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RFE/RL NEWSLINE, Vol 1, No. 88, Part I, 5 August 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 * CHERNOMYRDIN CALLS FOR HALTING NORILSK NICKEL SALE AT ELEVENTH HOUR * NEMTSOV DEMANDS INQUIRY INTO WIRETAP * GEORGIAN, ABKHAZ PRESIDENTS AGREE TO TALKS End Note : HOW YELTSIN DECIDES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA CHERNOMYRDIN CALLS FOR HALTING NORILSK NICKEL SALE AT ELEVENTH HOUR. Citing an appeal from the Procurator-General's Office, Prime Minister Viktor Chernomyrdin on 4 August ordered the State Property Committee and Russian Federal Property Fund to postpone the sale of a 38 percent stake in Norilsk Nickel. The auction was scheduled to take place on 5 August. According to Reuters, State Property Committee Chairman Alfred Kokh on 5 August agreed that the Norilsk sale should be postponed. However, Reuters said that it is not clear whether a government official or an Oneksimbank representative will cast the deciding vote at a 5 August meeting of a commission with the power to postpone the auction. Oneksimbank acquired management rights over the 38 percent stake in November 1995 in exchange for a $170 million loan to the government. Critics have said the planned sale was stacked in Oneksimbank's favor (see "RFE/RL Newsline," 22, 28, 31 July 1997). FSB CHECKING SVYAZINVEST SALE. The Russian Federal Property Fund on 1 August submitted documents concerning the Cyprus-based Mustcom, Ltd. to the Federal Security Service (FSB), "Kommersant- Daily" reported on 2 August. The Mustcom consortium, which includes Oneksimbank, Deutsche Morgan Grenfell and George Soros's Quantum Fund, won the recent auction for a stake of 25 percent, plus one share in the telecommunications giant Svyazinvest (see "RFE/RL Newsline," 28 July-1 August 1997). The FSB has been given a month to check the documents concerning Mustcom and the Svyazinvest sale. "Kommersant-Daily" said that under a December 1993 presidential decree, if a privatization auction is won by foreign companies, information about those companies must be submitted to the government and the security service. An FSB statement released on 1 August indicated that so far no irregularities connected to the Svyazinvest sale have been uncovered, Interfax reported. WEEKLY ACCUSES NEMTSOV OF HOLDING UP PRESIDENTIAL DECREE... The weekly "Novaya gazeta" has charged that First Deputy Prime Minister Boris Nemtsov inappropriately delayed the publication of a presidential decree. On 4 August the paper published an alleged transcript of a May telephone conversation between Nemtsov and the businessman Sergei Lisovskii. (Lisovskii was one of two workers on President Boris Yeltsin's campaign detained in June 1996 while carrying more than $500,000 out of government headquarters. See "RFE/RL Newsline," 8 April 1997.) In the transcript, Nemtsov demands that $100,000 in royalties for his book "The Provincial" be transferred to his bank account quickly. He says he is holding up the publication of a presidential decree requiring officials to submit income and property declarations, explaining that he needs to declare the book royalties so as not to be accused later of trying to hide the income. "Novaya gazeta" argued that Nemtsov acted out of personal considerations, fearing a scandal that could damage his future political career. ...NEMTSOV DEMANDS INQUIRY INTO WIRETAP. Appearing on Ekho Moskvy, Nemtsov's lawyer Vitalii Khavkin confirmed that a telephone conversation between Nemtsov and Lisovskii took place but said Nemtsov cannot remember what was discussed. Nemtsov has demanded that the Procurator General's Office investigate how his telephone conversation with Lisovskii was recorded, how the recording reached "Novaya gazeta," and whether that recording had been tampered with, Russian news agencies reported on 4 August. Nemtsov argued that the tap on his telephone was an illegal violation of his privacy rights. In an article accompanying the transcript, "Novaya gazeta" journalist Aleksandr Minkin acknowledged he did not know whether Nemtsov's telephone conversation had been recorded legally, but he argued that "machinations with presidential decrees" are a matter of state importance, not Nemtsov's private affair. Meanwhile, Nemtsov departed Moscow on 5 August for a two- and-a-half week vacation in Sochi. MORE DETAILS ABOUT RUBLE REDENOMINATION. Central Bank Chairman Sergei Dubinin on 4 August said the ruble redenomination planned for 1 January 1998 marks the "end of the era of hyperinflation," RFE/RL's Moscow bureau reported. Dubinin and First Deputy Finance Minister Vladimir Petrov predicted the ruble will not decline against the dollar when the redenomination takes effect and three zeroes are knocked off the ruble, Interfax reported. Dubinin also said new banknotes and coins have already been printed and minted. The new banknotes will be worth 5, 10, 50, 100 and 500 rubles, while the new coins will have face values of 1, 5, 10 and 50 kopecks as well as 1, 2, and 5 rubles. Dubinin and other senior officials, including First Deputy Prime Minister Anatolii Chubais and Deputy Presidential Chief of Staff Aleksandr Livshits, all echoed Yeltsin's promise that the currency reform will not hurt ordinary people. PATRIARCH TO DISCUSS RELIGION LAW WITH PRESIDENT. Patriarch of Moscow and All Russia Aleksii II says he and Yeltsin spoke by telephone on 1 August and agreed to meet on 6 August to discuss amendments to the controversial law on religious organizations. Yeltsin recently vetoed that law despite appeals to sign it from Aleksii and other Russian Orthodox Church leaders (see "RFE/RL Newsline," 23-25 July 1997). In an interview published in "Izvestiya" on 5 August, Aleksii denied that the original version of the law was discriminatory. For instance, he argued that Catholicism cannot be considered a "traditional" religion for today's Russia, because before the 1917 revolution, Catholics lived primarily in the part of the Russian empire that is now Poland. The patriarch also told "Izvestiya" that he has not met with leaders of the Communist Party for two years. Communist Party leader Gennadii Zyuganov has frequently called for supporting the church and blasted Yeltsin's veto of the religion law. ROKHLIN'S MOVEMENT MAY DEMAND RESIGNATION OF PRESIDENT, PRIME MINISTER. State Duma Defense Committee Chairman Lev Rokhlin says that at its founding congress in September, his movement to support the armed forces and defense industry may call for the resignation of the president and prime minister and the formation of a "government of national trust," RFE/RL's Moscow bureau reported on 4 August. These demands echo positions long taken by the Communist opposition, which has several representatives on the organizing committee of Rokhlin's movement. Although Rokhlin may be expelled from the Our Home Is Russia Duma faction in September, he cannot be removed from his Defense Committee post as long as he has the support of Communists and allied groups who have a majority in the Duma. According to the 5 August "Kommersant-Daily," Rokhlin also warned that Russia is becoming a police state as the army's ground forces are downsized and the Interior Ministry troops increased. STATE RADIO RESTRUCTURED. Yeltsin signed a decree on 4 August "liquidating" state-owned Radio-1 and merging the stations Mayak and Yunost into one station which will be called Mayak, RFE/RL's Moscow bureau reported. The move was made because of funding problems. The Russian government was able to pay out only 5 percent of finances planned for radio stations this year. The new system is expected to save 200 billion rubles ($34 million). The most popular state-owned station, Radio Rossii, will continue to broadcast on channel 1, with the new Mayak on channel 2. Channel 3 will be used by state-owned and private radio stations to be announced later. CHECHNYA ESTIMATES FINANCIAL DAMAGE FROM WAR. Chechen first deputy prime minister Musa Doshukaev told journalists in Grozny on 4 August that the "moral and material" damage inflicted on Chechnya during the war of 1994-6 amounts to 1,500 trillion rubles ($25.8 billion), Interfax reported. Doshukaev said this figure had been calculated on the basis of guidelines from the Organization for Security and Cooperation in Europe (OSCE), and that "moral damage" accounts for approximately half of the total. Also on 4 August, Shmidt Dzoblaev, secretary-general of the Assembly of National Democratic and Patriotic Forces of Russia, was released by his Chechen captors, Russian media reported. Dzoblaev was a member of a North Ossetian delegation abducted in Chechnya in December 1996. The delegation was en route for talks with Chechen leaders in Grozny. EXPERIMENTAL LAND-FOR-DEBT EXCHANGE IMPLEMENTED IN ST. PETERSBURG. For the first time, a Russian city has paid off its debt to an enterprise by granting that enterprise full ownership rights to the land on which it is based, an RFE/RL correspondent in St. Petersburg reported on 1 August. Through a complicated procedure involving a credit from the commercial bank Baltoneksimbank, the Kirov factory received the land underneath its buildings as compensation for St. Petersburg's 12.9 billion ruble ($2.2 million) debt to the factory. The experimental program suits both the city, which lacks the funds to pay its debts, and companies, which lack the cash to purchase the land plots underneath their buildings but view the lack of full land ownership rights as a barrier to foreign investment. According to the 2 August "Kommersant-Daily," some 50 other enterprises in St. Petersburg plan to take advantage of the experimental scheme. INDONESIA TO BUY RUSSIAN AIRCRAFT. State Planning Minister Ginanjar Kartasasmita announced on 5 August that his country will purchase 12 Russian Sukhoi-30 fighter planes and 8 Mi-17 helicopters, according to ITAR-TASS. Negotiations for buying the planes began after Indonesia cancelled plans to buy nine American F-16 fighters in early June because of human rights criticism from members of the U.S. Congress over East Timor, which Indonesia annexed in 1976. Indonesia will pay for the aircraft with goods, notably palm oil, coffee and rubber. TRANSCAUCASUS AND CENTRAL ASIA GEORGIAN, ABKHAZ PRESIDENTS AGREE TO TALKS. On 4 August, in his weekly radio address, Eduard Shevardnadze again expressed his readiness to meet with Abkhaz President Vladislav Ardzinba and Boris Yeltsin, Russian and Western agencies reported. Shevardnadze termed Yeltsin's proposals on resolving the Abkhaz conflict "absolutely acceptable" to the Georgian government. These proposals give Abkhazia broad autonomy within "a unified and indivisible Georgian state." Ardzinba likewise accepted Yeltsin's invitation to trilateral talks, but said the only acceptable basis for discussion is the protocol drafted by the Russian Foreign Ministry to which he agreed in talks in Moscow in June. Georgia then demanded changes to the text which Abkhazia rejected as unacceptable. Also on 4 August, the chairman of the Abkhaz parliament in exile, Tamaz Nadareishvili, said in Tbilisi that Abkhaz guerrillas had murdered 14 ethnic Georgians in Abkhazia's Kodori gorge on 3 August, Interfax reported. ARMENIAN MAJORITY PARTY LEADER OUTLINES STRATEGY. On 2 August chairman Vano Siradeghyan told the board of the Armenian Pan-National Movement -- the senior party in the ruling Hanrapetutyun (Republic) bloc -- that his top priority is to "restore people's trust" in the party before the parliamentary elections due in July, 1999, an RFE/RL correspondent in Yerevan reported on 4 August. Siradeghyan, who was elected chairman of the board of the Movement in early July, but is not a parliament deputy, said the Movement must form a "new bloc" with its allies to win the elections, but did not specify whether the Movement will leave the Republic bloc and set up a new alliance. He hinted that the Shamiram party -- the second largest within parliament -- and the Union of Industrialists and Businessmen will be incorporated into the Armenian Pan-National Movement "in the coming months." ARMENIAN, TURKISH BUSINESSMEN DISCUSS ECONOMIC COOPERATION. Meeting in Yerevan on 1-2 August, a group of Turkish business figures signed a protocol with the Union of Industrialists and Businessmen of Armenia to set up a Turkish trading center in Armenia and expand cooperation in banking, investment and textile production, Armenian agencies reported. The signatories also will conduct surveys on the viability of building a gas pipeline through Armenia to Turkey, and the use of Armenian territory as a transit zone between Turkey and the CIS. The possibility of creating a free economic zone in the Armenian regions of Armavir and Shirak also was discussed. Participants estimated that opening a frontier post between the two countries would facilitate the growth of annual bilateral trade to half a billion U.S. dollars. Turkish leaders say a frontier crossing cannot be opened until a solution is found to the Karabakh conflict. AZERBAIJAN TO REFORM BANKING SECTOR, CREATE INTERBANK CURRENCY MARKET. The Azerbaijani government plans to introduce more stringent banking regulations, including raising the minimum capital requirement from $600,000 to $1.2 million by the end of this year, the "Wall Street Journal" reported on 5 August. A second program drafted in conjunction with the IMF and the World Bank will expedite the privatization of those state-owned banks deemed viable. At the same time, the issuing of licenses to foreign banks has been temporarily suspended. The Azerbaijani government also plans to create an interbank currency market in anticipation that oil revenues will create favorable conditions for full convertibility of the manat. The Multilateral Investment Guarantee Agency has announced the extension of its guarantees of investments into 11 more countries, including Azerbaijan and Georgia, in 1997, an RFE/RL correspondent in Washington reported on 4 August. EXPLOSION NEAR TAJIK ALUMINUM PLANT. A home-made bomb went off outside the Tursunzade aluminum plant in western Tajikistan on 4 August, injuring two people, RFE/RL correspondents in Tajikistan reported. The bomb was planted at a bus stop near the factory gates. There is speculation in Tajikistan that an organized crime group is responsible for the bombing. The aluminum plant is the most lucrative enterprise in Tajikistan and has been the center of contention between various criminal groups since 1992. CHINESE CORPORATION WINS ANOTHER KAZAKH OIL TENDER. China National Petroleum Co. won the tender for the Uzensk oil field in western Kazakhstan, Interfax reported on 4 August. The Chinese corporation now has the exclusive right to negotiate for the contract. The Uzensk field currently produces 2.7 million tons of oil annually but the Chinese side says it can increase that figure to 7 million annually. In order to secure the contract, the Chinese company must form a joint venture with Kazakhstan's Uzenmunaigaz and help construct a pipeline from the field to China and the Kazakh section of a pipeline south to Iran via Turkmenistan. The Kazakh government and China National Petroleum now have one month to agree to terms, otherwise negotiations can begin with the other participants in the tender, Amoco and the U.S.-Malaysian companies Unocal-Petronas. In early June, China National Petroleum Corp. also bought 60 percent of the Aktyubinskmai field and facilities in northwest Kazakhstan. END NOTE DIAMOND IN THE ROUGH: HOW YELTSIN DECIDES By John Helmer One of the best things about Boris Yeltsin, an opposition deputy said before the president's first heart attack, was the way he would listen attentively to what you said, and agree with you. One of the worst things about him, the deputy added, was that Yeltsin agreed with everyone. First Deputy Prime Minister Anatolii Chubais knows the president's qualities. So he drafted a decree in August 1996 -- while Yeltsin was in medical isolation -- that strictly regulated how presidential decrees could take force. Chubais arranged the paperwork so if someone with a piece of paper managed to see Yeltsin and Yeltsin signed it, nothing could happen until the paper was published. And publication remained under Chubais's control. Last month, while Yeltsin was on holiday on the Volga, he signed a decree reforming Russia's diamond industry. The document had been in preparation for months. Diamond producers in the Sakha republic, diamond manufacturers and exporters in Moscow, and different parts of the government bureaucracy lobbied for their interests. Yeltsin wasn't personally involved, as he once was. But prime minister, ministries, and Chubais were all agreed. The decree stripped the Sakha Republic of tax and other privileges it had been granted by Yeltsin five years ago. The monopoly of diamond sales inside Russia and abroad, which Almazy Rossii-Sakha (ARS), a diamond mining company, had sought, was rejected. Price competition was introduced by allowing, for the first time, diamond cutters in Russia to import diamonds from abroad without duty. New Finance Ministry controls were ordered over every aspect of the diamond industry, including the stationing of inspectors inside ARS. The company was prohibited from supplying diamonds at a discount to Sakha Republic President Mikhail Nikolaev's administration or its friends. This was the biggest defeat Nikolaev has ever suffered at Yeltsin's hands. So, on July 25, he flew down to see the president face to face. Nikolaev had been seeking this meeting for months, but was always blocked. This time, with Chubais on holiday out of Russia, he got his wish. And more than that. Officials of ARS were saying last week that Yeltsin did the proverbial. He agreed to everything Nikolaev asked for. The ARS officials claim the Sakha government will be able to buy the stones it wants from ARS at a price Nikolaev told Yeltsin was at cost. Re-selling or exporting cut-price goods will be easy and profitable. Yeltsin reportedly agreed, and signed a paper to that effect. This is awkward, because in section 10 of the paper Yeltsin signed five days earlier, he decreed that Sakha could buy diamonds but only on terms and prices fixed by the Russian government. That meant the Ministry of Finance. Now that he's back from vacation, that means Finance Minister Chubais. Sensing the potential for embarrassment, some ARS officials now say they can't confirm the meeting between Nikolaev and Yeltsin took place. The presidential press service rummaged in its records, and said a meeting had occurred about a week ago. A Finance Ministry official in charge of the diamond sector said he, as he put it, had "heard something about the meeting, and (was) sure they agreed on something." He wasn't sure what. The legal department of the Kremlin, which also was ordered by last year's ukaz to check every decree before signing, says it can't do this, because the only place all the decrees must now go is to Chubais's office. Just what the latest document may say is hinted at by Nikolaev's representative in Moscow, Kliment Ivanov. He claims Yeltsin has approved government action to settle the terms on which the republic will get its stones, taking into consideration the interests of the republic Chubais followed Nikolaev to see Yeltsin four days later. His office hasn't responded to questions about what was decided, if anything. The author, a journalist based in Moscow, regularly contributes articles to RFE/RL. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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