier yesterday," Interfax
reported. The same day, presidential spokesman Dmitrii
Yakushkin emphatically denied reports by some agencies that
Yeltsin is ill with bronchitis. JAC

DUMA TO HAVE ONLY ONE CRACK AT STEPASHIN? Citing anonymous
sources in the Kremlin and White House, "Moskovskii
Komsomolets" reported on 18 May that if the candidacy of
acting Prime Minister Stepashin fails to win Duma approval
during the first round of voting, scheduled for 19 May, then
a new candidate will be put forward. According to the daily,
one of its sources said "there may be no second chance for
Stepashin--first of all because he himself does not want it."
JAC

STEPASHIN OUTLINES ECONOMIC POLICIES... In his speech to
Federation Council on 17 May, acting Prime Minister Stepashin
said that he is counting on the Duma to pass legislation
prepared by the previous government in accordance with its
agreement with the IMF. Stepashin also vowed to follow up on
an earlier pledge by former Prime Minister Primakov to reduce
the number of federal employees in the regions. He said that
he was shocked to learn that in Kursk Oblast, there are
19,000 civil servants for a total population of 1.3 million
He also promised to crack down on tax deadbeats and the
"criminalization of Russian business both at the state and
private levels." He noted that Interior Ministry and tax
police staff in Krasnoyarsk Krai managed to uncover more than
500 million rubles ($20.1 million) that properly belonged in
the krai's coffers. Stepashin added that the federal
government would make better use of the region's "colossal
economic experience" and "regional economic programs." JAC

...AS DOES AKSENENKO. In an interview with "Izvestiya" on 18
May, First Deputy Prime Minister Nikolai Aksenenko said that
he will most probably be put in charge of the economy's "real
sector," the power sector, and transportation infrastructure.
Regarding his appointment to supervise the operative affairs
commission, Aksenenko said that the commission will examine
this year's investment program and the situation in the
country's gasoline market and try to resolve the problem of
enterprise indebtedness. Aksenenko added that a key component
of the country's industrial policy should be the development
of enterprises engaged in the manufacture of goods that can
be substituted for imports. He also noted that the country's
military industrial complex is "waiting for real proposals
and real money." On the issue of IMF negotiations, he noted
that the first deputy prime minister cannot stand on the
sidelines during talks, but he added that a "highly
specialized expert should take up the issue." JAC

FEDERATION COUNCIL REJECTS FOREIGN INVESTMENT LAW... The
Federation Council on 18 May rejected the Law on Foreign
Investment, ITAR-TASS reported. According to the agency, some
senators feared that the law gave foreign investors an unfair
advantage over domestic producers. A conciliatory commission
will re-examine the law and suggest changes and amendments
before resubmitting it to the Federation Council. Foreign
lawyers and investors found the version of the law that
passed the State Duma "welcome enough in that it cleans up
some minor confusions about the status of foreign investors"
in Russia, but none of them thought it would attract new
investment, "The Moscow Times" reported on 11 May. JAC

...APPROVES JUDICIAL APPOINTMENT. On 17 May, the upper
chamber confirmed the appointment of Magomed Magomedov as a
new Supreme Court judge, ITAR-TASS reported. Previously,
Magomedov was a judge on the Supreme Court of Dagestan. JAC

CRIMINAL INVESTIGATION AGAINST SKURATOV DISMISSED--FOR NOW. A
Moscow court ruled on 17 May that an order to launch a
criminal case against Prosecutor-General Yurii Skuratov was
illegal and canceled the order, Interfax reported. In early
April, a deputy Moscow city prosecutor opened a criminal
investigation into whether Skuratov was guilty of abuse of
office. The Moscow court ruled that the deputy prosecutor
exceeded his authority by instituting the criminal
proceedings. An official at the Central Military Prosecutor's
Office said that the ruling will be challenged by the
military board of the Russian Supreme Court, ITAR-TASS
reported. In remarks to reporters, the chairman of the
Federation Council's Committee for Constitutional
Legislation, Sergei Sobyanin, did not rule out the
possibility that new criminal proceedings will be launched
against Skuratov and that President Yeltsin will send another
letter to the upper chamber asking that he be dismissed. JAC

RUSSIA LIFTS LIBYA SANCTIONS. President Yeltsin signed a
decree on 17 May lifting sanctions against Libya, Interfax
reported. The UN suspended its international sanctions last
month, after Libya agreed to hand over two suspects in the
1988 bombing over Lockerbie, Scotland. JAC

RUSSIA, EU PLEDGE DIPLOMATIC SOLUTION FOR KOSOVA... After
meeting with EU foreign ministers in Brussels on 17 May,
Russian Foreign Minister Igor Ivanov said Moscow will
continue to work toward a diplomatic solution of the Kosova
crisis. He warned, however, that "this is not going to be an
easy thing to do...if bombs are still being dropped." The EU
foreign ministers issued a statement saying that "half or
partial measures [by Belgrade] which do not meet the
conditions [set by the international community] will fail to
provide the guarantees necessary for the safe return of the
refugees," AP reported. The foreign ministers also agreed to
conclude a "stability pact" for southeastern Europe designed
to develop the region's economy after the end of the war.
Details of that pact have not yet been finalized (see also
Part II). FS

...WHILE EU SUPPORTS CHERNOMYRDIN-AHTISAARI MISSION. The EU
foreign ministers also expressed support for the joint
mediation mission of Finnish President Martti Ahtisaari and
Russian special envoy to Yugoslavia Viktor Chernomyrdin, an
RFE/RL correspondent reported from Brussels. German
Chancellor Gerhard Schroeder told Ahtisaari in Helsinki on 17
May that the Finnish president has "the full support of the
EU in this work which he is carrying out together with
Chernomyrdin," AP reported. Finland takes over the chair of
the EU presidency from Germany in July. Schroeder then
visited Italian Prime Minister Massimo D'Alema in Bari to
discuss an Italian-Greek proposal for a 48-hour suspension of
the bombing campaign. According to that proposal, this would
provide an opportunity for a new round of negotiations with
Belgrade and would allow the UN Security Council to adopt a
resolution referring to Chapter 7 of the UN Charter, which
provides for the use of force to uphold international peace
and security. FS

CHERNOMYRDIN URGES NATO TO END AIR STRIKES. Chernomyrdin told
Spanish Prime Minister Jose Maria Aznar in Moscow on 17 May
that NATO must stop its air campaign if it wants to reach a
political solution. After the meeting, Aznar said he expects
"a serious breakthrough toward a political settlement" in
"the next few days," AP reported. A spokesman for Russian
President Yeltsin announced that Chernomyrdin will travel to
Belgrade later this week. Duma speaker Gennadii Zyuganov,
after meeting with Aznar, said that "we consider this to be
NATO aggression. [Aznar] does not think so, and we will not
convince [him] otherwise." Acting Prime Minister Stepashin
said that "any negotiations are possible under one condition:
First the hostilities must stop." Stepashin also commented
that he "considers Spain [both] a serious trading partner
[and] a model of how a deep social and economic crisis can
and should be resolved," ITAR-TASS reported. FS

RUSSIA'S NEWEST COSMONAUT REPORTS FOR TRAINING. The
controversial British businessman Peter Llewellyn arrived in
Moscow on 14 May to begin his training for his flight on
space station "Mir," Interfax reported. According to the
agency, the Energiya company, which operates "Mir," hopes
that Llewellyn will help it obtain a $100 million loan to
prolong the station's life. "Kommersant-Vlast" reported in
its 11 May edition that Energiya President Yurii Semenov does
not give much credence to allegations that have appeared in
both Western and Russian media that Llewellyn is an
international swindler. According to the weekly, Semenov co-
signed documents creating a new Energiya investment company
in which he is president and Llewellyn is vice president. JAC

DEFEATED PRESIDENTIAL CANDIDATE IN KARACHAEVO-CHERKESSIA
CLAIMS RUN-OFF WAS RIGGED. Some 15,000 supporters of
Cherkessk Mayor Stanislav Derev gathered on the town's
central square on 17 May to protest the alleged falsification
of the second round of voting for the president of the
Republic of Karachaevo-Cherkessia, "Nezavisimaya gazeta"
reported on 18 May. According to preliminary estimates, Derev
received only 19 percent of the vote while his rival, former
Russian armed forces ground troops commander Vladimir Semenov
polled 75-80 percent. In the first round of voting on 25
April, Derev had received 40 percent of the vote and Semenov
19 percent. Derev called for raions populated by ethnic
Russian and Cherkess to be separated from the Republic of
Karachaevo-Cherkessia and the transfer of those districts to
neighboring Stavropol Krai if the poll is not declared
invalid. LF

NORTH OSSETIAN PRESIDENT SEEKS MOTIVES FOR BOMB ATTACK.
Speaking on 17 May in Moscow, where he was attending the
Federation Council session, Aleksandr Dzasokhov suggested
that the 16 May bomb explosions in a settlement for retired
Russian army officers in the North Ossetian capital,
Vladikavkaz, may have been intended to deflect attention from
the continuing investigation into the explosion two months
earlier in the town's central market, Interfax reported (see
"RFE/RL Newsline," 22 March and 17 May 1999). In an interview
with "Nezavisimaya gazeta" published on 18 May, Dzasokhov
rejected the possibility that the 16 May bombing was a purely
criminal act. He termed it part of a broader, concerted
campaign to destabilize the situation in the North Caucasus.
Meeting with Dzasokhov, Interior Minister and acting Russian
Prime Minister Stepashin vowed to continue to monitor the
investigation of the March Vladikavkaz bombing, Interfax
reported. LF

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN OPPOSITION CONCERNED AT IRREGULARITIES IN VOTER
REGISTRATION. Speaking at a press conference in Yerevan on 17
May, two prominent representatives of the National Democratic
Union (AZhM) cited instances in which district electoral
commissions in Yerevan have included the names of deceased
and temporary residents in lists of persons eligible to vote
in the 30 May parliamentary election, RFE/RL's Yerevan bureau
reported. Vahe Varsanian, who is the AZhM's representative on
the Central Electoral Commission, also claimed that the Self-
Determination Union (IM) and the Hayrenik bloc have sold to
pro-government figures the seats on local electoral
commissions to which they are legally entitled. He offered no
evidence to substantiate that allegation, which an IM
spokesman rejected. LF

AZERBAIJANI PRESIDENT DELAYS RETURN HOME. Heidar Aliev's
departure from the U.S. for Turkey, which Russian media
reported had taken place on 16 May (see "RFE/RL Newsline," 17
May 1999), was postponed until 18 May because of "technical
reasons" connected with the choice of airplane in which Aliev
will travel, Reuters reported on 17 May, quoting presidential
administration member Ali Hasanov. LF

ARE RUSSIAN BORDER GUARDS LEAVING ABKHAZIA? Georgian border
guards commander Valeri Ckheidze told journalists in Tbilisi
on 17 May that Russian border guards have already withdrawn
from three posts in Abkhazia in accordance with an agreement
signed last year by Moscow and Tbilisi, Caucasus Press
reported. He rejected as "unserious" a demand by the Abkhaz
leadership that departing Russian guards should not be
allowed to take their equipment with them. But Abkhaz
officials denied on 17 May that the Russian contingent has
begun to leave Abkhazia. The chief of staff of the Russian
Border Guards' Service, General Nikolai Reznichenko, had
reached an agreement on 5 May with Abkhaz President Vladislav
Ardzinba whereby the Russians would leave only after the end
of the academic year, as their children are attending local
schools. LF

RUSSIAN PEACEKEEPING COMMANDER CONDEMNS PLANNED ABKHAZ
MILITARY EXERCISES. Nikolai Rusak, who is a political officer
with the CIS peacekeeping force deployed along the border
between Abkhazia and the rest of Georgia, told Caucasus Press
on 18 May that the Abkhaz "have no right" to conduct large-
scale military maneuvers in the region's central Ochamchire
Raion and should have informed the Russian contingent of
their intention to do so. Abkhaz Defense Minister Vladimir
Mikanba had announced the previous day that the military
exercises, which will include the use of heavy equipment,
will be held in late May. Rusak added that the conduct of
such exercises would constitute a violation of the May 1994
cease-fire agreement, under which Ochamchira is designated
part of the arms-limit zone, in which only limited quantities
of military equipment may be deployed. LF

ABKHAZ SECURITY MINISTER SAYS PARLIAMENT BOMB WAS
'HOOLIGANISM.' Astamur Tarba told Caucasus Press on 17 May
that the bomb that damaged the Abkhaz parliament building in
Sukhumi on the night of 15-16 May was not the work of
professionals (see "RFE/RL Newsline," 17 May 1999). He
dismissed as improbable earlier suggestions by Abkhaz
Interior Ministry officials that Georgian intelligence may
have been responsible, saying that professional saboteurs
would have used more powerful explosive and planted the bomb
on a weekday. Also on 17 May, the Georgian paper "Dilis
gazeti" reported that an organization known as Amtsabza has
distributed leaflets in Sukhumi criticizing the present
Abkhaz leadership's policies and calling on the Abkhaz
population to oppose the regime. LF

KAZAKH SECURITY MINISTRY SAYS IT IS BUGGED. Kazakhstan's
National Security Ministry officials say they have discovered
a secret radio receiver on the roof of the building that
houses the British, German, and French embassies, RFE/RL's
Almaty bureau reported on 18 May quoting the "31st Channel"
TV station. The unnamed security officials told the TV
station that the receiver could be used to monitor
conversations within the ministry building and incoming
electronic messages. LF

KAZAKHSTAN'S OPPOSITION PARTIES MEET. Representatives of the
People's Republican Party, the Communist Party, Azamat, the
Azat movement, and cultural centers representing ethnic
minorities held a conference in Almaty on 17 May, RFE/RL's
bureau in the former capital reported. The discussion focused
on the current political situation and the parliamentary
elections due this fall. LF

TURKMENISTAN TO SELL ELECTRICITY TO TURKEY. Under an
agreement signed on 12 May by the Turkish and Turkmen Energy
Ministers, Ziya Aktash and Safarmurad Nuriev, Turkey will
purchase 750 million kW hours of electricity annually from
Turkmenistan between 2000 and 2006, an RFE/RL correspondent
reported on 17 May. The electricity will be transported via
Iran. It is unclear how much Ankara will pay for it. LF

UZBEK OFFICIAL IMPLICATES TAJIK LEADERSHIP IN DRUG-SMUGGLING.
The director of Uzbekistan's National Center to Fight
Narcotics , Kurban Baimuradov, told AFF on 17 May that drug
cartels regularly bribe senior Tajik government officials,
including members of the presidential apparatus. ITAR-TASS
reported the same day that Tajikistan's military court has
sentenced a police colonel to death for dealing in raw opium.
LF
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