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RFE/RL NEWSLINE Vol 1, No. 193, Part I, 12 January 1998
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 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I * SPOKESMAN EXPLAINS YELTSIN'S ABSENCE FROM TV * YELTSIN VETOES TWO TAX LAWS * KARABAKH FOREIGN MINISTER SAYS PRESSURE "INADMISSIBLE" xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA SPOKESMAN EXPLAINS YELTSIN'S ABSENCE FROM TV. Presidential spokesman Sergei Yastrzhembskii told ITAR-TASS on 9 January that Boris Yeltsin has not been shown on television during his vacation in Valdai because "it isn't possible to pester the president all the time." He added that "vacation is vacation." However, Yastrzhembskii said television footage of the president will be released sometime during the week of 12 January. Kremlin officials have repeatedly denied that a serious health problem is keeping Yeltsin out of public view. Daily official statements continue to emphasize that the president remains "active" in Valdai, holding telephone conversations, working with documents, and engaging in various forms of exercise. Yeltsin is scheduled to return to work full time on 19 January. LB YELTSIN VETOES TWO TAX LAWS. Yeltsin has vetoed amendments to the law on excise duties that would have introduced such charges on vodka, beer, tobacco, gasoline, automobiles, and oil transports, ITAR-TASS reported on 11 January. According to government estimates, the amendments would have raised 1998 revenues by 450 million rubles ($75 million) a month. However, executives in the energy sector and some Russian media have strongly opposed the proposed excise duty on oil transports in particular. Also on 11 January, the presidential press service announced that Yeltsin has vetoed a law that would have raised the tax on foreign-currency purchases from 0.5 percent to 1 percent. In Yeltsin's veto message to the parliament, he said both laws are inconsistent with Russian legislation. The laws vetoed by Yeltsin were among nine laws submitted to the parliament by the government in order to increase 1998 budget revenues. LB GOVERNMENT, KREMLIN AT ODDS OVER POLICY? Yeltsin's latest vetoes suggest that some presidential advisers are at odds with government officials over some economic policy matters. In an interview published in "Izvestiya" on 10 January, Economics Minister Yakov Urinson acknowledged there is occasional conflict between officials in the government and presidential administration over economic policies. He added that "one would like to believe that it's not political games that lie behind all this but, if you like, objective differences of opinion." Presidential economic adviser Aleksandr Livshits recently criticized First Deputy Prime Minister Anatolii Chubais's work on a government commission on tax and budgetary discipline. Livshits also alleged that government officials have leaked sensitive information to international financial organizations (see "RFE/RL Newsline," 19 December 1997). LB MINISTER ON CAUSES FOR POOR TAX COLLECTION. In the same interview with "Izvestiya," Economics Minister Urinson acknowledged that the government failed to improve tax collection in 1997. However, he argued that the head of the State Tax Service, Aleksandr Pochinok, was not to blame. (Pochinok, seen as an ally of Chubais, was appointed last April.) Rather, Urinson said, the poor tax collection stemmed from the failure to reform the tax system and secure adoption of a new tax code. In addition, Urinson continued, the government did not make the work of its commission on tax and budgetary discipline more effective, "so that it would be more profitable for people to pay taxes than to evade them." Urinson denied persistent speculation that Prime Minister Viktor Chernomyrdin is frequently at odds with First Deputy Prime Ministers Chubais and Boris Nemtsov. LB TWO DOZEN FIRMS PAY TWO-THIRDS OF ALL TAXES. State Tax Service head Pochinok told Interfax on 9 January that more than two-thirds of tax revenues come from Russia's 17 largest companies and about six major banks. A new special agency within the tax service will focus on those large taxpayers, he said. Meanwhile, Moscow Mayor Yurii Luzhkov claimed on 8 January that 30 percent of all budget revenues contributed by Russian regions to the federal government in 1997 came from the city of Moscow. Luzhkov said Moscow's contributions to the federal budget totaled 52.6 trillion old rubles ($8.8 billion). LB ANOTHER COMMITTEE CREATED ON STATE MONOPOLY ON ALCOHOL. Yeltsin has signed a decree creating a State Committee for Enforcing the Monopoly on Alcohol Production, which will be charged with "ensuring the state monopoly on the production of and trade in ethyl alcohol and alcoholic products," ITAR-TASS reported on 10 January. The same decree abolished the Federal Service for Enforcing the State Monopoly on Alcoholic Products, which was created nearly two years ago in place of the state inspectorate for ensuring the state monopoly on alcoholic products. Previous presidential decrees on the state monopoly on alcohol have not been enforced (see "OMRI Daily Digest," 2 January 1997). Meanwhile, Yeltsin signed a law substantially raising taxes on alcohol imports, production and sales, ITAR-TASS reported on 11 January. LB BEREZOVSKII DEFENDS CHUBAIS... Former Security Council Deputy Secretary Boris Berezovskii spoke out in defense of First Deputy Prime Minister Chubais at a Russian-U.S. investment symposium at Harvard University, Interfax reported on 11 January. In remarks to the symposium, U.S. financier George Soros had accused Chubais of aiding the development of "bandit capitalism" in Russia by organizing the misappropriation of state property. Berezovskii, whose LogoVAZ empire acquired lucrative stakes in several privatized companies in recent years, argued that Soros's allegations were unfair and tactless. He noted that Chubais and his allies succeeded in redistributing property in Russia without bloodshed. Berezovskii and Chubais were allies until July 1997, when a consortium involving Berezovskii failed to win a major stake in the telecommunications giant Svyazinvest. Since then, Berezovskii and media financed by him have repeatedly attacked Chubais (see "RFE/RL Newsline," 23 and 30 December 1997). LB ...SAYS WEALTHY SHOULD HELP CREATE MIDDLE CLASS. At the same investment symposium, Berezovskii also said large financial and industrial groups in Russia should take steps to help create a middle class, Interfax reported on 11 January. He added that the number of Russians living in poverty must be reduced "so they don't hang us." Berezovskii said he will work to ensure that the 1999 parliamentary elections are not a repeat of the December 1995 elections to the State Duma. In 1995, the Communist Party gained far more votes than any other party. In December 1997, Berezovskii joined the political council of the Socialist Party of Russia, which is headed by Security Council Secretary Ivan Rybkin. An electoral bloc headed by Rybkin gained less than 2 percent of the vote in the 1995 parliamentary elections. LB GOVERNMENT CALLS FOR TOUGHER ADVERTISING STANDARDS. The government on 8 January approved proposals to strengthen regulation of the advertising market, especially advertisements of alcohol, tobacco, and medical products, Russian news agencies reported. The measures, which were prepared by the State Anti-Monopoly Committee, include proposed amendments to the law on advertising and new procedures on registering medicines, to be adopted by the Health Ministry. State Anti-Monopoly Committee head Natalia Fonareva also urged the government to try to block efforts by some Duma deputies to weaken the ban on television advertising for alcohol and tobacco products. LB LATEST IMF TRANCHE TO PAY DEBTS TO DEFENSE INDUSTRY. First Deputy Finance Minister Aleksei Kudrin told Interfax on 9 January that the government will spend the latest $667.5 million loan tranche from the IMF mostly on paying debts to the defense industry. He estimated that those debts total more than 20 trillion old rubles ($3.3 billion). Kudrin claimed defense industry workers will receive wages owed to them within the next six months, although he acknowledged that it will take longer to settle all government debts for defense orders. The IMF board approved the latest tranche on 8 January. LB DEFENSE MINISTRY EXPLAINS FAILURE TO PAY BACK WAGES. The Defense Ministry says it is having trouble paying all back wages owed to military personnel, which were supposed to be settled by the end of 1997, because of funding shortfalls in other areas of the defense budget. According to a ministry statement published in the official military newspaper "Krasnaya zvezda" on 10 January, some funds earmarked for paying debts in soldiers' wages and financial benefits have been spent on other areas, such as financing the draft, military hospitals, and payments to officers laid off. Meanwhile, Defense Ministry officials told ITAR-TASS on 9 January that the Finance Ministry also contributed to problems in settling the wage debts on time by allocating funds to the Defense Ministry only on 30-31 December, rather than earlier in the month. LB AIR FORCE TURNS TO UNCONVENTIONAL SOURCES OF FUNDS. The Russian Air Force raised more than $25 million in 1997 by renting out military equipment, Reuters reported on 9 January, citing an interview published the same day in "Krasnaya zvezda." Major-General Nikolai Anisimov, who heads the financial department of the air force, told the newspaper that leasing military aircraft to private firms or to other branches of the armed forces accounted for most of the "unconventional" financing. He said more money could be raised in the future by renting out some of the air force's hangar and storage space and by charging commercial rates for private treatment at military hospitals and vacations in military resorts. LB HEAD OF RUSSIA'S LARGEST HOTEL KILLED. Yevgenii Tsimbalistov, the director-general of the massive Hotel Rossiya in Moscow, was shot dead in his apartment building on 9 January. Police believe the murder was a contract killing. Tsimbalistov became director of the hotel in 1995, after his predecessor was murdered. According to ITAR-TASS, the Hotel Rossiya, which has more than 3,000 rooms, is owned by the Moscow city government. The murder of Tsimbalistov is the latest in a string of apparent contract killings in the capital's hotel industry. Last November, the director-general of the Sovintsentr hotel and trade complex was shot dead, Reuters reported. In November 1996, an assailant killed U.S. citizen Paul Tatum, who was involved in an ownership dispute over the Radisson-Slavyanskaya Hotel. Those crimes remain unsolved. LB MORE RUSSIAN-CHECHEN TALKS. A Russian government delegation headed by Deputy Prime Minister Ramazan Abdulatipov held talks in Grozny on 10 January with Chechen acting Prime Minister Shamil Basaev and other government officials on a timetable for economic reconstruction and on upgrading the status of Grozny's Sheikh Mansur airport, Russian agencies reported. Georgii Kurin, Russian presidential representative in Chechnya, said that establishing a free economic zone in Chechnya is a necessary precondition for stabilization, according to ITAR-TASS. Basaev warned that "Chechnya expects Russia to fulfill its obligations, especially in the economic sphere [so that] cooperation in other areas will develop successfully." But Chechen Deputy Prime Minister Akhmed Zakaev told Interfax on 10 January that he thinks further Russian-Chechen talks are "pointless" since Russia "has not met a single commitment" made to Chechnya in the past 18 months. LF YELTSIN TO MEET WITH NORTH CAUCASUS ELDERS. On his return from Grozny to Moscow on 10 January, Abdulatipov told journalists that Russian President Boris Yeltsin will meet with North Caucasus elders in late January to discuss the "complicated and extremely contradictory" situation in the region, Russian agencies reported. Abdulatipov said that preparations for this meeting have been under way for some time and that "it will be a very useful dialogue." He said the meeting may be held either in Moscow, or in Stavropol or Makhachkala, the capital of Dagestan. LF BASAEV PRESENTS CABINET NOMINATIONS. Acting Chechen Prime Minister Shamil Basaev on 11 January met with President Aslan Maskhadov to discuss the 22 nominations to his new government, ITAR-TASS reported. First Deputy Prime Minister Movladi Udugov is expected to be named foreign minister, field commander Ruslan Gilaev defense minister, and Basaev's brother, Shirvani, minister of power and fuel. It is unclear whether Maskhadov will cede to Shamil Basaev the post of premier, which he currently occupies. On 10 January, Russian presidential envoy Petr Marchenko told ITAR-TASS that the outgoing Chechen government has failed to perform adequately and that its orders are frequently ignored by former field commanders. Marchenko said this trend undermines the authority of the Chechen leadership (see also "End Note" below). LF TRANSCAUCASUS AND CENTRAL ASIA KARABAKH FOREIGN MINISTER SAYS PRESSURE "INADMISSIBLE." Meeting with visiting U.S. Congressman Frank Pallone on 9 January in Stepanakert , Naira Melkumian said that attempts to impose an "unacceptable" solution to the Karabakh conflict on the unrecognized Nagorno-Karabakh Republic are "inadmissible," Noyan Tapan reported. She called for direct talks between Stepanakert and Baku and for the signing of a tripartite cease-fire agreement, which, she said, would expedite the peace process. Affirming that a "strategy to isolate Karabakh is counterproductive and will not work," Pallone pledged to try to convince Congress that supporting self-determination for Karabakh is not detrimental to U.S. Caspian oil interests, according to a 10 January press release by the Armenian Assembly of America. LF ARMENIAN SECURITY COUNCIL MEETING UPDATE. Armenian First Deputy Foreign Minister Vartan Oskanian told "RFE/RL Newsline" on 9 January that despite extensive discussions, Armenian and Karabakh leaders failed to reach a "definite common position" on resolving the conflict at the 7-8 January Armenian Security Council session. But he added that they will continue talks to that end. Yerevan has accepted "phased" peace plan proposed by the co-chairmen of the Organization on Security and Cooperation in Europe's Minsk Group as a basis for future talks, but Stepanakert continues to insists on a "package" solution that would resolve all contentious issues, including the enclave's future status and international security guarantees, in a single framework document. LF JAPAN TO BUILD OIL REFINERY IN GEORGIA. Japan's Itochu Corporation will sign a $300 million contract in Tbilisi later this month to build an oil refinery at the Black Sea port of Supsa, Interfax reported on 10 January, quoting Georgian International Oil Company President Giorgi Chanturia. The refinery will be located close to the terminal of the Baku-Supsa export pipeline, which is currently under construction, and will have an annual capacity of 3 million metric tons. It will produce fuel oil for electric power stations, diesel fuel, gasoline, and petrochemicals for both domestic consumption and export to Ukraine and Turkey. Itochu signed a memorandum of understanding with Georgia in September 1997, which covers investment in and modernization of hydro-electric power stations in Georgia. LF GEORGIA, GREECE SIGN DEFENSE COOPERATION AGREEMENT. Visiting Athens on 8-10 January, Georgian Defense Minister Vardiko Nadibaidze met with Greek President Constantinos Stephanopoulos and Foreign Minister Theodoros Pangalos, Russian media reported. Nadibaidze and his Greek counterpart, Apostolos Tsochatzopoulos, signed a cooperation agreement on exchanging information, joint maneuvers, and the transfer next month of a Greek patrol boot to the Georgian coast guard. Tsochatzopoulos stressed that Georgia and Greece are located in the same geo-political region and that greater interaction between them will contribute to countering regional instability. Greece signed a similar defense cooperation agreement with Armenia in July 1997. LF U.S.-AZERBAIJANI MINING AGREEMENT IN QUESTION? Vasif Halilzade, the deputy head of Azerbaijan's State Precious Metals Institute, has hinted that the Azerbaijani government may cancel a $500 million contract with a U.S. consortium to explore and develop the country's gold, silver, and copper deposits, AFP reported on 9 January citing Turan. Halilzade said RV Investment Group Services LLS has taken no steps to date to implement the contract , which was signed last summer (see "RFE/RL Newsline," 21 and 25 August 1997). LF HOSTAGE CRISIS RESOLVED IN TAJIKISTAN... Rahmon Sanginov and his followers on 10 January freed five hostages after securing freedom for three of their compatriots held by the Tajik government, RFE/RL correspondents in Dushanbe reported. Three days earlier, Tajik militia had detained three of Sanginov's men for carrying arms, prompting Sanginov to set up a road block outside eastern Dushanbe. As representatives of the Tajik government and National Reconciliation Commission were negotiating the men's release on 10 January, Sanginov's group took five hostages in downtown Dushanbe, one of whom was the city's deputy mayor. The exchange of hostages for prisoners was made on the evening of 10 January. BP ...WHILE NURI SAYS NO MORE HELP FROM HIS GROUPS. Chairman of the National Reconciliation Commission Said Abdullo Nuri warned on 12 January neither the commission nor the United Tajik Opposition, which Nuri also heads, will intervene again to resolve a hostage crisis, RFE/RL correspondents in Dushanbe reported. Members of the commission and the UTO have taken part in negotiations with hostage takers and/or kidnappers on several occasions.. Nuri said anyone engaging in such illegal activities will be on their own in the future. BP END NOTE WHO CONTROLS CHECHNYA? by Liz Fuller On 1 January 1998, Chechen President Aslan Maskhadov acquiesced to maverick field commander Salman Raduev's repeated demands that he dismiss his cabinet. Acting Prime Minister Shamil Basaev, notorious for his leading role in the June1995 Budennovsk hostage-taking, was charged with forming a new government. That move will inevitably fuel the ongoing debate in the Russian media about the extent of Maskhadov's control over his unruly countrymen and the alignment of domestic forces opposed to him. A former Soviet army colonel who served as chief of staff to President Dzhokhar Dudaev, Maskhadov won the adulation of the forces serving under his command during the 20-month war against Russia. Meeting with then Russian Security Council Secretary Aleksandr Lebed in August 1996, Maskhadov signed the agreements that in effect ended hostilities and paved the way for extended talks on Chechnya's future status vis-a-vis Moscow. Many Russian politicians made no secret of their desire to see Maskhadov, whom they considered pragmatic and open to reason, elected president of Chechnya rather than one of the more radical and unpredictable former field commanders, such as Basaev. But since his presidential election triumph in January 1997, Maskhadov has become increasingly perceived as having only limited authority. The real power, most observers agree, lies with the 18-strong Field Commanders' Council headed by Vice President Vakha Arsanov. By contrast, neither the parliament, the government, nor most political parties exercise significant influence on political developments. The former field commanders, each of whom established control over a specific district of Chechnya during the war, have thus emerged as a counterbalance and complement to the "teyps" (clans) that until late1994 were the single most important social and political entity. (There is a strict hierarchy among the more than 150 Chechen teyps, the most numerous and powerful of which, the "benoy," is one of the 20 or so oldest and most respected such groups.) This is not to assert that the power of the teyps has been totally eclipsed or that teyp membership carries no clout. Various teyps still control foreign policy and the oil sector, for example. Maskhadov's own faction is supported by Chechen businessmen from the smaller teyps who made their fortunes in Russia during the war. And two other groups jockeying for power are likewise teyp-oriented: the former Dudaev faction, which also includes representatives of some Ingush teyps; and that of Dudaev's deputy president, writer Zelimkhan Yandarbiev, and former chairman of the Chechen Oil Company, Khozh-Akhmet Yarikhanov, both of whom reportedly enjoy the support of the richest and noblest teyps. This latter faction also includes radical field commander Raduev and First Deputy Prime Minister Movladi Udugov, who, lacking teyp support, is engaged in building an alternative power base in the form of the Islamic Path party, which he heads. In August 1997, Yandarbiev and Raduev founded the Warriors of Freedom movement, which is composed of some 1,000 war veterans and opposes any compromise approach to securing Chechnya's formal independence from the Russian Federation. The visible erosion of Maskhadov's authority dates from May 1997, when he and Russian President Boris Yeltsin met in Moscow to sign a formal treaty on peace and bilateral relations. That move reportedly so outraged the Field Commanders' Council that its members contemplated a coup to depose Maskhadov. In early July, Shamil Basaev, at that time perceived as Maskhadov's most influential supporter within the council, resigned from his post as deputy premier. Basaev himself declined to comment on his motives, but one observer has claimed that Basaev's directives were routinely ignored and that he was not consulted when decisions were taken on matters within his competence. In late September, Vice President Arsanov, described by one Russian journalist as "unpredictable, single-minded, and ruthless," spontaneously ordered the expulsion of the entire Russian mission in Grozny. That move highlighted his role as what Ivan Rybkin, Lebed's successor as Security Council secretary, termed "the tail that controls the fox." One month later, in a possible bid to preclude further destabilizing moves by Arsanov, Maskhadov named Basaev first deputy prime minister and empowered him to act as premier during Maskhadov's private visits to Turkey and the U.S. It is unclear whether Maskhadov will continue to combine the posts of president and prime minister as he has done until now, despite objections from the Field Commanders' Council. Since Arsanov reportedly exercises full control over domestic political and economic issues, Basaev may find himself frustrated and side-lined if Maskhadov appoints him prime minister. Moreover, Basaev would be unable to prevent the further erosion of Maskhadov's dwindling authority. Meanwhile, Yandarbiev, Raduev and Udugov, united by their pathological antipathy to Russia, await an opportune moment to realize their shared objective of establishing an Islamic state in the North Caucasus. Maskhadov's avowed commitment to dialogue with Moscow is the single largest impediment to that objective. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. 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