RFE/RL NEWSLINE Vol 1, No.  174, Part I, 8 December 1997

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
* PLANE CRASH CAUSES CARNAGE IN IRKUTSK
* DUMA APPROVES BUDGET IN FIRST READING
* RUSSIAN-GEORGIAN FRONTIER DISAGREEMENT CONTINUES
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RUSSIA
PLANE CRASH CAUSES CARNAGE IN IRKUTSK.  Rescue workers
in Irkutsk have confirmed that at least 62 people were killed when
an An-124 military cargo plane crashed into several apartment
buildings shortly after takeoff on 6 December, an RFE/RL
correspondent in Irkutsk reported on 8 December.  Some 28 people
are still missing.  The plane was carrying 100 tons of fuel and two
fighter jets intended for delivery to Vietnam.  President Boris Yeltsin
has appointed Prime Minister Viktor Chernomyrdin to head a
government commission investigating the cause of the crash. 
Chernomyrdin flew to Irkutsk on 7 December to chair the first
meeting of that commission.  Several scenarios will be investigated,
including whether the plane was loaded with contaminated fuel,
which could cause engine failure, and whether the wings were
properly de-iced before takeoff.  In Irkutsk, as in many Russian
cities, the airport is near a residential area.  LB
DUMA APPROVES BUDGET IN FIRST READING.  The State Duma
on 5 December approved the 1998 budget in the first reading by 231
to 136 with six abstentions, RFE/RL's Moscow bureau reported.  Just
before the vote, President Boris Yeltsin paid a surprise visit to the
Duma and appealed to deputies to pass the budget, promising the
document will be revised before later readings.  The Our Home Is
Russia, Liberal Democratic Party of Russia, and Russian Regions
factions unanimously supported the budget, as did most Agrarian
deputies, Interfax reported.  All Yabloko deputies and most members
of the Communist and Popular Power factions opposed it.  The 1998
budget calls for 367.5 billion new rubles ($61 billion) in revenues,
499.9 billion rubles in spending, a deficit of 132.4 billion rubles (4.7
percent of GDP, which is estimated at 2.84 trillion rubles), and an
annual inflation rate of 5.7 percent.  LB
COMMUNIST VOTES KEY TO BUDGET PASSAGE.  Some 29
Communist Duma deputies, about one-fifth of the Communist faction,
voted to pass the budget in the first reading, RFE/RL's Moscow
bureau reported.  Without their support, the budget would have
fallen short of the 226 votes needed for a Duma majority.  The budget
vote is expected to undermine the credibility of Communist Party
leader Gennadii Zyuganov, who announced on 4 December that his
faction had unanimously agreed to vote against the budget.  Zyuganov
claimed on 5 December that he and the rest of the "Communist
leadership" voted to reject the budget.  However, those who
supported passage in the first reading included several prominent
members of the Communist faction, such as Duma Speaker Gennadii
Seleznev, faction coordinator Sergei Reshulskii, and Zyuganov adviser
Aleksei Podberezkin.  LB
YAVLINSKII DOUBTS GOVERNMENT CAN ADHERE TO BUDGET. 
Speaking to RFE/RL's Moscow bureau on 5 December, Yabloko leader
Grigorii Yavlinskii predicted that the government will be unable to
abide by the 1998 budget, just as it was unable to fulfill revenue and
spending plans for 1997.  Yavlinskii charged that a trilateral
commission of government, Duma, and Federation Council
representatives, which revised the budget after the Duma rejected an
earlier draft in October, had only made the budget worse.  He argued
that the trilateral commission agreed to add more than 27 trillion
rubles ($4.5 billion) in expenditures but did not provide realistic
plans to increase revenues accordingly.  Yavlinskii also criticized the
government for trying to boost 1998 revenues by raising various
taxes rather than by taking strong measures to improve tax
collection.  LB
YELTSIN PROMISES TO SIGN LAW ON GOVERNMENT.  While in
the Duma on 5 December, Yeltsin pledged to sign the law on the
government, Russian news agencies reported.  The president vetoed
that law earlier this year and then refused to sign it even after both
houses of the parliament overrode his veto, prompting the
Federation Council to appeal to the Constitutional Court.  In October,
Yeltsin indicated he would sign the law only if certain passages are
amended.  However, his remarks on 5 December did not appear to
make signing the law conditional on any amendments.  The law on
the government would increase parliamentary influence over the
composition of the cabinet.  In particular, it would require the whole
government to step down if the prime minister resigned or were
dismissed.  The Duma would then have to confirm a new prime
minister before other cabinet members could be named.  LB
NEMTSOV IN CHILE... First Deputy Prime Minister Boris Nemtsov
met with Chilean President Eduardo Frei and high-ranking economic
officials during a visit to Santiago, an RFE/RL correspondent in the
Chilean capital reported on 6 December.  Among other things,
Nemtsov is studying Chile's experience with non-governmental
pension funds.  Such funds exist in Russia, but a law regulating their
activities has not yet been passed.  Nemtsov, who flew to Mexico on 8
December, is likely to miss an upcoming report by the government
on its activities to Yeltsin.  Some Russian commentators have argued
that by sending Nemtsov abroad at this time, Yeltsin signaled that he
does not plan to sack the first deputy premier.  LB
...SAYS THERE'S NO 'RUSSIAN PINOCHET.'  While in Chile,
Nemtsov did not meet with General Augusto Pinochet, the Chilean
leader from 1973 to 1990 and currently commander of the armed
forces, RFE/RL's correspondent in Santiago reported.  But in an
interview with RFE/RL, Nemtsov said Pinochet had played a major
role in leading Chile to economic growth.  Nemtsov noted that some
Russian generals aspire to become political leaders, but he argued
that no "second Pinochet" will be found in Russia.  He added that "I
simply do not know of any general" who would conduct the correct
economic policies for Russia.  Nemtsov's comments were presumably
directed at former Security Council Secretary Aleksandr Lebed and
Duma Defense Committee Chairman Lev Rokhlin, who has founded a
movement to support the armed forces and defense industry.  LB
SERGEEV REASSURES DUMA ON MISSILE REDUCTION PLANS. 
Defense Minister Igor Sergeev said on 5 December that neither
Yeltsin nor the Defense Ministry has proposed unilateral cuts in the
Russian nuclear arsenal, Reuters and Interfax reported on 5
December.  Speaking to reporters after closed Duma hearings on arms
control and military reform plans, Sergeev said the Defense and
Foreign Ministries worked jointly on the disarmament initiatives
announced by Yeltsin in Stockholm (see "RFE/RL Newsline," 3 and 4
December 1997).  He stressed that further reductions in Russia's
nuclear warheads will be "in parity" with U.S. cuts.  The defense
minister also called on the Duma to ratify the START-2 arms control
treaty.  LB
LEBED BLASTS YELTSIN ON MILITARY, CHECHNYA POLICY. 
Former Security Council Secretary Lebed on 5 December slammed
Yeltsin's recent proposals on troop reductions in the Russian
northwest and further cuts in Russia's nuclear arsenal, Interfax
reported.  Lebed said president should resign, and he predicted that
Yeltsin's planned trip to Chechnya in January will achieve nothing.  He
charged that Russia has not held Chechen officials to the August 1996
Khasavyurt accords, which called for postponing a decision on
Chechnya's status for five years. ( Lebed negotiated the Khasavyurt
accords.)  Lebed also told Interfax that he is willing to form an
alliance with Yabloko leader Yavlinskii and Moscow Mayor Yurii
Luzhkov in the next presidential election, scheduled for 2000.  LB
LUZHKOV SAYS HE WON'T RUN FOR PRESIDENT... Moscow
Mayor Luzhkov has again denied that he plans to contest the next
presidential election, Interfax reported on 6 December.  In particular,
he ruled out running for president in an alliance with Lebed.  The
same day, Luzhkov attended the second congress of the Russian
Movement for New Socialism and told reporters that Russians
increasingly support socialism--not as a step toward communism, but
as a system to benefit the "absolute majority."  LB
...MEETS WITH LUKASHENKA.  Meanwhile, Luzhkov met with and
praised Belarusian President Alyaksandr Lukashenka during a 5
December visit to Minsk, ITAR-TASS reported.  The mayor reached
agreement with a Minsk factory on annual imports of 20,000 engines
for Moscow trucks and buses.  Luzhkov also charged that although
Yeltsin has taken steps toward unification with Belarus, First Deputy
Prime Minister Anatolii Chubais, former acting Prime Minister Yegor
Gaidar, and former Security Council Deputy Secretary Boris
Berezovskii are against the Russian-Belarusian union.  LB
ACCUSED U.S. SPY RELEASED PENDING INVESTIGATION.  U.S.
businessman Richard Bliss was released by the Federal Security
Service on 6 December but must remain in Rostov Oblast while his
case is investigated.  The previous day, Bliss was charged with
espionage.  U.S. State Department spokesman Richard Foley said there
is "no credible reason" for the case against Bliss, Reuters reported. 
Foley said Vice President Al Gore telephoned with Russian Prime
Minister Chernomyrdin to discuss the Bliss case.  Ambassador
Stephen Sestanovich, who coordinates U.S. policy toward Russia, and
U.S. Secretary of State Madeleine Albright also discussed the case
with Russian officials in Washington.  ITAR-TASS on 5 December
quoted unnamed FSB officials as claiming that Bliss had admitted to
illegally importing satellite equipment to Russia.  However,
Qualcomm, Bliss's employer, said it had licenses for all equipment
used in connection with a cellular telephone project in Rostov.  LB
COMMISSION BLAMES CRUSHED OXYGEN TANK FOR MINE
BLAST.  A government commission believes that a crushed oxygen
tank caused the recent explosion that killed 67 coal miners at the
Zyryanovskaya mine in Novokuznetsk (Kemerovo Oblast), ITAR-TASS
reported on 7 December.  According to the preliminary conclusions of
the commission investigating the disaster, an oxygen tank intended
for use in emergencies fell between mining machinery, where it was
depressurized.  A spark subsequently set the oxygen tank on fire,
which, in turn.  ignited coal particles and methane gases in the mine. 
Prime Minister Chernomyrdin arrived in Novokuznetsk on 8
December for a meeting of the government commission on the
mining disaster.  LB
RYBKIN RETURNS TO GROZNY.  Russian Security Council Ivan
Rybkin held further talks in Grozny on 6 December with the Chechen
leadership on preparations for Yeltsin's planned January visit,
Russian agencies reported.  Agreement was reached on installing a
telephone hot-line between Yeltsin and Chechen President Aslan
Maskhadov.  Chechen Deputy Prime Minister Akhmed Zakayev told
Interfax that no new Russian-Chechen agreements will be signed
until existing accords have been implemented.  On 7 December,
Chechen Vice President Vakha Arsanov told the same news agency
that Chechnya will guarantee Yeltsin's security during the visit only
if Yeltsin is officially invited by Maskhadov.  Arsanov further claimed
that some leading Russian politicians, including Prime Minister
Chernomyrdin, Deputy Prime Minister Ramazan Abdulatipov, and
Interior Minister Anatolii Kulikov, are "making every effort" to
prevent Yeltsin visiting Grozny.  LF
STROEV, CHERNOMYRDIN ON GUAM.  Federation Council
chairman Fedor Stroev told journalists in St. Petersburg on 7
December that the new alliance between Georgia, Ukraine,
Azerbaijan, and Moldova does not constitute a threat either to
Russia's national interests or to those of the CIS, according to
Interfax.  But Prime Minister Chernomyrdin expressed his
disapproval of the "dispersal to different corners" of CIS member
states, Turan reported on 5 December.  Chernomyrdin said that Russia
has embarked on "serious work" to expedite integration within the
CIS.  He also predicted that the 23 January CIS summit will constitute
a "landmark" in that body's development.  The possibility of creating
a free trade zone within the CIS is currently under discussion,
Chernomyrdin commented.  LF
TRANSCAUCASUS AND CENTRAL ASIA
RUSSIAN-GEORGIAN FRONTIER DISAGREEMENT CONTINUES. 
Georgian President Eduard Shevardnadze sent a letter to Russian
President Yeltsin on 5 December protesting the unilateral decision to
move a Russian frontier post 1 kilometer into Georgian territory,
Russian agencies reported.  Shevardnadze called for the immediate
resumption of bilateral talks on the demarcation of the border, but
the Georgian Foreign Ministry issued a statement the same day
arguing that the border demarcation commission should not resume
its work until the post is moved back to its original position.  On 6
December, Russian border guards used force against some 50 young
Georgian demonstrators who had begun a protest demonstration at
the frontier two days earlier.  The same day, the Russian Foreign
Minister issued a statement condemning allegedly biased
pronouncements by Georgian officials that reflect "an openly
nihilistic view" of bilateral relations, according to ITAR-TASS.  LF
OSCE MINSK GROUP CHAIRMEN IN YEREVAN ... Following talks
on 3-4 December in Stepanakert with the leadership of the Nagorno-
Karabakh Republic, the three co-chairmen of the Organization on
Security and Cooperation in Europe's Minsk Group returned to
Yerevan to meet with President Levon Ter-Petrossyan, ArmenPress
reported.  They evaluated the current stage of the peace process prior
to the 18-19 December OSCE foreign ministers' meeting in
Copenhagen.  LF
...AND BAKU.  On 5 December, the co-chairmen met in Baku with
Foreign Minister Hasan Hasanov and President Heidar Aliev,.  who
expressed his regret that it appears unlikely a settlement of the
Karabakh conflict will be reached before year's end, Interfax
reported.  Aliev said the most recent OSCE peace plan, which calls for
a phased solution to the conflict, should be approved by all parties to
the conflict.  Nagorno-Karabakh has rejected that plan and continues
to insist on a "package" solution.  Arriving in Paris on 7 December for
an official visit, Armenian Prime Minister and former Nagorno-
Karabakh President Robert Kocharyan similarly said he supports a
"package" solution rather than the "phased" approach, AFP reported. 
LF
ARMENIAN PARLIAMENT POSTPONES FURTHER BUDGET
DEBATE.  Following discussions that lasted three days, the National
Assembly on 5 December voted to postpone a vote on the 1998 draft
budget until after 20 December, RFE/RL's Yerevan bureau reported. 
Most factions have expressed reservations about the draft, including
the majority Hanrapetutytun faction, which objects in particular to a
provision enabling the government to spend an unspecified sum at
its discretion on "emergency situations."  Finance and Economy
Minister Armen Darbinian rejected the argument that Armenia needs
a budget that functions "like clockwork," arguing that the country's
economy does not yet do so, ArmenPress reported.  Darbinian also
warned that by the end of 1998, Armenia's foreign debt will reach
the maximum limit of 50 per cent of GDP.  In 1996, that debt
amounted to 34.9 percent and is estimated to total 46.3 percent in
1997.  LF
ARMENIAN PREMIER MEETS WITH MEDIA
REPRESENTATIVES.  Kocharyan met in Yerevan on 4 December
with editors and other media representatives to discuss demands
made during the one-day media strike on 3 December, Armenian
agencies reported.  Kocharyan reasoned that it is not feasible to
exempt the press from payment of taxes since that could lead to
"intractable violations."  But he did say he will propose that the
parliament include in the 1998 budget a provision on financial aid
for the media, to which the editors agreed.  Kocharyan said he had
been informed that media outlets were already exempt from paying
rent for the premises they occupy in addition to maintenance
charges.  That exemption was one of the strikers' demands.  LF
GEORGIA, TURKMENISTAN FAIL TO REACH GAS AGREEMENT. 
During his one-day visit to Ashgabat on 5 December, Georgian
President Eduard Shevardnadze and his Turkmen counterpart,
Saparmurat Niyazov, signed a cooperation agreement and reaffirmed
their interest in "mutual partnership" with the aim of "overcoming
economic difficulties", ITAR-TASS reported.  The two sides failed,
however, to negotiate the resumption of Turkmen gas supplies to
Georgia.  Those supplies were suspended in March 1997 because of
Georgia's inability to pay outstanding debts totaling $465.2 million
for gas imported since 1993.  Although Georgia has agreed to begin
repayments, the resumption of gas imports from Turkmenistan is
precluded by Gazprom's refusal to allow Ashgabat to use its pipeline
network.  LF
WORLD BANK TO LEND $20 MILLION TO TAJIKISTAN.  The
World Bank is preparing to lend Tajikistan $20 million over the next
two months, ITAR-TASS reported on 7 December.  The bank's board
of directors will meet on 16 December to approve the first $10
million credit, which the government will use to pay off wage and
pension arrears.  The board will convene again in late January to
approve another $10 million credit to help restore and maintain the
communications and social infrastructure in the Karagetinskaya
region.  BP
EBRD, IFC TO GRANT LOAN TO KAZAKH STEEL COMPANY.  The
European Bank for Reconstruction and Development and the
International Finance Corporation are to issue loans worth $450
million to the Ispat-Karmet steel company in Karaganda to go toward
upgrading equipment, Interfax reported.  Representatives of the two
financial organizations signed the relevant documents in Almaty on 5
December.  The EBRD is loaning $285 million and the IFC the
remainder, Ispat-Karmet will put up $300 million.  BP
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