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RFE/RL NEWSLINE Vol 1, No. 157, Part I, 11 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 *RUSSIA, CHINA PRESS IRAQ TO COOPERATE WITH UN *CENTRAL BANK MEASURES DESIGNED TO RESTORE CONFIDENCE *GEORGIAN AUTHORITIES TRY TO PREVENT FUGITIVES' CONGRESS End Note OBSTACLES TO RESOLVING KARABAKH CONFLICT xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA RUSSIA, CHINA PRESS IRAQ TO COOPERATE WITH UN. Meeting in Beijing on 10 November, the foreign ministers of Russia and China, Yevgenii Primakov and Qian Qichen, called on the Iraqi leadership to resume cooperation with the UN weapons inspectors, Russian media reported. They also called for restraint on the part of "all nations concerned" in order to preclude a recourse to arms. On 11 November, Russian presidential press spokesman Sergei Yastrzhembskii likewise criticized Baghdad's obstruction of the UN weapons inspectors but added that Russia "decisively" opposes using Iraq's defiance of the UN Security Council "as a cover for military strikes against Baghdad and Iraq," Western agencies reported. LF YELTSIN VISITS CHINA'S NORTHEAST... On 11 November, President Boris Yeltsin spent the last day of his China visit in the northeastern city of Harbin, which was the center of the country's Russian community last century, when Russia helped build the Chinese Eastern Railway. Yeltsin met with the 50 or so Russians who remain in the city. Yeltsin said he went to Harbin to help develop economic relations between his country and China. With a population of some 9 million, Harbin ranks as the fifth largest city in China and is a major industrial center situated close to the frontier with Russia. BP ...AFTER SONG AND DANCE IN BEIJING. Reuters quotes Yeltsin's spokesman Yastrzhembskii as revealing that President Jiang Zemin sang Russian songs and danced with Yeltsin's daughter and adviser Tatyana Dyachenko to the strains of Tchaikovsky's "Sleeping Beauty" at a state banquet in Beijing on 10 November. Also participating in the festivities were Russian First Deputy Prime Minister Boris Nemtsov and Chinese Deputy Prime Minister Li Lanqing, who reportedly sang "Moscow Nights" together. But at a press conference on 9 November, the two appeared out of harmony when Li claimed they have much in common but was interrupted by Nemtsov's pointing out that "we Russians are democrats." Nemtsov and Li did, however, salvage a multi-billion dollar deal for Russia to help construct a nuclear power plant in China. A final agreement is expected to be signed by the end of 1997. BP CENTRAL BANK MEASURES DESIGNED TO RESTORE CONFIDENCE... Central Bank Chairman Sergei Dubinin and First Deputy Prime Minister Anatolii Chubais announced on 10 November that recent turmoil on the Russian stock and bond markets prompted the Central Bank to impose "temporary" measures, RFE/RL's Moscow bureau reported. The bank raised the annual refinancing rate from 21-28 percent and commercial banks' reserve requirements for foreign currency from 6-9 percent. Appearing on NTV, Dubinin said the "preventive" measures, along with a new exchange rate policy, are designed to increase trust in the ruble and "make purchases of foreign currency unprofitable" (see "RFE/RL Newsline," 10 November 1997). He added that the Central Bank's gold and foreign-currency reserves, which totaled $22.6 billion as of 1 November, are sufficient to keep the exchange rate stable. LB ...BUT MARKET CONTINUES TO FALL. The Russian Trading System Index declined by 8.3 percent on 10 November following the announcement of the new Central Bank measures, and leading Russian stocks continued to decline in value the following day. The most liquid corporate stocks dropped by 15 percent or more, according to "Kommersant-Daily" on 11 November. Russian treasury bills and longer-term government bonds also declined on 10 November. It was unclear why the steep declines on the stock market did not lead to a halt of the Russian Trading System. The Russian Federal Securities Commission recently announced that trading will be halted if average share values decline by more than 5 percent in a single session. A few days later, officials said declines of at least 7.5 percent will lead to a halt. LB IMF OFFICIAL IN MOSCOW. After meeting with Chubais, Dubinin, Prime Minister Viktor Chernomyrdin, and other top officials, IMF First Deputy Managing Director Stanley Fischer on 10 November praised the decision to raise interest rates. He said the move dispelled potential doubts about the Russian government's commitment to stable inflation levels and exchange rates, Russian news agencies reported. Fischer confirmed that the IMF believes the crucial task for the Russian government is to tighten control over budget revenues and expenditures. He added that a recently delayed $700 million loan issue to Russia will not be released before early 1998. Meanwhile, Chubais told reporters that the government has drafted a plan to "radically" improve tax collection. He gave no details, saying Chernomyrdin is expected to approve the plan soon. LB DUMA COMMITTEE APPROVES TAX LAWS, REVISED BUDGET. The State Duma Budget Committee on 10 November recommended that the lower house of the parliament approve a package of tax laws and the revised 1998 budget in the first reading, ITAR-TASS reported. The government recently submitted the tax laws, which are intended to provide extra revenues to cover increased 1998 spending projections. Those increases were approved during recent negotiations between government and parliamentary representatives (see "RFE/RL Newsline," 29 October 1997). The Duma Council on 11 November announced the lower house will consider the tax legislation and the budget in the first reading at a 13 November plenary session, ITAR-TASS reported. LB MEDIA SPIN ON BEREZOVSKII'S DISMISSAL. Media outlets close to former Security Council Deputy Secretary Boris Berezovskii continue to speculate that his dismissal could have grave consequences for his main rivals, First Deputy Prime Ministers Chubais and Nemtsov (see "RFE/RL Newsline," 6 November 1997). Russian Public Television news commentator Sergei Dorenko on 8 November argued that by firing Berezovskii, Yeltsin has left Chubais and Nemtsov with no one to complain about or blame for policy failures. NTV anchor Yevgenii Kiselev made similar remarks during a broadcast the following day. "Nezavisimaya gazeta," which is partly financed by Berezovskii's LogoVAZ group, argued on 10 November that "however you look at it, Berezovskii's dismissal is advantageous most of all for Berezovskii himself." In contrast, Nikolai Svanidze of state-run Russian Television, which is close to Chubais, on 9 November cited various Western commentators as praising the decision to sack Berezovskii. LB COMMANDER ANNOUNCES CUTS IN INTERIOR MINISTRY TROOPS. Colonel-General Leontii Shevtsov, the commander of the Interior Ministry troops, announced on 10 November that the number of troops subordinated to that ministry will be cut to 220,000 by 1999, ITAR-TASS reported. The Interior Ministry troops have already been reduced from 440,000 in 1992 to 257,000 today, Shevtsov said. "Kommersant-Daily" reported on 11 November that plans are under way to reorganize and change the functions of forces subordinated to the Interior Ministry, the Emergency Situations Ministry, and the Federal Border Service. Citing an unnamed Defense Ministry source, Interfax reported on 8 November that Defense Council Secretary and Chief Military Inspector Andrei Kokoshin has been discussing restructuring plans with top officials from those bodies as well as from the Defense Ministry. LB SERGEEV SAYS MOLDOVAN FIGHTER PLANES CAN'T CARRY NUKES. Defense Minister Igor Sergeev on 10 November denied that MiG-29C jets recently sold by Moldova to the U.S. can carry nuclear weapons, Russian news agencies reported. The U.S. has purchased 21 MiG-29C fighter jets from Moldova in order to prevent "rogue states," such as Iran, from buying them (see "RFE/RL Newsline," 5 and 6 November 1997). U.S. Defense Secretary William Cohen claimed the jets are capable of launching nuclear missiles. Sergeev dismissed that claim as an "outright lie," saying hardware enabling the Moldovan MiGs to carry nuclear weapons was removed in 1989. A statement released by the Russian Air Force corroborated Sergeev's remarks. LB LUZHKOV SUES 'RUSSKII TELEGRAF.' Moscow Mayor Yurii Luzhkov has filed a libel lawsuit against the newspaper "Russkii telegraf," the mayor's office told Interfax on 10 November. Arkadii Murashev, a member of Yegor Gaidar's party Russia's Democratic Choice, is quoted in the newspaper's 28 October issue as saying Luzhkov is the "biggest entrepreneur in the city, who has everyone else under his thumb." Luzhkov's court appeal claims the accusation is false and has damaged the mayor's honor, dignity, and business reputation. He is demanding that the newspaper publish either a retraction or proof of the accusation. LB VLADIVOSTOK MAYOR ANNOUNCES RESIGNATION. During a live radio address on 11 November, Viktor Cherepkov surprised local observers and politicians by announcing that he will soon resign and call new mayoral elections, RFE/RL's correspondent in Vladivostok reported. He told journalists later that after leaving office, he plans to continue to fight local corruption and to write his memoirs. Cherepkov, a longtime political enemy of Primorskii Krai Governor Yevgenii Nazdratenko, was elected mayor in 1994 but ousted by Nazdratenko later that year. Since being reinstated by presidential decree in September 1996, Cherepkov has continued to clash with Nazdratenko's supporters. Most recently, he rebuffed an attempt by the krai legislature to remove him from office. Some observers have charged that the rivalry between Cherepkov and Nazdratenko has exacerbated Primore's economic problems, including rampant wage arrears and frequent energy crises. LB SOBCHAK HAS SURGERY IN PARIS. Former St. Petersburg Mayor Anatolii Sobchak underwent heart surgery in Paris on 10 November, Interfax reported. Sobchak's wife, Duma deputy Lyudmila Narusova, told the news agency that the former mayor is in satisfactory condition and plans to return to St. Petersburg following his recovery. She denied Russian customs agents' statements to ITAR- TASS that Sobchak and Narusova had flown to New York. Law enforcement officials want to question Sobchak in connection with a corruption investigation against his former associates. The Prosecutor-General's Office told Interfax that since no charges have been filed against Sobchak, he is not prohibited from traveling abroad. Investigators have not been allowed to see him since 3 October, when he fell ill during an interrogation. LB CHECHNYA IMPOSES ISLAMIC DRESS FOR WOMEN. Female students and women working in the state sector in Chechnya must in future conform with the Islamic dress code, Vice President Vakha Arsanov announced on Chechen television on 10 November. Managers who fail to enforce this requirement will be dismissed. Three days earlier, Arsanov banned the production and sale of alcoholic drinks in Chechnya, according to Interfax. LF CHERNOMYRDIN MEETS WITH TATAR PRESIDENT. Prime Minister Chernomyrdin met with Mintimer Shaimiev in Moscow on 10 November to discuss the economic situation in Tatarstan and cooperation between the Tatar and federal governments, RFE/RL's Kazan bureau reported. Russian government spokesman Igor Shabdurasulov told journalists later that Chernomyrdin has called for drafting an economic recovery program for Tatarstan's debt-ridden KamAZ truck factory, Russian agencies reported. A Russian government delegation to Vietnam on 17 November will include KamAZ management representatives. Vietnamese and Japanese companies have recently expressed interest in concluding joint ventures with the plant. LF TRANSCAUCASUS AND CENTRAL ASIA GEORGIAN AUTHORITIES TRY TO PREVENT FUGITIVES' CONGRESS. Several thousand police were deployed around the Philharmonia building in Tbilisi on 11 November to prevent a congress of representatives of the ethnic Georgians forced to flee Abkhazia and South Ossetia during the fighting in both regions from 1990-1993, CAUCASUS PRESS reported. Two of the congress's organizers were detained by police, while the meeting has convened in other, smaller premises. Georgian President Eduard Shevardnadze had on 10 November criticized the congress, whose delegates want to protest the Georgian leadership's failure to achieve political settlements of either conflict that would allow them to return home. They also intend to demand Shevardnadze's resignation. LF ARMENIAN RULING PARTY BACKS PRESIDENT'S KARABAKH POLICY. Vano Siradeghyan, the chairman of the Armenian Pan-National Movement (HHSh), told an RFE/RL correspondent in Yerevan on 10 November that the movement has pledged its support for President Levon Ter-Petrossyan's strategy for resolving the Karabakh conflict. Ter-Petrossyan met behind closed doors on 8 November to discuss the peace process with the movement's board and the leaders of the five smaller parties aligned with the HHSh in the ruling Hanrapetutyun coalition. Siradeghyan said the Armenian leadership's decision not to reveal details of the latest peace plan proposed by the Organization on Security and Cooperation in Europe's Minsk group "plays into the hands of the opposition. " But he added that it is "premature" to disclose particulars. LF ARMENIAN SECURITY MINISTER OPPOSES UNILATERAL CONCESSIONS. Interior and Security Minister Serzh Sarkisyan told journalists in Yerevan on 10 November that he favors an "honorable peace" with Azerbaijan that is not based on unilateral concessions, RFE/RL's Yerevan bureau reported. Sarkisyan, who was born in Nagorno-Karabakh, downplayed suggestions of a rift between the president and the power ministers over how best to resolve the conflict. Sarkisyan also said President Ter-Petrossyan's decision in November1996 to merge the Interior and Security Ministries has contributed to a reduction of the shadow economy's activities and a substantial increase in tax collection, according to ARMENPRESS. LF ARMENIAN GOVERNMENT REVISES ECONOMIC FORECAST. The Armenian Finance and Economics Ministry has revised its forecast for 1997 following the government's failure to meet macroeconomic targets in the first ten months, RFE/RL's Yerevan bureau reported. GDP growth has been revised downward from 5.7 percent to 3.3 percent. Annual inflation is now expected to reach 21 percent, while a 10 percent rate was originally forecast. The ministry has also proposed that the government cut budget expenditures by 11 percent or 17 billion drams ($34 million) since the volume of international loans is lower than expected. The proposed cutbacks will largely affect government investments and expenditures other than social entitlements. LF BULGARIA WANTS TO BUY, RE-EXPORT AZERBAIJANI OIL. Visiting Foreign Minister Nadezhda Mikhailova signed a protocol on regular consultations with her Azerbaijani counterpart Hasan Hasanov, Turan reported on 10 November. Mikhailova discussed with both Hasanov and President Heidar Aliev the possibility of Bulgaria's purchasing Azerbaijani oil and the transportation of Caspian oil to Europe via Bulgaria. Hasanov agreed that some Azerbaijani oil exported via the Western pipeline to the Georgian port of Supsa could be shipped by tanker to Bulgaria, according to CAUCASUS PRESS. Mikhailova also said Bulgaria wants to accede to the transport agreement concluded by Azerbaijan, Georgia, and Ukraine within the framework of the TRASECA project. LF KARIMOV SAYS UZBEKISTAN FOLLOWS ITS OWN PATH. Uzbek President Islam Karimov said in an interview published in "Izvestiya" on 11 November that Uzbekistan is not following any particular model of development but rather is discovering "its own potential." He said his policies are leading to a gradual change in the mind-set of the people, which will eventually allow greater social freedoms. Currently, "order and free elections" are most important, he noted. With regard to Uzbekistan's estrangement from Russia, Karimov denied that development was "by design." He noted that Russia usually conducts trade by barter but that Uzbekistan is interested in cash. BP KYRGYZSTAN SETS UP INVESTMENT AGENCY. Kyrgyzstan has established an Agency for Foreign Investments, Interfax reported on 10 November. The new agency is aimed at managing "important sectors of the national economy" and is a condition for receiving a $44 million loan from the Asian Development Bank. In other news, Prime Minister Apas Jumagulov criticized the delays in adopting the 1998 budget, saying it will have a "negative effect on the economic situation in the country." The budget foresees a deficit of 4.2 percent, compared with a projected 1997 deficit of 5.6 percent. The budget will be increased by 253 million som ($15 million) to total 7.84 billion som, half of which is targeted for the public sector. The parliament recently rejected the first draft of the budget. BP END NOTE OBSTACLES TO RESOLVING KARABAKH CONFLICT by Liz Fuller Since the spring of 1992, the Organization on Security and Cooperation in Europe's Minsk Group has sought to mediate a political solution of the Nagorno-Karabakh conflict. Azerbaijan has accepted the most recent peace plan drafted by the Minsk Group co-chairmen and presented to the three conflict parties in September. Armenia has accepted it as a basis for further talks but has expressed reservations, while Nagorno-Karabakh has rejected it. Those stances throw into doubt U.S. diplomats' optimistic predictions that a formal accord ending the conflict may be signed by the end of 1997. There are five obstacles to a solution of the conflict, two of which are political and three procedural or logistic. The first is Nagorno-Karabakh's future political status vis-a-vis the Azerbaijani government. Arkadii Ghukasyan, the unrecognized republic's president, has said repeatedly he will never agree to any status that subordinates Karabakh to Baku. He advocates "horizontal ties" between the two territories, without specifying precisely what he means by that. A confederative arrangement, for example, would preserve Azerbaijan's territorial integrity, which the OSCE insists must be enshrined in any settlement document. Azerbaijani President Heidar Aliev has proposed the "broadest possible autonomy" for Karabakh, but the very concept of "autonomy" is discredited throughout the former USSR as bestowing only minimal rights and benefits. The second political obstacle is resistance in both Armenia and Azerbaijan to any substantive concessions. In response to President Levon Ter-Petrossyan's relentlessly pragmatic arguments in favor of a compromise that would entail less than outright independence for Karabakh, Armenia's opposition parties branded him a traitor to national interests and demanding his resignation. Azerbaijan's Round Table opposition coalition similarly rejected the most recent Minsk Group peace proposal, which it perceives as aimed at forcing concessions from Baku that could result in "loss of control over Nagorno-Karabakh." And Ter-Petrossyan's proposal to submit any peace agreement for public endorsement before it is signed could derail a settlement at the final stage. The first procedural or logistic obstacle is Azerbaijan's insistence that the conflict is international, rather than internal, and resulted from Armenia's "aggression" against Azerbaijan. Claiming that Yerevan is the aggressor and therefore the logical negotiating partner, Baku has consequently refused to engage in direct talks with the Karabakh Armenian leadership. The second logistic obstacle is the timetable for resolving the conflict. The most recent draft peace plan proposed by the OSCE is based on the "phased" or "step-by-step" approach. In other words, it envisages a series of measures that would begin with the withdrawal of Armenian forces from six occupied districts of Azerbaijan, the repatriation of the enclave's Azerbaijani population, and the deployment of an international peacekeeping force to prevent a resumption of hostilities. Formal negotiations on Karabakh's future status would begin only after those and other measures have been implemented. The "phased" approach has been endorsed by Baku but rejected by the Karabakh Armenians. They argue that it obliges them to cede their only bargaining chip--the occupied territories -- and offers them no firm guarantee of receiving anything in return. They reason that once they withdraw from the districts in question, Baku may refuse to begin negotiations. Instead, the Karabakh Armenians favor a "package" solution to the conflict whereby all contentious issues (troop withdrawal, repatriation, deployment of international peacekeepers, Karabakh's future status) are simultaneously resolved within one framework document. Closely linked to the choice between the "packet" and "phased" approaches is the need to guarantee Karabakh's security against the possibility of a renewed Azerbaijani attack. Ghukasyan and Armenian First Deputy Foreign Minister Vartan Oskanian both argue that the international community should give Armenia--and possibly other states--an official mandate to act as guarantors of Karabakh's security. (Ghukasyan mentioned Russia, France, the U.S., "and possibly Iran" in this context.) The OSCE recently sent a group of military officers to tour the region and assess the needs of an OSCE peacekeeping force. Ghukasyan doubts, however, that the organization's member states would agree to provide more than a "purely symbolic" military force, which would be deployed for a limited period and which might withdraw in the event of a mass assault by Azerbaijani troops. Finally, an additional obstacle to a settlement is Iran. By virtue of its geographical position and its harmonious relations with Armenia, Tehran is keenly interested in resolving the conflict. But since it is not an OSCE member, there is no forum within which it may formally participate in the peace process. (Part of the rationale for enlisting the Conference on Security and Cooperation in Europe, the OSCE's predecessor, to help resolve the Karabakh conflict was to exclude Iran. In February and March1992, the Iranian authorities succeeded in mediating two separate cease-fire agreements, both of which collapsed almost immediately.) Specifically, Tehran says the deployment of military forces as part of a settlement of the conflict would be potentially destabilizing, according to Armenian Democratic Party leader Aram Sargsian. It is therefore doubtful whether any peace agreement that does not have Tehran's imprimatur could bring lasting stability to the region. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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