The only thing one knows about human nature is that it changes. - Oscar Wilde
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 95, Part I, 14 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/

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Headlines, Part I

*YELTSIN REPLACES STATE PROPERTY COMMITTEE CHAIRMAN


*CENTRAL BANK EXAMINES SVYAZINVEST SALE


*TAJIK PRESIDENT FIRES MUTINOUS COLONEL

End Note
AZERBAIJAN, TURKMENISTAN CONTEST OWNERSHIP OF CASPIAN OIL
FIELD
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RUSSIA

YELTSIN REPLACES STATE PROPERTY COMMITTEE CHAIRMAN.
President Boris Yeltsin on 13 August accepted Alfred Kokh's
resignation as deputy prime minister and head of the State Property
Committee and appointed Maksim Boiko to both posts. Having joined
the State Property Committee when it was run by current First
Deputy Prime Minister Anatolii Chubais, Kokh had chaired the
committee since September 1996. In a statement released to Russian
media, Kokh said he had submitted his resignation before leaving for
vacation on 11 August and will now work in the private sector. Kokh
added that he leaves the government "with a clear conscience."
Recent sales of state-owned stakes in the telecommunications giant
Svyazinvest and the Tyumen Oil Company have shown that
privatization has brought millions of dollars to the state coffers, he
said. Boiko, who, like Kokh, is considered a close ally of Chubais, had
served as deputy head of the presidential administration since
August 1996.

CHERNOMYRDIN ON KOKH'S DEPARTURE. Prime Minister Viktor
Chernomyrdin, who reportedly informed Yeltsin of Kokh's
resignation, described the outgoing State Property Committee
chairman as a "good economist" with a "good future," Interfax
reported on 13 August. The prime minister said all of the
achievements of privatization this year could be attributed to Kokh's
work. At a cabinet meeting in July, Chernomyrdin criticized the
implementation of privatization policy, saying every recent auction
organized by Kokh's committee had ended in a scandal (see "RFE/RL
Newsline," 25 July 1997). Meanwhile, State Property Committee
Deputy Chairman Fazil Gazizullin told Interfax that the committee's
staff had long known of Kokh's plans to resign and that privatization
policy will not change following Kokh's departure. State Duma
Privatization Committee Chairman Pavel Bunich of the Our Home Is
Russia faction agreed, noting that Boiko is "from the same team" as
Kokh, ITAR-TASS reported on 14 August.

PERSONNEL CHANGE REGARDED AS LINKED TO BANK WAR.
"Kommersant-Daily" on 14 August argued that Kokh's departure is
"the continuation of the bank war" that erupted this summer over
several controversial privatization sales. The newspaper argued that
Kokh was accused of showing favoritism toward Oneksimbank, the
winner of the recent auctions for state-owned stakes in Svyazinvest
and in Norilsk Nickel. Russian Public Television (ORT) journalist
Sergei Dorenko had suggested on nationwide television that Kokh
was too close to Oneksimbank. New State Property Committee
Chairman Boiko will have to supervise further privatization deals
without giving the appearance of being too close to any one financial
group, "Kommersant-Daily" argued. "Nezavisimaya gazeta" wrote on
14 August that Chernomyrdin "has achieved the dismissal of
Chubais's closest ally" but did not mention that Boiko is also seen as
close to Chubais. That newspaper has slammed recent privatization
sales supervised by Kokh.

CENTRAL BANK EXAMINES SVYAZINVEST SALE. The Central Bank has
begun investigating whether Russian currency laws were broken
during the recent sale of a state-owned stake in the
telecommunications giant Svyazinvest, Interfax reported on 13
August, quoting the bank's deputy chairman, Aleksandr Khandruev.
The same day, Igor Rogal, acting head of the Federal Service for
Currency and Export Controls, again denied Russian media reports
saying his service had already concluded that laws were broken
during the Svyazinvest transactions (see "RFE/RL Newsline," 13
August 1997). Rogal acknowledged that a draft report may have
been leaked from his service, but he said conclusions reached in such
a document may be unfounded and therefore may be left out of the
final evaluation of the Svyazinvest sale. Rogal said that together with
the justice minister and the head of the State Anti-Monopoly
Committee, he will soon sign a joint official evaluation of the legality
of the Svyazinvest deal.

OFFICIAL SAYS CONTROL OVER STATE-OWNED SHARES IN ENERGY
COMPANIES TO BE TIGHTENED. During a 13 August meeting, Yeltsin
instructed Chernomyrdin to draft a presidential decree on managing
state-owned shares in enterprises in the energy sector, Interfax
reported, quoting Deputy Presidential Chief of Staff Aleksandr
Livshits. Procurator-General Yurii Skuratov recently submitted a
report to the president criticizing the Fuel and Energy Ministry and
government representatives in partly state-owned energy
companies, Livshits said. Livshits also called for revoking decisions
that allowed companies to keep dividends earned from state-owned
shares. Earlier this year, First Deputy Prime Minister Boris Nemtsov
charged that the state earns little revenue from its 40 percent stake
in Gazprom and promised to strengthen state control over the gas
monopoly (see "RFE/RL Newsline," 14 April 1997). However, Gazprom
management retained the right to manage a 35 percent stake --
nearly all of the state-owned Gazprom shares.

STROEV CALLS FOR PASSING AMENDED TAX CODE. While meeting
with Yeltsin on 13 August, Federation Council speaker Yegor Stroev
said Russia should adopt a new tax code by the end of the year,
RFE/RL's Moscow bureau reported. However, Stroev noted that the
current draft should be amended to better reflect the interests of the
regions and domestic industry. He also said regional leaders believe
the draft code would not ease the tax burden and are unhappy that
most taxes would still be collected by the federal, rather than
regional authorities. Presidential spokesman Sergei Yastrzhembskii
told journalists that Yeltsin has accepted an invitation from Stroev to
address the Federation Council on 23 September. The upper house
will discuss the tax code on that day, according to the 14 August
"Segodnya." However, the code must first be approved by the State
Duma before it is put to a vote in the Council.

UNCERTAIN PROSPECTS FOR TAX CODE PASSAGE IN DUMA. While the
Duma approved the tax code in the first reading in June, Duma
Speaker Gennadii Seleznev recently predicted that deputies will
reject the code in the second reading. Duma Budget Committee
Chairman Mikhail Zadornov of the Yabloko faction has suggested that
a new code may be passed by the end of the year. However,
Zadornov told ITAR-TASS on 13 August that his committee has
already received some 500 proposed amendments from Duma
deputies or regional authorities. In addition, Sverdlovsk and Belgorod
Oblasts have each submitted alternative tax codes for consideration
by the Duma. "Segodnya" argued that opponents of the code are
planning to "drown it in amendments" that will change its
fundamental points. Government officials have repeatedly said the
1998 budget currently being drafted can be fulfilled only if a new
tax code goes into effect on 1 January.

SERGEEV ASKS OFFICERS FOR "UNDERSTANDING." Defense Minister
Igor Sergeev on 11 August told army commanders and officers in
Khabarovsk, "I don't expect applause from you. I expect
understanding of the extreme necessity of the measures that have
been planned and approved by the government." Sergeev's
comments on the main points of military reform were quoted by the
official military newspaper "Krasnaya zvezda" on 14 August. The
previous day, Sergeev completed his visit to the Trans-Baikal
Military District in Chita and flew to Novosibirsk, ITAR-TASS
reported. The defense minister has been touring garrisons in an
attempt to win officers' support for planned reforms that involve
downsizing military personnel and merging some branches of the
armed forces (see "RFE/RL Newsline," 12 August 1997). Several
prominent politicians, including former Security Council Secretary
Aleksandr Lebed and State Duma Defense Committee Chairman Lev
Rokhlin, have sharply criticized the military reform plans.

GOVERNMENT SCIENCE POLICY CRITICIZED. Vladimir Strakhov,
director of the Institute of Earth Physics, has warned that
government policies on restructuring the scientific sector are
tantamount to the "castration of Russia's scientific potential." In an
open letter to Deputy Prime Minister Vladimir Bulgak published in
"Sovetskaya Rossiya" on 14 August, Strakhov charged that the
government, the leadership of the Academy of Sciences, and trade
unions for scientific workers have focused their efforts on preventing
a "social explosion" among scientists rather than on promoting the
"real interests and needs of science." Strakhov has staged two hunger
strikes to protest funding shortages and low salaries for Russian
scientists (see "OMRI Daily Digest," 14 October 1996 and 7 January
1997) Meanwhile, 58 hospital workers in Altai Krai, who are owed
eight months in back wages, have vowed to continue a hunger strike
that has already lasted 10 days, ITAR-TASS reported on 13 August.

DEPUTY PRIME MINISTER WARNS OF TEXTBOOK SHORTAGE. Oleg
Sysuev has warned that two weeks before the start of the academic
year, Russian schools face a drastic shortage of textbooks, ITAR-TASS
reported on 13 August. He said that only 29 million textbooks have
been printed this year, despite a demand for more than 100 million
books. Sysuev blamed regional governments, which, he said, are
responsible for supplying schools with textbooks but which have
only allocated enough funds to print 10 million books this year. He
said various federal ministries and agencies have been instructed to
take urgent steps to alleviate the textbook shortage. Sysuev also
argued that the responsibility for funding textbook production had
been transferred to regional governments too "hastily." He called for
a revision of that policy.

RUSSIA, IRAN DISCUSS PORT DEVELOPMENT. Talks began in Moscow
on 13 August between Russian Transport Ministry officials and
Iranian representatives on a proposed joint venture to construct a
major trade port in the village of Olya in Astrakhan Oblast, Interfax
reported. Olya lies in the Volga delta, 95 kilometers from Astrakhan
and 45 kilometers from the Caspian coast. On completion, the port
will handle 10 million tons of freight annually. The first new
facilities, which will be completed by 2000, will have an annual
capacity of 2 million tons. The total cost of the project, including rail
and road connections, is estimated at $360 million.

RUSSIAN FIGHTER PLANES BUZZ GROZNY? Russian fighter aircraft on
13 August simulated attacks on the central market and airport in
Grozny, according to Western agencies and an RFE/RL correspondent
in Grozny. Russian defense ministry officials denied, however, that
Russian aircraft had entered Chechen airspace. Chechen Vice
President Vakha Arsanov toid ITAR-TASS that Chechnya's air
defense troops were placed on alert and instructed to destroy any
intruding aircraft. First Deputy Prime Minister Movladi Udugov
termed the mock attack a deliberate attempt to prevent the planned
meeting between Yeltsin and Chechen President Askan Maskhadov
from taking place, but an unnamed source within the Russian
Security Council told AFP on 14 August that the meeting will be held
on 18 August. Security Council Secretary Ivan Rybkin told Interfax
on 14 August that the decision by the Chechen parliament the
previous day to designate Russian a foreign language is
"counterproductive" and does not contribute to an "atmosphere of
trust."


TRANSCAUCASUS AND CENTRAL ASIA

TAJIK PRESIDENT FIRES MUTINOUS COLONEL. Tajik President
Imomali Rakhmonov signed a decree on 13 August relieving Col.
Mahmud Khudaberdiyev of his duties as commander of the
presidential guards rapid reaction force. Khudaberdiyev has made no
official statement, but the Khatlon Defense Council, which was largely
created by the mutinous colonel, has rejected the decree. Rakhmonov
has appointed Sherali Mirzoyev as commander of the rapid reaction
force.

SITUATION CALMS IN KURGAN-TEPPE... The southern Tajik city of
Kurgan-Teppe was quiet on 14 August, according to a resident
interviewed by RFE/RL's Tajik Service. The resident said that the
previous night, gunfire could be heard from the direction of Sarband
and the Fakhrabad Pass, which contradicts government claims that
the situation was calm there. The Kurgan-Teppe resident also said
the process of disarming people had begun but was unable to say
who was carrying out that process. The same person noted that
"everybody has weapons" and that after darkness no one dares go
outside. Similar reports have been filed from the northern sections of
Dushanbe.

...WHILE VIOLENCE FLARES ELSEWHERE. Following the defeat of
armed groups loyal to Customs Committee Chairman Yakub Salimov,
order has broken down in the "liberated" areas west of Dushanbe.
RFE/RL correspondents in Tajikistan and Uzbekistan report that the
armed forces that drove Salimov and his followers into hiding are
now engaging in looting, rape, and murder. One man told RFE/RL that
his brother and sister-in-law were taken from their home in the
town of Tursunzade and shot dead outside in the street. Other
reports say that travelers on the road from Tursunzade to Dushanbe
are stopped at check points and that suspected "Uzbeks" or
"Leninabadtsy" (people from the Tajikistan's north) are beaten and
stripped of their property or are subjected to even worse treatment.
The village of Cheptura, inhabited by ethnic Uzbeks and
Leninabadtsy, is deserted after rumors of violence prompted people
to flee, many to Uzbekistan.

PRIMAKOV, ARDZINBA IN TBILISI. Abkhaz President Vladislav
Ardzinba flew unexpectedly to Tbilisi on 14 August for one-to-one
talks with his Georgian counterpart, Eduard Shevardnadze. Ardzinba
was accompanied by Russian Foreign Minister Yevgenii Primakov,
who had been scheduled to travel to Tbilisi on 14 August for talks
with Shevardnadze to prepare for a proposed meeting between
Shevardnadze, Ardzinba, and Russian President Yeltsin in Moscow.
Primakov had met separately with Ardzinba on 9 August in Sochi. In
a three-hour interview with Georgian Television on 12 August,
Ardzinba rejected Yeltsin's latest proposals for resolving the conflict
and argued that Abkhazia is not a constituent part of Georgia.
Russian presidential press spokesman Sergei Yastrzhembskii on 12
August said the Russian leadership disapproves of attempts by the
Chechen leadership to mediate a resolution of the Abkhaz conflict,
NTV reported. Yastrzhembskii argued that foreign policy issues do
not lie within the competence of federation subjects.

GEORGIAN FUGITIVES TO DEMAND FINANCIAL COMPENSATION. Boris
Kakubava, spokesman for the ethnic Georgians forced to flee their
homes in Abkhazia during the 1992-93 war, says the displaced
persons will each demand $25,000 in compensation from the
Georgian government if the demands made at their 7-9 August
conference are not met, according to an RFE/RL correspondent in
Tbilisi, citing BS-Press. Those demands include the annulment of the
treaty permitting Russia to maintain military bases in Georgia and
that Georgia quit the CIS (see "RFE/RL Newsline," 12 August 1997).

AZERBAIJAN REJECTS RUSSIA'S "LAND FOR BASING RIGHTS" OFFER.
Meeting with three U.S. senators in Baku on 12 August, Azerbaijani
President Heidar Aliev said that Moscow had repeatedly offered to
"liberate" the districts of Azerbaijan currently under control of
Karabakh Armenian forces in return for the right to station troops in
Azerbaijan, Turan reported on 13 August. Azerbaijan consistently
rejected this proposal. Aliev proposed that the U.S. assume the role of
guarantor of the independence of the former Soviet republics.

END NOTE

AZERBAIJAN, TURKMENISTAN CONTEST OWNERSHIP OF CASPIAN OIL
FIELD

by Liz Fuller

        A major diplomatic row was triggered by the 4 July signing of
an agreement between the Russian oil companies Rosneft and LUKoil
and Azerbaijani's state oil company SOCAR on jointly exploring and
developing a Caspian offshore oil field known as Kyapaz. Involved in
that row are the Russian Federation, Azerbaijan, and Turkmenistan.
Their differences spotlight the ongoing dispute over the legal status
of the Caspian Sea and the ownership rights to the millions of tons of
hydrocarbons that lie beneath it.
        The five states with a Caspian coastline (Russia, Kazakhstan,
Turkmenistan, Azerbaijan, and Iran) have been at loggerheads for
the past three years over whether that body of water should be
legally defined as a sea or a lake. The question arose in September
1994, when Azerbaijan signed a multi-billion dollar contract with a
consortium of Western oil companies plus Russia's LUKoil to exploit
the Chirag and Azeri fields and the deep-water section of the
Gyuneshli field. The Russian Foreign Ministry immediately declared
the contract invalid and called for its annulment on the grounds that
it contravened a treaty concluded between the USSR and Iran in
1940 on the joint use of the Caspian's resources.
        Russia and Iran continue to insist that the Caspian is a salt-
water lake and that therefore, under international law, its various
resources -- whether sturgeon or oil and natural gas -- may be
exploited only on the basis of an agreement concluded by all littoral
states. Kazakhstan and Azerbaijan, for their part, argue that the
Caspian is a sea and should therefore be divided into national sectors
that each country has the right to exploit as it pleases. (Such a right
is included in the 1995 Azerbaijani Constitution.)
        Turkmenistan had initially subscribed to the Kazakh-
Azerbaijani view but, as of late fall1996, espoused the Russian-
Iranian argument. In November 1996, Russia modified its position by
proposing that the Caspian be divided into zones. Each littoral state
would have the exclusive use of resources within its territorial
waters, which would be extended from 10 to 45 miles. Resources
beyond that point would be jointly used by all five countries. Iran
and Turkmenistan approved that proposal.
        Early this year, however, Turkmenistan again switched tack. In
an interview with the "Financial Times" in January, Turkmen
President Saparmurad Niyazov claimed that the Azeri and Chirag
fields lie in the Turkmen sector of the Caspian. Azerbaijan's Foreign
Minister Hasan Hasanov refuted that claim, saying that in 1970 the
USSR Foreign Ministry had divided up the Soviet sector of the
Caspian between Russia, Kazakhstan, Turkmenistan, and Azerbaijan.
He also said that maps showing the respective sectors proved that
Niyazov's claim to the Azeri and Chirag fields were unjustified.
Russian Foreign Ministry officials likewise rejected Niyazov's
argument -- but on the grounds that no claims to individual fields
could be made until an agreement had been reached on the legal
status of the Caspian.
        The Turkmen leadership immediately protested the signing of
the Russian-Azerbaijani agreement on Kyapaz. On 5 July, Turkmen
Foreign Minister Boris Shikhmuradov issued a statement contesting
Azerbaijan's ownership of the field, which is located some 180
kilometers east of Baku and only 100 kilometers from the coast of
Turkmenistan, and demanding the annulment of the agreement. Two
days later, Shikhmuradov proposed creating an Azerbaijani-Turkmen
commission to formalize the dividing line between the two countries'
respective national sectors. Russian government spokesman Igor
Shabdurasulov downplayed the dispute, arguing that the agreement
was "purely commercial" and that therefore the Russian government
was under no obligation to take any action.
        In late July, however, when Azerbaijani President Heidar Aliev
was being lionized in Washington, Russian Deputy Prime Minister
Valerii Serov met with the Turkmen leadership in Ashgabat. On his
return to Moscow, Serov informed Niyazov that the Kyapaz contract
would be annulled. The Russian Foreign Ministry issued a statement
confirming the annulment on 5 August. Two days later in the
Kremlin, Russian President Boris Yeltsin told Niyazov that the signing
of the agreement had been a "mistake" on the part of the Russian oil
companies involved. He also said that neither he nor the Russian
government had known of the planned deal beforehand. (Russian
First Deputy Prime Minister Boris Nemtsov, however, had been
present at the negotiations that preceded the signing ceremony.)
        By thwarting the proposed joint venture, Russia not only
mollified its potential ally Niyazov but also succeeded in
embarrassing Aliev, whom it suspects of conspiring with the U.S. to
undercut Russia's influence in the Caspian. Azerbaijani Prime
Minister Artur Rasi-Zade conceded in early August that his country
does not claim "exclusive" ownership of Kyapaz, given that deposit
lies on the border between the Azerbaijani and Turkmen sectors. He
also proposed that its reserves (estimated at 50 million metric tons)
be exploited by both Azerbaijan and Turkmenistan. Ashgabat has not
yet commented on that offer.

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