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RFE/RL NEWSLINE Vol 1, No. 111, Part I, 5 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 * YELTSIN SENDS AMENDED RELIGION BILL TO DUMA * MOSCOW CONDEMNS GROZNY EXECUTIONS * AZERBAIJAN CONDEMNS TURKMEN OIL TENDER End Note : MONGOLIA BEGINS TO FIND ITS WAY xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA YELTSIN SENDS AMENDED RELIGION BILL TO DUMA. President Boris Yeltsin has sent to the State Duma an amended version of the controversial law on freedom of conscience and religious organizations, ITAR-TASS reported on 4 September. Presidential spokesman Sergei Yastrzhembskii said Yeltsin has sent Duma Speaker Gennadii Seleznev a letter offering "concrete proposals on how to correct the bill's flaws." Yastrzhembskii did not give any details on the updated draft, saying only that it was "approved by representatives of different faiths and members of parliament." The original version, passed in June with overwhelming support in the Duma and from Patriarch of Moscow and All Russia Aleksii II, would have recognized only Russian Orthodoxy, Islam, Buddhism, and Judaism as "traditional" religions. The Patriarch recently expressed his support for the amended legislation, saying "it was not a compromise for us." MOSCOW CONDEMNS GROZNY EXECUTIONS. Yeltsin, Prime Minister Viktor Chernomyrdin, and Seleznev issued statements on 4 September deploring the televised public execution in Grozny the previous day of a married couple whom an Islamic court had found guilty of murder. Yeltsin said the execution was "outrageous" and a violation of Russia's laws and constitution. Chernomyrdin termed the killings "medieval" and "savage" while Seleznev said they constituted a "many-sided provocation." Chechen parliamentary spokesman Ruslan Alikhadzhiev rejected Seleznev's criticism as "illogical," according to ITAR-TASS. "Nezavisimaya gazeta" on 5 September quoted Chechen First Deputy Premier Movladi Udugov as arguing that if the couple had been sentenced and executed under Russian law, their relatives would have killed the judge and executioners in revenge. But, under the requirements of the traditional blood feud, death sentences handed down by a religious court do not call for a revenge killing, he added. CONFUSION OVER CHECHEN OIL ACCORD. Conflicting statements by Russian officials suggest that a compromise agreement on terms for the export of Azerbaijan's Caspian oil via the Baku-Grozny- Tikhoretsk pipeline (see "RFE/RL Newsline," 4 September 1997) is in jeopardy. Russian First Deputy Prime Minister Boris Nemtsov, who is also fuel and energy minister, said that Transneft should not be required to pay the difference between the $0.43 the Russian government has offered and the $2.20 the Chechens are demanding. But he denied that the position of his ministry differs from that of the Security Council. Chechen state oil company president Khozh- Akhmed Yarikhanov, however, told Interfax later on 4 September that Russian deputy presidential representative to Chechnya, Anatolii Chernyshev, had assured him that the Rybkin-mediated agreement remains in force. Yarikhanov told ITAR-TASS on 5 September that a compromise agreement may be signed in Moscow the same day but he declined to reveal its terms. EXPORT OF EARLY OIL DELAYED AGAIN. Meanwhile in Baku, Terry Adams, head of the Azerbaijan International Operating Company, said on 4 September that the first "early" oil from Azerbaijan's Chirag Caspian field will be exported on 7 November, not on 1 October, Interfax reported. The original date for the export of the first early oil was late 1996. Adams did not say whether the latest delay is the result of Russia's failure to begin repair work to the Baku-Grozny- Tikhoretsk pipeline. NORTH OSSETIAN, INGUSH PRESIDENTS SIGN RECONCILIATION ACCORD. Akhsarbek Galazov and Ruslan Aushev signed an agreement in Moscow on 4 September aimed at overcoming tensions generated by the fighting in North Ossetia's Prigorodnyi Raion in November 1992, Russian agencies reported. Chernomyrdin, who was present at the signing, said the agreement was "a historic move," but he conceded that "this was not an easy decision." Galazov similarly noted that implementation of every article of the accord will entail "much work." Chernomyrdin said that an agreement between North Ossetia, Ingushetia, and the Russian Federation is being drafted and will be signed soon. That accord will outline measures to galvanize the local economies and procedures for residents of one of the two republics wishing to transit the other, according to ITAR-TASS. YELTSIN ISSUES DECREE ON UN SANCTIONS AGAINST IRAQ. Yeltsin on 4 September issued a decree calling for strict compliance with the March 1996 UN Security Council resolution barring the export of specific goods and technologies to Iraq, Russian agencies reported. Since early August, 10 Russian oil companies have concluded agreements to purchase a total of some 34.1 million barrels of Iraqi oil under the terms of the "oil for food" accord concluded by Iraq and the UN in December 1996. MOSCOW PROTESTS TURKISH PLANS TO INSPECT SHIPS IN STRAITS. Russian Foreign Ministry spokesman Gennadii Tarasov told journalists in Moscow on 4 September that any attempt by the Turkish military to detain and search merchant vessels passing through the Turkish Straits would constitute a violation of the 1936 Treaty of Montreux, Russian agencies reported. The Turkish authorities have recently detained and searched two ships in an attempt to prevent the premature shipment by Russia to Greek Cyprus of S-300 air defense missiles. Turkish Deputy Foreign Minister Ali Tuygan will soon meet with his Russian counterpart, Viktor Posuvalyuk, to discuss the missiles question, AFP reported on 4 September. GOVERNMENT TO EXPLAIN RUBLE REDENOMINATION. Deputy Finance Minister Alexei Kudrin told journalists on 4 September that the government will draft an ordinance explaining the ruble redenomination and what effect, if any, it will have on bank deposits, Interfax-FIA reported. He added that the ordinance will be made public within a few days, and he stressed the Kremlin's position that average Russians will not lose out as a result of the currency redenomination. Yeltsin has explained his August decision to drop three zeros from ruble notes and introduce new kopeck coins as the "government's triumph over inflation." Communist Party leader Gennadii Zyuganov has called the measure, "hasty, premature, poorly thought-out, and poorly calculated." He argued there has not been a single Yeltsin reform "that has not made the people's wallets thinner." GOVERNMENT SHARPLY CRITICIZES TAX POLICE. Government leaders on 4 September admitted serious problems in fighting tax evasion but sharply criticized the Federal Service of Tax Police (FSNP) for ineffective work, failure to improve tax collection, and corruption. Interior Minister Anatolii Kulikov was among the most vocal critics, saying the FSNP should not request additional powers until it has mastered its present duties, ITAR-TASS reported. As many as 20 top officials, including 10 generals, have been dismissed recently for "personal immodesty and ties with business circles," Kulikov said. Prime Minister Chernomyrdin said tax evasion poses a serious threat to the economy. He argued that measures should be stepped up and coordinated to tackle more sophisticated forms of tax evasion. First Deputy Prime Minister and Finance Minister Anatolii Chubais said recent tax collection has not increased government revenues, forcing the Kremlin to cover expenditures "from privatization revenues and other sources." TAX POLICE CHIEF DEFENDS RECORD. At the same cabinet meeting, FSNP director Sergei Almazov admitted some shortcomings but argued that his service has limited powers and resources to deal with the mounting problem of tax evasion, ITAR-TASS reported. He said tax evasion has more than tripled in the past two years, adding that FSNP officials opened 9,624 criminal cases in 1996 that resulted in 1,625 convictions. Almazov added that FSNP efforts were hindered by an outdated tax code. He promised better results in the future. Tax police officials recently lauded the force as a key component of the government's attempted crackdown on tax cheats. DEPUTY DUMA SPEAKER RESIGNS. Aleksander Shokhin has resigned as deputy speaker of the Duma following his recent promotion to head the Our Home is Russia (NDR) faction, ITAR-TASS reported on 5 September. Shokhin said that serving as both the deputy speaker and the head of the NDR would only damages his party's interests. He said the party will nominate its candidate to fill his post on 10 September. Shokhin had said on 4 September that he was elected head of NDR to revitalize the party and improve its "image," which has suffered following the 29 August resignation of former party leader Sergei Belyaev. Belyaev had accused the fraction of "sliding toward the principles of bureaucratic, nomenklatura leadership" and moving toward the communist left. DEFENSE MINISTER IN KALININGRAD. During a visit to Kaliningrad Oblast on 4 September, Igor Sergeev said Russia must sell off its old arms even at "dumping prices" to fund extensive military reforms, Reuters reported. Sergeev said revenues from the arms sales could be spent on paying compensation to officers who will lose their jobs as part of the long-term plan to streamline the armed forces, on improving conditions for those who stay on, and on buying more modern arms. Yeltsin in July broke up the virtual monopoly on arms exports held by state firm Rosvooruzhenie in what analysts say was a bid to raise funds for reforms and increase Defense Ministry control over the business. Promexport, the two trading company that in the future will share arms trade with a reorganized Rosvooruzhenie, will oversee the sale of surplus Defense Ministry stockpiles while certain manufacturers will be able to sell their output directly. EX-KGB GENERAL DENIES SEEKING PERMANENT U.S. RESIDENCE. In an interview with an RFE/RL Washington correspondent on 4 September, former KGB Maj.-Gen. Oleg Kalugin has denied a "Washington Post" report that he is seeking permanent residence in the U.S., Kalugin has lived in the U.S. since 1995 and currently works for the Washington-based consulting firm Intercon USA. He said his employer has expressed an interest in retaining him once his work permit expires in 1998, but he stressed that no papers have been filed with the U.S. government. However, he did not rule out eventually seeking permanent U.S. residency, explaining his life could be in danger if he were to return to Russia, where he says he is vilified and branded a traitor by many former Soviet officials. Kalugin has admitted he played a role in the death of a U.S. double agent when he worked as a Soviet counter-intelligence chief. HERZOG WRAPS UP RUSSIAN VISIT WITH TRIP TO SAMARA. At the close of his five-day visit to Russia, German President Roman Herzog traveled to Samara on 4 September to visit a German economic fair, dpa and ITAR-TASS reported. "Our economic cooperation with Russia is a guarantee of stability and security," Herzog said in his opening address to the fair. Konstantin Titov, the governor of the region, said the event, which was attended by more than 70 major German companies, aimed at consolidating the area's business contacts with Germany. Only about 12,000 ethnic Germans now live in Samara, according to Interfax. Most were deported from the region to Siberia and Kazakhstan by Stalin at the outbreak of World War Two. YELTSIN CONGRATULATES MUSCOVITES ON 850TH ANNIVERSARY. President Yeltsin acknowledged the role of Moscow in the "birth of Russian democracy" in a nationwide radio address on 5 September to mark the city's 850th anniversary, ITAR-TASS reported. Festivities are scheduled to get under way with a gala concert on Red Square, starring Italian tenor Luciano Pavarotti. On 6 September, they will continue with a parade and a spectacular laser show by French pop star Jean-Michel Jarre. With meteorologists forecasting rain, Moscow Mayor Yurii Luzkhov has ordered aircraft to fly for hours seeding storm clouds, which delays the formation of rain droplets. According to AFP, the operation will cost Moscow some $500,000. TRANSCAUCASUS AND CENTRAL ASIA AZERBAIJAN CONDEMNS TURKMEN OIL TENDER. President Heidar Aliev on 4 September said the tender launched by Turkmenistan for several Caspian oil fields is "illegal", Interfax reported. The tender covers the Kyapaz field (Serdar in Turkmen), which Azerbaijan's state oil company SOCAR had intended to develop jointly with two Russian companies. Prime Minister Artur Rasi-Zade similarly termed the tender "still-born" and predicted that no "serious" Western company would bid. Foreign Minister Hasan Hasanov suggested that Turkmenistan was instigated to declare the tender either by Armenia or by some other country interested in preventing Azerbaijan, Turkmenistan, and Kazakhstan from exploiting their Caspian oil. U.S.-ARMENIAN RELATIONS "DEVELOPING RAPIDLY." Recently appointed Deputy Foreign Minister Armen Bayburtyan told journalists in Yerevan on 4 September that the U.S. has become "one of Armenia's most important partners", RFE/RL's Yerevan bureau reported. Bayburtyan cited the "unprecedented" fact that four U.S. Congressional delegations have visited Armenia in recent weeks. At the same time, he noted that the so-called Azerbaijani oil factor "affects" U.S.-Armenian bilateral ties. Bayburtyan said the World Bank's recent evaluation of Armenia as "a solvent country" is expected to stimulate U.S. investment in that country, according to Interfax. ARMENIAN ECONOMIC ADVISER ON 1997 BUDGET. Implementation of the1997 Armenian budget is "unsatisfactory," presidential economic adviser Vahan Khachatryan told the Armenpress state news agency in an interview published in the 4 September issue of "Hayastani Hanrapetutyun." Khachatryan said budget revenues are being collected only with great difficulty and that recent changes in Armenia's tax legislation have led many small and medium-sized businesses to stop their activities. "Taxes must not be collected at any cost, because in the end there will be no one to pay them. We are now very close to such a situation," Khachatryan argued. He said that "businessmen are now forced to pay in advance value-added tax for October and November." He also expressed concern that the privatization process is losing momentum. RUSSIA CRACKS DOWN ON ARMENIAN EMIGRANTS. The Russian Federal Migration Service is seeking to halt emigration from Armenia to Russia and will refuse entry to Russia to people who lack the necessary documents, "Segodnya" reported on 1 September. Estimates of the number of Armenians who in recent years have emigrated to Russia in search of employment range from 400,000 to 700,000. Armenia has a total population of 3.5 million. Noyan Tapan on 3 September quoted an Armenian Ministry of Social Welfare official as staying that national employment agencies have helped 40 Armenians find employment in Russia over the past year. He said the ministry had concluded agreements with several unspecified CIS states on unrestricted migration. TAJIK OPPOSITION FIGHTERS EN ROUTE TO DUSHANBE. The first group of fighters from the United Tajik Opposition (UTO) left central Tajikistan for the capital on 5 September, RFE/RL correspondents reported. Under the June peace agreement, the fighters are to act as bodyguards for UTO leaders who are scheduled to return to Dushanbe on 8 September to take up their duties as members of the National Reconciliation Council. Overseeing the movement of the fighters are the CIS peacekeeping force as well as representatives from the government, the UTO, and the UN observer mission to Tajikistan. Another 200 UTO fighters will arrive in Dushanbe later and will also serve as bodyguards. WILD FIRES THREATEN KAZAKH CITY. Wild fires have reached the outskirts of Karaganda, in north-central Kazakhstan, AFP reported on 5 September. The fires have already swept across more than 75,000 hectares of land, aided by high winds. At least one firefighter is reported dead in efforts to keep the fires from reaching Karaganda. A mild winter and a hot summer combined to devastate large tracts of steppe and forest in the northern regions of Kazakhstan. "NO RUSSIAN TROOPS" IN UZBEKISTAN. The Russian Foreign Ministry has issued a statement rejecting as untrue an article published in August by "Moskovskii Komsomolets" claiming that a Russian division is currently deployed in Uzbekistan, "Segodnya" reported on 4 September, citing Foreign Ministry spokesman Gennadii Tarasov. Tarasov said the article has generated embarrassment within informed circles and alarm among the uninformed. TURKMEN PRESIDENT RECUPERATES IN GERMANY. Saparmurat Niyazov will remain in a German hospital until at least mid- September to recover from his 1 September heart surgery, ITAR- TASS and Reuters reported on 4 September. Doctors say Niyazov is making progress, but they have advised him to remain in Germany for the standard two-week recovery period. END NOTE MONGOLIA BEGINS TO FIND ITS WAY by Robert Lyle Overshadowed by its two giant neighbors, Mongolia often seems forgotten by the rest of the world. While Russia and China have kept the world's attention with their different approaches to transforming from central planning to market economies, Ulaanbaatar has quietly bounced from one side to another. But in its first review of Mongolia's economy to be released publicly, the International Monetary Fund (IMF) concludes that while major weaknesses remain, Mongolian authorities are now on the right track and have been taking the tough steps necessary to put the country's economy on a path of sustained growth and development. A program of transition and reform launched in the early 1990s had been derailed by 1995. Extensive central bank credit fueled inflation and the budget deficit, and trade barriers on both exports and imports caused the Asian Development Bank and the U.S. to suspend assistance programs. But the IMF said that in the second half of 1996, Mongolian authorities began implementing a wide-ranging program of monetary, fiscal, and structural reforms designed to reduce the public sector and promote rapid development of the private sector. Most important, the fund argued, authorities launched a major bank restructuring program, which included the immediate closure of two large insolvent banks and the clearing of nonperforming loans that had been made by the banks at the government's direction. Along with a significant tightening of monetary policy by the central bank, those measures helped curtail inflation, stabilize the exchange rate, and halt the decline in bank deposits. The fund particularly praised what it called the authorities' "bold and ambitious approach to reforms." That approach included programs aimed at streamlining government operations and reducing distortions in the tax system. As a major first step in straightening out twists in the tax system, the 1997 budget eliminated virtually all import duties, "making Mongolia one of the most open trade regimes in the world." In addition, the government reduced direct taxes, extended the base of the sale taxes, and raised excise taxes on alcohol, automobiles, and petroleum. The IMF said the willingness of Mongolian leaders to take "politically difficult steps at an early stage" provided "convincing evidence of their strong commitment to the reform process." But it noted that Mongolia still has a long way to go. The country's economic situation remains difficult, and current economic policy does carry risks, particularly in getting the government's fiscal situation in order. Mongolia has a weak banking system, a distorted tax system, a large and inefficient public sector, and an inadequate legal infrastructure. The IMF urged the Mongolian government to renew its attack on inflation, push ahead on tax reforms -- including imposition of a broad-based value-added tax -- and put new emphasis on privatization. The fund said this would require "early sales of large profitable [state] enterprises and the restructuring of some loss- making enterprises." It estimated that in 1997, Mongolia will record a real growth in gross domestic product of 3 percent and annual inflation of 31 percent. With a population of fewer than 2.5 million people and a land area of more than 1.5 million square kilometers, Mongolia had a 1995 GDP of $767 million $310 per capita, according to the World Bank. Its per capita GDP was lower than any recorded by a former Soviet republic, putting Mongolia among the poorest nations of Africa and southern Asia. The author is a Washington-based correspondent for RFE/RL. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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