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RFE/RL NEWSLINE Vol 1, No. 160, Part I, 14 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 EUROPE: Has The West Embraced The East? -- a five-part series about Europe's multilateral organizations and whether and how they've aided the integration of Central and Eastern Europe with the West -- is online at the RFE/RL Web site. http://www.rferl.org/nca/special/multilateral/index.html xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I *DUMA POSTPONES BUDGET DEBATE, REJECTS THREE TAX LAWS *FIRST HEAD ROLLS IN BOOK ROYALTIES SCANDAL *KAZAKHSTAN TO EXPORT OIL VIA GEORGIA, BULGARIA xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA DUMA POSTPONES BUDGET DEBATE, REJECTS THREE TAX LAWS... The State Duma on 13 November postponed consideration of the revised 1998 budget in the first reading until 19 November, RFE/RL's Moscow bureau reported. Communist Party leader Gennadii Zyuganov argued that it would be "senseless" to debate the budget after the Duma had rejected several tax laws on which 1998 revenues are based, according to Reuters. The Duma rejected in the first reading laws on changing current excise duties and on revoking tax exemptions for military personnel, as well as a package of amendments to the law on the fundamentals of the tax system, "Kommersant-Daily" reported. Those amendments would have rescinded 16 taxes, reduced fines for paying taxes late or concealing income, and allowed regional authorities to impose a sales tax of up to 5 percent. First Deputy Prime Minister Anatolii Chubais expressed confidence that the government and Duma will reach a compromise on the tax laws. LB ...BUT APPROVES OTHER TAX PROPOSALS IN FIRST READING. The Duma on 13 November supported several government-proposed tax laws in the first reading, "Kommersant-Daily" reported. The Duma approved a law that would force regional branches of corporations to pay taxes in the regions where they operate. (That law will find favor with regional leaders but will be bitterly opposed by Moscow Mayor Yurii Luzhkov.) Deputies also backed a law to raise the tax on foreign-currency purchases from 0.5 percent to 1 percent. In addition, the Duma approved draft laws dealing with taxation on land, alcohol production, and industrial use of animal products. Deputies postponed until 19 November consideration of a law on introducing a water tax. Meanwhile, the government withdrew from the Duma a law that would have raised value-added tax on food and children's products from 10 percent to 20 percent. LB FIRST HEAD ROLLS IN BOOK ROYALTIES SCANDAL. President Boris Yeltsin on 13 November sacked Aleksandr Kazakov, first deputy head of the presidential administration, ITAR-TASS reported the next day. Aleksandr Shokhin, leader of the Our Home Is Russia Duma faction, told the news agency that Kazakov's dismissal is most likely linked to the scandal over substantial royalty payments for a book on the history of Russian privatization, which has not yet been published (see "RFE/RL Newsline," 13 November 1997). Kazakov was one of the book's seven authors. The others are First Deputy Prime Minister Chubais, Federal Bankruptcy Administration Chairman Petr Mostovoi, former State Property Committee Chairman Alfred Kokh, State Property Minister Maksim Boiko, Federal Securities Commission Chairman Dmitrii Vasilev, and former Chubais aide Arkadii Yevstafev. It is unclear whether Kazakov will also be removed as chairman of the board of the gas monopoly Gazprom, a post to which he was elected in June. LB MORE FALLOUT FROM SCANDAL. Before leaving for Kyiv on 14 November (see Part II), Chubais told journalists that he believes criticism of the high fees received for the forthcoming book on privatization is justified, ITAR-TASS reported. Chubais said Yeltsin will judge the matter, adding that he will accept any decision by the president. Prime Minister Viktor Chernomyrdin, who is on a one-day visit to Novgorod Oblast, declined to comment on Kazakov's dismissal but told ITAR-TASS that the government will look into the book scandal. An unnamed source close to the prime minister said he does not expect Kazakov's dismissal to be the last in connection with the scandal. LB MOSCOW PROSECUTORS TO INVESTIGATE SCANDAL. Sergei Gerasimov, the head of the Moscow Prosecutor's Office, announced on 13 November that an investigation of the latest scandal is under way, Russian news agencies reported. Gerasimov said Chubais and other senior officials will be questioned. Moscow prosecutors are already investigating Kokh for accepting a $100,000 payment from a Swiss firm for another book on privatization. That investigation is to be completed by 1 December, Gerasimov said. Meanwhile, "Segodnya" on 14 November slammed the officials involved in the latest book scandal for hypocrisy. The author noted that while top officials received $90,000 each to write a book, State Property Minister Boiko recently ordered his ministry to investigate a privatization official in Vologda Oblast who receives a monthly salary of $16,500. "Segodnya," owned by Vladimir Gusinskii's Media-Most company, has frequently criticized Chubais and his associates. LB DUMA PASSES ANTI-CORRUPTION LAW. The Duma on 14 November approved by 363 votes to zero a law on fighting corruption, ITAR- TASS reported. The law would prohibit government officials from accepting remuneration from government agencies, individuals, or legal entities in the form of money, services, gifts (other than symbolic ones), or payment for trips within Russia or abroad. LB FOREIGNERS ALLOWED TO HEAD STOCK MARKET BROKERAGES. The Federal Securities Commission has revoked part of a resolution, adopted in September, that banned foreigners from serving as chief executive or chief accountant of banks or companies licensed to trade on the Russian stock market, "Kommersant-Daily" reported on 14 November. The decision affects several prominent firms, including Credit Suisse-First Boston and the investment bank MFK, part of the Oneksimbank empire. MFK appointed U.S. citizen Boris Jordan as chairman of the board in September. LB PRIMAKOV WRAPS UP JAPAN VISIT. Minister of Foreign Affairs Yevgenii Primakov ended his four-day visit to Japan on 14 November, Russian media reported. Primakov and his counterpart, Keizo Obuchi, signed an agreement allowing Russia to open a center in Japan for promoting foreign investment. An agreement on mutual protection of investments, currently being drawn up, will pave the way for a Japanese investment of $100 million in oil projects off Sakhalin Island. Russian managers will soon attend special training sessions in Japan, while a delegation from the Japanese Federation of Economic Cooperation will visit Russia on 19-20 November to seek ways to boost cooperation in power engineering. BP U.S. AMBASSADOR LISTS PRIORITIES. James Collins, the new U.S. ambassador to Russia, announced at his first press conference in Moscow that "security issues and preventing proliferation of weapons of mass destruction" are among his top priorities, AFP and Russian news agencies reported. Collins also called on Russia to ratify the START-2 arms control treaty. He said U.S. President Bill Clinton plans to visit Russia during the first half of 1998, although no date has been set. He added that Clinton's visit would be "most productive" following ratification of START-2, so that he and Yeltsin could discuss further arms control agreements. There is staunch opposition to START-2 in the Duma. Collins also said the U.S. will closely watch how Russian authorities implement the new religion law, which imposes restrictions on foreign missionaries and some minority religious groups. LB ORT SHAREHOLDERS CONFIRM DIRECTOR, BUT NOT CHARTER. Shareholders in the 51 percent state-owned network Russian Public Television (ORT) on 13 November unanimously approved Kseniya Ponomareva as the network's director-general , Russian news agencies reported. Ponomareva was named acting director-general last month (see "RFE/RL Newsline," 7 October 1997). However, shareholders postponed consideration of a new ORT charter until 2 December. According to "Kommersant-Daily" on 14 November, the government seeks changes to the draft charter proposed by ORT managers, who are close to former Security Council Deputy Secretary Boris Berezovskii. The current draft would require a two-thirds or three-quarters vote to appoint members of the ORT board of directors. But the government, which seeks to reduce Berezovskii's influence at the network, wants the right to appoint board members by a simple majority of shareholders--that is, without input from the private shareholders in the network. LB MOSCOW LEGISLATURE LOSES COURT APPEAL OVER REFERENDUM. The Supreme Court on 13 November approved a decision by the Moscow Oblast Court on setting a referendum for 14 December, the same day as elections to the Moscow Oblast Duma, "Kommersant- Daily" and "Nezavisimaya gazeta" reported. The referendum, backed by Governor Anatolii Tyazhlov, would ask voters whether they support halving the number of deputies in the oblast legislature who hold no job outside the legislature. The Moscow Oblast Duma, which opposes the referendum, failed to persuade the Supreme Court that the oblast court exceeded its authority by setting a referendum date without the legislature's approval. They fear that voters will pass the referendum, which has popular appeal as a cost-cutting measure. If the officials in the oblast administration were allowed to simultaneously serve as oblast Duma deputies, Tyazhlov would increase his influence over the legislature's activities. LB SOBCHAK'S WIFE RETURNS TO RUSSIA. Duma deputy Lyudmila Narusova on 13 November returned to St. Petersburg from Paris, where her husband, former St. Petersburg Mayor Anatolii Sobchak, is receiving medical treatment. Narusova told journalists that her husband will return to Russia by the end of the year, as soon as he has recovered, Russian news agencies reported. She said Sobchak has informed the Prosecutor-General's Office that he will answer any questions in connection with a corruption investigation of his former associates. The same day, ITAR-TASS reported that Sobchak is considering running for the Duma seat formerly held by Irina Khakamada, who was recently appointed to the cabinet. Duma deputies are immune from criminal prosecution. LB SCULPTOR SAYS LUZHKOV HAPPY WITH FRESCOES PLAN. Zurab Tsereteli says Moscow Mayor Yurii Luzhkov is satisfied with a budget of 372 billion rubles ($63 million) for frescoes in the restored Cathedral of Christ the Savior, ITAR-TASS reported on 13 November. Tsereteli said 60 percent of that sum will be spent on materials and the remainder on the salaries of some 360 artists who will be involved in the project. Earlier reports suggested the mayor thought the proposed budget was excessive, but Tsereteli explained that Luzhkov only objected to his initial cost estimate for painting the frescoes: 4 trillion rubles. That would have been nearly three times as expensive as all previous costs of rebuilding the church, which was razed under Stalin. LB STAVROPOL TO CREATE SECURITY ZONE ON BORDER WITH CHECHNYA. Participants at a meeting of law-enforcement officials in Stavropol on 13 November voted to create a 3-kilometer security zone along the region's border with Chechnya to prevent shootings and hostage- takings by maverick Chechen groups, Russian media reported. Addressing the conference, Russian Interior Minister Anatolii Kulikov termed Chechnya a destabilizing factor in the North Caucasus and said a special regiment of Interior Ministry troops will be deployed to protect the border. Kulikov said he opposed the creation of local volunteer armed militias in regions bordering on Chechnya as violating the Russian Constitution and federal laws. In Grozny, Chechen First Deputy Prime Minister Movladi Udugov criticized the planned deployment of more Russian forces along the border as evidence of "Russia's ongoing blockade of Chechnya," Interfax reported. LF INGUSHETIA PLANS "WILD DIVISION." Ingush President Ruslan Aushev on 13 November warned that his republic may be forced to form a "wild division" to protect its territory and people if the situation in the North Caucasus deteriorates, Interfax reported. Aushev expressed concern at the arming of Cossack units in the North Caucasus and the planned creation of self-defense militias in Dagestan. He called on the Russian authorities to take "premeditative rather than threatening steps" in the North Caucasus. LF TATARSTAN NOT TO ISSUE NEW RUSSIAN PASSPORTS. The Tatar parliament on 13 November ordered the republic's government not to proceed with issuing new Russian passports pending a vote in the republican legislature, RFE/RL's Kazan bureau reported. The parliament recently voted to postpone issuing the new passports to protest the omission of any mention of the holder's nationality (see "RFE/RL Newsline," 21 October 1997). Addressing parliamentary deputies, President Mintimer Shaimiev said the Russian passports issued to citizens of Tatarstan should mention Tatarstan's statehood and the state languages of Tatarstan. He added that the passports should also make provision for dual (Tatar and Russian) citizenship for the republic's inhabitants. LF TRANSCAUCASUS AND CENTRAL ASIA KAZAKHSTAN TO EXPORT OIL VIA GEORGIA, BULGARIA. Bulgarian Foreign Minister Nadezhda Mikhailova met with her Kazakh counterpart, Kasymzhomart Tokaev, and President Nursultan Nazarbayev in Almaty on 13 November to discuss cooperation in the oil sector. Mikhailova told Interfax that Bulgaria wants to buy part of the Kazakh oil exported via Azerbaijan and Georgia at its Burgas terminal. Tokaev said the proposed Burgas-Aleksandroupolis pipeline--a joint venture between Bulgaria, Russia, and Greece--was also discussed. In Tbilisi on 13 November, Minister of State Niko Lekishvili said President Eduard Shevardnadze had reached agreement with the Kazakh leadership in Almaty on 10-11 November on exporting 5-7 million metric tons of Kazakh crude via Georgian ports. LF RUSSIA WILL FIGHT FOR CASPIAN MAIN EXPORT PIPELINE. Russian First Deputy Prime Minister Boris Nemtsov, who is also fuel and energy Minister, said on 13 November that Russia will fight to have the main export pipeline for Azerbaijan's Caspian oil routed north to the Russian Black Sea port of Novorossiisk, Interfax reported. The same day, First Deputy Fuel and Energy Minister Sergei Kirienko said Russia proposes that the Azerbaijan International Operating Company (AIOC), which oversees the exploitation of three Azerbaijani Caspian oil fields, should hold a tender to select the route for the main export pipeline. He noted that a tender would be advantageous for Russia, since the northern route is the most economic one. The AIOC has said the choice of route will be determined by economic, not geo-political, factors. LF NEMTSOV CALLS FOR NEW TALKS ON STATUS OF CASPIAN. Nemtsov also told journalists in Moscow on 13 November that it is time for new talks to resolve the deadlocked question of the international status of the Caspian Sea. In an indication that Russia may stop insisting that Caspian hydrocarbon resources be developed jointly by all five littoral states, Nemtsov had hinted in Baku the previous day that the Caspian could be divided into national sectors. Those sectors would be determined on the basis of dividing lines drawn by the former USSR Oil Ministry, Turan reported on 13 November. Meanwhile, Iran's Permanent Mission to the UN has sent a letter to Secretary-General Kofi Annan protesting Azerbaijan's "unilateral exploitation" of Caspian oil resources, AFP reported on 13 November. The letter claimed Azerbaijan's action violates international agreements and affirms Iran's readiness to take action to protect its interests in the Caspian. LF COUNCIL OF EUROPE DELEGATION IN ARMENIA. Prime Minister Robert Kocharyan met with a delegation from the Council of Europe's Parliamentary Assembly in Yerevan on 13 November to discuss Armenia's possible full membership in that body and the political and human rights situation in Armenia, Noyan Tapan reported. The delegation also held talks with opposition party leaders. Speaking after that meeting, Paruyr Hayrikyan, head of the Union for Self- Determination, argued that Armenia's full membership in the council should be made contingent on the democratization of its political system, RFE/RL's Yerevan bureau reported. Hayrikyan proposed that the council stipulate preconditions for full membership including free and fair elections. LF ABKHAZIA CUTS POWER SUPPLIES TO GEORGIA. Following an 11 November explosion at a substation in Abkhazia's southern-most Gali Raion, Abkhazia has reduced power supplies to Georgia from the Inguri hydro-electric power station, Interfax reported. The Abkhaz government has blamed the explosion on Georgian guerrillas operating in Abkhazia. The Inguri facility generates much of the country's electricity. LF NEW KYRGYZ MEDIA LAW RESTRICTS FREEDOMS. Doronbek Sadyrbayev, the chairman of Kyrgyzstan's parliamentary commission on human rights, said a law on mass media passed by the parliament on 11 November, violates freedom of the press, Interfax reported on 13 November. Under the new legislation, journalists cannot report information on persons who are under criminal investigation until a verdict is passed. Mass media are not allowed to enter either public or private enterprises without permission or make public information about the private lives of individuals. Journalists must name their sources upon request. President Askar Akayev can veto the law within 10 days, but the parliament can override such a veto by a two-thirds majority. The new law reportedly enjoys "wide support" among law-makers. BP EU PROVIDES AID TO TAJIKISTAN. The EU has voted to grant Tajikistan $9 million ecu in humanitarian aid, ITAR-TASS reported on 14 November. The funds will be used for medicines and food supplies. BP U.S. ENERGY SECRETARY IN TURKMENISTAN. Federico Pena met with Turkmen President Saparmurat Niyazov on 13 November, whom he urged to seek to solve the dispute with Azerbaijan over an oil field in the Caspian Sea. Niyazov proposed that a gas pipeline running along the sea bed would be the best route for exporting Turkmen natural gas. That line would run from Turkmenistan via Azerbaijan to Turkey. BP xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1997 RFE/RL, Inc. 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