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RFE/RL NEWSLINE Vol 1, No. 99, Part I, 20 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 *BEREZOVSKII, MALASHENKO ON RUSSIAN JOURNALISTS' RELEASE *RUSSIAN FINANCE MINISTRY TRANSFERS FUNDS FOR MILITARY WAGE ARREARS *REBEL TAJIK FORCES SURRENDER End Note YELTSIN PLEDGES FAIR PRIVATIZATION xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA BEREZOVSKII, MALASHENKO ON RUSSIAN JOURNALISTS' RELEASE. Security Council Deputy Secretary Boris Berezovskii said in Moscow on 19 August that a ransom was paid for the two journalists from the television production company VID and the three from NTV released in Chechnya on 17 and 18 August. Chechen security official Magomed Magomadov had told journalists on 17 August that the two VID employees were freed by a special brigade under his command. NTV president Igor Malashenko similarly charged on 19 August that "a seven-figure dollar sum" was paid to secure the release of the three NTV journalists, Russian media reported. Malashenko accused Chechen Vice President Vakha Arsanov of being "the primary organizer" of a "highly developed kidnapping machine." He also suggested that President Aslan Maskhadov was aware of that connection but powerless to stop it. Malashenko said that Chechen First Deputy Prime Minister Movladi Udugov "provides propaganda cover-up" for the kidnappers, according to NTV. YELTSIN DEFENDS CHECHENS. Speaking at the opening of a session of the Security Council on 20 August, President Boris Yeltsin was sharply critical of Malashenko's accusations that the Chechen leadership is involved in hostage-taking, Interfax reported. Yeltsin said that "the Caucasus is a complex region" and that "we cannot allow figures like Malashenko to begin press conferences by insulting the Chechen leadership." Yeltsin criticized Berezovskii for encouraging the media in their negative coverage of events in Chechnya. Berezovskii wields considerable influence at Russian Public Television, and companies linked to Berezovskii own stakes in "Nezavisimaya gazeta," the weekly "Ogonek," and the TV-6 network. Assessing the situation in the North Caucasus, Yeltsin said it is improving "extremely slowly" and that every power agency, including government ones, should take extra measures to stabilize it, according to ITAR-TASS. YELTSIN SUBMITS DRAFT LAW ON STATE OF EMERGENCY. Yeltsin has submitted to the State Duma a draft law on a state of emergency. In an explanatory note, Yeltsin pointed out that the RSFSR law that remains in force is obsolete and in many respects contradicts the Russian Constitution, according to "Krasnaya zvezda" on 19 August. Yeltsin also noted that attempts to apply the existing law in North Ossetia's disputed Prigorodnyi Raion over the past two years have demonstrated the legislation's shortcomings. Over the past two month, Ingush President Ruslan Aushev has repeatedly called for the imposition of a state of emergency to stabilize the situation in Prigorodnyi Raion, but Yeltsin and North Ossetian President Akhsarbek Galazov have both rejected his proposal as unconstitutional. FINANCE MINISTRY TRANSFERS FUNDS FOR MILITARY WAGE ARREARS. First Deputy Prime Minister and Finance Minister Anatolii Chubais says the Finance Ministry has transferred 5.9 trillion rubles ($1 billion) to the Defense Ministry, ITAR-TASS reported on 20 August. He said that sum is enough to pay off all wage debts to military personnel. (A July presidential decree ordered the government to pay all debts to soldiers within two months.) Some other benefits owed to soldiers will be paid in September, Chubais added. Various government officials have said recent large privatization auctions helped provide the funds for the government to settle wage debts to the armed forces as well as to state employees such as doctors and teachers, which are to be paid by 1 January. SPECULATION ON MOTIVE FOR ASSASSINATION IN ST. PETERSBURG. Anatolii Ponidelko, head of the Interior Ministry's branch in St. Petersburg and Leningrad Oblast, has said that the so-called Tambov criminal group may have been behind the 18 August assassination of St. Petersburg Deputy Governor Mikhail Manevich, who had headed the city's Property Committee, RFE/RL's correspondent in St. Petersburg reported on 20 August. Ponidelko said he has already sent the Procurator-General's Office a list of city officials believed to have ties to the Tambov group. He indicated that at least four people are believed to have been involved in the murder. Officials have already released a description of the suspected killer based on eyewitness accounts. Meanwhile, the St. Petersburg daily "Smena" on 20 August quoted former Mayor Anatolii Sobchak as saying Manevich's assassination may have been linked to the upcoming privatization of a city-owned stake in the St. Petersburg port. REACTION TO CHINESE DAM TENDER. The Russian consortium composed of Energomashexport, Leningrad Metals Plant, and Elektrosila, failed to win the tender to provide generators and turbines for China's Three Gorges Dam. Leonid Matveev, the director of Gidroenergo, part of Energomashexport, was quoted by Interfax on 19 August as saying the decision is not "a tragedy for Russia," but he added that had the Russian consortium been chosen, Russia would have been able to "advance its power industry in terms of quality." But "Nezavisimaya gazeta" on 20 August said the Chinese decision, which was leaked to the international media, could be a "time bomb" for Russian-Chinese relations. The dam, which needs 14 foreign- made generators and turbines, will be the largest in the world. NEMTSOV TO HEAD COUNCIL ON SOCIAL, ECONOMIC REFORM. First Deputy Prime Minister Boris Nemtsov has been appointed chairman of a new government council on social and economic reforms, which will consist of cabinet ministers and heads of several local governments, ITAR-TASS reported on 20 August. Deputy Prime Ministers Valerii Serov and Oleg Sysuev will also be on the new council, which will submit policy recommendations to the government, taking local concerns into account. In recent months, the government and presidential administration have been courting mayors of large cities and other local leaders. Some observers have speculated that Moscow is backing top local officials as a potential counterweight to regional governors, who are less susceptible to pressure from the Kremlin after winning gubernatorial elections. CENTRAL BANK PLANNING PUBLIC RELATIONS CAMPAIGN. Central Bank First Deputy Chairman Sergei Aleksashenko has said the bank will spend 60-70 billion rubles ($10-12 million) by the end of the year to educate the public about the planned redenomination of the ruble, Russian news agencies reported on 19 August. As of 1 January 1998, the ruble will lose three zeroes. New coins and bank notes will be issued, although old bank notes will be valid through 1998 and may be exchanged in banks until the end of 2002. Yeltsin and various government officials have promised that the redenomination will not hurt the public or cause a sharp rise in inflation (see "RFE/RL Newsline," 8 and 11 August 1997). To convey that message and to explain how the reform will be implemented, the Central Bank is preparing brochures, posters, and television commercials. NEW "IZVESTIYA" TO APPEAR IN NOVEMBER. Former "Izvestiya" editor Igor Golembiovskii's new daily "Novye Izvestiya" will soon receive its first credit of 20 billion rubles ($3.4 million) and will begin publication in November, Golembiovskii told the latest edition of "Moskovskie novosti." The new paper will employ 32 former "Izvestiya" journalists, including Otto Latsis, Sergei Agafonov, Sergei Dardykin, and Valerii Yakov. Golembiovskii said that Media-Most head Vladimir Gusinskii is not involved but that it is "possible" that Security Council Deputy Secretary Berezovskii is among the financial backers of "Novye Izvestiya." "Kommersant-Daily" reported on 20 August that companies controlled by Berezovskii will be among those expected to provide $40 million in financing for "Novye Izvestiya" over the next two years. Berezovskii, however, says he is not involved in the project. The paper plans to open five bureaus in Western Europe, Japan, and the U.S., which very few Russian media outlets can afford. NEW HEADS OF GOVERNMENT, LEGISLATURE CHOSEN IN ALTAI REPUBLIC. The legislature of the Altai Republic on 19 August elected Vladilen Volkov as head of the government, the highest executive post in the republic, ITAR-TASS reported. Volkov was previously chairman of Altai's legislature. His predecessor as head of the government, Valerii Chaptynov, died of a heart attack on 10 August. Daniil Tabaev, up to now deputy chairman of the Altai legislature, was elected to replace Volkov as chairman of that body. Volkov and Tabaev will both also be members of the Federation Council (upper house of the parliament), which is made up of top executive and legislative officials from the Russian regions. PROCURACY DECLARES SCHOOL SURVEY ON SEX ILLEGAL. The Procurator-General's Office has announced that a survey on sexual experience, carried out in connection with a sex education program of the Ministry of Education, is illegal, ITAR-TASS reported on 19 August. The survey, entitled "What do you know about sex?", was carried out among a number of 12-year-old students in eight Russian regions. It included questions such as, "Is it possible for a girl to become pregnant before she begins menstruating?" and "What does a normal man's sperm consist of?" Experts from the procuracy concluded that the questions were "vulgar and immoral" and risked "tactlessly arousing the sexual instinct of those surveyed." In seven Russian regions, children filled out the forms without their parents' consent. The procuracy also said the Ministry of Education had entrusted "dubious" sociological research organizations with conducting the survey. RUSSIAN-LANGUAGE FOOD LABELS DELAYED AGAIN. A government directive requiring Russian-language labels on all imported food will not go into effect until 1 July 1998, ITAR-TASS reported on 20 August, citing a resolution recently approved by the government. The directive, issued in December 1996, requires imported food to carry Russian labels listing the country of origin and the ingredients, as well as information about calories, vitamin content, shelf-life, and correct storage. The new rules were to have gone into effect in May, but Foreign Trade Ministry officials said the previous month that food importers had asked the government to delay introducing the regulations until January 1998. The importers say they need more time to adapt to the new rules. More than half of all food consumed in Russia is imported, according to ITAR-TASS on 1 May. TRANSCAUCASUS AND CENTRAL ASIA REBEL TAJIK FORCES SURRENDER. The fighting between followers of Col. Mahmud Khudaberdiyev and forces loyal to the Tajik government is over. Prosecutor-General Salomiddin Sharipov said on national television on 19 August that "Khudaberdiyev's rebellious brigade failed in their attempt at a military coup." More than 50 of Khudaberdiyev's 1,500 troops were killed in the fighting; and an estimated 700 have since surrendered. Khudaberdiyev and some 40- 70 of his followers are reported to have taken refuge in the mountains near the Uzbek border, while others have gone into hiding into southwestern Tajikistan. The Tajik government has launched a helicopter and airplane search for them. The Uzbek government repeated its promise to hand over any of Khudaberdiyev's followers who try to cross into Uzbekistan. Meanwhile, Tashkent denied reports that Khudaberdiyev was already in Uzbekistan. KYRGYZ PROSECUTOR-GENERAL INVESTIGATES NEWSPAPERS. The Prosecutor-General's Office has launched an investigation into "Asaba," "Nasha Gazeta," and "Vecherny Bishkek," according to RFE/RL correspondents in Bishkek. All three newspapers have printed articles on corruption among parliamentary deputies. Deputy Dosbol Nur Uluu said comments in "Nasha Gazeta" that all chairmen of parliamentary committees were from Kyrgyzstan's southern regions were disinformation. The Prosecutor-General's Office in July requested permission from the parliament to initiate lawsuits against seven deputies, but the parliament denied the request and formed its own investigative committee. KAZAKH GOVERNMENT IN NEW CAPITAL BY MID-OCTOBER? President Nursultan Nazarbayev told the government on 19 August that the administration will move from Almaty to the new capital, Akmola, by 10 October, Interfax reported on 19 August. Nazarbayev had said earlier that he would be in the new capital to greet the New Year, but there is speculation that the reluctance of most ministries to move to Akmola has prompted Nazarbayev to bring forward the relocation schedule. Of the 28 ministries, only two have moved so far, together with the National Agency for Press and Mass Media. Moreover, of the 45 embassies accredited in Kazakhstan, only nine have bought plots of land in Akmola for their new buildings. RUSSIAN PEACEKEEPERS ABDUCTED IN WESTERN GEORGIA. Three Russians serving with the CIS peacekeeping force deployed along the border between Abkhazia and the rest of Georgia were abducted by armed Georgians on 16 August, Russian media reported three days later. ITAR-TASS quoted Tamaz Nadareishvili, the chairman of the Abkhaz parliament in exile in Tbilisi, as saying the kidnappers will release their hostages in return for the bodies of two Georgians killed by Abkhaz militants in Abkhazia's Gali Raion one week earlier. The Russian Embassy in Tbilisi has expressed concern at the incident. Georgian First Deputy Minister of National Security Avtandil Ioseliani has requested Abkhaz President Vladislav Ardzinba's assistance in securing the peacekeepers' release. Forty-two peacekeepers have been killed since the force was sent to Georgia in July 1994. CONTINUED PROTEST AGAINST SHEVARDNADZE-ARDZINBA DECLARATION. Nadareishvili announced on 19 August that he is resigning as chairman of the Abkhaz parliament in exile to protest the Georgian authorities policy toward Abkhazia, according to RFE/RL's Tbilisi bureau. He again argued that the use of military force is the only way to resolve the conflict. "Nezavisimaya gazeta" on 19 August quoted Georgian parliamentary deputy speaker Germane Patsatsia, who heads the Apkhazeti faction in the legislature, as saying that the faction's 12 members will resign their mandates to protest the agreement signed by Georgian President Eduard Shevardnadze and his Abkhaz counterpart, Vladislav Ardzinba, on 15 August. Patsatsia said the agreement is tantamount to Georgian recognition of Abkhaz independence. SHEVARDNADZE-MASKHADOV MEETING POSTPONED INDEFINITELY. A meeting between the Georgian and Chechen presidents scheduled to take place in Tbilisi before 20 August has been postponed indefinitely, ITAR-TASS reported on 19 August, quoting a Chechen representative in the Georgian capital. Arrangements for the meeting were discussed during three visits to Tbilisi in late July and early August by Chechen Deputy Prime Minister Akhmed Zakaev. SOUTH OSSETIA REIMPOSES CURFEW. President Lyudwig Chibirov issued a decree on 16 August reimposing a night-time curfew in the would-be secessionist north Georgian region. Reuters on19 August quoted a local official in the capital, Tskhinvali, as saying the decision was prompted by an upsurge in "acts of banditry", but Interfax and "Nezavisimaya gazeta" on 20 August quoted a South Ossetian government spokesman as saying that the crime figures have remained stable for the past several months. "Nezavisimaya gazeta" suggests that the curfew is intended to counter the traffic in illegal alcohol from Georgia to the Russian Federation. END NOTE YELTSIN PLEDGES FAIR PRIVATIZATION by Floriana Fossato, Stephanie Baker, and Laura Belin President Boris Yeltsin on 15 August commented directly for the first time on the continuing scandal over Russian privatization policy. The president insisted that his government will not favor any bank and will limit the influence of financial groups on privatization auctions. Future privatization deals should be "fair, based on strict legislative rules, and allowing no [procedural] deviations," he said. Yeltsin also indicated that the recent departure of Alfred Kokh as deputy prime minister and State Property Committee head was linked to controversial sales of state property. Kokh, who had overseen privatization deals since September 1996, officially resigned last week, but many Russian commentators believe he was forced out. Although an earlier statement issued by Yeltsin's office had expressed satisfaction with Kokh's work, Yeltsin noted that "some banks are apparently closer [than others] to the heart of Alfred Kokh, and this is not proper." Yeltsin added that economist Maksim Boiko was appointed to replace Kokh largely in the expectation that Boiko will be even-handed toward all banks. The sale of substantial shares in the telecommunications monopoly Svyazinvest set off a financial and media war in late July, dividing Russia's previously allied financial elite. The scandal intensified following the 5 August sale of a government stake in the metals giant Norilsk Nickel. Prime Minister Viktor Chernomyrdin had called for the Norilsk auction to be postponed on 4 August. But the next day, following meetings with Oneksimbank President Vladimir Potanin (who was a first deputy prime minister from August 1996 until March 1997) and several government officials, the prime minister agreed that the sale should take place on schedule. Influential news media charged that the auctions had been unfair. Kokh and other government officials were accused of having close ties to Oneksimbank, which led the consortium that won the Svyazinvest auction and is affiliated with the company that acquired Norilsk Nickel. Financial analysts, for their part, sharply criticized the sale of the 38 percent stake in Norilsk Nickel as an "insider deal" rigged in favor of Oneksimbank. They noted that the outcome was the logical conclusion of the loans-for-shares privatization scheme drawn up in 1995. Potanin is believed to have been one of the main architects of that scheme, which was implemented by both Kokh and Chubais. Critics of the loans-for-shares deals say the government allowed favored banks to acquire management rights over major state-owned stakes in Russia's biggest oil and industrial companies. In return, the banks extended loans to the government, but those loans were far below the market value of the shares. In addition, banks that participated in the loans-for-shares scheme were authorized to organize future auctions of the shares, giving them an important advantage over potential competitors in those auctions. The scheme effectively allowed banks to turn management control of state-owned shares into ownership. (A new privatization law that went into effect on 2 August prohibited loans-for-shares deals.) In the case of the 25 percent stake in Svyazinvest, Western financial analysts said the government, which organized the tender, may have appeared to favor Oneksimbank. But they pointed out that the auction was conducted more fairly than were previous deals. Russian government officials have said all future auctions will be modeled on the Svyazinvest tender: state property will be sold to the highest bidder. The Oneksimbank-led consortium -- which also involved Deutsche Bank's Deutsche Morgan Grenfell, Morgan Stanley Asset Management, and U.S. financier George Soros's Quantum Fund -- bid $1.875 billion. The government plans to use its share of that sum to help pay its huge debt to the army and the state sector. Igor Lipkin, chairman of the Russian Federal Property Fund, on 14 August said the Svyazinvest deal has already brought nearly $700 million to federal coffers. While Chernomyrdin ordered an investigation into the legality of the Svyazinvest sale, he has warned against "jumping to conclusions or making hasty allegations" about privatization auctions. First Deputy Prime Minister Boris Nemtsov has acknowledged that the Norilsk Nickel sale was controversial. But in an interview with RFE/RL in Sochi, where he has been vacationing, he noted that such scandals were inevitable, given the regulations governing loans- for-shares deals. In addition, Nemtsov turned the tables on the man believed to be behind much of the recent criticism of the privatization deals: business magnate and Security Council Deputy Secretary Boris Berezovskii. Nemtsov told RFE/RL that whatever its flaws, the Norilsk auction was conducted "more democratically and openly" than the May sale of a stake in the Sibneft oil company. (Financial structures linked to Berezovskii won the Sibneft tender.) In addition, Nemtsov said the state should establish control over both the finances and the "ideological foundations" of Russian Public Television (ORT). Berezovskii wields considerable influence at ORT, which sharply criticized the Svyazinvest sale. He is also believed to have participated in the losing consortium in that auction, although he denies any involvement in the bidding. Floriana Fossato is an RFE/RL correspondent in Moscow, and Stephanie Baker is a freelance writer in the Russian capital. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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