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RFE/RL NEWSLINE Vol. 2, No. 150 Part I, 6 August 1998
___________________________________________________________ RFE/RL NEWSLINE Vol. 2, No. 150 Part I, 6 August 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 * TAX SERVICE SEIZES OIL COMPANIES' ASSETS * LABOR UNREST IN RUSSIAN REGIONS * AZERBAIJANI LEADERS CALL ON OPPOSITION TO DROP ELECTION BOYCOTT End Note: TRANSITION NATIONS ACTIVE IN IMF LOANS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA TAX SERVICE SEIZES OIL COMPANIES' ASSETS. The Federal Tax Service on 6 August ordered the seizure of the assets of the oil companies SIDANCO, ONAKO, and Eastern Oil for non- payment of taxes. Vladimir Popov, head of the department charged with collecting payments from companies in arrears, told reporters that the assets will include buildings, apartments, and cars belonging to the companies' management and subsidiaries. According to Popov, SIDANCO owes 737.8 million rubles ($118 million) and ONAKO 214.5 million rubles. Earlier, Minister of Fuel and Energy Sergei Generalov had announced that SIDANCO and ONAKO will be unable to access export pipelines in August owing to tax arrears (see "RFE/RL Newsline," 3 August 1998). FINANCE MINISTRY TO SUBMIT 1999 BUDGET. According to Russian agencies, the Finance Ministry is putting the finishing touches to its 1999 budget which it will submit to the government on 7 August. The ministry is projecting 1 percent growth in GDP and a budget deficit of 80 billion rubles ($12.8 billion) or 2.9 percent of GDP. Revenues are pegged at 376.1 billion rubles (12.97 percent of GDP) and expenditures at 456.1 billion rubles (15.7 percent of GDP). ITAR-TASS reported that the government plans to spend more on services next year--36 percent of total expenditures. In 1998, services accounted for only 31 percent of total spending. At the end of the August, the government will pass along the budget to the State Duma for its approval. According to Interfax, Duma Budget Committee Chairman Aleksander Zhukov has already said that the Duma is unlikely to approve the budget unless it can do so with "a special statement inserted placing the entire responsibility for it on the government." JAC LABOR UNREST IN REGIONS. As the crisis on Sakhalin eased following the delivery of coal to the local power plant during the night of 5 August, workers across Russia in various industries expressed their dissatisfaction. On Komsomolsk na Amure, paintshop workers at the Amur shipyard began a hunger strike to protest two years' unpaid wages, according to ITAR-TASS on 6 August. Meanwhile, miners in Chelyabinsk who have been blocking the Trans-Siberian railroad and ambulance workers in Vladivostok vow to continue their strikes. Air-traffic controllers in Moscow have threatened to strike, but Prime Minister Sergei Kirienko on 6 August declared such action illegal. JAC REGIONS UNPREPARED FOR WINTER. "Izvestiya" reports on 6 August that the government has compiled a list of 12 areas with insufficient fuel reserves for the winter: Chukotka Autonomous District, Primore, Khabarovsk and Altai Krais, as well as Magadan, Kamchatka, Sakhalin, Chita, Ivanovo, Novosibirsk, Arkhangelsk and Murmansk Oblasts. In all localities, local energy suppliers have been owed debts for at least eight months. In Ivanovo, for example, residents owe more than 1 billion rubles ($158 million), and in Arkhangelsk, Arkhenergo is owed 2.4 billion rubles. Deputy Prime Minister Boris Nemtsov heads an interdepartmental group established to specify measures of state support; those measures will be elaborated in agreements to be signed with each region. "Izvestiya" concludes that "once again everything will depend on the availability of funds from the state budget." JAC ROSGOSSTRAKH SELL-OFF POSTPONED. Deputy State Property Minister Aleksandr Braverman told a press conference on 5 August that Rosgosstrakh, the nation's largest domestic insurance company, will not be privatized either this year or in 1999, ITAR-TASS reported. He added that "no personnel decision has been reached" concerning acting director Valerii Sukhov, who was on sick leave for more than a month and has faced tough questions from Rossgastrakh's board of directors about his financial and personnel policies. In February 1997, the Duma asked the government to postpone the company's privatization until the problem of restoring the value of insurance premiums paid before 1 January 1992 was resolved. JAC GOVERNMENT PROPOSES NATIONAL INSURANCE SYSTEM. According to ITAR-TASS on 6 August, the Finance Ministry has submitted a plan for the development of a national insurance system. The ministry has proposed that the government provide support with tax incentives and other measures in order to strengthen Russia's domestic insurance companies. Those companies generally do not have enough money to pay indemnity in case of major damage. Under the government's plan, insurance companies' minimum amount of authorized capital would rise at least 5 times by 2000. If approved, the program would be implemented during the remainder of 1998 through 2000. JAC RUSSIAN TAX SERVICE TO TARGET RICH INDIVIDUALS. In an interview with Trud on 6 August, Federal Tax Service director Boris Fedorov proposes broadening the tax base by increasing tax collection from small enterprises, shops, and individuals. He also seems to suggest that foreigners living in Russia could contribute more to government coffers since many of the ones living in Moscow are able to pay as much as $3,000-$4,000 a month for an apartment. According to the first part of the new Russian tax code published in "Rossiiskaya Gazeta" on 6 August, the tax system applies to all Russian residents, without exception. Fedorov argued that the tax burden is squeezing the life out of enterprises, and he proposed easing the profits tax by 10 percent to 15 percent. Earlier, Fedorov denied that he is drawing up a hit list of wealthy tax dodgers (see "RFE/RL Newsline," 6 June 1998). JAC ...WHILE TAX COLLECTIONS EDGE UP ONLY MARGINALLY. Fedorov's deputy, Vladimir Gusev, says that the Federal Tax Service's collections in August will be up only marginally from the July level, Interfax reported on 5 August. The agency will collect 12.5 billion rubles ($2 billion) in August, 16 percent less than the government's previously set target of 14.8 billion rubles but 500 million rubles more than in July. According to Bloomberg, Gusev explained that more new tax legislation will be required for the agency to meet its targets. JAC NEW WOMEN'S PARTY FORMED. Russian agencies reported that the organizing committee of a new political organization for women, called the Russian Party for the Protection of Women, convened in Moscow on 5 August. The party's goal is to urge the adoption of laws that would improve the life of women. Tatyana Roshchina, head of the organization Women for the Future of Russia, was elected chairwoman of the committee, according to ITAR-TASS. On 25 August, the new party will hold its founding conference in Moscow; some 5000 members are expected to attend. In 1993, the Women of Russia party received 8 percent of the vote in Duma elections that year, performing better than had been predicted. Analysts believe that the party took away votes primarily from the Communist Party. JAC ZYUGANOV FEARS CREEPING COUP. According to "Vremya MN" on 5 August, Communist Party leader Gennadii Zyuganov fears that recent staff changes in the Russian military and intelligence services suggest "the beginning of a creeping coup on the threshold of upcoming parliamentary and presidential elections." Zyuganov argued that Anatolii Chubais, presidential envoy to international financial institutions, spearheaded the personnel changes in order to influence upcoming parliamentary and presidential elections. Chubais's next step will be to change the leadership of the Ministry of Defense, he added. JAC FREQUENT FLYERS ENDANGERED. "Kommersant-Daily" on 5 August reported that the Russia's leadership is flying in planes that could crash at any moment. The state transport company, Rossiya, is in dire financial straits and cannot afford to replace outdated engines. Money is so short that even after a near catastrophe in January with a plane flying Russian President Boris Yeltsin and his family, Rossiya could not pay for needed repairs. JAC BASAEV ACCUSES KOVALEV. In an interview in "Nezavisimaya gazeta" on 6 August, former Chechen acting Premier Shamil Basaev again blamed Russian intelligence for the failed 23 July attempt to assassinate President Aslan Maskhadov. Basaev claimed that the reason President Yeltsin fired Federal Security Service head Nikolai Kovalev was that Kovalev had planned the assassination attempt without informing Yeltsin. The president sacked Kovalev on 25 July (see "RFE/RL Newsline," 27 July 1998) but rumors of Kovalev's impending dismissal were circulating days before 23 July . Basaev also claimed that the assassination bid was intended to plunge Chechnya into civil war and thus prevent an investigation into the clashes in Gudermes on 14-15 July between units from the Chechen National Guard and two Islamic regiments. But Basaev failed to explain what the Russian intelligence's motive might be to seek to thwart such an investigation. LF SAKHA SEEKS TATARSTAN'S HELP. A government delegation from the Republic of Sakha-Yakutia met in Kazan on 5 August with Tatar Prime Minister Rustam Minnikhanov to secure financial and technical help in overcoming the aftermath of recent flooding, RFE/RL's Kazan bureau reported. The damage from the floods, which affected 22 of Sakha's 35 regions, is estimated at about 1 billion rubles ($158 million) or 20 percent of the republic's annual budget. The Sakha delegation expressed particular interest in Tatar-produced diesel generators and special vehicles. Minnikhanov promised that Tatarstan will give what help it can afford. The delegation also met with Tatar State Council Deputy Chairwoman Zilya Valeeva to compare the two regions' legislation. LF TRANSCAUCASUS AND CENTRAL ASIA AZERBAIJANI LEADERS CALL ON OPPOSITION TO DROP ELECTION BOYCOTT... Presidential administration head Ramiz Mehtiev told journalists on 5 August that the Azerbaijani authorities still hope that five prominent opposition figures will reconsider their declared boycott of the 11 October presidential election. The five had reaffirmed their intention not to participate in the poll after meetings on 3 and 4 August with Mehtiev. They were informed by Mehtiev that President Heidar Aliev has rejected their conditions for lifting the boycott but is prepared to postpone the election to give the opposition more time to prepare for it. Aliev on 4 August had sent a letter to three of the five opposition politicians (Azerbaijan Popular Front Party Chairman Abulfaz Elchibey, Musavat Party Chairman Isa Gambar, and Liberal Party Chairwoman Lala-Shovket Gadjieva, who in 1993 served briefly as his secretary of state) urging them to participate in the poll. The three rejected that appeal, RFE/RL's Baku bureau reported. LF ...BUT SENDS MIXED SIGNALS OVER EX-PARLIAMENT SPEAKER. Mehtiev on 5 August referred respectfully to the Musavat and Azerbaijan Popular Front parties. He described them as ":influential" and expressed the hope that they will free themselves from the influence of former parliamentary speaker Rasul Guliev, whom he termed an unhealthy force. Guliev is also one of the five who declared their intention to boycott the elections. But a second member of Aliev's administration, Ali Hasanov, took a softer line on Guliev, suggesting that he may be allowed to return to Azerbaijan from his U.S. exile to contest the poll, given that presidential candidates enjoy immunity from criminal proceedings. Guliev has been charged in absentia with large- scale embezzlement. LF AZERBAIJAN PUZZLED BY U.S. SPY WARNING. An unidentified Azerbaijani National Security Ministry official told Turan on 5 August that he sees no reason for the statement issued the previous day by the U.S. State Department warning U.S. citizens visiting or working in Azerbaijan against possible anti-American provocations. The statement said that unidentified "anti-U.S. elements" have engaged in surveying U.S. companies, property, and personnel in Azerbaijan. It urged increased vigilance and security precautions. The Azerbaijani official said the U.S. statement is groundless, given that the "crime situation" in Baku and Azerbaijan as a whole "is safe." LF AZERBAIJANI OPPOSITION AGAINST VISIT BY ARMENIAN PRESIDENT. Several leading Azerbaijani opposition figures have criticized the invitation extended by President Heidar Aliev to his Armenian counterpart, Robert Kocharian, to attend an international conference in Baku in September, Turan reported on 5 August. The same day, Aliev's press service confirmed the invitation has been sent. Liberal Party chairwoman Lala-Shovket Gadjieva said the invitation is proof that the Azerbaijani government is "closing its eyes to Armenian aggression." Democratic Party Secretary-General Sardar Djalaloglu said it is "illogical" to invite a man against whom the Azerbaijani Prosecutor-General has instigated a criminal case. But Armenian presidential adviser Aram Sargsian told Interfax that Armenian participation at the conference, devoted to the EU's TRACECA project, "would be welcome." "Nezavisimaya gazeta" on 6 August quoted unnamed EU sources as similarly expressing the hope that an Armenian delegation will attend. LF ARMENIA ACCUSES AZERBAIJAN OF VIOLATING CFE TREATY. The head of the Armenian Foreign Ministry's national security and conventional weapons department, Armen Kharazian, told RFE/RL on 5 August that Azerbaijan continues to exceed its arms allocations under the 1990 Conventional Forces in Europe (CFE) treaty, thereby posing a "grave threat to Armenia's national security." According to Kharazian, Azerbaijan has officially declared that it possesses 270 battle tanks, 557 armored personnel carriers, and 300 artillery systems, thereby exceeding the CFE allocations of 220, 270, and 285, respectively. The CFE treaty stipulates equal quotas for all three Transcaucasus states. Kharazian said Armenia strictly complies with the CFE provisions and possesses 200 tanks, 218 armored personnel carriers and 225 artillery systems. He said a recent Turkish-led international inspection of an Armenian military detachment registered no violations of the treaty. He said the number of Azerbaijan's military aircraft and attack helicopters is within the CFE quotas but is eight times higher than Armenia's. LF GEORGIA TO DECIDE ON FUTURE OF CIS PEACEKEEPERS. Speaking at a press conference in Tbilisi on 5 August, Georgian Foreign Minister Irakli Menagharishvili said that the Georgian leadership will decide in the next few days whether to request the renewal of the mandate of the Russian peacekeeping force currently deployed under CIS auspices in Abkhazia, ITAR-TASS reported. That mandate expired on 31 July and can be renewed only by CIS heads of state collectively. Menagharishvili noted that Georgia has repeatedly criticized the peacekeeping force's inability to protect ethnic Georgians in Abkhazia, but he did not advocate its replacement with a UN contingent, as Georgian leaders have suggested in the past. Also on 5 August, Abkhaz President Vladislav Ardzinba told journalists in Sukhumi that any state wishing to participate in a future peacekeeping operation should have the consent of both parties to the conflict. Ardzinba denied that Georgian President Eduard Shevardnadze has made new proposals for resolving the conflict, "Nezavisimaya gazeta" reported on 6 August. LF TALIBAN REJECT UZBEK, RUSSIAN OFFER FOR MEDIATION. Abdul Mutmain, an official spokesman for Afghanistan's Taliban movement, said the movement is not interested in an offer made by Uzbekistan and Russia to mediate the conflict in Afghanistan, ITAR-TASS reported on 6 August. Mutmain said Afghanistan will be "liberated exclusively by military means." He also rejected any deals with the coalition forces opposed to the Taliban. "Kommersant-Daily" reported on 5 August that Taliban forces have seized part of the Hairaton area, which borders on Uzbekistan. That claim was refuted by anti-Taliban alliance commander General Rosi Geldy in an interview with RFE/RL's Turkmen service later the same day. BP FOREIGN EXPERTS DENIED ACCESS TO INFORMATION ON KYRGYZ CHEMICAL SPILL. Two foreign toxicologists invited by the management of Kyrgyzstan's Kumtor Mining company to examine findings on the consequences of the 20 May chemical spill have been denied access to that information, RFE/RL correspondents reported on 5 August. The Kyrgyz Health Care Ministry said that the U.S.'s Allen Holl and Russia's Yurii Ostapenko do not have authorization from the World Health Organization to investigate the effects of the incident, in which 1.7 tons of sodium cyanide spilled into the Barskoon River. Kyrgyz Deputy Minister of Health Care Viktor Grinenko said that without such authorization, the two toxicologists are not allowed to talk with people who were hospitalized following the spill. Grinenko added that the information gathered on the accident is now in the hands of the National Security Ministry, which has begun its own investigation. BP TAJIK CLERIC FOUND MURDERED. The bodies of Domullo Kiemiddin and one of his students have been found in a mortuary in the Kofarnikhon district about 20 kilometers from Dushanbe, ITAR-TASS and RFE/RL correspondents reported on 5 August. Kiemiddin, a mullah at a Dushanbe mosque, and his student went to Kofarnikhon 10 days ago on "religious business," according to United Tajik Opposition (UTO) leader Said Abdullo Nuri. Nuri has called on the Tajik government to allow UTO fighters to help in investigating "the growing number of murders committed by unidentified armed criminals in Tajikistan." BP END NOTE TRANSITION NATIONS ACTIVE IN IMF LOANS by Robert Lyle Of the 183 member nations of the IMF, the countries of the former Soviet Union and its East European allies account for only 14 percent. Yet among the 61 active programs listed by the fund, more than one quarter are with the nations in transition. Last month, new loans worth $11.2 billion were approved as part of an IMF-led Russian rescue package. A first drawing of $4.8 billion was released immediately, while a $6.4 billion trance will be available in September if Russia implements the required reforms. IMF First Deputy Managing Director Stanley Fischer was in Moscow recently to review program implementation, a trip one IMF official privately described as part of Fischer's "war against complacency" by Russian officials. Afterward, Fischer said that "the agreed measures are being implemented" and that if this continues, the September tranche should be available on time as well. In Kyiv, another IMF team reached tentative agreement with Ukrainian officials on a projected three-year extended fund facility loan of $2.2 billion. The head of the IMF delegation, Mohammad Shadman-Valavi, said the new Ukrainian loan would go to the fund's Board of Directors in late August. The long-term loan will replace a one-year $585 million stand-by arrangement that was suspended last spring after the Ukrainian government missed a number of key economic targets. The new program contains a long list of reforms that the government must implement. Thirty-three of those reforms, including a new reduced-deficit budget, had to be in place before the loan could be approved. The IMF had insisted upon parliamentary passage of the entire package but accepted the assurances of speaker Oleksandr Tkachenko that the parliament will stand behind President Leonid Kuchma's decree putting the new budget into effect. Yet another IMF team was in Sofia last week and reached agreement with Bulgarian officials on a new, three- year extended loan program worth around $800 million. Anne McGuirk, head of the IMF delegation, said the loan would be part of overall foreign funding totaling $1.6 billion that should be available to Bulgaria over the next three years. McGuirk said that a key part of the large reform program underlying this proposed new loan is the privatization of state enterprises. The new long term loan will follow up what was begun under a regular stand-by facility of around $502 million. When Sofia drew the final tranche of that loan in May, the IMF praised Bulgaria for its "good track record" of stabilization and reform. Romania, whose last one-year stand-by loan of around $414 million expired in May with only two of five tranches drawn, has made no noticeable progress on putting together a new IMF program. Fund officials say they are still waiting for details on how Romania proposes to proceed with a new loan program. A number of other countries continue to work through their IMF reform programs and draw their loans: Bosnia, which received its first stand-by loan of around $81.8 million at the end of May, has drawn nearly $33 million so far. Estonia, which received a stand-by loan of nearly $22 million last December, has not drawn any of the money, as planned. But it has used the IMF technical guidance, which is part of the program. Latvia, similarly, has not drawn any of its loan of around $44.5 million, approved last October. Like Tallinn, Riga took the loans merely to have IMF experts provide advice and guidance. In addition to Ukraine, countries in the region with extended fund facility loans are: Azerbaijan, which has drawn around $43.4 million of its $79 million three-year program approved in December 1996; Croatia, which has drawn about $38.8 million from its $477 million loan, approved in March; Kazakhstan, which has drawn the entire $417.6 million of its loan, which was granted in July 1996; And Moldova, whose $182 million loan, first approved in May 1996, has been suspended since last year owing to the failure of the government to meet the goals to which it had agreed. An IMF team was in Chisinau in June and worked out a memorandum on economy policy which, if fully implemented, could reopen the loan this fall, perhaps in October. Moldova agreed to revise its budget, tighten fiscal discipline and speed up privatization as pre-conditions for resuming the loan. It had drawn around $50.6 million of the loan before it was suspended. Seven East European or former Soviet nations have loan programs under the fund's Enhanced Structural Adjustment Facility, a special program of subsidized loans for poorer nations: Albania, which has drawn only the first tranche of about $7.9 million from its $47.6 million loan, approved in May; Armenia, which has drawn $91 million from its $136.6 million three-year loan, approved in February 1996; Azerbaijan, which has drawn $75 million from its $126 million long-term loan adopted in December 1996; Georgia, which received approval last week for the latest $37 million drawing from its $224.7 million three- year loan, approved in February 1996. Georgia had previously drawn about $150 million; Kyrgyzstan, which has not yet taken the first drawing on its $87 million loan, approved in late June; Macedonia, which has drawn about $36.8 million of its $73.6 million three-year loan, approved in April 1997; And Tajikistan, which has drawn $24 million from its $130 million loan, approved in early June. The author is a Washington-based RFE/RL correspondent. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. All rights reserved. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx HOW TO SUBSCRIBE Send an email to firstname.lastname@example.org with the word subscribe as the subject of the message. HOW TO UNSUBSCRIBE Send an email to email@example.com with the word unsubscribe as the subject of the message. 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