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RFE/RL NEWSLINE Vol 1, No. 130, Part I, 2 October 1997
A daily report of developments in Eastern and Southeastern Europe, Russia, the Caucasus and Central Asia prepared by the staff of Radio Free Europe/Radio Liberty. This is Part I, a compilation of news concerning Russia, Transcaucasia and Central Asia. Part II covers Central, Eastern, and Southeastern Europe and is distributed simultaneously as a second document. Back issues of RFE/RL NewsLine and the OMRI Daily Digest are online at RFE/RL's Web site: http://www.rferl.org/newsline xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I * YELTSIN AMBIGUOUS ON POSSIBLE THIRD TERM * PROSECUTOR-GENERAL TO INVESTIGATE KOKH * ARMENIAN OPPOSITION LEADER PLEADS NOT GUILTY End Note : THE PARADOXES OF PRIVATIZATION xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA YELTSIN AMBIGUOUS ON POSSIBLE THIRD TERM. After stating unequivocally in September that he will not seek a third term, President Boris Yeltsin said on 2 October that aides have urged him not to comment. Asked during a visit to Nizhnii Novgorod if there is any chance he will seek a third term, Yeltsin told reporters: " My friends and colleagues have forbidden me from talking about this. Why are you pushing me so early?" Russia's constitution, adopted in 1993, limits the president to two terms in office, but some commentators have suggested the Kremlin is looking for a loophole allowing Yeltsin to run again. Speculation has centered on the fact that Yeltsin was first elected in 1991 under the Soviet-era constitution. He has therefore served only one term under the new constitution. State Duma Speaker Gennadii Seleznev said on 2 October that a third Yeltsin term is a bad idea. Interfax quoted Seleznev as saying Yeltsin's two terms "are quite enough." SELEZNEV ACCUSES YELTSIN OF PROVOKING CONFRONTATION. Seleznev told a news conference on 1 October that Yeltsin's hints that he will disband the Duma are provoking a conflict, an RFE/RL correspondent in Moscow reported. Yeltsin criticized Duma deputies on 29 September for holding up passage of the 1998 federal budget and a new tax code, rejecting the government's welfare reforms, and supporting a land code that prohibits the sale of farmland. Seleznev said Yeltsin's remarks are counterproductive and merely serve to further galvanize the Duma against Yeltsin. "The president must understand that every shout brings a reaction and that deputies will be considering the laws he proposed with bias and irritation," Seleznev told reporters. However, Seleznev indicated he was not in favor of a vote of no confidence in the cabinet, saying the feud between Yeltsin and legislators should not be brought to the "point of explosion." PROSECUTOR-GENERAL TO INVESTIGATE KOKH. The Moscow Prosecutor-General's Office on 1 October launched a criminal investigation into former privatization chief Alfred Kokh after allegations that he may have done favors for a major bank. Moscow Deputy Prosecutor-General Yurii Syomin told ITAR-TASS that the investigation will focus on abuse of power. He cited suspicions over a $100,000 advance Kokh received from the Swiss firm Servina Trading for a book yet to be published and media allegations that the firm has links to Oneksimbank, which is controlled by Kokh's close friend, Vladimir Potanin. Syomin also told Ekho Moskvy that Kokh has not been charged but there are grounds for suspicion. Kokh told "Kommersant Daily" in an interview published the same day that he sees nothing suspicious about his relationship with Potanin. He insisted his book will be published soon. CHUBAIS DEFENDS KOKH. First Deputy Prime Minister Anatolii Chubais defended Kokh, saying the probe into his long-time ally is the work of Kokh's former friends in the big banks angry about the auction of Svyazinvest, Interfax and ITAR-TASS reported. "Kokh's an honest man," Chubais said in televised remarks. "Well-paid-for lies are being reprinted...from one banker's newspaper to the other's [and broadcast] from one television channel to the other.... But they're still lies." In July, Oneksimbank led a consortium that was awarded a 25 percent stake in Svyazinvest in what was Russia's biggest-ever sale of a state asset. Chubais said the probe into Kokh is the latest move in attacks by disappointed Svyazinvest bidders, Reuters reported. SKURATOV ORDERS REVIEW OF CORRUPTION CASES. Continuing Russia's crackdown on corruption, Prosecutor- General Yurii Skuratov on 2 October issued an order re-opening corruption cases dropped in recent years, Interfax reported. Skuratov will send a team of "most experienced workers" to the regions where there are cases of corruption, his aide Aleksandr Zvyagintsev said. He said the decision came after Skuratov's recent meeting with President Yeltsin, in which the two discussed ways to prevent criminals from infiltrating the country's political structure. The latest anti-corruption drive comes after "Izvestiya" published allegations in September that the mayor of Leninsk-Kuznetsk has a criminal past. A special investigative unit from the Prosecutor-General's Office is due in Leninsk-Kuznetsk by the end of the week to probe charges against Gennadii Konyakhin, "Izvestiya" reported on 1 October. RUSSIAN DEFENSE MINISTER MEETS WITH NATO COLLEAGUES. Igor Sergeev arrived in Maastricht on 1 October to attend an informal two-day meeting of NATO defense ministers. Sergeev met with his Greek counterpart, Akis Tsohatzopoulos, to discuss Turkey's ongoing protests over the planned delivery to Greek Cyprus of Russian S-300 anti-aircraft missiles, "Nezavisimaya gazeta" reported. Sergeev told Interfax that he plans to exchange views with his NATO counterparts Russian President Boris Yeltsin's proposal that NATO gradually be transformed into a political alliance in the framework of the OSCE. Other topics of discussion were bilateral military, political, and technical issues, the situation in Bosnia and the reduction of conventional forces in Europe. Sergeev is also to meet with NATO Secretary-General Javier Solana. IS RUSSIA LOSING PATIENCE WITH GROZNY? Russian Deputy Prime Minister Ramazan Abdulatipov held talks with President Aslan Maskhadov in Grozny on 1 October. The two leaders agreed that the staff of the Russian representation in Chechnya be allowed to return to Grozny. The approximately 80 staff members were forced to leave Grozny for Mozdok in neighboring North Ossetia during the night of 30-September to 1 October on orders from Chechen Vice President Vakha Arsanov (see "RFE/RL Newsline," 1 October 1997). Speaking at a press conference in Moscow the same day, Russian Security Council Secretary Ivan Rybkin said Yeltsin's insistence that he will not sign an inter-state treaty with Chechnya has triggered "hysterics" in Grozny. He termed the expulsion of the Russian delegation "a thoughtless move" on the part of the Chechen leadership. He also implicitly criticized Maskhadov for not overruling Arsanov. CHERNOMYRDIN ANNOUNCES NEW PENSION INDEXATION PLAN. Prime Minister Viktor Chernomyrdin announced on 1 October the introduction of a new pension indexation plan that, he said, will in effect raise pensions payments, according to ITAR-TASS. Chernomyrdin said under the new plan, which will take effect on 1 February 1998, pensions will be based on "real labor contributions." Yeltsin recently signed a law raising pensions by 10 percent as of 1 October and by another 10 percent as of 1 December. NEMTSOV INDICATES GOVERNMENT FLEXIBLE ON BUDGET. First Deputy Prime Minister Boris Nemtsov said in Nizhnii Novgorod on 1 October that despite the government's ongoing battle with the State Duma over the 1998 budget, he expects a compromise to be reached by the end of the year, Interfax reported. Nemtsov said Russian legislators understand that "a bad budget is better than none at all." He added that the government is ready to work with legislators on revising the budget draft, according to Interfax. The first reading of the budget in the Duma is scheduled for 9 October. Legislators, even from the pro-government Our Home is Russia faction, have been critical of reductions in state investments and subsidies for regions. Government officials have said they are ready to negotiate on all major elements of the budget, except for the key figures for revenues and the deficit. ..SAYS CAR MANUFACTURER ON BRINK OF BANKRUPTCY. Nemtsov warned that Russia's biggest car manufacturer, AvtoVAZ, could soon face bankruptcy unless it agrees to pay its huge debt to the state, Reuters reported. Nemtsov issued an ultimatum to the car producer to either agree to a plan of payments to the treasury or face bankruptcy by mid-October. AvtoVAZ-- the producer of Russia's most popular car, the Lada-- declined comment on Nemtsov's remarks, according to Reuters. The company is among the government's major debtors. According to the State Tax Service, it owes more than 8 trillion rubles ($1.3 billion ). The company reached a preliminary agreement with the government on debt restructuring in May. Shareholders then voted in August to double charter capital through a new share issue, paving the way for a controlling stake to be transferred to the government as collateral against the firm defaulting. But AvtoVAZ deputy chief executive Konstantin Sakharov said at the end of August that negotiations are still continuing about such a transfer. NEMTSOV SLAMS MASS MEDIA. Nemtsov also said in Nizhnii Novgorod that the Russian mass media are no longer objective, an RFE/RL correspondent reported. Nemtsov singled out NTV and Russian Public Television, which, he said, "only reflect the opinion of certain people whom everyone knows." (Security Council Deputy Secretary Boris Berezovskii is considered a highly influential figure at ORT, while NTV is owned by Vladimir Gusinskii's Media-Most group.) Nemtsov also commented that most people in Nizhnii Novgorod prefer to receive their news from RFE/RL and Radio Mayak. KURIL ISLANDS ASK FOR FINANCIAL HELP FROM JAPAN. Japanese Deputy Foreign Minister Minoru Tamba has received a request from the deputy administrative head of the Southern Kuril region for loans, Russian media reported. Tamba concluded his three-day visit to the island of Kunashir on 2 October; he is the highest ranking Japanese official to visit the Kuril Islands since the end of World War II. Meanwhile in Nizhnii Novgorod, Boris Yeltsin said on 2 October that he wants to discuss a peace treaty when he meets with Japanese Prime Minister Ryutaro Hashimoto in Krasnoyarsk on 1-2 November. Tamba will also be present at those talks. Yeltsin added that "we are going to touch on all issues, including territorial questions." A dispute over ownership of the Kuril Islands is a major reason for Russia and Japan not signing a treaty ending World War II. "MIR" GETS NEW COMPUTER. A new computer has been installed on the "Mir" space station and is expected to be fully operational by 2 October, Russian media reported. The new computer was brought to the station by the U.S. shuttle "Atlantis" to replace older computers that have failed several times since the 25 June collision of a Russian cargo ship with "Mir." The "Atlantis," which is docked with the station, kept the space station's solar panels oriented toward the sun while the computer was turned off. One Russian cosmonaut and one U.S. astronaut took a five-hour space walk to bring a "cap" to the area where there is a suspected puncture caused by the collision. TRANSCAUCASUS AND CENTRAL ASIA ARMENIAN OPPOSITION LEADER PLEADS NOT GUILTY. In his final speech to the Supreme Court, Vahan Hovannisyan, one of the leaders of the banned Dashnak party (HHD), again affirmed his innocence, RFE/RL's Yerevan bureau reported on 1 October. Hovannisyan is charged with calling for the overthrow by force of the present leadership. Hovannisyan said law enforcement agencies have found no evidence of his guilt. He demanded his and other defendants' acquittal. Hovannisyan and 30 other HHD members and supporters were arrested in July 1995 on charges of plotting a coup d'etat and murdering two policemen. The state prosecutor has demanded a seven-year prison sentence for Hovannisyan. Hovannisyan described the trial, which began in March 1996 and has been condemned as politically motivated by human rights groups, as "political punishment" for his party. VETERAN ARMENIAN DISSIDENT ASSESSES POLITICAL SITUATION. Speaking at a press conference in Yerevan on 1 October, the leader of the Union for Self-Determination, Paruir Hairikyan, predicted that recent splits within both the Hanrapetutyun bloc (which has a majority within the Armenian parliament) and the opposition National Accord will result in a realignment of political forces, Armenian agencies reported. Hairikyan cited the findings of a poll conducted by the union according to which the Communist Party is the most popular political party in Armenia, followed by the opposition National Democratic Union, the Union for Self- Determination, the Dashnak Party, and the ruling Armenian Pan- National Movement. The poll further established that President Levon Ter-Petrossyan's popularity rating has fallen to 14.7 percent. In last year's presidential elections he polled 51 percent of the vote. ARMENIA SOON TO JOIN COUNCIL OF EUROPE? Hovannes Igityan, the chairman of the Armenian parliament's Committee on Foreign Affairs, predicted on 1 October that the issue of his country's full membership in the Council of Europe (will be soon resolved "positively." Igityan said that of the three Transcaucasian states, Armenia has the best chances of joining the council, according to RFE/RL's Yerevan bureau. Igityan, who headed a recent Armenian delegation to Strasbourg, said a council commission on human rights will visit Armenia on 23 October, after which the council will decide on whether to recommend Armenia to the final stage of the admission process. Igityan said he personally thinks it expedient that Armenia and Azerbaijan be admitted to the council simultaneously. In April, the council adopted a resolution making membership for the Transcaucasian states contingent on tangible progress in resolving the Abkhaz and Karabakh conflicts. AZERBAIJAN DEMANDS EXTRADITION OF RUSSIAN JOURNALIST. Anatolii Naumov, a member of the editorial staff of the St. Petersburg newspaper "Chas Pik," is being held in solitary confinement awaiting extradition to Azerbaijan on charges of extortion, according to "Segodnya" and "Izvestiya" on 1 and 2 October. A Russian citizen and graduate of Leningrad State University, Naumov had worked as deputy editor of a Russian- language newspaper in Baku. He returned to St. Petersburg in December 1996. COMPLICATIONS OVER REPATRIATION OF TAJIK REFUGEES IN AFGHANISTAN. The repatriation of some 7,000 Tajik refugees in northern Afghanistan has been complicated by fighting in that area, according to ITAR-TASS and Interfax. Refugees near the city of Mazar-i-Sharif are now caught in the fighting between the Taliban movement and the anti-Taliban coalition forces. Their proposed route of return, through the Uzbek city of Termez, is no longer open following the Taliban capture of the Afghan town of Khairaton, on the river bank opposite Termez. The border in that area has been sealed by Uzbek border guards. The refugee camp was accidentally hit during an air assault on 1 October that left one person dead and 10 wounded. A contact group for implementing the peace agreement in Tajikistan has appealed to the UN for help. It is looking for an alternative route through Turkmenistan for the refugees. KAZAKH PREMIER REASSURES INVESTORS. Amirjan Kosanov, the press secretary of Prime Minister Akezhan Kazhegeldin, has passed on a message from the premier to foreign investors telling them they "need not be worried about their investments," Reuters reported on 1 October. Kazhegeldin, currently in a hospital in Switzerland, said reforms in Kazakhstan are "irreversible." Kosanov also responded to rumors of Kazhegeldin's dismissal from office, saying "the question of [Kazhegeldin's] resignation or retirement is a question for the president." MAFIA'S GROWING INFLUENCE IN TURKMENISTAN. Mukhammed Nazarov, the chairman of the National Security Committee, said mafia organizations are exploiting the country's current problems to make a profit, Interfax reported on 30 September, quoting an interview in the daily "Neitralny Turkmenistan." So far this year, the committee has brought 138 people to trial for economic crimes. Nazarov also criticized "some structures" that are using their connections with foreign partners to smuggle "cotton fiber, car oil, gas condensate, alcohol, gold, silver, mercury, and non-ferrous materials" out of Turkmenistan. He noted that the committee's work has resulted in the confiscation of narcotics worth $5.5 billion since the beginning of 1997. END NOTE THE PARADOXES OF PRIVATIZATION by Paul Goble Transferring ownership from the state to private persons will not, in itself, guarantee the emergence of a market economy. Indeed, it may not even constitute privatization in the sense of the word typically employed in the West. That was the unsettling message of Grigorii Yavlinskii, the leader of the Yabloko faction in the Russian State Duma, during his recent visit to Washington. Speaking at the Carnegie Endowment for International Peace, Yavlinskii noted that 82 percent of all enterprises in the Russian Federation no longer belong to the state. But he suggested that at the same time, few are privately owned. In fact, their new "owners" are the old communist-era managers. And those people consider their new possessions to be more like the collective farms of the past than the private enterprises of a market economy. That is, they do not seek to maximize their profit in competition with other firms but rather to maximize their immediate personal wealth and to gain additional subsidies from the state. In order to line their own pockets, they sell off assets created by others rather than investing in their own enterprises to improve the future position of the firm. As a result, Yavlinskii said, investment in the Russian Federation is likely to decline some eight to ten percentage points this year instead of rising, as Moscow routinely claims. Such disinvestment not only pushes any turnaround in the Russian economy further into the future but also means that any future growth will start at a far lower level and with far fewer available resources than is the case in capitalist countries following a down-turn. In order to secure additional state subsidies, the new "owners" behave much as they did in the past. They form alliances with state bureaucrats who can provide them with both resources and protection from other owners as well as from other government bureaucrats who may be grouped against them and their allies in the state apparatus. According to Yavlinskii, such alliances mean that both the "owners" and the bureaucrats with whom they are allied generally oppose any real reform lest it challenge both their incomes and power. And as in communist times, those alliances entail additional costs as well. Neither the owners or the bureaucrats want to face the prospect of social upheaval that bankruptcies or massive unemployment might produce. As a result, both work to keep enterprises in operation even when the efficiencies of the market dictate that many older and inefficient firms should be allowed to fail and their resources reallocated to better use. And both work to hide unemployment. Yavlinskii argued that real unemployment in Russia is equal to the number of people not being paid--some 25 percent of the total labor force-- and not to the much lower figure put out by the Russian government. But neither the government nor the firms have the funds to compensate those laid off or the political will to deal with the massive social dislocation caused by such lay-offs. For all these reasons, Yavlinskii suggested, privatization has not been the panacea that many in both Russia and the West had expected. Instead, privatization--as carried out under Russian conditions--has often had the effect of reinforcing rather than undermining Soviet-styles of economic activity. But if privatization has not yet led to a free market and a dynamic Russian economy, Yavlinskii implied that it is a necessary, if not sufficient, measure. He also suggested that any retreat from a commitment to private ownership and a free market would be even more disastrous than the current situation. What Russia needs, Yavlinskii said, is the political will to stand up to the social pressures opposing a shift from collective-farm style ownership to genuine private property. It also requires the state institutions capable of making possible such a transformation, he added. Until Russia has both, Yavlinskii concluded, its economy and even more its political system will remain mired in their currently disastrous state. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. All rights reserved. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx SUBSCRIBING: 1) To subscribe to RFERL-L, please send a message to email@example.com 2) In the text of your message, type subscribe RFERL-L YourFirstName YourLastName UNSUBSCRIBING: 1) To un-subscribe to RFERL-L, please send a message to firstname.lastname@example.org 2) In the text of your message, type unsubscribe RFERL-L Current and Back Issues Back issues of RFE/RL Newsline and the OMRI Daily Digest are online at: http://www.rferl.org/newsline/search/ Listen to news for 13 countries RFE/RL programs for countries in the Caucasus, Central Asia, Russia and the South Slavic region are online daily at RFE/RL's 24-Hour LIVE Broadcast Studio. http://www.rferl.org/realaudio/index.html Reprint Policy To receive reprint permission, please contact Paul Goble, Publisher Email: GobleP@rferl.org Phone: 202-457-6947 Fax: 202-457-6992 Postal Address: RFE/RL, 1201 Connecticut Ave., NW Washington, DC 20036 USA RFE/RL Newsline Staff: * Paul Goble, Publisher, GobleP@rferl.org * Liz Fuller, Acting Editor (Transcaucasia) CarlsonE@rferl.org * Patrick Moore, Acting Deputy Editor (West Balkans) MooreP@rferl.org * Michael Shafir (East Balkans) ShafirM@rferl.org * Laura Belin (Russia) BelinL@rferl.org * Bruce Pannier (Central Asia) PannierB@rferl.org * Jan Cleave, CleaveJ@rferl.org * Mike Gallant, GallantM@rferl.org RFE/RL Newsline Fax: (420-2) 2112-3630
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