Miracles are natural. When they do not occur, something has gone wrong. - A Course in Miracles
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 3, No. 99, Part I, 21 May 1999


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RFE/RL NEWSLINE Vol 3, No. 99, Part I, 21 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

* FAULTLINES EMERGING IN ECONOMIC POLICYMAKING?

* SOME IMF LEGISLATION SENT BACK FOR MORE FINE-TUNING

* ARMENIA DENIES PURCHASING CHINESE ROCKETS
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RUSSIA

FAULTLINES EMERGING IN ECONOMIC POLICYMAKING? Prime Minister
Sergei Stepashin on 20 May announced the creation of a new
Economic Council, which will attempt to anticipate economic
trends and plan how to deal with them. Stepashin suggested
that the government needs to do less ad hoc planning, asking
"why is it every year we hold emergency discussions on paying
holiday wages to public sector employees or on rivers
freezing over?" ITAR-TASS reported. The new council will be
composed of economists and regional governors. The next day,
"Moskovskii komsomolets" reported, without citing any source,
that Stepashin is refusing to sign a decree appointing First
Deputy Prime Minister Nikolai Aksenenko as head of the
Operative Affairs Commission. The newspaper reported the
previous day that Aksenenko, in his debut as acting
commission chairman, adopted a distinctly independent stance
from that of Stepashin. "Kommersant-Daily" the same day
claimed that presidential administration head Aleksandr
Voloshin will dictate economic policy to Aksenenko from the
Kremlin. JAC

GOVERNMENT AIMING FOR QUICK SETTLEMENT OF FOREIGN DEBT.
Acting Finance Minister Mikhail Zadornov told reporters on 20
May that First Deputy Finance Minister Mikhail Kasyanov and
his team are trying to resolve all technical questions with
Russia's foreign creditors so that a restructuring of the
country's Soviet-era debts can quickly follow an announcement
of the IMF board's approval of the government's economic
program. Kasyanov is currently conducting talks with the
Paris Club and will meet with London Club representatives on
25 May, Reuters reported. According to Zadornov, the
government is not even considering a restructuring of its
Eurobond debt at present since it is meeting its Eurobond
obligations, Interfax reported. Zadornov also said that
settlement of the foreign debt problem will largely depend on
the adoption of draft laws agreed upon with the IMF. JAC

SOME IMF LEGISLATION SENT BACK FOR MORE FINE-TUNING. The
State Duma's Budget Committee on 20 May accepted one and
rejected two of the bills submitted by Yevgenii Primakov's
government in accordance with its agreement with the IMF,
ITAR-TASS reported. The two rejected bills, one imposing a
tax on motor vehicles and the other on gasoline stations,
need further work. The same day, Prime Minister Stepashin
said that the bills submitted to the Duma "were
insufficiently calculated and drafted in haste" and that
alcohol prices must not be increased too sharply, Interfax
reported. Earlier, Stepashin said that he will call for a
confidence vote if the Duma blocks the passage of the IMF
legislation. Duma First Deputy Speaker Boris Kuznetsov said
on 21 May that in June the lower chamber will examine 26 of
the 59 bills prepared by the government for the IMF. At the
beginning of next month, the Duma will consider in its first
reading the bill on the restructuring of credit
organizations. JAC

STATE BACKLOG OF UNPAID WAGES SHRINKS... Unpaid wage arrears
dropped 6.8 percent last month to a total of 63.108 billion
rubles ($2.6 billion) as of 1 May, according to the State
Statistics Committee, Interfax reported on 21 May. JAC

...AS COUNTRY'S GRAIN STOCKS DROP. As of 1 May, Russia's
grain stocks were less than half the previous year's level--
totaling 12.8 million metric tons, according to the State
Statistics Committee the previous day. Stocks had declined by
24 percent from the previous month. JAC

TRIPARTITE MEETINGS ON KOSOVA CONCLUDE UNTIL NEXT WEEK.
Russia's Foreign Ministry issued a statement on 20 May
condemning NATO's latest air strikes against Yugoslavia,
Interfax reported. According to the statement, bombs damaged
the residence of Sweden's ambassador in Belgrade as well as a
clinic, killing three patients and injuring medical staff.
The same day, acting Foreign Minister Igor Ivanov said that a
first draft of the U.S. Security Council resolution on
Yugoslavia "had been put on paper." The next day, Ivanov said
that several concrete aspects of a Kosova settlement were
coordinated in Moscow by himself and visiting U.S. Deputy
Secretary of State Strobe Talbott. For his part, Talbott said
only that his consultations in Moscow with Ivanov and special
envoy to Yugoslavia Viktor Chernomyrdin and Finnish President
Martti Ahtisaari were "quite constructive." The next
tripartite meeting will be held in Moscow on 26 May, ITAR-
TASS reported. JAC

STEPASHIN'S ASCENT TO CONTINUE? Prime Minister Stepashin's
recent confirmation has lead political analysts and others to
jigger their prognostications for Russia's upcoming
presidential race. Yabloko leader Grigorii Yavlinskii told
reporters on 20 May that he now considers Stepashin a likely
presidential contender in 2000. The same day "Nezavisimaya
gazeta" claimed that Stepashin "currently has everything
necessary to form around him a new "party of power" and that
he is President Boris Yeltsin's "heir apparent." On 21 May,
Duma deputy Konstantin Borovoi (independent) told "Moskovskii
komsomolets" that the "anti-Western propaganda spread by
Primakov and his team make [Communist Party leader Gennadii]
Zyuganov's chances [of winning the presidential vote] almost
certain." Political analyst Vyacheslav Nikonov told the daily
that the likelihood that presidential elections will be
canceled has increased, while Primakov's chances have
declined. He added that a split in "Primakov's electorate"
should be expected between Moscow Mayor Yurii Luzhkov,
Zyuganov, and Yavlinskii. JAC

FUNDS SENT TO KEMEROVO MISSING? Prime Minister Stepashin
instructed First Deputy Prime Minister Aksenenko to
investigate the disappearance of "a $100 million external
credit that did not reach Kemerovo Oblast," ITAR-TASS
reported on 20 May. Aksenenko will leave for Kemerovo next
week, accompanied by representatives from the Finance,
Economics, and Fuel and Energy Ministries. After a meeting
with Stepashin the same day in Moscow, Kemerovo Oblast
Governor Aman Tuleev told "Interfax-Eurasia" that the two
officials discussed the problem of interbudgetary relations
between the center and the regions. He said that the Ministry
of Finance is constantly trying to cut funds to the regions
almost as if it wants to trigger social explosions there. He
also told Stepashin about the necessity of investigating
"millions of rubles [for the coal sector] that simply
evaporated in commercial banks." JAC

REGIONS IMPOSING TRADE RESTRICTIONS ON GASOLINE BEYOND THEIR
BORDERS. Sverdlovsk Oblast is experiencing the large hikes in
gasoline prices that were witnessed earlier in St. Petersburg
and Moscow, according to "EWI's Russian Regional Report" on
20 May. Ninety-three octane gas costs 32 percent more than
just a week ago, at 3.7 rubles per liter (15 cents). Local
roads are noticeably quieter following the price hikes.
Gennadii Tikhmirov, director-general of Uralnefteprodukt,
told the publication that prices are rising because of
increasing shipments of domestically produced fuel to world
markets and to domestic agricultural producers during spring
sowing. In addition, gasoline station owners are passing
along increases in their tax bill to consumers. According to
the publication, Omsk Oblast and Bashkortostan Republic,
which traditionally supply fuel to Sverdlovsk, have put
restrictions on the export of gasoline beyond their borders
so that their own local supplies do not run out. JAC

RUSSIA DISMISSES CONCERNS RAISED BY NAS REPORT. Russia's
Atomic Energy Ministry has accused the U.S. of
overdramatizing problems associated with the safeguarding of
radioactive materials, Interfax reported on 20 May. The
ministry's press service said that a recent U.S. National
Academy of Sciences report saying that the thefts of Russian
radioactive matter have been underreported flies in the face
of the facts. The same day, the Duma passed a law on the
development, maintenance, and safeguarding of nuclear
weapons. The legislation requires that all nuclear weapons
facilities be exclusively federally owned. In addition, the
bill establishes clearer accountability for nuclear
accidents. JAC

AFTER BUSY WEEK, YELTSIN RESTS. President Yeltsin left for
the Black Sea resort of Sochi on 21 May for a two-week
vacation. According to RIA news agency, he is likely to meet
with South Korean President Kim Jae Dung while in Krasnodar
Krai. JAC

RUSSIA TO RESUME DEFENSE COOPERATION WITH LIBYA. Following
the UN Security Council's decision to lift international
sanctions against Libya, a delegation from the Russian arms
export company Rosvooruzhenie has flown to Tripoli to discuss
the resumption of military-technical cooperation, AFP and
Interfax reported on 20 May, quoting Rosvooruzhenie director
Grigorii Rapota. LF

RUSSIA PROMOTES GREEK, NOVOROSSIISK OIL PIPELINES... Deputy
Russian Fuel and Energy Minister Yelena Telegina met with
Greek Development Minister Evangelos Venizelos in Athens on
18 May to discuss the planned construction of a pipeline from
the Bulgarian port of Varna to Alexandropoulis bypassing the
Turkish straits, ITAR-TASS reported. A feasibility study for
that pipeline was recently completed. Meeting in Moscow two
days later with U.S. special envoy Jan Kalicki, Russian
acting Deputy Prime Minister Vladimir Bulgak said that an
economically and ecologically sound export route must be
found for Caspian oil and gas, Interfax reported. Bulgak said
that both the existing Baku-Novorossiisk and the planned
Tengiz-Novorossiisk pipelines fill those criteria. LF

...WHILE WESTERN CONSORTIUM PREFERS GEORGIAN VARIANT. But
David Woodward, president of the Azerbaijan International
Operating Company, which is developing three off-shore
Caspian oilfields, told journalists in Baku on 20 May that he
is concerned by the recent repeated shutdowns of the Baku-
Novorossiisk pipeline and by the higher transit costs
involved, according to Turan. Woodward said that one reason
why the AIOC favors the alternative pipeline from Baku to the
Georgian Black Sea terminal at Supsa is because high-quality
light Azerbaijani oil transported through that pipeline is
not mixed with lower-grade crude, as is the case with the
Baku-Novorossiisk line. LF

TRANSCAUCASUS AND CENTRAL ASIA

CIS DEFENSE MINISTERS MEET IN YEREVAN. The defense ministers
of the six CIS states that have confirmed their continued
adherence to the 1992 CIS Collective Security Treaty (Russia,
Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan)
attended a session of the CIS Defense Ministers' Council in
Yerevan on 20 May chaired by Russian Defense Minister Igor
Sergeev, RFE/RL's Yerevan bureau and Russian agencies
reported. Georgia and Ukraine were represented by deputy
ministers, while Moldova, Azerbaijan, and Uzbekistan did not
send representatives. The ministers discussed adapting the
Collective Security Treaty to the present geopolitical
situation and also tackled problems arising from the
establishment of unified CIS military systems, including the
air defense system, of which Armenia is a member. Sergeev
told journalists that his fellow ministers expressed support
for Russia's insistence that the Kosova conflict must be
resolved by political, not military means, according to
Interfax. LF

ARMENIA DENIES PURCHASING CHINESE ROCKETS. Both Armenian
Defense Minister Vazgen Sargsian and his Russian counterpart,
Sergeev said in Yerevan on 20 May that Azerbaijani claims
that Armenia has acquired Chinese Typhoon rocket systems are
untrue, RFE/RL's Yerevan bureau reported (see "RFE/RL
Newsline," 19 and 20 May 1999). Sargsian said "nothing of the
sort has taken place," while Sergeev dismissed the
allegations as "nonsense." LF

ARMENIA, BELARUS SIGN DEFENSE COOPERATION AGREEMENT. On the
sidelines of the CIS defense ministers' meeting, Vazgen
Sargsian and his Belarusian counterpart, Alyaksandr Chumakou,
signed an intergovernmental agreement on military and
military-technical cooperation, ITAR-TASS and Noyan Tapan
reported. Chumakou termed that agreement, which had been
negotiated for a long time, "a great historical event." He
also praised Armenia's role within the CIS Collective
Security Treaty. LF

WORLD BANK ASSESSES IMPLEMENTATION OF LOAN FOR ARMENIA'S
ENERGY SECTOR. World Bank officials said at a press
conference in Yerevan on 20 May that Armenia's energy sector
will need more than $1 billion in capital investment over the
coming decade to replace obsolete infrastructure and phase
out financial losses, RFE/RL's Yerevan bureau reported. The
first tranche, worth $21 million, of a $52 million World Bank
loan, released in March 1999, will be used to help cut down
losses during transmission, which are one of the reasons for
Armenia's high energy tariffs. Privatization of Armenia's
power grid may push prices even higher, according to a World
Bank officials. But the inability of not only private
consumers but also many state-run enterprises to pay their
electricity bills has already resulted in huge debts to the
energy sector. LF

U.S. CONCERNED ABOUT LOCAL ELECTIONS IN AZERBAIJAN. Meeting
on 20 May with Azerbaijani parliamentary International
Relations Committee Chairman Rza Ibadov, U.S. Ambassador
Stanley Escudero asked whether the parliament will be able to
enact by October legislation on municipalities and on
municipal elections, Turan reported. Those elections were due
two years ago. Also on 20 May, Turan's Washington
correspondent quoted exiled former Azerbaijani parliamentary
speaker Rasul Guliev as saying that in recent meetings he and
U.S. Congressional leaders agreed on the need for renewed
efforts to ensure free and fair elections in Azerbaijan. But
Musavat Party Chairman Isa Gambar told Turan he believes the
bill on municipal elections currently under discussion in the
parliament is undemocratic. He argued that the opposition
should boycott the polls. LF

GEORGIAN PARLIAMENT CHAIRMAN TO MEDIATE WITH REBEL COLONEL?
Zurab Zhvania may meet with rebel Colonel Akaki Eliava to
discuss the terms on which the latter is prepared to
surrender to the Georgian authorities, Caucasus Press
reported on 20 May, citing "Alia." Eliava has been in hiding
in western Georgia since launching an abortive insurrection
in October 1998 (see "RFE/RL Newsline," 19 and 20 October
1998). He recently said that talks with Deputy Security
Minister Levan Kenchadze on his possible surrender were a
failure, claiming that Kenchadze had threatened to kill him.
Eliava then appealed to Zhvania either to meet with him
personally or to name a group of parliamentary deputies to
conduct further negotiations. Eliava believes that Zhania,
who, like Eliava, comes from Mingrelia in western Georgia,
has a better understanding of, and greater sympathy for, the
problems facing that region's inhabitants, according to
RFE/RL's correspondent in Zugdidi. LF

KAZAKH PRESIDENT CALLS FOR AMENDMENTS TO MEDIA LAW...
Nursultan Nazarbaev has called for changes to the draft law
on the media to preclude the suspension or closure of media
outlets, except at the discretion of the owner or following a
court ruling, Interfax reported on 20 May, citing the
presidential press service. Nazarbaev said that gradual
democratization is impossible without free media. Opposition
politicians have argued that the draft law, which is
currently under discussion in the parliament, will restrict
freedom of speech and of the media (see "RFE/RL Newsline," 28
April 1999). LF

...RULES OUT FURTHER SUBSIDIES FOR AGRICULTURE. Meeting with
farmers in Akmola on 20 May, Nazarbaev warned that the
leadership will phase out direct subsidies to the
agricultural sector, Interfax reported. But he added that the
country's leadership is considering alternative ways of
supporting the sector, which he termed crucial to the
development of the economy as a whole. Nazarbaev said he
hopes legislation on private ownership of farm land, which is
currently before the parliament, will contribute to the
revival of agriculture. LF

KYRGYZSTAN COMMEMORATES 1998 ECOLOGICAL DISASTER. Some 1,000
residents of the village of Barskoon held a meeting on 20 May
to mark the first anniversary of the accident in which a
lorry belonging to the Canadian-owned Kumtor Operating
Company spilled toxic chemicals into the Barskoon river,
which flows into Lake Issyk-Kul, RFE/RL's Bishkek bureau
reported. No local or national officials attended the
ceremony. But at a session of the Karakol regional assembly
the same day, the chairman of the regional commission on the
aftermath of the accident announced that Kumtor has promised
another $7,000 in compensation for thousands of villagers
affected by the toxic spill. Victims of the spill took local
officials hostage earlier this month to protest the alleged
embezzlement of earlier finds Kumtor had paid in compensation
(see "RFE/RL Newsline," 14 May 1999). LF

INDIAN FOREIGN MINISTER VISITS UZBEKISTAN, TURKMENISTAN.
Jaswant Singh met with Uzbekistan's President Islam Karimov
in Tashkent on 19 May to discuss bilateral relations,
Interfax reported. Karimov noted the potential for expanding
trade and economic relations between the two countries. The
following day, Singh traveled to Ashgabat, where he met with
President Saparmurat Niyazov to discuss bilateral relations
and regional cooperation. Singh told Interfax that "complete
mutual understanding" was expressed on all issues discussed.
LF

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