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RFE/RL NEWSLINE Vol 2, No. 238, Part I, 11 December 1998
________________________________________________________ RFE/RL NEWSLINE Vol 2, No. 238, Part I, 11 December 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 * NEW REGIONAL FOOD RESTRICTIONS IMPOSED * IMF SLAMS GOVERNMENT'S TAX PLANS * AZERBAIJANI JOURNALISTS RESUME HUNGER STRIKE xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA NEW REGIONAL FOOD RESTRICTIONS IMPOSED. In a repetition of events in the regions after the mid-August devaluation of the ruble, the Vologda Oblast administration announced on 10 December a ban on the export of milk and meat outside the oblast, while Krasnoyarsk Krai Governor Aleksandr Lebed issued an instruction the next day limiting shipments of flour, meat, pasta, butter, and other food products beyond the krai's borders. Sergei Gromov, deputy governor of Vologda Oblast, told ITAR-TASS that measures are necessary in order to defend the interests of the local food industry. Meanwhile, in Yaroslavl Oblast, Governor Anatolii Lisitsyn slashed subsidies for collective farms that sell their products to consumers outside the region who are able to pay higher prices (see "RFE/RL Newsline," 10 December 1998). JAC IMF SLAMS GOVERNMENT'S TAX PLANS. IMF First Deputy Managing Director Stanley Fischer told reporters in Washington on 10 December that the IMF is "very worried about cutting taxes without improvements in tax collection." Fisher added that while Russia's tax system is overly complicated and needs lower rates, a reduction in value-added tax is ill-advised, Reuters reported. The previous day, Federal Tax Service head Georgii Boos told reporters that IMF Managing Director Michel Camdessus believes that Russian taxes should be lowered and that Camdessus "would be revising his position." He added that the government's package of tax cuts is primarily designed to boost economic growth and that tax collection will likely not increase until 2000. Tax policy will be a key issue at upcoming talks with the IMF mission that is scheduled to arrive in Moscow in January. JAC GOVERNMENT TO SUBMIT BUDGET LATER... Finance Ministry spokesman Oleg Zhukov told Reuters that the government will probably not submit the budget to the State Duma on 11 December as had been previously scheduled. He cited the need for additional calculations and said it would most likely be submitted over the next few days. The government approved the budget the previous day. According to "Trud-7," the budget is based on an exchange rate of 21.5 rubles per dollar, which is close to the previous day's official exchange rate of 20.86 rubles per dollar. Annual inflation is estimated at 30 percent. The final figure for the budget deficit is 101.5 billion rubles ($4.9 billion), which is 3 billion rubles lower than the budget deficit considered by the Finance Ministry at the beginning of this month (see "RFE/RL Newsline," 1 December 1998). JAC ...AS FOREIGN CREDITORS REJECT GKO PLAN. The deficit will wind up even bigger should the government not be able to arrange more than $7 billion in new loans from foreign lenders, including the IMF and World Bank, and limit its foreign debt repayments to $9.5 billion, as the budget plan projects. Finance Minister Mikhail Zadornov told reporters on 10 December that the government is "counting on understanding by creditors and investors in restructuring of both foreign and domestic debts." Meanwhile, foreign holders of short- term treasury bonds have rejected the government's plan to start swapping new bonds for old defaulted ones as early as next week. CS First Boston, which co-chairs a committee of foreign banks, issued a statement saying that Russia will "aggravate its financial isolation if it unilaterally imposes unfair restructuring terms on foreign investors." London Club creditors have not yet responded to a government proposal to restructure debt of the Soviet Union, Interfax reported on 11 December. JAC HOW THE MIGHTY BANKS HAVE FALLEN. Smaller regional banks have displaced some of Russia's once powerful banks from the rankings of the country's largest financial institutions compiled by "Kommersant Dengi," "Kommersant-Daily" reported on 9 December. Menatep, Inkombank, and Rossiiskii Kredit have plummeted from the ranks of the top 10 based on capital, falling below even the top 200 banks. Meanwhile, the "Moscow Times" reported on 11 December that Gazprombank, Sobinbank, Toribank, and the Bank of Moscow have boosted their standing. The Bank of Moscow, in particular, soared from 32 to 8 on a ranking compiled by the Rating Information Center, increasing its capital from July to October by 48.7 percent, the daily reported. Former customers of Menatep, Most and Promstroibank have withdrawn only 33 percent of their accounts from Sberbank, ITAR-TASS reported on 8 December. JAC DUMA COMMITTEE FORMED TO INVESTIGATE STAROVOITOVA CASE. The Duma on 9 December formed a committee to investigate the murder of slain deputy Galina Starovoitova. Deputy Valerii Vorotnikov (Communist Party) will chair the committee and Nikolai Astafiev (Liberal Democrat Party) will be his deputy, "Segodnya" reported. The committee will report to the Duma after 20 January on the results of its investigation and on how much money it has spent. JAC DUMA, FOREIGN MINISTER ENGAGE IN MORE NATO-BASHING. The so-called Anti-NATO group within the Duma wants to link ratification of START-II to a guarantee of no further NATO expansion. Interfax reported on 10 December that any recommendation adopted by the group would be non- binding. Deputy speaker and member of the People's Power faction Sergei Baburin, who heads the group, said NATO's eastward expansion signifies "a systematic destabilization" of Europe aimed at creating a new world order that excludes Russia and Serbia. The same day, Foreign Minister Igor Ivanov said that attempts to place NATO at the center of a world collective security system are "counter productive" and "extremely dangerous." JAC CHECHEN BEHEADING SUSPECT ARRESTED. Chechen Deputy Prime Minister Atgeriyev told ITAR-TASS on 11 December that Grozny has arrested Apti Abitayev in connection with the beheading of four Western hostages. Atgeriyev said that the Chechen authorities are continuing the search for others involved. The previous day, Grozny officials indicated that they would be happy to have the assistance of Britain's Scotland Yard for the investigation. And they showed a seized film in which the hostages were forced to confess to being agents of Western and Israeli intelligence services. Also on 10 December, Chechnya's senior prosecutor, Mansur Tagirov, was abducted on 10 December by as yet unidentified individuals and then released the next day. PG CHECHNYA TO EXPEL ARAB TERRORIST GROUP. Deputy Premier Yusup Soslanbekov told the "Al-Hayat" newspaper on 10 December that Grozny intends to expel an Arab terrorist group led by Hattab, a native of Jordan, ITAR-TASS reported. Soslanbekov said that his government opposes the republic being converted into a "terrorist morass." But neighboring republics reportedly closed their borders with Chechnya on 10 December in order to prevent terrorists from moving to their territories. PG YELTSIN BACK AT KREMLIN. President Boris Yeltsin reported for work at the Kremlin on 11 December, two days after leaving the hospital to recuperate at his home in the country. On his agenda are meetings with several top aides. JAC RIGHTIST DEMOCRATS HOLD FOUNDING CONGRESS. The new coalition of rightist democrats held a founding session on 10 December in a Moscow hotel. According to "Izvestiya," the question of leadership of the new alliance was avoided by having Soviet President Mikhail Gorbachev's adviser Aleksander Yakovlev give the opening address and head the alliance's political commission. Former First Deputy Prime Minister Boris Nemtsov will chair the regional commission, former Federal Tax Service head Boris Fedorov the economics commission, former acting Premier Yegor Gaidar the program commission, and former First Deputy Prime Minister Anatolii Chubais the organization commission. Former Prime Minister Sergei Kirienko, deputy chief of the presidential administration Oleg Sysuev, and mayors of several cities such as Abakan, Tolyatti, Tambov, and Tver also participated in the conference. Fedorov told reporters that he would not want to be in a party headed by Gaidar or Chubais and that "people who have less chance of attracting votes will be less visible." JAC SOLZHENITSYN TURNS 80. Celebrated Russian writer and Nobel Prize winner Aleksandr Solzhenitsyn turned 80 on 11 December. President Yeltsin signed a decree granting Solzhenitsyn the order of Saint Andrei, according to press spokesman Dmitrii Yakushin, Interfax reported. "Kommersant-Daily" called Solzhenitsyn the only writer living in Russia who can be called great without a second thought. JAC TRANSCAUCASUS AND CENTRAL ASIA NO DETAILS YET ON MURDER OF ARMENIAN DEFENSE OFFICIAL. Armenian authorities on 10 December announced they have formed a special prosecution team to investigate the murder of Deputy Defense Minister Vagram Khorkhoruni earlier that day, ITAR-TASS reported. Yerevan has not yet provided any further details on this latest of a series of murders of Armenian officials. PG AZERBAIJANI JOURNALISTS RESUME HUNGER STRIKE. Seven newspaper editors on 10 December continued their hunger strike to protest the government's crackdown on press freedom, Turan reported. The protest began on 18 November but was interrupted for the previous 10 days as a result of disagreements among the organizers. After several days, the seven will be replaced by other journalists, who will then be replaced by a third group. The journalists say they will continue their protest until the government ends its "pressure" on the press. PG SHEVARDNADZE URGES INTERNATIONAL GROUPS TO PROTECT REFUGEES... Speaking on the 50th anniversary of the adoption of the UN Universal Declaration of Human Rights, Georgian President Eduard Shevardnadze called on international groups to provide more help to protect refugees from Abkhazia, ITAR-TASS reported on 10 December. Shevardnadze said that what is taking place in Abkhazia is a form of "ethnic cleansing and genocide." PG ...WHILE OPPOSITION PROTESTS ON HUMAN RIGHTS DAY. Some 400 opposition supporters staged a protest in Tbilisi on 10 December to call attention to what they say are human rights abuses by President Shevardnadze, ITAR-TASS reported. A few of the participants clashed briefly with the police. The protesters called on the UN to investigate and assess the events that led to the overthrow of former President Zviad Gamsakhurdia. PG GEORGIAN OFFICIAL SEEKS COOPERATION WITH RUSSIA. Georgian State Minister Vazha Lordkipanidze told Interfax on 10 December that his recent meetings with Russian Prime Minister Yevgenii Primakov have convinced him that there are no "objective obstacles" to improved ties between the two countries. Lordkipanidze added that Georgia's involvement in an East-West transport corridor is not directed against Russia in any way. At the same time, however, the Georgian leader said that Tbilisi is not exploring "prospects for cooperation with NATO" at the present time. PG TAJIK GOVERNMENT OFFERS ZIYOYEV GOVERNMENT POST. The government has offered UTO field commander Mirzo Ziyoyev the post of deputy defense minister (see "RFE/RL Newsline," 9 December 1998), Interfax reported on 11 December. The UTO nominated Ziyoyev as defense minister several times but the government rejected that nomination on each occasion. The head of the UTO press service, Sulton Hamadov, said that if Ziyoyev accepts the offer, he will likely be named chairman of the joint chiefs of staff and have a seat on the Security Council. BP HUMAN RIGHTS IN KAZAKHSTAN CRITICIZED. At a 10 December roundtable discussion in Almaty to mark the 50th anniversary of the UN Declaration on Human Rights, the deputy director of Kazakhstan's International Bureau on Human Rights, Jemis Turmagambetova, criticized the country's progress in this are, ITAR-TASS reported. Turmagambetova said Kazakhstan has "only declared" the right to freedom of speech but has done nothing to implement it. She added that laws on elections are "not fully developed" and do not meet internationally recognized standards. BP AZAMAT TO BECOME POLITICAL PARTY. Leaders of Azamat have decided to turn the movement into a registered political party, RFE/RL correspondents in Almaty reported. Petr Svoik, Murat Auezov, and Galym Abelseitov said that the first session of the new party will be held before year's end. They also criticized the political activities of former Prime Minister Akezhan Kazhegeldin, who they say has become more concerned about his own political agenda and is paying little attention to the plight of the nation. Kazhegeldin intended to run in presidential elections next month but is barred from doing so because of misdemeanor charges. Auezov said that since there is no way to stop the 10 January presidential elections, it is all the more important to form political parties that take "into consideration the realities and current situation in the country." BP OFFICIAL SAYS $160 BILLION NEEDED TO DEVELOP KAZAKHSTAN'S CASPIAN OIL. Aidar Demeuov, the head of the oil and gas department at the Ministry of Power Engineering, said it will cost a whopping $160 billion to develop oil fields in Kazakhstan's sector of the Caspian Sea, Interfax reported on 10 December. Demeuov said the initial development of the fields requires $10 billion, noting that Western companies have already invested $2 billion. There is an estimated 12 billion tons of oil in Kazakhstan's Caspian Sea sector. BP KAZAKHSTAN HALTS SALES OF STOCK FOR TWO COMPANIES. Finance Minister Sauat Mynbayev told the parliament on 10 December that the sale of state-owned stock in two leading gas companies, Aktobemunaigaz and Mangistaumunaigaz, has been stopped, Interfax reported. Mynbayev said falling share prices prompted the decision, adding that prices have dropped to one-tenth what they were in August 1997. Kazakhstan has already halted sales of state-owned stock in Kazakhtelekom and the Ust-Kamenogorsk Titanium and Magnesium Plant. 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