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RFE/RL NEWSLINE Vol 1, No. 110, Part I, 4 September 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 * DUMA TO PROBE PRIVATIZATION DEALS * RUSSIA, CHECHNYA REACH COMPROMISE ON OIL TRANSPORT TARIFFS * AZERBAIJAN SEEKS TO INTENSIFY COOPERATION WITH U.S End Note EU RETHINKS ITS FUNDING TO EAST xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA DUMA TO PROBE PRIVATIZATION DEALS. At the opening of its fall session on 3 September, the State Duma established a commission to probe the Svyazinvest and Norilsk Nickel privatization deals, Interfax reported. The commission will check whether the auctions were conducted in accordance with the law and investigate the role of government officials in the two deals. According to Interfax, the Duma said the commission was established following the public outcry over the controversial deals. Alfred Kokh resigned as deputy prime minister and head of the State Property Committee after he was accused of being linked with Oneksimbank, the winner of both sales of stakes in Svyazinvest and Norilsk Nickel. SELEZNEV CALLS FOR CONSTRUCTIVE COOPERATION. Duma Speaker Gennadii Seleznev on 3 September called for constructive cooperation between the parliament and the government. He said legislators will consider some 400 bills during the fall session. The debate on the 1998 budget is one of the most important issues "on which the prospects of the Russian economy [and] the nearest future of education, science, culture and other subsidized spheres and progress of army reform depend," Interfax quoted him as saying. However, Seleznev criticized the 1998 government draft budget as continuing the "same destructive policy by the government.... It is not a policy; it is an offense to reason." The Communists and other parties in the Duma issued a joint statement on 1 September criticizing the draft budget. They said it fails to guarantee the rights of workers, rejects state regulation of vital branches of the economy, and promotes both the destruction of natural monopolies and the sale of state property. YAVLINSKII SAYS TAX CODE MOST VITAL ITEM ON DUMA AGENDA. Also on 3 September, Yabloko leader Grigorii Yavlinskii told Duma deputies that adoption of a new tax code will be the most pressing issue for legislators in the fall session, Interfax reported. Yavlinskii said adoption or rejection of the code will have far-reaching consequences for the economy and the budget. He added that the next most important issue for the Duma was debate on the budget and described the government's 1998 budget draft as realistic. (The previous day, Yavlinskii had told an RFE/RL correspondent that it was a "budget of stagnation.") Yavlinskii said Yabloko will continue what he called "its course of democratic opposition to those in power." RUSSIA, CHECHNYA REACH COMPROMISE ON OIL TRANSPORT TARIFFS. Russian and Chechen representatives have finally agreed on tariffs for the export of Azerbaijan's Caspian oil via Chechnya, Russian agencies reported on 3 September. Under the compromise agreement, proposed by Russian Security Council Secretary Ivan Rybkin, Chechnya will be paid the standard Russian rate of $0.43 per metric ton of oil transported. The Russian pipeline company Transneft will make up the difference between that amount and the $2.2 that the Chechens had demanded. Chechnya had rejected Rybkin's earlier suggestion that Chechnya receive a fixed sum in aid from the federal budget in lieu of the higher tariff. Khozh-Akhmed Yarikhanov, chairman of the Chechen state oil company, told Interfax that Chechen President Aslan Maskhadov initially rejected the compromise proposal but then reluctantly accepted. Speaking in Moscow on 3 September, Prime Minister Viktor Chernomyrdin argued that any concession by Russia on tariffs would be "misplaced." GOVERNMENT SETS ENERGY LIMITS FOR STATE ENTERPRISES. First Deputy Prime Minister Boris Nemtsov has said that beginning 1 October, state-run enterprises will be restricted in their fuel and electricity use, RFE/RL's Moscow bureau reported on 3 September. Nemtsov, who is also fuel and energy minister, told journalists that Gazprom and United Energy Systems will cut off all energy supplies of those government-financed enterprises exceeding the new energy usage limits. Nemtsov also announced the government will issue bonds worth 3 trillion rubles ($517.2 million) to cover part of the energy sector's debt to the federal budget, according to ITAR-TASS. The energy sector is heavily indebted to the federal government, mostly because of the inability of Russian enterprises and other consumers to pay for fuel and electricity. COMMUNISTS APPEAL TO HERZOG TO HELP KRENZ. Communist Duma deputies appealed to visiting German President Roman Herzog on 3 September to intervene in granting clemency to jailed former East German leader Egon Krenz, Interfax and Reuters reported. In a statement, the Communists condemned the imprisonment of Krenz, calling it the "continuing persecution of former leaders of [East Germany,] a country that was a full member of the United Nations and different organizations and with which a majority of states had diplomatic relations." In July, a Berlin court found Krenz guilty on four counts of manslaughter for his role in the deaths of people trying to flee over the Berlin Wall. Krenz, who was East German leader for six weeks in late 1989, was sentenced to six-and-a-half years in prison. NORTH CAUCASUS REPUBLICS FAIL TO ADOPT ANTI-CRIME MEASURES. Representatives of the North Caucasus republics ended a two-day meeting in Pyatigorsk on 3 September without signing any of the four proposed documents on coordinating measures to combat crime, "Izvestiya" reported on 4 September. A North Ossetian official told the newspaper that the draft documents, which had been drawn up in Moscow, were "too far removed from reality" and that participants had suggested more than 120 amendments. Interior Minister Anatolii Kulikov on 2 September told the conference that crime and terrorism in the region constitute a direct threat to Russian security Deputy Prime Minister Ramazan Abdulatipov expressed concern at frequent alliances between criminal elements and local leaders. CHERNOMYRDIN MEETS WITH JORDANIAN CROWN PRINCE... During a meeting with Prince Hassan in Moscow on 3 September, Prime Minister Viktor Chernomyrdin said bilateral relations with Jordan are a top priority Interfax and ITAR-TASS reported. Chernomyrdin said Moscow intends to pursue closer trade, economic, and political ties with Jordan. In an earlier meeting with Foreign Minister Yevgenii Primakov, Hassan urged Russia not to limit its involvement in the Mideast peace process to Arab countries. He appealed to Russia to try to exert influence on Israel as well. Primakov said the views of Russia and Jordan on the Mideast settlement are close or coincide in many respects, according to Interfax. ...REPEATS OPPOSITION TO BALTICS JOINING NATO. Also on 3 September, Chernomyrdin stressed again Moscow's opposition to NATO membership for the three Baltic States, saying it would inevitably lead to "new sources of mistrust and suspicion" in their relations with Russia. Chernomyrdin said no one had been able to explain why Latvia, Lithuania, and Estonia should join NATO. He said that Kaliningrad, seized by Soviet troops from Germany at the end of World War Two, will always remain part of Russia. Chernomyrdin is due to arrive in Vilnius on 5 September for a 12-nation summit, where he will meet with Baltic and other East European leaders. JUSTICE MINISTER ON DEATH PENALTY. After meeting with President Boris Yeltsin on 3 September, Sergei Stepashin said Russia is still debating whether to abolish the death penalty. Moscow promised to ban capital punishment in January 1996 when it joined the Council of Europe. But Yeltsin's attempts to outlaw executions have been blocked by hard-liners in the parliament, who warn that crime in the country will only worsen if capital punishment is banned. Human rights activists say Russia executed 62 prisoners after joining the council, but Russian officials say there have been no executions since 1996. In July, Yeltsin sent a new bill to the parliament that would permit capital punishment only after approval by the chairman of Russia's Supreme Court, procurator-general, and the presidential Commission for Pardons. IMF APPROVES LOAN TRANCHE. The IMF board of directors on 3 September approved a $700 million tranche of its three-year loan to Russia, Reuters reported. The fund noted economic developments in Russia in the first six months of 1997 have been encouraging, adding that monetary policy is on track to keep inflation down and the ruble stable. However, Moscow needs to do more to settle its problem of budgetary arrears, according to the fund. Wage, pension, and tax arrears are one of Russia's most pressing social and economic problems. The IMF has delayed several disbursements of the three- year, $10 billion loan to Russia because of low tax revenues, a leading cause of the arrears problem. NEW JOB FOR FORMER STATE PROPERTY COMMITTEE CHAIRMAN. Alfred Kokh has been elected chairman of the board of the Montes Auri investment firm, Interfax and "Kommersant-Daily" reported on 3 September. Board member Arkadii Yevstafev said that beginning this fall, Montes Auri will bid in auctions for shares in major enterprises, and Kokh will supervise the firm's largest investment projects. As a member of the State Property Committee for several years and its chairman from September 1996 to August 1997, Kokh was closely involved in preparing the government's privatization program. First Deputy Prime Minister Anatolii Chubais earned some 1.25 billion rubles ($250,000) from investments with Montes Auri between January and July 1996, when he held no official post. Yevstafev also heads the Fund for the Protection of Private Property, founded by Chubais. He gained fame in June 1996 as one of two men detained outside government headquarters carrying more than $500,000 in cash. DIFFERING VIEWS ON NEW VERSION OF RELIGION LAW. Yeltsin's Political Consultative Council has approved amendments to the controversial law on freedom of conscience and religious organizations, Interfax reported on 2 September. The new version is to be submitted to the Duma soon, although some Duma deputies advocate overriding Yeltsin's July veto of the original religion law. The amended law would expand the list of "traditional" Russian faiths. The original version recognized only Russian Orthodoxy, Islam, Buddhism, and Judaism as "traditional." Duma deputy Galina Starovoitova charged on 28 August that the new version retains major flaws and would still violate the constitutional guarantee that all religious groups are equal under the law, ITAR-TASS reported. Patriarch of Moscow and All Russia Aleksii II, a strong supporter of the law, announced on 2 September that the Russian Orthodox Church is satisfied with the amendments, which "have not changed [the law's] concept and essence." CHRIST THE SAVIOR CATHEDRAL OPENED TO PUBLIC. Yeltsin and Patriarch Aleksii II attended the opening on 3 September of the rebuilt Christ the Savior Cathedral. "From now on this path [leading to the cathedral] will welcome hundreds and thousands of pilgrims coming here, as in earlier times to worship the Lord," the Patriarch said. The original cathedral was intended to commemorate the defeat of Napoleon's army in 1812 but was not completed until 1883. It was blown up on Stalin's orders in 1931, and the site was later turned into an enormous public swimming pool. The opening coincided with the 850th anniversary of Moscow's founding. TRANSCAUCASUS AND CENTRAL ASIA AZERBAIJAN SEEKS TO INTENSIFY COOPERATION WITH U.S. President Heidar Aliev on 3 September issued a decree instructing cabinet ministers, the Foreign Ministry, and the National Bank to intensify dialogue and cooperation with their U.S. counterparts, Turan and Interfax reported. The Foreign Ministry was also ordered to maintain closer contacts with France and Russia. Those two countries and the US are the co-chairs of the Organization for Security and Cooperation in Europe's Minsk Group, which is mediating a settlement of the Karabakh conflict. Aliev also charged the Foreign and Defense Ministries to expand military cooperation with the U.S. under the aegis of NATO's Partnership for Peace program and the North Atlantic Cooperation Council and to work more closely in the fields of security and arms control. The "Turkish Daily News" on 4 September reported that Azerbaijan, the U.S., and Israel are supplying intelligence data to Turkey on the planned transfer of Russian S-300 missiles to Greek Cyprus. AZERBAIJAN CONCERNED ABOUT RUSSIAN-ARMENIAN TREATY. Speaking at a press conference in Moscow on 2 September, Russian Foreign Ministry spokesman Valerii Nesterushkin denied that the 29 August Russian-Armenian Treaty on Friendship, Cooperation, and Mutual Assistance is "aimed at a third party, notably Azerbaijan," Interfax reported. On 1 September, Azerbaijani Foreign Minister Hasan Hasanov had told Moscow's ambassador to Baku that he was "concerned" and "bewildered" at the treaty. Hasanov also responded to Armenian President Levon Ter-Petrossyan's statement that the treaty provides for military assistance if one of the signatory states is attacked. Hasanov said the statement is an "open challenge to Azerbaijan, which is itself the victim of aggression by Armenia," according to "Nezavisimaya gazeta" on 4 September. Azerbaijani state foreign policy adviser Vafa Gulu-Zade told the newspaper that if Azerbaijan tries to reconquer territories currently occupied by Armenian forces, it will be drawn into a war with Russia. OSCE UPBEAT ON ABKHAZIA. Niels Helveg Petersen, the Danish foreign minister who is also OSCE chairman-in-office, has said the prospects for resolving the Abkhaz conflict are "encouraging," ITAR- TASS reported on 3 September. Petersen was in Tbilisi in late August for talks with the Georgian leadership on both Abkhazia and South Ossetia. On 2 September, the first day of the fall session of the Georgian parliament, speaker Zurab Zhvania said the attitude of the Russian leadership toward resolving the Abkhaz conflict has improved, according to Interfax. Parliamentary deputies from several factions, however, consider the Georgian government's Abkhaz policy has resulted in "deadlock." They intend to create a coalition to restore Georgian hegemony over the region, the Caucasian Institute for Peace, Democracy and Development reported on 3 September, citing "Rezonansi". GEORGIAN PRESIDENT CANCELS PLANNED MOSCOW VISIT. Presidential press secretary Vakhtang Abashidze said on 4 September that Eduard Shevardnadze has canceled his planned visit to Moscow to take part in the city's 850th anniversary celebrations, Interfax reported. Shevardnadze's decision was taken in response to a statement on 1 September by Col.-Gen. Andrei Nikolaev, the Russian Federal Border Service director. Nikolaev said that his men will use "all available means" to prevent some 300 trucks carrying alcohol from entering the Russian Federation. The convoy has been halted for several weeks at the Georgian-Russian frontier. Gen. Valerii Chkheidze, Nikolaev's Georgian counterpart, said on Georgian Radio on 3 September that Russian prohibition is an "attempt to discredit Georgia." PROBLEMS ON TAJIK-AFGHAN BORDER. Russian border guards on 3 September stopped eight men from crossing into Tajikistan from Afghanistan, killing five of the intruders, ITAR-TASS and Reuters reported. One border guard was wounded during the brief exchange of fire. The three men who survived fled back to Afghanistan. The incident comes one day after an ethnic Tajik serving in a Russian border guard unit near the Pyanj border crossing was killed. Authorities said that the 2 September attack was a "terrorist action." The amount of drugs confiscated in Central Asia has increased recently, likely because of the advent of winter and the accompanying snowfalls that will block the major routes from Afghanistan to its northern neighbors. KAZAKH PRESIDENT WRAPS UP VISIT TO ARAB STATES. Nursultan Nazarbayev on 3 September ended his tour of several Arab states in the Persian Gulf area, TAR-TASS and Interfax reported. Nazarbayev left Oman, his last stop, having signed agreements on cooperation between the two countries' Foreign Ministries. He also discussed with Omani officials how to bring Kazakh oil to the Persian Gulf. Oman has invested in Kazakhstan's Tengiz oil field. Previously, Nazarbayev was in Bahrain, where he signed agreements on avoiding double taxation and on investments. Bahrain also raised the possibility of opening an embassy in Kazakhstan soon. The main goal of Nazarbayev's tour, which started in Kuwait, was to encourage the Gulf states to invest in Kazakhstan. UZBEKISTAN OPENS EMBASSY IN ISRAEL. Uzbekistan on 3 September opened an embassy in Israel, ITAR-TASS reported. From 1992, Uzbekistan had a consulate in Tel-Aviv. Acting Uzbek ambassador to Israel is Rustam Isayev, who was the former consul. At the opening ceremony, Isayev said the friendship between Israel and Uzbekistan is much older than five years. He recalled that Jews have been living in Uzbekistan for centuries and that many found refuge in Uzbekistan during World War Two. END NOTE EU RETHINKS ITS FUNDING TO EAST by William Echikson The European Union set up its TACIS and PHARE programs five years ago to aid the countries of Central and Eastern Europe and the former Soviet Union. When the two programs were launched, they focused on providing emergency food and transport aid. Since then, they have expanded and evolved to embrace hundreds of separate projects in 25 countries. Recent reports, however, criticize their effectiveness. Under a mandate from the European Parliament, independent consultants prepared so-called interim evaluations in August. At the same time, the EU's Luxembourg-based Court of Auditors carried out audits of the two programs. Significant overlap was uncovered in the two aid programs. In theory, PHARE helps Central and Eastern Europe, while TACIS is designed for the former Soviet Union, except for the Baltics. But in practice, the two often duplicate each other. Worse, almost two-thirds of the aid money goes to highly paid Western consultants, including wealthy multi-national consulting and accounting groups. Those expensive consultants do not even record their working hours, the Court of Auditors complained. In particular, consultants working in Ukraine did not bother "to warn their superiors of the alarming situation in the nuclear-power stations." The auditors found that, because of the heavy use of consultants, the aid money produced few concrete, lasting results. "About 80 percent of PHARE projects managed on a decentralized basis are spent on contracts for services, supplies, or work," the report concluded. Also, EU officials prefer to stay in comfortable Brussels rather than resettle in the countries receiving the aid. The supposed benefactors of the EU's are furious. One Russian member of parliament told EU investigators. "TACIS programs are supervised now by foreign specialists whose work is paid at the expense of funds allocated for our country.... In fact, TACIS [is helping solve] the problem of unemployment in the EU." Bureaucratic bumbling means that much money approved by the EU's political leaders is never spent. PHARE still has not managed to disburse $2.2 billion. Nonetheless, PHARE's budget is scheduled to rise from $1.4 billion in 1997 to $1.76 billion in 1999. TACIS's budget is about half that amount, even though the countries in TACIS are more backward than their neighbors in PHARE. But the EU Court of Auditors noted in its report that only a third of the $180 million allocated to improve Ukrainian nuclear safety has been disbursed. Months are needed to get EU programs up and running, but many of the countries receiving the aid are moving fast toward market economies. The EU's TACIS Interim Evaluation report acknowledged that "most projects are outdated even before the tenders make their bids and strategy proposals." At the same time, it notes that "poor projects are rarely terminated." Only 10 TACIS projects were canceled owing to poor performance. But 80 programs were able to run their full course, despite signs they had failed to reach their interim objectives. The two programs are funding too many separate projects, the report concluded. PHARE and TACIS official are pledging to change their ways in response to such criticism. "This is a wake-up call," an unnamed PHARE official admitted. "We realize that our program has to be revised." PHARE officials say that in the future only projects costing more than $2.2 million will be approved in the hope that fewer larger projects will be easier to control than numerous smaller ones. Instead of continuing to divide funds into 13 areas, PHARE will focus on funding infrastructures. For example, the main Berlin to Warsaw highway will be improved. Up to 70 percent of the overall program will be spent on such projects. A second priority will be preparing Central and Eastern European recipients to join the EU. Money will go toward computerizing customs facilities and upgrading other public institutions to meet EU standards. The poor -- or even nonexistent -- image of the two programs has also been sharply criticized. Some PHARE and TACIS officials would like to change the programs' names to something more recognizable, such as "Europa." When the Rowland Company's contract to promote the two programs ran out this summer, a new public relations firm was hired for the job. The author runs the Brussels-based East-West news agency. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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