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RFE/RL NEWSLINE Vol 1, No. 82, Part I, 28 July 1997
This is Part I of Radio Free Europe/Radio Liberty's Newsline. Part I is a compilation of news concerning Russia, Transcaucasia and Central Asia. Part II, covering Central, Eastern, and Southeastern Europe, is distributed simultaneously as a second document. Back issues of RFE/RL NewsLine are available through RFE/RL's WWW pages: http://www.rferl.org/newsline/search/ Back issues of the OMRI Daily Digest are available through OMRI's WWW pages: http://www.omri.cz/ xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I *RUSSIAN-GERMAN CONSORTIUM WINS SVYAZINVEST AUCTION *RUSSIAN FOREIGN MINISTER IN MALAYSIA, MEETS WITH ALBRIGHT *GEORGIA, ABKHAZIA ABJURE USE OF VIOLENCE End Note A WATERSHED IN CENTRAL ASIA xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA RUSSIAN-GERMAN CONSORTIUM WINS SVYAZINVEST AUCTION. In Russia's largest privatization sale to date, a consortium involving affiliates of Russia's Oneksimbank and Germany's Deutsche Bank AG won a 25 July auction for 25 percent plus one share of the telecommunications giant Svyazinvest. The consortium offered $1.875 billion for the stake in Svyazinvest, which holds controlling interests in 85 of Russia's 87 regional telecommunications companies as well as the long-distance and international telephone provider Rostelecom. Only one other bid, for $1.71 billion, was submitted for the Svyazinvest auction. A consortium involving Russia's Alfa-group and Most Bank, as well as the Spanish Telefonica de Espana SA, made the losing bid, Interfax reported. According to Bloomberg News, 71 percent of the money raised at the auction will go to the federal government, 24 percent to regional governments, and 5 percent toward investment in Svyazinvest. PROMINENT JOURNALIST CRITICIZES SVYAZINVEST SALE. The Svyazinvest sale drew sharp criticism from Sergei Dorenko, the anchor of a weekly news and analysis program on the state- controlled Russian Public Television (ORT) network, Reuters reported on 27 July. Although the winning bid was higher than the losing offer and well above the minimum bid of $1.18 billion, Dorenko charged on 26 July that the rival offer would have channeled more investment toward updating Russia's telephone network. He also claimed that State Property Committee Chairman Alfred Kokh had shown favoritism toward Oneksimbank head Vladimir Potanin. Reuters cited an unnamed government source as saying Security Council Deputy Secretary Boris Berezovskii was involved in the rival bid for Svyazinvest, but Berezovskii could not be reached for comment. Appointed to the Security Council in October 1996, Berezovskii has wielded considerable influence at ORT since the network began broadcasting on Channel 1 in April 1995. AUDIT CHAMBER CALLS FOR HALT TO NORILSK SALE. Audit Chamber Deputy Chairman Yurii Boldyrev has sent letters to President Boris Yeltsin, State Duma Speaker Gennadii Seleznev, and Procurator- General Yurii Skuratov demanding that the upcoming sale of a 38 percent stake in Norilsk Nickel be halted, RFE/RL and "Kommersant- Daily" reported on 25 July. Audit Chamber inspector Valerii Meshalkin, who conducted a recent audit of Norilsk Nickel, told an RFE/RL correspondent in Moscow that a May 1995 presidential decree prohibited the sale of the government stake in Norilsk Nickel before the end of 1998. He added that a September 1995 government directive listed Norilsk Nickel among enterprises that have "strategic significance for national security" and therefore should not be sold off quickly. Oneksimbank acquired the state's 38 percent stake in the company in November 1995 in exchange for a $170 million loan. The Audit Chamber has previously declared that acquisition illegal. FOREIGN MINISTER IN MALAYSIA... Yevgenii Primakov, arriving in Kuala Lumpur on 26 July to attend an Association of South East Asian Nation conference, met with his Chinese counterpart Qian Qichen. It was announced later that Russian President Boris Yeltsin is tentatively scheduled to arrive in China about 10 November for an official visit. Addressing the ASEAN conference the next day, Primakov unveiled a plan for the ASEAN area that envisions a "simultaneous advance in three directions: introduction of confidence building measures, preventive diplomacy, and development of mechanisms for settlement of conflicts." He also joined those who called for North Korea's participation at ASEAN conferences, noting that the situation on the Korean peninsula was potentially the most dangerous for the Pacific area. ...MEETS WITH ALBRIGHT. Also on 27 July, Primakov met with U.S. Secretary of State Madeleine Albright to discuss disarmament and the Middle East peace process. Primakov later said a new "impulse is needed" to accelerate the peace process and that it is necessary to consider both the Syrian-Lebanese and the Palestinian sides. The next day, Primakov addressed the Post Ministerial Conference and once again blasted NATO's recent invitation to three former eastern bloc states to join the alliance. Primakov said Moscow views this "enlargement" as a threat to its security, and he called such alliances an "anachronism." Russia fears that "bloc expansion would once again create dividing lines" similar to those that existed and fueled tensions during the Cold War, he commented. ZYUGANOV SLAMS PRESIDENTIAL VETOES. Communist Party leader Gennadii Zyuganov says President Boris Yeltsin "has begun a new stage of the crusade against Russia" by vetoing the law on religious organizations and the land code, Interfax reported on 26 July. The previous day, Yeltsin vetoed the code, primarily because it would have banned the purchase and sale of farmland (see "RFE/RL Newsline," 25 July 1997). Zyuganov charged that Yeltsin "has already sold two-thirds of the country" through privatization and now "is preparing the third re-distribution of property" through land sales. However, he admitted that the State Duma will find it "very, very difficult" to override the veto. At the same time, Zyuganov expressed confidence that both the Duma and the Federation Council will override Yeltsin's recent veto of the religion law. A two-thirds majority in both houses of parliament is required to override a presidential veto. YELTSIN SIGNS PRIVATIZATION LAW... Yeltsin signed the law on privatization on 25 July, ITAR-TASS reported. Under that law, the government is to seek parliamentary approval for its annual privatization targets. Transfers of government stakes in enterprises in exchange for bank loans ("loans for shares" schemes) will be prohibited. In addition, the privatization of certain "strategically important enterprises" will require the passage of a special federal law. The law signed by Yeltsin also allows the state to appropriate privatized property if the new owner fails to meet investment requirements or other obligations under which the privatization contract was awarded (see "RFE/RL Newsline," 25 June and 7 July 1997). ...VETOES SEVERAL OTHER LAWS. Yeltsin vetoed several laws on 25 July, including the law "on military-technological cooperation with foreign countries," which would have declared a state monopoly on the arms trade, Russian news agencies reported. Yeltsin also vetoed the law on protecting Lake Baikal and the law on the status of those serving in the armed forces or troops subordinate to federal agencies (see "RFE/RL Newsline," 8 July 1998). The presidential press service did not specify on what grounds those laws were rejected. On 23 July, Yeltsin vetoed a law on regulating relations between autonomous okrugs and the krais or oblasts of which they are part. In a message to the parliament, Yeltsin said a recent Constitutional Court decision on Tyumen Oblast's relationship to Khanty-Mansi and Yamal-Nenets Autonomous Okrugs should be taken into account when that law is revised (see "RFE/RL Newsline," 16 July 1997). IRKUTSK MAYOR WINS GUBERNATORIAL ELECTION. Boris Govorin was elected governor of Irkutsk Oblast on 27 July with 50.34 percent of the vote, according to preliminary results, RFE/RL's correspondent in Irkutsk reported on 28 June. Communist candidate Sergei Levchenko finished a distant second with 18.8 percent. State Duma deputy Viktor Mashinskii of the Popular Power faction gained some 14 percent, while Vostsibugol director Ivan Shchadov, who was backed by former Security Council Secretary Aleksandr Lebed and Yabloko leader Grigorii Yavlinskii, gained just over 7 percent, according to Russian news agencies. Turnout was 46 percent. Although Govorin was the candidate favored by the Moscow authorities, he campaigned primarily on promises to defend the oblast's interests; no federal officials traveled to Irkutsk to campaign on his behalf. Govorin was considered the front-runner in the race but was not expected to win by such a large margin. NEMTSOV SAYS GOVERNMENT TO CUT BUREAUCRACY. First Deputy Prime Minister Boris Nemtsov says the government has adopted a resolution to reduce the federal bureaucracy by 10 percent, Russian news agencies reported on 26 July. Answering telephone calls to a hot line organized by the newspaper "Komsomolskaya pravda," Nemtsov said the money saved would go toward "burning needs" such as paying wages, pensions, and benefits for those serving in the armed forces. He added that he would cut by 25 percent the personnel of the Fuel and Energy Ministry, which he also heads. In recent years, promises by various government officials to cut down the bureaucracy by as much as a third have not been implemented. Nemtsov also promised that housing benefits for those serving in or discharged from the military will be transferred directly to soldiers' bank accounts to prevent the funds from being "pocketed by local authorities." COURT HEARS LAWSUIT AGAINST NEMTSOV. A Nizhnii Novgorod court heard the first arguments in Communist State Duma deputy Gennadii Khodyrev's lawsuit against First Deputy Prime Minister Nemtsov, RFE/RL's correspondent in Nizhnii Novgorod reported on 25 July. Appearing in the Republic of Mordovia on 30 June, Nemtsov repeatedly asked his audience whether they wanted a "Communist" or a "normal person" to be in charge of the neighboring oblast. Those comments were broadcast on local television in Nizhnii Novgorod on 1 and 2 July, and Khodyrev lost a gubernatorial election to Ivan Sklyarov on 13 July. Khodyrev claims that by implying that all Communists are abnormal, Nemtsov insulted his honor and dignity and damaged his business reputation. He is demanding that Nemtsov apologize and publicly retract his statement. The next court hearing in the case is scheduled for October. MOSCOW POLICE WANT TO REOPEN CRIMINAL CASE AGAINST ZHIRINOVSKY. The command of the Moscow city police has asked the city's procuracy to reopen the criminal case against Liberal Democratic Party of Russia leader Vladimir Zhirinovsky, Interfax reported on 25 July. Television journalist Yuliya Olshanskaya had previously asked the Moscow procurator's office to reopen the case, according to the 25 July "Kommersant-Daily." Zhirinovsky was investigated for hooliganism following an incident in which he forced Olshanskaya into his car after striking her and her cameraman (see "RFE/RL Newsline," 9 and 21 May 1997). The Moscow city police closed the case on 10 July on the grounds that Zhirinovsky's actions had not been premeditated. Even if the case is reopened, Zhirinovsky cannot be prosecuted unless the Duma votes to lift his parliamentary immunity. RYBKIN IN NORTH OSSETIA. Russian Security Council Secretary Ivan Rybkin and Nationalities Minister Vyacheslav Mikhailov met with Ingush refugees in North Ossetia's disputed Prigorodnyi Raion on 25 July, Interfax reported. They were accompanied by the presidents of North Ossetia and Ingushetia, Akhsarbek Galazov and Ruslan Aushev. Rybkin said the 200 billion rubles ($34.6 million) earmarked by the federal government for aid to refugees should be exempt from the budget sequester. ("Nezavisimaya gazeta" on 26 July quoted a local official as saying the North Ossetian leadership had received only 14 billion of the planned 200 billion rubles.) Rybkin called for vigorous measures to defuse rising tensions in the region, but he neither agreed to nor rejected Aushev's suggestion that Russian Interior Ministry troops be deployed in Prigorodnyi Raion to prevent violence. CHECHEN POLITICAL PARTIES TO WORK FOR "STABILIZATION." Meeting in Grozny on 26 July, representatives of up to 20 Chechen political parties called for the consolidation of political forces in the Caucasus, the annexation of districts in neighboring Dagestan traditionally inhabited by Chechens, the extradition to Chechnya of pro-Russian former leaders Salambek Khadzhiev and Doku Zavgaev, and establishing Islam as the world religion, Russian agencies reported. Speaking on Chechen television on 25 July, Khozh-Akhmed Yarikhanov, the head of the Chechen Oil Company, called for volunteers to join a 450-strong force that will guard the Baku- Grozny-Tikhoretsk oil pipeline. He added that Chechnya will receive $4-5 of the $15.67 that Azerbaijan will pay for each metric ton of oil exported, according to Interfax. In other news, the last two of five Chechens taken hostage in North Ossetia on 8 July were released on 24 July. NEW RAILWAY INAUGURATED IN DAGESTAN. A 78 km stretch of railway went into operation from Kizlyar, in Dagestan, to Karlan-Yurt, bypassing Chechnya on 26 July, Russian agencies reported. The railway, which was built in eight months, will end the virtual blockade of Dagestan caused by the suspension of rail transport through Chechnya. TRANSCAUCASUS AND CENTRAL ASIA GEORGIA, ABKHAZIA ABJURE USE OF VIOLENCE. Georgian and Abkhaz government representatives agreed on 26 July not to resume hostilities after the expiration on 31 July of the mandate of the CIS peacekeeping force currently deployed along the border between Abkhazia and the rest of Georgia. The agreement came after two days of talks under the aegis of the UN and with the participation of U.S., French, German, British, and Russian representatives, all of whom asked the conflict parties to agree to the extension of the peacekeepers' mandate. Abkhaz President Vladislav Ardzinba told journalists on 26 July that he is optimistic that the peacekeepers' mandate will be extended. But he added that if they withdraw, Abkhaz units will advance south and occupy their positions, Interfax reported. The Georgian parliament will vote in the next few days on whether to endorse extending the peacekeepers' mandate. GERMANY GRANTS LOAN TO ARMENIA TO MODERNIZE ENERGY SECTOR. Under an intergovernment loan signed in Yerevan on 25 July, Germany will lend Armenia DM 10 million (some $5.4 million) to finance reconstruction of the Kanaker hydro-electric power station, Interfax and Armenpress reported. A second agreement worth DM 15 million is scheduled to be signed in August. KAZAKH POLL. According to a poll conducted by Kazakhstan's Giller Institute among 1,400 people from six of the country's regions, President Nursultan Nazarbayev would win presidential elections if they were held today, Interfax reported. He garnered the support of 41.6 percent of respondents. Some 33 percent said they back the present course of reforms, while 48.6 percent said they did not favor Nazarbayev's economic policy. Only 5.5 percent said they have trust in the government. About one-third said they thought Kazakhstan would be a "well-off" country one day; 11.4 percent said the country would never be considered "prosperous." Only 1.9 percent thought the economic situation in Kazakhstan had improved, and 13.7 percent said the country is sliding into "chaos." SEMIRECHE COSSACKS CELEBRATE 130 YEARS. The Semireche Cossacks have celebrated their 130th anniversary, according to ITAR-TASS. On 26 July 1867, a detachment of Cossacks arrived at the foot of the Tien-Shan Mountains and constructed fortification of Vernyy, which was renamed Alma-Ata early in the Soviet era. Semireche Cossacks invited to their anniversary celebration members of the government, Almaty municipal officials, representatives from the Organization for Security and Cooperation in Europe, and ambassadors of Russia, Belarus, and Ukraine. ITAR- TASS on 26 July reported that Kazakh officials had not given their approval to the festivities. Many members of the indigenous ethnic groups of Central Asia regard the Cossacks as "instruments of colonization," according to the news agency. END NOTE A WATERSHED IN CENTRAL ASIA by Paul Goble and Bruce Pannier A demonstration last week at the Kazakh-Uzbek border drew attention to an issue -- the distribution of Central Asia's scarce water supplies -- that is likely to put a brake on the efforts of some leaders there to promote integration. On 24 July, residents of Southern Kazakhstan Oblast staged a demonstration to protest a decision by the Uzbek government to cut the amount of water flowing from that country into Kazakhstan. The demonstrators said the Uzbek decision threatened the corn and cotton crops on some 100,000 hectares of land in the oblast. While insignificant in itself, the protest reflects the conjunction of three factors: geographical location, the legacy of Soviet policy, and the imperatives of competing national interests since independence. Combined, those factors will almost certainly generate more popular protests as well as high-level political conflicts. For most of its history, Central Asia has suffered from a shortage of water, a problem that has been compounded by extremely rapid population growth, the introduction of cotton monoculture by tsarist and Soviet administrators, and the fact that the region's major rivers rise in areas dominated by one ethnic community but flow into areas where other national groups predominate. While the first and second of those factors have attracted widespread attention from specialists in the region and beyond, the third has not, even though it may ultimately prove the most significant. There are two major rivers in the region: the Amu Darya and the Syr Darya. The Amu Darya rises in Tajikistan, where it is known as the Pyanj, but it flows through Uzbekistan and Turkmenistan before reaching the Aral Sea. The Syr Darya rises in Kyrgyzstan, where it is fed by two smaller rivers, the Naryn and the Kara Darya. It then flows through eastern Uzbekistan, Tajikistan, and Kazakhstan before draining into the Aral Sea. Along the length of both rivers, local governments are drawing out part of the flow for their growing populations and to support agricultural development . The combined amount withdrawn is so great that the flows of the two rivers into the Aral Sea are insufficient to prevent the sea's disappearance in the first decades of the next century. Not surprisingly, water shortages both current and anticipated have already sparked conflicts. Under the Soviets, the borders of the Central Asian republics were drawn in such a way as to ensure there would always be competition between water-surplus and water-short republics. Such a competition worked to Moscow's advantage in two ways. Fights over water reinforced the national distinctiveness of the five republics and thus limited the ability of the republics to cooperate in ways that would threaten Soviet control. In short, water policy became part and parcel of Moscow's effort to divide and rule the region. Also, competition over water forced the republics to look to Moscow to adjudicate disputes among them. The Soviet authorities were only too willing to do so. They established a complex set of dams and irrigation arrangements to control the size of the flow of the two major river systems as well as institutions to allocate water among the various republics and local authorities. Since achieving independence, the five countries of the region have had to cope with this inheritance. Not surprisingly, those suffering water shortages have pressed hard for maintaining regional cooperation, while those with water surpluses increasingly have wanted to defend their own particularist interests. Complicating and exacerbating those tensions are three factors, each of which played a role in the 24 July demonstration. First, the civil war in Tajikistan has effectively removed from the competition one of the largest suppliers of water in the region. Several days before the demonstration, a Tajik official told representatives of the region's other governments that neither he nor his embattled government could make any promises over future water supplies. Second, the independent governments lack the funds to repair the decaying Soviet-era infrastructure. Earlier this year, Kyrgyzstan's parliament discussed asking downstream countries to help offset the $4 million Bishkek now spends to maintain its river-water control system. To date, none of those countries has publicly offered to help out. And third, the five governments, driven by national interests or pressed by their own populations, are looking to their own interests rather than trying to find a way out of the water crisis through cooperation. To the extent that they continue to do so, the recent demonstration in southern Kazakhstan could prove a watershed for regional cooperation as well. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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