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RFE/RL NEWSLINE Vol 2, No. 24, Part I, 5 February 1998
___________________________________________________________ RFE/RL NEWSLINE Vol 2, No. 24, Part I, 5 February 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 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I * YELTSIN SAYS RUSSIA WON'T ALLOW STRIKE AGAINST IRAQ * DUMA PASSES LAW ON COOPERATION WITH IRAQ * KOCHARIAN ALLY ELECTED ARMENIAN PARLIAMENTARY SPEAKER * End Note: ARMENIAN PRESIDENT'S RESIGNATION LIKELY TO CAUSE POLICY CHANGES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA YELTSIN SAYS RUSSIA WON'T ALLOW STRIKE AGAINST IRAQ. Commenting on the Iraqi crisis, President Boris Yeltsin told reporters on 5 February that Moscow will "not allow the problem to be solved by force." The president added that he is an optimist and believes the crisis has already peaked. Later, Yeltsin announced he had received a telephone call "about Iraq" and that Russian diplomacy has succeeded in finding a peaceful solution to the situation. ITAR-TASS, however, commented that "he did not define what [the telephone conversation] was about." BP RUSSIAN OFFICIAL EXPLAINS YELTSIN'S COMMENT ON 'WORLD WAR THREE.' Yeltsin's 4 February comment that a strike against Iraq could lead to World War Three was a reference to the use of nuclear weapons, according to Russian Ambassador to the UN Sergei Lavrov. A press release from the U.S. Embassy in Moscow on 4 February said the U.S. does not intend to use nuclear weapons against Iraq because "we realize the...consequences of such actions." Meanwhile, talking to Yeltsin by telephone on 4 February, British Prime Minister Tony Blair noted that in order to have Iraq to comply with inspections, there has to be "a real threat of force and the use of force if necessary." Meanwhile in China, Deputy Foreign Minister Grigorii Karasin is continuing talks with Chinese officials. A spokesman for the Chinese Foreign Ministry said "both countries oppose military action against Iraq." BP DUMA PASSES LAW ON COOPERATION WITH IRAQ. The State Duma on 4 February passed by 290 to seven with three abstentions a law on cooperation with Iraq, RFE/RL's Moscow bureau reported. The law, which was proposed by the Liberal Democratic Party of Russia, is a revised version of a bill passed last year by the Duma but rejected by the Federation Council. It would prohibit federal funds from being used to maintain UN sanctions against Iraq unless such expenses are listed as a separate item in the federal budget, Interfax reported. It also would allow Russian companies to conduct trade with Iraq "that is not banned by the Russian president and government." The bill was approved after deputies passed a controversial resolution urging Yeltsin to review Russia's adherence to UN sanctions if Iraq comes under military attack (see "RFE/RL Newsline," 4 February 1998). LB LUKIN COMMENTS ON IRAQ DIPLOMACY. Duma Foreign Affairs Committee Chairman Vladimir Lukin of Yabloko argued on 4 February that the Russian government must make sure its promises regarding Iraq take into account the "limit of Russian diplomatic possibilities in the Middle East," ITAR-TASS reported, quoting comments made in an interview with Ekho Moskvy. Lukin said he had voted against the non-binding resolution on Iraq approved by the Duma, which he described as "distorted." In particular, he questioned a provision in the resolution saying Iraq does not pose a global or regional threat. Foreign Ministry officials also criticized that resolution and urged Duma deputies to reject it. LB YELTSIN SAYS CHUBAIS, NEMTSOV TO STAY. Yeltsin said on 5 February that First Deputy Prime Ministers Anatolii Chubais and Boris Nemtsov will stay in the government until 2000 if they wish to do so, despite attempts by others to secure their removal. Yeltsin said that Chubais and Nemtsov "are not trying to rock the boat" but that others "are trying to force them out either individually or together," ITAR-TASS reported. He added that he will "resist all those who are putting pressure on [Chubais and Nemtsov] and will not allow them to be touched." The comments reflect Yeltsin's traditional leadership style of balancing competing factions in his government. Since last November, the authority wielded by Chubais and Nemtsov has been significantly reduced, and a recent redistribution of responsibilities within the cabinet was seen to strengthen Prime Minister Viktor Chernomyrdin (see "RFE/RL Newsline," 16 and 19 January 1998). LB ZYUGANOV VAGUE ABOUT INTENTIONS ON BUDGET VOTE. Communist Party leader Gennadii Zyuganov announced on 4 February that his faction will vote "intelligently, knowledgeably, and responsibly" when the 1998 budget is put to a third reading in the Duma, ITAR-TASS reported. He added that the Communist stand on the budget will reflect the "interests of domestic industry," but he did not elaborate. Communist leaders vowed to oppose the budget in the first and second readings, but on both occasions the document was approved by slim margins with some Communist support (see "RFE/RL Newsline," 8 and 29 December 1997). On 4 February, the Duma began debating the budget in the third reading, during which deputies vote on the document item by item, but a final vote was postponed until the next day. Duma Budget Committee acting Chairman Aleksandr Zhukov urged deputies to approve the document. LB DUMA APPROVES INCREASED FUNDING FOR MILITARY REFORM. The Duma on 5 February passed an amendment to the 1998 budget that calls for allocating 1 percent of the consolidated budget (the combined federal and regional budgets) toward carrying out military reform, ITAR-TASS reported. Yabloko deputy Oksana Dmitrieva, who chairs a budget subcommittee, spoke out against the amendment. She described the measure as a "built-in sequester," since it will reduce by 1 percent expenditures on all other programs, including science, education, and agriculture. However, the Duma approved the amendment by 237 to 23 with three abstentions. LB OFFICIAL CITES NEED TO RATIFY START-2... First Deputy Defense Minister Nikolai Mikhailov argued on 4 February that military reform will be "brought to a standstill" if Russia fails to ratify the START-2 arms control treaty, Russian news agencies reported. Mikhailov said Russia cannot afford to maintain its current stockpile of nuclear weapons. He added that the country's security is determined not by the number of warheads it possesses but by its ability to launch those warheads. LB ...WHILE ZYUGANOV CALLS FOR REJECTING TREATY. Communist Party leader Zyuganov told journalists on 4 February that no member of the parliament "who has self-respect" should vote to ratify the START-2 treaty, RFE/RL's Moscow bureau reported. Zyuganov slammed recent U.S. actions concerning Iraq, saying the U.S. "talks about democratic principles" but behaves like a "slightly intoxicated cowboy." He also charged that the U.S. has violated earlier arms control treaties, including the START-1 agreement. LB DEFENSE MINISTRY OFFERS EXPLANATION FOR ARMY PROBLEMS. The Defense Ministry says inadequate training is to blame for the wave of killings and suicides in the military, according to "Segodnya" of 2 February. The daily reported the Defense Ministry as explaining that "society is sick and therefore sends to the army sick conscripts." A lack of discipline among the ranks is exacerbated by sergeants, 90 percent of whom are draftees under 21. In addition, lieutenants are being rushed through military academies, "as if in time of war," to fill depleted ranks. The Defense Ministry's plans to cut up to 100,000 "experienced officers" as part of downsizing the military. BP RUSSIA TO CEASE NEW BORROWING IN FIRST QUARTER... During a meeting with First Deputy Prime Minister Chubais on 4 February, Yeltsin instructed the government to "live within its means" and to avoid new foreign and domestic borrowing during the first quarter of the year, Russian news agencies reported. Chubais told ministers at a 5 February cabinet meeting that Russia will be able to avoid new borrowing during the first quarter of 1998, thanks to improved tax collection, ITAR-TASS reported. He said tax receipts in January were up 26 percent and collection of customs duties up 30 percent over the same month last year. Finance Minister Mikhail Zadornov announced on 3 February that tax revenues totaling 9.5 billion rubles ($1.6 billion) were collected in January, close to the target of 10 billion rubles. Central Bank First Deputy Chairman Sergei Aleksashenko said the previous day that tax receipts for January 1998 were 40 percent higher than in January 1997. LB ...AS DOWNGRADE THREATENS TO RAISE BORROWING COSTS. The move to avoid new foreign and domestic borrowing comes as market turmoil and interest rate hikes have pushed up the cost of borrowing on Russian markets through treasury bills. In addition, an expected downgrade in Russia's credit rating is likely to increase the cost of future foreign borrowing. The international credit rating agency Moody's announced on 3 February that it is sending representatives to Moscow to consider downgrading Russia's sovereign debt rating. Moody's is also reviewing the credit ratings of nine major Russian commercial banks. On 4 February, the Finance Ministry announced that it is ready to meet with Moody's experts in order to convince them that Russia's fiscal situation has improved, Russian news agencies reported. Chubais announced at the 5 February cabinet meeting that Russia will not borrow on European markets again before late March at the earliest. LB YELTSIN DEMANDS TOUGH TAX POLICY, INVESTOR PROTECTION. In an apparent effort to boost confidence in the Russian markets, Yeltsin told Chubais on 4 February that the government must do more to promote tax reform and protect investors' rights. He urged the government to seek to ensure that, by the end of March, the Duma passes the new tax code in the first reading. He also told Chubais that the government must be tough with tax debtors and must not allow tax debts to be canceled against other debts owed to companies. (A November presidential decree banned the use of offsets to settle tax debts as of 1 January 1998.) In addition, Yeltsin called for convening a session of a government commission on the rights of foreign and domestic shareholders. He said those who do not respect shareholders' rights must be punished. LB GOVERNMENT REPRESENTATIVES CRITICIZE EES MANAGERS. The government representatives in the electricity monopoly Unified Energy System (EES) on 4 February criticized both Anatolii Dyakov, the chairman of the company's board of directors, and Boris Brevnov, the company's chief executive, Interfax reported. The representatives concluded that the energy sector has been harmed by the high-profile struggle between Dyakov and Brevnov, which began when the EES board recently tried to sack Brevnov (see "RFE/RL Newsline," 29 January 1998). They also decided to call an extraordinary meeting of EES shareholders in March. Government spokesman Igor Shabdurasulov announced on 3 February that the government will make personnel changes at EES after it has studied a report on the company by the Audit Chamber, ITAR-TASS reported. The Prosecutor-General's Office is also investigating alleged financial crimes committed by EES managers. LB PREDICTABLE PRESS COVERAGE OF SCANDAL. "Komsomolskaya pravda" on 4 February published a friendly interview with Brevnov, who denied the allegations against him and again accused his adversary Dyakov of improprieties. Oneksimbank is a major shareholder in "Komsomolskaya pravda," which generally supports First Deputy Prime Minister Boris Nemtsov (Brevnov's patron). In contrast, coverage of the EES conflict in "Nezavisimaya gazeta" has been unsympathetic to Brevnov. On 5 February, the newspaper charged that the EES leadership has managed the company poorly and is not concerned enough about "the dangers to the national economy posed by the consolidation of EES shares in the hands of foreigners." The company plans to raise cash by reducing its state-owned stake from some 52 percent to 50 percent plus one share. "Nezavisimaya gazeta" is largely financed by the LogoVAZ group of Boris Berezovskii, who has recently warned against foreign investment in the Russian energy sector. LB NO PROGRESS MADE ON REVISING LAND CODE. Duma Agrarian Affairs Committee Chairman Aleksei Chernyshev told Interfax on 4 February that work on revising the draft land code has not begun, despite an agreement reached at roundtable talks on land reform last December. Chernyshev, a member of the Agrarian faction, said a conciliatory commission of representatives from the Duma, Federation Council, and government has not even been formed. State Land Committee Chairman Ilya Yuzhanov, who has sharply criticized the current version of the land code, recently said reaching agreement on the document by the end of March will be extremely difficult (see "RFE/RL Newsline," 29 December 1997 and 8 January 1998). LB DAGESTANI POLICE PUT ON ALERT. Authorities in Dagestan have put police there on alert ahead of the 15 February elections for mayor of the capital city of Makhachkala, ITAR-TASS reported on 4 February. They also put Dagestani police on alert along the Dagestan-Chechnya border out of concern that the Chechens might stage an incident. Grozny, however, has denied any such possibility. PG TRANSCAUCASUS AND CENTRAL ASIA KOCHARIAN ALLY ELECTED ARMENIAN PARLIAMENTARY SPEAKER. Khosrov Harutunian, a long-time adviser of acting President Robert Kocharian, has been elected speaker of the parliament by a vote of 99 to 66, RFE/RL's Armenian Service reported on 4 February. Khosrov was prime minister briefly in 1992 but was dismissed by then president Levon Ter-Petrossyan over policy differences. Also on 4 February, the parliament formally accepted Ter-Petrossyan's resignation (see "End Note" below). PG KOCHARIAN SAYS ARMENIAN VOTE WILL TAKE PLACE ON SCHEDULE... Acting President Kocharian said on 4 February that new presidential elections will take place within 40 days, as specified by the constitution, RFE/RL's Armenian Service reported. Kocharian said the vote will be free and fair but declined to hint whether he will be a candidate. Because Kocharian comes from Nagorno-Karabakh, he would be allowed to run only if the constitutional provisions on Armenian citizenship and residency for the presidency are waived. PG ...OUTLINES HIS PLANS FOR KARABAKH, ARMENIA. Kocharian says he is committed to a peaceful settlement of the conflict in Karabakh and that his accession to the presidency does not represent any threat to peace, ITAR-TASS reported on 4 February. But Kocharian suggested that the current stability in the region may be upset by the introduction of peacekeepers or observers--both of which are provisions of the peace formula suggested by the Organization for Security and Cooperation in Europe's Minsk Group. In another move certain to strengthen those opposed to the Minsk Group formula, Kocharian announced he will re-legalize the Dashnak party, a nationalist group that Ter-Petrossyan banned in December 1994 for alleged involvement in terrorism. PG INTERNATIONAL COMMUNITY EXPRESSES REGRET, HOPE OVER CHANGES. Governments around the world have generally reacted with regret over Ter-Petrossyan's resignation but also with hope that the political changes in Yerevan will not affect the Karabakh peace process or change Armenia's relations with other countries. Azerbaijani President Heidar Aliev convened his Security Council and announced that he is "concerned" by developments in Yerevan, ITAR-TASS reported on 4 February. Russia's President Boris Yeltsin and State Duma leaders expressed regret at Ter-Petrossyan's departure but said they hope that ties between Yerevan and Moscow will remain strong. A U.S. State Department spokesman praised Ter-Petrossyan but said Washington has "every hope" that the OSCE Minsk Group's proposals will ultimately be accepted as the basis for peace. France, the third co-chairman of that group, expressed deep regret but also said it hopes that the peace process will continue. PG UTO FREES MORE GOVERNMENT TROOPS. Forces loyal to the United Tajik Opposition in the central Tavil-Dara region have freed the last 44 Tajik government soldiers captured during fighting there in 1996-1997, RFE/RL correspondents in Dushanbe reported. The UTO claims it has now freed all government soldiers captured in the five-year civil war. UTO spokesman Yusuf Khakimov said the organization now awaits "the release of 1,300 opposition soldiers from government prisons." BP TAJIK DEBT TO UZBEKISTAN RESCHEDULED. Uzbek Prime Minister Utkur Sultanov paid a one-day visit to Tajikistan on 4 February to meet with Tajik President Imomali Rakhmonov, RFE/RL correspondents in Dushanbe reported. The two leaders agreed to reschedule payment of Tajikistan's $150 million debt to Uzbekistan until the year 2000. They also discussed Tajikistan's entry into the Central Asian Customs Union (whose members are Uzbekistan, Kyrgyzstan, and Kazakhstan) and Uzbek President Islam Karimov's upcoming visit to Tajikistan. Sultanov also met with his Tajik counterpart, Yahye Azimov, to discuss bilateral trade. BP HUNGER STRIKER DIES IN KAZAKHSTAN. One of the hunger strikers in the southern city of Janatas has died, RFE/RL correspondents in Almaty reported. The 26-year-old Jumahan Esentayev, who worked at the Janatas phosphorus plant, died of a heart attack. Some of the plant's workers have been on hunger strike for three months demanding payment of wage arrears, which in some cases go back three years. BP KAZAKH CHILDREN ACCIDENTALLY INFECTED WITH TUBERCULOSIS. Negligence among medics in Janatas is being blamed for the infection of 133 children with tuberculosis, ITAR-TASS reported on 4 February. The children were diagnosed with disease last September and given inoculations of the wrong vaccine. Local officials attempted to cover up the mistake, and the incident went unreported until "several days ago." Criminal proceedings have been launched against both the medics and those who covered up the incident. BP END NOTE ARMENIAN PRESIDENT'S RESIGNATION LIKELY TO CAUSE POLICY CHANGES by Emil Danielyan The sudden resignation of Armenian President Levon Ter-Petrossyan is likely to have far-reaching consequences for both the Nagorno-Karabakh conflict and Armenia's internal politics. An immediate result is that politicians who take a harder line are now in full control of the country. Prime Minister Robert Kocharian is acting president. Both he and his ministers have consistently rejected the recent "phased" peace plan on Nagorno-Karabakh proposed by the Organization for Security and Cooperation in Europe's Minsk Group. That plan, which has been approved by Ter-Petrossyan and Azerbaijan, would provide for the withdrawal of the Karabakh Armenian forces from six occupied districts in Azerbaijan proper before Nagorno-Karabakh's status is resolved. Ter-Petrossyan argued that confidence-building measures would facilitate an overall agreement on status. Kocharian's government and Karabakh Armenians, however, say the plan is too dangerous because it provides no sufficient guarantees that Azerbaijan will not attack the disputed enclave once it regains lost territories. Instead, they call for a "package" deal that would involve a single framework accord on all contentious issues. With the new Armenian leadership and Nagorno-Karabakh certain to reject the "phased" approach, the Russian, U.S. and French co-chairs of the OSCE Minsk Group may be forced to return to the "package" strategy. International mediators from the OSCE postponed a meeting in Paris on 4 February pending the resolution of the political crisis in Armenia. In his final address to the nation, Ter-Petrossyan said internal government disputes over the peace process merely disguise fundamental differences on how and when to end the 10-year dispute with Azerbaijan. Ter-Petrossyan appears to believe that Armenia has no prospect of economic development without a lasting peace with Azerbaijan. In his view, Armenia will eventually find it very difficult to cope with the oil-rich Azerbaijan. That made him inclined to compromise on Karabakh's status, namely to accept Karabakh returning to Azerbaijani rule but preserving a high degree of autonomy, its own armed forces, and a land corridor link to Armenia. Kocharian and his two closest associates, Defense Minister Vazgen Sarkisian and Interior and National Security Minister Serzh Sarkisian (who is not related to Vazgen), take a much tougher view. They rule out any "vertical subordination" of Karabakh to Baku. Kocharian recently said that Armenia should insist on the establishment of some kind of trilateral confederation in which Karabakh and Azerbaijan would be equal entities. Having forced Ter-Petrossyan's resignation, Kocharian and his associates feel that Armenia could reach prosperity even without a settlement of the Karabakh issue. Karabakh is important to the Armenians because of historical and psychological factors. After having lost territories for centuries, the Armenians are reluctant to "lose" Karabakh now that they have won a war against Azerbaijan. But it is clear that the ouster of Ter-Petrossyan will affect the peace process for at least several months. International reaction will depend on internal political developments in Armenia. Ter-Petrossyan's resignation will result in either the country's democratization or stronger authoritarian rule than is the case at present. Observers believe that democratization is the more likely of those two options. Kocharian said on 4 February that presidential elections, scheduled for March, will be free and fair. He seems to think that he has good chances of winning those elections. Although only an Armenian citizen can become president, Kocharian, who comes from Nagorno-Karabakh, may find a loophole in the constitution enabling him to run. Kocharian is likely to rally a broad coalition behind him. The re-legalization of the banned Dashnak party, expected later this week, will give a crucial boost to Kocharian's popularity. His main challenger will probably be the former opposition presidential candidate, Vazgen Manukian. In fact, the two men have similar agendas: both favor democratization and a firmer stand on Karabakh. Another option is that Armenia could be transformed into a parliamentary republic. That idea is supported by most opposition parties but has not been formally considered. The author is an RFE/RL corresponent based in Yerevan. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. 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