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RFE/RL NEWSLINE Vol 2, No. 186, Part I, 25 September 1998
___________________________________________________________ RFE/RL NEWSLINE Vol 2, No. 186, Part I, 25 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 * YELTSIN REAPPOINTS ZADORNOV AS FINANCE MINISTER * GOVERNMENT ADOPTS TOUGH STANCE WITH WESTERN BANKS * KYRGYZ AUTHORITIES TRY TO BAN DEMONSTRATION End Note: LUZHKOV AND ZYUGANOV: FRIENDLIER THAN EVER xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA YELTSIN REAPPOINTS ZADORNOV AS FINANCE MINISTER. Russian President Boris Yeltsin on 25 September reappointed Mikhail Zadornov as finance minister. He also ended the suspense for some other cabinet members, reappointing acting Fuel and Energy Minister Sergei Generalov, acting Justice Minister Pavel Krasheninnikov, acting Transport Minister Sergei Frank, and acting Railroads Minister Nikolai Aksenenko. Acting Minister for Trade and Industry Georgii Gabuniya was named head of the new Ministry of Trade. Among the new cabinet members, former Deputy Prime Minister in charge of nationality policy Ramazan Abdulatipov has been named minister of nationalities affairs, former First Deputy Minister of Economics Andrei Shapovalyants minister of economy, former Deputy Foreign Minister Boris Pastukhov minister for CIS affairs, and Mikhail Kirpichnikov minister of science and technology. JAC PRIMAKOV SKETCHES ECONOMIC MEASURES. Russian Prime Minister Yevgenii Primakov on 24 September finally revealed at least a skeletal outline of his government's economic priorities. He told a cabinet meeting that his government intends to lower taxes for producers, force exporters to sell more dollars, improve tax collection measures, reduce capital flight, and revive the banking system. Primakov also pledged that in September the government will pay back wages to the military and as of October begin paying all wages on time. JAC GOVERNMENT ADOPTS TOUGH STANCE WITH WESTERN BANKS. Russian officials' comments on foreign financial institutions turned bellicose on 24 September. Deputy Prime Minister Aleksandr Shokhin told reporters that the attitude of Western banks and international financial institutions is "driving Russia into a corner." He added that "I do not wish to scare people with a prospect of a default on foreign debts, but our partners, including the G-7 countries, should realize the situation" that Russia faces. The same day, Central Bank Chairman Viktor Gerashchenko warned that those foreign banks that are being "greedy" and are unwilling to search for a solution during debt negotiations "may get nothing at all." But he noted that some Western banks are acting reasonably. The next day Shokhin told reporters that it would be shameful for the IMF mission to leave Moscow "without cheering the world by announcing results." JAC INCOMES TO FALL, ECONOMY TO SHRINK. The Russian Central Bank on 24 September predicted that inflation will soar to at least 240-290 percent this year and that the population's real incomes could plunge by 13-24 percent. The bank based its predictions on a exchange rate of 20 rubles per dollar. If the ruble's value falls below that level, then inflation will be even higher and real incomes even smaller. According to Interfax, inflation in July measured only 0.3 percent, compared with 45.5 percent for the first 21 days of September. The Central Bank also forecast that GDP in 1998 will fall by 5-6 percent. In 1997, GDP rose 0.8 percent. JAC GOVERNMENT TO SCUTTLE ROSNEFT SALE? Interfax reported on 24 September that the government's plan to sell a 75 percent stake in the oil company Rosneft is likely to be scrapped. The sale of the company has been postponed twice owing to a lack of bidders. Deputy Prime Minister Vladimir Bulgak has ordered his staff to concentrate its efforts on speeding up the sale of a stake in the oil firm Slavneft. JAC NEMTSOV TO RUN FOR DUMA. Just two days after President Yeltsin announced Boris Nemtsov's appointment to the new post of deputy chairman of the Local Self-Government Council, Nemtsov announced on 24 September that he will run for a State Duma seat in 1999 (see "RFE/RL Newsline," 23 September 1998). Nemtsov refused to say whether he will run as a representative of an existing party or form his own. Former Central Bank chairman Sergei Dubinin will become deputy chairman of Gazprombank, according to "Kommersant-Daily" on 25 September. JAC SUPPORT GROWS FOR FEWER, LARGER REGIONS. Sakhalin Governor Igor Farkhutdinov has become the latest leading Russian official to endorse Moscow Mayor Yurii Luzhkov's proposal for rationalizing the existing structure of the Russian Federation. Meeting on 16 September with Prime Minister Primakov, Luzhkov had advocated reducing the number of federation subjects from the present 89 to 10-12 (see "RFE/RL Newsline," 21 and 22 September 1998). Farkhutdinov acknowledged that merging several small federation subjects to form one larger territorial unit is "difficult and intricate," but he argued that it is necessary to prevent Russia from disintegrating. On 21 September, Kemerovo Governor Aman Tuleev had suggested that the optimum number of federation subjects would be between 25 and 35, according to ITAR-TASS. Tuleev said the federal authorities should bestow on those unified regions economic autonomy equal to that currently enjoyed by Tatarstan and Yakutia. He added that steps should be taken to prevent "regional separatism." LF YELTSIN APPROVES FIRST SUCH MERGER. First Deputy Prime Minister and former Leningrad Oblast Governor Vadim Gustov told journalists on 24 September that President Yeltsin has approved the administrative merger of the city of St. Petersburg and Leningrad Oblast, Interfax reported. Gustov, who originally suggested the merger, said that Yeltsin has given him responsibility to prepare for the merger (see "RFE/RL Newsline," 22 September 1998). Referenda on the merger are required by the Russian Constitution. They will be held in St. Petersburg in December 1998, at the same time as elections for the city legislature, and in Leningrad Oblast at a later unspecified date. LF MOSCOW TO CRACK DOWN ON REGIONAL TAX DEADBEATS? "Nezavisimaya gazeta" on 24 September, reported that regional leaders are again trying to withhold tax money from the central government. On 22 September, Khabarovsk Governor Viktor Ishayev announced that he is suspending payments to Moscow in part because the central government owes the region more than 3 billion rubles ($189 million). The newspaper reported that Khakassia and Omsk are prepared to take a similar step, although they have not yet made a public announcement. "Nezavisimaya gazeta" receives financial backing from Boris Berezovskii's LogoVAZ group. On 23 September, Russian Prosecutor-General Yurii Skuratov sent orders to all prosecutors in Russia's republics and regions to check on the suspension of tax-payments and to launch criminal proceedings and/or lawsuits if necessary, according to "Segodnya". The newspaper also included Khabarovsk in its list of regions refusing to transfer tax funds to the center. JAC SCANDALS PLAGUE MAYORAL RACES. A court in Vladivostok has ruled that Mayor Viktor Cherepkov cannot stand for reelection because he used public money to pay for his campaign. The flamboyant Cherepkov hosted outdoor discos to promote his candidacy and decorated a road construction project with an enormous flower bed that said, "To the city from the mayor," according to the "Moscow Times" on 25 September. Since Cherepkov intends to appeal the court's decision, he may still be able to run in the election scheduled to take place on 27 September. Meanwhile, as the mayoral election nears in Nizhnii Novgorod, the candidates there are accusing one another of violating local election laws. In August, the local election committee refused to register two new candidates, accusing them of falsifying voters' signatures, "Novosti" reported. Duma deputy Vladimir Semago, who recently quit the Communist Party, has called for Interior Minister Sergei Stepashin to ensure the legality of the elections (see "RFE/RL Newsline," 18 September 1998). JAC MOTHERS SUGGEST HOW TO SAVE MONEY. The Soldiers' Mothers Committee has sent an open letter to President Yeltsin asking him to cancel the fall draft, "Kommersant-Daily" reported on 24 September. The committee proposed that the money saved by canceling the draft could be used to pay back wages to Russia's armed forces officers. The newspaper argued that the president will be sorely tempted to accept the mothers' suggestion as an "anti-crisis measure," since it would not require the Duma's approval. JAC RUSSIA TO GRANT IRAN MFN STATUS? Speaking at a joint press conference with his Iranian counterpart, Ali Akbar Nateq Nouri, at the close of his four-day visit to Tehran, Russian State Duma speaker Gennadii Seleznev said that there would be no opposition in the Duma to the ratification of documents granting Iran most-favored-nation status, "Parlamentskaya gazeta" reported on 25 September. On Afghanistan, Seleznev said that the Taliban are given far greater significance than they actually merit and would not exist as a political force without financial support from Pakistan. But at a 24 September press conference after his return to Moscow, Seleznev conceded that Russia is concerned about reports that the Taliban are deploying long-distance missiles on the Afghan-Iranian frontier, according to Interfax. Seleznev also said that Russia will continue to sell arms to Iran, which he termed "a reliable partner." LF KHACHILAEV SUPPORTERS STAGE PROTEST IN MAKHACHKALA. Several hundred supporters of Magomed Khachilaev, one of the leaders of the Kazi Kumukh organization representing Dagestan's Lak minority, and his brother Nadirshakh, chairman of the Union of Muslims of Russia, ended their march on the Dagestani capital on 24 September and began a protest demonstration on the outskirts of the city (see "RFE/RL Newsline," 22 September 1998), Interfax reported . The demonstrators are demanding the release of Magomed Khachilaev, who was arrested on 9 September for his role in the 21 May storming of the government building. They further demand that a Russian State Duma delegation travel to Makhachkala to meet with them. In a vote that observers believe to have been falsified, the Duma stripped Nadirshakh Khachilaev of his deputy's immunity on 18 September to facilitate his arrest for his involvement in the 21 May incident. Dagestan State Council chairman Magomedali Magomedov assured Prime Minister Primakov on 24 September that there are no anti-Russian or separatist sentiments in Dagestan, according to ITAR-TASS. LF TRANSCAUCASUS AND CENTRAL ASIA KYRGYZ AUTHORITIES TRY TO BAN DEMONSTRATION... Between 500 and 1,000 people met in a cinema in the city of Dzhalalabad on 25 September to formulate their opposition to the changes to the Kyrgyz Constitution proposed by President Askar Akayev, RFE/RL's correspondent in the city reported. The organizers of the meeting had been prevented from convening it on the city's central square by police, who also blocked all roads leading into the city. The constitutional changes legalize private land ownership, modify the structure of the parliament, and restrict the parliament's role in drafting key legislation, including the state budget. Those amendments are to be submitted to a nationwide referendum in mid- October. Three of the protest organizers were arrested on 22- 23 September. Two of them have been tried and sentenced to 15 days in prison for violating public order, while the third, Nazarbek Nyshanov, chairman of the unregistered Patriotic Party of Kyrgyzstan, has been charged with large-scale embezzlement. LF ...AS OPPOSITION TO PROPOSED CHANGES MOUNTS. Interfax on 23 September quoted Communist Party leader Absamat Masaliev, who was Kirghiz Communist Party first secretary from 1985-1991, as saying that 80 percent of Kyrgyz citizens oppose the idea of private land ownership, which he claimed was forced on Kyrgyzstan by the IMF. On 24 September, the Bishkek daily newspaper "Utro Bishkeka" predicted that a civil war comparable to those in Chechnya and Tajikistan may be imminent. The newspaper claimed that Masaliev and the chairmen of the Ata-Meken and Agrarian-Labor parties are planning to oust Prime Minister Kubanychbek Djumaliev. Meanwhile, the local council in Osh Oblast had to cancel an urgent session to discuss President Askar Akayev's proposed constitutional changes for lack of a quorum, according to RFE/RL's correspondent in the oblast capital. LF KAZAKHSTAN, VATICAN SIGN AGREEMENT. Vatican Secretary of State Cardinal Sodana and Kazakh Foreign Minister Kasymzhomart Tokaev signed an agreement on 24 September regulating the legal status of the Roman Catholic Church in Kazakhstan, Reuters reported. The agreement, which grants the Church full religious freedom and access to the media, is the first of its kind signed between the Vatican and a former Soviet republic. Following the signing ceremony, Kazakh President Nursultan Nazarbayev had an audience with Pope John Paul II. LF TAJIK GOVERNMENT ACCUSES OPPOSITION. The Tajik government On 24 September issued a statement accusing United Tajik Opposition field commanders of violating last year's peace agreement and committing terrorist acts, ITAR-TASS reported. The statement claimed that some opposition commanders engage in looting and hostage-taking. It also identified opposition detachments in the Darband region as being responsible for the murders of four members of the UN observer mission in July and of a leading customs official the following month. The chief of staff of the UTO armed forces, Mirzokhudja Nizomov, rejected the government's accusations. On 25 September, the U.S. embassy in Dushanbe announced it is suspending its work indefinitely because of insufficient security guarantees. LF TURKMENISTAN'S CLANS LOOKING AHEAD TO POST-NIYAZOV ERA? The 17 September sackings by President Saparmurat Niyazov of seven prominent military and security officials (see "RFE/RL Newsline," 18 September 1998) may have been intended to circumscribe the influence of former Interior Minister Gurban Kasymov, according to "Nezavisimaya gazeta" on 24 September. Niyazov has transferred Kasymov to the post of defense minister. The newspaper claims that after Niyazov's cardiac surgery one year ago, the various Turkmen clans began a covert struggle for power in which each faction tried to enlist Kasymov's support. The daily also claims that the country's inability since March 1997 to export natural gas has brought it to the verge of an economic catastrophe that can be averted only if Niyazov draws on his personal funds in Western banks, estimated at $3 billion. LF ARMENIAN, RUSSIAN ARMED FORCES BEGIN MANEUVERS... Armenian military units and Russian troops from the military base near Armenia's second-largest city, Giumri, began four-day joint maneuvers on 23 September at the Armavir training ground, west of Yerevan, Russian media reported. Infantry units backed by armor and aircraft will participate in the exercises, which will simulate defense actions in mountain conditions and a joint retaliatory strike, according to AP. Armenian Defense Minister Vazgen Sargsian told "Nezavisimaya gazeta" on 24 September that he hopes the Russian Defense Ministry will soon replace the obsolete equipment of its forces stationed in Armenia. LF ...AS DOES KARABAKH. The armed forces of the Nagorno-Karabakh Republic on 25 September began three weeks of maneuvers that coincide with the 27 September local elections in the disputed enclave and with the 11 October Azerbaijani presidential elections, RFE/RL's Stepanakert correspondent reported. Those maneuvers are aimed at monitoring coordination between various detachments of the Karabakh Defense Army, testing combat readiness, and honing the military skills of its personnel, according to a statement released by the Karabakh Defense Ministry. The statement affirmed that optimum combat readiness is an important safeguard against renewed hostilities with Azerbaijan for control of the enclave. LF TURKISH MILITARY INSPECT RUSSIAN BASES IN GEORGIA. Turkish defense experts have inspected Russian military bases in Georgia and established that the levels of equipment deployed there do not exceed those permitted under the 1990 Treaty on Conventional Forces in Europe, ITAR-TASS reported on 24 September. An Italian contingent similarly inspected Russian military installations in Leningrad Military District and found no violations there. LF GEORGIA, ABKHAZIA CONDUCT MORE TALKS. Georgian Minister of State Vazha Lortkipanidze led a government delegation to Sukhumi on 24 September for talks with the Abkhaz leadership. Abkhaz President Vladislav Ardzinba said those talks focused on creating confidence-building measures and defusing tensions. As a first step toward achieving those aims, the Georgian and Abkhaz interior and security ministers signed a protocol on the disengagement of forces along the Inguri River, which forms the border between Abkhazia and the rest of Georgia. Abkhaz Prime Minister Sergei Bagapsh told journalists after the talks that a meeting between Arzdinba and Georgian President Eduard Shevardnadze will take place "in the nearest future," according to ITAR-TASS. Meanwhile, two Abkhaz local officials were shot dead by unidentified gunmen in Abkhazia's southernmost Gali Raion during the night from 23 to 24 September. LF GEORGIA, AZERBAIJAN INITIAL OIL PIPELINE PROTOCOL. Georgian and Azerbaijani representatives on 23 September initialed a protocol stipulating that if the Baku-Ceyhan route is selected for the Main Export Pipeline for Azerbaijan's Caspian oil, that pipeline will be routed through Georgia, Reuters and Interfax reported. The agreement is to be signed by the presidents of Azerbaijan, Georgia, and Turkey on 9 October. The vice president of the Azerbaijan International Operating Company, which represents the first consortium created to exploit Azerbaijan's Caspian oil, told journalists in Baku on 22 September that the decision on the final route for the MEP will be made on schedule in late October, ANS Press reported. The Turkish newspaper "Yeni Yuzil" reported last week that the U.S. State Department has advised the AIOC to delay a decision on the final route until early 1999. LF AZERBAIJAN, UKRAINE DISCUSS OIL EXPORT. Azerbaijani First Deputy Prime Minister Abbas Abbasov met with Ukrainian President Leonid Kuchma on 24 September in Kyiv to discuss the prospects for exporting some of Azerbaijan's oil by tanker from the Georgian port of Supsa to Odessa and then via a pipeline to Brody in western Ukraine, AP reported. Ukrainian officials maintain that this is the shortest and cheapest route for transporting Caspian oil to Europe. Ukrainian First Deputy Premier Anatoliy Holubchenko said completion of the half-built pipeline will cost approximately $400 million and take some two years. The cost of the Baku- Ceyhan pipeline is estimated at $3 billion. LF TENSION BEFORE AZERBAIJAN PRESIDENTIAL ELECTIONS. Central Electoral Commission spokesman Arif Guseinov told Interfax on 24 September that preparations are almost complete for the 11 October presidential poll. But Turan reported that the opposition Movement for Democratic Elections and Electoral Reform is still demanding that the poll be postponed for three months. The Movement also demands that eight of the 24 seats on the Central Electoral Commission be allocated to opposition representatives. Some 100 members of the movement staged a picket on 24 September outside the Prosecutor- General's Office to demand the release of the remaining 12 persons held in custody since the 12 September clashes between police and opposition supporters in Baku. Musavat Party spokesman Arif Gadjiev said on 24 September that the opposition will proceed with plans for a march in Baku on 27 September along the route they have chosen rather than that proposed by Baku Mayor Rafael Allakhverdiev. LF END NOTE LUZHKOV AND ZYUGANOV: FRIENDLIER THAN EVER by Floriana Fossato Not many Russian governors receive congratulations and presents from the Kremlin on their birthday The powerful mayor of Moscow, Yurii Luzhkov, does. And in the current times of political and financial uncertainty, that is not by chance. Earlier this week, President Boris Yeltsin wished Luzhkov a happy 62nd birthday, and Russian television channels showed Yeltsin holding a large present wrapped in green paper. Hours later, Prime Minister Yevgenii Primakov found time to go to Moscow City Hall and personally give Luzhkov his present. Analysts in Moscow say that the Kremlin's show of consideration is also a sign of fear, as it comes precisely at the moment when populist, nationalist-leaning Luzhkov is openly sealing his ties with Yeltsin's communists foes. Yeltsin's comment that the Moscow mayor deserves a tribute on the occasion of his birthday seemed to disguise a last-minute attempt to make a "non-aggression pact" with Luzhkov, said one analyst who wished to remain unnamed. Luzhkov has repeatedly denied having presidential ambitions, but many--both in Moscow and across Russia--see him as a likely presidential candidate in the year 2000, when the next presidential vote is scheduled. They also see him as a candidate in the event of early elections. Luzhkov and communist leader Gennadii Zyuganov in the past week or so have revealed that their positions are growing closer. Echoing earlier communist demands, Luzhkov has urged Primakov to renationalize some former state companies, adding that the architects of privatization schemes, as well as officials involved in investment pyramid schemes, should be put on trial. Zyuganov, for his part, has openly praised Luzhkov. He said he is pleased to see that "in the present crisis situation, Luzhkov has assumed positions aimed at strengthening order in the country." Using Soviet-era terminology, Zyuganov added that people like Luzhkov are considered by the Communists to "poputchiki" or fellow- travelers. "Kommersant-Daily" reports that Luzhkov has agreed that his goals do, indeed, coincide with the Communists'. The daily quoted him as saying that "as a matter of fact this is a consolidation, aimed at implementing important principles that we share." One of Luzhkov's closest allies, General Andrei Nikolaev, is reportedly working to broaden the political platform that could bring Luzhkov to power. Fired by Yeltsin earlier this year from the post of Federal Borderguard Service, the ambitious general, reportedly with Luzhkov's backing, soon obtained a seat in the State Duma and created a political movement, the Union of People's Power and Labor. Within a matter of only a few months, the union has forged alliances with 12 centrist and leftist political organizations. Most recently, it signed a protocol aimed at coordinating its activities with those of the communist-led Popular and Patriotic Union. Nikolaev has announced that his plans for the 1999 parliamentary elections include the creation of a wide bloc that would become the "party of the majority." If such a bloc emerges, he predicted, it is very likely that its common candidate for the presidential vote will be Luzhkov. However, "Kommersant-Daily," quoting unnamed communist Duma deputies, said Nikolaev's predictions overlook the fact that most communists legislators would like to see their leader, Zyuganov, as the common candidate for the next presidential election. In the event of early elections, a struggle for power could easily break out among the new "fellow-travelers." Until the financial crisis started biting hard in the capital, sweeping away savings and leaving the emerging middle-class jobless, Moscow had been the symbol of coming abundance. Having re-elected Luzhkov in 1996 with 90 percent of the vote, Muscovites are now anxious that the capital could end up resembling the deprived and neglected towns that abound in Russia. They would most likely support the Moscow mayor in a presidential ballot in the hope this would guarantee them a better future. Other Russians, who have been wary of Moscow's success so far, would have to be convinced that the mayor of the capital would be able to improve their situation to some degree. Luzhkov has been criticized by human rights organizations and by many Russians for perpetuating Soviet- era practices, such as the Moscow residency permit, or "propiska." The Constitutional Court has twice instructed Moscow authorities to abolish the propiska, but Luzhkov responded by publicly telling officials to disregard the ruling. Others underline that Luzhkov, far from being a politician who counts on businesses to finance his political initiatives, is himself a full-fledged member of Russia's "oligarchy" and would have trouble finding the support of other "oligarchs." The English-language daily "Moscow Times" wrote last month that Luzhkov has never missed a chance to criticize privatization over the past years and its main architect, Anatolii Chubais. However, the daily noted that "few have benefited more from Chubais' privatization than Luzhkov himself." Luzhkov's financial and industrial resources include telecommunications companies, television and printed media assets, car, electronics, and food-processing plants, refineries and dozens of filling stations. With such "incredible resources," writes the newspaper, Luzhkov can only be considered an oligarch who is "well ahead of the pack," as he is "the only oligarch who holds elected office." 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 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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