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RFE/RL NEWSLINE Vol 3, No. 99, Part I, 21 May 1999
________________________________________________________ RFE/RL NEWSLINE Vol 3, No. 99, Part I, 21 May 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 * FAULTLINES EMERGING IN ECONOMIC POLICYMAKING? * SOME IMF LEGISLATION SENT BACK FOR MORE FINE-TUNING * ARMENIA DENIES PURCHASING CHINESE ROCKETS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA FAULTLINES EMERGING IN ECONOMIC POLICYMAKING? Prime Minister Sergei Stepashin on 20 May announced the creation of a new Economic Council, which will attempt to anticipate economic trends and plan how to deal with them. Stepashin suggested that the government needs to do less ad hoc planning, asking "why is it every year we hold emergency discussions on paying holiday wages to public sector employees or on rivers freezing over?" ITAR-TASS reported. The new council will be composed of economists and regional governors. The next day, "Moskovskii komsomolets" reported, without citing any source, that Stepashin is refusing to sign a decree appointing First Deputy Prime Minister Nikolai Aksenenko as head of the Operative Affairs Commission. The newspaper reported the previous day that Aksenenko, in his debut as acting commission chairman, adopted a distinctly independent stance from that of Stepashin. "Kommersant-Daily" the same day claimed that presidential administration head Aleksandr Voloshin will dictate economic policy to Aksenenko from the Kremlin. JAC GOVERNMENT AIMING FOR QUICK SETTLEMENT OF FOREIGN DEBT. Acting Finance Minister Mikhail Zadornov told reporters on 20 May that First Deputy Finance Minister Mikhail Kasyanov and his team are trying to resolve all technical questions with Russia's foreign creditors so that a restructuring of the country's Soviet-era debts can quickly follow an announcement of the IMF board's approval of the government's economic program. Kasyanov is currently conducting talks with the Paris Club and will meet with London Club representatives on 25 May, Reuters reported. According to Zadornov, the government is not even considering a restructuring of its Eurobond debt at present since it is meeting its Eurobond obligations, Interfax reported. Zadornov also said that settlement of the foreign debt problem will largely depend on the adoption of draft laws agreed upon with the IMF. JAC SOME IMF LEGISLATION SENT BACK FOR MORE FINE-TUNING. The State Duma's Budget Committee on 20 May accepted one and rejected two of the bills submitted by Yevgenii Primakov's government in accordance with its agreement with the IMF, ITAR-TASS reported. The two rejected bills, one imposing a tax on motor vehicles and the other on gasoline stations, need further work. The same day, Prime Minister Stepashin said that the bills submitted to the Duma "were insufficiently calculated and drafted in haste" and that alcohol prices must not be increased too sharply, Interfax reported. Earlier, Stepashin said that he will call for a confidence vote if the Duma blocks the passage of the IMF legislation. Duma First Deputy Speaker Boris Kuznetsov said on 21 May that in June the lower chamber will examine 26 of the 59 bills prepared by the government for the IMF. At the beginning of next month, the Duma will consider in its first reading the bill on the restructuring of credit organizations. JAC STATE BACKLOG OF UNPAID WAGES SHRINKS... Unpaid wage arrears dropped 6.8 percent last month to a total of 63.108 billion rubles ($2.6 billion) as of 1 May, according to the State Statistics Committee, Interfax reported on 21 May. JAC ...AS COUNTRY'S GRAIN STOCKS DROP. As of 1 May, Russia's grain stocks were less than half the previous year's level-- totaling 12.8 million metric tons, according to the State Statistics Committee the previous day. Stocks had declined by 24 percent from the previous month. JAC TRIPARTITE MEETINGS ON KOSOVA CONCLUDE UNTIL NEXT WEEK. Russia's Foreign Ministry issued a statement on 20 May condemning NATO's latest air strikes against Yugoslavia, Interfax reported. According to the statement, bombs damaged the residence of Sweden's ambassador in Belgrade as well as a clinic, killing three patients and injuring medical staff. The same day, acting Foreign Minister Igor Ivanov said that a first draft of the U.S. Security Council resolution on Yugoslavia "had been put on paper." The next day, Ivanov said that several concrete aspects of a Kosova settlement were coordinated in Moscow by himself and visiting U.S. Deputy Secretary of State Strobe Talbott. For his part, Talbott said only that his consultations in Moscow with Ivanov and special envoy to Yugoslavia Viktor Chernomyrdin and Finnish President Martti Ahtisaari were "quite constructive." The next tripartite meeting will be held in Moscow on 26 May, ITAR- TASS reported. JAC STEPASHIN'S ASCENT TO CONTINUE? Prime Minister Stepashin's recent confirmation has lead political analysts and others to jigger their prognostications for Russia's upcoming presidential race. Yabloko leader Grigorii Yavlinskii told reporters on 20 May that he now considers Stepashin a likely presidential contender in 2000. The same day "Nezavisimaya gazeta" claimed that Stepashin "currently has everything necessary to form around him a new "party of power" and that he is President Boris Yeltsin's "heir apparent." On 21 May, Duma deputy Konstantin Borovoi (independent) told "Moskovskii komsomolets" that the "anti-Western propaganda spread by Primakov and his team make [Communist Party leader Gennadii] Zyuganov's chances [of winning the presidential vote] almost certain." Political analyst Vyacheslav Nikonov told the daily that the likelihood that presidential elections will be canceled has increased, while Primakov's chances have declined. He added that a split in "Primakov's electorate" should be expected between Moscow Mayor Yurii Luzhkov, Zyuganov, and Yavlinskii. JAC FUNDS SENT TO KEMEROVO MISSING? Prime Minister Stepashin instructed First Deputy Prime Minister Aksenenko to investigate the disappearance of "a $100 million external credit that did not reach Kemerovo Oblast," ITAR-TASS reported on 20 May. Aksenenko will leave for Kemerovo next week, accompanied by representatives from the Finance, Economics, and Fuel and Energy Ministries. After a meeting with Stepashin the same day in Moscow, Kemerovo Oblast Governor Aman Tuleev told "Interfax-Eurasia" that the two officials discussed the problem of interbudgetary relations between the center and the regions. He said that the Ministry of Finance is constantly trying to cut funds to the regions almost as if it wants to trigger social explosions there. He also told Stepashin about the necessity of investigating "millions of rubles [for the coal sector] that simply evaporated in commercial banks." JAC REGIONS IMPOSING TRADE RESTRICTIONS ON GASOLINE BEYOND THEIR BORDERS. Sverdlovsk Oblast is experiencing the large hikes in gasoline prices that were witnessed earlier in St. Petersburg and Moscow, according to "EWI's Russian Regional Report" on 20 May. Ninety-three octane gas costs 32 percent more than just a week ago, at 3.7 rubles per liter (15 cents). Local roads are noticeably quieter following the price hikes. Gennadii Tikhmirov, director-general of Uralnefteprodukt, told the publication that prices are rising because of increasing shipments of domestically produced fuel to world markets and to domestic agricultural producers during spring sowing. In addition, gasoline station owners are passing along increases in their tax bill to consumers. According to the publication, Omsk Oblast and Bashkortostan Republic, which traditionally supply fuel to Sverdlovsk, have put restrictions on the export of gasoline beyond their borders so that their own local supplies do not run out. JAC RUSSIA DISMISSES CONCERNS RAISED BY NAS REPORT. Russia's Atomic Energy Ministry has accused the U.S. of overdramatizing problems associated with the safeguarding of radioactive materials, Interfax reported on 20 May. The ministry's press service said that a recent U.S. National Academy of Sciences report saying that the thefts of Russian radioactive matter have been underreported flies in the face of the facts. The same day, the Duma passed a law on the development, maintenance, and safeguarding of nuclear weapons. The legislation requires that all nuclear weapons facilities be exclusively federally owned. In addition, the bill establishes clearer accountability for nuclear accidents. JAC AFTER BUSY WEEK, YELTSIN RESTS. President Yeltsin left for the Black Sea resort of Sochi on 21 May for a two-week vacation. According to RIA news agency, he is likely to meet with South Korean President Kim Jae Dung while in Krasnodar Krai. JAC RUSSIA TO RESUME DEFENSE COOPERATION WITH LIBYA. Following the UN Security Council's decision to lift international sanctions against Libya, a delegation from the Russian arms export company Rosvooruzhenie has flown to Tripoli to discuss the resumption of military-technical cooperation, AFP and Interfax reported on 20 May, quoting Rosvooruzhenie director Grigorii Rapota. LF RUSSIA PROMOTES GREEK, NOVOROSSIISK OIL PIPELINES... Deputy Russian Fuel and Energy Minister Yelena Telegina met with Greek Development Minister Evangelos Venizelos in Athens on 18 May to discuss the planned construction of a pipeline from the Bulgarian port of Varna to Alexandropoulis bypassing the Turkish straits, ITAR-TASS reported. A feasibility study for that pipeline was recently completed. Meeting in Moscow two days later with U.S. special envoy Jan Kalicki, Russian acting Deputy Prime Minister Vladimir Bulgak said that an economically and ecologically sound export route must be found for Caspian oil and gas, Interfax reported. Bulgak said that both the existing Baku-Novorossiisk and the planned Tengiz-Novorossiisk pipelines fill those criteria. LF ...WHILE WESTERN CONSORTIUM PREFERS GEORGIAN VARIANT. But David Woodward, president of the Azerbaijan International Operating Company, which is developing three off-shore Caspian oilfields, told journalists in Baku on 20 May that he is concerned by the recent repeated shutdowns of the Baku- Novorossiisk pipeline and by the higher transit costs involved, according to Turan. Woodward said that one reason why the AIOC favors the alternative pipeline from Baku to the Georgian Black Sea terminal at Supsa is because high-quality light Azerbaijani oil transported through that pipeline is not mixed with lower-grade crude, as is the case with the Baku-Novorossiisk line. LF TRANSCAUCASUS AND CENTRAL ASIA CIS DEFENSE MINISTERS MEET IN YEREVAN. The defense ministers of the six CIS states that have confirmed their continued adherence to the 1992 CIS Collective Security Treaty (Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan) attended a session of the CIS Defense Ministers' Council in Yerevan on 20 May chaired by Russian Defense Minister Igor Sergeev, RFE/RL's Yerevan bureau and Russian agencies reported. Georgia and Ukraine were represented by deputy ministers, while Moldova, Azerbaijan, and Uzbekistan did not send representatives. The ministers discussed adapting the Collective Security Treaty to the present geopolitical situation and also tackled problems arising from the establishment of unified CIS military systems, including the air defense system, of which Armenia is a member. Sergeev told journalists that his fellow ministers expressed support for Russia's insistence that the Kosova conflict must be resolved by political, not military means, according to Interfax. LF ARMENIA DENIES PURCHASING CHINESE ROCKETS. Both Armenian Defense Minister Vazgen Sargsian and his Russian counterpart, Sergeev said in Yerevan on 20 May that Azerbaijani claims that Armenia has acquired Chinese Typhoon rocket systems are untrue, RFE/RL's Yerevan bureau reported (see "RFE/RL Newsline," 19 and 20 May 1999). Sargsian said "nothing of the sort has taken place," while Sergeev dismissed the allegations as "nonsense." LF ARMENIA, BELARUS SIGN DEFENSE COOPERATION AGREEMENT. On the sidelines of the CIS defense ministers' meeting, Vazgen Sargsian and his Belarusian counterpart, Alyaksandr Chumakou, signed an intergovernmental agreement on military and military-technical cooperation, ITAR-TASS and Noyan Tapan reported. Chumakou termed that agreement, which had been negotiated for a long time, "a great historical event." He also praised Armenia's role within the CIS Collective Security Treaty. LF WORLD BANK ASSESSES IMPLEMENTATION OF LOAN FOR ARMENIA'S ENERGY SECTOR. World Bank officials said at a press conference in Yerevan on 20 May that Armenia's energy sector will need more than $1 billion in capital investment over the coming decade to replace obsolete infrastructure and phase out financial losses, RFE/RL's Yerevan bureau reported. The first tranche, worth $21 million, of a $52 million World Bank loan, released in March 1999, will be used to help cut down losses during transmission, which are one of the reasons for Armenia's high energy tariffs. Privatization of Armenia's power grid may push prices even higher, according to a World Bank officials. But the inability of not only private consumers but also many state-run enterprises to pay their electricity bills has already resulted in huge debts to the energy sector. LF U.S. CONCERNED ABOUT LOCAL ELECTIONS IN AZERBAIJAN. Meeting on 20 May with Azerbaijani parliamentary International Relations Committee Chairman Rza Ibadov, U.S. Ambassador Stanley Escudero asked whether the parliament will be able to enact by October legislation on municipalities and on municipal elections, Turan reported. Those elections were due two years ago. Also on 20 May, Turan's Washington correspondent quoted exiled former Azerbaijani parliamentary speaker Rasul Guliev as saying that in recent meetings he and U.S. Congressional leaders agreed on the need for renewed efforts to ensure free and fair elections in Azerbaijan. But Musavat Party Chairman Isa Gambar told Turan he believes the bill on municipal elections currently under discussion in the parliament is undemocratic. He argued that the opposition should boycott the polls. LF GEORGIAN PARLIAMENT CHAIRMAN TO MEDIATE WITH REBEL COLONEL? Zurab Zhvania may meet with rebel Colonel Akaki Eliava to discuss the terms on which the latter is prepared to surrender to the Georgian authorities, Caucasus Press reported on 20 May, citing "Alia." Eliava has been in hiding in western Georgia since launching an abortive insurrection in October 1998 (see "RFE/RL Newsline," 19 and 20 October 1998). He recently said that talks with Deputy Security Minister Levan Kenchadze on his possible surrender were a failure, claiming that Kenchadze had threatened to kill him. Eliava then appealed to Zhvania either to meet with him personally or to name a group of parliamentary deputies to conduct further negotiations. Eliava believes that Zhania, who, like Eliava, comes from Mingrelia in western Georgia, has a better understanding of, and greater sympathy for, the problems facing that region's inhabitants, according to RFE/RL's correspondent in Zugdidi. LF KAZAKH PRESIDENT CALLS FOR AMENDMENTS TO MEDIA LAW... Nursultan Nazarbaev has called for changes to the draft law on the media to preclude the suspension or closure of media outlets, except at the discretion of the owner or following a court ruling, Interfax reported on 20 May, citing the presidential press service. Nazarbaev said that gradual democratization is impossible without free media. Opposition politicians have argued that the draft law, which is currently under discussion in the parliament, will restrict freedom of speech and of the media (see "RFE/RL Newsline," 28 April 1999). LF ...RULES OUT FURTHER SUBSIDIES FOR AGRICULTURE. Meeting with farmers in Akmola on 20 May, Nazarbaev warned that the leadership will phase out direct subsidies to the agricultural sector, Interfax reported. But he added that the country's leadership is considering alternative ways of supporting the sector, which he termed crucial to the development of the economy as a whole. Nazarbaev said he hopes legislation on private ownership of farm land, which is currently before the parliament, will contribute to the revival of agriculture. LF KYRGYZSTAN COMMEMORATES 1998 ECOLOGICAL DISASTER. Some 1,000 residents of the village of Barskoon held a meeting on 20 May to mark the first anniversary of the accident in which a lorry belonging to the Canadian-owned Kumtor Operating Company spilled toxic chemicals into the Barskoon river, which flows into Lake Issyk-Kul, RFE/RL's Bishkek bureau reported. No local or national officials attended the ceremony. But at a session of the Karakol regional assembly the same day, the chairman of the regional commission on the aftermath of the accident announced that Kumtor has promised another $7,000 in compensation for thousands of villagers affected by the toxic spill. Victims of the spill took local officials hostage earlier this month to protest the alleged embezzlement of earlier finds Kumtor had paid in compensation (see "RFE/RL Newsline," 14 May 1999). LF INDIAN FOREIGN MINISTER VISITS UZBEKISTAN, TURKMENISTAN. Jaswant Singh met with Uzbekistan's President Islam Karimov in Tashkent on 19 May to discuss bilateral relations, Interfax reported. Karimov noted the potential for expanding trade and economic relations between the two countries. The following day, Singh traveled to Ashgabat, where he met with President Saparmurat Niyazov to discuss bilateral relations and regional cooperation. Singh told Interfax that "complete mutual understanding" was expressed on all issues discussed. LF xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1999 RFE/RL, Inc. 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