|Thursday, 5 December 2019|
RFE/RL Newsline, Vol. 1, No. 120, 97-09-18
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 1, No. 120, 18 September 1997
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 ARMENIA DENIES DEVELOPING NUCLEAR WEAPONSArmenian Defense and Foreign Ministry spokesmen have rejected Azerbaijani claims that Armenia is developing nuclear weapons at secret bases, RFE/RL's Yerevan bureau reported on 17 September. Azerbaijani Foreign Minister Hasan Hasanov made the allegations the previous day at a conference on nuclear non-proliferation in Tashkent. Armenian Foreign Ministry spokesman Arsen Gasparyan said Yerevan fully adheres to its obligations under the Nuclear Non-Proliferation Treaty and uses its nuclear potential "only for peaceful purposes." He said Armenia's Medzamor nuclear power plant is regularly inspected by the International Atomic Energy Agency, which, he stressed, has found no violations. Hasanov had called for the closure of Medzamor and for the declaration of the South Caucasus as a nuclear-free zone, according to Interfax.
 CHANGES TO KARABAKH PEACE PLAN IN OFFING?Armenian First Deputy Foreign Minister Vartan Oskanian told an RFE/RL correspondent in Yerevan on 17 September that he believes the co-chairmen of the Organization for Security and Cooperation in Europe's Minsk Group will make changes in their latest peace proposals for Nagorno-Karabakh. The co-chairmen are scheduled to arrive in the Armenian capital on 19 September. The unrecognized Nagorno-Karabakh Republic has already rejected the draft plan proposed by the Minsk Group in early June, and Armenia has expressed reservations. Oskanian said Yerevan has made alternative proposals, but he declined to reveal them. Karabakh President Arkadii Ghukasyan said on 17 September that Yerevan and Stepanakert have differing approaches to resolving the conflict but that they have the same strategic goal, Interfax reported.
 TWO UN OBSERVERS ABDUCTED IN WEST GEORGIATwo members of the UN observer mission in western Georgia were abducted on 16 September by unidentified persons, RFE/RL's Tbilisi bureau reported citing BS-Press. The two mission members were released the following day. A UN spokesman confirmed the abduction but gave no further details. The nationality of the abductors is not known.
 TURKMEN TENDER UPDATETurkmen Minister for Foreign Economic Relations Toyli Kurbanov says none of the international oil companies interested in developing 11 oil and gas deposits in the Turkmen sector of the Caspian Sea has questioned the legality of Turkmenistan's ownership of the Serdar (Kyapaz in Azerbaijani) field, "Nezavisimaya gazeta" reported on 18 September. Kurbanov reaffirmed Turkmenistan's claim to ownership of the Chirag and Azeri fields, which are being developed by a major Western consortium. He said that Turkmenistan will not prevent the consortium from developing the deposits in question but will insist that the Azerbaijani government give Ashgabat a share of the profits.
 ITALIAN PRIME MINISTER IN UZBEKISTANRomano Prodi met with Uzbek President Islam Karimov in Tashkent on 17 September to sign a friendship and cooperation agreement, Reuters and Interfax reported. At a joint press conference, Prodi said there is a "huge potential to expand our relations," while Karimov noted that bilateral trade was up 60 percent in the first half of 1997 compared with the same period last yar. The same day, an agreement was signed on setting up a joint venture between the Italian company Stet and the Uzbek government to form the telephone communications firm Udinet. The Italian oil company Agip is currently negotiating with Uzbekistan's state oil and gas corporation Uzbekneftegaz for rights to explore Uzbek fields.
 KARIMOV COMMENTS ON RUSSIA, AFGHANISTANAt the 17 September press conference with visiting Italian Premier Prodi, Karimov said problems in Uzbek-Russian relations were due to forces inside Russia that had not "renounced the imperial vision with regard to former USSR republics." Karimov said he wanted relations developed "on an equal basis" but added that relations in the CIS were being developed "according to Russia's desire." With regard to Afghanistan, Karimov said the problems there needed to be solved by the Afghan people. He objected to the Russian press's portrayal of General Abdul Rashid Dostum as an "Uzbek general." Dostum is an ethnic Uzbek who recently returned to Afghanistan. Meanwhile, ITAR-TASS on 18 September cited Taliban militia sources as saying they had captured the town of Khairaton on the southern bank of the Amu-Darya River, opposite the Uzbek city of Termez.
 KAZAKH OPPOSITION LEADER SENTENCEDMadel Ismailov, a leader of the Almaty's Workers Movement, has been sentenced to one year's hard labor, RFE/RL correspondents reported. Ismailov was found guilty of organizing "events that could cause mass unrest in the capital" in connection with his role in a 30 May demonstration in Almaty. Ismailov had been imprisoned while an investigation into the incident had taken place. During the trial proceedings, the judge asked the police chief investigator, Talghat Iskakov, if he was aware that under Article 2 of Chapter 170 of the criminal code, a person not considered dangerous cannot be imprisoned while an investigation is under way. Iskakov replied he had received his orders "from above" and had never read the relevant chapter of the criminal code.
 PROGRESS ON DEMARCATING KAZAKH-CHINESE BORDERKazakhstan and China have delimited another 11 kilometer stretch of their common border, near the Khan-Tengri peak, Interfax reported on 17 September. An agreement on that section of the border is expected to be signed when Chinese Premier Li Peng visits Kazakhstan on 25 September. Sections on the 1,700 kilometer border east of Almaty and in the far eastern part of Kazakhstan have still be determined.
[B] SOUTHEASTERN EUROPE
 TWELVE KILLED IN BOSNIAN HELICOPTER CRASHNATO peacekeepers on 18 September began to recover the bodies of 12 people killed when a UN helicopter crashed the previous day into a remote mountain in central Bosnia in heavy fog. The helicopter's four-man Ukrainian crew survived the crash. Among the dead are German diplomat Gerd Wagner, who was a deputy to Carlos Westendorp, the international community's chief representative in Bosnia. Westendorp said that Wagner was one of many dedicated foreigners who had sacrificed much time and effort to help bring peace to Bosnia.
 U.S. SUPPORTS DECISION NOT TO DISQUALIFY KARADZIC'S PARTYA State Department spokesman said on 17 September that Washington "strongly supports" the decision by U.S. envoy Robert Frowick not to disqualify Radovan Karadzic's Serbian Democratic Party (SDS) from the ballot in Pale in the 13-14 September local elections (see "RFE/RL Newsline," 17 September 1997). The spokesman stressed that any move to disqualify the SDS should have been made well before the elections and not afterward, as a court tried to do. To ban the SDS from the ballot after the elections, the spokesman continued, would disenfranchise voters who cast their ballots for that party. Meanwhile in Sarajevo, two legal advisers to the Organization for Security and Cooperation in Europe, which organized the elections, resigned to protest Frowick's decision.
 MORE ARRESTS ON CORRUPTION CHARGES IN CROATIAPolice officials announced in Zagreb on 17 September the arrests of seven military men and four civilians for involvement in an auto theft ring, an RFE/RL correspondent reported from the Croatian capital. The gang operated both in Croatia and in Bosnia, where car-theft is particularly lucrative business. In related news, the Croatian government on 16 September identified Petar Petric and Sretan Juric as the two top officials in the Economics Ministry arrested on 13 September for corruption (see "RFE/RL Newsline," 16 September 1997). The government said that the two had accepted a bribe of $90,000 from a businessman in return for offering to sell to the public $1.3 million worth of unspecified goods from state reserves. The businessman tipped off police, who then arrested the two officials.
 NEWS FROM FORMER YUGOSLAVIAIn Zagreb, Development Minister Jure Radic on 17 September told Metropolitan Jovan Pavlovic, the head of the Serbian Orthodox Church in Croatia, that the Church will get back all its property that the Communists nationalized 50 years ago. Across Serbia, campaigning is coming to an end for the presidential and legislative elections slated for 21 September. Police have recently used force against demonstrators opposed to Yugoslav President Slobodan Milosevic in Cacak, Kraljevo, and Nis, an RFE/RL correspondent reported from Belgrade on 17 September. Some 2,500 candidates will compete for 250 parliamentary seats, but most of the Serbian opposition and all ethnic Albanian parties are boycotting the vote. Leading presidential candidates are Milosevic aide Zoran Lilic, ultra-nationalist Vojislav Seselj, and opposition figure Vuk Draskovic.
 MACEDONIAN MAYOR JAILED FOR SPREADING ETHNIC HATREDA court in Skopje sentenced Rufi Osmani, the ethnic Albanian mayor of Gostivar, to 13 years and 8 months in jail for "fanning national, racial, and ethnic intolerance, inciting rebellion, and disregarding [the decisions of] the Constitutional Court." The Skopje court also sentenced Gostivar City Council President Refik Dauti to three years in jail. Osmani had allowed Albanian and Turkish flags to fly from the town hall in July after the court ruled that only the Macedonian flag could be flown from public buildings under most circumstances. Violent protests ensued when the Macedonian authorities ordered the flags taken down. Ethnic Albanians make up 23 percent of Macedonia's population.
 ALBANIA SAYS SERBIA MUST TALK TO KOSOVARSForeign Minister Pascal Milo said in Tirana on 17 September that Serbian officials must speak directly to representatives of the Kosovar Albanians and not expect the Albanian government to act as an intermediary. Milo was responding to speculation in the media that his upcoming talks in New York with Yugoslav Foreign Minister Milan Milutinovic will center on Kosovo. Meanwhile, the parliament passed an amendment to the press law in order to guarantee the opposition access to the state-run media (see "RFE/RL Newsline," 9 September 1997).
 ALBANIAN ELECTRIC POWER COMPANY FACES HUGE LOSSESThe state owned-electric power company faces a deficit of $ 43 million due to unpaid bills, "Dita Informacion" reported on 17 September. Robert Lalo, the company's investment director, told "Dita Informacion" that government funds for modernizing the outdated grid have been withheld for the last three months, which could endanger the winter power supply to the north. The World Bank is currently preparing a $50 million loan to upgrade five hydroelectric power plants. Lalo, however, indicated that Albania may soon have to import electricity.
 ROMANIA TO CHANGE INVESTMENT LAWThe government on 17 September decided to submit a new draft law on foreign investment that would put foreign and local investors on an equal footing, RFE/RL's Bucharest bureau reported. Since June, foreign investment has been regulated by a government ordinance that amended the 1991 law on foreign investment. Local investors and several parties in the ruling coalition protested what they considered to be discriminatory provisions in the amended law. The new law will be drafted by 20 October, coalition leaders said. Until then, the government ordinance remains in force.
 ROMANIA CALLS FOR COOPERATION AGAINST ORGANIZED CRIMEAddressing a three-day conference in Bucharest on crime in the Balkans and the Black Sea region, Calin Mateescu, head of the Romanian police unit for combating organized crime and corruption, urged East European countries to set up a regional body to combat the growth in organized crime. Mateescu said drugs and arms smuggling, money laundering, prostitution, and terrorism are spreading rapidly through the region. He also complained of the lack of a legal framework and a shortage of specialists and equipment to prevent crime, Reuters reported on 17 September.
 MOLDOVAN PREMIER MAKES CASE FOR FOREIGN INVESTMENTSpeaking at an international investors' forum in Chisinau on 17 September, Ion Ciubuc said that Moldova has passed legislation to facilitate foreign investment. He also pointed to the country's low rate of inflation and stable national currency, legislation on the protection of private property, and Moldova's location at the crossroads between Eastern Europe and the CIS. Ciubuc noted that in 1996, the private sector accounted for 50 percent of GDP and that 60 percent of the country's industry has already been privatized, Infotag reported.
 MOLDOVAN OPPOSITION DIVIDEDValeriu Matei, the leader of the Party of Democratic Forces (PFD), has denied that his party intends to set up an alliance with the pro- presidential For a Democratic and Prosperous Moldova (PMDP). Matei told journalists in Chisinau on 17 September that, despite the understanding reached between the PFD and the Democratic Convention of Romania (CDM) to refrain from mutual attacks, CDM leaders continue to accuse the PFD of obstructing the formation of a right-wing alliance and of serving the interests of the Left. Matei said those "absurd accusations" rule out the possibility of an agreement with the CDM. He said the PFD will continue negotiations with the Liberal Party and the National Peasant Party on running joint lists in the 1998 parliamentary elections, RFE/RL's Chisinau bureau reported.
 IMF EXPERT SAYS BULGARIA'S REFORMS "ON TRACK"Anne McGuirk, the IMF mission chief in Sofia, says economic reforms "appear to be on track" for Bulgaria. In an interview with "Bloomberg Financial News," McGuirk said she did not anticipate problems when an IMF review team arrives in Bulgaria in October to recommend whether Sofia should receive the next installment of a $647 million loan aimed at helping the transition to a market economy. McGuirk said Bulgaria's budget is now in better condition than had been expected several months ago. She recommended that proposed tax privileges for foreign investors be included in new tax legislation rather than a new foreign investment law. A proposed foreign investment law under consideration by the parliament calls for foreigners who invest more than $5 million to receive a 50 percent tax exemption for 10 years.
 BULGARIAN BANK RECEIVES CYPRIOT OFFSHORE LICENSEThe National Bank of Cyprus on 17 September announced it has granted the First Investment Bank of Bulgaria an offshore banking license, dpa reported. The Arab Bank PLC of Jordan has also received a license permitting it to participate in the $2 billion offshore Cypriot market. In other news, five Bulgarian local branch bankers and four currency dealers who worked for brokerage houses went on trial in Plodviv on charges of embezzling and illegally channeling abroad the equivalent of $6.3 million in state funds and depositors' savings. A prosecutor said that in 1994-1995, the defendants transferred money of unknown origin to 11 firms in Austria, Hong Kong, and Dubai, an RFE/RL corespondent in Sofia reported.
[C] END NOTE
 THE GREAT POKER GAMEby Liz Fuller
In recent weeks, Russian and Chechen leaders have engaged in a high-stakes exercise in brinkmanship over the planned export from Azerbaijan via Chechnya of Azerbaijan's Caspian oil. This has highlighted dissent in Moscow both over the importance of the pipeline and over support for the present Chechen leadership.
The first "early" oil from Azerbaijan's Chirag Caspian field is scheduled to be exported through the sole available pipeline, which runs from Baku via Grozny and Tikhoretsk to the Black Sea terminal of Novorossiisk. The export is scheduled to begin on 1 October, but extensive repairs and modifications to the pipeline are required before that date to make it operational.
Renovating the pipeline was a top priority of both the Russian and Chechen governments following the signing in May of a treaty formally ending Moscow's undeclared war against Chechnya. In July, Russian First Deputy Prime Minister Boris Nemtsov (who is also fuel and energy minister), Chechen President Aslan Maskhadov, and Natik Aliev, the president of Azerbaijan's state oil company SOCAR, signed a document providing for the annual export via Chechnya of 5 million metric tons of Azerbaijani oil. In addition, Moscow undertook to finance necessary repairs to the 153 kilometer sector of the pipeline that runs through Chechnya. Yarikhanov estimated that those repairs could be accomplished within 20-30 days at a cost of $2 million.
Within weeks, however, Yarikhanov complained that Moscow was sabotaging the agreement by failing to release the required funds for repairs. In early August, Russian Deputy Fuel and Energy Minister Sergei Kirienko said Grozny was making "impossible" tariff demands. He noted that his ministry had conducted feasibility studies on six routes for an alternative export pipeline through Dagestan, bypassing Chechen territory.
On 27 August, Kirienko resumed talks with the Chechen leadership on the question of transport tariffs. Under the July agreement, Russia was to receive $15.67 in transit fees per metric ton of oil and Chechnya $4-5. But Moscow apparently backtracked on that agreement and offered the standard rate--$0.43--for the transport of oil within the Russian Federation, instead of the $4.27 demanded by the Chechens.
In early September, Russian Security Council Secretary Ivan Rybkin tried to break the deadlock over tariffs by advocating that Chechnya be paid a lump sum from the federal budget to compensate for the lower tariff rate. The Chechen delegation rejected that suggestion but accepted Rybkin's proposal that Transneft pay the difference between the standard $0.43 and the $2.20 subsequently demanded by the Chechens. Nemtsov, however, rejected that option.
On 9 September, Nemtsov and Yarikhanov finally reached agreement on the terms for the export of 200,000 metric tons of oil in 1997. Chechnya is to be paid $0.43 per ton and receive from the federal budget an additional $854,000 to cover the cost of repairs to the pipeline. While professing at the time of signing to be satisfied with the compromise, each side threatened to abrogate the accord the following day unless the other agreed to additional conditions. Nemtsov said Russia would "tear up" the agreement if Grozny could not ensure the safety of members of the Russian repairs team, two of whom were injured in an explosion on the border between Chechnya and Dagestan on 9 September. Chechen First Deputy Prime Minister Movladi Udugov, for his part, said implementation was contingent on Moscow paying wage arrears to teachers and doctors in Chechnya.
Three days later, Nemtsov raised the stakes even higher by announcing that Russia will proceed with plans to build an alternative pipeline, bypassing Chechen territory. He explained that the throughput capacity of the existing pipeline is inadequate for the huge volumes of oil that will begin to be exported within several years. He added, however, that Russia will honor its commitment to the Chechens to repair the existing pipeline. Nemtsov predicted that the 283 kilometer bypass pipeline could be built within one year at a cost of $220 million. This would make it considerably cheaper than the proposed "main export pipeline" from Baku to the Turkish Mediterranean terminal at Ceyhan.
The decision to build a second Baku-Novorossiisk pipeline not only confirms Russian aspirations to exercise maximum control over the export of both Azerbaijani and Kazakh Caspian oil. It also appears to be a compromise between two camps within the Russian leadership. Nemtsov and Prime Minister Viktor Chernomyrdin both opposed concessions to the Chechens and therefore advocated a bypass pipeline, regardless of the consequences for the Chechen leadership.
President Boris Yeltsin and Rybkin, on the other hand, argued that Moscow should abide by its commitment to Maskhadov to provide funds for repairing the existing pipeline in order to enable Grozny to benefit from the transit tariffs. Maskhadov is currently under considerable pressure from rivals in Grozny, including maverick field commander Salman Raduev. In early September, Raduev threatened to prevent the recommissioning of the existing pipeline unless Russia officially recognizes Chechnya as an independent state.
Reprinted with permission of Radio Free Europe/Radio Liberty