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RFE/RL NEWSLINE Vol. 2, No. 102 Part I, 29 May 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 102 Part I, 29 May 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 xxxxxxxxxxxxxxxxxxx SPECIAL REPORT xxxxxxxxxxxxxxxxxxxxxx RUSSIAN MEDIA EMPIRES III A new prime minister has taken office, Boris Berezovsky's now a CIS official, and the state plans to form a new media holding company. See our updated media report. http://www.rferl.org/nca/special/rumedia3/index.html (English) http://www.rferl.org/bd/ru/russian/content/reports/rumedia3/ index.html (Russian) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I * MOSCOW MOVES TO CUT SPENDING, BOOST REVENUES * GOVERNMENT SACKS TOP ROSNEFT EXECUTIVES * RUSSIA CONDEMNS ABKHAZ STATE OF EMERGENCY xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA MOSCOW MOVES TO CUT SPENDING, BOOST REVENUES. The government on 29 May issued a directive on measures to cut federal spending by 41.9 billion rubles ($6.8 billion) this year, Reuters reported. The directive calls for raising 5 billion rubles in tax arrears from 20 large firms next month and revoking a March decision to cut excise duties on oil. President Boris Yeltsin on 29 May issued a decree on measures to boost revenues, Interfax reported. According to presidential spokesman Sergei Yastrzhembskii, the decree will make it easier to seize property owned by tax debtors. Meanwhile, Yeltsin has sacked State Tax Service chief Aleksandr Pochinok and replaced him with State Duma deputy Boris Fedorov, a former finance minister. Also on 29 May, the extraordinary presidential commission on tax and budget discipline is meeting to discuss tax arrears of more than a dozen large firms. LB IMF LEADERSHIP TO RECOMMEND DISBURSEMENT OF LOAN TRANCHE. The IMF's leadership will recommend that the fund's board of directors agree to disburse the next $670 million tranche of a four-year loan to Russia, Interfax reported on 29 May, citing a press release from the fund's Moscow office. Senior IMF Russian expert John Odling-Smee arrived in Moscow the previous day for talks concerning the tranche. Some Russian media have reported that the government is seeking a special multi-billion-dollar IMF credit to help calm the markets. Deputy Finance Minister Oleg Vyugin on 28 May said such a loan would play a great "psychological" role but added that there are "real chances to save the situation without extra help," according to Reuters. The newspaper "Vremya MN" on 29 May quoted Central Bank First Deputy Chairman Sergei Aleksashenko as saying that he did not discuss any special credit during his meeting with Odling-Smee. LB YELTSIN POSTPONES MEETING WITH BANKERS. Presidential spokesman Yastrzhembskii told Interfax that a meeting between Yeltsin and influential businessmen scheduled for 29 May has been postponed until 2 June to allow the president to prepare "concrete proposals." The meeting is to include the founders of six major Russian banks, Gazprom head Rem Vyakhirev, Unified Energy System Chief Executive Anatolii Chubais, and LUKoil President Vagit Alekperov (see "RFE/RL Newsline," 26 May 1998). On 27 May, Prime Minister Sergei Kirienko discussed the situation on Russian markets with four of the businessmen who have been invited to meet with Yeltsin: Oneksimbank founder Vladimir Potanin, Media-Most head Vladimir Gusinskii, SBS-Agro bank head Aleksandr Smolenskii, and Menatep bank founder Mikhail Khodorkovskii. The same day, Central Bank Chairman Sergei Dubinin met with representatives of several leading Russian and foreign investment banks, "Kommersant-Daily" reported on 29 May. LB MARKETS SHOW SLIGHT IMPROVEMENT. Russian share values rose on 28 May by an average of 6 percent, Reuters reported. Yields on government treasury bills fell slightly the same day but remained about 70 percent, according to the "Moscow Times." In an interview published in "Vremya MN" on 29 May, Central Bank First Deputy Chairman Aleksashenko claimed that the bank has "completely turned around" the situation on the currency market and has begun buying back some of the dollars sold in recent days to shore up the ruble. He said Russia's gold and hard-currency reserves now exceed $14.5 billion. LB GOVERNMENT SACKS TOP ROSNEFT EXECUTIVES. The government on 28 May dismissed Yurii Bespalov, chief executive of the state-owned oil company Rosneft, and Aleksandr Putilov, the chairman of the company's board of directors. Interfax and Reuters quoted an unnamed government official as saying the firings are linked to the recent failure of an auction to sell a 75 percent stake in Rosneft (see "RFE/RL Newsline," 27 and 28 May 1998). The source said Bespalov and Putilov opposed the government's plans to privatize the company, adding that the government will sack leaders of other companies in which the state has a controlling stake if those leaders "do not carry out government decisions." LB CHUBAIS IN U.S. TO MEET WITH EES SHAREHOLDERS. Chubais flew to the U.S. on 28 May to meet with foreign shareholders in the Unified Energy System (EES) company, Russian news agencies reported. Yeltsin recently signed a law that limits the number of shares in EES that can be held by foreigners, and some government officials have blamed that law for provoking the steep declines on the Russian markets. "Russkii telegraf" on 29 May suggested that during his U.S. visit, Chubais will also hold negotiations on taking out foreign loans to help EES pay its tax debts. LB RUSSIA DEPLORES PAKISTANI NUCLEAR TESTS. The Russian Foreign Ministry issued a statement on 28 May expressing "deepest concern" that Pakistan went ahead with nuclear weapons tests despite "persistent appeals by the world community to show restraint," Interfax reported. The statement said that "a real threat is emerging" of the spread of nuclear weapons, and it urged all states that have not yet done so to accede to the Nuclear Non-Proliferation Treaty. State Duma International Affairs Committee chairman Vladimir Lukin (Yabloko) and Geopolitics Committee chairman Aleksei Mitrofanov (Liberal Democratic Party of Russia) said that "the struggle for nuclear non-proliferation is lost." They predicted that Iran, Israel, and possibly Saudi Arabia, South Africa, and South Korea will redouble their efforts to acquire nuclear potential. LF RUSSIA MAY NOT MEET OBLIGATIONS FOR NEW SPACE STATION. Yurii Koptev, director of the Russian Space Agency, said at a cabinet meeting on 28 May that if his country cannot finance its share of the international space station, its status may be downgraded from partner to contractor, Interfax reported. Koptev said Russia is unlikely to meet its part of the construction schedule owing to lack of finances. However, he said other countries participating also have problems meeting their deadlines, adding that the original time frame was "overly optimistic." The first stage of construction is slated to begin in the last quarter of this year but now seems likely to be delayed again by nearly one year. With regard to the fate of the "Mir" space station, Koptev said there are options for closing it down late this year or early next year. The agency is also considering moving the aging station into a higher orbit rather than crashing the 140 ton station into the Pacific Ocean. BP RUSSIA, CHECHNYA SIGN LEGAL COOPERATION AGREEMENTS. Meeting in the Ingushetian capital, Nazran, on 28 May, Russian and Chechen officials signed three cooperation agreements, Russian agencies reported. The agreements focus on coordinating anti-crime activities and exchanges of information between Prosecutor-General's Offices and Justice Ministries as well as between the Russian Interior Ministry and the Chechen Shariat Security Ministry. A preliminary protocol on such cooperation was signed in Nazran earlier this month (see "RFE/RL Newsline," 18 May 1998.) Russian Prosecutor-General Yurii Skuratov, who attended the Nazran talks, told journalists that there are no legal grounds to close the criminal case against Chechen Prime Minister Shamil Basaev for his role in the 1996 Budennovsk raid, Interfax reported. But Skuratov added he did not discuss Basaev's case during the 28 May talks. LF YELTSIN WANTS FREE MEDIA TO SUPPORT STATE POLICIES... Yeltsin on 28 May told the top executives of Russia's three major television networks that the state has no plans to restrict media freedom but added that "we have the right to ask you to promote state policy," Russian news agencies reported. Yeltsin arranged the meeting with Kseniya Ponomareva, director-general of 51 percent state-owned Russian Public Television, Mikhail Shvydkoi, chairman of fully state-owned Russian Television, and Oleg Dobrodeev, director-general of the private network NTV after presidential spokesman Sergei Yastrzhembskii accused unnamed Russian media of going "beyond reasonable limits" in their coverage of recent protests by coal miners (see "RFE/RL Newsline," 26 May 1998). ITAR-TASS quoted Shvydkoi as saying the president wants media coverage to help "common sense and national interests triumph." LB ...AND NOT LEAVE OUT GOOD NEWS. In a nationwide radio address on 29 May, Yeltsin argued that it is important for the media "not to forget to tell their readers, listeners, and viewers" good news about what is going on in Russia. He acknowledged that it is "not possible to keep quiet" about bad news but said journalists often concentrate too much on violence, crime, and catastrophes. He added that "the principle of freedom of the press does not mean premissiveness and open cynicism and does not mean irresponsibility and forgetting about professional ethics." LB NTV DIRECTOR, FOUNDER DEFEND NEWS COVERAGE. NTV Director- General Oleg Dobrodeev told RFE/RL's Moscow bureau on 28 May that he defended his network's coverage of the recent miners' protests during Yeltsin's meeting with top television executives. Vladimir Gusinskii, whose Media-Most holding company owns a controlling stake in NTV, also defended the network's broadcasts in an appearance at a Moscow conference organized by the U.S.-based watchdog group Freedom Forum. He argued that Yeltsin's recent decree creating a holding company for state-owned electronic media violates Russian legislation on the mass media. Gusinskii told RFE/RL after the conference that the authorities should do their job, such as collecting taxes and paying state employees, and leave journalists to do theirs. LB ANOTHER NEWSPAPER BEGINS PUBLICATION. The newspaper "Vremya MN," which was launched on 20 May and currently appears three times a week, is expected to begin daily publication in the coming months. The newspaper's editor-in-chief is Vladimir Gurevich, a longtime economic reporter and deputy editor of the weekly "Moskovskie novosti." There are already more than a dozen daily newspapers in Moscow, but in an interview with "RFE/RL Newsline" on 27 May, Gurevich dismissed as an "illusion" the belief that the market is oversaturated. He argued that there is a niche for a "quality newspaper" that presents a balanced point of view and differentiates between news reports and opinion columns. The Central Bank is not formally involved in "Vremya MN" but is close to several banks, including the Sberbank savings bank, that are providing indirect financial support through the newspaper's partner company, Media Finance. LB AGRARIAN LEADER CLAIMS ALTAI LEADER BREAKING CAMPAIGN RULES. Agrarian Party leader Mikhail Lapshin on 28 May charged that Semen Zubakin, the head of the Altai Republic, is "openly using all acceptable and unacceptable measures" supporting the campaign of former First Deputy Finance Minister Andrei Vavilov, who is running in a 31 May by-election for a seat in the State Duma. Lapshin is Vavilov's main rival for the seat, which Zubakin gave up when he was elected to the top post in Altai last December. Lapshin has already accused Vavilov of trying to buy votes, an allegation Vavilov denied in an interview with "Kommersant-Daily" on 28 May. Meanwhile, Gazprom head Rem Vyakhirev arrived in Altai Republic on 28 May to support Vavilov, who is an adviser to Vyakhirev. According to "Nezavisimaya gazeta" on 28 May, the popular singer and Duma deputy Iosif Kobzon will fly to Altai on 29 May in order to support Vavilov. The same day, Communist Party leader Gennadii Zyuganov is scheduled to campaign on behalf of Lapshin. LB NIZHNII COURT CONVICTS WOULD-BE MAYOR. The Nizhnii Novgorod Oblast Court on 27 May found the businessman Andrei Klimentev guilty of embezzling some $2 million of a Finance Ministry loan, Russian media reported. Klimentev received a six-year prison sentence, which will include time he has already spent in detention (18 months when his case was first being investigated and tried plus eight weeks since his re-arrest on 2 April). Klimentev won the 29 March mayoral election in Nizhnii, but his victory was annulled by the city's electoral commission, with the approval of federal officials. He will now almost certainly be barred from competing in the repeat mayoral election, to be held later this year, unless the Supreme Court overturns the oblast court's ruling. LB TRANSCAUCASUS AND CENTRAL ASIA RUSSIA CONDEMNS ABKHAZ STATE OF EMERGENCY. In a statement issued on 28 May, the Russian Foreign Ministry called on the Abkhaz to comply with the 25 May cease-fire protocol, Interfax reported. The statement condemned President Vladislav Ardzinba's 28 May decision to impose a state of emergency on Gali and parts of two adjoining raions, terming it an attempt to prevent the return to their homes of ethnic Georgians who fled during the fighting. Such restrictions are "blatantly inconsistent with international standards" and with the repatriation agreement signed by Abkhaz, Georgian, Russian, and UN representatives in April 1994, the Russian statement concluded, adding that the repatriation of fugitives is essential to restoring peace in the region. LF UN, OSCE, TURKEY EXPRESS CONCERN OVER ABKHAZ FIGHTING. The UN Security Council issued a statement on 28 May registering "grave concern" at the recent hostilities in Abkhazia and the resulting loss of life, Reuters reported. It called on Secretary-General Kofi Annan to secure the support of all sides for deploying additional UN troops to protect the unarmed UN Observer Mission in western Georgia. OSCE Chairman-in-Office Bronislaw Geremek likewise expressed concern over the deteriorating situation in Gali Raion, saying it "seriously threatens UN-led efforts to achieve an overall solution of the conflict and poses a danger to the security of other regions of the Caucasus." The Turkish Foreign Ministry affirmed Ankara's support for steps to resolve the Abkhaz conflict "through peaceful means, [preserving] Georgia's sovereignty and territorial integrity." Georgian President Eduard Shevardnadze canceled a planned visit to Turkey on 28 May because of the Abkhaz crisis, Caucasus Press reported. LF GEORGIA, ABKHAZ WEIGH PEACEKEEPING OPTIONS. Georgian presidential press spokesman Vakhtang Abashidze said on 28 May that Tbilisi is hoping the UN will agree to launch a peace-enforcing operation in Abkhazia, Interfax reported. Shevardnadze had proposed such a Bosnia-style intervention earlier this year before the recent fighting erupted (see "End Note," "RFE/RL Newsline," 21 January 1998). But Ardzinba signaled he will reject such a proposal, which he told Interfax would "trigger a new blood bath that will spill over the borders of the region." He suggested that if such a peace-enforcing operation is launched it should be directed against Georgia, which he called the aggressor in the conflict. LF GEORGIAN OPPOSITION BLAMES SHEVARDNADZE FOR DEFEAT. Several Georgian opposition parties and the Coordinating Council of Political Organizations of Abkhazia, which represents ethnic Georgian displaced persons from the region, have all condemned the Georgian leadership's handling of the past week's fighting, specifically its failure to provide military support to the Georgian guerrillas, according to Caucasus Press. Nationalist Party leader Zaza Vashakmadze and Union of Traditionalists of Georgia Chairman Akaki Asatiani both called for Shevardnadze's resignation. Asatiani and Vakhtang Bochorishvili, the chairman of the Konstantine Gamsakhurdia Society, have identified Russia as "the winner in this game." LF ARMENIAN PRESIDENT STRESSES NEED FOR STRONG ARMY. In a radio address to the nation on 28 May to mark the 80th anniversary of the First Armenian Republic, President Robert Kocharian said contemporary Armenia must have a "strong state structure" and "galloping economic growth." "We are obliged to become the best organized state in the region," Kocharian said. "We are simply doomed to have a powerful army, without which the balance of forces in our complicated and unstable region will be disrupted." Also on 28 May, "Hayastani Hanrapetutyun" quoted Murad Petrosian, chairman of the Defense and Security Committee of the Nagorno-Karabakh parliament, as advocating that Prime Minister Leonard Petrosian should resign to make way for "new people" who are "clever and creative organizers" such as Defense Minister Samvel Babayan. LF ARRESTS IN ARMENIAN CORRUPTION SCANDAL. Officials from the Prosecutor-General's Office said on 27 May that several top managers at the newly privatized ArmenTel telecommunications company have been arrested on charges of taking bribes, RFE/RL's Yerevan bureau reported. They are to be detained pending an investigation into the company's operations. Former Communications Minister Grigor Poghpatian has already been interrogated by the office in connection with the case, according to Armenian media reports. Greece's OTE acquired 90 percent of ArmenTel's stock in late 1997 in a deal worth some $500 million. The Armenian government retained the remaining 10 percent stake. LF ISRAELI PRIME MINISTER IN TASHKENT. Returning from China to Israel on 28 May, Prime Minister Benjamin Netanyahu stopped in the Uzbek capital, Tashkent, according to Interfax and Jerusalem Television Channel 2. Netanyahu met with Uzbek President Islam Karimov and Prime Minister Utkir Sultanov to discuss regional issues, particularly the possible acquisition of nuclear arms by Iran. Netanyahu extended an invitation to Karimov to visit Israel, which the Uzbek leader accepted. Interfax reported there are 25,000 Jews currently living in Uzbekistan, down from the 145,000 recorded in the 1989 census, and that 10 new synagogues have been built since Uzbekistan gained independence in 1991. BP NAZARBAYEV LAUDS SOUTH KOREAN INVESTMENT. At a ceremony opening the LG Electronics Plant in Almaty, Kazakh President Nursultan Nazarbayev praised South Korea for being the biggest direct foreign investor in Kazakhstan, Interfax reported. The plant will manufacture up to 300,000 televisions annually and employ more than 1,000 local workers. Nazarbayev noted that South Korean direct investment now totals $750 million. BP xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. 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