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RFE/RL NEWSLINE Vol 2, No. 179, Part I, 16 September 1998
___________________________________________________________ RFE/RL NEWSLINE Vol 2, No. 179, Part I, 16 September 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 * RUBLE RESUMES DROP * CENTRAL BANK PREPARES PRESSES * SEVEN KILLED IN SHOOTINGS ON ABKHAZ-GEORGIAN BORDER xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA RUBLE RESUMES DROP. The value of the ruble wavered erratically on 15 September, finally closing on the electronic exchange at 11.95 rubles per dollar--27 percent lower than the official exchange rate. Yulia Romanenkova, president of the Guild of Professional Dealers, told Interfax that in the first half of the trading session, the Central Bank bought a large amount of rubles at an artificially low rate of 7.5 rubles per dollar. The Central Bank might have taken such action to subsidize Russian banks, reducing their losses on "forward contracts," agreements to sell rubles at a certain rate at a future date (see "RFE/RL Newsline," 15 September 1998). However, the Central Bank denied reports that it is intervening in the currency market. On 16 September, the bank lowered the official rate of the ruble from 8.67 rubles to 9.61 rubles per dollar. JAC CENTRAL BANK PREPARES PRESSES... Recently appointed Central Bank Chairman Viktor Gerashchenko says Russia "cannot do without" a monetary emission. He told reporters on 15 September that there is a "catastrophic" shortage of money in Russia. Gerashchenko declined to specify the size of the emission until the bank's board of directors has met and made its own assessment. President Yeltsin approved all eight of Gerashchenko's nominees for the board, which included Andrei Kozlov, who had resigned from the Bank only 10 days ago (see "RFE/RL Newsline," 7 September 1998). "Russkii telegraf" argued that "there will be no need to define the parameters of the [planned] emission" if the "cabinet decides to immediately index-link all deposits and to provide compensation for the losses suffered by the poorest sections of the population while also increasing enterprises' working capital. The printing presses will go out of control and will themselves determine not only economic policy but the future of the [Prime Minister Yevgenii] Primakov government," according to the newspaper. JAC ...WHILE SHOKHIN PLEDGES NO NEW MONEY. New Deputy Prime Minister for Finance Aleksandr Shokhin of the Our Home is Russia faction told Russian Public Television on 15 September that "issuing money as a means of resolving all problems" is ruinous for the economy. He added that it is important not to rely too heavily on any single method such as issuing money or price controls. Communist Party leader Gennadii Zyuganov blasted Shokhin's appointment, saying that Shokhin, together with recently deposed acting Prime Minister Viktor Chernomyrdin, has "squandered away the entire state treasury and failed to fulfill every budget." Another member of the Our Home is Russia faction and State Duma deputy, Georgii Boos, will head the Federal Tax Service, a post held by acting Deputy Prime Minister Boris Fedorov, ITAR-TASS reported, Whether Fedorov will retain his other post is not yet known. JAC PRIMAKOV PROMISES PAYMENTS WITHOUT INFLATION. Prime Minister Primakov told reporters on 15 September that Russia will pay back wages and pensions but prevent hyperinflation and a worsening of the country's economic situation. According to ITAR-TASS, Primakov and trade union leaders agreed the same day to form a tripartite commission composed of representatives from the government, unions, and employers to address the problem of wage arrears. Meanwhile in Krasnodar, Vladimir Rybalko, a locksmith, killed himself by self- immolation, leaving behind a note in which he complained he had not been paid for two years. And, in the Vorkuta region, a group of miners blocked a highway to protest non-payment of wages. JAC PRESS PROFILES BORDYUZHA... Russian newspapers described Foreign Minister Igor Ivanov and Secretary of the National Security Council Nikolai Bordyuzha as capable bureaucrats, appointed as much for their loyalty as their skills. "Izvestiya" on 16 September said that Bordyuzha is "absolutely loyal" to his superiors and openly known as "Primakov's man." According to "Kommersant-Daily" on 15 September, Bordyuzha was elevated to his new position primarily for his loyalty to President Boris Yeltsin. Those people behind the decision to appoint Bordyuzha want to preclude the National Security Council from acting independently in Kremlin maneuverings, the newspaper commented. "Russkii telegraf," on the other hand, cites Bordyuzha's reform of the organization of the Federal Border Service and concludes that Bordyuzha will bring to the National Security Council concrete experience with "conceptual reforms." JAC ...AND IVANOV. "Nezavisimaya gazeta" suggested Primakov's selection of his right-hand man at the Foreign Ministry responsible for the ministry's day-to-day operations means that despite his new responsibilities, Primakov will retain control over foreign affairs. According to the newspaper, "for several years Ivanov has had the whole diplomatic service in his hands, knowing every individual and every paperclip on every document," thus enabling Primakov to focus on the larger policy issues and not the specifics of running the ministry. The newspaper added that "no head of department was appointed without reference to Ivanov" and "all key diplomats are now 'his people.'" JAC GROUP OF SEVEN TO RECONVENE. British Prime Minister Tony Blair announced on 15 September that a meeting of the foreign ministers of major industrialized nations to discuss Russia's financial crisis is merited (see "RFE/RL Newsline," 15 September 1998). The meeting will take place in New York on 24 September. An IMF/World Bank mission is currently in Moscow. JAC LEADING NEWSPAPERS TO MERGE. Mirroring the trend in the industry of its main benefactor, namely banking, newspapers are starting to merge in order to weather the current financial crisis. On 16 September "Kommersant-Daily" reported that Interros holding company president Vladimir Potanin announced that his "company is being forced to dispose of inefficient assets." Because "'Russkii telegraf' is not profitable and 'Izvestiya' is just breaking even," the two newspapers will be merged. Staff at "Izvestiya" will be cut and some of "Russkii telegraf" personnel will work on the new newspaper. According to "Kommersant-Daily," the editor of the new newspaper will likely be chairman of the board of "Izvestiya" Mikhail Kozhokin. JAC GOLD OUTPUT DROPPING. In the first eight months of 1998, Russian gold production dropped from 66.4 million tons during the same period last year to 59.4 million tons. The Ministry of Economics told Interfax that total gold production this year will be lower than in 1997 because of sharp declines in two gold-producing regions, Yakutia and Chukotka. An additional problem is that some producers are holding onto their gold rather than selling it. Several banks have proved unable to pay for volumes of gold already under contract. JAC TRANSNEFT EXECUTIVES FACING CRIMINAL CHARGES. According to ITAR-TASS, the prosecutor-general has launched a criminal investigation into the activities of former managers of Russia's giant pipeline company, Transneft. Former President Valerii Chernayev and his deputies reportedly used company money to buy up the shares in the firm and then transferred the stock to outside companies that they controlled. Twenty- five percent of the company was transferred to employees, who were then pressured by management into selling or transferring their stock. Chernayev was fired in May. JAC RESTIVE REGIONS EXAMINED. "Segodnya" on 15 September argued that recent unilateral actions by regions to separate their economies from Russia's center may have been only a dress rehearsal for a new crisis. "No one in Russia has repealed the winter, which promises to be far colder than usual, and the crisis as such is still far from overcome," the newspaper commented. "It will be extremely difficult for Yevgenii Primakov to steer a line toward state regulation after the regions have already experienced independence as a result of the crisis." According to the newspaper, the regions' yearning for local rule is barely contained: "Only two senator-governors--for Maritime Krai and Moscow--have remained staunch state supporters." "Segodnya" concluded that an extreme leftward tilt in government policy would alienate the liberal governors, while a continuation of the current crisis would drive everyone away. JAC RUSSIA ADVOCATES POSTPONING CIS PREMIERS MEETING. Prime Minister Primakov has asked CIS Executive Secretary Boris Berezovskii and Ukrainian Prime Minister Valeriy Pustovoytenko to postpone the 24-25 September session of the CIS Heads of Government Council, Russian agencies reported on 15 September. Primakov explained that only after a new Russian government is formed can Moscow formulate its official position on CIS reform. Addressing a 15 September session in Minsk of the interstate forum tasked with preparing proposals on reform within the CIS, Berezovskii said some CIS prime ministers still want this month's planned meeting to take place as scheduled. LF NEW LIFE FOR 'MIR'? Russian cosmonauts on 15 September quickly carried out repairs inside an airless Spektr module on board the space station "Mir," rejoining two cables that had loosened. According to ITAR-TASS, the repair took less than an hour although mission control had allotted almost three hours. Reuters quoted Russian Space Agency spokesman Vyacheslav Mikhailichenko as saying that the country's economic crisis may delay completion of the new International Space Station and extend the operational life of "Mir," which is scheduled to be retired next June. He added that "as long as the International Space Station is not in orbit, it does not make sense to bring 'Mir' down." JAC CHECHEN PARLIAMENT TO INVESTIGATE CORRUPTION ALLEGATIONS. Addressing the parliament on 15 September, Chechen Vice President Turpal Atgeriev proposed creating a special commission to investigate what he termed the "unfounded and baseless" accusations leveled by Vice President Vakha Arsanov against President Aslan Maskhadov and other members of the Chechen leadership, Caucasus Press and "Nezavisimaya gazeta" reported. On 8 September, Arsanov had accused Maskhadov of financial irregularities and of being unable to establish order in Chechnya. He advocated convening a nationwide conference to assess the leadership's effectiveness. Arsanov is aligned with radical elements opposed to the more moderate policies of Maskhadov, who is currently visiting Malaysia. LF ANOTHER CHECHEN GROUP CALLS FOR KHACHILAEV'S RELEASE. The Congress of Peoples of Chechnya and Dagestan, the founder and chairman of which is former acting Chechen Prime Minister Shamil Basaev, has formally demanded that the Dagestani authorities release Magomed Khachilaev, ITAR-TASS reported on 15 September, quoting the Congress's deputy chairman, Ilyas Musaev. Khachilaev, who is one of the leaders of the Kazi Kumukh organization that represents Dagestan's Lak minority, was arrested on 9 September in connection with the storming in May of the government building in Makhachkala. Chechen warlord Salman Raduev threatened reprisals against the Dagestani leadership unless Khachilaev was released, but he later retracted that threat (see "RFE/RL Newsline," 10 and 14 September 1998). LF TRANSCAUCASUS AND CENTRAL ASIA SEVEN KILLED IN SHOOTINGS ON ABKHAZ-GEORGIAN BORDER. Seven people were shot dead by unidentified gunmen and several more injured in the Abkhaz border village of Tagiloni on 15 September. Reuters and AP quoted Georgian security officials as saying that those killed were Abkhaz police officers, while Interfax and ITAR-TASS quoted Abkhaz sources that said they were civilian farmers. Abkhaz Interior Minister Aslanbek Kshach blamed the shootings on the Georgian guerrilla organization White Legion, which has vowed revenge for the bomb explosion in the Zugdidi administrative building on 24 August, according to an RFE/RL correspondent in Tbilisi. White Legion leader Zurab Samushia has disclaimed any responsibility for the 15 September incident. LF GEORGIAN PROSECUTORS PROPOSE SENTENCES IN 'TRIAL OF CENTURY.' Prosecutors on 15 September called for sentences of up to 15 years in the trial of Mkhedrioni leader Djaba Ioseliani and 14 other men accused of involvement in the August 1995 assassination attempt against Eduard Shevardnadze and of planning a coup d'etat. The prosecutors demanded 15 years' imprisonment for Ioseliani, whose defense lawyer has protested that the case against his client is largely based on evidence by a co-defendant that the latter subsequently retracted. The trial, which opened last December, will resume on 28 September. LF GEORGIA'S ETHNIC ARMENIANS DRAFT OWN CONSTITUTION. Caucasus Press on 15 September reported that Djavakhk, the organization that is lobbying for autonomy for predominantly Armenian-populated districts in southern Georgia, has drafted a separate constitution for the region. That document has been sent to Tbilisi to be translated from Armenian into Georgian. LF ARMENIAN COGNAC ROW CONTINUES. Presidential spokeswoman Gassia Apkarian told journalists on 15 September that President Robert Kocharian is not violating the constitution by delaying a response to the June request by 68 parliament deputies to convene a special parliamentary session to discuss the sale of the Yerevan cognac factory (see "RFE/RL Newsline," 15 September 1998), RFE/RL's Yerevan bureau reported. She rejected rumors that Kocharian has demanded the resignation of Prime Minister Armen Darpinian. Also on 15 September, opposition deputies said they have collected the required number of signatures to refer Kocharian's alleged refusal to appeal to the Constitutional Court. Hayrenik faction chairman Eduard Yegorian said his group will try to collect the 96 signatures required to begin impeachment proceedings against the president. LF UZBEK PRESIDENT IN ISRAEL. Meeting on 15 September, Islam Karimov and Israeli Prime Minister Benjamin Netanyahu discussed regional security issues, including the threat posed by Islamic fundamentalism, and signed a series of agreements on expanding bilateral trade and cooperation in agriculture, Reuters and AP reported. Karimov also met in the West Bank town of Ramallah with PLO chairman Yasser Arafat, who described the Uzbek president as a close personal friend as well as a friend of the Palestinian people, according to dpa. Arafat assured Karimov that the U.S.-mediated Mid-East peace talks will continue. LF TAJIK-IRANIAN TALKS FOCUS ON AFGHANISTAN. On a working visit to Dushanbe on 15 September, Iranian Deputy Foreign Minister Morteza Sarmadi met with Tajik President Imomali Rakhmonov and Tajik Foreign Minister Talbak Nazarov to discuss the situation in Afghanistan and bilateral economic and trade cooperation, Interfax and ITAR-TASS reported. Sarmadi handed Rakhmonov an invitation from Iranian President Mohammad Khatami, which Rakhmonov accepted. The date of that visit will be determined later. LF KAZAKH PREMIER OUTLINES INDUSTRIAL REFORM PLANS. Industry, Energy and Trade Energy Minister Mukhtar Abliyazov told a cabinet session on 15 September that under a five-year reform program, the Kazakh government will create a number of state holding companies and bring the majority of the country's heavy industry under state control, with the aim of a 25 percent increase in industrial output by 2003 and a 50 percent rise in the number of people employed in the industrial sector, RFE/RL's Almaty bureau reported. He added that the Kazakh government will control foreign investment in the industrial sector. Abliyazov also announced that shuttle traders importing foreign goods will be required to pay a 25 percent value-added tax on those goods. LF xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1998 RFE/RL, Inc. 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