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RFE/RL NEWSLINE Vol. 2, No. 105 Part I, 3 June 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 105 Part I, 3 June 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 * PRESIDENT, BUSINESS LEADERS AGREE TO COOPERATE * STOCK MARKET GAINS SOME GROUND * AZERBAIJAN SIGNS NEW OIL, GAS CONTRACTS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA PRESIDENT, BUSINESS LEADERS AGREE TO COOPERATE. Anatolii Chubais, the chief executive of the electricity giant Unified Energy System, told journalists after a 2 June meeting between President Boris Yeltsin and 10 business leaders that "major Russian entrepreneurs are ready to lend a hand to the authorities, and the authorities...are ready to support the entrepreneurs," Russian media reported. Yeltsin invited the founders of six major Russian banks and chief executives of four leading companies in the energy sector to discuss the current financial crisis, among other issues. Presidential spokesman Sergei Yastrzhembskii told journalists that Yeltsin promised to consider policies proposed by the businessmen, but the spokesman declined to specify the nature of those proposals. "Kommersant-Daily" reported that Vladimir Potanin, the founder of Oneksimbank and now head of the Interros holding company, met separately with Yeltsin and Prime Minister Sergei Kirienko. LB STOCK MARKET GAINS SOME GROUND. Share values on the Russian stock market rose on 2 June by more than 12 percent on average and prices for some of the most frequently traded shares increased by up to 20 percent, Interfax reported. The gains appear to reflect increasing confidence that Russia will receive a major stabilization loan from foreign governments, banks, or financial institutions. (Prime Minister Kirienko is to fly to Paris on 3 June and will reportedly hold talks on a possible bailout package.) The auction of government treasury bills (GKOs) on 3 June will be the next test of investor confidence. Massive selling of GKOs by foreign and then Russian investors has nearly tripled yields in recent weeks and has contributed to pressure on the ruble. Central Bank First Deputy Chairman Sergei Aleksashenko told "Vremya MN" on 29 May that foreign investors took $500 million-$700 million out of the GKO market last month. LB IS GOVERNMENT KEEPING PROMISES TO COAL MINERS? Kemerovo Oblast Governor Aman Tuleev on 1 June charged that the government is not honoring the pledges it made to persuade unpaid coal miners to end their blockade of the Trans- Siberian railroad, Interfax reported. Tuleev said that at the rate money is arriving in Kemerovo, debts to miners will be settled 10 days later than the 1 June deadline to which Deputy Prime Minister Oleg Sysuev agreed. Addressing a 2 June meeting in Moscow of the main Russian trade union for coal industry workers, Deputy Prime Minister Boris Nemtsov claimed that the government is fully meeting its obligations toward miners. But he noted that the federal authorities do not directly pay miners' wages. Once government assistance has been sent to coal enterprises, it is the responsibility of those companies' executives to pay their workers, Nemtsov said. LB MIDDLEMEN KEEP ONE-THIRD OF PROCEEDS FROM COAL SALES. Moscow-based middlemen keep about one-third of the proceeds earned from sales in the coal industry, according to Federal Tax Police Deputy Director Andrei Przhezdomskii. He said investigations of coal enterprises have revealed widespread tax evasion and huge profits for middlemen, Russian news agencies reported. For instance, company managers often conclude barter agreements instead of selling coal for cash, and the value of the goods received in exchange for the coal is often far less than the market value of the coal. During the recent blockades of major railroads by unpaid miners, government officials repeatedly blamed coal enterprise managers and middlemen for the persistent wage arrears in the coal sector (see "RFE/RL Newsline," 21 May 1998). LB ROUNDTABLE TALKS ON 'ANTI-CRISIS' MEASURES DELAYED. State Duma Speaker Gennadii Seleznev on 2 June announced that roundtable talks on the government's "anti-crisis program" have been postponed from 5 June to 23 June, Interfax reported. At the height of the recent wave of protests by unpaid coal miners, Yeltsin agreed to hold such talks during the first 10 days of June (see "RFE/RL Newsline," 22 May 1998). The delay may last longer than Seleznev suggested. Presidential spokesman Yastrzhembskii says all Federation Council members and some Duma deputies will be invited to the Kremlin on 30 June for a "big discussion." Meanwhile, the Duma has asked Prime Minister Sergei Kirienko to inform the chamber on 10 June about the government's plans for dealing with the economic crisis. Yeltsin is slated to discuss the government's policies during a 14 June session of the Federation Council, according to Council speaker Yegor Stroev. LB KREMLIN TO CHECK SOME INCOME DECLARATIONS. Yevgenii Savostyanov, the deputy head of the presidential administration, says the Kremlin is to establish a process for checking the veracity of bureaucrats' income and property declarations, Russian news agencies reported on 2 June. He said 1-2 percent of the more than 426,000 declarations submitted this year will be reviewed. The targets will be selected on the basis of information received from the tax police, law enforcement agencies, or other sources such as media reports. Savostyanov said the declarations show that most of Russia's "bureaucratic elite is poor." Others have argued that it is easy for officials to conceal the true size of their incomes and property holdings. LB CONSTITUTIONAL COURT IN NO HURRY ON TROPHY ART, ELECTORAL LAWS. The Constitutional Court will not consider the trophy art law and the law on parliamentary elections until late 1998, court Chairman Marat Baglai announced on 2 June, following a meeting with Yeltsin. The court in April instructed Yeltsin to sign the trophy art law, but the president has questioned the constitutionality of provisions that prohibit the transfer abroad of cultural valuables seized by the Soviet Union during World War II. The challenge to the electoral law questions the proportional representation system currently used to elect half the State Duma. Both cases highlight sharp controversies between Yeltsin and his parliamentary opponents. But Baglai estimated that of the cases considered by the Constitutional Court, only 10 percent concern disputes between the legislative and executive branches, while some 60 percent concern individual rights and 30 percent deal with federalism issues or the constitutionality of regional laws, Interfax reported. LB SUPREME COURT CHAIRMAN BEMOANS UNDERFUNDING OF COURTS. Vyacheslav Lebedev has warned that "there can be no talk of providing for the independence of the judicial system" given current levels of funding for Russia's courts, RFE/RL's Moscow bureau reported on 2 June. He said many raion courts have been forced to cease functioning. According to Lebedev, the Supreme Court requested 5.6 billion rubles ($909 million) in spending on the judicial system for this year. But the 1998 budget projected only 3.4 billion rubles, and the government later reduced that sum by more than 26 percent, Interfax reported. (Russia's Council of Judges has asked Yeltsin to instruct the government to reverse the planned spending cuts on the judiciary, ITAR-TASS reported on 29 May.) The Supreme Court has asked the Constitutional Court to consider the legality of budget targets that are insufficient for safeguarding the independence of the courts. LB GOVERNMENT TO SIGN POWER-SHARING AGREEMENT WITH MOSCOW. Yeltsin has instructed the government to sign a power- sharing agreement this month between the federal authorities and the Moscow city government, presidential spokesman Yastrzhembskii announced on 2 June. Moscow Mayor Yurii Luzhkov met with Prime Minister Kirienko for two hours on 30 May to discuss various policy issues. Among other things, the mayor reminded Kirienko that the Moscow city government would like to buy a controlling stake in the Sheremetevo international airport, Russian news agencies reported. He called for lowering electricity tariffs by at least 30 percent in order to stimulate industry. Luzhkov also lobbied against plans to cut by nearly a third payments this year to compensate Moscow for the cost of maintaining federal facilities in the capital. LB NIZHNII NOVGOROD MAKES MAYORAL RACES TWO-ROUND ELECTIONS. The Nizhnii Novgorod Oblast legislature on 2 June amended the law on local elections to introduce a two-round system for electing city mayors, Interfax reported. Runoff elections will be held if no candidate gains more than 50 percent of the vote in the first round. The new system will make it more difficult for extreme or highly controversial figures to win elections and was adopted in response to the victory of businessman Andrei Klimentev in a March mayoral race in Nizhnii Novgorod. If a two-round system had been in place, Klimentev would most likely have lost in the runoff. In any case, that election was quickly annulled, and Klimentev has since been sentenced to six years in prison (see "RFE/RL Newsline," 29 May 1998). LB TRANSCAUCASUS AND CENTRAL ASIA AZERBAIJAN SIGNS NEW OIL, GAS CONTRACTS. Azerbaijan's state oil company SOCAR on 2 June signed two contracts with international consortia to explore and develop off-shore Caspian oil fields. A $2.5 billion agreement provides for production-sharing at the Kyurdashi field, whose reserves total an estimated 100 million metric tons. The participants are SOCAR (50 percent), Italy's Agip (25 percent), Japan's Mitsui (15 percent), Turkey's TPAO (5 percent), and Spain's Repsol (5 percent). The other agreement applies to the South-West Gobbustan field, with estimated reserves of 50 million metric tons. The partners are SOCAR (40 percent), the British-Canadian Commonwealth Oil and Gas (40 percent), and Union Texas Petroleum (20 percent). An accord was also signed on exploration rights for the onshore Kyursangi and Karabaghli oil and gas deposits. SOCAR has a 50 percent stake in the undertaking, Frontera Resources 30 percent, and the Saudi-U.S. Delta-Hess 20 percent. LF ABKHAZ, GEORGIAN ENVOYS MEET. Abkhaz presidential envoy Anri Djergenia and Georgian ambassador to Russia Vazha Lortkipanidze began talks in Moscow on 2 June to prepare for a meeting between President Eduard Shevardnadze and his Abkhaz counterpart, Vladislav Ardzinba, Interfax reported. The previous day, Lortkipanidze said it is hoped such a meeting could take place later this month. But this is unlikely, since Tbilisi insists such a meeting is contingent on the repatriation of the 30,000-40,000 ethnic Georgians forced to flee Abkhazia's southernmost Gali Raion during last month's fighting. LF GEORGIAN ARMY "NOT COMBAT-READY." Meeting with journalists in Tbilisi on 2 June, President Shevardnadze said that the Georgian armed forces are not combat-ready because Russia has not yet fulfilled agreements on providing Georgia with arms to replace those withdrawn from the country in 1991- 1993, Interfax reported. Shevardnadze said the low level of combat-readiness was one of the reasons why the Georgian armed forces were not sent into Abkhazia to protect the Georgian population during last month's fighting. Georgian human rights activists, however, claim that the reason for the low level of combat-readiness within the Georgian army are the appalling conditions under which conscripts serve. A platoon of Georgian cadets left for the U.S. on 2 June to participate in maneuvers within the framework of NATO's Partnership for Peace program. LF ARMENIAN PRESIDENT SAID TO OPPOSE PRE-TERM PARLIAMENTARY ELECTIONS. Armenian parliamentary speaker Khosrov Harutiunian told journalists on 2 June that President Robert Kocharian is opposed to pre-term parliamentary elections and wants the current National Assembly to complete its four- year term, which expires in summer 1999, RFE/RL's Yerevan bureau reported. Harutiunian said both he and Kocharian believe that the parliament should be dissolved only if there is a "political crisis" in the country. He added that it is unlikely the parliament will pass new a new election law before the summer recess. The majority Yerkrapah group wants a maximum of 40 seats in the 131-member parliament allocated on the basis of proportional representation, but other parties want the majority of seats allocated under that system. LF TAJIK COMMISSION FORMED TO DEAL WITH CONTROVERSIAL LAW. Following a meeting with United Tajik Opposition leader Said Abdullo Nuri on 2 June, President Imomali Rakhmonov signed a decree forming a "conciliation commission" tasked with resolving the problems arising from the passage last month of a law banning religious political parties, ITAR-TASS reported. The commission has 20 days to find an acceptable compromise after complaints by the UTO, the UN Security Council, the Iranian and Russian Foreign Ministries, and the U.S. State Department that the law contravenes the Tajik peace accord signed last year. Nuri said that he hopes the prohibition will be lifted and does not believe it will take 20 days to do so. Russian Ambassador to Tajikistan Yevgenii Belov responded to the formation of the commission by saying that "a light has appeared at the end of the tunnel." BP RUSSIAN INTERIOR MINISTER SAYS FUNDAMENTALISM "A CIS PROBLEM." Sergei Stepashin, attending a conference of CIS interior ministers in the Uzbek capital of Tashkent, said "expressions of fundamentalism...or Wahhabism...have become a serious issue throughout the CIS," Interfax reported. He said an agreement has already been reached with Azerbaijan on "studying expressions of Wahhabism in Dagestan" and that Uzbekistan has shown interest in participating in that project. He added that a data base has been set up that lists criminal groups with connections in other countries. He said the data base already has 250,000 entries. Stepashin also stressed the need to cooperate in combating drug trafficking. BP WOMAN DIES FROM CYANIDE POISONING IN KYRGYZSTAN... A woman on 3 June died in a hospital in the eastern town of Karakol from cyanide poisoning, RFE/RL correspondents reported. She is the first person to die as a result of the spill last month of 1.7 tons of sodium cyanide into the Barskoon River, which flows into the southern part of Lake Issyk-Kul. More than 1,000 people have received medical treatment following the accident. The full extent of the damage is still unknown. RFE/RL correspondents report that at the end of May, tourists on the north shore of Issyk-Kul received little, if any information, about the toxic spill and were still swimming in Issyk-Kul. BP ...CAMECO PRESIDENT SAYS CONTAMINATION REPORTS EXAGGERATED. Michel Bernard, the president of Canada's CAMECO Corp., said on 3 June that the spill into the Barskoon River does not pose a serious threat to residents of the area or nearby Lake Issyk-Kul. CAMECO is the foreign partner of Kyrgyzstan's Kumtor Gold Mining Company. Bernard said reports in the Kyrgyz and CIS media have exaggerated the seriousness of the spill. He argued that "well-respected experts" say the leak will not endanger the Issyk-Kul environment as most of the chemical has settled at the bottom of the river which feeds into Issyk-Kul. A special government commission supported Bernard's claim, saying the amount of sodium cyanide in the lake does not exceed the norm. BP NEW UZBEK LAND LAW PUBLISHED. Uzbekistan's new land law was published on 2 June, Reuters reported. According to that legislation, land is the property of the state and cannot be sold, bought, traded, presented as a gift, or used as collateral. Land may be leased to Uzbek citizens engaged in agriculture or wishing to construct a private house after obtaining permission from the local authorities; foreigners, however, require special permission from the government to lease land. Reuters quotes a World Bank official as saying the free purchase and sale of land, as well as its use as collateral, may still be "premature" issues for Uzbekistan. The law takes effect on 1 July. BP xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. 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