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RFE/RL NEWSLINE Vol 3, No. 50, Part I, 12 March 1999
________________________________________________________ RFE/RL NEWSLINE Vol 3, No. 50, Part I, 12 March 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 NATO MARKS 50TH YEAR Special reports from NATO's London conference as well as coverage of the ceremony inducting Poland, Hungary, and the Czech Republic into the military alliance are available online: http://www.rferl.org/nca/special/madrid-nato/index.html xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I * IMF TO ASK FOR NEW BUDGET? * PRIMAKOV, MASKHADOV MEETING PLANNED, WHILE REPORTS ON SHPIGUN'S WHEREABOUTS DIVERGE * AZERBAIJANI OIL REACHES GEORGIAN BLACK SEA TERMINAL xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA IMF TO ASK FOR NEW BUDGET? Shortly before new talks started with the IMF mission in Moscow on 12 March, Russian Prime Minister Yevgenii Primakov told reporters that Russia "needs an agreement with the IMF, but that does not mean that this will be the main pillar of support for the domestic economy." Primakov also called for stronger central control over local spending. Meanwhile, sources at the IMF told RFE/RL's Washington bureau that Russia will have to get an amended budget through the State Duma if there is to be any chance of reopening the fund's lending programs. The Duma, however, is likely to oppose such an effort. Ekho Moskvy reported that legislators passed in the third reading a bill reducing value-added tax as of 1 July just one day after Prime Minister Primakov asked legislators to refrain from making any decision on when the cut would take effect. JAC PRIMAKOV, MASKHADOV MEETING PLANNED... Russian First Deputy Prime Minister Vadim Gustov told Interfax on 11 March that preparations are under way for a meeting between Prime Minister Primakov and Chechen President Aslan Maskhadov. Yeltsin's press secretary, Dmitrii Yakushkin, said the meeting "must be thoroughly planned and prepared" in order to achieve tangible results, but Ingushetia's President Ruslan Aushev urged that it take place "immediately." Aushev added that the 5 March abduction in Grozny of Russian Interior Ministry Major-General Gennadii Shpigun was "not a criminal kidnapping, it was committed for purely political objectives to weaken" Maskhadov. LF ...WHILE REPORTS ON SHPIGUN'S WHEREABOUTS DIVERGE. A senior Chechen official in charge of one of the groups investigating Shpigun's abduction told journalists in Grozny on 11 March that Shpigun is no longer in Chechnya, but the official declined to divulge the major-general's whereabouts. He added that the identity of the abductors is known. But Radio Mayak on 11 March quoted a Russian Interior Ministry official in the North Caucasus as stating that Shpigun is still in Chechnya. That official, too, claimed that the identity of the kidnappers has been established. In Grozny, Maskhadov issued a decree merging all existing security and special services into a new ministry for state security, of which Deputy Prime Minister Turpal Atgeriev was named head, Interfax reported. Meanwhile, two convicted murderers were executed by firing squad in Grozny on 11 March, Reuters and AP reported. LF U.S. FOOD AID ARRIVES. The first batch of U.S. food assistance--48 containers of green-pea seeds intended for farmers in the northern and central areas of Russia-- arrived in St. Petersburg on 11 March, ITAR-TASS reported. According to "Trud" the same day, a special Russian government decree lays out how the food will be distributed to each federation subject. For example, Moscow will receive 360,000 tons of wheat, 10,000 tons of rice, and 40,000 tons of beef. Most of the food assistance from the U.S. and EU will go to Komi Republic, Primorskii and Khabarovsk Krais, and Kemerovo, Kamchatka, and Smolensk Oblasts, the newspaper reported. JAC RUSSIA SUGGESTS BARTER TO REDUCE FOREIGN DEBT. Deputy Finance Minister Mikhail Kasyanov told ITAR-TASS on 12 March that Russia wants to pay off part of its foreign debt with goods. According to Kasyanov, the government of Italy has already expressed "a general interest in the plan," while similar proposals were discussed with the German government during Chancellor Gerhard Schroeder's visit to Moscow and during the meeting of deputy finance ministers of G-7 and G-25 countries in Bonn on 11 March. Kasyanov added that "the talk is not about raw materials. We want Russian equipment to be bought." JAC STOCKS FLOAT UPWARD, AS MARKET REGULATOR FACES THREAT. Russian share prices on 11 March rose to their highest level since the onset of the economic crisis last August, with the benchmark RTS index soaring 7.55 percent. Analysts suggest the increase is due to optimism about upcoming IMF talks and upward trends in oil prices, the "Moscow Times" reported on 12 March. According to the newspaper, the market's regulator, the Federal Securities Commission, is facing new legal challenges to its authority. On 11 March, a Moscow court ruled that the commission exceeded its powers when it ruled last August to ban the Moscow Interbank Currency Exchange from trading in derivatives. Next week, the Moscow Central Stock Exchange will appeal to the Supreme Court, asking it to declare all the commission's rulings since 1 July 1996 invalid because they were not published in an official newspaper, as required by a 1996 presidential decree. JAC YELTSIN TRIP TO PARIS POSTPONED. President Boris Yeltsin's trip to Paris scheduled for the second half of March has been postponed, presidential spokesman Yakushkin announced on 11 March. Yeltsin is currently slated to leave the hospital on 20 March, but Yakushkin emphasized that his release will depend on how his medical treatment proceeds. Yeltsin met with Yabloko leader Grigorii Yavlinskii on 10 March. Yavlinskii told NTV the next day that the two men discussed the Russian Constitution, the IMF, the foreign debt, and corruption. Yavlinskii also revealed that following news reports of his meeting with Yeltsin, 11 governors contacted him by phone. According to Interfax, Yeltsin may meet with Moscow Mayor Yurii Luzhkov "in the near future." JAC MORE HARSH WORDS ABOUT NATO. Yeltsin "was and remains negative" about NATO's eastward expansion, presidential spokesman Yakushkin told reporters on 12 March. Foreign Minister Igor Ivanov said the landmark event of three former Warsaw Pact countries--the Czech Republic, Hungary, and Poland--joining the alliance is "rather sad" and a "movement in the wrong direction." Colonel-General Leonid Ivashov, head of the Defense Ministry's Department for International Military Cooperation, told Interfax that Russia is not planning any new military measures but "NATO's further enlargement, which is diminishing Russia's geopolitical and military-strategic space, may force Russia to take responsive measures." Colonel-General Leontii Shevtsov, commander of the Moscow military district, suggested that Russia needs more soldiers. He told reporters on 12 March that at their current strength Russian ground forces would be incapable of countering a NATO attack. JAC RUSSIAN REGIONS VULNERABLE TO MILLENIUM BUG. While playing down fears about the ability of large Russian companies such as Gazprom or managers of the country's nuclear missile system to cope with problems associated with the millennium bug, computer specialist and Director-General of Lanit-Tercom Andrei Terekhov told Reuters on 11 March that local governments in Russia are dangerously unprepared. The breakdown of local computers could trigger interruptions in the provision of social services, heat, and electricity. Meanwhile, in Khabarovsk representatives from 10 krais and oblasts gathered with a group of information technology specialists from Moscow to discuss the problem at a session of a subcommittee of the Far East and Trans-Baikal Association, ITAR-TASS reported. One official noted that to resolve the YK2 problem, it is essential for local officials to first recognize that they have one. JAC RUSSIA, CHINA CONSULTING ON ABM. Russian and Chinese officials are "more or less continuously" discussing possible steps to counter U.S. plans to set up a tactical anti-ballistic missile system in Asia, Russian "military and diplomatic sources" told Interfax on 11 March. According to these sources, the issue is likely to be raised again when Defense Minister Igor Sergeev visits India in the spring and his Chinese counterparts visit Moscow in April. JAC FINANCE MINISTRY CONTINUING TO SPOTLIGHT REGIONAL MISSPENDING. First Deputy Finance Minister Viktor Khristenko told reporters on 11 March that while the central government has paid wages to state workers financed from its budget in February in full, most regions are continuing to have problems meeting the payrolls of their workers, although there has been some overall progress. For example, as of 1 February 1999, the debt to workers paid by local budgets had dropped 9 percent from 1 January to 11.6 billion rubles ($516 million). But in only six regions have wages been paid in full with no accumulated debt. According to "Izvestiya" on 12 March, the poorest regions tend to have the biggest government staffs, whose wages are "not bad." Union leaders complain, according to the daily, that information about transfers from Moscow is not reported in the local press and therefore it is hard to track how money is being spent or, in many cases, wasted. JAC KRASNOYARSK PLAGUED BY TAX EVASION. A top Interior Ministry official in Krasnoyarsk Krai announced that he has uncovered evidence of tax evasion in some of the territory's key cities, such as Achinsk, Nazarov, and Divnogorsk, "EWI Russian Regional Report" reported on 11 March. With growing export volumes and declining tax revenues, krai officials are naturally suspicious. Large enterprises, such as Krasugol, the Nazarovskii and Berezovskii coal mines, the Krasenergo power utility, and the Achinsk Alumina Combine, owe large tax bills to all levels of government. Their total debt is some 3 billion rubles ($134 million), tax agencies estimate, according to the report. JAC IRANIAN DELEGATION SIZES UP MILITARY-INDUSTRIAL COMPLEX IN KIROV. Headed by Iran's ambassador and plenipotentiary to Russia Medhi Safari, an Iranian delegation has arrived in Kirov Oblast for a two-day official visit, "Izvestiya" reported on 11 March. Featuring prominently on the itinerary of the group, which includes the Iranian military and defense attaches, are visits to the oblast's military-industrial complex. According to the daily, Kirov Governor Vladimir Sergeenkov favors promoting arms exports and using the revenues for dual-purpose high-technology production. JC TATARSTAN'S PRESIDENT ADDRESSES PARLIAMENT. In his annual address to the State Council on 11 March, Mintimer Shaimiev said his republic's primary objective in 1999 is to "overcome the consequences of the financial crisis in Russia," RFE/RL's Kazan bureau reported the following day. Shaimiev said the current negotiations on prolonging the intergovernmental treaty between Tatarstan and Russian Federation, which expired last month, focus on defining future inter-budget relations between Russia's donor regions and the federal center. He confirmed that the republican government will continue to support and develop domestic industry by "bringing the system of financial institutions and the taxation system in the Tatarstan Republic into order." Shaimiev also advocated reprofiling former Russian defense industry plants in Tatarstan to produce consumer goods. LF CONFUSION OVER BEREZOVSKII'S STATUS CONTINUES. Boris Berezovskii told Interfax on 11 March that reports he has resigned as CIS executive secretary are "a lie and a provocation." Earlier that day, ITAR-TASS and Caucasus Press quoted the Georgian presidential press service as stating that President Yeltsin had informed his Georgian counterpart, Eduard Shevardnadze, the previous day that Berezovskii submitted his resignation on 9 March. Berezovskii said that he merely requested Yeltsin's permission to take vacation. He added that only the Council of CIS Heads of State , which appointed him as executive secretary, is empowered to remove him from that post. LF TRANSCAUCASUS AND CENTRAL ASIA AMENDMENTS TO ARMENIAN CONSTITUTION PROPOSED. Meeting on 10 March, the presidential Commission on Constitutional Reform proposed making it more difficult for the parliament to overturn a presidential veto on legislation, RFE/RL's Yerevan bureau reported the following day. The commission proposed that the parliament need a two-thirds majority--instead of the current simple majority--to override a presidential veto. It also proposed that the president be empowered to dissolve parliament only in the event of its "inactivity." The constitution currently enables the president to dissolve the legislature virtually at will, except during the first year of its tenure and his last six months in office. The commission moved to remove the latter constraint. Commission chairman and presidential adviser Paruyr Hayrikian was quoted as saying that the proposed changes give the parliament more powers and "create a real balance" between the executive and legislative branches. LF ARMENIA DENIES INVOLVEMENT IN FORMER ENVOY'S TRIP TO BAKU. An Armenian Foreign Ministry spokesman told RFE/RL's Yerevan bureau on 11 March that a planned visit to Baku by Jirair Libaridian, Armenia's former chief negotiator on Nagorno- Karabakh, was not endorsed by the Armenian leadership. "Libaridian is not authorized to speak on behalf of Armenia," the spokesman said. The Azerbaijani news agency Turan reported the previous day that Libaridian, who is a U.S. citizen, will arrive in Baku from Paris on 12 March as a "private guest" of President Heidar Aliev's chief foreign policy aide, Vafa Guluzade. The Azerbaijani agency quoted Guluzade as saying that Libaridian will be visiting Azerbaijan "on his own initiative" to "see Baku" and discuss the unresolved Nagorno-Karabakh conflict. Liparitian and Guluzade met face to face on several occasions in 1994-1996 in an attempt to find a solution to the Karabakh conflict. LF EUROPEAN PARLIAMENT BACKS OSCE KARABAKH PEACE PLAN... The European Parliament passed a resolution on 11 March endorsing the most recent Karabakh peace proposal by the OSCE Minsk Group, which it characterized as constituting a basis for discussion likely to end the negotiating deadlock. Noting that the October 1998 Azerbaijani presidential elections were "marked by fraud and irregularities that have been condemned by international observers" and that irregularities were also noted during the March 1998 Armenian presidential elections, the resolution proposes that EU aid to both countries be linked to "tangible progress in the areas of human rights and democracy." LF ...WHILE U.S. BACKS DIRECT TALKS BETWEEN ARMENIA, AZERBAIJAN. In a 10 March message to Azerbaijani President Heidar Aliev, U.S. Secretary of State Madeleine Albright underscored the intention of the U.S. to continue its efforts to resolve the Karabakh conflict, adding that Washington "firmly backs" direct dialogue between the Armenian and Azerbaijani leaderships, Turan and AFP reported. Albright also expressed satisfaction that Aliev plans to attend the NATO summit next month. Aliev will meet with U.S. leaders during his U.S. visit to discuss security issues in the Caucasus. LF AZERBAIJANI OIL REACHES GEORGIAN BLACK SEA TERMINAL. The first Azerbaijani off-shore Caspian oil to be exported via the western export pipeline via Georgia reached Supsa on 11 March, three months after it was pumped into the pipeline at Baku, AP and Interfax reported. The 812 kilometer pipeline has a throughput capacity of 5 million metric tons annually. Caucasus Press on11 March quoted Georgian Deputy Foreign Minister Valerii Chechelashvili as saying that disagreements over financing are delaying a decision on construction of the so-called Main Export Pipeline from Baku to the Turkish terminal at Ceyhan. Chechelashvili added that the precise route of that pipeline through Georgia has not yet been decided and that it may run from Baku to Supsa and from there to Ceyhan. LF FORMER AZERBAIJANI PARLIAMNET SPEAKER DENIES PLANNING ASSASSINATION. In a statement summarized on 11 March by Turan, Rasul Guliev rejects allegations by Azerbaijan's National Security Ministry that he enlisted the advice of a former CIA employee to plan the assassination of former Azerbaijani President Abulfaz Elchibey (see "RFE/RL Newsline," 3 and 8 March 1999). Guliev termed the charges part of "a series of threats and intimidation" directed against the Azerbaijani opposition as a whole. He added that he and Elchibey are "united in [their] refusal to recognize the results" of the 1998 presidential poll, in which incumbent Heidar Aliev was re-elected for a second term. Guliev and Elchibey were among five prominent opposition leaders who boycotted the poll. LF KYRGYZSTAN TO REINFORCE ITS SOUTHERN BORDERS. First Deputy Defense Minister Major-General Ismail Isakov announced on 11 March that Kyrgyzstan will send additional troops to its borders with Tajikistan and Uzbekistan, Interfax reported. Isakov said the situation there "compels us to come to grips with border reinforcement," but he did not elaborate. With regard to the recent decision to withdraw the Kyrgyz battalion from the CIS peacekeeping force in Tajikistan, Isakov said it has "become economically difficult" to unilaterally maintain the unit along the Tajik-Afghan border. It is unclear whether the unit that guarded the Tajik-Afghan border will be sent to the Tajik-Kyrgyz border. BP KYRGYZ PARLIAMENT DISCUSSES BORDER WITH UZBEKISTAN. Lawmakers met behind closed doors on 12 March to discuss claims that Uzbekistan has been advancing its borders into Kyrgyz territory, RFE/RL correspondents in Bishkek reported. Defense Minister General Myrzakan Subanov told the parliament that since 1996 Uzbekistan has built 27 new fortified border posts along the Uzbek-Kyrgyz border. Also, Uzbekistan has deployed a special unit to guard the Kempirabad reservoir, which straddles the countries' common border. Subanov added that Uzbekistan's national army has 130,000 troops, making it the largest army in CIS Central Asia. The parliament decided to appeal to President Askar Akayev to set up a special commission to investigate the issue. BP AKAYEV COMMENTS ON GREAT SILK ROAD. Kyrgyz President Askar Akayev, in an article published in "Nezavisimaya gazeta" on 10 March, wrote about the "diplomacy of the Silk Road," noting that international community supports the revival of the ancient route and that Kyrgyzstan lies at the center of it. But, he said, dynamic development is necessary but is impossible without friendly ties between the countries located on the route. His country foresees development in three directions--toward immediate neighbors, toward Europe, and toward East and Southeast Asia. He said the principles of cooperation and "equal partnership" with regard to the new Silk Road should be "mutual dependence, mutual advantage, and development of long-term perspectives." Akayev noted that at the end of the 20th century, "globalization" is an indisputable fact. No country, regardless of "military or economic power," can exist in isolation, he commented. BP KYRGYZ NATIONAL CURRENCY LOSING VALUE... Kyrgyzstan's national currency, the som, was trading on 11 March at 32.7 to $1, RFE/RL correspondents in Bishkek reported. The som was exchanged at 30.5 to $1 at the start of March and has slowly decreased in value since then. BP ...WHILE GOLD PRODUCTION DWINDLING. Kyrgyzstan's biggest gold company, Kyrgyzaltyn, said gold production dropped in the first two months of 1999, Interfax reported on 11 March. The company noted an 8.3 percent drop, compared with the same period last year. The major reason is a decrease in production at the country's largest mining project, Kumtor. The Kumtor Gold Company, in which Canada's Cameco Corp. is a partner, reported a 9.4 percent decline in production in January-February. Kumtor produced 19.2 tons of gold in 1998, up 25 percent on the previous year. Kyrgyzaltyn reported it produced 21.311 tons of gold last year. BP UZBEK TERRORISTS DETAINED IN KYRGYZSTAN? ITAR-TASS reported on 11 March that up to 10 Uzbek citizens have been arrested on the outskirts of Bishkek on suspicion of involvement in the 16 February bombings in Tashkent. The 10 reportedly resisted arrest. The same source later reported that the officials in the Kyrgyz Security Ministry could not confirm the report. The spokesman for the Kyrgyz Interior Ministry, Joldoshbek Busurmankulov, told an RFE/RL correspondent in Bishkek that his ministry has no information on the arrests. BP KAZAKH ENVIRONMENTALIST FAVORS CAVIAR OVER OIL. Ibragim Kushenov, the leader of Kazakhstan's Kaspi Tabigaty environmental organization, told a press conference in Almaty on 10 March that the extraction of oil from the Caspian Sea could cause an environmental disaster, Interfax reported. Kushenov said that under the Law on Specially Protected Territories, adopted in 1997, the northern section of the Caspian Sea and the Ural River have the status of nature preserve, which gives fishing priority over oil extraction. Kushenov pointed out that sturgeon live in the north part of the Caspian and that "1 ton of black caviar produced by the Atyraubalyk company costs an average of $1.2 million on the world market. 1 ton of oil costs only $60." BP IRANIAN OFFICIAL CRITICIZES CASPIAN PIPELINE PROJECT. Iranian Deputy Oil Minister Ali Majedi was in Ashgabat on 11 March to attend the Oil and Gas Exhibit-1999, ITAR-TASS reported. Speaking at the exhibit, Majedi said an Iranian pipeline route carrying Turkmen natural gas to Turkey would save $700 million, compared with the construction of the Trans-Caspian pipeline. The previous day, Majedi had said in Tehran that his country opposes Turkmenistan's plan to lay a natural gas pipeline across the bed of the Caspian Sea to Azerbaijan. Majedi said "Iran has a common border with Turkmenistan--it is the best and cheapest route for Turkmen gas." Majedi criticized the decision to begin construction of the pipeline before the legal status of the Caspian has been defined. Majedi added that Turkmenistan's "ignoring of Tehran's rightful misgivings are unacceptable." BP FOREIGN COMPANIES CUT PRODUCTION AT TURKMEN OIL FIELDS. According to London's International Oil Exchange, the U.S.'s Mobil, Britain's Monument Oil, and Ireland's Dragon Oil will cut the volume of work at Turkmen deposits by 50 percent, ITAR-TASS reported on 12 March. The reason for that move is reportedly the high cost of the extraction and transportation of the oil from the east coast of the Caspian Sea. The same agency cites London brokers as saying Mobil and Monument wantthe Turkmen government to change the terms of development at the Garashyzlyk field and offer a more advantageous tax regime. Dragon Oil also wants the terms revised for work at the Chelken field. BP xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1999 RFE/RL, Inc. All rights reserved. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx HOW TO SUBSCRIBE Send an email to email@example.com with the word subscribe as the subject of the message. HOW TO UNSUBSCRIBE Send an email to firstname.lastname@example.org with the word unsubscribe as the subject of the message. 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