RFE/RL NEWSLINE Vol. 3, No. 123, Part I, 24 June 1999

________________________________________________________
RFE/RL NEWSLINE Vol. 3, No. 123, Part I, 24 June 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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Headlines, Part I

* STEPASHIN SAYS ECONOMIC RECOVERY ALREADY STARTED

* NEW ALLIANCE TIPPED BETWEEN YABLOKO, STROEV

* KAZAKHSTAN'S PARLIAMENT VOTES CONFIDENCE IN GOVERNMENT
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

RUSSIA

STEPASHIN SAYS ECONOMIC RECOVERY ALREADY STARTED... During a
discussion with Danish Foreign Minister Niels Holveg Petersen
on 23 June, Prime Minister Sergei Stepashin said that
Russia's economic recovery began earlier than forecasted.
Stepashin pointed to a rise in industrial output of 1.5
percent during the first five months of the year, the
stabilization of the ruble's exchange rate, and a monthly
inflation rate of less than one percent. He also declared
that the country's foreign investors were now returning. JAC

...AS TRUE STATE OF INDUSTRY REMAINS UNCERTAIN. The same day,
"Trud" reported that industrial output in May jumped 6.1
percent compared with the same month last year, but retail
trade turnover plummeted 14.3 percent over the same period.
At the same time, the average wage in May amounted to 1,465
rubles ($60) a month, which in terms of real purchasing power
represents a decline of more than one-third. Noting that
industrial output declined last May compared with the
previous month, Yevgenii Gavrilov, deputy director of the
Bureau of Economic Analysis, told "The Moscow Times" that he
is "more inclined to trust the May figure compared with
April" because it is calculated on the basis of physical
volume of output, which means that industrial production
could have contracted. JAC

DUMA MEMBERS PASS MORE IMF LEGISLATION... State Duma deputies
passed more bills on 23 June that are part of the package of
measures drafted by the government in accordance with its
agreement with the IMF. The law on the restructuring of
credit organizations, which passed on its second reading,
sets out the procedure for restructuring banks as well as
defining the status and property of the Agency for
Restructuring Credit Organizations, according to Interfax-
AFI. A second law allows the Central Bank to issue short-term
bonds until next year, while a third allows it to purchase
gold directly from producers. Both measures were approved on
their third and final reading. Duma deputies also approved a
bill that taxes luxury vehicles or cars with engines ranging
from 2,500 to 3,000 cubic centimeters on its second reading.
All bills must pass three readings before they are sent to
the upper chamber and later to the president for approval.
JAC

...STRENGTHEN GOVERNMENT'S TAX COLLECTION ABILITY...
Additional measures approved were amendments to the tax code
and the law on the state tax service, both on their third
readings. According to ITAR-TASS, the tax service will have
the right to recover debts on taxes and fees as well as set
up tax inspection posts in organizations that have not paid
taxes for three or more months. JAC

...AND GIVE THEMSELVES A 67 PERCENT PAY RAISE. Deputies also
approved on 23 June a law that will raise their monthly
salaries from 6,000 rubles a month ($248) to 10,000 rubles
and grant three months severance pay in the case of a
dissolution of the lower chamber by the president, according
to "The Moscow Times." The vote was 297 in favor with 77
opposed. According to the daily, before the salary increase
deputies received wages four times the national average.
According to Russian Public Television, all factions except
Yabloko supported the legislation. In addition, the bill
provides deputies with a pension that is 75 percent of their
salaries, the station reported. JAC

ANNAN PROMISES IVANOV RUSSIAN PARTICIPATION IN CIVILIAN
KOSOVA MISSION. UN Secretary-General Kofi Annan told Russian
Foreign Minister Igor Ivanov in Moscow on 23 June that he
will include Russian officials in the UN Mission in Kosovo,
AP reported. Annan thanked Russian President Boris Yeltsin,
Russian special envoy to Yugoslavia Viktor Chernomyrdin, and
Ivanov for helping to end the Kosova crisis, stressing that
Russia helped strengthen the role of the UN in the process.
Ivanov told ITAR-TASS after talks with his Danish
counterpart, Niels Helveg Petersen, that "considering the
role [Russia] plays in the settlement in [Kosova]. ...We will
seek the post of deputy to the high representative." Annan
already appointed two out of the four deputies. The post of
deputy representative in charge of reconstruction will go to
the EU, leaving only the post of OSCE representative for
institution building open to Russia (see "RFE/RL Newsline" 22
June 1999). FS

IVANOV URGES UCK DISARMAMENT. After briefing the State Duma
about the deployment of Russia's Kosova peacekeeping force
(KFOR) contingent, Ivanov told journalists in Moscow on 23
June that KFOR may have problems disarming the Kosova
Liberation Army (UCK). He said that KFOR must "scrupulously
comply with those provisions of the UN Security Council
resolution which call for the demilitarization of all bandit
groups and terrorist organizations," ITAR-TASS reported. He
declined to comment about a "Newsday" report that Russian
volunteers committed atrocities in Kosova (see "RFE/RL
Newsline," 23 June 1999). Defense Minister Igor Sergeev told
the legislators that Russian peacekeepers are ready to leave
for Kosova within three hours after the mission's expected
approval by the Federation Council on 25 June. Duma deputy
speaker Sergei Baburin said that a group of legislators will
travel to Prishtina along with the peacekeepers. FS

CHERNOMYRDIN SAYS RUSSIA HAS ENOUGH 'HEALTHY FORCES.'
Chernomyrdin told the Parliamentary Assembly of the Council
of Europe in Strasbourg on 23 June that Russia wants to be
integrated into Europe and will never be "a closed country"
again, ITAR-TASS reported. He underlined that "there are
enough healthy forces in our country which have once and for
all rejected the stereotypes of the old confrontation
mentality and which are capable of securing the country a
dignified future in the family of European nations."
Chernomyrdin stressed that Russia, "after a series of social
experiments and upheavals," is on a course of development. He
added that "Russia has gone through serious tests and
survived. The country is gathering strength for a historic
breakthrough into the future." FS

NEW ALLIANCE TIPPED BETWEEN YABLOKO, STROEV... Following
earlier reports in "Segodnya," more Russian newspapers are
tracking the recent interest of Yabloko leader Grigorii
Yavlinskii in the Orel Oblast, whose governor is Federation
Council Chairman Yegor Stroev. According to "Novye Izvestiya"
on 22 June, Yavlinskii has visited the area three times in
the last month and a "coincidence of mutual interests"
between the two politicians has been confirmed by the Yabloko
faction. According to the daily, Yavlinskii is trying to
"tempt" the governor with his party's new agrarian program
and Stroev has responded to Yavlinskii's proposals "rather
benevolently," lending him one of his advisors on the topic.
The next day, "Nezavisimaya gazeta" reported that the two men
"exchanged opinions about questions of strategy and tactics
in agriculture reform." JAC

...AS LEFT PARTIES STRUGGLE TO FORM COALITION. Communist
Party (KPRF) leader Gennadii Zyuganov said on NTV on 23 June
that his movement will participate in upcoming parliamentary
elections in a single bloc. Commenting on earlier announced
plans of Duma deputies Viktor Ilyukhin and Albert Makashov
and Kemerovo Governor Aman Tuleev to run separately, Zyuganov
said "they will think about it for a month or so" and agree
to run in one strong bloc. "Vremya MN" reported the same day
that according to unidentified sources in the KRPF, leaders
of radical movements are trying to blackmail them with
statements that they will take part in the elections
independently so that they can obtain more seats on the board
of directors of the KPRF. The Agrarian Party announced on 16
June that it will participate in parliamentary elections as
an independent organization. JAC

ORT HEAD SAYS ELECTIONS POSE CRITICAL TEST FOR MEDIA...
Addressing a congress of Russian-language newspapers in
Moscow, Igor Shabdurasulov, general-director of Russian
Public Television (ORT), said that upcoming elections will be
the touchstone by which the civic maturity of Russia's media
will be judged, RFE/RL's Moscow bureau reported on 23 June.
Shabdurasulov revealed that an unnamed large organization
recently tried to buy coverage from his station and that such
efforts will not be tolerated. The previous day, Russian
Television (RTR) announced that it is canceling "Sovershenno
Sekretno" (Top Secret), a show known for its political
exposes. Artem Borovik, president of the company that
produces the show, declared that a cleansing of the media is
underway in advance of the elections. An RTR official said
that the show was taken off the air because it dealt in
"kompromat," or compromising materials, released by
politicians to discredit their opponents, Reuters reported.
JAC

...AS SLAIN JOURNALIST'S CASE CLOSED. The investigation of
the 1994 assassination of Dmitrii Kholodov, an investigative
journalist for "Moskovskii Komsomolets," is "over in
principle," according to Vladimir Kolesnikov, deputy interior
minister, "Novye "Izvestiya" reported on 19 June. Kolesnikov
said that the guilty parties have been identified and will be
tried; however, he declined to name them, saying that an
official announcement will occur in a month. JAC

PROSECUTOR ASKS THAT REPORTER SPEND 12 YEARS IN JAIL. The
espionage and treason trial of military journalist Grigorii
Pasko adjourned for one week on 24 June, as the prosecutor in
the case asked for a verdict of 12 years' imprisonment, ITAR-
TASS reported. Pasko is accused of providing classified
information to Japanese media about the Pacific fleet's
environmentally hazardous handling of nuclear waste. The
previous day, "Vremya MN" reported that expert witnesses
called by Pasko's lawyers found that certain fragments of the
document that was compiled after a search of Pasko's
apartment had been falsified. These experts concluded that
signatures on one of the pages of the document were not made
by the witnesses of the official search. According to AFP,
the case is in its final phase and earlier sources had
predicted that the tribunal will reach a decision on Pasko's
guilt by mid-June. JAC

ALTAI LEADER FINDS HIMSELF IN THE HOT SEAT. Deputies in the
legislative assembly of the Altai Republic have voted no
confidence in the local government head Semen Zubakin,
"Pravda" reported on 24 June. According to the daily, a
backlog of unpaid wages to state sector employees in the
region totals 150 million rubles ($ 6.2 million) and the
leadership of the republic has proven "incompetent in
handling economic problems." The previous day, Prime Minister
Stepashin met with Zubakin and Agrarian party leader Mikhail
Lapshin to discuss the republic's economic situation,
Interfax-Eurasia reported. The meeting focused on the urgent
efforts required to prepare for next year's harvest in light
of the worsening weather forecast (see "RFE/RL Newsline," 15
June 1999) as well as the region's chronic financial
problems, which include a 7-8 month backlog of unpaid wages
to state workers. The republic is among the country's worst
performing regions in terms of paying wages on time (see
"RFE/RL Newsline," 26 May 1999). JAC

TRANSCAUCASIA AND CENTRAL ASIA

SOUTH CAUCASUS LEADERS ENTHUSIASTIC OVER AGREEMENT WITH EU.
Speaking at a joint news conference in Luxembourg on 22 June,
Georgian President Eduard Shevardnadze said the partnership
and cooperation agreements he and Armenian and Azerbaijani
leaders had signed earlier that day with the EU mark the
beginning of a new era for the south Caucasus, Interfax
reported (see "RFE/RL Newsline," 23 June 1999). Both
Shevardnadze and his Armenian counterpart, Robert Kocharian,
noted that the EU stresses the need to resolve regional
conflicts as a precondition and incentive for expanded mutual
economic cooperation. Azerbaijan's Prime Minister Artur
Rasizade said implementation of EU-sponsored projects to
develop a regional transportation system and promote the
exploitation of Caspian hydrocarbons will increase the
importance of the south Caucasus in the 21st century. A joint
declaration signed by the three leaders and the EU also
underscores the importance of developing good governance and
the rule of law, and establishing fair legislation for
foreign investment. LF

ZHIRINOVSKII PREDICTS NATO INTERVENTION IN CAUCASUS...
Liberal Democratic Party of Russia leader Vladimir
Zhirinovskii told journalists in Strasbourg on 23 June that
he believes NATO will seize any opportunity to intervene
militarily in the Transcaucasus, Interfax reported.
Zhirinovskii said he believes new fighting is imminent
between Armenia and Azerbaijan, and in Abkhazia. He also
predicted that NATO will encourage the Crimean Tatars to
pursue an independence drive modeled on that in Kosova,
casting Ukrainian President Leonid Kuchma in the role of
villain a la Yugoslavia's Slobodan Milosevic. But the
Armenian daily "Yerkir" on 23 June quoted Zhirinovskii as
saying that NATO "would not dare" to replicate the Kosova
scenario in either Karabakh or Abkhazia. LF

...BUT SOLANA DENIES SUCH PLANS. NATO Secretary-General
Javier Solana told journalists in Brussels on 23 June after a
meeting with Armenian President Kocharian that the alliance
has no plans to send troops to Azerbaijan as a counterweight
to the Russian forces stationed in Armenia. The previous day,
Turan had quoted Azerbaijani State Foreign Policy Advisor
Vafa Guluzade as saying that Azerbaijan would welcome NATO's
input towards resolving the Karabakh conflict. Solana noted
that NATO is on good terms with all three south Caucasus
states, which he termed partners and successful participants
in the Partnership for Peace program. Speaking in Baku on 23
June, British Ambassador Roger Thomas said his country
believes that the OSCE Minsk Group (of which the U.K. is not
a member) remains the most suitable body to resolve that
conflict. "We are not waiting for NATO to bring anything new
in the Minsk Group," Turan quoted him as saying. LF

ARMENIAN PRESIDENT MEETS EC COMMISSIONER. Before leaving
Luxembourg for Brussels, Kocharian met on 22 June with the
EC's foreign policy commissioner, Hans van den Broek, Noyan
Tapan reported. Their talks focused on efforts by Kocharian
and his Azerbaijani counterpart, Heidar Aliev, to resolve the
Karabakh conflict, EU assistance programs to the
Transcaucasus, economic problems in Armenia, the country's
Mezdamor nuclear power station, and the situation in Kosova.
LF

AZERBAIJANI PRESIDENT DISCUSSES ENERGY ISSUES. President
Aliev met in Baku on 23 June with the outgoing U.S. special
envoy for Caspian energy issues, Richard Morningstar, and
Morningstar's successor in that post, John Wolf, Turan and
Caucasus Press reported. The talks focused on the planned
Baku-Ceyhan export pipeline for Azerbaijan's Caspian oil, and
a Trans-Caspian pipeline to transport Turkmen gas to world
markets via Azerbaijan and Georgia. Natik Aliev, president of
Azerbaijan's state oil company SOCAR, said on 23 June that
Turkey is demanding that the estimated cost of the former
project be revised upwards by $300 million from the present
$2.4 billion. Heidar Aliev told journalists prior to his
talks with the two U.S. officials that rumors of his
precarious health are "false and immoral," according to ITAR-
TASS. But Reuters noted that Aliev appears frail and thinner
than before the heart bypass surgery he underwent in the U.S.
in April. LF

GEORGIAN PRESIDENT VISITS NETHERLANDS. On a one-day state
visit to The Netherlands on 23 June, Eduard Shevardnadze held
talks with Prime Minister Wim Kok on bilateral cooperation,
Georgian cooperation with the EU, and the prospects for
increased Dutch investment in the Georgian economy, ITAR-TASS
and Caucasus Press reported. Shevardnadze also met with Queen
Beatrix, and traveled to Rotterdam for the signing of a
memorandum on cooperation between that port and the Georgian
Black Sea port of Poti. Also signed was a memorandum on
cooperation between the Netherlands and Georgian defense
ministries. LF

TWO KILLED BY LANDMINE IN ABKHAZIA... Two people were killed
and at least 13 injured on 23 June when a passenger bus ran
over a landmine in Abkhazia's southernmost Gali raion,
Caucasus Press reported. The Foreign Ministry of the
unrecognized Republic of Abkhazia issued a statement blaming
Georgian guerrillas operating in Gali for the attack, while a
spokesman for the guerrillas said that Abkhaz special
services perpetrated the assault to discredit them. Several
dozen people, most of them policemen, have died in such
incidents over the past year. LF

...AS PEACEKEEPERS' ANNIVERSARY GENERATES PROTEST. Also on 23
June, Russian President Yeltsin sent congratulations to the
Russian peacekeeping force on the fifth anniversary of its
deployment along the border between Abkhazia and the rest of
Georgia (see "RFE/RL Newsline," 23 June 1999). The Abkhaz
parliament- and government-in-exile, which represent ethnic
Georgians who fled Abkhazia in 1992-93, issued a joint
statement protesting the anniversary celebration, noting that
in the past five years 2,000 people have been killed on
territory which the peacekeepers control, Caucasus Press
reported. LF

KAZAKHSTAN'S PARLIAMENT VOTES CONFIDENCE IN GOVERNMENT. In a
secret ballot on 24 June, the required two thirds of all
deputies of both chambers of Kazakhstan's parliament voted
confidence in Premier Nurlan Balghymbaev's cabinet, ITAR-TASS
reported. Balghymbaev had demanded such a vote on 21 June
after deputies rejected further planned cuts in budget
spending (see "RFE/RL Newsline," 22 June 1999). On 21 June,
Marat Ospanov, speaker of the lower house, had argued that
the government should not choose the easy option of cutting
social programs, especially during the runup to parliamentary
elections scheduled for this fall. Instead, the government
should work for more effective tax collection and the growth
of monetary policy, Interfax quoted him as saying. Speaking
in London on 22 June, Foreign Minister and Deputy Prime
Minister Kasymzhomart Toqaev assured potential investors that
the cabinet "will not allow" default on either domestic or
foreign debt, according to Interfax. LF

DEPUTIES' ARREST DELAYS KYRGYZ PARLIAMENT SESSION. The
People's Assembly--the upper chamber of Kyrgyzstan's
parliament--resumed its session on 23 June with a 36-hour
delay following the arrest late on 21 June of deputy Djalgap
Kazakbaev, RFE/RL's Bishkek bureau reported. Interfax quoted
Deputy Security Minister Kubat Kozhonaliev as saying that
Kazakbaev is accused of selling, at dumping prices, uranium
concentrate from the Kara-Balta uranium and gold mine of
which he is director, and of embezzling $739,500 from state
coffers. Some 200 employees of the Kara-Balta mine picketed
the government building in Bishkek on 22 June to demand
Kazakbaev's release. People's Assembly speaker Abdygany
Erkebaev told journalists on 23 June that the arrests of
Kazakbaev and of a second parliament deputy, Boris Vorobev,
on charges of embezzlement and tax evasion constitute a
violation of the constitution. In a referendum in October
1998, the Kyrgyz electorate endorsed restricting deputies'
immunity from arrest to when parliament is in session, but
the constitution has not yet been amended to incorporate that
change. LF

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
               Copyright (c) 1999 RFE/RL, Inc.
                     All rights reserved.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

HOW TO SUBSCRIBE
Send an email to newsline-request@list.rferl.org with
the word subscribe as the subject of the message.

HOW TO UNSUBSCRIBE
Send an email to newsline-request@list.rferl.org with
the word unsubscribe as the subject of the message.

For subscription problems or inquiries, please email
allenm@rferl.org
________________________________________________
CURRENT AND BACK ISSUES ON THE WEB
Back issues of RFE/RL Newsline and the OMRI Daily Digest
are online at: http://www.rferl.org/newsline/search/
_________________________________________________
LISTEN TO NEWS FOR 25 COUNTRIES
RFE/RL programs are online daily at RFE/RL's 24-Hour
LIVE Broadcast Studio.
http://www.rferl.org/realaudio/index.html
_________________________________________________
REPRINT POLICY
To receive reprint permission, please contact Paul Goble
via email at GobleP@rferl.org or fax at 1-202-457-6992
_________________________________________________
RFE/RL NEWSLINE STAFF
* Paul Goble, Publisher, GobleP@rferl.org
* Liz Fuller, Editor-in-Chief, CarlsonE@rferl.org
* Patrick Moore, Team Leader, MooreP@rferl.org
* Jan Cleave, CleaveJ@rferl.org
* Julie A. Corwin, CorwinJ@rferl.org
* Jan Maksymiuk, MaksymiukJ@rferl.org
* Fabian Schmidt, SchmidtF@rferl.org
* Michael Shafir, ShafirM@rferl.org

FREE-LANCE AND OCCASIONAL CONTRIBUTORS
* Pete Baumgartner, Jeremy Branston,  Victor Gomez, Mel
Huang, Dan Ionescu, Zsolt-Istvan Mato, Jolyon Naegele, Matyas
Szabo, Anthony Wesolowsky

RFE/RL Newsline Fax: (420-2) 2112-3630
_________________________________________________
RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC