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RFE/RL NEWSLINE Vol 1, No. 114, Part I, 10 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 * ROKHLIN EXPELLED FROM OUR HOME IS RUSSIA FACTION * RUSSIA, CHECHNYA SIGN OIL TRANSIT AGREEMENT * GEORGIAN-ABKHAZ TALKS RESUME End Note ARMENIA'S ECONOMIC RECOVERY SLOWS DOWN xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA ROKHLIN EXPELLED FROM OUR HOME IS RUSSIA FACTION. State Duma deputies from the pro-government Our Home Is Russia voted on 9 September to expel Lev Rokhlin from their ranks. Rokhlin was one of the movement's leading members and is the chairman of the lower chamber's Defense Committee. He recently sharply criticized plans to reorganize the armed forces. Rokhlin told reporters he will leave the parliamentary faction but does not intend to give up the chairmanship of the committee. He warned that if deputies try to oust him from that post, the issue will have to go before the full house. But Prime Minister Viktor Chernomyrdin, a founding member of Our Home Is Russia, said the chairmanship has been granted to the movement, which, he said, will nominate deputy Roman Popkovich to the post, ITAR-TASS reported. RUSSIA, CHECHNYA SIGN OIL TRANSIT AGREEMENT. Russian First Deputy Prime Minister Boris Nemtsov, who is also fuel and energy minister, and President of the Chechen state oil company (YUNKO) Khozh-Akhmed Yarikhanov have signed five agreements that will enable Azerbaijan to export 200,000 metric tons of "early" Caspian oil via Chechnya beginning, as planned, in early October. Chechnya will receive $854,000 from the federal budget, and the Russian pipeline company Transneft will pay Grozny $0.43 for each metric ton of oil exported, Russian media reported on 9 September. The federal allocation comprises $1.60 per ton in transport tariffs and a lump sum toward repairs to the pipeline, which are expected to be completed within the next month. Yarikhanov told ITAR-TASS he was "satisfied" with the deal but did not exclude more negotiations to set new terms for the export of oil beginning 1 January 1998. GROZNY POSTPONES PLANNED EXECUTIONS. Chechen prosecutor- general Khavazh Serbiev announced on 10 September that the public execution of two men convicted of murdering a family has been postponed, Reuters reported. The execution was due to take place later that day. Said-Khasan Khadzhiev, the press secretary of the Supreme Religious Court, told ITAR-TASS that only the Chechen president can take a decision on the public execution of convicted criminals. Khadzhiev also denied Russian media claims that some 30 people are awaiting execution in Chechnya, saying there are only two. The televised execution on 3 September of a couple convicted of murder elicited widespread condemnation in Russia and abroad. Chechen Deputy Prosecutor-General Magomed Magomadov told ITAR-TASS that public executions are a "temporary phenomenon" and will be discontinued as soon as the crime rate is "normalized." DUMA APPROVES SHOKHIN'S REPLACEMENT. Duma deputies on 10 September approved the candidacy of Vladimir Ryzhkov as the lower chamber's first deputy speaker. Ryzhkov is a member of the Our Home Is Russia faction. He replaces Aleksandr Shokhin, who vacated the post to take over the faction's leadership from Sergei Belyaev. Belyaev recently quit the movement, saying its policies had become too closely linked with those of the government. PROCURATOR-GENERAL INVESTIGATES NEMTSOV'S CLAIM ON PHONE TAPPING. The Procurator-General's Office has launched a criminal investigation into alleged eavesdropping on First Deputy Prime Minister Boris Nemtsov's telephone conversations, Russian media reported on 9 September. Nemtsov asked the office to investigate how the newspaper "Novaya Gazeta" obtained the transcript of a telephone conversation he had with businessman Sergei Lisovskii. U.S. CARRIER FILES COMPLAINT AGAINST AEROFLOT. United Airlines has filed a formal complaint with U.S. aviation authorities against Aeroflot in a bid to have the Russian carrier banned from landing in Washington, Chicago, and San Francisco, U.S. media reported on 9 September. The U.S.-based airline said it filed the complaint after Russian officials disallowed United Airlines-Lufthansa flights to Moscow despite a 1993 agreement between Russia and the U.S. allowing such cooperative flights. United Airlines also said Russia rejected an application to use a recently established air route over Russia's Far East. Cyril Murphy, United Airlines vice president for international affairs, said Russia's actions are damaging not only to U.S. airlines but also to Russian ones. RUSSIA TO BUILD FLOATING NUCLEAR POWER PLANT. Russia plans to build a floating nuclear power station off the Chukotka peninsula to provide electricity to remote areas of northern Siberia, ITAR-TASS reported on 10 September. A decision to build the power station, which will be based on a submarine, was reached in a meeting between the Minister for Atomic Energy Viktor Mikhailov and the governor of Chukotka, Aleksandr Nazarov. The new nuclear station is intended to replace the aging coal-powered electricity plant in the remote Chukotka town of Pevek. It is expected to be operational by 1999. NEW DAILY NEWSPAPER GOES ON SALE. A new daily appeared on Moscow's newsstands on 9 September. Leonid Zlotkin, editor-in-chief of the "Russian Telegraph," told Reuters that Oneximbank, Russia's third largest commercial bank, is a major investor in the newspaper. Oneximbank has been eager to boost its involvement in the media and already has a stake in many regional and several national newspapers. Zlotkin said the daily will be a "bourgeois, conservative newspaper" that will have a strong business bias but will also provide serious coverage of politics, diplomacy, and culture. "Russian Telegraph" will soon be available in major cities across the country, according to its editors. HISTORICAL MUSEUM PARTLY REOPENED. The State Historical Museum, a landmark building flanking Moscow's Red Square, partly reopened on 9 September following renovations that have lasted for 11 years. The museum opened 13 of its more than 40 exhibition rooms in a ceremony attended by Prime Minister Chernomyrdin and representatives of the federal government, city administration, and the Russian Orthodox Church. Chernomyrdin promised that the government will come up with funds to finish restoration work in the "near future." RUSSIAN-GEORGIAN VODKA WAR INTENSIFIES. Russian government minister Yevgenii Yasin said on 9 September that Moscow will not allow the alcohol convoy currently detained at the Georgian-Russian frontier to enter the Russian Federation because the owners of the spirit do not have licenses, ITAR-TASS reported. The Russian government reportedly issued a ban on imports of alcohol from Turkey via Georgia in February 1997, but border guards began systematically implementing it only in July. Since that time, several hundred trucks have been stranded at the border. "Krasnaya zvezda" estimated on 4 September that those trucks contain enough raw alcohol to manufacture 50 million bottles of vodka. Georgian President Eduard Shevardnadze insists that documentation for the transit shipments is legally valid. He also accuses Russia of attempting to undermine international confidence in Georgia's merits as a transit corridor. Helicopters are now being hired to airlift the alcohol across the frontier. TRANSCAUCASUS AND CENTRAL ASIA GEORGIAN-ABKHAZ TALKS RESUME. Georgian, Russian, and UN representatives met in Sukhumi on 9 September for two-day talks with the Abkhaz leadership, Russian media reported. Lander Tsaava, the deputy chairman of the Abkhaz parliament in exile and a member of the Georgian delegation, told Interfax that the talks will focus on Abkhazia's future political status and conditions for the repatriation of ethnic Georgians forced to flee during the 1992-1993 war. Russian First Deputy Foreign Minister Boris Pastukhov commented that the main issue will be Abkhazia's future status. "Nezavisimaya gazeta" on 10 September, however, quoted Abkhazia's permanent representative in Moscow Igor Akhba as saying that economic and humanitarian issues will be discussed. Meanwhile in Tbilisi, Georgian Defense Minister Vardiko Nadibaidze said his army is ready to "resolve the Abkhaz problem by force" if President Eduard Shevardnadze issues the appropriate orders. AZERBAIJAN TO DELAY OPENING EMBASSY IN ISRAEL. Israfil Vekilov, Azerbaijan's ambassador to Egypt, said in Cairo on 9 September that opening an Azerbaijani embassy in Israel is contingent on a settlement in the Middle East, AFP reported. Israel has an embassy in Baku. Vekilov called on Arab countries to open diplomatic representations in Azerbaijan. He also deplored the lack of trade between his country and the Arab world. "Literaturnaya gazeta" on 3 September reported that Azerbaijani President Heidar Aliev has repeatedly postponed an official visit to Israel, originally scheduled for 1995, in order to avoid further exacerbating Baku's already strained relations with Iran. AZERBAIJANI OPPOSITION PROTESTS TRAVEL RESTRICTIONS. Deputies of the opposition Azerbaijan Popular Front on 9 September appealed to Interior Minister Ramil Usubov to protect their constitutional right to travel within the country, Turan reported. Four members of the front were detained by police at Nakhichevan airport on 6 September and ordered to return to Baku (see "RFE/RL Newsline," 8 September 1997). The Nakhichevan Interior Ministry broadcast a statement on national television claiming that local police had discovered a cache of weapons believed to belong to the front in the village of Keleki, where former President Abukfaz Elchibey has lived since fleeing Baku in June 1993. The front issued a statement on 8 September denying having stockpiled arms in Keleki. MORE EXPLOSIONS IN TAJIK CAPITAL. Four small bombs exploded in the Dushanbe area early on 10 September, RFE/RL correspondents reported. The bombs, planted in districts adjoining the main route to the airport, went off within several minutes of one another. No one is reported injured, but the explosions are expected to further delay the arrival of United Tajik Opposition leader Said Abdullo Nuri from Tehran. PLANS TO PROTEST NATO EXERCISE IN KAZAKHSTAN. The Almaty committee of the Workers Movement on 9 September announced it is organizing a demonstration in front of the U.S. embassy on 12 September to protest NATO-sponsored military exercises, according to Kazakh Commercial Television and Reuters. A statement released by the committee noted that NATO is "already on the borders of Russia, Ukraine, and Belarus." The exercise is scheduled to take place in southern Kazakhstan and northern Uzbekistan from 14-21 September under NATO's Partnership for Peace program. Troops from U.S., Turkey, Russia, Georgia, Latvia, Kazakhstan, and Uzbekistan will be taking part. IMMINENT MEAT SHORTAGE IN KYRGYZSTAN? Minister of Agriculture and Water Resources Jumakadyr Akineyev is quoted in the 5-12 September issue of "Pravda-5" as saying number of sheep in the country has decreased by more than half. Sheep are traditionally the most important, and least expensive, source of meat in Kyrgyzstan. According to Akineyev, their number has dwindled in the last few years from some 10 million to 2-3 million. The minister blamed the overuse of easily accessible grazing lands and financial constraints on most herders preventing them from reaching remote, virtually untouched pastures. The minister conceded that it currently costs some $200 to raise a sheep for two years and its sale price is only $80. He added that there may be meat shortages and accompanying higher prices later this year. ARMENIA'S ECONOMIC RECOVERY SLOWS DOWN by Gagik Bakhshian and Michael Wyzan Armenia's main economic indicators during the first half of 1997 were less favorable than in the last few years. The growth of gross domestic product slowed to 1.4 percent from 5.8 percent in 1996, and industrial production fell by 2.9 percent, after increasing by 1.2 percent in 1996. Official unemployment rose to 10.6 percent in June from 10.1 percent in December 1996. External developments were also worrisome in the period from January to June. Exports decreased by 21 percent, while imports rose by 16 percent, yielding a trade deficit (net of foreign assistance) of $326 million, compared with $571 million in 1996 as a whole. Nonetheless, the economic situation in the first half of 1997 had its positive sides, including low inflation. Consumer prices were up by only 7.2 percent compared with the same period last year. Moreover, performance may improve in the second half of 1997, as was the case last year, when GDP growth was 3.2 percent for the first five months and 5.8 percent for the year. In addition, in 1996 inflation turned out to be lower than projected during the year. Armenia enjoyed the best economic macroeconomic performance in the CIS from 1994 to 1996. GDP grew by 5.4 percent in 1994, 6.9 percent in 1995, and 5.8 percent last year. The figures for 1994 and 1995 were the highest in the CIS those years. By 1996, consumer- price inflation had fallen to 5.7 percent on a December-to-December basis, the lowest of any former Soviet republic since the break-up of the USSR. The biggest macroeconomic problems are sizable external imbalances, which result from very weak export performance, and large budget deficits. Although both types of deficit have been largely financed by international assistance, such a situation cannot persist indefinitely. >From 1991 to 1993, GDP fell by 63 percent, while four-digit annual inflation continued through 1994. That disastrous performance was caused by such factors as the 1988 earthquake, the shutting down of the Medzamor nuclear power plant in 1989 (reopened in 1995), the disruption of trade with the rest of the former Soviet Union, blockades by Turkey and Azerbaijan, and civil unrest in Georgia, which cut off Armenia's only remaining outlet to the sea. In early 1995, the economy rebounded almost immediately after IMF awarded the country its first, $23.6 million loan in December 1994. Inflation fell from almost 61 percent in that month to 3.9 percent in January, while GDP growth went from -14.8 percent in 1993 to 5.4 percent in 1994. In February 1996, the IMF granted Armenia a three-year, $148 million loan. Although the fund has generally praised Armenian economic policy, it has expressed concern this year over poor performance on tax collections and a growing debt burden. Such concern has resulted in a delay in its release of the first tranche of the loan from the first to the second quarter. There are grounds for uneasiness about the future of Armenia's economy beyond slightly worse statistics and a more standoffish IMF this year. It is unclear whether Armenia will be able to generate the sustained, rapid economic growth necessary to raise its standard of living. As in most transition countries, foreign investment--especially in new plant and equipment for production of goods for export--is vital for achieving such growth. Several factors make it difficult for Armenia to attract such investment, however. The country is landlocked, isolated from world markets, and has no direct economic contact with two neighbors, Turkey and Azerbaijan. It is also rather poor in natural resources, although they are good prospects for the exploitation of copper and molybdenum deposits (as well as gold in territory disputed with Azerbaijan). Most important, the threat of a renewed conflict over the unrecognized Nagorno-Karabakh Republic hangs over its economic prospects. It is likely that the Armenian Diaspora, by itself, could provide sufficient foreign investment to improve the country's macroeconomic performance. But so far, cumulative foreign investment is in the range of only $12-24 million. Another roadblock to growth are banks unable to mobilize domestic savings or stimulate investment. Better economic prospects might result from improved relations with Russia. The two countries signed a treaty on "friendship, cooperation, and mutual assistance" on 29 August. They also signed a second accord creating a joint venture to re-export Russian gas to Turkey. But Armenian Energy Minister Gagik Martirossian's prediction that revenues from the transit and export of gas will enable Armenia to repay its foreign debt within two years and pay off its external finance requirements is perhaps overly optimistic. Gagik Bakhshian is deputy director of the Center for Economic Policy Research and Analysis in Yerevan. Michael Wyzan is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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