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RFE/RL NEWSLINE Vol. 2, No. 116 Part I, 18 June 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 116 Part I, 18 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 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I * YELTSIN SAYS CHUBAIS'S APPOINTMENT IS 'TEMPORARY' * MARKETS RISE ON FOREIGN BUYING * ARMENIAN FOREIGN MINISTER CRITICIZES BAKU'S 'INTRANSIGENCE' xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA YELTSIN SAYS CHUBAIS'S APPOINTMENT IS 'TEMPORARY.' President Boris Yeltsin on 18 June said his appointment the previous day of Unified Energy System chief executive Anatolii Chubais as presidential envoy to international financial institutions is a "temporary" measure, Russian news agencies reported. Yeltsin cautioned journalists against drawing "unnatural conclusions" from the appointment, Interfax reported. Chubais will keep his job at the electricity monopoly. In a speech to the second annual St. Petersburg Economic Forum on 17 June, Prime Minister Sergei Kirienko warned that the government's "anti-crisis program" will be "tough" and "unpopular," RFE/RL's correspondent in St. Petersburg reported. He did not disclose details about the program but said its implementation will require "courage and political will." Some observers believe that in his new position, Chubais will become a scapegoat for unpopular government policies, an RFE/RL correspondent in Moscow reported on 18 June. LB 'THIRD COMING' OF CHUBAIS DRAWS MIXED REACTION. The Russian media has viewed Chubais's appointment (his "third coming" in the words of "Kommersant-Daily") as an attempt to reassure foreign investors who have fled Russian markets during the last six weeks. Speaking to journalists in St. Petersburg on 17 June, State Duma Speaker Gennadii Seleznev charged that international financial institutions themselves initiated the appointment, Interfax reported. Seleznev expressed regret that "Western financiers continue to regard Chubais as a panacea." Duma First Deputy Speaker Vladimir Ryzhkov of Our Home Is Russia argued that Chubais's appointment will worsen the already difficult relations between the government and the Duma. He noted that the government needs the parliament's cooperation in order to adopt key economic legislation. Duma deputy Sergei Ivanenko of Yabloko viewed the latest appointment as evidence that "the government is not going to change its old habits" of cultivating crony capitalism. LB BEREZOVSKII ON CHUBAIS, OLIGARCHS' CONTACTS WITH GOVERNMENT. CIS Executive Secretary Boris Berezovskii, who fought for months to have Chubais removed from the government, told journalists on 17 June that he supported naming Chubais as liaison with international financial groups, adding that the appointment was partly his idea, RFE/RL's correspondent in St. Petersburg reported. Commenting on the 16 June meeting between Prime Minister Kirienko and top Russian "oligarchs," Berezovskii told Interfax that the meetings are a positive "sign of consolidation of reformist forces...for overcoming the [economic] crisis." He argued that the authorities have no other base of "realistic support." ITAR-TASS on 18 June quoted Berezovskii as saying that "the Russian business elite is united" and understands that business groups "cannot afford not to coordinate their activities" during the crisis. Although Berezovskii claims no longer to be directly involved in business, he reportedly attended Kirienko's meeting with the "oligarchs." LB MARKETS RISE ON FOREIGN BUYING. Share values on the Russian stock market rose 5-10 percent in early trading on 18 June amid buying by foreign traders, ITAR-TASS reported. The bond market also posted gains, as yields on government treasury bills fell by some 10 percentage points to 55-57 percent. On 17 June, the Finance Ministry canceled two auctions for six- month and 11-month treasury bills, which were to have raised a combined total of 14 billion rubles ($2.3 billion), Interfax reported. According to Central Bank First Deputy Chairman Sergei Aleksashenko, the Finance Ministry did not want to raise money through treasury bills at yields of 65 percent to 68 percent. The 'Moscow Times" reported on 18 June that the cancellation of the auctions "fueled speculation in the market that the government has found other sources of funds" to redeem more than $1 billion in maturing treasury bills. LB FINANCE MINISTER SAYS NO GROWTH THIS YEAR. Addressing a cabinet session on 18 June, Mikhail Zadornov predicted that Russian will not achieve economic growth this year, ITAR- TASS reported. The Economics Ministry is forecasting 1998 GDP at 0.5 percent below to 0.5 percent above the previous year's figure. Zadornov also said Russia will post a budget deficit of some 14 billion rubles ($2.3 billion) in 1998, with revenues falling 5-7 billion rubles short of budget targets. Wage arrears to state employees total 6 billion to 7 billion rubles, of which the Finance Ministry owes 3 billion rubles, Zadornov noted. In a speech to the St. Petersburg Economic Forum on 17 June, Central Bank Chairman Sergei Dubinin said one-third of budget expenditures go toward debt servicing. LB DUMA WANTS SUPREME COURT TO HAVE SAY ON PRESIDENT'S HEALTH. The Duma on 17 June passed in the first reading an amendment to the civil procedural code that would empower the Supreme Court to rule on "the ability or persistent inability of the president for health reasons to carry out his functions," ITAR-TASS reported. Article 92 of the constitution stipulates that the president's term ends early in the event of "persistent inability for health reasons" to carry out his duties, but the constitution does not establish a mechanism for evaluating the president's health. Aleksandr Kotenkov, Yeltsin's representative in the Duma, argued that the proposed amendment is unconstitutional. LB COMMUNIST DEPUTY SUSPECTS YELTSIN HAS A DOUBLE. Duma deputy Aleksandr Salii of the Communist faction has asked the Prosecutor-General's Office to investigate the possibility that a double has been standing in for Yeltsin since the president's heart surgery in November 1996, "Moskovskii komsomolets" reported on 18 June. Rumors that a surgically- altered double has taken Yeltsin's place have occasionally surfaced in the opposition press during the last two years. Salii told "Moskovskii komsomolets" that analysis of some 1,500 photographs shows that the president's appearance changed after the 1996 presidential election. He also charged that the "new Yeltsin" frequently shows his hand with two missing fingers, whereas the president used to try to conceal that hand from public view. LB DUMA PRAISES RUSSIAN DIPLOMACY ON KOSOVA. The Duma on 17 June passed by 332 to three votes a statement calling for a peaceful settlement of the situation in Kosova "on the basis of respect for the sovereignty and territorial integrity of the Yugoslav Federal Republic and observing the rights of the [ethnic] Albanian population," Russian news agencies reported. The statement praised the recent meeting between President Yeltsin and his Yugoslav counterpart, Slobodan Milosevic, and expressed "full support" for Russian diplomatic efforts. At the same time, the Duma criticized the "obviously biased policy of several Western countries" on the Kosova issue, adding that "the language of sanctions and threats of using force against Belgrade in effect encourage separatism" (see also Part II). LB KIRIENKO SAYS GOVERNMENT WON'T REACT TO MINERS' PICKET. Prime Minister Kirienko told journalists on 17 June that the government will not take any steps in response to the ongoing picket of government headquarters by coal miners, ITAR-TASS reported. The miners, who came to Moscow from various regions of Russia, have been demonstrating outside the White House since 11 June. Kirienko noted that the government is prepared to discuss economic problems with the miners, but not political demands. A participant in the picket told RFE/RL's Moscow bureau on 16 June that the miners will not drop their demand for the resignations of Yeltsin and the government. Another miner who has joined the demonstration addressed the Duma on 17 June, after which deputies passed an appeal urging Yeltsin to "put the coal industry in order." LB GAZPROM, TAX SERVICE CLASH OVER PROPERTY SEIZURES... Regional officials of the State Tax Service have begun seizing assets and bank accounts belonging to subsidiaries of the gas monopoly Gazprom, "Kommersant-Daily" reported on 18 June. On the order of its director, Boris Fedorov, the State Tax Service recently warned more than 100,000 enterprises that their assets may be seized if they do not pay their tax debts by 1 July. The Gazprom subsidiaries Orenburggazprom and Uraltransgaz are among the first enterprises affected. According to "Kommersant-Daily," Fedorov is seeking to annul the agreement on tax payments signed by his predecessor, Aleksandr Pochinok, with Gazprom. The company's press service on 17 June slammed the "forcible extraction of debts" by the tax authorities. The same day, the Duma passed a resolution warning that the tax service's methods will harm the domestic economy and are "aimed at destroying" the country's gas supply system. LB ...AS MONOPOLY SEEKS REDUCTIONS IN VAT AND EXCISE DUTIES. Gazprom head Rem Vyakhirev on 13 June warned that the current value-added tax of 22 percent and excise duties of 30 percent threaten to "bury" Russia's gas exports to Europe, Russian news agencies reported. Vyakhirev said Gazprom will stop signing new export contracts unless the government reduces VAT and excise rates. Gazprom lost some of its political clout when its former head Viktor Chernomyrdin lost his job as prime minister in March. Last month, the government submitted to the parliament a draft law that would levy excise duties on gas at the time of delivery rather than when Gazprom collects payment. Such a law would be a disaster for the gas monopoly, which "only collects between 10 and 15 percent of its revenues from gas sales in cash," according to the "Financial Times" on 15 June. LB THIRD SUSPECT ARRESTED IN JOURNALIST'S MURDER. Aleksandr Zvyagintsev, an aide to Prosecutor-General Yurii Skuratov, announced on 17 June that police have arrested a third man in connection with the 7 June murder of "Sovetskaya Kalmykia Segodnya" editor Larisa Yudina, Russian news agencies reported. He identified the suspect as V. Shanukov but did not provide other details. The two men previously arrested for Yudina's murder both have ties to Kalmykian President Kirsan Ilyumzhinov. Meanwhile, the Union of Journalists on 18 June announced that it will fight to ensure that "Sovetskaya Kalmykia Segodnya" can be published and distributed freely in the republic, ITAR-TASS reported. A statement issued by the union called on the State Press Committee to become one of the newspaper's "co-founders" in order to help provide for its regular publication. LB SUSPECT IN CORRUPTION CASE ARRIVES IN RUSSIA. Andrei Kozlenok, the main suspect in a high-level corruption case, was flown from Athens to Moscow on 17 June, Russian news agencies reported. Kozlenok is to be questioned on 18 June and charged with embezzlement in connection with a scheme to sell $180 million in gemstones. He fought his extradition from Greece for five months, saying his life would be in danger in Russia. Kozlenok's former "right-hand man," another key suspect in the case, was found hanging in his Moscow jail cell in February. LB ANOTHER AIDE TO AN LDPR DEPUTY GUNNED DOWN. Igor Klyachko, an aide to a Duma deputy from the Liberal Democratic Party of Russia, was found shot dead in St. Petersburg on 17 June, ITAR-TASS reported. A revolver, a gun permit, and several thousand U.S. dollars were found on Klyachko. According to ITAR-TASS, he was the sixth aide to a Duma deputy from Vladimir Zhirinovsky's party to be killed since November 1996. LB AMMUNITION BLAZE WREAKS HAVOC IN SVERDLOVSK OBLAST. Fourteen soldiers have died, 17 have been injured, and more are reported missing after an explosion at a ammunition storage compound near Yekaterinburg (Sverdlovsk Oblast), Interfax reported on 18 June. The previous day, lightning set fire to the compound, setting off massive explosions and spreading across 200 hectares into surrounding forests. The head of administration of Berezovksii, the city closest to the compound, told ITAR-TASS on 18 June that 1,070 local residents were evacuated, while Interfax put the figure at1,500-2,500. BT GREENPEACE DEMANDS INVESTIGATION INTO WATER-POLLUTION CASE. Greenpeace of Russia has sent a letter to the Prosecutor- General's Office demanding an investigation into an environmental catastrophe in Krasnoyarsk Krai, Interfax reported on 17 June. Dumping of mercury waste into the Bratskoe water reservoir (on the Angara River) by the local enterprise Usolyekhimprom has affected 500,000 local residents, Greenpeace of Russia said in a 17 June press release. The press release cites increased cancer rates as well as cases of respiratory, vascular, and urinary system diseases in nearby settlements. Mercury content in hair samples from local children allegedly exceed the regional average by 800 percent. Owing to faulty processing, the enterprise dumps 2.5 tons of mercury waste into the reservoir each month, Greenpeace claimed. BT TRANSCAUCASUS AND CENTRAL ASIA ARMENIAN FOREIGN MINISTER CRITICIZES BAKU'S 'INTRANSIGENCE.' Speaking at a press conference in Yerevan on 17 June, Vartan Oskanian said the Karabakh peace process is in effect deadlocked because Azerbaijan opposes changes in the Karabakh peace plan proposed by the OSCE Minsk Group, RFE/RL's Yerevan bureau reported. Oskanian said that Armenia has made a major concession by agreeing to less than total independence for the unrecognized Nagorno-Karabakh Republic and that Baku should reciprocate by abandoning its insistence on granting Karabakh only an autonomous status within Azerbaijan. Oskanian said that if the present deadlock persists for another two years, Baku will have the opportunity to strengthen its military capacity and Yerevan will be forced to strengthen its political and military commitment to the security of the Karabakh Armenian population. He added that Yerevan will consider alternative approaches to resolving the deadlock, including reunification with Karabakh. LF GEORGIAN, RUSSIAN OFFICIALS DISCUSS ABKHAZIA. Georgian President Eduard Shevardnadze held talks in Tbilisi on 17 June with Russian special envoy for Abkhazia Gennadii Ilichev and General Sergei Korobko, the commander of the Russian peacekeeping forces deployed in Abkhazia's Gali Raion under the aegis of the CIS, Caucasus Press reported. Shevardnadze accused the Russian peacekeepers of failing to prevent the Abkhaz Interior Ministry forces from bringing heavy artillery into the conflict zone, RFE/RL's Tbilisi bureau reported. But Korobko pointed out that the peacekeepers' mandate does not empower them to intervene in hostilities. Ilichev and Shevardnadze agreed on the need to expedite the return to their homes of ethnic Georgians constrained to flee during last month's fighting. Also on 17 June, the U.S., French, British, German, and Russian ambassadors in Tbilisi were in Novy Afon for talks with Abkhaz President Vladislav Ardzinba. LF GEORGIAN PRESIDENT SAYS HE HAS FAITH IN RUSSIAN MEDIATION. Shevardnadze told a press conference in Tbilisi the same day that "Russia can and must" speed up the process of resolving conflicts in the Transcaucasus, ITAR-TASS reported. Arguing that "it is difficult to imagine tranquillity in the North Caucasus without a stable South [Caucasus]," Shevardnadze said that he does not believe the Caucasus will become a center of confrontation between Russia and the West, despite their conflicting interests in the region. LF AZERBAIJAN CONTINUES TO PRESSURE OPPOSITION. Police searched the editorial offices of the opposition newspaper "Chag" in the evening of 16 June and confiscated computer equipment and documents, Turan reported. The following day, police also searched the apartment of Elchin Pashaev, secretary of the United Azerbaijan Union, which is campaigning for the unification of the Azerbaijan Republic and Iranian Azerbaijan. The Azerbaijan Popular Front Party has issued a statement threatening protest actions if the authorities continue arbitrary repression of the opposition. Of the two aides to APFP chairman Abulfaz Elchibey who were arrested on 14 June (see "RFE/RL Newsline," 17 June 1998), one has been charged with illegal possession of weapons and the other with refusing to obey police orders. LF AZERBAIJANI OPPOSITION LEADERS ANNOUNCE ELECTION BOYCOTT. Five prospective opposition presidential candidates--Abulfaz Elchibey (APFP), Lala-Shovket Gadjieva (Liberal Party of Azerbaijan), Isa Gambar (Musavat Party), Ilyas Ismailov (Democratic Party of Azerbaijan), and Rasul Guliev (non- affiliated)--issued a statement on 17 June arguing that their participation in a poll held under "reactionary laws" would be tantamount to legitimizing a dictatorial regime and tacitly condoning repression, Turan reported. They affirmed their intention to boycott the presidential election scheduled for October. They also warned that "sooner or later, all dictatorial regimes end with social upheaval." LF AZERBAIJANI OFFICIAL CONDEMNS TURKMEN CASPIAN TENDER. Azerbaijani presidential adviser Vafa Gulu-zade told journalists on 17 June that no foreign companies should start exploiting the Kyapaz/Serdar Caspian oil field until the dispute between Azerbaijan and Turkmenistan over ownership of the oil field has been resolved, Interfax reported. Turkmenistan the previous day announced the results of a tender in which Mobil acquired the rights to that deposit, but Gulu-zade said Mobil's representation in Baku reassured the Azerbaijani leadership that it will not begin work on Kyapaz until the ownership dispute is resolved. Also on 17 June, a spokesperson for the Azerbaijan International Operating Company engaged in exploiting three offshore Caspian oil fields said the company is confident that Russia's Transneft pipeline company can ensure uninterrupted shipments of Azerbaijani oil through the Baku- Grozny-Novorossiisk export pipeline. The Chechen leadership threatened to halt the oil flow if Moscow failed to meet its outstanding financial commitments to Chechnya. LF ANOTHER COMMITTEE FOUNDED TO INVESTIGATE KYRGYZ CYANIDE SPILL. Representatives of several Kyrgyz ecological and human rights organizations have founded a Committee to Protect the Environment, RFE/RL's Bishkek bureau reported on 17 June. The committee intends to conduct an independent investigation into the 20 May accident in which a lorry carrying 20 tons of sodium cyanide plunged into the Barskoon River. Kyrgyz parliamentary deputies and intellectuals founded a Committee to Protect Lake Issyk-Kul (into which the Barskoon River flows) on 22 May, and the parliament on 13 June voted to create an international commission to investigate the causes of the accident (see "RFE/RL Newsline," 15 June 1998). A State Customs Committee spokesman on 17 June said that the committee will sue the Kyrgyz-Canadian gold-mining joint venture whose lorry was involved in the accident for $1.44 million in unpaid customs duties. LF TOP TAJIK SECURITY OFFICIAL SLAIN. Usmon Khodjiev, the deputy commander of the Defense Ministry's recently established special unit for protecting the UN observer force in Tajikistan, was found murdered in Dushanbe on 17 June, Interfax reported. Khadjiev was a former opposition field commander. Other former opposition fighters have issued a statement condemning the killing. LF xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. 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