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RFE/RL NEWSLINE Vol 1, No. 156, Part I, 10 November 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 News from the Armenian Service's Yerevan bureau is posted to RFE/RL's Armenia Report each weekday. RFE/RL ARMENIA REPORT http://www.rferl.org/bd/ar/index.html xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I * YELTSIN IN CHINA * MOSCOW ANNOUNCES NEW EXCHANGE RATE POLICY * AZERBAIJAN'S EARLY OIL FINALLY BEGINS TO FLOW End Note CHANGES AT RUSSIA'S TV NETWORKS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA YELTSIN IN CHINA. President Boris Yeltsin, who is in Beijing for his fifth summit with the Chinese leadership, met with his Chinese counterpart, Jiang Zemin, on 10 November. They later released a joint statement noting improving ties between the two countries and respect for each other's independence and internal policy decisions, ITAR-TASS reported. The statement confirmed regular meetings will be held between government officials, including foreign ministers. It also called for improving economic ties and noted that military- technical cooperation between the two countries should not be seen as a threat to any third party. The two leaders promised the "responsible development" of resources along the border area so as not to cause environmental damage in the neighboring country. BP RUSSIA, CHINA SIGN BORDER AGREEMENT... Also on 10 November, Yeltsin and Jiang signed a much-publicized border demarcation agreement. Both sides expressed satisfaction at concluding an accord that has complicated Russian-Chinese relations for more than 300 years. Clarification is still needed in some areas of the Amur, Argun, and Ussuri Rivers. Yeltsin hailed the agreement as possibly setting an example for other countries but quickly added that his remark did not refer to the dispute with Japan over the southern Kuril Islands. Jiang also accepted an invitation from Yeltsin to hold an informal "meeting without coats." In early November, Yeltsin held informal talks with Japanese Prime Minister Ryutaro Hashimoto in Krasnoyarsk, Russia, in what was billed as a "meeting without neckties." BP ...AND MEMORANDA. Russian First Deputy Prime Minister Boris Nemtsov and Chinese Deputy Prime Minister Li Lanqing have signed memoranda of understanding on cooperation between the Russian government's regional administrations and the Chinese local governments as well as on economic, scientific, and technical cooperation. One memorandum deals with development of Russia's Kovykta gas field and the construction of a pipeline planned to carry gas to China, South Korea, and Japan. The Kovykta project will take 30 years to complete and cost about $12 billion. BP MOSCOW ANNOUNCES NEW EXCHANGE RATE POLICY. In a joint statement released on 10 November, the government and Central Bank said they will support an average exchange rate of 6.1 rubles to $1 during 1998 and an average rate of 6.2 rubles to the dollar from 1998-2000, Reuters and ITAR-TASS reported. Since mid-1995, the exchange rate of the ruble to the dollar has floated within a "corridor" that has periodically been revised to allow the gradual depreciation of the ruble. From 1998-2000, the exchange rate will be allowed to fluctuate no more than 15 percent in either direction of the average rate, from 5.25-7.15 rubles to the dollar. According to the current official exchange rate, $1 is worth 5,898 rubles. Three zeroes will be removed from the ruble when the currency is redenominated on 1 January. LB CENTRAL BANK RAISES REFINANCING RATE. Also on 10 November, the Central Bank raised the annual refinancing rate from 21 percent to 28 percent, effective 11 November, ITAR-TASS reported. No explanation for the move was given. The Central Bank has lowered the refinancing rate four times this year, most recently on 6 October. Officials have previously said that stable low inflation made the interest rate reductions possible. The refinancing rate is the one at which the Central Bank lends to commercial banks. Current government projections call for an annual inflation rate of 12 percent this year and 5.7 percent in 1998. LB DECREE BANS TAX PAYMENTS THROUGH OFFSETS. Yeltsin on 8 November decreed that, as of 1 January 1998, the government is prohibited from canceling debts to enterprises against tax arrears, ITAR-TASS reported. The government will also be prohibited from canceling debts to budget-funded organizations against payments owed for goods or services provided by the government. Russian officials have repeatedly promised to end the widespread practice whereby tax arrears are canceled against government debts to enterprises. In the past, such offsets have often been recorded as taxes collected. Russia needs to improve tax collection in order to secure the release of a $700 loan issue from the IMF (see "RFE/RL Newsline," 3 November 1997). LB MORE SHOOTING ON DAGESTANI-CHECHEN BORDER. A Dagestani police official was shot dead on 9 November in Khasavyurt, close to Dagestan's border with Chechnya, Russian agencies reported. A series of killings and kidnappings have recently exacerbated Dagestani- Chechen tensions. Chechen First Deputy Prime Minister Movladi Udugov told Interfax the same day that he welcomes the Dagestani authorities' decision to create armed militias to patrol the border region. He also said Chechnya may introduce similar security measures. Visiting the border region on 10 November, Dagestani Security Council Secretary Magomed Tolboev said 5,000 Dagestanis have already volunteered to serve in the local militias, RFE/RL's North Caucasus correspondent reported. Tolboev refrained from blaming Chechnya for the growing tensions, noting it is frequently difficult to establish whether Chechens or Dagestanis committed a crime. LF YELTSIN CREATES ANOTHER COMMISSION FOR CHECHNYA. President Yeltsin on 8 November issued a decree creating a new commission intended to "stabilize and develop" Chechnya, AFP reported, citing the Russian presidential press service. Russian Deputy Prime Minister Ramazan Abdulatipov was named chairman of the commission, whose precise functions and responsibilities remain unclear. Meanwhile, Chechen President Aslan Maskhadov met in Istanbul on 7-8 November with former Prime Minister and Welfare Party Chairman Necmettin Erbakan and with the son of late Nationalist Movement Party leader Alparslan Turkes, ITAR-TASS reported. LF YELTSIN REPLACES NAVY COMMANDER. Yeltsin on 8 November appointed Vladimir Kuroedov as commander of the Navy. Kuroedov replaces Admiral Feliks Gromov, who was simultaneously retired from military service. The decree included neither a reason for the change nor appreciation of Gromov's career, leading to speculation that Gromov was sacked on corruption allegations or because of explosions at naval arms depots in the Far East. (In the most recent such explosion, 12 torpedoes exploded at a Pacific Fleet depot in Primorskii Krai on 7 November.) However, a Defense Ministry statement on 9 November denied such allegations, saying Gromov was replaced because he recently reached the mandatory retirement age of 60. Kuroedov, a former commander of the Pacific Fleet, had served as first deputy Navy commander and chief of the Navy's General Staff since July. LB RADICALS CRITICIZE COMMUNIST PARTY STRATEGY. Representatives of radical communist groups criticized the strategy of Gennadii Zyuganov's Communist Party of the Russian Federation (KPRF) at 7 November rallies marking the 80th anniversary of the Bolshevik Revolution. Workers' Russia leader Viktor Anpilov accused the KPRF of pursuing a policy of "appeasement" and "making advances toward the authorities," ITAR-TASS reported. Addressing tens of thousands of demonstrators in St. Petersburg, Russian Communist Workers' Party leader Viktor Tyulkin called Zyuganov a "traitor," RFE/RL's correspondent in the city reported. At the same rally, Anatolii Kryuchkov, who heads the Russian Party of Communists, called for a massive uprising, arguing that changing the regime will be impossible through elections and parliamentary means of struggle. Zyuganov has recently drawn criticism from within the KPRF (see "RFE/RL Newsline,"4 November 1997). LB ROKHLIN SAYS RUSSIA LOSING 'WAR' ON ALL FRONTS. Duma Defense Committee Chairman Lev Rokhlin told a 7 November rally in Moscow that Russia is waging a "third world war" and "losing it on all fronts," RFE/RL's Moscow bureau reported. He cited the collapse of Russian industry and large-scale capital flight since 1991, adding that the Russian army is currently "unable to accomplish any serious tasks." Rokhlin also vowed that his Movement in Support of the Army will stage protests seeking to force the current regime to resign, Interfax reported. Justice Minister Sergei Stepashin recently told journalists that his ministry has returned the registration application of the Movement in Support of the Army to Rokhlin, RFE/RL reported on 7 November. Stepashin said the application raised questions as to the main goals of the movement. LB PILOTS RETURN TO MOSCOW FROM CONGO. Nine Russian pilots returned to Moscow on 10 November following three weeks of captivity in the Republic of Congo, Russian news agencies reported. Congolese authorities arrested 11 Russian pilots on 17 October on charges that they had delivered weapons to former President Pascal Lissouba. Following negotiations with Russian Foreign Ministry officials, the Congolese authorities released four of the pilots on 6 November and the remaining seven three days later. However, two Russian pilots decided to stay in Congo to work for a Belgian company rather than return to Moscow. They signed a document accepting "full responsibility" for that decision. LB SOBCHAK TO RECEIVE MEDICAL TREATMENT ABROAD. Former St. Petersburg Mayor Anatolii Sobchak has left Russia to seek treatment abroad for a heart ailment, RFE/RL's correspondent in St. Petersburg reported on 10 November. There were conflicting reports as to whether he flew to Paris or to New York. Sobchak was hospitalized on 3 October after falling ill during questioning in a corruption investigation against former associates. He was discharged from hospital on 7 November, but had reportedly agreed to an upcoming cardiogram and possible heart surgery in St. Petersburg. Gennadii Khubulava, the deputy head of the clinic where Sobchak was being treated, told journalists that Sobchak went abroad because his doctors had received anonymous threats. However, some observers believe that Sobchak deceived both his doctors and investigators in order to flee Russia. Law enforcement authorities have been investigating Sobchak, although no criminal charges have been filed against him. LB DEMONSTRATORS PICKET NTV STUDIOS. Some 2,000 protesters, including Orthodox priests, picketed the Ostankino television center, where the private network NTV's studios are located, Reuters reported on 9 November. Placards protesting plans to broadcast Martin Scorsese's film "The Last Temptation of Christ," read, among other things, "Satan controls NTV" and "Zionism will destroy Russia." (Vladimir Gusinskii, whose Media-Most company owns NTV, is president of the Russian Jewish Congress.) The 7 November issue of the opposition newspaper "Sovetskaya Rossiya" also denounced plans to show the film. NTV general producer Leonid Parfenov remarked in a 9 November interview with RFE/RL's Moscow bureau that neither the Russian Orthodox Church nor opposition groups objected when NTV showed the films "Jesus of Montreal" and "Jesus Christ, Superstar," which Parfenov described as equally "non-traditional" approaches to the subject. LB TATARSTAN BEGINS PAYING DEBTS TO GAZPROM. Deputy Prime Minister Vladimir Shevtsov announced on 10 November that the Tatar government has paid Gazprom 70 percent of the 210 billion rubles ($35.6 million) owed for gas supplies in October, RFE/RL's Kazan bureau reported. Gazprom cut supplies of gas to several regions of Tatarstan the previous month because of non-payment of debts. Senior Tatar government officials and Gazprom representatives recently reached agreement on repaying 90 percent of the republic's total 4.3 trillion ruble debt to Gazprom by year's end. In November, enterprises in Tatarstan are required to pay 80 percent of the cost of gas supplied that month. In December, that figure rises to 90 percent. LF TRANSCAUCASUS AND CENTRAL ASIA AZERBAIJAN'S EARLY OIL FINALLY BEGINS TO FLOW. The first oil from the Chirag Caspian field that the Azerbaijan International Operating Company (AIOC) is developing came on stream on 8 November, one year later than originally anticipated. An AIOC spokesman told ITAR-TASS that output from the first well is expected to reach 10,000 barrels a day. The Azerbaijani parliament on 7 November ratified a $2 billion contract that the Mobil and Azerbaijani state oil company SOCAR signed in August to explore the Oguz Caspian field, Turan reported. Meanwhile, Azerbaijani oil extracted on-shore by SOCAR has begun flowing through the Chechen sector of the Baku-Grozny-Novorossiisk pipeline, Russian agencies reported on 9 November. LF MORE KARABAKH DIPLOMACY. The three OSCE Minsk Group co- chairmen held "intensive" talks with the leadership of the unrecognized Nagorno-Karabakh Republic in Stepanakert on 7-8 November, RFE/RL's Yerevan bureau reported. Karabakh Foreign Minister Naira Melkumyan told Interfax on 8 November that the enclave's leadership rejected unspecified "new proposals" by the co- chairmen. Karabakh had rejected an earlier draft peace proposal in October. Karabakh President Arkadii Ghukasyan, in an interview with Interfax, said Azerbaijan plans to divide Nagorno-Karabakh into Armenian and Azerbaijani sectors on the Cypriot model. No details have been released of the scheduled talks in Yerevan on 8 November between the Minsk Group co-chairmen and Armenian President Levon Ter-Petrossyan. LF BULGARIAN FOREIGN MINISTER IN YEREVAN, TBILISI. Nadezhda Mikhailova met in Yerevan on 7 November with her Armenian counterpart, Aleksander Arzoumanian, President Ter-Petrossyan and other senior officials to discuss expanding bilateral ties within the framework of the Black Sea Economic Cooperation, ARMENPRESS and ITAR-TASS reported. Businessmen traveling with Mikhailova signed an agreement on cooperation and mutual assistance with the Union of Businessmen and Industrialists of Armenia. The next day in Tbilisi, Mikhailova met with President Eduard Shevardnadze and Foreign Minister Irakli Menagharishvili to discuss possible U.S. and Japanese investment in the planned TRASECA transport corridor linking Central Asia, the Transcaucasus, and Europe. Mikhailova extended invitations to Ter-Petrossyan, Arzoumanian, and Prime Minister Robert Kocharyan to visit Bulgaria next year. Shevardnadze is scheduled to travel to Sofia in the near future. LF GEORGIAN PRESIDENT DECLARES AMNESTY. Shevardnadze on 7 November signed two decrees pardoning a total of1,378 convicts, including 420 first offenders, Interfax reported. Presidential press secretary Vakhtang Abashidze said the amnesty is part of an ongoing policy of reconciliation. Earlier this year, 50 prisoners who had been sentenced to death were pardoned. LF KAZAKH NATIONAL SYMBOLS TRANSFERRED TO NEW CAPITAL. President Nursultan Nazarbayev was in Akmola on 8 November to participate in a ceremony at which the national flag and presidential standard that had hung in Almaty were hoisted in their new surroundings, ITAR-TASS reported. Nazarbayev was accompanied by newly appointed Prime Minister Nurlan Balgimbayev and members of the cabinet. Despite the transfer of the national symbols, the Kazakh parliament does not move to Akmola until 10 December in accordance with a decree that Nazarbayev signed in October. Nazarbayev will not take up residence in the new capital until spring 1998, when new government buildings are scheduled to be completed. BP END NOTE CHANGES AT RUSSIA'S TV NETWORKS by Floriana Fossato Changes are under way at Russian Television (RTR) and Russian Public Television (ORT), the country's main nationwide networks. Kultura, a new cultural channel that is de-facto a department of the fully state-owned RTR, began broadcasting on 1 November. It has a potential audience of some 100 million in European Russia and uses a frequency formerly used by St. Petersburg Channel 5. Unlike rival channels (including RTR), "Kultura" does not have advertising, Instead, it relies fully on state subsidies. The network's first broadcast was a recorded message from President Boris Yeltsin, who chairs the network's board of trustees and who signed a decree in August that ordered the launching of Kultura. Yeltsin said hopes the channel will increase the profile of the arts and the general level of culture in society. He added that the new network will have to "fight for an audience, find its own style" to attract a public that has grown accustomed to a wide choice of televised entertainment. The launching of Kultura, Yeltsin continued, fulfills the aspirations of artists and many others "who have long been waiting" for a serious approach to culture and discussions on "spiritual values, morality, faith, education, and Russia's cultural and historical heritage." Oleg Poptsov, who chaired RTR from 1990 until his dismissal in 1996, told RFE/RL that he is skeptical about Kultura's prospects. Poptsov said it is "absurd" and "ignorant" to think that the network will be able to survive purely on state funding. He predicted that the network will soon be partly privatized, as was the Channel 1 network ORT two years ago. According to Poptsov, the focus on cultural and educational programming is unlikely to continue, if financial groups, at some stage, acquire shares in the new channel. In an implicit admission that problems could arise, Mikhail Shvydkoi, the director of Kultura, said recently that the new channel is a very ambitious project and could face financial difficulties. Mikhail Lesin, the recently appointed deputy chairman of RTR, told "Kommersant daily" that "with respect to profitability, everything is clear. Everybody knows culture has never been profitable." Lesin was a founder of one of Russia's most successful advertisement companies, Video International, which is reported to be RTR's exclusive advertising agent. Moreover, the majority of RTR's prime-time programs are produced by Video International. Some observers have speculated that Video International has been playing a growing role in financing RTR. First Deputy Prime Minister Boris Nemtsov told RFE/RL in August that he is in favor of the state re-establishing control over both the finances and the "ideological foundation" of ORT. He also attacked tycoon-turned-politician Boris Berezovskii, whom Yeltsin sacked as deputy secretary of the Security Council on 5 November. An unnamed Kremlin official said the same day that Nemtsov and First Deputy Prime Minister Anatolii Chubais were behind Berezovskii's dismissal. Berezovskii's business interests include stakes in the giant car dealer LogoVAZ and in the Aeroflot and Transaero airlines. Through his business holdings, Berezovskii owns an eight percent stake of ORT and is reported to maintains control over some top ORT managers, who formerly were top LogoVAZ managers. Obedinennyi Bank, a LogoVAZ affiliate, belongs to the four-bank consortium that owns 38 percent of ORT. Berezovskii was appointed to the Security Council following last year's presidential election. In the electoral campaign, newspapers, magazines, and particularly television channels linked to a group of powerful bankers and businessmen played a key role in boosting Yeltsin's ratings. Following his appointment, Berezovskii said he had delegated all his business commitments, including his position on ORT's board of directors. But Nemtsov said in August that "even if formally Berezovskii has now delegated the running of his business, he is de facto dealing only with this." Nemtsov also said that Berezovskii had "invented and developed to the very end a peculiar privatization scheme" that was applied at ORT, Aeroflot, and other companies. According to Nemtsov, Berezovskii first "privatized" the company's top managers. Formally the company belongs to the state, Nemtsov said, but "the money it needs is being channeled through private companies." A 12-member council of government representatives at ORT recently held its first meeting. State Property Minister Maksim Boiko chaired the council, which also includes Yeltsin's daughter and presidential adviser Tatyana Dyachenko, Yeltsin's spokesman and deputy head of administration Sergei Yastrzhembskii, government spokesman Igor Shabdurasulov, First Deputy Finance Minister Aleksei Kudrin, ITAR-TASS director-general Vitalii Ignatenko, and Mikhail Kommissar, another deputy head of the presidential administration. Boiko said the board will work out and implement a policy aimed at developing a "standard mechanism for managing government stakes in strategically important companies." He said similar councils have been set up in some of Russia's monopolies, notably the gas giant Gazprom, the electricity monopoly Unified Energy Systems, and in the pipeline monopoly Transneft. An ORT shareholders' meeting, scheduled to take place on 13 November, is to choose a director-general and a new board of directors. At that meeting, ORT may become an open joint-stock company, which Berezovskii has already said he opposes in principle. The author is a Moscow-based RFE/RL correspondent. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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