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RFE/RL NEWSLINE Vol 3, No. 25, Part I, 5 February 1999
________________________________________________________ RFE/RL NEWSLINE Vol 3, No. 25, Part I, 5 February 1999 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 * MISDEEDS OF CENTRAL BANK DETAILED * BUDGET PASSAGE PREDICTED * SIX CIS STATES AFFIRM READINESS TO PROLONG SECURITY TREATY End Note: SCANDAL EXPOSES SHADY SIDE OF TER-PETROSSIAN ERA xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA MISDEEDS OF CENTRAL BANK DETAILED. Details from former Prosecutor-General Yurii Skuratov's report of his investigation into activities of the Russian Central Bank finally emerged on 4 February. According to the report, the bank allowed a tiny offshore firm in the Channel Island of Jersey to manage roughly $50 billion of its currency reserves over five years and to charge allegedly illegal commissions, Interfax reported. In addition, the report said that bank officials sold federal property, such as real estate and cars, without the permission of the State Property Fund and used official bank credit cards with monthly credit limits of $5,000-$15,000 to purchase personal items. The bank also used 600 million rubles ($25 million at the current exchange rate) from its 1997 profits for a special social fund for employees. The "Moscow Times" on 5 January quoted an anonymous Central Bank official as saying that "current accusations may be based on unprofessional conclusions." JAC BUDGET PASSAGE PREDICTED. As the State Duma began the fourth and final reading of the 1999 budget on 5 February, both Duma deputies and government officials were predicting the budget's smooth passage. The previous day, the Duma's Budget Committee recommended the current draft be approved. More important was Communist Party leader Gennadii Zyuganov's agreement to accept the government's proposal to reduce spending on the presidential administration by 20 percent rather than 40 percent, as stipulated during the budget's last reading. When passed, the budget will be forwarded to the Federation Council, which is also expected to approve it quickly. JAC AEROFLOT OFFICES SEARCHED. Investigators from the Prosecutor- General's Office on 4-5 February searched offices of Aeroflot and several of companies with which it contracts work as part of its continuing investigation into allegations that Boris Berezovskii authorized the installation of illegal electronic listening devices in President Boris Yeltsin's office and home. Berezovskii reportedly owns a large stake in Aeroflot Investigators are also searching for evidence of "illegal entrepreneurial activity," according to Interfax. On 5 February, the Aeroflot board of directors dismissed four senior vice presidents. JAC SUPREME COURT PROLONGS NIKITIN CASE. At a closed hearing on 4 February, the Supreme Court decided to return the espionage case of environmentalist Aleksandr Nikitin for further investigation, turning down an appeal by Nikitin's lawyers to dismiss the case. Nikitin told reporters after the ruling that he is worried that the additional investigation "will last forever." The International Helsinki Federation for Human Rights denounced the decision, arguing that the court ignored one of the most fundamental principles of criminal proceedings, that the defendant should be presumed innocent. Nikitin is charged with including classified materials in a report on Russia's Northern Fleet prepared for the Norwegian- based Bellona Foundation. JAC RUSSIA POISED TO TURN OFF ENERGY SPIGOT TO NEIGHBORS. Prime Minister Yevgenii Primakov told cabinet members on 4 February that other CIS countries owe Russia more than $600 million for fuel and energy. He argued that "a kind of moratorium" on further supplies should be imposed while talks on debt repayment are held. Regarding the chronic fuel shortages to the regions in Russia's Far North, Primakov suggested that the problem "must be lifted from the shoulders of government" and competitive tenders to transport fuel should be held among commercial firms, ITAR-TASS reported. JAC START-II ON HOLD UNTIL FUNDING FOR NUCLEAR FORCES ALLOCATED. In an interview with the military newspaper "Krasnaya zvezda" on 2 February, State Duma Defense Committee Chairman Roman Popkovich of Our Home Is Russia said that the Duma must first adopt the law on financing Russia's strategic nuclear forces until 2010 before it can turn to the issue of ratification of the START II treaty. Popkovich admitted that if the Duma were to ratify the treaty, there would be no money in the 1999 budget for implementation and probably none would be available for "the next two or three years." Popkovich added that Russia is already "spending too much on the liquidation of armaments under previous agreements and treaties." JAC LACK OF CASH DICTATES MORE CUTS IN ARMED FORCES. The size of the army and navy must be reduced by two times if the government is going to be able to fully fund them, according to a Defense Ministry report on funding the armed forces until 2000, "Nezavisimaya gazeta" reported on 4 February. Under the report's pessimistic scenario, if Russia experiences annual rates of economic growth of 0.5-1.5 percent, then it will be possible only to fully finance an "Army numbering 550,000 to 600,000." Even if the Russian economy manages to grow by 8-10 percent a year, the Defense Ministry would not receive adequate financing for the army's present size until 2004-2005. JAC ANOTHER POPULATION DECLINE RECORDED. Russia's population dipped by 401,000 or 0.3 percent in 1998 compared with the previous year, according to a preliminary estimate by the State Statistics Committee, ITAR-TASS reported on 4 February. In 1997, the population also fell by 0.3 percent. As of 1 January, 146 million people lived in Russia. JAC WORLD BANK CHECKS UP ON COAL LOAN. World Bank officials arrived in Kemerovo Oblast on 3 February to try to find out what happened with monies disbursed to local organizations under the coal-sector loan, "Izvestiya" reported. The money had been earmarked for the creation of new jobs for unemployed coal miners. According to the newspaper, bank officials wanted to see with their own eyes exactly how money had been spent before they began negotiations with Moscow on further installments. World Bank Country Director of Russia Michael Carter had warned earlier that the bank might suspend further installments of its coal loan, unless it receives clarification of the Russian government's plans for the coal sector (see "RFE/RL Newsline," 18 January 1999). JAC NIZHNII NOVGOROD MAKING LIFE DIFFICULT FOR BUSINESS? The Nizhnii Novogorod municipal authorities have increased rents for business premises, prompting protests among angry local business owners, according to the "EWI Russian Regional Report" of 4 February. Special breaks have been announced for businesses that serve municipal needs, companies offering social services, and exporters. But according to the report, this means that some businesses will have to pay up to 11 times more than previously. Locals now fear spiraling retail prices, coming on the heels of a newly introduced 5 percent sales tax and hikes in petroleum products and utilities. A similar rent hike introduced by the St. Petersburg authorities last year resulted in many bankruptcies of small businesses and failed to increase municipal revenues, the report points out. JC VLADIVOSTOK LOCALS CONTINUING TO BACK FORMER MAYOR. The Supreme Court on 4 February rejected former Vladivostok Mayor Viktor Cherepkov's suit against President Yeltsin's decree removing him from office, Interfax reported (see "RFE/RL Newsline," 15 December 1998). The previous day, "Segodnya" reported that some residents in Vladivostok formed an association for the protection of voters' rights and sent a telegram to Moscow demanding the resignations of top officials of Vladivostok's Internal Affairs Department and Prosecutor-General's Office as well as the abolition of krai and municipal election committees. According to the newspaper, a local theater capable of holding 300 people was jammed at the association's inaugural conference. "Izvestiya" suggested that the next local elections would likely result in a city assembly that was even more strongly in favor of Cherepkov than before. JAC PRESIDENT OF TATARSTAN HOSPITALIZED. Mintimer Shaimiev was admitted to hospital on 1 February suffering from high blood pressure, ITAR-TASS reported three days later. RFE/RL's Kazan bureau quoted the presidential press service as saying that Shaimiev's condition is "stable" but that his doctors have advised him to remain in hospital under observation for two weeks. Shaimiev celebrated his 62nd birthday on 20 January. LF KOVALYOV REFUSING TO EAT JAIL FOOD. Former Justice Minister Valentin Kovalyov, who was arrested on 3 February told Russian Television, the next day that he is going on a hunger strike to protest not being allowed to contact his lawyers. Kovalyov is charged with embezzling $50,000 and the illegal possession of firearms, Interfax reported. He was sacked from the Justice Ministry in July 1997, after a videotape of him frolicking with naked women in a sauna was aired on national newscasts. JAC 'MIR' EXPERIMENT CANCELED. The reflective screen that cosmonauts on the space station "Mir" tried to unfurl on 4 February got caught in an antenna, dpa reported. Meanwhile, unaware that the experiment had failed, residents of Karaganda, Kazakhstan, assembled on the city streets at 8.04 p.m. local time that day to witness the station's "sunbeam," ITAR-TASS reported. The next day, Mission Control Center in Moscow decided against conducting the experiment again. JAC MIXED REACTION TO CHECHNYA'S INTRODUCTION OF ISLAMIC LAW. Russian State Duma speaker Gennadii Seleznev called on those Russian agencies responsible for the North Caucasus to determine precisely how President Aslan Maskhadov's 3 February decree imposing Shariah law in Chechnya will be interpreted and implemented, Russian agencies reported. Seleznev added that violations of the Russian Constitution in Chechnya "should be taken for granted." Nationalities Minister Ramazan Abdulatipov commented that Maskhadov's decision has brought him far "closer to the extremist forces which he had actively opposed in the past." Ingushetian President Ruslan Aushev interpreted Maskhadov's decree as a preemptive move intended to prevent the spread of "extremist forms of Islam" in Chechnya, according to Interfax. Krasnoyarsk Krai Governor Aleksandr Lebed observed that "Chechens have never been radical believers," and he advocated trusting Maskhadov's judgement. Lebed and Maskhadov signed the 1997 agreements ending the war in Chechnya. LF TRANSCAUCASUS AND CENTRAL ASIA COUNCIL OF EUROPE DELEGATION VISITS ARMENIA. Armenian President Robert Kocharian assured a fact-finding mission from the Parliamentary Assembly of the Council of Europe on 3 February that Armenia is committed to democracy and complete freedom of the press, speech, belief, and political activity, Noyan Tapan and Interfax reported. Presidential spokesman Vahe Gabrielian told journalists on 3 February that a Human Rights Watch report arguing that Armenia should not be granted full membership in the Council of Europe was based on inaccurate statistics. He added that the report, which cited widespread and egregious human rights violations, had exaggerated the incidence of such occurrences, Noyan Tapan reported (see "RFE/RL Newsline," 22 January 1999). A member of the PACE delegation was quoted in the Armenian press as saying that a decision on whether to grant Armenia to full membership in the Council of Europe will be contingent on the fairness and transparency of the parliamentary elections tentatively scheduled for May. LF AZERBAIJANI FOREIGN MINISTER IN PARIS. Meeting in Paris on 2 February, Tofik Zulfugarov and his French counterpart, Hubert Vedrine, discussed ongoing efforts to mediate a solution to the Karabakh conflict, which Vedrine said undermines the region's potential for development. The two ministers also agreed to hold regular consultations on security issues and discussed the potential for expanding economic ties, Turan reported. Zulfugarov discussed the latter issue in greater depth with Foreign Trade Secretary Jacques Dondoux, focusing on aeronautics, telecommunications, and infrastructure development. LF MOSCOW WANTS TO EXPEDITE SOLUTION TO ABKHAZ CONFLICT. Speaking at the CIS Foreign Ministers' meeting in Moscow on 4 February, Russian Foreign Minister Ivanov expressed dissatisfaction with the lack of progress towards a negotiated settlement of the Abkhaz conflict, Russian agencies reported. He noted the "enormous difficulties" dogging the peace negotiations, and stressed Russia's interest in expediting a settlement. Also on 4 February, Caucasus Press summarized the results of a poll conducted among Georgian displaced persons from Abkhazia that revealed 83 percent of those questioned will not return to their homes until Georgian jurisdiction over Abkhazia is restored. Abkhaz leader Vladislav Ardzinba has offered to allow all Georgian displaced persons from Gali Raion to return to their homes beginning 1 March. He has also created a government commission to ensure adequate economic and security conditions in the region. LF SIX CIS STATES AFFIRM READINESS TO PROLONG SECURITY TREATY. At the CIS foreign ministers' meeting in Moscow on 4 February, the representatives of Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan said their countries will extend their participation in the CIS Collective Security Treaty beyond the April expiry date, Interfax reported, quoting Russian Foreign Minister Igor Ivanov. Georgia will also do so after unspecified amendments are made to the treaty, Ivanov added. Speaking in Baku the same day, Azerbaijani presidential adviser Vafa Guluzade hinted that Azerbaijan should consider not extending its participation because the treaty failed to end Armenia's aggression against its fellow CIS state Azerbaijan, Turan reported. LF UZBEKISTAN CLARIFIES POSTION ON SECURITY AGREEMENTS... The Uzbek Foreign Ministry released a statement on 4 February clarifying the country's position on security agreements, ITAR-TASS reported. The statement confirmed that Uzbekistan will not renew its membership in the CIS Collective Security Treaty. But it added that "this position has no relationship to bilateral agreements on cooperation with the Russian Federation and other states of the Commonwealth." It also states that such relationships "will develop on the basis of generally accepted norms of international law, mutually advantageous cooperation, mutual respect, and non- interference in each other's internal affairs." BP ...WHILE RUSSIA SEEMS UNCONCERNED. Russian Minister for CIS Affairs Boris Pastukhov said on 4 February that it is pointless to "overdramatize" Uzbekistan's decision not to renew its participation in the CIS Collective Security Treaty, Interfax reported. Pastukhov said "all of the CIS's agencies and organizations are established on a voluntary basis," adding that "it is the sovereign right of a every state...to make a decision which it considers to be necessary." Pastukhov said he personally has heard nothing from the Uzbek side on the issue. BP TAJIKISTAN FORMS SPECIAL MILITARY UNIT. Following UN representatives' criticism about the lack of progress on integrating United Tajik Opposition units into the government forces, the press center of the Reconciliation Commission announced on 4 February that a special rapid reaction force combining government and opposition fighters will be formed, Interfax reported. The unit will be used to combat illegal paramilitary formations still present in Tajikistan. BP HUMAN RIGHTS WORKER DEPORTED FROM TURKMENISTAN. Aleksandr Petrov from the Moscow office of Human Rights Watch was deported from Turkmenistan on 3 February, RFE/RL's Turkmen Service reported. Petrov was part of a four-man team that arrived in Turkmenistan on 29 January to evaluate the human rights situation there. After two members of the team departed on other business, officers from Turkmenistan's National Security Committee came to Petrov's hotel room, accused him of possessing material that threatened the country's security, and asked him to return to Moscow. Petrov told RFE/RL upon his return that the "offending" materials were earlier reports about human rights in Turkmenistan. BP EBRD CRITICIZES IMPORT RESTRICTIONS IN KAZAKHSTAN. An economist for the European Bank of Reconstruction and Development (EBRD), Martin Raisner, told a news conference in Almaty on 4 February that Kazakhstan should not restrict imports and should stop giving direct support to industrial and agricultural companies, Interfax reported. Raisner said restrictions would reduce competition and proposed instead that tariffs be regulated to promote competition. Raisner also said farming and industrial companies should be left to fend for themselves but that the EBRD is prepared to issue loans and offer technical aid and consultation to these companies. Raisner acknowledged that 1999 will be a difficult year for Kazakhstan, but he praised the monetary and lending policies of the country's National Bank, saying the EBRD sees no danger that Kazakhstan will default on its debts. BP U.S. DIPLOMAT TOURS CENTRAL ASIA. A delegation from the U.S. State Department, led by senior department official Ross Wilson, arrived in Ashgabat on 4 February for talks with the Turkmen leadership, ITAR-TASS and Interfax reported. The topic under discussion was implementing energy projects in the Caspian Basin, including the Trans-Caspian pipeline project. Companies participating in that project are due to be announced in Ashgabat on 19 February. Wilson promised his country would help mediate a dispute between Turkmenistan and Azerbaijan over Caspian oil fields to which both countries lay claim. Wilson was also in Kyrgyzstan on 1-2 February, where he promised officials that the U.S. will recommend that the IMF extend further loans to the country. Wilson also visited Uzbekistan, but there is no information on that visit. BP END NOTE SCANDAL EXPOSES SHADY SIDE OF TER-PETROSSIAN ERA by Emil Danielyan One of the key politicians who helped shape the history of post-Soviet Armenia, former Interior Minister Vano Siradeghian fled Armenia on 29 January, several days after state prosecutors accused him of murder. He is now rumored to be in Paris. While Siradeghian's supporters say he has gone abroad for medical treatment, his enemies are convinced that he fled to avoid punishment for serious "crimes." Whatever the truth, there are few indications that the formerly powerful and feared minister will voluntarily return home if the Armenian parliament eventually lifts his immunity. And regardless of whether the charges are based on facts--and Siradeghian and other members of the former ruling Armenian Pan-National Movement, which he heads, claim they are not-- the Siradeghian affair is another sign of the crumbling legacy of Levon Ter-Petrossian, the country's first post- Soviet president. The scandal broke on 25 January when Prosecutor-General Aghvan Hovsepian told the parliament that Siradeghian should be arrested and put on trial for ordering two police officers murdered five years ago, when he was interior minister. Hovsepian said the officers were shot dead after failing to assassinate an Armenian-born Russian businessman, Serge Jilavian, who was at odds with the former authorities. Hovsepian accused Siradeghian of obstructing the investigation into the two men's disappearance and misleading their relatives. Last summer, investigators found what they said were the officers' remains in a Yerevan suburb. The main witness in the case is a former interior troops commander, Vahan Harutiunian, who the prosecutors say was instrumental in executing the death orders. Denying the charges, Siradeghian alleged that the arrested ex-commander is "mentally sick" and that his testimony was extracted by force. Siradeghian said the accusations against him signal the start of political "repressions," which, he added, could lead Armenia to "civil war" and ultimately "destruction." Voting the day after the prosecutor's speech, the parliament refused to allow Siradeghian's prosecution. On 29 January, Prosecutor-General Hovsepian told reporters that he would again ask the parliament to lift Siradeghian's immunity. A few hours later, the former interior minister left Armenia. A question many observers are asking is why the authorities moved against him now. The explanation of the Armenian Pan-National Movement (HHSh) that President Robert Kocharian wants to "break up the party" ahead of parliamentary elections is hardly credible. The discredited former ruling party (of which Ter-Petrossian was the unofficial leader) is not a serious threat to the present regime. The material self-enrichment of many HHSh leaders against the background of a mostly impoverished population since1991 has engendered a widespread hatred toward the former rulers. And for many people, the flamboyant Siradeghian is the main symbol of an official engaging in corruption with impunity. Lashing out at Siradeghian was therefore bound to boost the dwindling popularity of Kocharian's leadership. That Kocharian's blow struck home was evidenced by the fact that Ter-Petrossian finally broke the silence he had maintained since his resignation on 3 February 1998. The ex- president said the authorities have "disgraced" Armenia by targeting Siradeghian. Since Ter-Petrossian did not speak out last December, when Siradeghian admitted that the 1996 presidential election was rigged to ensure Ter-Petrossian's second term, the former president may well see a danger for himself if his old comrade-in-arms goes on trial. In such a case, the former president may be held accountable for the actions of his former subordinate. And if the murder allegations proved true, the disgrace caused to Ter- Petrossian would cast a shadow on his seven years in power, which he believes was a period of sweeping reforms constituting an important chapter in the country's history. Siradeghian's rise and fall epitomizes the outcome of those reforms. Touted as a promising fiction writer in the 1980s, Siradeghian joined the famous Karabakh committee that led the 1988 movement for the unification of Armenia and Nagorno-Karabakh. His role was confined to "friend-of-the- people" functions until, in 1992, he was appointed interior minister. He held that post until 1996, when he was named mayor of Yerevan. Siradeghian's supporters credit him with a successful fight against crime, which declined dramatically during his tenure. Yet that period was also characterized by the pervasive power of the police, which also spread to the economic sphere. Siradeghian is believed to have made a huge personal fortune, of which his house in Yerevan (estimated to be worth $1 million) is the most conspicuous evidence. His flamboyant behavior and extravagant, contradictory, and often cynical discourse were apparently based on political calculations. For example, in the wake of the 1996 post-election unrest, he reportedly endorsed the release of an amateur video featuring a drunken party of "power" ministers (including himself) and generals who could be seen congratulating one another on having successfully engineered Ter-Petrossian's re-election. Armenians were thus given to understand that they cannot change their leadership through fair elections. Regardless of whether the parliament gives the green light for criminal proceedings against Siradeghian, the political survival of the former interior minister now hangs in the balance. The author is an RFE/RL correspondent based in Yerevan. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1999 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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