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RFE/RL NEWSLINE Vol 1, No. 91, Part I, 8 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 *RUSSIAN, TURKMEN PRESIDENTS MEET *RUSSIA BANS FURTHER EXPORTS OF KAZAKH GAS *GEORGIAN POLITICIAN THREATENS MILITARY ACTION IN ABKHAZIA End Note: IMF TEAM SAYS GEORGIA SAFETY NET 'UNSUSTAINABLE' xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA RUSSIAN, TURKMEN PRESIDENTS MEET ... On 7 August, Russian President Boris Yeltsin held a two-hour summit meeting in Moscow with his Turkmen counterpart Saparmurad Niyazov. The meeting succeeded in resolving some, but not all, problems in bilateral relations. In a joint communique, the two presidents pledged to upgrade bilateral relations on the principle of equal partnership, and to draft economic accords on protecting mutual investment and avoiding dual taxation in order to broaden economic cooperation. Yeltsin accepted an invitation from Niyazov to visit Turkmenistan in spring 1998. ... DISCUSS OIL ... Specifically, Yeltsin told Niyazov that the signing in early July of an agreement between Azerbaijan's state oil company SOCAR and the Russian oil companies Rosneft and LUKoil to develop the Kyapaz oil field, ownership of which is contested by Turkmenistan, was "a mistake" resulting from the failure of the Russian oil companies involved to inform the Russian president and government of their intentions, according to ITAR-TASS. (This disclaimer lacks conviction insofar as Russian First Deputy Prime Minister Boris Nemtsov discussed the deal with Azerbaijani President Heidar Aliev prior to the signing and was present at the signing ceremony.) Yeltsin noted that the positions of Russia and Turkmenistan concerning the legal status of the Caspian Sea "are quite close," and that both countries agree on the need to expedite the signing by all Caspian littoral states of a convention based on international law formalizing the status of the Caspian. ... AND GAS ... "Nezavisimaya gazeta" on 8 August quoted Niyazov as telling journalists after his meeting with Yeltsin that their primary topic of discussion was the market for natural gas, of which Russia and Turkmenistan together control 68 percent of world reserves. Niyazov claimed that "Russia fully supports Turkmenia" and will not insist on a monopoly on the extraction and transportation within the CIS of natural gas. Niyazov also said that Yeltsin endorsed the unilateral annulment by the Turkmen government of the Russian- Turkmen joint venture Turkmenrosgas. He explained that Turkmenrosgas had been abolished because it had failed to engage as planned in exploration, development and investment, according to DPA. Niyazov said he and Yeltsin had reached agreement on creating a new joint venture to supply Turkmen gas to the CIS market, but in an implicit contradiction, he accused Russia of "squeezing Turkmenistan out of the CIS gas market." ... BUT NO EXPORT AGREEMENT REACHED. Speaking at a joint news conference with Niyazov, Rem Vyakhirev, head of Russia's giant Gazprom, which controls the gas pipeline network, said that although Russia no longer needs Turkmen gas, the company would continue its cooperation with Turkmenistan in order to prevent the country's population from "starving to death," Interfax and NTV reported. Niyazov told journalists that during a meeting on 6 August with Vyakhirev and Russian Prime Minister Viktor Chernomyrdin he had failed to reach agreement on the export of Turkmen gas via Russia to Europe, but that Russia had offered to continue exporting Turkmen gas to other CIS member states, whose combined unpaid debts to Turkmenistan for gas supplies amount to billions of dollars. Russia and Turkmenistan are in competition to increase their exports of natural gas to Turkey. RUSSIA BANS FURTHER EXPORTS OF KAZAKH GAS. Vyakhirev also announced at the press conference that Gazprom will "under no circumstances" allow Kazakhstan to continue to use the Russian export pipeline network to export natural gas to world markets, AFP and Interfax reported. Vyakhirev argued that "surrendering one's market when there is insufficient [export] capacity is ... a crime against Russia.." CRITICISM OF ONEKSIMBANK IN PRESS INTENSIFIES. Several newspapers have attacked Oneksimbank over some 5.5 trillion rubles ($950 million) in customs duties said to be held in Oneksimbank accounts (see "RFE/RL Newsline," 7 August 1997). "Moskovskii komsomolets" on 7 August said those funds alone could pay off about one-tenth of wage arrears owed by the state. (Government officials have said recent sales of government stakes in Svyazinvest, the Tyumen Oil Company, and Norilsk Nickel are needed to pay wage arrears.) The paper also reminded readers that Oneksimbank President Vladimir Potanin was first deputy prime minister dealing with economic matters from August 1996 until March 1997. "Segodnya" on 7 August also slammed Oneksimbank for making money from customs duties, asking rhetorically on whose money Oneksimbank had won recent privatization auctions. Owned by Vladimir Gusinskii's Media-Most, "Segodnya" has sharply criticized Oneksimbank since the Svyazinvest sale (see "RFE/RL Newsline," 29, 31 July 1997). "IZVESTIYA" VIEWS LATEST DEVELOPMENTS. Although Oneksimbank is a major shareholder in "Izvestiya," that paper's business supplement "Finansovye izvestiya" on 7 August argued that the "hasty" sale of a 38 percent stake in Norilsk Nickel "clearly contradicted Russian state interests." Attempts by government officials to postpone the auction were both "fair" and "economically correct," the paper said. A company linked to Oneksimbank won the controversial Norilsk auction (see "RFE/RL Newsline," 4-7 August 1997). A separate commentary in the 7 August "Izvestiya" blamed government policies of the past two years for failing to establish fair conditions for the sales of state assets. By way of example, the paper cited the deal under which Stolichnyi Bank acquired a controlling interest in Agroprombank last November. That arrangement was either "unwise" or a straightforward "give-away" by the government, "Izvestiya" said. (Stolichnyi Bank, now called SBS-Agro, partly finances "Kommersant-Daily.") YELTSIN PROMISES RUBLE REDENOMINATION WILL NOT CREATE "VICTIMS." Yeltsin has promised that unlike monetary reforms of the Soviet and post-Soviet period, the upcoming redenomination of the ruble will not hurt Russian citizens. Beginning on 1 January 1998, three zeroes will be taken off the ruble (see "RFE/RL Newsline," 4-5 August 1997). In an 8 August nationwide radio address, Yeltsin promised the reform will not involve any "victims" or "confiscations" and will make it easier for people to calculate and plan their spending. He added, "With this currency reform we declare firmly that we have conquered inflation. We have it firmly under control. The ruble will not be devalued again." TWO NEW ASTRONAUTS JOIN "MIR" CREW. Russian astronauts Anatolii Solovev and Pavel Vinogradov joined one U.S. and two Russian astronauts aboard the space station "Mir" on 7 August after their Soyuz capsule docked with the station. In the coming weeks, Solovev and Vinogradov are to attempt repairs to the Spektr module, damaged in a 25 June collision with a cargo shuttle. However, vital repairs to the station's oxygen generating system will have to wait until late September, when a U.S. space shuttle will bring a new part to "Mir." Reuters quoted Russian Space Agency head Yurii Koptev as saying oxygen canisters on board "Mir" can supply enough oxygen to last 70 days. NO BREAKTHROUGH IN LATEST ROUND OF RUSSIAN-CHINESE BORDER TALKS. The latest session of the Sino-Russian joint demarcation commission, which met in Beijing from 21 July to 4 August, failed to resolve outstanding disputes over the eastern section of the border, "Nezavisimaya gazeta" reported on 8 August. The previous day, Interfax quoted Primorskii Krai Deputy Governor Vladimir Stegnii as saying China had agreed not to claim Russian territory near the Tumannaya River--an apparent breakthrough. However, RFE/RL's correspondent in Beijing reported on 7 August that neither Chinese officials nor the official Xinhua news agency had confirmed Stegnii's statement. Stegnii told "Nezavisimaya gazeta" that he was misquoted by Interfax. Speaking to journalists in Moscow on 7 August, Russian Foreign Ministry spokesman Valerii Nesterushkin said Russia and China have agreed on three-fourths of their border and still hope to complete the demarcation process by the end of 1997. FUTURE OF CIS AFFAIRS MINISTRY IN DOUBT. More than a month after Yeltsin appointed then CIS Affairs Minister Aman Tuleev as governor of Kemerovo Oblast, the fate of the CIS Affairs Ministry remains in doubt, "Izvestiya" reported on 7 August. Tuleev's successor has not yet been appointed, and the acting head of the ministry, Vasilii Shcheglovskii, is considered to lack authority among CIS leaders. Among those rumored to be considered for CIS affairs minister are State Duma Deputy Speaker Sergei Baburin, Yeltsin's representative in the Constitutional Court Sergei Shakhrai, Our Home Is Russia Duma faction leader Sergei Belyaev, and Duma First Deputy Speaker Aleksandr Shokhin, also of Our Home Is Russia. Of those four politicians, only the outspoken opposition figure Baburin has denied that he is being considered for the post. A plan to downgrade the CIS Affairs Ministry into a department within the Foreign Ministry is also under consideration, according to "Izvestiya." RUSSIAN PRINTERS REPORTEDLY SHUN KORZHAKOV'S MEMOIRS. State Duma deputy Aleksandr Korzhakov, Yeltsin's former bodyguard and confidant, is having trouble finding a printer for his memoirs, "Kommersant-Daily" reported on 8 August. Representatives of the Interbuk publishing house say several printers initially expressed interest in Korzhakov's book, but all have retracted their orders in recent weeks. Interbuk Deputy Director Sergei Goncharenko claimed that pressure from unnamed law enforcement agencies was being brought to bear on the printers. However, Korzhakov told "Kommersant-Daily" that he is confident his book will nonetheless appear in Russian within one week. Excerpts from the memoirs, published in the "Times" of London on 3 August, portray Yeltsin as having a chronic drinking problem and depict the president's behavior during various foreign visits as embarrassing and erratic. INDIGENOUS PEOPLES CALL FOR BOYCOTTING CELEBRATIONS IN KAMCHATKA. The Council for the Revival of Kamchatka Itelmens (an indigenous Paleo-Siberian ethnic group) has decided to boycott the upcoming celebrations of the 300th anniversary of Kamchatka becoming part of the Russian empire, "Segodnya" reported on 7 August. The council called on groups representing other indigenous peoples to boycott the celebrations as well. A statement adopted by the Itelmens argued that it is time for Russia to admit that it captured Kamchatka as a colony, without trying to portray seizure of territory and "genocide" of indigenous peoples as a "noble gesture." About 1,400 Itelmens remain in Kamchatka Oblast out of an estimated population of 15,000 when Russia first colonized the area. Most villages populated by Kamchatka's indigenous peoples are in Koryak Autonomous Okrug, which makes up the northern part of the oblast. "Segodnya" noted those villages are afflicted with high rates of unemployment and alcoholism. GARBAGE BEING REMOVED IN VLADIVOSTOK. Vladivostok workers have begun clearing an estimated 27,000 tons of garbage from the city's streets, ITAR-TASS reported on 7 August. Primorskii Krai Governor Yevgenii Nazdratenko recently invited Vladivostok's striking garbage collectors to sign a contract with the krai administration and promised them 9 billion rubles ($1.6 million) toward paying wage arrears. Vladivostok Mayor Viktor Cherepkov denounced Nazdratenko's "interference" in the strike, but attempts by the city administration to organize alternative brigades to clear the garbage met with little success. Meanwhile, on 8 August Cherepkov met with representatives of other municipal workers on strike in Vladivostok, who have staged numerous demonstrations outside the city administration building since 21 July, ITAR-TASS reported. The mayor promised to allocate some 15 billion rubles toward paying back wages, and the workers agreed to end their strike on 11 August. TATARSTAN'S CONSTITUTIONAL WATCHDOG TERMS GOVERNMENT RESOLUTION UNCONSTITUTIONAL. Tatarstan's Constitutional Oversight Committee has recommended that several key elements of a government resolution adopted in May should be overturned, an RFE/RL correspondent in Kazan reported on 6 August. The resolution was highly controversial because the republic's government sought to raise funds to increase the minimum wage for government employees by sacking 47,000 workers. In a decision published on August 6 in "Respublika Tatarstan," the Constitutional Oversight Committee says the government's resolution violates Tatarstan's Constitution and labor law. The Committee calls on the government to review the measure and bring it into conformity with the republic's legislation. RYBKIN IN GROZNY. Russian Security Council Secretary Ivan Rybkin met in Grozny on 7 August with Chechen first deputy prime minister Movladi Ugudov to discuss the planned meeting between Yeltsin and Chechen President Aslan Maskhadov, Russian and Western agencies reported. Rybkin subsequently told journalists that preparations for the meeting, which is to take place within the next week, are almost complete. He said both sides are concerned that previously signed agreements are not being implemented. In Moscow, Yeltsin's press spokesman Sergei Yastrzhembskii said the upcoming meeting "will not be easy," but that the signing of a bilateral power sharing agreement is planned, ITAR-TASS reported. Also on 7 August, Maskhadov delivered a new ultimatum to kidnappers to release all those whom they have abducted by 10 August, AFP and Interfax reported. TRANSCAUCASUS AND CENTRAL ASIA GEORGIAN POLITICIAN THREATENS MILITARY ACTION IN ABKHAZIA. Tamaz Nadareishvili, the chairman of the Tbilisi-based Abkhaz parliament in exile, has said that if the Georgian government fails to take decisive steps to resolve the Abkhaz conflict before 31 August, the parliament in exile will act independently to restore Tbilisi's control over Abkhazia by force, the Georgian newspaper "Rezonansi" reported on 7 August. Nadareishvili was addressing the leaders of military units subordinate to the parliament in exile in the west Georgian town of Zugdidi. Russian Foreign Minister Yevgenii Primakov, who is currently vacationing in Sochi, is likely to meet there in the next few days with Abkhaz President Vladislav Ardzinba, and in Tbilisi on 14 August with Georgian President Eduard Shevardnadze to discuss Yeltsin's most recent Abkhaz peace proposals. KAZAKH, KYRGYZ, UZBEK PRIME MINISTERS MEET. At a one-day meeting of the Inter-State Council of the Central Asian Union held in Almaty on 7 August, the prime ministers of the three member states -- Kazakhstan, Kyrgyzstan, and Uzbekistan -- signed 10 agreements, including regulations on immigration and railroad tariffs, Interfax reported. The three premiers postponed the signing of agreements on international road haulage and energy, and failed to address coordinating taxation systems and value-added tax. Speaking at a joint press conference afterwards, Kazakh Prime Minister Akezhan Kazhegeldin termed the meeting "productive" and said it proved that integration among Central Asian states is possible, according to an RFE/RL correspondent in Almaty. END NOTE IMF TEAM SAYS GEORGIA'S SAFETY NET 'UNSUSTAINABLE' By Robert Lyle A team of experts from the International Monetary Fund (IMF) has told Georgian authorities that the country's social support system is "unsustainable" because it is not providing adequate protection to the most vulnerable. The team came to that conclusion after working with the government at its request to help design a better social support mechanism. In its report, a summary of which was released by the fund, the IMF team said Georgia had already made great strides by scrapping its old social system when it gained its independence and instituting pay-as-you-go systems for social security, unemployment and health. The Georgian safety net currently costs the equivalent of about 3 percent of GDP (gross domestic product) or about one-third of the state budget. Among measures already successfully implemented, the IMF team pointed to the rise in retirement ages from 55 to 60 years for women and from 60 to 65 for men instituted in early 1996. While that move had the unintended immediate effect of increasing the pension rolls -- as many as 50,000 previously unregistered elderly took advantage of the grandfathering provisions to get in under the deadline -- it will eventually reduce the number of pensioners by about 40 percent. At the same time, the team said that by targeting social benefits on the poorest and most vulnerable of the population, Georgia has been able to increase benefits generally in line with government wages, including a 15 percent increase in benefits last January 1st, increasing payments on average by about 100 percent in real terms. Still, says the team, benefit levels remain low, with the standard monthly rate of 9.8 lari (7.70 dollars) only one-tenth the official minimum subsistence level. According to that standard, said the team, "all employees of the public sector, for whom the monthly average wage is only lari 35, are destitute." However, the team added, the official poverty standard is "misleading" because it is based on the situation before reforms and before the major price adjustments since 1992. First, it said, an alternative basket of food with the same calorie content can be assembled easily for 35 lari a month. More importantly, the IMF team said a recent household survey indicates that cash incomes constitute only a "small proportion of total household incomes," especially among the poorest. "It is therefore misleading to base poverty assessments solely on cash incomes, which are generally very low," the team said. When allowance is made for in-kind income -- trading of goods, etc. -- the income distribution for the country becomes much more even. With this, the team said it estimates that about 25 to 30 percent of the Georgian population is living below the poverty line, considerably fewer than the official estimate of 65 percent of the people. Nevertheless, the team said there is reason for concern because the "considerable reliance" among the citizenry on subsistence production and other informal activities "confirms the stresses the population has experienced since transformation to a market-based system." The IMF experts said that many people in Georgia have managed to maintain living standards at about subsistence levels with support from relatives and by depleting their assets -- remedies the team says provide "only short term relief." "This situation is unsustainable," the IMF team concluded, and requires improvements in the size and coverage of benefits. The team recommended further modifications to better target vulnerable groups which have been missed by the present system, for example, large families and single mothers. To better concentrate the benefits on the most needy, and make them high enough to provide real protection, the IMF team recommended further tightening of eligibility criteria, using income tests to weed-out people with high incomes, and improved benefit administration. The team also gave government officials ideas about redesigning the country's pension system to put it on a sound financial footing. One proposal involves shifting the pension system to a defined-contributions scheme based on individual contributions. However, the team cautioned. such a scheme -- now popular in the west -- would imply a "substantial loss of payroll tax collections, initially placing an insupportable burden on the budget to finance the continued retention of present safety net provisions." For now, the team said, the emphasis should continue to be placed on sustaining an adequate safety net for the elderly without compromising the budget. As to the country's economy in general, the IMF team said Georgia has made "major strides in stabilization and structure reform after a period of acute economic crisis," and said it expects economic growth this year to reach 10 percent. Robert Lyle is an RFE/RL correspondent in Washington. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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