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RFE/RL NEWSLINE Vol 3, No. 78, Part I, 22 April 1999
________________________________________________________ RFE/RL NEWSLINE Vol 3, No. 78, Part I, 22 April 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 * FEDERATION COUNCIL AGAIN DEFIES YELTSIN OVER SKURATOV * CHERNOMYRDIN IN BELGRADE * KARABAKH CALLS ON AZERBAIJAN TO RESUME PEACE PROCESS End Note: BAKU-CEYHAN PIPELINE PACT: OBSTACLES REMAIN xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA FEDERATION COUNCIL AGAIN DEFIES YELTSIN OVER SKURATOV... Members of the Federation Council have rejected the resignation of Prosecutor-General Yurii Skuratov for a second time. On 21 April, only 61 votes of the necessary 90 were cast in favor of approving Skuratov's resignation; 79 votes were cast against. "Izvestiya" the next day wrote that the decision is evidence that "Russia is becoming a parliamentary republic" and that "political decisions are no longer made behind the Kremlin's walls." "Segodnya" interpreted the action as not only bad news for Russian President Boris Yeltsin, who had actively been seeking the chamber's support in his effort to dismiss Skuratov, but also a blow for Prime Minister Yevgenii Primakov, who made a last minute appeal to the senators to bounce Skuratov. Krasnoyarsk Governor Aleksandr Lebed had said earlier that the vote is not a question of a feud between Skuratov and Yeltsin; rather, if Skuratov remains, it will mean the end of presidential power in the country, RFE/RL's Moscow bureau reported. JAC ...AS SKURATOV'S ROLE REMAINS UNCERTAIN. During the eight- hour discussion of his fate, Skuratov did not offer any new revelations, insisting that such disclosures would be "fatal for the country," Russian Television and Interfax reported. Despite the vote, Skuratov remains suspended pending the outcome of a criminal investigation against him, Federal Security Service (FSB) Director Vladimir Putin announced. Skuratov himself told reporters that he needs guarantees that he will be able to do his job and "that the FSB and Interior Ministry will follow up on what we tell them." After the vote, Federation Council Chairman Yegor Stroev suggested the creation of a bilateral commission composed of presidential administration and parliamentary representatives to resolve the issue. JAC IMF AGREEMENT IMMINENT? IMF Managing Director Michel Camdessus said on 21 April that there has been progress in negotiations with Moscow and that "there is a possibility to agree," even within the "next few days," RFE/RL's Washington bureau reported. Camdessus added that the fund wants to see more rapid progress in restructuring the banking sector and clarification of the propriety of the behavior of the Russian Central Bank. The next day, Petr Rodionov, deputy chairman of Gazprom's board of governors, told "Izvestiya" that the IMF wants Gazprom to cut supplies to customers who do not pay their bills and to set up several competing gas companies. According to Rodionov, Gazprom opposes both recommendations and usually succeeds in satisfactorily explaining its reasons why to IMF experts during negotiations. However, when the negotiating team is replaced, then the "discussion practically starts over from the beginning," he said. JAC MORE ELECTORAL BLOCS EMERGE... An unidentified source in the State Duma told Interfax on 21 April that the formation of a new electoral bloc called Russia's Patriots, which will most likely be headed by Duma Chairman Gennadii Seleznev of the Communist Party, will be officially announced on 15 May. The bloc will be composed of members of the Spiritual Heritage movement, headed by Aleksei Podberezkin, and the Democratic Party, led by Georgii Khatsynkov. Other likely members are Kemerovo Governor Aman Tuleev and Popular Rule faction leader Nikolai Ryzhkov. "Vremya MN" reported the same day that the new bloc composed of the neo-fascist Russian National Unity, Savior, and Renaissance will be called the National Bloc (see "RFE/RL Newsline," 20 April 1999). According to the daily, the National Bloc believes that the majority of votes for its deputies in upcoming elections will be from those opposed to NATO aggression against Yugoslavia. JAC ...INCLUDING NEW REGIONAL BLOC. A new electoral bloc called Vsya Rossiya (All Russia) held an organizational committee meeting on 22 April. The bloc was founded by Tatarstan President Mintimer Shaimiev, along with Bashkortostan President Murtaza Rakhimov, Ingushetian President Ruslan Aushev, St. Petersburg Governor Vladimir Yakovlev, Astrakhan Oblast Governor Anatolii Guzhvin, and Omsk Governor Leonid Polezhaev, "Nezavisimaya gazeta" reported on 21 April (see also "RFE/RL Russian Federation Report," 21 April 1999). In a separate interview with the daily, the informal leader of another regional movement, Golos Rossii, Konstantin Titov, said that Golos Rossii will try to merge with any new regional blocs. At the meeting, Shaimiev proposed an alliance with Otechestvo, headed by Moscow Mayor Yurii Luzhkov, who attended the Vsya Rossiya meeting as a "guest," ITAR-TASS reported. According to RFE/RL's Kazan bureau, the leaders of Chelyabinsk and Penza Oblasts as well as the Yamalo-Nenets Autonomous Okrug are also expected to join. JAC CHERNOMYRDIN IN BELGRADE. Russian President Boris Yeltsin's special envoy to Yugoslavia, Viktor Chernomyrdin, arrived in Belgrade on 22 April for talks with Yugoslav President Slobodan Milosevic, ITAR-TASS reported. Interfax reported that Chernomyrdin planned to discuss ways to solve the Kosova crisis but gave no details. The previous day, Patriarch of Moscow and All Russia Aleksii II briefed Chernomyrdin, Prime Minister Yevgenii Primakov, and Foreign Minister Igor Ivanov on his recent visit to Belgrade (see "RFE/RL Newsline," 21 April 1999). Chernomyrdin also met with Yugoslav Ambassador to Moscow Borislav Milosevic, the brother of the president. He did not disclose details of his meetings. FS IVANOV DESCRIBES RUSSIAN PEACE PLAN. Foreign Minister Ivanov held telephone conversations with his British, Spanish, Italian, and Vatican counterparts on 21 April to discuss efforts to find a political solution in Kosova, ITAR-TASS reported. In an interview published in "Le Monde" the previous day, he explained that Russia's peace plan envisages an immediate end to NATO air strikes, the withdrawal from Kosova of Serbian soldiers and police, the withdrawal from Yugoslavia's borders of NATO forces, the safe return of all refugees, free access to Kosova for humanitarian organizations, the resumption of peace talks aimed at giving Kosova substantial autonomy while respecting Yugoslavia's territorial integrity, and the deployment of a UN peace- keeping force with Belgrade's consent. FS RUSSIA TO BOYCOTT NATO ANNIVERSARY. Foreign Minister Igor Ivanov said that Russia will boycott NATO's 50th anniversary celebrations and the summit focusing on the Kosova crisis in Washington, ITAR-TASS reported on 21 April. He said that the Russian boycott aims to put pressure on NATO to end its air strikes. Belarus is also boycotting the meeting, but all other 13 former Soviet republics have confirmed their participation. Chernomyrdin has just returned from a tour of the former Soviet republics of Georgia, Azerbaijan, and Ukraine, where he tried to rally support for Russia's position (see "RFE/RL Newsline," 21 April 1999). Meanwhile, State Duma deputy speaker Sergei Baburin has proposed setting up a special commission to compile data on alleged NATO war crimes so that alliance commanders can be put on trial, AP reported. FS GOVERNMENT ANGERS METAL PRODUCERS BY IMPOSING NEW CUSTOMS DUTY. The Russian government on 21 April approved the introduction of a 5 percent export duty on some kinds of ferrous metals and aluminum, ITAR-TASS reported. The duties will remain in effect for six months. Russian metal producers have responded to the new government action with anger and frustration, condemning their chief lobbyist, the International Union of Metallurgists, "Novye Izvestiya" reported on 21 April. They claim that the new duty could prove fatal to their industry, given that global metal prices are already declining and approaching the cost of their production in Russia. According to the resolution, the duty was adopted to increase budget revenues and improve the regulation of foreign economic activities. JAC CHUKOTKA LEADERS FLOAT IDEA OF NUCLEAR POWER PLANT ON WATER. Local authorities in the polar city of Pevek in the Chukotka Autonomous Okrug have agreed to the construction of the world's first 70 megawatt floating nuclear power plant in a local harbor, according to "EWI Russian Regional Report" on 22 April. However, for construction to go ahead, approval of the federal authorities is still needed. Residents are hoping that the plant, which would be constructed in 2004-2006, would help alleviate chronic fuel shortages during the region's long harsh Arctic winter. JAC TATAR NATIONALISTS ALARMED THAT YUGOSLAVIA MAY JOIN RUSSIA- BELARUS UNION. The All-Tatar Public Center, which has an estimated 50,000 members, has expressed concern that Yugoslavia's accession to the Russia-Belarus Union will create a "monstrous" formation that would embark on "genocide, state terror, and other forms of violence" against the non-Slav peoples of Russia, according to "Nezavisimaya gazeta" on 21 April. The center calls on the leaders and people of the national republics of the Russian Federation to declare their independence from the impending "Union of Three" and join an independent Eastern Union that would be composed of all national republics and okrugs "from Siberia to the Caucasus." Sheikh Ravil Gainutdin, the spiritual head of Russia's Muslims, has also expressed his opposition to Yugoslavia's joining the Russia-Belarus Union, the newspaper noted. LF CHECHNYA MARKS THIRD ANNIVERSARY OF DUDAEV'S DEATH. "Scores of thousands" of people from Chechnya and neighboring Dagestan and Ingushetia gathered on 21 April near the village of Gekhi-chu, where Chechnya's first president Djokhar Dudaev was killed by a remote-controlled missile three years ago, Interfax reported. Addressing the mourners, current President Aslan Maskhadov reaffirmed his commitment to Dudaev's aspiration to create an independent Islamic state in Chechnya. Maskhadov also expressed the hope that his planned meeting with President Yeltsin will break the deadlocked relations between Moscow and Grozny and serve as a guarantee of future stability throughout the North Caucasus. He added that Chechnya 'wants Russia to be a good reliable neighbor and partner, not an eternal enemy." LF TWO ARRESTED FOR ASSASSINATION ATTEMPT IN KARACHAEVO- CHERKESSIA. Two men have been arrested by regional officials of the FSB on suspicion of participating in the 13 April grenade attack on Islam Burlakov, chairman of the Supreme Court of the Republic of Karachaevo-Cherkessia, Caucasus Press reported on 22 April. Burlakov was hospitalized with serious injuries after that attack (see "RFE/RL Newsline," 15 April 1999). LF TRANSCAUCASUS AND CENTRAL ASIA KARABAKH CALLS ON AZERBAIJAN TO RESUME PEACE PROCESS. In a statement issued on 20 April, the Foreign Ministry of the unrecognized Nagorno-Karabakh Republic accused the Azerbaijani leadership of ignoring the March appeal by the OSCE Chairman-in- Office and the Minsk Group co-chairmen to exercise restraint in their official statements so as not to jeopardize efforts to resolve the conflict, Noyan Tapan reported. The statement accuses Baku of rewriting Azerbaijani history and propagating a hostile image of Armenians, which, it noted, could have irreversible negative repercussions. The statement calls on the Azerbaijani leadership to "stop the propaganda of nationalism and xenophobia," embark on confidence-building measures, and resume peace negotiations on the basis of the most recent draft Minsk Group proposal. LF EMIR OF QATAR VISITS KAZAKHSTAN. Sheykh Hamad bin-Khalifa ath-Thani met with President Nursultan Nazarbaev on his arrival in Astana late on 21 April to discuss expanding bilateral economic relations, RFE/RL's Astana bureau reported. The presidential press service also quoted Nazarbaev as saying that Kazakhstan wants to upgrade its cooperation within the framework of the Organization of the Islamic Conference. While the two sides affirmed that their views on most urgent international and regional issues are similar, the visit, which was originally scheduled for two days, was curtailed, reportedly because of inclement weather conditions. As a result, only two bilateral agreements were signed, instead of the expected nine. LF KYRGYZ PARLIAMENT APPROVES NEW PREMIER. After a lengthy and heated debate on 21 April, parliament deputies voted to approve the candidacy of Amangeldi Muraliev as prime minister, RFE/RL's Bishkek bureau reported. Of the 61 deputies who attended the session, 37 voted in favor, two against, and the remainder abstained. Deputies expressed concern at the country's deteriorating economic situation and tensions in relations with neighboring countries. They also criticized Akaev's personnel policy. In response, Akaev conceded that numerous unspecified mistakes have been made but added that Kyrgyzstan "is not bringing up the rear" in terms of its commitment to reform, according to Interfax. Akaev said that a 10-year strategic development program will soon be drafted with the help of international financial organizations. LF CZECH PREMIER VISITS UZBEKISTAN. Milos Zeman headed a Czech government delegation that visited Uzbekistan on 20-21 April to discuss expanding bilateral economic cooperation and trade, ITAR-TASS reported. Trade turnover between the two countries totaled $800 million last year. Zeman held talks with President Islam Karimov and his Uzbek counterpart, Utkir Sultanov, and signed a declaration on developing mutually beneficial cooperation. He also opened a trade exhibition. LF TURKMENISTAN, UKRAINE TRY TO RESOLVE GAS NON-PAYMENT PROBLEMS. Turkmenistan's President Saparmurat Niyazov said on 21 April that Ukraine has not paid for supplies of Turkmen gas since the beginning of 1999, Interfax reported. As a result, Ukraine's gas debt to Turkmenistan has risen to $223 million, half of which is due in hard currency and half in barter goods. Niyazov said the Ukrainian government has undertaken to ensure the shipment of barter goods owed. On 15 April, Ukraine's First Deputy Prime Minister Vladimir Kuratchenko announced that the Ukrainian government will halt the import of Turkmen natural gas by the state company Neftegaz Ukrainy, which is unable to pay for those imports. Instead, it will hand over the right to engage in such trade to commercial companies, ITAR-TASS reported. LF END NOTE BAKU-CEYHAN PIPELINE PACT: OBSTACLES REMAIN by Michael Lelyveld A protocol signed last week by Azerbaijan and Turkey on building the Baku-Ceyhan pipeline is both more and less than meets the eye. While the agreement was hailed by both countries, the preliminary pact, known as the Istanbul Protocol, is just one of many steps that must be taken before the Caspian Sea oil line to the Mediterranean can proceed beyond the field of dreams. At its most obvious level, the accord for the U.S.- backed project is little more than an agreement to conclude another agreement, perhaps in three months' time. Officials feared that the 18 April general elections in Turkey could have delayed talks on Baku-Ceyhan by six months without a pact to give negotiations a head-start. For now, Azerbaijan and Turkey have at least averted the criticism that no progress has been made on the plan for a main export pipeline, which many regard as too costly, too risky, and too political to succeed. The pipeline policy still has many obstacles to overcome. The Istanbul Protocol must be accompanied by a host country agreement, an inter-government agreement, a government guarantee agreement, and a turnkey agreement before the 1,730-kilometer pipeline to Western markets gets off the drawing boards, industry sources say. There have already been countless protocols aimed at advancing the oil export plan supported by the administration of U.S. President Bill Clinton, as well as the parallel project for a trans-Caspian gas line. But what may make the latest agreement different is the growing commitment to the idea that Turkey must provide a guarantee against cost overruns on the Baku-Ceyhan project. Ankara has argued for more than a year that industry estimates are simply wrong and that the line from Azerbaijan through Georgia and Turkey will cost no more than $2.4 billion. Oil companies are concerned that it will cost $4 billion dollars or more. A government guarantee would put Turkey's assertions to the test and take the burden of being wrong off the Azerbaijan International Operating Company (AIOC), the only international consortium currently exporting Caspian oil from Azerbaijan. That consortium is reluctant to make a firm commitment. The U.S. administration has been pressing the Turkish government for such a guarantee for the past six months as a way to break the impasse between the governments and the oil companies. But if the concept of a guarantee is approved, industry officials have at least two major questions. The first is how much it will cover. There is bound to be bargaining over whether Turkey will hold itself accountable for costs only up to $3 billion or $4 billion, or whether it will pay all excess costs, no matter how high they might go. The question is not trivial in light of AIOC's experience with the early oil line between Baku and the Georgian port of Supsa, which was inaugurated on 17 April. Original project estimates, variously reported as $315 million to $325 million, were grossly exceeded, with actual costs reported at between $560 million and $590 million. Even using the most conservative comparison, the overrun on Baku-Supsa amounted to more than 72 percent. If the same formula were applied to the Baku-Ceyhan project, final costs would total more than $4.1 billion. The second question is whether Turkey can legally be held liable for overruns in construction costs that do not take place on its own territory. The parties are likely to take great care in dealing with such questions. AIOC and the State Oil Company of the Azerbaijani Republic have argued for months over who should pay for the overruns on the Baku-Supsa line. But assuming that such problems are eventually settled, the oil companies will have pulled off a remarkable coup. The government cost guarantee would amount to little more than a subsidy to private industry, greatly reducing its risk. Similarly, the U.S. government's commitment to use financing from the Export-Import Bank and other agencies for Baku-Ceyhan makes the project more attractive, although it undercuts earlier arguments that the line must be commercially viable. While oil companies have stuck to their insistence over the past four years that the pipeline must be a sound investment for them, governments have been gradually drawn in to tip the balance and make the deal work. When and if a comprehensive deal on cost overruns is signed, the question of commercial viability will largely cease to be a problem for the oil companies. Governments will instead be taking the risk, in exchange for the benefits of being able to direct the flow of oil. Before such a deal is struck, there may be a renewed debate about the nature and the value of such benefits. The reasons for controlling Caspian export routes may be seen as economic, strategic, or simply political. The questions about the Caspian are the same ones that have been asked since the start of offshore development. But once governments assume business risk by devoting their resources, the public may inquire more closely about the benefits, and it may demand more precise answers this time. The author is a senior correspondent for the "Journal of Commerce." 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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