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RFE/RL NEWSLINE Vol 2, No. 203, Part I, 20 October 1998
________________________________________________________ RFE/RL NEWSLINE Vol 2, No. 203, Part I, 20 October 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 * MORE RUSSIANS FALLING INTO POVERTY * IMF OFFERS FOOD, NOT CASH * GEORGIAN INSURRECTION QUASHED End Note SAKHALIN: WAITING FOR OIL BUT PATIENCE IS RUNNING OUT xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA MORE RUSSIANS FALLING INTO POVERTY... More Russians slipped into poverty in September compared with August, Interfax reported on 19 October. Last month, the amount of the population living in poverty reached more than one-third. Real incomes plunged 12.4 percent during the first nine months of the year, compared with the same period in 1997, while consumer prices swelled 38.4 percent in September alone--the biggest monthly rise in three years. Nationwide, the number of unemployed increased by 0.5 percent, while the rate of unemployment as of 1 October was estimated at 11.5 percent. "Segodnya" reported on 17 October that the number of jobless in Moscow rose 10 percent from mid-September to mid-October. JAC ...AS ECONOMIC CONTRACTION ACCELERATES. Russian gross domestic product shrank 9.9 percent in September, following an 8.2 percent drop in August, Interfax reported on 19 October. The State Statistics Committee called it the largest economic drop since 1994. Industrial output dropped 14.5 percent in September; automobile production was particularly hard hit, sustaining a 35 percent decline. Among the nation's export industries, fuel dropped 4.6 percent, iron, steel, and non-ferrous metals fell 16 percent, and logging, timber, pulp, and paper industries 6.4 percent. First Deputy Prime Minister Yurii Maslyukov told a conference of defense industry executives that the nation's natural monopolies could be used to pull the Russian economy out of its crisis. According to Interfax, he added that "the lending potential of the Central Bank should be better used for export industries and for the construction of houses and roads." JAC IMF OFFERS FOOD, NOT CASH. The IMF mission arrived in Moscow on 20 October--one day after IMF Managing Director Michel Camdessus declared that his agency is unlikely to provide any new money soon, calling on the West to provide Russia with humanitarian assistance to avert hunger. "Kommersant-Daily" dubbed the offer of humanitarian assistance "Camdessus's legs," a reference to "Bush's legs," or the U.S. poultry imports, especially chicken legs, that flooded the Russian market as food aid during President George Bush's administration. The newspaper noted that the IMF is waiting for the government to present its economic plan, but "all last week Maslyukov and other government officials said that the emergency budget for the fourth quarter was not yet ready." The newspaper also reported that Karelia and other raions in Leningrad Oblast have already received humanitarian assistance from Scandinavian countries. JAC LEGISLATORS MAINTAIN PRESSURE ON YELTSIN... Russian legislators are continuing to pressure the presidential administration. State Duma Security Committee Chairman Viktor Ilyukhin (Communist Party) declared on 19 October that he has drafted legislation requiring an independent medical examination of President Boris Yeltsin. NTV reported that the Impeachment Commission has completed preparation of three clauses of the bill of indictment and are currently deciding whether to prepare two more or speed ahead with a vote. "Sovetskaya Rossiya" reported on 17 October, that 79 members of the Federation Council voted in favor of a motion asking Yeltsin to resign voluntarily. Twenty-eight members voted to reject the motion, while 68 members either did not vote or failed to attend the session. JAC ...AS ADMINISTRATION FIGHTS BACK. Meanwhile, the presidential administration is trying to characterize continued calls for Yeltsin's resignation as politically motivated and to link the completion of President Yeltsin's term in office with stability. Oleg Sysuev, presidential first deputy chief of staff, told Ekho Moskvy that the country does not need early elections and that "President Yeltsin will work until 2000 for the sake of calm and stability in Russia." CIS Executive Secretary Boris Berezovskii told reporters on 17 October that he is categorically opposed to the early resignation of Yeltsin. Earlier in an interview with BBC, Berezovskii said that the era of President Yeltsin is over and that he should go. He added "Of course, that is conditional on what the alternative is, but I think that today we have alternatives better than him" (see "RFE/RL Newsline," 17 September 1998). JAC RUSSIA TO DONATE PERSONNEL, HARDWARE TO OSCE. Russian Defense Minister Igor Sergeev told ITAR-TASS on 20 October that Russia is ready to offer the OSCE its own aircraft to conduct flight observations of the situation in Kosova. The previous day, Russian diplomatic sources told Interfax that a "high-ranking Russian diplomat" will be one of two deputy chairman of the OSCE verification mission in Kosova. The team is still being formed, but the same diplomatic sources predicted that international observers could be in place in Kosova in November. Meanwhile, two top cabinet officials, Foreign Minister Igor Ivanov and First Deputy Prime Minister Maslyukov, called on the State Duma to ratify START II. Maslyukov told the military newspaper "Krasnaya zvezda" that if Russia does not ratify START II, "no one in the world will understand us." Earlier, cabinet officials warned that NATO air strikes against Yugoslavia would kill any chance of START II ratification (see "RFE/RL Newsline," 5 October 1998). JAC YAVLINSKII THROWS HAT IN RING. Having recovered from his heart attack, Yabloko leader Grigorii Yavlinskii returned to the Duma on 19 October and declared his intention to run for president in 2000. Yavlinskii told reporters that he does not think that President Yeltsin's ill health is sufficient reason to hold early elections. He denied reports that Yabloko was poised to form a coalition with the Union of People's Power and Labor, led by Duma deputy Andrei Nikolaev. Yavlinskii added that all presidential candidates should undergo an independent medical examination. JAC HIGH-PROFILE HUMAN RIGHTS TRIAL BEGINS. The trial of environmentalist and former Russian Navy captain Aleksandr Nikitin began in St. Petersburg on 20 October. Nikitin was arrested in 1996 on charges of high treason and espionage for publicizing information about aging nuclear submarines near the Kola Peninsula and their waste disposal practice. Nikitin's case has attracted much international attention, and the trial, according to Reuters, will be monitored by more than 20 international human rights organizations (see "RFE/RL Newsline," 1 July 1998). JAC MORMON MISSIONARIES FACING EXPULSION. Krasnoyarsk authorities have arrested two members of the Church of Jesus Christ of the Latter Day Saints for "illegally infiltrating a military unit," ITAR-TASS reported on 20 October. Aleksandr Gorovoy, chief of the Krasnoyarsk Interior Ministry, explained that the two men said that they committed the offense in order "to hold religious discussions with the servicemen." He added that they face possible deportation. On 17 October, two Mormon missionaries were attacked in Ufa in what authorities say was a random act of violence (see "RFE/RL Newsline," 19 October 1998). JAC CHECHEN MINISTER DEMANDS RELEASE OF ALL HOSTAGES. Speaking on Chechen Television on 19 October, Shariah Security Minister Aslanbek Arsaev issued an ultimatum to all kidnappers to release the estimated 103 people currently being held hostage in Chechnya within three days, Interfax reported. Arsaev threatened "a large- scale operation" to neutralize armed kidnappers should they fail to comply with that demand. Also on 19 October, the Russian Federal Security Service told Interfax it cannot confirm the claim by Arsaev's first deputy, Supyan Akhmadov, that Russian Presidential envoy Valentin Vlasov, who was abducted on 1 May, has been moved from Chechnya to Dagestan. Vlasov has undergone an appendectomy in captivity, according to "Nezavisimaya gazeta" on 20 October. LF TRANSCAUCASUS AND CENTRAL ASIA GEORGIAN INSURRECTION QUASHED... Mutinous Georgian army units retreated to their west Georgian base on 19 October following an artillery exchange with regular army units on the outskirts of Kutaisi, Caucasus Press reported. Three men were killed in that exchange. The regular army troops under the personal command of Defense Minister Davit Tevzadze recaptured the tanks and armored personnel carriers seized by the rebels. The insurgents, meanwhile, released National Security Minister Djemal Gakhokidze, whom they had taken hostage together with two generals and the presidential representative in Imereti. Akaki Eliava, the leader of the mutiny, has fled. LF ...BUT WHAT WAS ITS OBJECTIVE? "Izvestiya" on 20 October quoted Eliava as demanding the resignation of Georgian President Eduard Shevardnadze. Eliava told Caucasus Press on 19 October that he was protesting the plundering of Georgia by a corrupt leadership. But Shevardnadze's press spokesman, Vakhtang Abashidze, told the news agency that the rebels were demanding the restoration of what they termed the "legal government" formed by Gamsakhurdia in 1990. Shevardnadze, for his part, claimed that the insurrection was intended to sabotage plans for exporting Azerbaijan's Caspian oil via Georgia. LF ARMENIAN PRESIDENT CALLS FOR DIASPORA ENGAGEMENT. Meeting on 19 October with a delegation from the Armenian General Benevolent Union, Robert Kocharian expressed gratitude for that organization's assistance since Armenia regained its independence, RFE/RL's Yerevan bureau reported. But he also appealed to Diaspora Armenians to share their "experience and capabilities" to promote economic revival, which he characterized as his "number one priority." LF AZERBAIJAN OPPOSITION TO DISCUSS UNITED ACTION. Four of the five Azerbaijani opposition leaders who boycotted the 11 October presidential election may meet soon with three defeated candidates to discuss joint actions, Turan reported on 19 October. The five boycotters and defeated candidate Ashraf Mehtiev issued a statement on19 October condemning gerrymandering and the "usurpation of power" by President Heidar Aliev. They added that they will not recognize the legitimacy of any international agreements signed by Aliev's leadership. Musavat Party chairman Isa Gambar, Democratic Party chairman Ilyas Ismailov, and defeated presidential candidate Nizami Suleymanov all cast doubt on the sincerity of Aliev's 18 October plea for dialogue with the opposition, but at the same time they did not reject that appeal out of hand. LF DEFEATED PRESIDENTIAL CANDIDATE'S APPEAL REJECTED. The Azerbaijani Supreme Court has rejected a suit by defeated presidential candidate Etibar Mamedov, refusing even to consider his 20-page statement and accompanying evidence of the alleged falsification of the 11 October vote, Turan reported on 19 October. Mamedov's Azerbaijan National Independence Party plans to hold a march in Baku on 24 October to protest the ruling. LF NEW CHAIRMAN APPOINTED TO TAJIK RECONCILIATION COMMISSION. Muhammed Sharif Himmatzoda has been named chairman of the legal subcommission of Tajikistan's National Reconciliation Commission, ITAR-TASS and Interfax reported on 19 October. Himmatzoda, formerly chairman of the Islamic Renaissance Party of Tajikistan, was chosen by representatives of the United Tajik Opposition. He replaces Otakhon Latifi, who was killed in Dushanbe on 22 September by assailants still at large. BP CRIME INCREASES TAJIKISTAN. In the first nine months of 1998, crime more than doubled in Tajikistan, compared with the same period last year, ITAR-TASS reported on 19 October. The increase in the theft of weapons accounts for the growing number of crimes committed with guns or acts of terrorism employing explosives. There has also been an increase in mafia wars and kidnappings. BP KAZAKH OPPOSITIONIST SUFFERS HEART ATTACK. Petr Svoik, co-chairman of the opposition movement Azamat, has been hospitalized after suffering a heart attack, RFE/RL correspondents in Almaty reported on 20 October. Svoik was serving a three-day jail sentence for participating in a meeting of the For Fair Elections movement earlier this month (see "RFE/RL Newsline," 16 October 1998). BP END NOTE SAKHALIN: WAITING FOR OIL BUT PATIENCE IS RUNNING OUT by Floriana Fossato Russian Prime Minister Yevgenii Primakov has repeatedly underlined the importance of having regional leaders on his side to prevent local tendencies toward independence dividing the country. Sakhalin governor Igor Farkhutdinov, who presides over a region where offshore energy resources are estimated by some experts to rival those of the North Sea, was one of the first governors to hold talks with the new prime minister. The focus of that meeting was almost certainly how to speed up the development of oil and gas projects on Sakhalin as well as how to deal with the threat of social unrest on the Far Eastern island. For despite Sakhalin's great natural wealth, the level of poverty in the region is one of the highest in Russia, with more than a third of the population of 600,000 people officially registered as living below the subsistence line. Farkhutdinov's main aim at the talks would likely have been to forge the same cooperative links with Primakov as he had with the previous Moscow government on a key issue, namely securing the passage through the parliament of legislation guaranteeing the protection of foreign investment in Russia. Since the early 1990s, the Communist-dominated State Duma has put obstacles in the way of laws guaranteeing the protection of foreign investment for consortia and a share of the oil and gas extracted. Those terms are included in the so-called production- sharing agreements (PSA) signed by local authorities and the consortia. Local officials have tried to galvanize the Duma into taking action and are frustrated by the lack of results. Galina Pavlova, director of the Sakhalin local department for offshore oil development, told RFE/RL in a recent interview that "instead of working together, the Duma obstructs everything...; as a result we are, with our own hands, destroying our own possibilities." Farkhutdinov says passage of the necessary laws is a critical issue for Sakhalin if the big foreign oil companies already working there are to remain committed to developing the region's resources. "At a time when foreign capital is fleeing Russia, this is not happening on Sakhalin," he commented. "Sakhalin cannot go on without money, but if we want to overcome this difficult situation and not become a burden for the state, we need legislation even more than financing." Enormous sums of money are at stake. Foreign consortia have said that the first three major projects, called Sakhalin-1, -2, and -3, could result in investments totaling $36 billion. Sakhalin-2, the only project on target so far, is scheduled to begin production next spring. Those prospects, however, could suffer if the Duma decides not to approve a bill amending existing legislation to comply with tax breaks and provisions included in PSA. Meanwhile, Sakhalin-2 managers put on a brave face. Sakhalin's road toward the desired oil and gas wealth has not been an easy one. Vladimir Sorochan, the editor of the newspaper "Sovietskii Sakhalinsk," said that prospects for oil production, coupled with plans for developing rich gas fields, provoked "euphoria" earlier in the 1990s, when it was thought that there would be cheap energy, jobs, and positive developments for the island. But the situation "has changed radically over the years," Sorochan commented. "People have understood they will have to wait a long time for tangible results," he said, "while hopes of jobs are fading and the governor, instead of improving people's lives in decrepit cities and villages, seems more interested in grandiose plans like the building of an international airport." Farkhutdinov denies those charges. "If the oil projects finally get under way, 20,000 permanent jobs will be created over the years...and an international airport would be a sound investment, if only because every meeting with foreign investors starts with the question: what's your airport like?" The regional administration has also announced that the first $20 million bonus from the Sakhalin-2 project is to be used for urgent construction projects such as a new school or hospital. After the breakup of the Soviet Union, Russian authorities acknowledged that extraction and production operations in Sakhalin's oil sector required expensive and sophisticated technologies that the country did not have. So they started offering the reserves to consortia dominated by, and often composed entirely of, foreign companies. Foreign oil companies were lured by the prospect of gaining access to offshore oil reserves estimated at 29 million barrels. There is interest also in Sakhalin's vast gas resources. Farkhutdinov told RFE/RL that the development of gas resources would provide cheap energy for the island and would thereby solve the problem of energy cuts owing to the non-payments crisis in the coal sector. That crisis led to the coal miners strikes this summer that paralyzed Sakhalin for weeks. Even more important, said the governor, noting Sakhalin's proximity to Asian markets, energy companies involved in the oil projects, would help build natural gas pipelines running to Japan, South Korea, and China. This is the last in a three-part series on Russia's Far East by Floriana Fossato, 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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