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RFE/RL NEWSLINE Vol 1, No. 90, Part I, 7 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 * CONDUCT OF NORILSK AUCTION BEING INVESTIGATED * YELTSIN WANTS TO EXPEDITE PASSING OF LAW ON RELIGION * RUSSIA CONSIDERING NEW OIL PIPELINE TO BYPASS CHECHNYA End Note: A PAST TOO MUCH WITH US xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA CONDUCT OF NORILSK AUCTION BEING INVESTIGATED. In line with a request from Prime Minister Viktor Chernomyrdin, the Procurator- General's Office, State Property Committee, and Russian Federal Property Fund (RFFI) have begun investigating how the recent auction of a 38 percent stake in Norilsk Nickel was conducted, RFFI Chairman Igor Lipkin announced on 6 August. However, a senior government official cited by Reuters said the investigation was unlikely to lead to the reversal of the auction. Lipkin told Russian news agencies that the Norilsk auction was conducted in full compliance with the law: the rules for participating were published a month in advance, and the shares were awarded to the company that submitted the higher of the two bids. Lipkin added that the federal budget will receive nearly $80 million from the sale, funds that he said will help pay wage arrears to state employees. BARGAIN PRICE FOR NORILSK SHARES, LACK OF TRANSPARENCY CRITICIZED. Although RFFI Chairman Lipkin noted that the winning bid for the Norilsk shares exceeded the minimum bid by nearly 80 percent, critics have charged that the minimum bid was set far too low. AFP reported on 6 August that independent analysts believe the Norilsk stake was acquired at a bargain price by Svift, a company linked to Oneksimbank. Analysts also have criticized the lack of transparency and apparent conflicts of interest surrounding the sale. Oneksimbank had managed the Norilsk shares since November 1995 in exchange for a $170 million loan to the government, and Reuters noted that the Norilsk auction was organized by MFK Moscow Partners, a company linked to Oneksimbank's financial empire. In addition, Oneksimbank President Vladimir Potanin held secret meetings with State Property Committee Chairman Alfred Kokh, Procurator General Yurii Skuratov, and Prime Minister Chernomyrdin the day of the auction (see "RFE/RL Newsline," 5-6 August 1997). CHUBAIS WANTS TO BAR COMMERCIAL BANKS FROM COLLECTING CUSTOMS DUTIES ... First Deputy Prime Minister Anatolii Chubais is seeking to bar commercial banks from collecting customs duties on behalf of the government, Russian news agencies reported on 6 August, citing Chubais's spokesman Andrei Trapeznikov. By 18 September, the Finance Ministry, State Customs Committee, Federal Treasury and Central Bank are to submit draft guidelines on the new procedure to the government. All bank accounts for customs duties are to be moved to the Central Bank, Trapeznikov said. If the Central Bank is not prepared to handle those accounts, commercial banks will be forced to compete for the privilege of collecting customs duties. Under a May presidential decree, the role of so-called "authorized banks" is to be reduced by January 1998, after which such authorization to handle state funds may only be awarded to commercial banks through open, competitive bidding (see "RFE/RL Newsline," 14 May 1997). ...AS CENTRAL BANK BEGINS AUDITING ONEKSIMBANK. In line with the May decree on reducing the role of authorized banks, the Central Bank has begun auditing Oneksimbank, which handles more budget funds than any other commercial bank, "Kommersant-Daily" reported on 6 August. Critics have said that instead of transferring budget funds to their intended destination right away, some commercial banks have earned huge profits by investing state money in short- term accounts at other banks. For this reason, "Kommersant-Daily" argued on 7 August that Chubais's plan to prohibit banks from collecting customs duties will hurt Oneksimbank more than any other commercial bank. Some 5 trillion to 5.5 trillion rubles ($860 million to $950 million) in customs duties are said to be held in Oneksimbank accounts, enough for the bank to earn an estimated 3 billion rubles ($520,000) in profits for each day that it delays transferring the customs payments to the government. MEASURES COULD PLACE PRIVATIZATION AUCTION RESULTS IN DOUBT. The Central Bank's audit of Oneksimbank and the proposed changes in rules on collecting customs duties could force the recent sales of government stakes in the telecommunications giant Svyazinvest and in Norilsk Nickel to be reviewed, "Kommersant- Daily" argued on 6 and 7 August. The paper noted that Oneksimbank has not yet paid out all the money it pledged toward the winning bids for Svyazinvest and Norilsk. If it is deprived of the right to handle state funds and customs duties, Oneksimbank may simply be unable to earn enough in profits to meet investment commitments it assumed as conditions for the Svyazinvest and Norilsk auctions. Under a new privatization law that went into effect on 2 August, the government may appropriate privatized property if the new owners fail to meet investment commitments under which the property was awarded (see "RFE/RL Newsline," 28 July 1997). YELTSIN WANTS TO EXPEDITE PASSING OF LAW ON RELIGION. Russian President Boris Yeltsin told journalists on 6 August that he would like the conciliatory commission charged with making the required changes to the controversial law on religious organizations to present its revised draft by 1 September, Russian media reported. Yeltsin vetoed the law last month despite appeals from Patriarch of Moscow and All Russia Aleksii II. Attending the ceremonial consecration of the Chapel of Saints Boris and Gleb in Moscow on 6 August together with Aleksii, Yeltsin noted that cooperation between the Russian Orthodox Church and the state has increased in recent years, and praised the patriarch for his peacemaking and charitable activities. Aleksii expressed confidence that the revised version of the law will be enacted shortly. He praised Yeltsin's role in "overcoming the heritage of Soviet rule" and noted that St. Boris is Yeltsin's patron saint, NTV reported. OPPOSITION STANDS BEHIND ROKHLIN. In an interview published in "Nezavisimaya gazeta" on 6 August, Communist Party leader Gennadii Zyuganov said activists from the Communist-led Popular-Patriotic Union of Russia are involved in forming regional branches of State Duma Defense Committee Chairman Lev Rokhlin's new movement to support the armed forces and defense industry. Meanwhile, the opposition newspaper "Sovetskaya Rossiya" on 7 August charged that local elites used underhanded methods to prevent Rokhlin from meeting with potential supporters during his recent visit to Tver Oblast. The paper charged that Tver newspapers carried little information about where Rokhlin would be speaking. In addition, the venue of Rokhlin's public meeting was changed at the last minute. The paper said that shortly before his visit, Rokhlin sent a message to Tver Governor Vladimir Platov expressing the desire to cooperate to defend the interests of defense enterprises in Tver, but the oblast authorities ignored Rokhlin's appeal. SEMAGO CRITICIZES DUMA, COMMUNIST ACTIVITIES. State Duma Deputy Vladimir Semago, a member of the Communist Party (KPRF), has criticized the priorities of the KPRF leadership and has charged that the Duma's work is generally unproductive. In an article for the 6 August "Nezavisimaya gazeta," Semago said KPRF figures holding senior posts in the Duma had stalled on forming a commission to investigate corruption and subsequently hindered the commission's work. He also called for a "serious discussion" of the KPRF's future strategy in the Duma and in regional elections. He said he had tried to publish his article in the opposition newspapers "Pravda," "Pravda-5," and "Sovetskaya Rossiya," as well as in the KPRF organ "Pravda Rossii," but all had rejected it. Semago's public criticism of senior Communists has recently drawn fire from Duma Speaker Gennadii Seleznev and party leader Zyuganov (see "RFE/RL Newsline," 4 and 6 August 1997). RUSSIAN, CHECHEN PRESIDENTS TO MEET 10 AUGUST? Chechen First Deputy Prime Minister Movladi Udugov told ITAR-TASS on 6 August that the planned meeting between Yeltsin and Aslan Maskhadov may take place on 10 August. Russian Security Council Secretary Ivan Rybkin and Deputy Secretary Boris Agapov will fly to Grozny today to prepare for the meeting, at which a document regulating relations between Moscow and Grozny is to be signed. Maskhadov has called for an interstate treaty, but "Nezavisimaya gazeta" on 7 August quoted sources in the Russian Security Council as saying that the document in question will be called neither an interstate treaty nor an agreement on power-sharing. The sources said the document probably will be called "On Relations between the Organs of State Power of the Russian Federation and Chechnya." RUSSIA CONSIDERING NEW OIL PIPELINE TO BYPASS CHECHNYA. Russian First Deputy Fuel and Energy Minister Sergei Kirienko told journalists in Moscow on 6 August that talks on the transit of Azerbaijan's Caspian oil via Chechnya to Novorossiisk "are deadlocked" because of Chechnya's "impossible" tariff demands, Russian agencies reported. Kirienko said his ministry had conducted feasibility studies on six routes for an alternative pipeline through Dagestan. He said that a bypass pipeline would take 1 1/2 -2 years to build, at an estimated cost of $250 million, but that the final decision on whether a bypass pipeline should be built would be taken by the Russian government. Under the 11 July agreement signed by Russian, Azerbaijani and Chechen oil company heads, Russia is to receive $15.67 in transit fees per metric ton of oil. Chechnya's share was set at $4-5, but Kirienko said the Chechens are now demanding $6. TRANSCAUCASUS AND CENTRAL ASIA GEORGIAN BORDER GUARD COMMANDER DENIES CHECHEN INCURSION. On 6 August Major General Valeri Chkheidze denied Georgian television reports earlier in the day that several dozen Chechen militants had advanced into Georgia, according to ITAR-TASS. The Chechens allegedly intended to thwart a proposed meeting between Georgian President Eduard Shevardnadze and his Chechen counterpart Aslan Maskhadov. Maskhadov's representative Akhmed Zakayev left for Tbilisi on 6 August to coordinate a date for that meeting, Interfax reported. In a written address to the Georgian parliament and people, Maskhadov on 6 August repeated his support for Shevardnadze's efforts to find a peaceful solution to the Abkhaz conflict. PROBLEMS REMAIN ON TAJIK-AFGHAN BORDER. Russian border guards, late on 5 August, repelled an attempt by two armed groups of drug couriers to cross the Tajik-Afghan border, ITAR-TASS reported. During one of the attempted crossings, a Russian border guard and two of the drug runners were killed in the exchange of fire. Meanwhile, border guard deputy director Aleksei Kozhevnikov inspected border posts and voiced alarm at a buildup of armed groups near the border in Afghanistan. Kozhevnikov said the group is part of the United Tajik Opposition (UTO). A UTO representative in Dushanbe, Dawlat Usmon, said the opposition would discourage anyone from breaking the recently signed peace accord. Kozhevnikov also said that the process of repatriation of refugees continues and that 500 people cross into Tajikistan from Afghanistan at the Nizhnii Pyanj checkpoint every day. BIGGEST GRAIN HARVEST REGISTERED IN KYRGYZSTAN. Indications early in the Kyrgyz harvest show the country will increase its grain production this year to 1.4 million tons, according to RFE/RL correspondents in Bishkek. Wheat and barley crops account for the increase. The Russian newspaper "Pravda-5" on 6 August claimed the reason for the increase is due to a switch in the use of land. According to the paper, 14 percent more land was given over to wheat and barley at the expense of Kyrgyzstan's cotton and tobacco crop, but the actual figure for land under cultivation is continuing to shrink. AZERBAIJAN GAS OUTPUT DOWN. Azerbaijan's State Oil Company SOCAR produced 5.2 million metric tons of oil and 3.5 billion cubic meters of gas during the first seven months of this year, Interfax reported. Of the total, 4.3 million metric tons of oil and 3.4 billion cubic meters of gas were produced offshore. Gas output declined by 3.3 per cent compared with the corresponding period for 1996. The CIPCO consortium representing Pennzoil, Russia's Lukoil, the Russian- Italian joint venture LUKAgip and SOCAR began drilling its first exploratory well in Azerbaijan's Caspian Karabakh field in early August, ITAR-TASS and Turan reported on 6 August. The Karabakh deposit has estimated reserves of 80 million metric tons. END NOTE A PAST TOO MUCH WITH US By Paul Goble Russian President Boris Yeltsin's decree reclosing a city in his country to all outsiders reflects both how little has changed in his country since Soviet times -- and also how much. On the one hand, Yeltsin's action simply extends the Soviet practice of using this administrative device to hide things Moscow does not want anyone to find out about. But more disturbingly, it calls attention to both the large number of Russian cities that remain "closed" from Soviet times and Yeltsin's willingness to close some opened more recently. On the other hand, the Russian president's actions have sparked a lively public discussion in the Russian press about both Yeltsin's motives in this particular case and the implications of using this administrative device in a country that seeks to be a democratic one. At the end of July, Yeltsin issued a decree declaring that Shikhana, an urban center some 130 kilometers north of Samara, was once again a "closed city." This decree means that no one -- Russian or foreigner -- can enter it without special permission from the Russian defense or interior ministries. A closed city in Soviet times known as Volzhk 18, Shikhana is home to some 15,000 civilians, an unknown number of military personnel, and one of the Russian military's largest chemical weapons manufacturing and testing facilities. The Soviet authorities routinely closed such military industry centers both to enhance the army's control of their populations and to block efforts by foreign intelligence services to gain access to their secrets. But at the end of the Soviet era and in the beginning of post- Soviet Russian history, Moscow ended such restrictions in many cases. Sometimes this was done because of a sense that the end of the Cold War made such restrictions obsolete. Sometimes, these restrictions were lifted in response to local civilian pressures for greater democratization. And sometimes, Moscow took this step in order to give Russian military industries located in these areas the ability to market their goods abroad. Not surprisingly, many Russian reformers are deeply concerned about both Yeltsin's motives in this particular case and his willingness to use Soviet-style methods to deal with some fundamental political, economic, and ecological problems. One Moscow paper has suggested that Yeltsin's motives were anything but encouraging. It quoted the conclusion of an ecological group based in Samara that "the closing of Shikhana is nothing less than the sabotage of the process of destroying chemical weapons according to the agreements Russia has signed and which it is prepared to sign." As a result, the leader of the group Vladimir Petrenko told "Obshchaya gazeta," Yeltsin "has given back total secrecy to the manufacture and testing of chemical weapons." Another environmental group from the region told the Moscow press that the closing of the city might in fact be the result of reform rather than a means of blocking it. The"Ecology and Legal Defense" group said that the Russian army has set up a private commercial firm in Shikhana to produce and sell highly-toxic arsenic. The group said that one of the founders of this company is Stanislav Petrov, the head of Russia's chemical weapons troops. And the group's spokesman implied that Petrov had used his influence to get Yeltsin to take a step that will make it difficult for anyone to monitor what he is doing or to prevent his company from continuing to poison the environment there. What is most striking about all this, of course, is not the existence of closed cities in a country long used to their existence or the willingness of officials and entrepreneurs there to use this method to advance their own interests, however selfish or duplicitous. Instead, what is striking is that Yeltsin's actions have sparked discussions in Moscow but they have not prompted widespread protests from the West, both from human rights activists concerned about progress toward the rule of law there and from governments concerned that Russia live up to its promises to destroy chemical weapons. At a time when the United States has allowed the Russian air force to overfly American territory -- as it did this week under the provisions of the "open skies" agreement -- Yeltsin's decision to reclose a city is a particularly disturbing reminder that some unfortunate features of the past remain very much with us. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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