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RFE/RL NEWSLINE Vol. 2, No. 131 Part I, 10 July 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 131 Part I, 10 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 * UPPER HOUSE BACKS ANTI-CRISIS PROGRAM IN PRINCIPLE * OFFICIALS RULE OUT PAYING WAGES AT EXPENSE OF DEBT SERVICING * INTERFAX RETRACTS REPORT ON NATO PEACEKEEPING FORCE End Note: PIPELINES UNDER TROUBLED WATERS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA UPPER HOUSE BACKS ANTI-CRISIS PROGRAM IN PRINCIPLE. The Federation Council on 10 July voted by 97 to four to support in principle the government's plan to deal with the current economic and financial crisis, Reuters reported. Of the more than 20 laws in the government's program, most have not been adopted by the State Duma and therefore cannot yet be considered by the upper house of the parliament. Prime Minister Sergei Kirienko addressed the Council on 10 July and urged deputies to support the government's plan. He warned that "the situation on financial markets has worsened, treasury bill yields are rising, social tension is also growing." He also repeated that one of the main goals of the government's policies is to shift the tax burden from industry to consumption, RFE/RL's Moscow bureau reported (see "RFE/RL Newsline," 1 and 2 July 1998). LB OFFICIALS RULE OUT PAYING WAGES AT EXPENSE OF DEBT SERVICING. Finance Minister Mikhail Zadornov told the Federation Council on 10 July that the government will not sacrifice its debt servicing requirements in order to ensure the timely payment of wages to state employees, RFE/RL's Moscow bureau reported. He rejected a proposal by Primorskii Krai Governor Yevgenii Nazdratenko that the government temporarily halt repayments of Russia's domestic debt in order to help solve the chronic problem of wage arrears. In his address to the upper house, Prime Minister Kirienko also said that the government is "ready to consider any proposal, but we simply cannot fail to repay treasury bills," Reuters reported. The Russian bond market has declined significantly over the last two months, forcing the government to borrow at higher interest rates and increasing future debt servicing costs. LB GOVERNMENT WANTS TO CUT OFF PENSIONS FOR WORKING PENSIONERS... Deputy Prime Minister Oleg Sysuev announced during a 10 July session of the Federation Council that the government wants to stop paying pensions to those who continue to work, ITAR-TASS reported. He said pension arrears in Russia now total 12.5 billion rubles ($2 billion) and added that the figure could rise considerably by year- end. Sysuev also claimed that working people do not receive pensions in any other country. The relatively low level of pensions, as well as their irregular payment, prompts millions of elderly people in Russia to work to supplement their incomes. On several occasions in 1997, officials announced provisional plans to reduce or eliminate pension payments to working pensioners, but each time President Boris Yeltsin or government ministers backed off from such plans (see "OMRI Daily Digest," 7 February 1997 and "RFE/RL Newsline," 30 June 1997). LB ...AND FREEZE INDEXATION OF ALL PENSIONS. In his speech to the Federation Council, Sysuev also said the government wants to return pensions to their pre-February 1998 level and halt further indexation of pensions, ITAR-TASS reported on 10 July. The proposal would suspend implementation of a law that took effect in February, which calls for pensions to be recalculated every three months, using the average monthly wage as a baseline. In addition, Sysuev said the government is seeking to raise Pension Fund contributions from individuals from 1 percent to 5 percent while reducing Pension Fund contributions by employers from 28 percent to 21 percent. The planned changes in pension policy are part of the government's anti-crisis program to boost federal budget revenues and reduce expenditures. LB DEPUTY PRIME MINISTER SAYS MORE REVENUE-BOOSTING PLANS IN WORKS. Viktor Khristenko announced on 9 July that the government is preparing two additional documents to add to its "stabilization program" (the phrase officials now prefer to use instead of "anti-crisis program"). He said the documents will address the liability of corporations for the debts of their subsidiaries and measures that can be taken against corporations that do not pay their taxes, Russian news agencies reported. Khristenko said federal budget revenues in June totaled some 22 billion rubles ($3.5 billion), including 11.2 billion rubles in tax revenues (up 600 million rubles from the total in May) and 7.44 billion rubles in customs duties (240 million rubles more than were collected in May). Speaking to the Federation Council on 10 July, Prime Minister Kirienko said Russia must spend 30-31 billion rubles a month on debt servicing. LB FEDERATION COUNCIL OVERRIDES THREE MORE PRESIDENTIAL VETOES... The Federation Council on 9 July approved a law regulating mortgage procedures, overriding a presidential veto. The law allows enterprises, buildings, apartments, and some land plots to be mortgaged, RFE/RL's Moscow bureau reported. However, it prohibits mortgages of farmland or property belonging to the state or municipalities. Several deputies called attention to flaws in the law, and the Council approved it on condition that certain passages be amended. Also on 9 July, the upper house overrode Yeltsin's vetoes of a law to double the tax on foreign-currency purchases from 0.5 percent to 1 percent and of legislation granting discounts on transportation fees for children who need treatment at sanitoria, ITAR-TASS reported. Yeltsin is obliged to sign laws after both houses of the parliament override his veto. LB ...BUT REJECTS LAW ON MEDICAL CHECKS FOR PRESIDENT. The Federation Council on 9 July rejected a law that would have outlined a procedure for determining the president's fitness to serve, Russian news agencies reported. The law would have allowed the Supreme Court to rule on whether the president displays a persistent inability for health reasons to perform the duties of his office (see "RFE/RL Newsline," 3 July 1998). The same day, the Council voted down a law passed by the Duma, which would have declared 23 February a non-working holiday. During the Soviet period, 23 February was celebrated as Red Army Day and was a major holiday. Now it is Defenders of the Fatherland Day and is not a guaranteed day-off from work. LB COUNCIL FAILS TO APPROVE BUDGET CODE. The Federation Council on 9 July decided not to consider the budget code, which was passed by the Duma on 3 July. Instead, the upper house voted to form a conciliatory commission to amend that law, which is part of the government's anti-crisis program. The budget code outlines the procedure for adopting and amending the federal budget and also regulates relations between federal and regional budgets. Also on 9 July, the Council approved several laws that would increase 1998 budget spending, ITAR- TASS reported. The laws seek to add a separate article to the budget on funding for teachers' salaries and to allocate 30 million rubles ($4.8 million) for the office of Russia's human rights commissioner (see "RFE/RL Newsline," 17 June 1998). Another law would allocate more government funds for low-interest credits to agricultural enterprises. LB NEMTSOV CONDEMNS RAILROAD BLOCKADE... Deputy Prime Minister Boris Nemtsov told a 9 July congress of the main trade union for coal miners that the blockade of the Trans-Siberian Railroad in Kemerovo Oblast is an insulting response to government measures to help the coal industry, such as the lowering of freight tariffs on coal by 25 percent, ITAR-TASS reported. Nemtsov urged the congress to oppose the economically "devastating" blockade and proposed that unions make a proposal for trade-union control of federal expenditures to the coal industry. In an interview with RFE/RL's Moscow bureau, Nemtsov said the current blockade is "not linked to the worsening of the social or economic position of miners," which, he argued, has somewhat improved since May. Instead, Nemtsov claimed, "on both the regional and federal level, there are political forces that try to use miners to achieve their own narrow goals." He declined to elaborate, but called for "the toughest measures" to be imposed against those behind the protests. BT ...WHILE UNIONS OPPOSE NEMTSOV. Most union representatives opposed Nemtsov's appeal to condemn the blockade of the Trans-Siberian Railroad, "Nezavisimaya gazeta" reported on 10 July. Telegrams from miners who did not receive back wages promised by recent government protocols were presented at the congress, RFE/RL's Moscow bureau reported. Of the two candidates expected to run for leadership of the Independent Trade Union of Coal Miners, "Nezavisimaya gazeta" anticipated the victory of Ivan Mokhnachuk, who supports the miners' demands for Boris Yeltsin's resignation. Meanwhile, the number of pickets on the Trans-Siberian in Kemerovo Oblast doubled by 10 July, ITAR-TASS reported. The previous day, Deputy Prime Minister Sysuev sent a telegram to Kemerovo Governor Aman Tuleev offering to chair a meeting of the Inter-Departmental Commission for the Problems in Mining Regions in Kemerovo Oblast before 25 July, on condition that the blockade is immediately lifted and the miners' "political demands" not discussed. BT GOVERNMENT EXTENDS DEADLINE FOR BIDDING ON ROSNEFT. First Deputy State Property Minister Aleksandr Braverman announced on 10 July that the government has extended the deadline for the privatization auction of a 75 percent stake plus one share of the oil company Rosneft, RFE/RL's Moscow bureau reported. The government had scheduled the auction for this month after the first attempt to sell the controlling stake in Rosneft failed in May. But in recent days, the companies considered most likely to purchase Rosneft have announced that they will not bid for the shares (see "RFE/RL Newsline," 7 July 1998). Braverman said the government will now accept bids for the Rosneft stake until 27 October and will announce a winner three days later. Fuel and Energy Minister Sergei Generalov told NTV on 9 July that the government hopes world oil prices will rise by this fall, making Rosneft a more attractive investment. LB PROSECUTORS CHARGE WIFE OF SLAIN OPPOSITION FIGURE. Tamara Rokhlina has been charged with premeditated murder in the 3 July killing of her husband, former State Duma Defense Committee Chairman Lev Rokhlin, ITAR-TASS reported on 10 July, citing Vladimir Solovev, the deputy head of the team from the Prosecutor-General's Office that is investigating the killing. Rokhlina confessed to the crime while being questioned by police. The weekly "Argumenty i fakty" reported in its latest edition that Rokhlina had threatened to kill her husband on many occasions. But several other newspapers, most recently "Komsomolskaya pravda" on 10 July, suggest that police forced her to confess and have pointed to evidence that casts doubt on her guilt (see also "RFE/RL Newsline," 7 July 1998). "Novye izvestiya" on 8 July speculated that the special services may have been involved in the murder. Rokhlin's allies have also charged that his death was a political killing. LB IS RUSSIA PLANNING ANOTHER CAUCASUS WAR? The Russian military and the Interior Ministry are engaged in systematic large-scale preparations for a new war in the North Caucasus, according to "Moskovskii Komsomolets" on 9 July. The newspaper identifies as the key figures in those preparations Colonel-General Leontii Shevtsov, who commands the Interior Ministry's Operational Force in the North Caucasus, and Chief of General Staff Anatolii Kvashnin, both of whom were involved in drafting plans for the 1994 invasion of Chechnya. The plans reportedly include "surgical strikes" by Russian bombers against guerrilla bases in Chechnya. Any decision on the beginning of combat actions must be endorsed by the Russian Security Council, of which Russian President Yeltsin is chairman. LF TRANSCAUCASUS AND CENTRAL ASIA INTERFAX RETRACTS REPORT ON NATO PEACEKEEPING FORCE. Interfax on 9 July issued a revised version of a report released the previous day on a Tbilisi press conference held by newly appointed U.S. Ambassador Kenneth Spencer Yalowitz. Interfax admitted that the original report "contained an error which significantly affected the essence of what the ambassador said." That report cited Yalowitz as saying the U.S. intends to promote a decision on the deployment in Abkhazia of a NATO peacekeeping force (see "RFE/RL Newsline," 9 July 1998). The revised dispatch quotes Yalowitz as saying that a political decision by Georgia and Abkhazia is a necessary precondition for the deployment of a NATO force and that since no such decision has been made, there are no grounds for deploying NATO peacekeepers in Abkhazia. LF DOCUMENT READY FOR SIGNING AT ARDZINBA-SHEVARDNADZE MEETING. Abkhaz presidential envoy Anri Djergenia and Georgian Ambassador to Moscow Vazha Lortkipanidze have reached agreement on "the basic principles" of a document to be signed by Georgian President Eduard Shevardnadze and his Abkhaz counterpart, Vladislav Ardzinba, "Nezavisimaya gazeta" reported on 10 July. Djergenia said the planned meeting between the two presidents can now take place "in the very near future." The document focuses on measures to repatriate and guarantee the security of the estimated 35,000 ethnic Georgians who fled from Abkhazia's southernmost Gali Raion during the fighting in late May. LF GEORGIAN OPPOSITION WANTS TERRITORIAL DIVISIONS ABOLISHED. Fifty-two opposition representatives on 9 July announced they will appeal to the Constitutional Court to abolish the existing territorial-administrative division of the country, Caucasus Press and RFE/RL's Tbilisi bureau reported. Labor Party leader Shalva Natelashvili told journalists that the present division of the country into administrative regions is inadmissible, both politically and economically. He added that unspecified regional administrators may demand formal autonomy for their fiefdoms and that the funds allocated for local administration could better be spent on social needs. Natelashvili said that his party and other opposition parties agree on the need for changes in the Constitution to redefine the role of the Cabinet of Ministers and to introduce a two-chamber parliament. LF ARMENIA'S YEZIDI KURDS WANT REPRESENTATION IN PARLIAMENT. Meeting on 9 July in Yerevan, the Presidium of the Union of Yezidis of Armenia unanimously agreed to propose to the president, prime minister, and parliament that the new election law allow the Yezidi community to elect a representative to the Armenian parliament, Noyan Tapan reported. There are an estimated 50,000-70,000 Yezidi Kurds in Armenia, some of whom are lobbying for recognition as an ethnic group distinct from the Muslim Kurds. LF ARMENIAN SUPREME COURT DISBANDED. In accordance with the 1995 Constitution of the Republic of Armenia, the Supreme Court has been superseded by a Court of Appeals, which is vested with fewer responsibilities, RFE/RL's Yerevan bureau reported on 9 July. The new court is divided into two "chambers": criminal-military and civil-economic. It will examine only those appeals against verdicts handed down by lower courts. Introducing chairman Henrik Danielyan to the new court, President Robert Kocharian rejected criticism of the new Criminal Procedural Code adopted by the National Assembly, according to Noyan Tapan. LF AZERBAIJANI OPPOSITION CRITICIZES ELECTION LEGISLATION. The Democratic Congress, which is composed of 10 opposition parties, issued a statement on 9 July assessing the recent changes to legislation on the upcoming presidential elections, Turan reported. The statement said the changes are not substantive and do not address the opposition's criticisms. It stressed that the opposition will nominate a candidate for the elections only if the minimum turnout is reduced from 50 percent plus one vote to 25 percent and if parity is observed in forming electoral commissions. Also on 9 July, the Social Democratic Party of Azerbaijan announced it will join the opposition boycott of the 11 October ballot. President Heidar Aliev has signed a decree empowering the parliament, Foreign Ministry, and Central Electoral Commission to invite foreign observers to monitor voting. LF KAZAKH GOVERNMENT SPARED AX--FOR NOW. Kazakh President Nursultan Nazarbayev expressed displeasure after hearing a report on the country's economic performance in the first half of 1998 but did not sack the government of Prime Minister Nurlan Balgimbayev as had been rumored, ITAR-TASS and Interfax reported on 10 July. ITAR-TASS the previous day had quoted an unnamed government official as saying Nazarbayev would dismiss the government after hearing the report. Interfax the same day quoted presidential press secretary Kairat Sarybayev as refuting such rumors. According to the report, tax revenues and investments are down and the economic situation is worsening. While not dismissing the government, Nazarbayev told cabinet members "I am warning you, perhaps for the last time." BP ALMATY WATER SUPPLY CONTAMINATED. Traces of cholera bacteria have been found in the reservoirs and rivers that provide water to Kazakhstan's largest city, Almaty, ITAR-TASS reported on 9 July. Local epidemiologists have requested that all water reservoirs within city limits be drained, their beds dredged to a depth of 1.5 meters, and the soil transported outside Almaty for treatment. Waste from recreation areas in the nearby mountains is being blamed for the problem. BP FLOODING IN UZBEKISTAN LEAVES 71 DEAD. Flooding in the Uzbek section of the Fergana Valley has left at least 71 people dead, ITAR-TASS reported on 10 July. A landslide in the mountains of neighboring Kyrgyzstan two days earlier causes the water of lakes to rise by 3-4 meters; those lakes were already over-filled as a result of earlier rains. The Uzbek village of Shakhimardan was especially hard hit when water in the Ak-su River also rose by 3-4 meters. An Uzbek official from the Fergana Oblast said "the main reason" why people were not evacuated from the area was the lack of a timely warning by the Kyrgyz authorities of the approaching flood. BP CENTRAL ASIA'S 'ROYAL WEDDING' ANNOUNCED. Aydar Akayev, the oldest son of Kyrgyz President Askar Akayev will marry Aliya Nazarbayeva, the daughter of Kazakh President Nazarbayev, in the second half of July, Interfax reported on 10 July. The ceremony will be held at President Akayev's residence on the shores of Issyk-Kul near the town of Cholpon-Ata. The wedding will follow a Central Asian Union summit meeting in Kyrgyzstan scheduled to begin on 17 July. BP REGIONAL AFFAIRS FEDERATION COUNCIL CALLS FOR ACTION AGAINST LATVIA. The Federation Council on 9 July unanimously approved a non- binding resolution calling on President Boris Yeltsin to "take the toughest steps against the Latvian authorities, going as far as an economic embargo against Latvia, to put an end to the large-scale violations of the rights" of ethnic Russians, Interfax reported. The same day, the Council unanimously approved a statement "on the continuing violations of fundamental human rights and freedoms" in Latvia. It called on the government to consider imposing an economic embargo on Latvia and urged politicians and entrepreneurs to put more pressure on Latvian authorities, "going as far as curtailing business relations with Latvia." Moscow Mayor Yurii Luzhkov, one of the most outspoken critics of Latvia's policy toward ethnic Russians, urged his colleagues to pass both documents (see "RFE/RL Newsline," 13 and 30 March 1998). LB LATVIAN PRESIDENT URGES OSCE TO CEASE RECOMMENDATIONS ON CITIZENSHIP. At a joint press conference with Polish President Alexander Kwasniewski in Riga on 8 July, Guntis Ulmanis said he hopes the OSCE will give Latvia guarantees that it will not make any "new and unfeasible" recommendations on amending Latvia's citizenship law, Interfax reported the next day. Poland currently chairs the OSCE. In response to a journalist's question as to whether such guarantees would be forthcoming, Kwasniewski said that in Europe there is a "long-established approach" to the problem of ethnic minorities. "If the OSCE leadership confirms that this approach is correct, then we accept it," he said. JC BIRKAVS IN ST. PETERSBURG. Earlier this week, Latvian Foreign Minister Valdis Birkavs visited St. Petersburg, despite calls by the Russian presidential administration for regional leaders to snub him (see "RFE/RL Newsline," 3 July 1998). RFE/RL's Latvian Service reports that Birkavs met with the deputy governor of St. Petersburg but that a scheduled meeting with the governor of that city did not take place. JC END NOTE PIPELINES UNDER TROUBLED WATERS by Paul Goble The actions of Western oil companies and the concerns of their Russian counterparts have prompted Moscow to change its position on the legal status of the Caspian Sea. But Moscow's shift, as reflected in a new accord with Kazakhstan signed earlier this week, seems unlikely to end disagreements among Caspian littoral states over the exploitation of the natural resources in and below that body of water. Instead, both Moscow's response and the Western actions that appear to have triggered it may mean that development in the Caspian basin will proceed without any formal resolution of this dispute. That development, in turn, could set the stage for some new and even more intense disagreements among the countries and companies involved in the dispute. On 6 July, Russian President Boris Yeltsin and visiting Kazakh President Nursultan Nazarbayev signed an accord delimiting the northern Caspian sea bed and thus allowing the two countries to exploit resources lying under the sea bed without having to worry about a legal challenge from the other. Both Russian and Western media suggested that this was a major change in Moscow's position and that Moscow's new position in effect settles the conflict over the status of the Caspian Sea. And Umirsek Kasenov, a senior Kazakhstan scholar, told RFE/RL two days later that the accord marked "the first step toward the full regulation of the issue." In fact, the accord may not do anything of the kind. It does not represent a complete negation of Russia's earlier insistence that the Caspian be treated as a lake and exploited only on the basis of a joint agreement of all littoral states. Rather, it simply draws a line on the sea floor of one small part of the northern Caspian that adjoins the Russian Federation and Kazakhstan. And it specifically holds that exploitation of the fish and other bio-resources of the sea should be governed by a joint agreement between all five littoral states. Moreover, the Russian-Kazakh agreement does not satisfy the other littoral states, which continue to insist that the Caspian be treated as a sea and thus subdivided on the basis of territorial waters. And it has already been denounced by two of those countries as a breach of earlier internationally recognized agreements. Azerbaijan, for example, continues to insist that both the sea and the sea bed must be divided, while the leaders of Turkmenistan and Iran denounced the Russian-Kazakh agreement. Speaking in Tehran on 8 July, Turkmen President Saparmurat Niyazov said that "the sea bed and the waters of the sea cannot be divided on a bilateral basis." And the previous day, the Iranian Foreign Ministry said that Tehran "will not recognize" a bilateral accord that is "contrary to the existing legal regime of the Caspian Sea." But three other announcements this week suggest that the Russian shift may mark a turning point in the development of the region, albeit one very different from the kind many are predicting. First, Russian reporting on the accord suggested that it had been concluded for largely economic reasons. Several Moscow experts described as "equally distant from the internal political ambitions" of Yeltsin and Prime Minister Sergei Kirienko said Moscow had acted because it is seeking "cheap credits" from the West. By suggesting that the latest shift does not reflect Russia's strategic interests, they implicitly pointed to the power of Russian oil and gas interests in forcing Yeltsin's hand. That, in turn, suggests a new coalition in the Russian capital that may try to cut economically beneficial deals with other littoral states even at large geopolitical costs. Second, another Russian analyst suggested that "only Washington" will be able to promote a consensus on the Caspian, "considering the interests of American oil and gas- producing companies." Having argued that Turkmenistan and Azerbaijan have "granted the Americans de-facto the right to divide the Caspian," this analyst suggested that Moscow had little choice but to modify its earlier views. Third, and perhaps most significantly, Azerbaijan indicated on 8 July that it would no longer let disputes on the Caspian affect the construction of pipeline under the Caspian between Turkmenistan and Azerbaijan. Vafa Goulizade, a senior adviser to Azerbaijani President Heidar Aliev, said that the building of this pipeline should "absolutely not" be linked to a resolution of the legal question of the status of the sea. If that attitude receives the support of Western oil and gas companies and the deference of Russian petroleum concerns, that in itself could set the stage for a new kind of competition over the Caspian. Instead of being between governments, it would be among firms. But as has happened so often before, the actions of large companies could draw in the governments as well. And in the absence of any semblance of legal regulation of the status of the Caspian Sea, such involvement by strong firms and regional governments might not only lead to potentially serious clashes but draw in outside powers as well. 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. 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