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RFE/RL NEWSLINE Vol. 3, No. 140, Part I, 21 July 1999
________________________________________________________ RFE/RL NEWSLINE Vol. 3, No. 140, Part I, 21 July 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 * RUSSIA-NATO COUNCIL MEETING POSTPONED * GOVERNMENT TO SELL OFF MORE STAKES IN ENERGY COMPANIES * AZERBAIJANI OFFICIALS MOVE AGAINST OPPOSITION xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA RUSSIA-NATO COUNCIL MEETING POSTPONED. Russian and NATO officials postponed a meeting of the Russia-NATO Permanent Joint Council due to take place in Brussels on 20 July, following disputes over the agenda of that meeting. It was the first scheduled gathering of ambassadors to the joint body since Russia suspended relations with NATO in March to protest NATO's air campaign against Yugoslavia. NATO and Russian diplomats intend to draw up an agenda that will ensure the council presents a joint statement at the end of the meeting, an RFE/RL South Slavic Service correspondent reported from Brussels. The meeting is now expected to take place on 22 or 23 July. Russian Foreign Ministry spokesman Vladimir Rakhmanin told AP in Moscow that the meeting will not mark a formal resumption of full relations with NATO. He stressed that "we have resumed our contacts with NATO [only] in one clearly defined sphere: interaction within the framework of [KFOR]." FS RUSSIAN OFFICIALS DENY CAPTURING PRISHTINA AIRPORT TO SEIZE CLASSIFIED ARMS... Unidentified officials of Russia's Foreign and Defense Ministries told Interfax on 20 July that Russia did not send its troops into Prishtina on 10 June, ahead of the arrival of NATO troops, in order to secure classified weapons (see "RFE/RL Newsline," 24 June 1999). The officials were reacting to a report in "The Times" on 19 July quoting journalists from "Jane's Defence Weekly" as saying that Russia's surprise move may have been designed to withdraw Russian SA-10 surface-to-air missiles and Czech-made Tamara devices, which are capable of tracking stealth bombers. FS ...BUT RAF OFFICER SAYS RUSSIANS WITHDREW LARGE AMOUNTS OF ARMS. Also on 19 July, "The Times" quoted an RAF officer at Prishtina airport as saying that during the first few days of Russian control in June, "the stuff [military equipment] was pouring out of here." He added that the Prishtina airport was one of the most impressive military facilities he has seen. Already on 24 June, "Komsomolskaya pravda" reported that Russian paratroopers had orders to stop British forces from accessing a Yugoslav storage area at the airport that included unspecified "radar devices," missiles, and laser- guided bombs. FS GOVERNMENT TO SELL OFF MORE STAKES IN ENERGY COMPANIES... The State Property Ministry plans to sell a 9 percent stake in LUKoil and 2.5 percent of Gazprom shares before the end of the year, Igor Shuvalov, chairman of the Federal Property Fund announced on 20 July, Interfax reported. According to "The Moscow Times," Shuvalov said that two 0.5 percent stakes in LUKoil are likely also to be sold off. First Deputy Property Minister Yurii Medvedev said the same day that the government may have to sell the stakes at below market rates, but he stressed the sales are necessary to help finance the budget. JAC ...DESPITE PAST FAILURES TRYING TO UNLOAD ROSNEFT, SLAVNEFT. According to Shuvalov, tenders for stakes in Rosneft, Slavneft, and Tyumen Oil company will be announced in August or September. Twenty-five percent plus one share of Rosneft and a 19.68 percent stake in Slavneft will be available, Shuvalov said. The government has twice failed to sell stakes in Rosneft and Slavneft in earlier privatization rounds, but Shuvalov expressed confidence that the sales will be structured in such a way as to attract investor interest. He also noted that Sibneft has already expressed an interest in the Rosneft stake, ITAR-TASS reported. "Kommersant-Daily" on 10 July was less optimistic, arguing that the proposed package of shares is too small to allow the potential buyer to effectively influence company policy. An additional concern is the conflicting announcements by members of Sergei Stepashin's government about their intention to form a national oil company composed of Rosneft and Slavneft. Foreign investors are likely to want to wait and see what happens, according to the newspaper. JAC RUSSIANS' FAITH IN BANKS REVIVING? The Ministry of Finance is a new combatant in the struggle to control the restructuring of Russia's banking, "Kommersant-Daily" reported on 21 July. That struggle already involves the Tax Ministry, the Central Bank, and the Agency for Restructuring Credit Organizations (ARK0). According to the newspaper, the Finance Ministry has gotten Tax Ministry officials to submit for approval a list of banks whose debt to the federal budget is eligible for restructuring. Overall, banks owe around 35 billion rubles ($1.4 billion). The daily concluded that the addition of a new bureaucratic player could prove decisive for the sector, particularly if the Finance Ministry decides to side with the Central Bank and ARKO and lobby for a reduction in the sector's debts. "Kommersant-Vlast" reported on 13 July that Russians appear to be returning to commercial banks. As of 1 May 1999, the volume of accounts in rubles increased by 15.4 percent, compared with the beginning of 1999, and accounts in hard currency by 3.1 percent. JAC RUSSIA TO TRIM WISHFUL LEGISLATION. The government plans to submit draft legislation to the State Duma in the fall that would suspend laws mandating programs that cannot be financed by the 2000 budget, "Rossiiskaya gazeta" reported on 21 July. First Deputy Prime Viktor Khristenko described the measure as one "forced [by circumstances] but necessary." According to ITAR-TASS, Khristenko added that in order to finance all social programs called for by various laws the government would need a sum equal to two or three annual federal budgets. Khristenko thinks that the legislation will find strong support in the Federal Council since it will give regional authorities the opportunity to choose which programs they want to be fully financed. JAC REAL INCOMES FALL AS UNEMPLOYMENT RISES. Russian's real incomes shrank by 25.6 percent in the first half of 1999, compared with the previous year, according to the Russian Statistics Agency, Interfax reported on 20 July. Real incomes in June also slipped 22.9 percent, compared with the previous year. Meanwhile, the ranks of the unemployed swelled by 28.9 percent during the first half of the year to 10.443 million. JAC ROUGHER SAILING PREDICTED IN LONDON CLUB NEGOTIATIONS. Mikhail Zadornov, presidential envoy to international financial institutions, predicted that once the boards of the World Bank and IMF approve their respective programs for Russia at the end of July, Russia will be able to conclude an agreement with the Paris Club in only a few days, "Vremya MN" reported on 20 July. According to the daily, both sides have few objections to a current plan for restructuring Russia's debts. But negotiations with the London Club will be difficult and protracted, according to Zadornov. The daily attributed that assessment to the presence of U.S. investment banks in the London Club that "are more aggressive toward Russia." However, the newspaper commented that the worst that can happen is that London Club creditors can declare Vneshekonombank in default: "To bankrupt Russia they will have to prove in court that the Russian government is legally responsible for the debts of the Soviet bank." JAC CONSTITUTIONAL COURT RULES ON TROPHY ART LAW... The Constitutional Court on 20 July ruled that parts of the so- called trophy art law are unconstitutional, but it stopped short of declaring the legislation invalid. The court determined that cultural valuables seized from Nazi Germany at the end of World War II and now located on Russian territory should not be returned to former "aggressor- countries." At the same time, it said that countries that fought against Hitler as well as victims of the Holocaust and the Hitler regime are entitled to the restitution of their cultural heritage. The court also ruled that parliamentary procedures were violated when the law was passed. Russian President Boris Yeltsin had been forced to sign the law in April 1998 but simultaneously filed an appeal with the court challenging the law's contents and the procedures used to adopt it (see "RFE/RL Newsline," 16 April 1998). JC ...GERMANY'S RUHRGAS HELPS FUND AMBER ROOM RESTORATION. One day before the Constitutional Court ruling on the trophy art law, the Germany company Ruhrgas announced it is donating some $3.5 million to help restore the Amber Room of the summer palace at Tsarskoe Selo, whose panels were plundered by Nazi troops during World War II. Work on the project was recently halted because of a lack of funding. JC RUSSIA MAY SUPPLY SYRIA WITH AIR DEFENSE SYSTEMS... Russian military-industrial enterprises have begun preparing a contract on the delivery to Syria of S-300 (SA-10) anti- aircraft defense systems, Interfax reported on 19 July, citing an unidentified "informed source." The contract is to be drawn up by the Russian arms exporter Rosvooruzhenie and fulfilled by the Moscow-based Almaz central design bureau. The source did not specify when the document would be signed or how many systems delivered. JC ...WHILE HELPING CHINA, SOUTH KOREA DEVELOP AIR DEFENSE. The Almaz bureau is currently developing parts of air defense systems for China and South Korea, the bureau's director, Nikolai Polyashev, told Interfax on 20 July. He noted that these activities are being supervised by the federal authorities, in particular the Russian Defense Ministry, adding that "numerous countries" have asked Almaz to develop various elements of their air defense. Also on 20 July, Colonel-General Leonid Ivashov, who oversees Russia's military cooperation with foreign countries, told Interfax that the Russian and Chinese Defense Ministries are expanding contacts in two spheres--defense and military technology. He stressed that all weaponry delivered to China is of a defensive nature. JC U.S. ASKS MOSCOW TO RESPOND TO Y2K TRANSITION PROPOSAL. A U.S. Defense Department official told Reuters on 20 July that Washington has again asked Moscow to participate in an effort to minimize the risk of misunderstandings over missile launches at the beginning of the year 2000. The official said that the latest "U.S. overture" was made fairly recently but that Russia has not yet responded. Washington wants Moscow to take part in a temporary "early warning" center in Colorado that would keep missile-launch commanders informed about what the other side sees and does on New Year's Eve, the agency reported. Meanwhile, Norway's Bellona environmental group has said that Russia's Northern Fleet lacks funds to deal with the Y2K problem and that its warning systems may report non- existent missile attacks at the start of the millennium, AP reported. The Northern Fleet, for its part, has said its nuclear weapons can be launched only manually. JC ARMY CLAIMS LITTLE AFFECTED BY ELECTRICITY SHUT-OFF IN FAR EAST. The Strategic Rocket Forces press service denied that any "direct danger" resulted from electricity being shut off to "objects of secondary significance" at the 11th Army of the Air Force and Anti-Aircraft Defense Forces based in Khabarovsk Krai, "Izvestiya" reported on 21 July. News agencies had reported the previous day that an electricity cut-off resulted in radar units losing their ability to monitor the country's air border (see "RFE/RL Newsline," 20 July 1999). Lieutenant-General Aleksandr Ionov, acting chief of the Air Force Main Staff, told "Rossiiskaya gazeta" the same day that the power outage did not affect the 11th Army's combat capability and the air border remained sealed. According to a Unified Energy Systems spokesman, the 11th Army has not paid for electricity in Khabarovsk for the past three years, which has put Khabarovskenergo on the brink of bankruptcy, ITAR-TASS reported on 20 July. JAC CHECHNYA MOVES TO REPAIR PIPELINE. Transneft Vice President Oleg Gordeev told ITAR-TASS on 20 July that Grozny is working to restore its section of the Baku-Novorossiisk pipeline. Since 7 July, Russia has been bypassing Chechnya by shipping oil to Dagestan via pipeline and from there by train. PG INGUSH PRESIDENT APPROVES POLYGAMY. Ruslan Aushev on 20 July issued a decree permitting male residents of the Republic of Ingushetia to have up to four wives, Caucasus Press reported. Aushev said he took the decision in response to "the current demographic situation in the republic" and he added that he is appealing to the Russian State Duma to make the necessary modifications in the country's family code. PG NORTH OSSETIAN LEADER URGES RUSSIA TO COMBAT OUTSIDE INFLUENCES IN CAUCASUS. North Ossetian President Aleksandr Dzasokhov told Caucasus Press and ITAR-TASS on 20 July that Russia must expand its influence in the North Caucasus via diplomatic and special services means. "The day has come," he said, "when Russian diplomacy must ensure that the Caucasus is an area of Russian and not North Atlantic national interests." And he complained that the Russian Foreign Ministry has been slow in responding to the U.S. challenge in this region. PG ARMENIAN, RUSSIAN PREMIERS AGREE TO MEET MONTHLY. Following their session in Moscow on 20 July, Russian Prime Minister Stepashin and his Armenian counterpart, Vazgen Sarkisian, agreed to meet approximately once a month "not to start chattering about problems but to settle issues in a working environment," Armenpress reported. PG TRANSCAUCASUS AND CENTRAL ASIA AZERBAIJAN'S ALIEV WELCOMES TALKS WITH KOCHARIAN. Azerbaijani President Heidar Aliev on 19 July told U.S. Ambassador to Baku Stanley Escudero that he felt his 16 July meeting with Armenian President Robert Kocharian was "very significant," even though the two sides remained far apart, Turan news agency reported on 20 July. "I feel we are both trying to understand each other, and I want this to yield results and bring peace," Aliev said. PG AZERBAIJANI OFFICIALS MOVE AGAINST OPPOSITION. During the last few days, the Baku authorities have moved against several opposition figures and groups. On 20 July, the trial of Geyrat Party chairman Ashraf Mekdiyev on charges of insulting President Aliev continued, Turan reported. On 19 July, Baku police prevented United Azerbaijan Movement leader Ashdar Tagizade from flying to Switzerland. And on 18 July, officials in Ganja prevented Democratic Party of Azerbaijan (DPA) activists from holding a meeting by briefly detaining 10 DPA members, Baku's "525 Gazet" reported on 20 July. PG IRANIAN ENVOY REFUSES BAKU POST. Abdulnaser Himmati, who was recently named Tehran's ambassador to Azerbaijan, has refused to take up his position, "525 gazet" reported on 20 July. An ethnic Azerbaijani from Iran's Hamadan, Himmati reportedly cited personal reasons. This is the second time an Iranian appointee to Baku has refused to serve there; the first was in 1994. Meanwhile, Azerbaijan's Space television reported that various Azerbaijani opposition groups have picked the Iranian embassy in Baku to protest what they say is Iranian repression of ethnic Azerbaijanis in Iran. PG GEORGIAN ANGER AT LEBED COMMENTS GROWS. Revaz Adamia, the chairman of the Georgian parliament's Defense Committee, sharply criticized Aleksandr Lebed, the governor of Russia's Krasnoyarsk Krai, for his comments in Ajaria (see "RFE/RL Newsline, 19 July 1990), Prime News reported on 20 July. Part of the reason for this reflects Tbilisi's concern about unsettled conditions in that region, the Georgian news agency reported. PG KAZAKHSTAN POLICE ARREST SUNNI FAITHFUL. The authorities arrested 70 people in Zhambul region on 19 July, Kazakh Khabar television reported on 20 July. Originally suspected of being Wahhabis or escaped prisoners, those arrested proved to be Sunni Muslims, a group permitted by Kazakhstan's legislation. PG FIRST CENSUS RESULTS IN KYRGYZSTAN. The Kyrgyzstan authorities on 20 July released the first results of a census conducted there last spring, Interfax reported. The country's population now stands at 4.856 million, up 13 percent since 1989. Final results from this first post-independence count are to be released by the end of the year. PG TAJIKISTAN BANS CARRYING ARMS IN PUBLIC. The Tajik government and the United Tajik Opposition on 17 July agreed to ban carrying arms in public, Interfax reported on 20 July. The Russian news agency said the order seems to have had an effect almost immediately in Dushanbe. PG NIYAZOV RENAMES TURKMENISTAN CITY. On 19 July, President Saparmurad Niyazov renamed Chardzhou Turkmenabad, Interfax reported. He said he took this step to ensure that the names in the country reflect its rebirth. PG NO AFGHAN ACCORD AT TASHKENT TALKS. Two days of talks in Tashkent between Afghan factions and the six countries supporting a peace effort there have ended without significant progress. The meeting concluded with a declaration that a military solution is impossible and that there must be further talks, Interfax reported on 20 July. PG 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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