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RFE/RL NEWSLINE Vol. 2, No. 146 Part I, 31 July 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 146 Part I, 31 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 * GOVERNMENT STRIKES DEAL WITH GAZPROM ON TAXES * TOP OFFICIALS SEEK TO REASSURE FOREIGN INVESTORS * AZERBAIJAN PLEDGES TO ABOLISH CENSORSHIP xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx NOTE TO READERS: The publisher, editor, and staff of "RFE/RL Newsline" would like to thank Laurie Belin for her valuable contribution to our publication and to wish her well as she pursues an advanced degree at Oxford University, England. As of 3 August, Julie Corwin will take over the position as regional specialist for Russia. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA GOVERNMENT STRIKES DEAL WITH GAZPROM ON TAXES. Government officials and Gazprom chief executive Rem Vyakhirev have agreed on a tax payment schedule, RFE/RL's Moscow bureau reported on 30 July. The gas monopoly was originally supposed to pay some 4 billion rubles ($640 million) in taxes this month. However, Fuel and Energy Minister Sergei Generalov told journalists that Gazprom's monthly tax bill will total 3.1 billion rubles. Of that figure, 2.5 billion rubles will come from Gazprom, and 600 million rubles will be paid to the company from the Finance Ministry and immediately relayed to the federal budget. (The Finance Ministry payments will help settle debts to Gazprom accrued by budget-funded organizations.) Earlier this month, ministers vowed to force Gazprom to pay its full tax bill and described as "illegal" a deal struck earlier this year allowing Gazprom to pay 2.45 billion rubles each month (see "RFE/RL Newsline," 3 and 7 July 1998). LB KIRIENKO TELLS TAX CHIEF TO LEAVE GAZPROM ALONE FOR NOW. Prime Minister Sergei Kirienko on 30 July ordered State Tax Service chief Boris Fedorov to halt all punitive measures against Gazprom until the government and gas monopoly have signed an agreement on settling mutual debts, Russian news agencies reported, citing Fuel and Energy Minister Generalov. That agreement is expected to be signed during the first few days of August. Speaking at a cabinet meeting earlier the same day, Gazprom head Vyakhirev charged that tax officials are using "inappropriate" methods against his company, and he threatened that the company will cease production if those methods continue. In early July, Fedorov halted the seizure of Gazprom assets but has since warned Vyakhirev that the asset seizures will resume if Gazprom has not paid its July taxes in full by 1 August, "Izvestiya" reported on 31 July. LB TOP OFFICIALS SEEK TO REASSURE FOREIGN INVESTORS... Prime Minister Kirienko, Central Bank Chairman Sergei Dubinin, Finance Minister Mikhail Zadornov, Unified Energy System chief Anatolii Chubais, and State Tax Service head Fedorov were among the officials who met with representatives of foreign banks and investment firms in Moscow on 30 July, "Kommersant-Daily" reported. The officials briefed foreign investors on economic data and the government's policy plans but did not announce any new initiatives. At a press conference later the same day, Zadornov said tax revenues in cash during the first half of 1998 were 8 percent higher than the corresponding figure from 1997, RFE/RL's Moscow bureau reported. He added that tax revenues for July are expected to exceed 12 billion rubles ($1.9 billion). (In June the federal government collected 11.2 billion rubles in taxes.) Zadornov predicted that tax collection will continue to improve once new laws and government directives take effect in August. LB ...INSIST DEVALUATION OUT OF THE QUESTION. Central Bank Chairman Dubinin on 30 July dismissed speculation that the government will be forced to abandon the ruble corridor later this year, RFE/RL's Moscow bureau and Reuters reported. Independent economist Andrei Illarionov is among those who believe a sharp ruble devaluation is inevitable. But during a joint press conference with Finance Minister Zadornov, Dubinin said Illarionov either "does not understand how the market works or is deliberately misleading people." The Central Bank head even mentioned rumors that Illarionov is trying to drive down the ruble in order to make money on a futures contract, although Dubinin did not vouch for the accuracy of such allegations. During an interview with Ekho Moskvy on 30 July, Central Bank First Deputy Chairman Sergei Aleksashenko said "rumors of the ruble's death are premature." LB CENTRAL BANK'S HARD-CURRENCY RESERVES INCREASE. The Central Bank's gold and hard-currency reserves rose from $13.6 billion to $19.2 billion from 17 to 24 July, ITAR-TASS reported on 30 July. During that week the bank received $4.8 billion in funds from an IMF credit. Several Eurobond issues helped bolster the Central Bank's reserves earlier this year, but Finance Minister Zadornov announced on 30 July that Russia plans no further sales of Eurobonds until late October, Interfax reported. He said Russia will borrow abroad again only once market conditions become more favorable. Turmoil on Russian financial markets and downgrades by international credit rating agencies have driven up the cost of foreign borrowing for the Russian government. LB KIRIENKO WILL NOT TOLERATE RAILROAD BLOCKADES. Prime Minister Kirienko said at a 31 July conference at the Railroads Ministry that "the government will instill order" to bring an end to the railroad blockades, Interfax reported. Sakhalin Oblast's botched attempt to have Interior Ministry troops disperse miners blockading a power plant on 30 July drew strong criticism. The chairman of the nationwide coal miners' union said it will incite its 600,000 members to civil disobedience, including the blockade of highways and railroads if force is used against Sakhalin protesters. The management of a coal operation in Sakhalin warned that such force would trigger social unrest throughout Russia's mining regions, ITAR-TASS reported on 30 July. Sakhalin Deputy Governor Ivan Malakhov told reporters the next day that the regional authorities will not use force to disperse the picketers. Meanwhile, coal shortages caused by the blockade have led to further electricity outages in Sakhalinsk. Sakhalin's hospitals will have electricity for only 6 hours on 31 July. BT CHELYABINSK GOVERNOR GIVES PROTESTING MINERS ULTIMATUM. Petr Sumin announced that a state of emergency would be imposed in Chelyabinsk Oblast if miners did not lift their five-day blockade of the Trans-Siberian Railroad by the night of 30 July, "Kommersant-Daily" reported. Blockaders have begun to stop passenger trains in addition to freight trains, leading to fist fights between miners and train officials. The federal government recently sent 9.6 million rubles ($1.5 million) to pay wage debts, but the miners insist on 60 million rubles as a condition for lifting the blockade. BT RUSSIAN-JAPANESE NAVAL EXERCISE 'BIG SUCCESS.' The first Russian-Japanese naval maneuvers have been dubbed a "big success " by both sides, ITAR-TASS and Interfax reported. Two destroyers from each country, along with Russian helicopters and Japanese airplanes, conducted a mock rescue of a Japanese ship in the northeastern part of the Sea of Japan, about 400 kilometers from Vladivostok. Bad weather forced the exercise to continue until 30 July. Meanwhile, Yeltsin and Kirienko sent letters of congratulations to the new Japanese Prime Minister Keidzo Obuchi on 30 July. Yeltsin's letter also contained an invitation to Obuchi to visit Russia this fall. The Russian president also sent a message to former Prime Minister Ryutaro Hashimoto thanking him for his part in the "history-making" developments in the two countries' relations. BP NEW FSB CHIEF SAYS NO MAJOR PURGE DURING REORGANIZATION. Federal Security Service (FSB) Director Vladimir Putin told "Kommersant-Daily" on 30 July that there will be no "massive firings" during the reorganization of the FSB. He said the service's staff does not greatly exceed 4,000 people, the upper limit set by a recent presidential decree (see "RFE/RL Newsline," 27 July 1998). Putin said staff reductions will be carried out mostly by attrition. Commenting on reports describing him as a close ally of Unified Energy System head Anatolii Chubais, Putin said he and Chubais hardly knew each other in St. Petersburg. He added that it was Kremlin official Pavel Borodin who invited him to join the presidential administration in 1996 (when Chubais was Yeltsin's chief of staff). Writing in "Nezavisimaya gazeta" on 31 July, a correspondent from St. Petersburg also discounted reports characterizing Putin as "Chubais's man." LB OFFICIAL WARNS OF POSSIBLE RADIATION THREAT IN NORTH. Deputy Atomic Energy Minister Nikolai Yegorov on 30 July warned that spent fuel removed from nuclear submarines could pose a radiation hazard in the Andreev Bay (Murmansk Oblast), Russian news agencies reported. Speaking to journalists following a meeting of a Russian-Norwegian commission on radiation safety, which he co-chairs, Yegorov said the radiation level is currently under control but noted that "the situation is getting worse with each passing year" and could eventually become a "catastrophe." He said Russia has decommissioned 157 submarines, 95 of which belong to the Northern Fleet. But whereas an estimated $1.5 billion is needed to dismantle decommissioned submarines and improve the way spent fuel is stored, Interfax said the Russian budget has earmarked only some $35 million for such projects. ITAR-TASS said Norway, Japan, and The Netherlands have promised a combined $53 million to help deal with the problem. LB PROSECUTORS CHARGE FORMER DEFENSE MINISTRY OFFICIAL. Chief Military Prosecutor Yurii Demin announced on 30 July that his office has filed criminal charges against former Deputy Defense Minister Konstantin Kobets, RFE/RL's Moscow bureau reported. Kobets gained fame when he helped defend the White House during the August 1991 coup and later held high posts in the Defense Ministry. Duma Defense Committee Chairman Lev Rokhlin publicly accused Kobets of corruption in July 1996, but Kobets was fired and arrested only in May 1997. He is charged with taking bribes, abusing his official position, and illegal possession of firearms (see "RFE/RL Newsline," 19 and 20 May 1997). No trial date has been set, as Kobets will be given time to read documents related to the case against him. He denied the charges against him in an interview with "Kommersant-Daily" on 31 July. LB OFFICIAL SAYS AMNESTY BENEFITS HIGH-RANKING MILITARY CRIMINALS. Chief Military Prosecutor Demin told journalists on 30 July that an amnesty declared by the State Duma has allowed the heads of some criminal groups to escape punishment, RFE/RL's Moscow bureau reported. Demin said 14 former high-ranking generals have been sentenced during the last two years, another 14 are under criminal investigation, and 13 have been freed under an amnesty (see "RFE/RL Newsline," 7 January 1998). He argued that the wording of the amnesty resolution has allowed highly decorated generals who masterminded some crimes to be freed, while the lower- ranking officers who carried out those crimes serve prison terms. The constitution grants the Duma alone the power to declare amnesties. LB UNION OF RUSSIAN CITIES PROTESTS GOVERNMENT TAX LAWS. The Union of Russian Cities has issued a resolution protesting the anti-crisis program's budget and recent tax laws as infringements on "cities' financial independence," "Nezavisimaya gazeta" reported on 30 July. According to the union, new tax laws cut local governments' share of overall tax revenues while increasing municipalities' responsibility for spending on services like education and housing. Planned revenues to offset municipalities' losses, such as the sales tax, are to be implemented on a regional level, but the new system may make mayors more dependent on regional governors or republican presidents. "Nezavisimaya gazeta" points out that in many regions, mayors and governors are political opponents. The Union will appeal to the President to veto legislation passed by the parliament. It plans to "recall" deputies and regional leaders who are "destroying local self-government and deepening the country's crisis" through the legislation. However, the Union has no mechanisms to change federal laws or recall deputies. BT PROSECUTORS INVESTIGATING POSSIBLE FRAUD IN NIZHNII. The Prosecutor's Office in Nizhnii Novgorod is investigating allegations that officials falsified the results of the March mayoral election, which was later annulled, RFE/RL's correspondent in Nizhnii Novgorod reported on 31 July. Yurii Lebedev, who resigned as presidential representative in Nizhnii Novgorod Oblast after the mayoral election, alleged during a recent appearance on local television that Governor Ivan Sklyarov phoned election officials, asking them how many votes they shaved off Andrei Klimentev's total. The official tally indicated that Klimentev won the race by just 2 percent of the vote, but Lebedev says Klimentev's real margin of victory was 10 percent. Prosecutors have questioned Lebedev and the former chairman of the city electoral commission in connection with the allegations, and are expected to question the governor soon. Sklyarov, a former mayor of Nizhnii Novgorod, supported Vladimir Gorin, who finished second to Klimentev in the March election. LB DUMA DEPUTY MAY TAKE KLIMENTEV'S PLACE IN NIZHNII ELECTION. Communist Duma deputy Vladimir Semago told ITAR-TASS on 30 July that he may compete in the Nizhnii Novgorod mayoral election this September in place of Klimentev, who is currently serving a prison sentence. Semago assisted Klimentev's mayoral campaign earlier this year and criticized the cancellation of the election. He later defended Klimentev in court. He has been collecting signatures to register as a candidate in the September election in case Klimentev is unable to compete or withdraws his candidacy. Semago, a wealthy businessman who owns a casino and other properties in Moscow, has been a thorn in the side of the Communist leadership since his election to the Duma. He has periodically criticized the party's strategy and has suggested that top officials may be involved in corruption (see "RFE/RL Newsline," 7 August and 23 October 1997). LB KRASNODAR LEGISLATURE SEEKING TO LIMIT GOVERNOR'S POWERS. The Krasnodar Krai legislature has passed an amendment to the regional law on the budget, which would limit the governor's control over regional expenditures, ITAR-TASS reported on 30 July. Governor Nikolai Kondratenko has slashed some budget items this year without obtaining approval from the legislature, and cuts have not affected all programs equally. Education programs have been especially hard hit. Legislators also charge that the governor has used his power over budget allocations to benefit well-connected firms. LB LUZHKOV OVERSPENDS ON WORLD YOUTH GAMES BUDGET. The city of Moscow spent 240 million rubles ($40 million) on July's World Youth Games, some five times the planned amount, Moscow finance head Serafim Yarnykh told reporters on 30 July. The city constructed an Olympic Village for the 7,000 participating teenage athletes, bought 200 new buses for the event, and stationed 32,000 police in Moscow for the duration of the games, Reuters reported. In September 1997, Mayor Yurii Luzhkov's government staged elaborate and expensive festivities for Moscow's 850th birthday. BT DETAILS OF KIRIENKO-MASKHADOV MEETING STILL UNCLEAR. The venue and agenda for the planned 1 August meeting between Russian Prime Minister Kirienko and Chechen President Aslan Maskhadov is still unclear, RFE/RL's Grozny correspondent reported on 31 July. Maskhadov's press spokesman Mairbek Vachagaev declined to confirm that the talks will take place in the Ingushetian capital, Nazran, while a senior Russian Interior Ministry official told ITAR-TASS on 31 July that the probable venue will be the Dagestani capital, Makhachkala. The talks are likely to focus on economic aid for Chechnya rather than political issues. Viktor Ilyukhin, chairman of the Duma Security Committee, told ITAR-TASS on 30 July that Kirienko should demand the disarming of all Chechen forces that have not pledged loyalty to Maskhadov, adding that the Russian premier should offer the assistance of federal forces in achieving that objective. LF TRANSCAUCASUS AND CENTRAL ASIA TAJIK OFFICIAL DIES FROM INJURIES. Ali Imomnazrov, the deputy head of the Tajik Customs Committee, died on 31 July from injuries sustained when a bomb planted in his car exploded the previous day, ITAR-TASS reported. The Tajik Interior Ministry has so far not commented on the investigation. BP TAJIK OPPOSITION RECEIVES GOVERNMENT POSTS. President Imomali Rakhmonov met with United Tajik Opposition (UTO) leader Said Abdullo Nuri on 30 July to discuss appointments of UTO members to posts in the government, RFE/RL correspondents reported. Rakhmonov approved Shodi Kabirov as minister of agriculture, Salamshah Muhabbatov as chairman of the State Committee for Oil and Gas, Muhammadjon Davlatov as chairman for the State Committee for Precious Stones, Muhammadruzi Iskandarov as chairman of the State Committee on Emergency Situations and Civil Defense, and Dovudkhoja Islomov as chairman of the State Committee for Milk and Meat. However, Rakhmonov rejected the leader of the Islamic Renaissance Party, Muhammadsharif Himmatzoda, as deputy prime minister and UTO field commanders Mirzo Ziyoyev as defense minister and Amirkul Shukurov as chairman of the State Committee of Industry. The rejection of the last three will be discussed again by the two leaders in the near future. BP WORLD BANK APPROVES LOAN TO TAJIKISTAN. The World Bank announced on 30 July that it has approved a $50 million loan to Tajikistan, ITAR-TASS reported. The loan is part of $165 million loan package over three years and is to be used for economic reform. BP LORTKIPANIDZE ACCEPTS POST OF GEORGIAN STATE MINISTER. Vazha Lortkipanidze told journalists in Tbilisi on 30 July that he has accepted the post of minister of state offered him by Georgian President Eduard Shevardnadze on 27 July. He said his first priority would be to expedite economic reform. Lortkipanidze rejected the allegations of opposition politicians that he is "pro-Russian." He said both Georgia and Russia need to take steps to elevate bilateral relations to a new level. Lortkipanidze declined to name possible candidates for his new cabinet but did not rule out creating a coalition government, according to Caucasus Press. LF UN EXTENDS OBSERVERS' MANDATE IN GEORGIA. The UN Security Council has extended until 31 January 1999 the mandate of the UN Observer Mission in Georgia, which expires on 31 July, Reuters reported on 30 July. The Security Council also adopted a resolution condemning the "deliberate destruction of houses by Abkhaz forces with the apparent motive of expelling people from their home areas." It stopped short, however, of complying with the Georgian leadership's request that it condemn the punitive measures against ethnic Georgians in Abkhazia's Gali Raion as genocide. LF RUSSIA WANTS GEORGIAN DECISION ON CIS PEACEKEEPERS. Russia's special envoy for the Abkhaz conflict, Lev Mironov, told Interfax on 30 July that Moscow wants the Georgian leadership to state clearly whether or not it wishes the mandate of the CIS peacekeeping force deployed along the border between Abkhazia and the rest of Georgia to be extended. That mandate expires on 31 July. Abkhaz President Vladislav Ardzinba has written to Russian President Yeltsin to request that the peacekeepers' mandate be prolonged. But several prominent Georgian political figures have argued that there is no sense in doing so if the peacekeeping force is unwilling or unable to protect the Georgian population in Gali. LF RUSSIA, AZERBAIJAN ISSUE JOINT STATEMENT ON CASPIAN. A statement issued on 30 July summarizing Russian First Deputy Foreign Minister Boris Pastukhov's talks with Azerbaijani leaders notes that Moscow and Baku have moved closer to an agreement on dividing the sea bed of the Caspian but continue to differ over dividing the waters and surface area of the sea, ITAR-TASS reported. Pastukhov told journalists before leaving Baku on 29 July that the agreement concluded between Russia and Kazakhstan earlier this month on delineating the northern sector of the sea will take effect only after all five littoral states have signed a convention on the Caspian's status. LF AZERBAIJAN PLEDGES TO ABOLISH CENSORSHIP. Meeting in Washington on 29 July with National Democratic Institute personnel, Shahin Aliev, a legal adviser to Azerbaijani President Heidar Aliev, announced that within seven to 10 days an official decree will be passed abolishing censorship, Turan reported the next day. LF DASHNAK PARTY CRITICIZES ARMENIAN PRESIDENT. Meeting with journalists on 30 July, Dashnak Party (HHD) leaders said that the party approves most, but not all aspects of President Robert Kocharian's policy, RFE/RL's Yerevan bureau reported. Vahan Hovanissian, who also is an aide to Kocharian, and Armen Rustamian criticized Kocharian's personnel policy, with the latter claiming that 22 "discredited" officials who served under the previous leadership still occupy prominent positions. Hovanissian took issue with Kocharian's assertion that there are no longer any political prisoners in Armenia, noting that several persons convicted in two notorious trials in 1996- 1997 remain in prison. The HHD was one of several parties that aligned in the Justice and Unity bloc to support Kocharian's candidacy in the March presidential election. On 27 July, a two-week congress of the HHD's Armenia-based organization concluded with the election of a new nine- member "supreme body." LF 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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