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RFE/RL NEWSLINE Vol. 2, No. 125 Part I, 1 July 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 125 Part I, 1 July 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 * KIRIENKO URGES DUMA TO APPROVE GOVERNMENT PROGRAM * STROEV CONCERNED ABOUT ANTI-CRISIS PLAN'S EFFECT ON REGIONS * GEORGIA PREPARES TO BEGIN GUARDING FRONTIERS End Note: SHAKHRAI SEEMS UNFAZED BY DISMISSAL xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA KIRIENKO URGES DUMA TO APPROVE GOVERNMENT PROGRAM...Prime Minister Sergei Kirienko warned State Duma deputies on 1 July that failure to approve urgent legislative measures could have dire consequences for the Russian economy, RFE/RL's Moscow bureau reported. He described the government's anti-crisis program, a package of more than 20 draft laws, as a "depoliticized" plan to cut spending and boost revenues. He defended plans to reduce taxes on industry and increase consumption taxes, which, he noted, can more easily be collected. Kirienko also said the government will consider "constructive proposals" for amending the laws, ITAR-TASS reported. He called for creating a conciliatory commission of government representatives and deputies from the Duma and Federation Council, which would revise the laws approved by the Duma in the first reading. A similar commission hammered out a compromise on the 1998 budget, but the government has been unable to stick to that budget. LB ...FOLLOWING TALKS BEHIND THE SCENES TO DRUM UP SUPPORT. Kirienko has met with several prominent Duma deputies from opposition ranks in recent days, seeking their support for the government's anti-crisis program. He held talks with Communist Party leader Gennadii Zyuganov on 27 June and met two days later with Duma Economic Policy Committee Chairman Yurii Maslyukov and Duma Budget Committee member Yurii Voronin, both Communists. On 30 June, the premier met with Popular Power faction leader Nikolai Ryzhkov, ITAR-TASS reported. The government-backed laws cannot be approved by the Duma without at least some support from the Communists and their allies, the Agrarian and Popular Power factions. Meanwhile, citing unnamed sources in the business community, Interfax reported on 30 June that Kirienko met with leading Russian businessmen at government headquarters. The names of those who attended the meeting are not available. LB DUMA SET TO BACK ONLY PART OF PROGRAM QUICKLY. Our Home Is Russia faction leader Aleksandr Shokhin on 1 July predicted that only six or seven of the government-backed draft laws will be approved by mid-July, RFE/RL's Moscow bureau reported. In a speech to the Duma, he called for a conciliatory commission to prepare a comprehensive package for parliamentary approval in the fall. President Boris Yeltsin and Prime Minister Kirienko have urged the Duma to approve the entire program this month. Communist Party leader Gennadii Zyuganov expressed support only for the parts of the program that, he said, would reduce the tax burden and promote the development of industry. Grigorii Yavlinskii said his Yabloko faction is willing to work on the government proposals but will slowly and carefully analyze the draft laws. He called on the government to act without waiting for decisions by the Duma, which, he said, could take months. LB STROEV CONCERNED ABOUT ANTI-CRISIS PLAN'S EFFECT ON REGIONS. Federation Council Speaker Yegor Stroev on 30 June expressed concern about some of the government's proposed measures to stabilize the economy, RFE/RL's Moscow bureau reported. In particular, he criticized a proposal to change the distribution of income tax revenues, which now go entirely to regional authorities. The government wants 40 percent of income tax revenues to go to the federal budget and has proposed the introduction of a sales tax to help regional and local governments compensate for lost income tax revenues. But Stroev noted that the anti-crisis program calls for forcing regional governments to finance more projects even as it calls for diverting income tax revenues to the federal government. Prime Minister Kirienko is to address a session of the Federation Council on 9 July, before the upper house votes on the government-backed draft laws. LB FIVE OIL COMPANIES FACE REDUCED ACCESS TO EXPORT PIPELINES. Deputy Prime Minister Viktor Khristenko announced on 30 June that beginning on 1 July, the government will reduce access to oil export pipelines for five companies that have not paid their tax debts, ITAR-TASS reported. The five are Bashneft, Sidanko, Tyumen Oil Company, Tatneft, and Onako. The IMF, which is negotiating with Russian officials a possible multibillion-dollar stabilization loan, has long supported measures to force oil companies to pay their tax debts. But according to the 27 June edition of the "Moscow Times," the government directive linking oil export quotas to repayment of tax debts makes an exception for companies that are exporting oil in order to repay foreign loans. LUKoil and Yukos are among the oil companies that have borrowed abroad and used oil exports to secure such loans, the newspaper said. LB DISMISSAL OF AIDE FUELS NEW SPECULATION OVER THIRD TERM FOR YELTSIN. "Kommersant-Daily" argued on 30 June that by firing Sergei Shakhrai as his representative in the Constitutional Court, Yeltsin has signaled that he plans to run for re- election again in 2000. No official reason was given for Shakhrai's dismissal, which came two days after Shakhrai endorsed Moscow Mayor Yurii Luzhkov for the presidency (see "RFE/RL Newsline," 30 June 1998). In an interview published in "Izvestiya" on 1 July, Shakhrai claimed that he was fired because he told Yeltsin on 20 May that "he cannot run in the  elections." Shakhrai's replacement, Mikhail Mityukov, told the 1 July edition of "Moskovskii komsomolets" that the decision to replace Shakhrai was made "about a month ago." The Constitutional Court is to rule later this year on whether Yeltsin has the right to seek a third term (see also "End Note" below). LB NIKOLAEV RECRUITS SUPPORT FOR NEW MOVEMENT. Duma deputy Andrei Nikolaev, the former director of the Federal Border Service, attended the founding conference of the St. Petersburg branch of his new political movement on 30 June. Nikolaev said he considers trade unions strong allies of the Union of Popular Power and Labor, which will hold its founding congress in Moscow on 8 July, an RFE/RL correspondent in St. Petersburg reported. Nikolaev's movement is expected to become the core of a pro-Moscow Mayor Luzhkov bloc for the next elections to the Duma. He told journalists that he hopes for an alliance with all "centrist or left-center" parties and movements for those elections, which are scheduled for December 1999. He also expressed respect for Yabloko leader Grigorii Yavlinskii, with whom, he said, he is on good terms. LB ENVIRONMENTALIST'S TREASON CASE FINALLY GOES TO COURT... The St. Petersburg Prosecutor's Office has referred the criminal case against retired Navy Captain Aleksandr Nikitin to the city court, Interfax reported on 30 June. Nikitin is charged with treason, revealing state secrets, and falsifying documents while working for the Norwegian environmental group Bellona. He was arrested in February 1996 after writing two chapters for a Bellona report on the risk of radioactive pollution from nuclear submarines in Russia's Northern Fleet. Nikitin has said he used only public sources to write the report. His defenders also say the case against him is based on secret documents. In that event, the case would be in violation of Russian law (see "RFE/RL Newsline," 19 May 1998). LB ...AS NEW BOOK CONCLUDES HE REVEALED NO STATE SECRETS. Three retired vice admirals--Yevgenii Chernov, Viktor Khrantsev, and Leonid Zhdanov--have published a book about the Nikitin case based on two years of their own research, an RFE/RL correspondent in St. Petersburg reported on 29 June. Speaking to journalists, Chernov refused to reveal either the name of the publisher or the size of the book's print run. The authors concluded that all of the information Nikitin provided for the Bellona report was published before in books or in the Russian press. The vice admirals also argue that the naval experts who determined that the Bellona report contained state secrets had an interest in seeing Nikitin prosecuted, since they themselves were involved in Navy policies that posed a risk of radioactive contamination on the Kola Peninsula (Murmansk Oblast). LB GOVERNMENT APPROVES PLAN TO RESTRUCTURE DEFENSE INDUSTRY. By 2005, the defense sector will be reduced from its current 1,700 to 600-700 enterprises, Prime Minister Kirienko announced on 29 June, adding that the remaining enterprises will produce civilian products and compete for state military contracts, "Russkii telegraf" reported. The measure is part of the government's program to restructure the defense industry, which calls for spending 2.1 billion rubles ($339 million) from the 1998 federal budget. Of that sum, 632 million rubles are to be used as credit for conversion projects, 508 million rubles for financing private projects, and 1.019 billion as subsidies for converting enterprises. On 26 June, Finance Minister Mikhail Zadornov told the Duma that mutual debts between the government and the defense sector amounting to 6 billion rubles ($967 million) will be written off and that remaining government debts to defense enterprises will be cleared within one to one-and-a-half months (see "RFE/RL Newsline," 16 February and 8 April 1998). BT DUMA REJECTS ECONOMIC AMNESTY BILL. By three votes, the Duma on 26 June rejected a draft law on amnesty for economic crimes in its third reading Interfax reported. The law would have granted amnesty to those who transfer illegally-earned funds from foreign accounts to Russian banks. Duma Legislation Committee member Nikolai Shaklein (Popular Power faction) argued that the law is too vague and would allow criminals to escape punishment without returning significant amounts of money to Russia. Liberal Democratic Party leader Vladimir Zhirinovsky voted against the law, saying it would encourage the "shadow economy." Earlier, he had supported it, claiming the return of some $500 billion from foreign accounts could "stabilize the economy for many years," ITAR- TASS reported. Meanwhile, Interior Minister Sergei Stepashin met with the Association of Russian Banks on 30 June to discuss measures to combat crime in the banking sector, "Kommersant-Daily" reported. BT REGIONAL LEGISLATURES VOTE NO CONFIDENCE IN YELTSIN. The Yaroslavl Oblast Duma on 30 June became the third regional legislature to express its displeasure with Yeltsin in recent weeks. Deputies voted by 35 to four with one abstention to vote no confidence in Yeltsin and to support the State Duma's decision to launch impeachment proceedings. The Yaroslavl legislature's statement said Yeltsin is incapable of "stabilizing the situation and leading the country on the path of steady development and high quality of life," Interfax reported. The Ryazan Oblast Duma on 27 May unanimously adopted an appeal asking Yeltsin to resign, "Nezavisimaya gazeta" reported on 1 July. The Sakhalin Oblast Duma passed a similar appeal on 25 June. According to "Nezavisimaya gazeta," the legislatures of Tula and Belgorod Oblasts are to consider similar resolutions. LB CHECHEN PRESIDENT TARGETS ABDUCTIONS, OIL THEFTS. Speaking on Chechen television on 30 June, Aslan Maskhadov vowed that within 20 days, the Chechen security forces will put an end to kidnappings and illegal oil refining, which is said to be worth 20 million rubles ($3.3 million) a month, Interfax reported. Under the state of emergency introduced eight days ago, Maskhadov has placed all ministries on increased alert and appointed two of his close associates to head the presidential administration and presidential guard. Also on 30 June, Chechnya's Sharia court ruled blood feud murders illegal and punishable by the death sentence. Russian observers have argued that fear of revenge killings was the primary factor preventing a more ruthless crackdown on abductions in Chechnya. "Kommersant-Daily" on 1 July quoted Chechen spokesmen as denying that the security measures were prompted by fear of a coup against Maskhadov (see also "RFE/RL Caucasus Report," Vol. 1, No. 18, 30 June 1998). LF RUSSIA REJECTS CHECHEN STANCE ON UN, OSCE. Russian Foreign Ministry spokesman Vladimir Rakhmanin told journalists on 30 June that Chechnya is not entitled to apply for UN membership as it is a subject of the Russian Federation, Interfax reported. Rakhmanin also said that only the federal government is competent to review the status of the OSCE mission in Chechnya and that there are "no serious reasons" for doing so. The previous day, Chechen Foreign Minister Movladi Udugov had said that Chechnya intends to seek UN membership. He also threatened to expel the OSCE mission if it does not formally apply to the Chechen government within 15 days for a new mandate. LF TRANSCAUCASUS AND CENTRAL ASIA GEORGIA PREPARES TO BEGIN GUARDING FRONTIERS... Georgian border troops on 1 July began preparations to assume sole responsibility for guarding the country's land and sea borders, which since 1992 have been jointly patrolled by Georgian and Russian forces. Georgian Frontier Guard Commander Valerii Chkheidze told journalists in Tbilisi on 29 June that Georgia will assume responsibility for guarding its 12 km territorial waters on 16 July and its land border with Turkey in September. An agreement to this effect was initialed in Moscow on 27 June. LF ...AMID ABKHAZ, RUSSIAN RESERVATIONS. Abkhaz Defense Minister Vladimir Mikanba on 30 June warned that "Abkhazia as a sovereign state will not allow patrol ships of a country with which it is in conflict enter its territorial waters," according to Interfax. Mikanba suggested that Russian border guards should continue to protect Abkhazia's sea borders until relations with Georgia are clarified. In Moscow, former Russian Federal Border Service director Andrei Nikolaev said the withdrawal of Russian border troops from Georgia is tantamount to the "loss of Russia's strategic position in the Caucasus." LF ROMANIAN PRESIDENT IN BAKU. Emil Constantinescu and President Heidar Aliev met for two hours in Baku on 30 June for talks focusing primarily on Romania's potential role as a transit country for exports of Azerbaijani Caspian oil. Constantinescu pointed out that existing terminal and refining facilities at Romania's Black Sea port of Constanta have a handling capacity of 31 million metric tons per year. Aliev agreed that the Baku-Supsa-Constanta route could function as one of several, together with the Baku- Novorossiisk and Baku-Ceyhan pipelines, according to Turan. The two presidents also discussed the potential for cooperation within the Black Sea Economic Cooperation Organization and the EU "Silk Road" project. A declaration on further cooperation and inter-governmental agreements on cargo traffic and exchange of information by the two countries' official news agencies were signed. LF DATE SET FOR AZERBAIJANI PRESIDENTIAL ELECTIONS. The newly elected Central Electoral Commission has scheduled the upcoming presidential elections for 11 October, Turan reported on 30 June The previous day, 17 of the 18 members already appointed to the commission elected Jafar Veliev as chairman. Veliev, who also chaired the previous commission, vowed that the body will do its best to ensure that the presidential elections are free and fair. He added that the commission will create all conditions necessary for the participation of international observers. The OSCE is expected to send 140 such observers. LF AZERBAIJANI EX-PRESIDENT INTERROGATED. Former President and Azerbaijan Popular Front Party chairman Abulfaz Elchibey was questioned for three hours on 30 June by the Azerbaijani Interior Ministry's Department to Combat Organized Crime, Turan reported. A ministry spokesman said that the questions focused on Elchibey's aide Gabil Mamedov, who was arrested on 14 June on fabricated charges of illegal possession of arms, and on a document entitled "Meeting Tactics of the Opposition." That document was confiscated during a search of the premises of the opposition newspaper "Chag" on 16 June. LF IMPRISONED FORMER AZERBAIJANI DEFENSE MINISTER ON HUNGER STRIKE. Rahim Gaziev, who was extradited from Russia to Baku in April 1996, embarked on a hunger strike on 22 June to demand a public retrial, Caucasus Press reported on 30 June. Gaziev was sentenced to death in absentia in 1994 on charges of embezzlement, illegal possession of arms, and surrendering the towns of Lachin and Shusha to Armenian forces in May 1992. LF ARGENTINEAN PRESIDENT IN YEREVAN. Carlos Menem and his Armenian counterpart, Robert Kocharian, discussed economic cooperation, regional issues, and cooperation within the framework of international organizations during Menem's one- day visit to Yerevan on 30 June, RFE/RL's Yerevan bureau reported. The two presidents signed a joint declaration on the "fundamentals of friendly relations" and pledged their support for the Argentinean Bridas oil and gas company's participation in the planned construction of a gas pipeline from Iran to Armenia. Inter-ministerial agreements on cooperation in the peaceful use of nuclear energy, health care, culture, and education were also signed. Kocharian told journalists that the two presidents "understood each other correctly," having "very close or identical" views on all issues discussed. Kocharian visited Argentina in May 1996, while still president of the unrecognized Nagorno- Karabakh Republic. LF NAZARBAYEV ADDRESSES PARLIAMENT ON ECONOMY. Kazakh President Nursultan Nazarbayev told a joint session of the parliament on 30 June that the country must become less dependent on the fluctuations of the world financial market, Interfax reported. Nazarbayev said small and medium-size businesses must be developed, the tax system made more flexible to benefit the internal market, and value-added tax revised. Nazarbayev also said industries producing consumer goods and all banks except the National Bank must be privatized. And he commented that the Asian financial crisis "has not left Kazakhstan unaffected," mentioning that prices for Kazakhstan's main exports--oil and nonferrous metals--have dropped on world markets. The Kazakh president said the government needs to take measures to support exporters through tariffs, adding that he favors diversifying exports. BP KYRGYZSTAN RECEIVES ANOTHER IMF LOAN. The board of the IMF approved an economic structural adjustment facility (ESAF) loan for Kyrgyzstan, Interfax reported on 29 June. Kyrgyzstan will receive between $20-36 million annually for the next three years. Finance Minister Talaibek Koichumanov said the money will be used to support the national currency. An RFE/RL correspondent based in Washington describes an ESAF loan as "available to the poorest members of the IMF [and] given at a 0.5 percent interest rate with five-and-a half year grace period." BP LAST UTO FIGHTERS BEGIN TO RETURN TO TAJIKISTAN. A group of some 150 fighters from the United Tajik Opposition who had been stranded in Afghanistan crossed the lower Pyanj River into Tajikistan on 1 July, RFE/RL correspondents and ITAR- TASS reported. Their repatriation is being overseen by the UN observer mission to Tajikistan, Russian border guards, and the joint peace-keeping force. Some 500 fighters have been waiting for more than a year to return home, following the signing of the Tajik peace accord in Moscow last June. BP END NOTE SHAKHRAI SEEMS UNFAZED BY DISMISSAL by Floriana Fossato Sergei Shakhrai, sacked by President Boris Yeltsin as presidential representative at the Constitutional Court, does not seem to regret losing his long-time job. On the contrary, Shakhrai has given the impression to journalists that he is satisfied that his statements at the weekend have had the desired effect. He has suggested that he can now join a bloc of political forces preparing to support Moscow Mayor Yurii Luzhkov in the 2000 presidential elections. Shakhrai was long regarded in Moscow as one of Yeltsin's more loyal officials. Observers therefore were surprised when, at a weekend congress of his almost forgotten Party of Russian Unity and Accord, Shakhrai said that in preparation for the next parliamentary and presidential elections, the party should shift its political allegiances to Luzhkov's camp. Shakhrai also criticized the presidential administration for underestimating the threat of presidential impeachment procedures that the State Duma is trying to initiate. According to Shakhrai, deputies' demands for a parliamentary debate on Yeltsin's impeachment will garner the support of at least two-thirds of Duma deputies, as required by the constitution for the formal start of impeachment procedures. The Kremlin. meanwhile, has brushed off the Duma's threat of impeachment. Sergei Markov, director of the Moscow Institute of Political Studies, told RFE/RL that because of the provisions of Russia's Constitution, the impeachment bid is "purely theoretical." Even if at least 300 of the Duma's 450 members support a formal indictment of Yeltsin, the charges against the president--including instigating the collapse of the USSR, launching the war in Chechnya, or ruining the Russian economy--are unlikely to be deemed valid by the Supreme Court. Shakhrai, one of the main authors of the 1993 constitution, is well aware of the difficulties that Yeltsin's foes could face. The start of the impeachment commission "will become a reality when parliamentary work on the government anti-crisis project reaches a dead-end and only the dissolution of the Duma and early parliamentary elections will break the [deadlock]," he commented According to the constitution, the president cannot disband the lower house of the parliament if the Duma has adopted a motion on impeachment. Shakhrai also said that Yeltsin would be "unelectable" if he decided to run again in the year 2000. In an interview with "Russkii telegraf," he said the president "cannot announce his decision to run if he does not want everyone to laugh at him." This fall, the Constitutional Court will examine the possibility that Yeltsin, taking advantage of a Constitutional loophole, will run again. According to Markov, "it is clear that Yeltsin has decided some time ago to run and that his decision is opposed by influential business and financial tycoons who are now trying to put pressure on him in different ways, including with the impeachment threat, in order to discourage him." Shakhrai said that the next parliamentary elections, scheduled for December 1999, will "determine two leading candidates for the presidency: Luzhkov and Krasnoyarsk Krai Governor Aleksandr Lebed." The result, he said, will "help" the powerful oligarchs who backed Yeltsin's re-election bid in 1996" to take a final decision on the candidate they will support in the next election. Shakhrai seems to have put his stakes on Luzhkov. According to "Russkii Telegraf," the "usually careful" Shakhrai may have decided "that the Kremlin boat is sinking and the moment has come to leave it." Shakhrai told "Kommersant" that his party will most likely compete in the next parliamentary elections as part of a coalition of political movements close to Luzhkov. Luzhkov has repeatedly said he will not participate in the presidential election, but few observers are inclined to believe him. "Russkii Telegraf" argued that Luzhkov is unlikely to express gratitude to Shakhrai. In 1993, Shakrai's party gained some 6.7 percent of the vote in Duma elections. But in the 1995 parliamentary elections, it gained just 0.36 percent and did not make it to the Duma. So far, the Moscow mayor has not commented on Shakhrai's announcement. The author is an RFE/RL correspondent based in Moscow. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. All rights reserved. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx HOW TO SUBSCRIBE Send an email to email@example.com with the word subscribe as the subject of the message. HOW TO UNSUBSCRIBE Send an email to firstname.lastname@example.org with the word unsubscribe as the subject of the message. 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