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RFE/RL NEWSLINE Vol 1, No. 117, Part I, 15 September1997
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 MEETS WITH TOP BANKERS * RUSSIA TO BUILD OIL PIPELINE BYPASSING CHECHNYA * ANOTHER BOMB EXPLODES IN DUSHANBE End Note : TODAY'S MOSCOW IS NOT YESTERDAY'S CHICAGO xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA YELTSIN MEETS WITH TOP BANKERS. President Boris Yeltsin met with the heads of several leading Russian banks and financial groups on 15 September, RFE/RL's Moscow bureau reported. According to ITAR-TASS, Oneksimbank's Vladimir Potanin, Media-Most's Vladimir Gusinskii, Inkombank's Vladimir Vinogradov, Alfa-Bank's Mikhail Fridman, Rosprom group's Mikhail Khodovkorskii, and SBS-Agro's Aleksandr Smolenskii attended the meeting with Yeltsin. Security Council Deputy Secretary Boris Berezovskii, considered among Russia's wealthiest and most influential businessmen, was not present. He claims not to have been directly involved in business since joining the Security Council last fall, although most Russian observers doubt that he has fully delegated his business interests. CHUBAIS'S SECURITY STEPPED UP. The security protecting First Deputy Prime Minister Anatolii Chubais has been strengthened following tips that his assassination is being plotted, Interfax reported on 14 September, citing Chubais's spokesman Andrei Trapeznikov and an anonymous source in the Federal Security Service. The source suggested that an unspecified oil company threatened by bankruptcy because of tax debts may be behind the alleged assassination plot. "NEZAVISIMAYA GAZETA" SLAMS CHUBAIS. "Nezavisimaya gazeta" on 13 September accused Chubais of "striving for complete control over Russia" and strengthening "oligarchic, not democratic" trends in Russian society. The newspaper charged that Chubais and Oneksimbank head Potanin have close ties and seek to use a "Trojan horse" candidate to win the presidential election in 2000. It also claimed Chubais "entirely controls" Russian Television, the country's Channel 2 network, and that he is seeking to remove Security Council Deputy Secretary Boris Berezovskii and reduce his influence over the Channel 1 broadcaster, Russian Public Television. In addition, the newspaper charged that Chubais seeks to limit the influence of the private network NTV, owned by Vladimir Gusinskii's Media-Most group. "Nezavisimaya gazeta," which is partly financed by Berezovskii's LogoVAZ group, has repeatedly criticized Chubais and First Deputy Prime Minister Boris Nemtsov during the past two months, as have outlets owned by Media-Most. YELTSIN APPROVES FOURTH-QUARTER PRIVATIZATION LIST. Yeltsin on 12 September approved the list of enterprises scheduled for privatization during the fourth quarter of 1997, Russian news agencies reported. The list includes the Eastern Oil Company and the Tyumen Oil Company. Yeltsin told State Property Committee Chairman Maksim Boiko that although privatization is an important source of revenue, Russia "should not hurry too much" with the sales, ITAR-TASS reported. In particular, the president said Russia must not "repeat scandals" such as the July sale of a 25 percent plus one share in the telecommunications giant Svyazinvest. A Cyprus-based consortium involving Oneksimbank won the Svyazinvest auction, which touched off a fierce battle among major banking and financial groups. Meanwhile, in an interview with the weekly newspaper "Interfax-Aif," State Duma Privatization Committee Chairman Pavel Bunich of the Our Home Is Russia faction predicted that more major privatization scandals will occur in 1998, Interfax reported on 14 September. DUMA COMMISSION TO INVESTIGATE CONTROVERSIAL PRIVATIZATION SALES. The State Duma on 12 September created its own commission to investigate four major privatization sales, ITAR- TASS reported. The Duma commission will investigate the May auction of a stake in the oil company Sibneft, the July sales of stakes in the Tyumen Oil Company and the telecommunications giant Svyazinvest, and the August auction of shares in Norilsk Nickel. The Duma had previously requested that the Audit Chamber investigate those four auctions (see "RFE/RL Newsline," 8 September 1997). Meanwhile, State Anti-Monopoly Committee head Natalya Fonareva announced on 12 September that neither her committee nor the Federal Service for Currency and Export Controls has found any legal violations in the conduct of the Svyazinvest sale. Prime Minister Viktor Chernomyrdin had ordered those investigations into the Svyazinvest auction (see "RFE/RL Newsline," 13-14 August 1997). CHERNOMYRDIN REJECTS ISRAELI ACCUSATIONS. Prime Minister Chernomyrdin on 12 September said that repeated Israeli claims that Russia is supplying Iran with technology for building long-range ballistic missiles are "stupid" and "unworthy of comment." The same day, Eitan Ben-Tsur, the director-general of the Israeli foreign ministry met with Russian ambassador to Israel Mikhail Bogdanov and demanded that Moscow halt "further transfers" of nuclear technology to Iran, according to AFP. Also on 12 September, the "Washington Times" reported that U.S. President Bill Clinton had sent a special representative to Moscow to discuss the alleged nuclear technology transfer with the Russian leadership. Meanwhile, Israeli National Infrastructure Minister Ariel Sharon on 15 September denied media reports that Israeli Prime Minister Benjamin Netanyahu has ordered the suspension of bilateral economic agreements and talks with Moscow on buying Russian natural gas to protest alleged Russian-Iranian nuclear cooperation, ITAR-TASS reported. RUSSIA TO BUILD OIL PIPELINE BYPASSING CHECHNYA. First Deputy Premier Nemtsov, who is also fuel and energy minister, told journalists in Moscow on 15 September that the decision has been made to construct a 283 kilometer oil pipeline bypassing Chechnya to export Azerbaijan's Caspian oil, ITAR-TASS reported. The pipeline will run from Khasavyurt, in Dagestan, to Terskaya, in North Ossetia. Nemtsov had said on 13 September that the pipeline could be built within one year and will cost $220 million. Its throughput capacity will be adequate to transport not only "early" Azerbaijani oil but also much larger quantities of mainstream oil. Discussions on financing the project are to begin shortly, according to Nemtsov. Speaking in Grozny on 14 September, Chechen President Aslan Maskhadov said that the export of oil via the existing Baku-Grozny-Tikhoretsk pipeline is of greater political than economic interest to Chechnya. NEW ROUND OF RUSSIAN-CHECHEN TALKS. Meeting in Dagomys on 13-14 September, senior Russian and Chechen delegations agreed to create three working groups to draft the proposed treaty between Russian and Chechen state agencies, Russian media reported. The working groups will also draw up two agreements on forming common defense and economic policies. Russian Security Council Secretary Ivan Rybkin told the meeting that acrimonious exchanges between Russian and Chechen leading officials following the recent public executions in Grozny are "detrimental to the ongoing peace talks." Chechen First Deputy Prime Minister Movladi Udugov on 12 September had stressed Grozny's intention to abide by earlier peace agreements. Meanwhile, Chechen President Aslan Maskhadov on 14 September said that both he and Yeltsin are "almost ready" to sign a treaty on establishing full diplomatic relations. CHECHEN PRESIDENT HONORS BUDENNOVSK VETERANS. Maskhadov on 13 September presented awards to 115 Chechen fighters who participated in the June 1995 hostage-taking in Budennovsk, Stavropol Krai, under field commander Shamil Basaev. Some 130 civilians and 36 police and army personnel were killed in the raid. According to Basaev, who attended the ceremony, that raid was perpetrated with the prior approval of Chechen President Dzhokhar Dudaev and Maskhadov, at the time chief of staff. Budennovsk residents have denounced the award ceremony, Interfax reported on 14 September. RUSSIA'S "FRANK SINATRA" ELECTED TO DUMA. Popular singer and businessman Iosif Kobzon, who is frequently described as Russia's Frank Sinatra, won a landslide victory in a 14 September by-election for a State Duma seat in Agin-Buryat Autonomous Okrug, RFE/RL's Moscow bureau reported on 15 September. According to preliminary returns, Kobzon gained some 86 percent of the vote, far outstripping his five rivals. He replaces Bair Zhamsuev, who was elected governor of the okrug in February. Kobzon has been accused of having mafia ties and was denied an entry visa to the U.S. in 1995. But the following year, he won a libel lawsuit against the newspaper "Sovetskaya Rossiya," which had alleged that Kobzon had personal ties to organized criminals (see "OMRI Daily Digest," 6 March 1996). Kobzon unsuccessfully contested the December 1995 Duma election as the number three candidate for Boris Gromov's bloc My Fatherland. COMMUNIST WINS DUMA SEAT IN STAVROPOL. Preliminary results show that Communist Party candidate Ivan Meshcherin easily won a 14 September by-election for a State Duma seat in Stavropol Krai, RFE/RL's Moscow bureau reported on 15 September. In a field of 16 candidates, Meshcherin gained some 43 percent of the vote, according to ITAR-TASS. He replaces Nikolai Manzhosov, who died in the spring. Manzhosov won the seat in the December 1995 Duma election as a Communist Party candidate. The Stavropol race had attracted media attention because of high-profile extreme nationalist candidates, including author Eduard Limonov and a candidate representing Aleksandr Barkashov's national-socialist party Russian National Unity (RNE). Limonov and RNE candidate Mikhail Burlakov received just 2.5 and 3.5 percent of the vote, respectively. Candidates supported by the Congress of Russian Communities and Vladimir Zhirinovsky's Liberal Democratic Party of Russian gained 14 and 6 percent. KREMLIN SAYS LUKASHENKA PROMISED TO FREE ORT JOURNALIST. The Russian presidential press service on 13 September said that during his recent meeting with Russian President Yeltsin, Belarusian President Alyaksandr Lukashenka promised to free Russian Public Television (ORT) journalist Pavel Sheremet, ITAR-TASS reported. The press service also said the Kremlin will consider the problem regarding ORT journalists in Belarus resolved only when Sheremet has been released. Sheremet has been imprisoned since mid-July for allegedly crossing the Belarusian-Lithuanian border illegally. Other ORT journalists arrested on similar charges have been released, but ORT's accreditation to work in Belarus has been revoked. On 12 September, Interfax quoted Lukashenka as saying that during their 6 September meeting, Yeltsin had agreed that the case against Sheremet was justified. Lukashenka previously said the case against Sheremet, a Belarusian citizen, will be settled under Belarusian law (see "RFE/RL Newsline," 8 September 1997). ONEKSIMBANK EXPANDS ACTIVITIES IN BELARUS. Oneksimbank head Vladimir Potanin expressed optimism regarding his bank's long-term participation in the Belarusian banking system, Russian news agencies reported on 12-13 September. Potanin discussed a proposed Belarusian Eurobond issue and other topics during 12 September meetings with Lukashenka, Belarusian Prime Minister Sergei Ling, and Belarusian National Bank Chairman Gennadii Aleinikov. Oneksimbank and its affiliates recently purchased 49 percent of the shares in Minskkompleksbank, which was reorganized in July (see "RFE/RL Newsline," 15 August 1997). Potanin suggested that Minskkompleksbank will help alleviate the non-payments problem in Belarus and will attract more Russian and other international investment in the Belarusian economy. Potanin participated in a 13 September seminar on Oneksimbank's activities in Belarus, which was attended by bankers and factory directors as well as some Belarusian government officials. GAZPROM HEAD TO RETAIN CONTROL OVER MOST STATE-OWNED SHARES. A new trust agreement to be signed between the government and the gas monopoly Gazprom will allow Gazprom head Rem Vyakhirev to continue to manage a 35 percent state-owned stake in the company, First Deputy Premier Nemtsov told Interfax and ITAR-TASS on 14 September. The state owns 40 percent of Gazprom shares, and Vyakhirev has managed most of those shares under a 1994 trust agreement. In the spring, Nemtsov sharply criticized that agreement and vowed that the government will take a stronger role in managing state-owned shares in the monopoly (see "RFE/RL Newsline," 14, 16, and 29 April 1997). In June, Gazprom finished paying an estimated $2.5 billion in debts to the federal budget. It is seen as closely allied with Prime Minister Chernomyrdin, who headed the gas monopoly from 1989 to 1992. DUMA APPROVES PROPOSAL TO FOUND OWN MAGAZINE. The Duma on 12 September passed a resolution approving a Federation Council proposal that the parliament found a magazine called "Rossiiskaya Federatsiya," ITAR-TASS reported. Representatives of both houses of the parliament will help with the registration of the new publication. The government announced in June that it would cease publication of a small-circulation monthly magazine called "Rossiiskaya Federatsiya," whose editor was criticized by First Deputy Prime Minister Chubais (see "RFE/RL Newsline," 12 and 17 June 1997). Opposition Duma deputies have repeatedly called for creating media to be run by the parliament, claiming that most Russian media outlets offer biased coverage of the legislature's activities. RUSSIAN-GEORGIAN ALCOHOL WAR CONTINUES. Senior Russian and Georgian military and Foreign Ministry officials met on 12 September to discuss restrictions on the transit of alcohol through Georgia to Russia, ITAR-TASS reported. Colonel-General Vladimir Ruzlyaev, the commander of the Caucasus special border district, told journalists later that trucks transporting alcohol may enter Russia only if their drivers possess a license from the Russian Ministry for Foreign Economic Relations, can prove that customs duties have been paid, and have written permission from the Russian State Customs Committee. The next day, Georgian President Eduard Shevardnadze chaired a session of the national Security Council to discuss the situation on the frontier, where several hundred truckloads of alcohol are stranded. Shevardnadze's press spokesman accused Russia of violating intra-CIS transit agreements by imposing the new restrictions. On 11 September, Georgian frontier guards began preventing their Russian counterparts and Russian military vehicles from entering Georgian territory. RUSSIA, TURKEY DISCUSS S-300 MISSILES. Turkish Foreign Ministry official Ali Tuygan has told Russian First Deputy Foreign Minister Boris Pastukhov and Deputy Foreign Minister Viktor Posuvalyuk that Ankara will exercise its right to take the necessary measures to prevent the "premature" transfer by Russia to Greek Cyprus of S-300 missiles, the "Turkish Daily News" reported on 13 September. FORMER ROSVOORUZHENIE BOSS APPOINTED DEPUTY MINISTER. General Aleksandr Kotelkin, who resigned under pressure as head of the arms export company Rosvooruzhenie in late August, was appointed deputy minister for foreign economic relations on 10 September, Russian media reported. Kotelkin had worked in the ministry's department for military-technical cooperation from 1992- 1994, when he was named head of Rosvooruzhenie. In his new post, Kotelkin will continue to coordinate Russian arms exports, according to "Kommersant-Daily" on 11 September and "Izvestiya" on 13 September. Under Kotelkin's leadership at Rosvooruzhenie, Russia became the world's number two arms exporter in 1996. TATARSTAN TO OPEN REPRESENTATION IN KAZAKHSTAN. Tatar President Mintimer Shaimiev has issued a decree on opening a plenipotentiary representation in Kazakhstan, RFE/RL's Kazan bureau reported on 15 September. The office will seek to increase bilateral trade and expand economic, scientific, cultural, and humanitarian relations. MORE COMPUTER PROBLEMS ABOARD "MIR." The main computer system aboard the space station "Mir" malfunctioned again on 14 September, Russian media reported. Russian officials downplayed this latest problem, saying it will soon be fixed. Built in 1989, the computer was used aboard the analog "Mir" station on Earth and was "urgently" sent to the space station in 1995, when there were computer problems. It had also malfunctioned on 8 September. A computer that failed earlier this year was finally shut down in mid- August, following maintenance using parts from two other "faulty computers." TRANSCAUCASUS AND CENTRAL ASIA ANOTHER BOMB EXPLODES IN DUSHANBE. Just hours after President Imomali Rakhmonov and United Tajik Opposition (UTO) leader Said Abdullo Nuri spoke of "unity" and "peace" at a joint press conference, a bomb went off in a Dushanbe bazaar, RFE/RL correspondents reported on 12 September. The explosion, which left 16 people injured, was the third such incident in the Tajik capital in eight days. In other news, the UN Security Council voted the same day to extend the mandate of the UN observer mission to Tajikistan until 15 November. UN Secretary-General Kofi Annan said in a letter to the council that the mission should provide assistance in integrating the armed forces of the government and the UTO and help in the work of the National Reconciliation Commission. That body is scheduled to hold its first session in Dushanbe on 15 September. CENTRAZBAT KICKS OFF IN KAZAKHSTAN. The Centrazbat military exercises began in southern Kazakhstan on 15 September, RFE/RL correspondents reported. Some 40 soldiers from Kazakhstan, Kyrgyzstan, and Uzbekistan and 500 troops from the U.S. 82nd Airborne Division, led by Marine Corps General John Sheehan, parachuted into the area from U.S. airplanes to meet up with other Central Asian troops. Paratroopers from Russia and Turkey are to join them for the first stage of the exercises, which end on 17 September. U.S. troops are not taking part in the second stage, which will be held in Uzbekistan; but the Central Asian troops will be joined by soldiers from Georgia and Latvia for that part of the exercise. Sheehan said the message the US wants to send is "that the Central Asian republics live in stability." VETERAN ARMENIAN DISSIDENT SLAMS AUTHORITIES. Paruir Hairikyan, head of the Union for Self-Determination and a Soviet-era dissident, has said his party's efforts to cooperate with the authorities to "establish democracy" have failed, RFE/RL's Yerevan bureau reported on 12 September. Hairikyan said the government did not want free and fair elections, and he claimed that Levon Ter- Petrossyan owed his reelection as president last year to hard-line politicians such as Defense Minister Vazgen Sarkisyan and Yerevan Mayor Vano Siradeghyan. Hairikyan said deputy parliamentary speaker Ara Sahakyan's draft election law does not provide equal conditions for all parties. But he predicted that the united Armenian opposition could nonetheless defeat the ruling Republic bloc in future elections. Hairikyan was harshly criticized by other opposition parties for engaging in a dialogue with the Armenian leadership earlier this year. ARMENIA, AZERBAIJAN ANTI-CRIME COOPERATION. Officials from the Armenian and Azerbaijani Interior Ministries have discussed joint efforts to combat crime in the regions adjoining their common border, Armenian and Azerbaijani news agencies reported. The discussion took place during the 11-12 September meeting of CIS interior ministers in Baku. Armenian Deputy Interior Minister Haik Harutyunyan told journalists in Yerevan on 12 September that there have been "isolated attempts" to use Armenia as a transit country for drugs. But he noted that those attempts do not yet pose a serious threat. END NOTE TODAY'S MOSCOW IS NOT YESTERDAY'S CHICAGO by Paul Goble A recent World Bank report demolishes one of the most widely-held views about the nature of the Russian economy and the reforms taking place in that county. That view holds that Russia is now passing through the "robber baron" stage of capitalism, much as the U.S. economy did one century ago. And it implies that the Russian economy will just as inevitably graduate to mature capitalism. In its 20th annual world development report, which was released in late June and is entitled "The State in a Changing World," World Bank experts make three key arguments. They point out that the Russian economy is fundamentally different from the "robber baron" capitalism of the U.S. past. They suggest that there is nothing inevitable about a "robber baron" stage of economic development. And they also argue that a quick and easy escape from what many call the "robber baron" stage of economic development is not inevitable. The report makes a distinction between "robber baron" capitalism in the U.S. and what it calls "robber capitalism" in Russia. In the U.S. case, entrepreneurs during the latter part of the 19th century built enormous industrial enterprises, often flaunting the law in the process but creating something of real value for society. In the Russian case, various former Communist Party officials and economic managers have privatized the Soviet economy into their own hands, selling off assets rather than building up new ones and exporting capital instead of creating it. The report also notes that many of the more than 60 countries surveyed have developed free market economies without passing through a "robber baron" stage at all. In some of those countries, a strong legal system kept entrepreneurs from gaining control of the political system. In others, the legal system grew apace with the economic one, preventing outrages of either the U.S. or the Russian kind. Finally, the report makes it very clear that Russian "robber capitalism" today, just like U.S. "robber baron" capitalism of a century ago, does not necessarily contain within itself a cure for its excesses. Rather those excesses must be addressed by the political system and in a comprehensive way over time. That is what happened in the U.S. Popular revulsion at the behavior of the robber barons helped to power a political movement that imposed a variety of constraints on their behavior and thus allowed the U.S. economic system to mature. In Russia, on the other hand, that process has not yet really begun. Some Moscow officials are now trying to cope with some excesses of "robber capitalism" and are even having some success. But no mass political movement has emerged to push the process further. As a result, virtually all efforts to reform the Russian economy after privatization have been incomplete or have had consequences directly opposite to those the reformers have sought. Indeed, the World Bank report concludes that the successes to which Russian reformers point are almost always matched--or exceeded--by negative developments that the political leaders in Moscow have been unwilling or unable to address. But if the bank's conclusions about the current situation in Russia are largely negative, its findings do provide some guidance both for that country and for others who hope to see the Russian economy develop. The message is a simple one: Russia cannot overcome its own "robber capitalism" stage by economics alone. Instead, it must create a state that enjoys sufficient authority to erect the boundaries within which economic development can occur. If Russia achieves that political goal, it will have greater economic success. If it does not, the World Bank report suggests, Russia faces a bleak future economically as well as politically. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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