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RFE/RL NEWSLINE Vol. 3, No. 210, Part I, 27 October 1999
___________________________________________________________ RFE/RL NEWSLINE Vol. 3, No. 210, Part I, 27 October 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 *** Note to readers: "RFE/RL Newsline" will not appear on 28 October, which is a national holiday in the Czech Republic. *** xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Headlines, Part I * FIGHTING ESCALATES IN CHECHNYA * KEY BUDGET OFFICIAL CALLS NEW DRAFT A STEP BACK * RUSSIA CRITICIZES GEORGIA'S ASPIRATIONS TO NATO MEMBERSHIP xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx RUSSIA FIGHTING ESCALATES IN CHECHNYA... Russian air and artillery bombardment of Grozny intensified on 26 October and ground forces continued their advance on the capital in what Chechen chief of staff Mumadi Saidaev called "the fiercest and biggest battle" since the beginning of the war, Interfax reported. Early on 27 October, Russian troops were reported to be just some 7 kilometers north of Grozny. Reuters quoted unnamed Chechen officials as saying that Russian forces had taken the town of Sernovodsk, 43 kilometers west of Grozny. Interfax said Rusian forces have also taken the villages of Azamat-Yurt, Stepnoe, Nizhnii Gerzel, and Kadi-Yurt and are closing in on Gudermes, east of Grozny. Maverick field commander Salman Raduev, together with Arbi Baraev, is coordinating the defense of Gudermes, according to Interfax. LF ...AS FIELD COMMANDERS VOW RETRIBUTION FOR GROZNY MARKET BOMBING. Meeting in Grozny on 26 October, Chechen field commanders issued a statement blaming the Kremlin for the 21 October blast in Grozny's central market place, which killed more than 100 people, Interfax reported. They vowed that "this crime will not go unpunished." In a statement circulated on 25 October in the electronic Turkestan Newsletter, Chechen President Aslan Maskhadov warned that some groups within the Chechen army might act independently to carry out acts of retaliation, targeting nuclear powers plants, reservoirs, dams, and oil refineries elsewhere in the Russian Federation. LF U.S. URGES RUSSIAN RESTRAINT TOWARD CHECHNYA... At a news conference with Dutch Foreign Minister Jozias van Aartsen on 26 October, U.S. Secretary of State Madeleine Albright said the U.S. "urges Russia not to repeat the mistakes of the past in Chechnya and instead open a dialogue toward a peaceful resolution with legitimate Chechen partners," AP reported. Aartsen said that "a warning toward Russia is necessary." JAC ...EXPRESSES CONCERN OVER RUSSIAN STATEMENTS ON ABM... The same day, U.S. Secretary of State Albright told journalists that she is "troubled" by reports of statements by some Russian military on the U.S.'s "interest" in developing a limited national defense system. She said that First Deputy Defense Minister Nikolai Mikhailov's warning that Moscow could "overcome" such a system (see "RFE/RL Newsline," 26 October 1999) was an "overreaction," adding that she does not want anyone, whether in the U.S. or Russia, "to be reviving old problems." Meanwhile, Interfax reported that during his visit to Moscow on 27-28 October, U.S. Deputy Secretary of State Strobe Talbott is expected to hold talks with Russian First Deputy Foreign Minister Grigorii Berdennikov, who last week took part in another round of U.S.-Russian disarmament talks in the Russian capital. JC ...PROPOSES MOSCOW REAL ESTATE DEAL. Also on 26 October, Interfax cited unidentified sources as saying the U.S. is proposing that Russia transfer ownership of five real estate properties in Moscow, including the residence of the U.S. ambassador, in payment of the Soviet Union's lend-lease debt. Under a 1985 agreement, according to the agency, the U.S. agreed to pay 72,500 rubles ($2,800) annually, but more recently the Russian government has suggested an annual rent of $890,000. The agency also reported that Russia's outstanding debt for assistance that the U.S. provided during World War II is some $600-$700 million. JAC KEY BUDGET OFFICIAL CALLS NEW DRAFT A STEP BACK... In an interview with Ekho Moskvy on 26 October, State Duma Budget Committee Chairman Aleksandr Zhukov slammed the new version of the budget approved by the State Duma in its first reading on 26 October. He said that the government "has taken a major step back" and as a result the draft document is "less realistic." In the new version, revenues are set at 797.2 billion rubles ($31 million at the current exchange rate) and expenditures at 855.1 billion rubles. Zhukov added that the Budget Committee will consider amendments to the budget for its second reading on 30 October, which will likely be held during the first week of November. The third reading must be held before 28 November if the budget is to be approved before the end of the year, Zhukov warned. JAC ...SAYS IMF MAY DISAPPROVE. Zhukov also said the IMF may not approve of the 2000 draft budget in its current form because the fund "views the additional revenues of the 2000 budget as unrealistic in many aspects." Deputy Finance Minister Tatyana Golikova was more optimistic, telling reporters the same day that the government will show the IMF how budget revenues will be increased without decreasing the primary surplus. She added that "we are well aware that the 20.1 billion ruble increase in revenues will necessitate strenuous work on the part of all fiscal agencies." Finance Minister Mikhail Kasyanov admitted that the government will "need fresh consultations with the IMF to explain the basis for the rise in revenues." JAC GOVERNMENT PROMISES ALL EXPORTERS WILL SHARE THE PAIN. State Duma Budget Committee Chairman Zhukov said that additional taxation of oil and gas exporters required to meet the budget's new revenue requirements will deal "a serious blow to those industries." However, Deputy Finance Minister Golikova noted that although increasing the export duty on oil has been discussed for a long time, "it would be premature to speak about concrete figures." And First Deputy Finance Minister Aleksei Kudrin told Interfax on 26 October that "several commodities will face higher export duties next year besides oil." JAC RUMORS ABOUT PUTIN'S 'TRANSFER TO ANOTHER POST' HEAT UP... "Moskovskii komsomolets" argued on 26 October that despite President Boris Yeltsin's assertion the previous day that he still fully supports Putin, the prime minister's position remains shaky. The newspaper, which is close to Moscow Mayor Yurii Luzhkov, claims that "it is common knowledge that media magnate Boris Berezovskii wants Putin out." It also suggested that Yeltsin's conference with security ministers during Putin's absence from Moscow "looks suspicious" since "who or what prevented the president from postponing the conference by a day?" Putin, meanwhile, is taking the speculation in stride, according to Russian Public Television. "Gossip will exist as long as politics exists," he said. Vladimir Pribylovskii of the Panorama Research Center told "The Moscow Times" on 26 October that "firing Putin would be completely illogical right now, but we have learned never to explain or predict Yeltsin's behavior from the point of view of logic." JAC ...AS YELTSIN PLANS TO TAKE ANOTHER HOLIDAY. Presidential spokesman Dmitrii Yakushkin announced on 26 October that Yeltsin plans to take a holiday starting 27 October for "not less than a week." Yakushkin also claimed that Yeltsin still plans to attend an OSCE summit in Istanbul on 18-19 November. JAC RUSSIA LOOKING TO SELL FIGHTER JETS TO LIBYA... Deputy Trade Minister Vladimir Pakhomov said on 26 October that Russia hopes to boost sales of fighter jets and other warplanes next year and intends to "resume cooperation with Libya and other countries that feel a need for multi-purpose fighters of the SU-type," AP reported, citing ITAR-TASS. Pakhomov noted that sales prospects have become brighter since three factories involved in the production of SU-type fighters consolidated their export efforts, ending competition between them. JC ...DENIES SUPPLYING IRAN WITH PROHIBITED GOODS VIA CASPIAN. Interfax on 26 October reported that the Russian Foreign Ministry has issued a statement "categorically denying" claims that Russia is using the Caspian Sea as a route for supplying Iran with components for weapons of mass destruction. Citing intelligence services in the West and Middle East, London's "The Times" had reported the previous day that Russia and Iran are believed to have concluded a "secret agreement" whereby a Russian shipping company with branches in Europe has been contracted to transport "prohibited components" from Europe to Russian ports on the Caspian Sea. From there, according to the newspaper, Russian and Iranian shipping companies transport the goods to Iran. JC INFLATION PROJECTIONS RISE. The Economics Ministry reported on 26 October that the annual rate of inflation in 1999 may reach 41-43 percent, and not 30 percent, as was projected in the 1999 budget, according to Interfax. During the first nine months of the year, inflation totaled 31.4 percent. Central Bank Chairman Viktor Gerashchenko, however, has come up with a different figure. He told reporters on 25 October that Russia will likely end the year with an annual inflation rate of 38 percent and money supply growth rates of 43-50 percent. Previously, the money supply was predicted to increase by 18- 26 percent, according to ITAR-TASS. JAC CIS CUSTOMS UNION MEMBERS MEET. Meeting in Moscow on 26 October, the presidents of the five members of the CIS Customs Union--Russia's Boris Yeltsin, Belarus's Alyaksandr Lukashenka, Kazakhstan's Nursultan Nazarbaev, Kyrgyzstan's Askar Akaev, and Tajikistan's Imomali Rakhmonov--signed 10 agreements, including one imposing value-added tax in the place of destination and one on rail transport tariffs. The five leaders also signed a "Moscow Declaration" stressing the importance of political and economic stability as a basis for further economic integration and condemning "all forms of international terrorism and religious extremism," Russian agencies reported. In addition, Russia, Belarus, and Kazakhstan agreed on a shared position on accession to the World Trade Organization, of which Kyrgyzstan is already a member. The participants praised the role of Nazarbaev, who is chairman of the Inter-State Council, in reversing the decline in trade between the union's member states that followed the 1998 Russian financial crisis, according to "Nezavisimaya gazeta" on 27 October. LF EBRD DENIES CO-FUNDING CHECHEN BYPASS PIPELINE. A spokesman at the London headquarters of the European Bank for Reconstruction and Development denied on 26 October that the bank is contributing to the funding of the oil pipeline bypassing Chechnya, ITAR-TASS reported. The construction of the pipeline began the same day. Interfax on 19 October had quoted Semen Vainshtok, director of the Russian pipeline operator Transneft, as saying that Russia's Sberbank and the EBRD has agreed to guarantee $120 million to fund that project. Transneft Deputy Director Sergei Ter-Sarkisyants said on 26 October that the company has lowered the cost of the bypass pipeline from more than $180 million to under $100 million and could provide at least half of that sum from its own funds. LF TRANSCAUCASUS AND CENTRAL ASIA COUNCIL OF EUROPE SAYS ARMENIAN LOCAL ELECTIONS 'FREE AND FAIR.' In a statement issued in Yerevan on 26 October, a delegation from the Council of Europe Local and Regional Authorities of Europe described the Armenian local elections two days earlier as free, fair, and a significant improvement on the 1996 local ballot, Noyan Tapan and RFE/RL's Yerevan bureau reported. The delegation, whose members visited 88 polling stations, said the vote was well organized and that voting and the vote count were conducted in conformity with the election law. This positive assessment is likely to expedite Armenia's full membership in the Council of Europe. LF U.S. DEPUTY SECRETARY OF STATE VISITS AZERBAIJAN. Visiting Baku on 26 October, Strobe Talbott assured Azerbaijan's President Heidar Aliev that the U.S. appreciates and will do its best to support Aliev's efforts to resolve the Karabakh conflict, Reuters and ITAR-TASS reported. Talbott is to travel to Yerevan on 27 October and then to Moscow (see above). The U.S. hopes to persuade Aliev and his Armenian counterpart, Robert Kocharian, to sign a formal settlement of the conflict at the OSCE summit in Istanbul in November, but Kocharian has said he considers the venue inappropriate (see "RFE/RL Newsline," 19 October 1999). Talbott and Aliev also discussed the planned Baku-Ceyhan oil export pipeline. Turkey and Azerbaijan are to sign four legal and political agreements that constitute the framework for that project at the Istanbul summit. LF NEW AZERBAIJANI FOREIGN MINISTER NAMED. President Aliev on 26 October named parliamentary deputy and Democratic Independence Party co-chairman Vilayat Guliev as foreign minister, Reuters and Turan reported. Guliev, who is 48, is a philologist who speaks English and Persian. He has never worked in foreign policy or held any diplomatic post, according to Turan. Guliev replaces Tofik Zulfugarov, who submitted his resignation on 24 October to protest Aliev's policy on resolving the Karabakh conflict. LF ANOTHER WESTERN OIL COMPANY PULLS OUT OF AZERBAIJAN. The Houston-based oil company Conoco has announced the closure of its Baku office, following its failure after three years of talks to reach agreement with the Azerbaijan state oil company SOCAR on reviving the shallow-water sector of the Gyuneshli oil field, Business Wire and Interfax reported on 21 and 26 October, respectively. Meanwhile a SOCAR spokesman told Interfax on 21 October that he opposes the over-hasty implementation of plans for the company's partial privatization. Under those plans, which President Aliev has not yet approved, the state would retain a 15 percent stake in SOCAR and in the Azerkhimiya, Azerigaz and Azerenergiya companies. Thirty percent of the shares would be sold at a cash auction and the remaining 55 percent for vouchers. LF RUSSIA CRITICIZES GEORGIA'S ASPIRATIONS TO NATO MEMBERSHIP... In an indirect response to a remark made the previous day by Georgian President Eduard Shevardnadze to the "Financial Times," the Russian Foreign Ministry on 26 October issued a statement warning that NATO enlargement "does not help to strengthen stability in the Euro-Atlantic region," ITAR-TASS reported. Shevardnadze had told the London-based daily that if he is re-elected president next year, Georgia will campaign vigorously for NATO membership. The Russian Foreign Ministry statement said that doing so "is not the way to solve the problem of the security of one's own country or on the whole continent." In a separate development, an unnamed Russian Foreign Ministry official told Interfax on 26 October that Russia is interested in the strengthening of peace and stability in Georgia and in continuing its policy of pursuing friendly relations with that country. Also on 26 October, Shevardnadze and Russian President Yeltsin held a telephone conversation, no details of which have been disclosed. LF ...AS GEORGIA DENOUNCES RUSSIAN OFFICER'S ELECTION COMMENTS. The Georgian Foreign Ministry on 26 October officially protested as "provocative and irresponsible" a remark made by Major General Vyacheslav Borisov, commander of the Russian military base in Batumi, to the independent Rustavi-2 TV station two days earlier, ITAR-TASS and Caucasus Press reported. Borisov had said that the majority of troops at the base support the election alliance headed by Adjar Supreme Council chairman Aslan Abashidze. He said if that bloc wins the 31 October parliamentary elections, the new parliament will ratify the 1994 agreement allowing Russia to maintain military bases in Georgia for 25-30 years. The Georgian protest note said Borisov's statement constitutes interference into Georgia's internal affairs. LF COMPOSITION OF NEW KAZAKH PARLIAMENT BECOMES CLEARER. The Otan Party, which supports Kazakhstan's President Nursultan Nazarbaev, will be the largest faction in the lower chamber of Kazakhstan's new parliament. It won 15 of the 47 seats contested in the second round of voting on 24 October, giving it a total of 23, Interfax reported on 26 October, quoting Central Electoral Commission member Tatyana Okhlopkova. The Civic Party, which also supports the Kazakh leadership, won three additional seats, giving it 12 in all. The Communist Party has three seats, the Agrarian Party two, and the Republican People's Party of Kazakhstan one. It is unclear how many of the remaining deputies are nominally independent but support the present government. LF TURKMEN PRESIDENT SAYS 'ANYONE' MAY RUN FOR PARLIAMENT, PRESIDENT. In a 27 October speech marking the anniversary of Turkmenistan's 1991 declaration of independence, Saparmurat Niyazov promised that the 12 December parliamentary elections will be free and democratic and that anyone may run as a candidate, RFE/RL's Turkmen Service reported. He added that all candidates will be granted access to state television to publicize their election programs. Niyazov similarly said that "anyone" is free to contest the presidential elections due in 2002. LF 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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