|What the sick man likes to eat is his medicine. - Russian Proverb|
RFE/RL NEWSLINE Vol 1, No. 84, Part I, 30 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 * OFFICIALS SAY SVYAZINVEST SALE IS FINAL * YELTSIN NAMES CHERNOMYRDIN TO OVERSEE ARMS TRADE * RUSSIA UPS ANTE OVER ABKHAZ PEACEKEEPERS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA OFFICIALS SAY SVYAZINVEST SALE IS FINAL... First Deputy Prime Minister Anatolii Chubais announced on 29 July that the results of the Svyazinvest auction "are final and not subject to review," since the sale was conducted "in strict compliance with a government directive," Russian news agencies reported. A consortium involving an Oneksimbank affiliate placed the winning bid for 25 percent plus one share in Svyazinvest. Chubais emphasized that the money earned from the sale will be used to pay wage arrears to armed forces personnel. At the same press conference, Deputy Prime Minister Vladimir Bulgak said some 9 trillion rubles ($1.6 billion) in proceeds from the sale will go to the federal budget, RFE/RL's Moscow bureau reported. Speaking in the Republic of Chuvashia the same day, First Deputy Prime Minister Boris Nemtsov said only "honest auctions" can raise enough funds to pay wage arrears. ...WHILE CHERNOMYRDIN SAYS PRIVATIZATION DEALS SHOULD BE "TRANSPARENT." Prime Minister Viktor Chernomyrdin has called for the government to examine the situation surrounding the recent Svyazinvest sale, saying such privatization deals should be "absolutely transparent" without any "innuendoes," Russian news agencies reported on 29 July. Speaking to journalists in Krasnodar Krai, Chernomyrdin noted that the government should take steps to ensure that not every privatization deal ends up in court. The prime minister recently criticized the work of the State Property Committee, saying scandals had frequently accompanied major privatizations (see "RFE/RL Newsline," 25 July 1997). Also on 29 July, Chernomyrdin denied rumors of imminent personnel changes at the Russian Public Television (ORT) network. The Svyazinvest sale has drawn sharp criticism from ORT and NTV, along with other media outlets financed in part by large financial groups (see "RFE/RL Newsline," 27 and 28 July 1997). ORT, NTV SHAREHOLDERS DENY ACCUSATION BY NEMTSOV. A statement released by private investors in ORT on 29 July slammed First Deputy Prime Minister Boris Nemtsov for accusing the network's shareholders of trying to buy Svyazinvest on the cheap, Interfax reported. Speaking in Chuvashia, Nemtsov had said earlier in the day that the "owners of ORT and NTV" had tried to acquire one quarter of Svyazinvest for an undervalued price and could not accept that they had lost in a fair auction. The ORT statement said that of the company's shareholders, only Alfa-Bank took part in the Svyazinvest auction (implying that the LogoVAZ group affiliated with Security Council Deputy Secretary Boris Berezovskii was not involved). Meanwhile, the Most group issued a statement denying that Media-Most, which owns NTV, Ekho Moskvy, and the newspaper "Segodnya," had bid for the Svyazinvest stake. ONEKSIMBANK HEAD JOINS FRAY. Oneksimbank head Vladimir Potanin told Interfax on 30 July that he is against behind-the-scenes deals related to privatization sales. Potanin confirmed that before the Svyazinvest auction, he had met with Media-Most group head Vladimir Gusinskii, Security Council Deputy Secretary Berezovskii, and First Deputy Prime Minister Chubais. (On 29 July, Chubais also confirmed that such a meeting took place, Interfax reported.) Potanin claimed that Gusinskii and Berezovskii had proposed that Oneksimbank not bid for Svyazinvest, allowing interests controlled by Gusinskii and Berezovskii to acquire the stake for near the starting price. (Only two bids were submitted in the Svyazinvest auction.) Potanin told Interfax that he rejected the deal and that Chubais had confirmed that the government would stand by the terms previously announced for the Svyazinvest sale. ANOTHER VIEW OF BANKERS' MEETING WITH CHUBAIS. Citing an unnamed source in the presidential administration, "Kommersant- Daily" reported on 30 July that the meeting between Chubais, Potanin, Berezovskii, and Gusinskii was held in France on 23 July, two days before the Svyazinvest auction. The paper said that Berezovskii and Gusinskii sought Oneksimbank's withdrawal from the auction. Among other things, they reportedly threatened to unleash an "information war" and to withdraw their bid for Svyazinvest. However, the paper alleged, Chubais insisted that the auction take place as planned. "Kommersant-Daily" quoted its source as saying that if the media associated with Gusinskii and Berezovskii continue an all-out information war against Chubais's circle, two outcomes are possible: either NTV will be weakened, ORT reorganized and Berezovskii removed from the Security Council; or both Chubais and Nemtsov will have to leave the government. "NEZAVISIMAYA GAZETA" SLAMS NEMTSOV ON POLICY TOWARD ENERGY GIANTS. "Nezavisimaya gazeta" on 30 July charged that a May presidential decree concerning Gazprom shares, drawn up by associates of Nemtsov, had damaged the gas monopoly's market capitalization. Noting that Gazprom shares stopped rising in value after the decree was signed, the newspaper calculated that the state had lost some $2 billion over the last two months. In addition, the paper accused Nemtsov of seeking to undermine Gazprom and its top executive Rem Vyakhirev while having Boris Brevnov, a close Nemtsov associate, installed as chairman of the board of the electricity giant Unified Energy System (see "RFE/RL Newsline," 2 June 1997). The newspaper argued that the recent decision to allow the electricity giant to issue convertible bonds was orchestrated by Nemtsov to show that only the "young reformers" in the government are capable of solving the country's budgetary problems. "Nezavisimaya gazeta" is partly financed by Berezovskii's LogoVAZ group. YELTSIN NAMES CHERNOMYRDIN TO OVERSEE ARMS TRADE... President Boris Yeltsin on 28 July issued a decree naming Prime Minister Chernomyrdin to oversee the arms trading company Rosvooruzhenie and military-technical cooperation with foreign countries, Russian media reported. The decree subordinates Rosvooruzhenie directly to the Russian government, according to Interfax. Its director will be appointed by the president at the prime minister's recommendation. The decree ends a one-year struggle for control of the weapons sector, beginning with the dismissal in June 1996 of First Deputy Prime Minister Oleg Soskovets and Yeltsin's influential bodyguard Aleksandr Korzhakov, who until then had supervised arms sales. At that time, Chernomyrdin failed to persuade Yeltsin to replace Rosvooruzhenie's current director, Aleksandr Kotelkin, with former Deputy Premier Georgii Khizha, according to "Kommersant-Daily" on 30 July. ...APPEALS TO MILITARY TO SUPPORT REFORMS. In a statement released by the Kremlin on 29 July, Yeltsin asked the military to support planned reforms of the armed forces, Russian media reported. He repeated the promise that wage arrears to servicemen will be paid by 1 September. Reforms are necessary and will lead to the "enhancement of the country's military," making military forces "compact, mobile, and well-equipped," he said. Yeltsin also quoted the 18th century Russian commander Aleksandr Suvorov's statement that "victory is the product of skill rather than numbers." The president wants to keep to the 1 January 1999 deadline to cut the armed forces to 1.2 million personnel. He said housing will be constructed and arrangements made for those leaving the service to receive work "corresponding to their training," even if that meant sending some abroad to study. He made no mention of his May 1996 decree to form an all-volunteer army by 2000. CHECHNYA ACCUSES RUSSIA OF SABOTAGING OIL TRANSIT AGREEMENT... Khozh-Akhmed Yarikhanov, head of the Chechen State Oil Company Yunko, told journalists in Grozny on 29 July that Russian agencies are preventing the company from acquiring equipment needed to repair the Chechen sector of the Baku-Grozny-Tikhoretsk oil pipeline, Interfax reported on 29 July. Yarikhanov said the Russian Central Bank has failed to unfreeze the accounts of Yunko's subsidiaries in Russian banks. He said that under those circumstances, "I cannot honor the commitments under the agreement on the pumping of Caspian oil." ...BUT SAYS IT WON'T BREAK OFF ALL CONTACTS. Also on 29 July, Chechen presidential spokesman Kazbek Khadzhiev said the suspension of Chechen-Russian talks announced by President Aslan Maskhadov does not apply to contacts with the Russian government and Security Council, according to "Nezavisimaya gazeta" on 30 July. Security Council Secretary Ivan Rybkin told ITAR-TASS that combined efforts to restore Chechnya's economy "have not stopped and will not stop for one minute." Commenting on Maskhadov's call for a full-fledged treaty between Chechnya and the Russian Federation and for the opening of embassies in Moscow and Grozny, Russian Foreign Ministry spokesman Valerii Nesterushkin said the Russian government continues to observe the agreement signed in summer 1996 in Khasavyurt that postpones a definitive ruling on Chechnya's political status vis-a-vis the Russian Federation. He added that Chechnya remains a federation subject. UPCOMING ROSNEFT PRIVATIZATION NOT TO RESTRICT SHARE PURCHASES BY FOREIGNERS. Yurii Bespalov, the president of the fully state-owned oil company Rosneft, has announced that the number of Rosneft shares that may be purchased by foreign investors will not be restricted when the company is privatized later this year, Russian news agencies reported on 29 July. It would be the first oil company privatization in Russia with no limits on foreign participation. Under a plan recently approved by the company's board of directors, the state will not retain a controlling stake in Rosneft, Bespalov said. Instead, 7.6 percent of Rosneft shares will be sold to company staff, a 51 percent stake will be auctioned in August or September, and the remaining shares will be sold to investors under terms to be announced later. Earlier this year, Fuel and Energy Ministry officials had suggested that the state would keep a controlling stake in Rosneft. LEBED CRITICIZES NEMTSOV, SUGGESTS ALLIANCE WITH LUZHKOV POSSIBLE. Former Security Council Secretary Aleksandr Lebed says First Deputy Prime Minister Nemtsov has "made too many mistakes" to be considered a serious contender for the next presidential election. He told Interfax on 29 July that Nemtsov's planned reform of payments for housing and municipal services will hurt the poor far more than the rich, adding that the standard of living should be raised before housing reform is implemented. With regard to his own presidential prospects, Lebed said consultations with potential supporters were under way, and he suggested that Moscow Mayor Yurii Luzhkov might become one of his allies. Lebed's criticism of the government's planned housing reform echoes recent comments by Luzhkov. But in September 1996, the Moscow mayor was one of the most outspoken critics of the peace plan Lebed negotiated with Chechen rebel commander Aslan Maskhadov. Luzhkov called the deal a "bomb under the [Russian] constitution." BREAD PRICES TO FALL IN KEMEROVO AS GUBERNATORIAL CAMPAIGN HEATS UP. Kemerovo Governor Aman Tuleev told ITAR- TASS on 30 July that, thanks to advanced technology in grain production and processing, bread prices in Kemerovo Oblast will gradually be reduced by an average of 20 percent beginning in August. Tuleev was appointed governor by Yeltsin in early July and will contest an election for that post in October. "Nezavisimaya gazeta" reported on 30 July that Tuleev's appointment has divided the left camp in Kemerovo. Four other politicians, all Communists, have already declared that they will run for governor. Some formerly staunch supporters of Tuleev now call him a traitor and believe he will serve the interests of the Kremlin and Moscow businessmen. Although Tuleev is not a Communist Party member, he was third on the Communist list for the December 1995 parliamentary elections and supported party leader Gennadii Zyuganov's presidential bid in 1996. BORDER GUARDS CRACK DOWN ON ALCOHOL SHIPMENTS FROM GEORGIA. Over the past few days, Russian border guards have turned back some 170 alcohol tankers at the frontier between Georgia and North Ossetia, Russian agencies reported. Border guards have been fired on with anti-tank missiles and offered bribes of up to $1 million to allow the tankers to enter Russia. Some 550 tankers, each containing 20 metric tons of alcohol, are currently being refused entry to Russia from two frontier crossing posts, the head of the Vladikavkaz frontier district told Interfax on 29 July. Since the closure of many defense plants in North Ossetia, the manufacture of fake vodka has become the leading industry in the republic. TRANSCAUCASUS AND CENTRAL ASIA RUSSIA UPS ANTE OVER ABKHAZ PEACEKEEPERS. The CIS peacekeeping force deployed along the border between Abkhazia and the rest of Georgia will be withdrawn unless Georgia and Abkhazia formally request that its mandate be prolonged after it expires on 31 July, Russian Foreign Ministry spokesman Valerii Nesterushkin told ITAR-TASS on 29 July. According to "Nezavisimaya gazeta" the next day, the peacekeepers are already training for the withdrawal. The Georgian parliament has rejected a proposal by opposition deputies to convene an emergency session to discuss the peacekeepers' continued presence and has begun its summer recess, "Rossiiskaya gazeta" reported. The chairman of the Abkhaz parliament in exile, Tamaz Nadareishvili, said that the 3,000 ethnic Georgian former Abkhaz police who have been sent to western Georgia will not automatically cross the border into Abkhazia's Gali Raion if the peacekeepers withdraw, "Svobodnaya Gruziya" reported on 29 July. AZERBAIJANI PRESIDENT IN U.S. Heidar Aliev, meeting with UN Secretary-General Kofi Annan in New York on 28 July, discussed ways to alleviate the plight of the Azeris driven from their homes during the Karabakh conflict. Annan expressed his support for the deployment of a multinational peacekeeping force under the auspices of the Organization for Security and Cooperation in Europe, according to AFP. TAJIK OPPOSITION UNHAPPY WITH DELAYS IN IMPLEMENTING AGREEMENTS. The leadership of the United Tajik Opposition has appealed to UN special envoy to Tajikistan Gerd Merrem to use his influence to pressure the Tajik government to adhere to agreements reached in Moscow in June, according to RFE/RL correspondents in Tajikistan. The 27 July session of the National Reconciliation Commission was postponed for "technical reasons," meaning the failure to find housing and office space for members of the UTO returning to Dushanbe to participate in the commission's work. UTO leader Said Abdullo Nuri, meeting with Iranian Foreign Minister Ali Akbar Velayati on 29 July in Tehran, requested that Iran use its influence to accelerate government efforts at resolving the "technical problems." Iran is one of the guarantors of the Tajik peace process. ANOTHER DEMONSTRATION IN KAZAKHSTAN. About 400 people gathered in the northern city of Kokchetau on 29 July to protest living conditions, ITAR-TASS reported. They called for an end to the reform process, which, they say, has had little effect in their area. The news agency reports that every fourth person in Kokchetau is without employment and that every third cannot pay for housing and utilities. Pensioners are only now receiving their March and April payments. The situation grew worse after Kokchetau Oblast was merged with Northern Kazakhstan Oblast earlier this year. Kokchetau city was subsequently deprived of the funding it had previously received as a regional center. US COMPANY INVESTS IN KAZAKH POWER. The U.S. company A.E.S. Suntry Power has reached agreement with the Kazakh government on concession rights to the Shulbinsk and Ust-Kamenogorsk hydroelectric plants, Interfax reported on 29 July. The U.S. company plans to invest about $600 million in the plants, which, according to a Kazakh official, are in a "deplorable state." A.E.S. bought Kazakhstan's Ekibastuz thermal power plant in August 1996. SHELL OIL SHOWS INTEREST IN TURKMEN HYDROCARBONS. The U.S. company Shell Oil has sent a letter to President Saparmurat Niyazov expressing the company's interest in participating in projects to develop Turkmenistan's "legendary" hydrocarbon resources, ITAR- TASS reported on 29 July. The letter also noted that, because of its geographical location, Turkmenistan was in the "unique position" to supply several markets. Shell also referred to the potential of Caspian Shelf fields. "Nezavisimaya gazeta" on 30 July quoted Niyazov as saying that Turkmenistan intends to hold a tender in the U.S. for for exploitation of the disputed Kyapaz field of the Caspian the Turkmen call Serdar. Azerbaijani and Russian oil companies signed an agreement earlier in July on the joint exploitation of the deposit. UZBEK ECONOMIC DATA. President Islam Karimov announced on 29 July that in the first six months of this year, industrial output increased by 5.4 percent and agricultural production by 22.8 percent, Interfax reported. Transportation and communications operations rose by 1.8 percent, construction by 1 percent, retail commodity turnover by 13.5 percent, and services by 18.1 percent. Karimov also pointed out that while GDP was up by only 1.6 percent in 1996, it had already grown by 3.9 percent in the first six months of this year. Inflation decreased from 13 percent in December 1996 to 2.9 percent in May 1997 and consumer prices fell by 3.1 percent in June. While some international financial organizations predicted average monthly inflation at 7 percent, the rate for January to June 1997 was 3.5 percent. PLAINTIFF IN KYRGYZ SLANDER CASE APPEALS TO SUPREME COURT. The Procurator's Office and plaintiff Dastan Sarygulov on 29 July appealed to the Supreme Court to enforce the original verdict against four journalists for the Kyrgyz weekly newspaper "Res Publica," according to RFE/RL correspondents in Bishkek. In May, two journalists for "Res Publica" were sentenced to 18 months in jail and two others barred from practicing journalism for the same period because of accusations printed against Sarygulov in their newspaper. The verdict against the journalists was overturned in June by a Bishkek court, which revoked the sentences of three of the journalists and ruled that editor-in-chief Zamira Sydykova would serve her sentence in a penal colony rather than in jail. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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