|Thursday, 5 December 2019|
RFE/RL Newsline, 02-10-17
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
 PUTIN WARNS OF ECONOMIC STAGNATION...In a written statement addressed to the second annual national congress of Business Russia, a national organization of medium-sized and large businesses, President Vladimir Putin gave an unusually pessimistic assessment of the Russian economy, polit.ru and other Russian news agencies reported on 17 October. Putin wrote that the economy "is stuck in a condition of sustainable stagnation as its dynamic for growth is disappearing." The president said that all the economy's growth in recent years can be attributed to inflation and increasing revenues from energy exports, while the influx of "fresh investment" has steadily declined. He stressed that the large number of technological disasters in 2002 is a warning sign that Russia's production infrastructure is on the brink of collapse in 2003. Finally, Putin wrote that Russia remains an unattractive investment target because it has failed to minimize political and economic risks and to modernize the banking system. VY
 ...AS STATE OPENS SAFETY VALVE ON SOCIAL PROTESTMore than 9 million workers took part in nationwide demonstrations on 17 October against delays in wage payments and price increases for communal services, ITAR-TASS reported, citing Federation of Independent Trade Unions (FNPR) head Mikhail Shmakov. The demonstrations in Moscow, St. Petersburg, Nizhnii Novgorod, Saratov, and about 20 other large Russian cities were organized by the FNPR and the pro-Kremlin Unified Russia party. According to Shmakov, whose trade unions are considered to be closely controlled by the government, the private sector of the economy accounts for 87 percent of all wage arrears. He said that the FNPR has refused to participate in any joint actions with the Communist Party. VY
 PREMIER OPTIMISTIC ABOUT PENSION REFORMOpening a government session on 17 October, Prime Minister Mikhail Kasyanov expressed confidence in the process of reforming the country's pension system, strana.ru and other Russian news agencies reported. Kasyanov said that the initial reforms have enabled the government to increase monthly payments to 12 million pensioners by an average of 350 rubles ($12), noting that pensions were increased in February and again in August. The prime minister also emphasized that contributions to the pension system from workers are increasing and that about 70 percent of workers are currently paying into the system. Mikhail Zurabov, head of the Pension Fund, reported that the government will invest up to 100 billion rubles in securities this year, strana.ru reported, citing RIA-Novosti. Kasyanov urged the government to complete work on draft legislation on pensions that is supposed to take effect at the beginning of next year. RC
 TOP EU DELEGATION ARRIVES FOR TALKS IN MOSCOWSenior European Union officials including High Representative for the Common Foreign and Security Policy Javier Solana and External Affairs Commissioner Chris Patten began talks in Moscow on 17 October concerning the dispute over the Kaliningrad exclave, Russian and Western news agencies reported. According to ITAR-TASS, Solana said it is essential to resolve the Kaliningrad issue before the Russia-EU summit to be held in Copenhagen on 11 November. The two sides are also expected to discuss Iraq. ITAR-TASS quoted Solana as saying upon arrival that it is necessary "to achieve complete consensus" how to deal with Baghdad. RC
 U.S., RUSSIA SEEK TO 'PRESERVE THE UNITY OF THE UN SECURITY COUNCIL' ON IRAQForeign Minister Igor Ivanov discussed the Iraq situation with U.S. Secretary of State Colin Powell by telephone on 17 October, Russian and Western news agencies reported. According to a statement released by the Foreign Ministry, "both sides expressed concrete suggestions on how to preserve the unity of the UN Security Council...on this important issue." Russia again repeated its opposition to any resolution authorizing the automatic use of force against Iraq. The ministry also reported that Ivanov has told UN Secretary-General Kofi Annan by telephone that any new resolution "must be directed at the soonest possible resumption of the work of international weapons inspectors in Iraq." RC
 CENSUS COUNTS PRISON POPULATION...Ilya Kolubelov, spokesman for the Interior Ministry's Main Corrections Directorate, has said the census within the prison system was completed ahead of schedule and, according to its results, the country has 919,000 prisoners, including 130,000 in pretrial detention, Russian news agencies reported on 15 October. Kolubelov said the prison census was finished so quickly because inmates did not need to answer many questions, such as those about the size of their housing or their sources of income. VY
 ...AS ACTIVISTS INTERPRET RESULTS IN CHECHNYAAs demographers attempt to explain the unexpectedly high census figures from Chechnya (see "RFE/RL Newsline," 16 October 2002), a source from the human rights organization Memorial told RFE/RL's Russian Service on 16 October that this phenomenon can be explained by the harsh policies of the Russian military against the republic's civilian population. Because of the widespread practice of "zachistki" -- rounding up and checking entire local male populations suspected of having ties to separatists -- many Chechens declared themselves residents of several cities or villages in order to avoid endless security checks of nonresidents. In this way, many locals were counted two or even three times, the Memorial source said. VY
 COMMUNIST LEADER SAYS BEREZOVSKII IS GOING WITH THE FLOWAddressing a gathering of young communists in Leningrad Oblast, Communist Party of the Russian Federation (KPRF) leader Gennadii Zyuganov said on 17 October that he understands the motives of self-exiled tycoon Boris Berezovskii, who recently indicated that he is ready to provide financial support to the leftist opposition (see "RFE/RL Newsline," 7,8, and 10 October 2002), Russian news agencies reported. Zyuganov said that Berezovskii has realized that the momentum of Russian political life has shifted toward the left. Zyuganov added that 1,850 young people have entered the KPRF in recent months, a figure that he noted exceeds the total membership of some Russian political parties. "Moskovskii komsomolets" reported on 16 October that Viktor Vidmanov and Vladimir Semagin, KPRF functionaries responsible for party finances, recently visited Berezovskii in London. According to the report, Berezovskii allegedly told them that he will provide funds to the KPRF if it nominates Duma Deputy Sergei Glaziev as its candidate for president. VY
 INTELLIGENCE OFFICER FACES TRIAL FOR TELEVISION APPEARANCEIn a closed session of the Moscow Military District Court, Aleksei Ivanov, a senior lieutenant of Russian military intelligence (GRU), stands accused of abusing his status as a security officer, "Komsomolskaya pravda" reported on 16 October. The accusations stem from an appearance Ivanov made on an STS television show called "Harem," in which female audience members observe and evaluate the masculine qualities of male contestants. Ivanov participated in some "adventure" scenes shot in Africa. GRU officials now charge that Ivanov violated the organization's secrecy and illegally crossed several international borders, the daily reported. If convicted, Ivanov faces up to three years in prison. VY
 MOSCOW ELITE SPLIT OVER KALMYKIA PRESIDENTIAL RACE...Federation Council Chairman Sergei Mironov joined Central Election Commission Chairman Aleksandr Veshnyakov on 16 October in calling for Kalmykia President Kirsan Ilyumzhinov to take a leave of absence until the republic's 20 October presidential election is over, Interfax and "Trud" reported. According to "Trud," the Moscow-based political elite is divided in its attitude toward Ilyumzhinov. In February, a group of representatives from the Communist, Union of Rightist Forces, and Yabloko parties reportedly approached President Putin complaining that Ilyumzhinov has created "a corporate state system with no separation of powers or genuine local government, a system that suppresses fundamental civil rights and liberties." However, more recently State Duma Speaker Gennadii Seleznev praised Ilyumzhinov, noting that the republic's capital Elista is "better than many other regional capitals." JAC
 ...AS IS THE KREMLINAccording to "Kommersant-Daily" on 14 October, the Kremlin is also split over the race. Reportedly, one group in the Kremlin led by presidential administration head Aleksandr Voloshin supports Ilyumzhinov, while Interior Minister Boris Gryzlov and deputy presidential administration head Viktor Ivanov are actively working for Ilyumzhinov's removal. In an interview with "Kommersant-Daily" on 16 October, Baatr Shondzhiev, deputy chairman of the administration of the High Technology Bank and one of Ilyumzhinov's chief rivals in the race, claimed that he has conducted negotiations with Ivanov regarding the election. Shondzhiev also claimed that Gryzlov has signed an order dismissing Kalmykia Interior Minister Timofei Sasykov, who is a firm supporter of Ilyumzhinov. President Putin must also approve the order. According to Shondzhiev, if the order dismissing Sasykov is signed, it will mean that Ilyumzhinov has lost the election. According to "Kommersant-Daily" on 14 October, the leadership of the Interior Ministry is dissatisfied with the criminal situation in Kalmykia and with Ilyumzhinov's alleged ties to the criminal underworld. Viktor Ivanov is a former deputy director of the Federal Security Service. JAC
 LEGISLATORS NIX MONUMENT FOR NICHOLAS...Duma deputies voted on 16 October to reject a bill calling for the erection of a monument to Tsar Nicholas II on Lubyanka Square in Moscow (see "RFE/RL Newsline," 16 October 2002), Russian news agencies reported. According to RosBalt, only 12 legislators voted in favor of the bill, while 52 voted against and one abstained. The bill was sponsored by independent deputy Aleksandr Fedulov, who was tossed out of the Unity faction last April for proposing a bill to ban the Communist Party (see "RFE/RL Newsline," 5 April 2002). JAC
 ...BUT RAISE MINIMUM MONTHLY WAGE INDEXOn the same day, legislators approved in its first reading amendments to the law on intellectual property. The vote was 299 in favor with no votes opposed, according to ITAR-TASS. According to Nikolai Gubenko (independent), chairman of the Committee on Culture and Tourism, the amendments would bring Russian law into conformity with the Berne Convention for the Protection of Literary and Artistic Works, which Russia joined in 1995. The bill would also bring certain trade aspects of intellectual-property rights into correspondence with World Trade Organization requirements. Also approved on 16 October was a bill raising the minimum monthly wage index to 600 rubles ($19) a month. The vote was 405 in favor, with one against and two abstentions, ITAR-TASS reported. JAC
 FEDERATION COUNCIL REJECTS ENERGY-RATES BILL...The Federation Council on 16 October rejected a bill passed by the Duma last week that would establish new rates for electricity and heating, RIA-Novosti reported. The bill received only 68 of the 90 votes necessary to pass. Fifty-two senators voted against the bill, and eight abstained. Deputy Economic Development and Trade Minister Andrei Sharonov spoke against the bill, pointing out that a number of its provisions conflict with existing legislation. The bill will now go to a conciliation commission. Vyacheslav Volodin -- head of the Fatherland-All Russia faction, which sponsored the bill in the Duma -- told Interfax he thinks it is possible the Duma has enough votes to override the upper chamber's veto. Deputy head of the Yabloko faction in the Duma Sergei Mitrokhin condemned the upper chamber's decision. "Once again the Federation Council has confirmed that it is an appendage of the oligarchic system and is concerned with the interests of large monopolies and not the regions," he said. JAC
 ...BUT PASSES BILLS ON MONEY LAUNDERING AND BANKRUPTCYOn the same day, the council adopted a bill on money laundering, which the Duma approved on 27 September, and a law on bankruptcy. The latter bill was originally approved by both the Duma and the Federation Council last summer, but was vetoed by President Putin on 25 July. JAC
 DONOR REGIONS ARE NO MOREThe so-called donor regions no longer exist in the original sense of the term, "Vremya MN" reported on 16 October, citing a Deutsche Bank analyst. According to the 2002 law on the budget, all regions -- including the traditional donor regions, such as the cities of Moscow and St. Petersburg -- receive transfers from the federal budget from various funds such as the Federal Fund for Aid to the Regions, the Compensation Fund, the Fund for Regional Development, the Fund for Co-Financing Social Expenditures, and the Fund for Reforming Regional Finance. In a comment to the daily, Duma Deputy Igor Lisinenko (Unity) said he agrees that there are no donor regions left, with the possible exception of the oil-producing republics and oblasts. He added, "Today there are no sources for replenishing local budgets, and all the most significant taxes go to the federal treasury." Consequently, governors, "in the search for new sources of revenue, will start with uncontrolled 'tax reform,' raising consumption taxes, including those on land and real estate," he continued. JAC
 PERM -- BULWARK OF RUSSIAN DEMOCRACYNikolai Petrov, an expert on regional politics formerly of the Carnegie Moscow Center, presented on 15 October the results of election research he conducted over the past seven years in 88 regions, "Izvestiya" reported on 16 October. Petrov looked at a number of different indicators to measure the level of democracy in Russia, and some of his preliminary conclusions are surprising. For example, the most democratic region in the country appears to be Perm Oblast, and in three of the 10 most democratic regions, the governors in charge are Communists. These regions are Nizhnii Novgorod, Ivanovo, and Kamchatka oblasts. Other regions in the ranks of the top 10 are Novosibirsk, Moscow, Tambov, Leningrad, Kaliningrad, and Sakhalin oblasts. Listed among the least democratic regions are Orel Oblast, the republics of Tatarstan, Bashkortostan, Tuva, Mordovia, and Kalmykia, and the Agin-Buratskii Autonomous Okrug. JAC
 REQUIEM FOR AN INDEPENDENT NEWSPAPERThe independent newspaper, "Novyi Reft" which was published in the Sverdlovsk Oblast village of Reftinskii, has closed, RFE/RL's Yekaterinburg correspondent reported on 16 October. The newspaper's former editor-in-chief, Eduard Markevich, was shot dead in September 2001 outside of his home, and his widow, Tatyana Markevich, has now closed the newspaper because of fears for her own life and that of her son. Following her husband's death, Markevich had been putting out the newspaper almost by herself. Now she no longer feels that she can put out an independent newspaper and plans to leave the village entirely, RFE/RL's correspondent reported. Recently, someone threw a dumbbell through her apartment window with a note attached reading, "Remember, you do not have to do this." The newspaper was published for six years with a print run of about 2,000 for the town that has a population of 19,000. JAC
 CHECHEN ADMINISTRATION OBJECTS TO PLANNED TALKS BETWEEN DUMA DEPUTY, CHECHEN PRESIDENT'S REPRESENTATIVEAslanbek Aslakhanov, who represents Chechnya in the Duma, told Interfax on 16 October that he plans to meet soon in Switzerland with Chechen Vice Premier Akhmed Zakaev, who is President Aslan Maskhadov's personal representative, to discuss "any ways of avoiding the further killing of civilians in Chechnya." He added that preparations should begin now for eventual talks between the Russian leadership and Maskhadov's representatives in order to ensure that no "silly conditions" are laid down at those talks. "Kommersant-Daily" on 17 October reported that former Russian Security Council Secretary Ivan Rybkin will accompany Aslakhanov, and that they will propose to Maskhadov that Chechnya in future be granted "full or partial autonomous status" within the Russian Federation. Chechen Security Council Secretary Rudnik Dudaev made clear his objection to any such meeting, telling Interfax the same day that, as Chechnya's Duma deputy, Aslakhanov should act according to the position of the republic's leadership. Dudaev said no negotiations should be undertaken with "rebels," meaning Maskhadov and his supporters, until the latter put down their arms and surrender. LF
 CHECHEN PEACE CONFERENCE ORGANIZERS SOLICIT INPUT FROM MASKHADOVThe organizers of a two-day international conference to be held in Moscow on 9-10 November on possible approaches to ending the Chechen war have written to Maskhadov and Zakaev to ask them to submit their position on doing so, chechenpress.com reported on 17 October. The organizers hope that the conference will result in an immediate cessation of hostilities, including "sweeps" of Chechen villages, and the beginning of talks without preconditions on the basic principles for restoring peace in Chechnya. They propose taking as a basis for those talks the peace treaty signed in May 1997 between Maskhadov and then-President Boris Yeltsin and subsequent documents drafted during talks in 1997-98 between Chechen representatives and the Russian Security Council. LF
 EU, UN APPROVE MORE AID FOR CHECHNYAAn EU commissioner announced in Brussels on 16 October that the EU has allocated some 20.5 million euros ($20.1 million) to supply food, tents, and medications to Chechen displaced persons this winter, Reuters reported. Also on 16 October, a senior UN coordinator for humanitarian issues assured Chechen Deputy Prime Minister Aminat Batyzheva in Grozny that the UN plans to increase humanitarian aid to Chechnya and to redirect most of that aid from Ingushetia to Chechnya. Chechen administration officials claim at least 70,000 displaced persons have returned from camps in Ingushetia to Chechnya in recent months. LF
TRANSCAUCASUS AND CENTRAL ASIA
 ANOTHER PARTY BACKS INCUMBENT ARMENIAN PRESIDENT'S BID FOR RE-ELECTIONAt a meeting in Yerevan on 16 October, members of the extraparliamentary Ramkavar-Azatakan Party announced their support for President Robert Kocharian's candidacy in the presidential elections scheduled for 19 February 2003, Noyan Tapan reported. The party also formally endorsed the economic and social policies of the current leadership. Prime Minister Andranik Markarian's Republican Party of Armenia expressed its support earlier this month for Kocharian's candidacy (see "RFE/RL Newsline," 10 October 2002). LF
 ARMENIA ESTABLISHES COMMISSION TO PROBE HUMAN TRAFFICKINGArmenian Prime Minister Markarian established a special government commission on 16 October that is to investigate allegations that the country has failed to comply with the "minimum standards" to prevent human trafficking, RFE/RL's Yerevan bureau reported. A U.S. report issued last June alleged that Armenia is "a source country for women and girls trafficked to the United Arab Emirates, Turkey, Russia, Greece, and Germany for sexual exploitation." LF
 ARMENIA, RUSSIA REVIEW ECONOMIC COOPERATIONPresident Kocharian and other senior members of the Armenian leadership met on 16 October with Nikolai Ryzhkov, who is co-chairman of the Russian State Duma's group for cooperation with the Armenian parliament, ITAR-TASS reported. Kocharian expressed satisfaction that bilateral cooperation is expanding to encompass ever new spheres of activity. Armenian Trade and Economic Development Minister Karen Chshmaritian said that Russia is Armenia's largest trade partner, accounting for 18.9 percent of that country's foreign trade. Deputy parliament speaker Gagik Aslanian, who is the Armenian co-chairman of the commission, noted that bilateral trade turnover has grown by 7 percent this year to reach $56.6 million. Trade with Moscow alone amounts to $34.4 million, Aslanian said. LF
 RUSSIAN AIR FORCE COMMANDER VISITS ARMENIAColonel General Vladimir Mikhailov, who is commander of the Russian Air Force, met on 16 October in Yerevan with Armenian Defense Minister Serzh Sarkisian and President Kocharian to discuss bilateral military cooperation in general and cooperation within the framework of the CIS collective air-defense system in particular, Noyan Tapan reported. LF
 NATO COMMANDER VISITS AZERBAIJANOn a one-day visit to Baku on 16 October, General Joseph Ralston, who is NATO Supreme Allied Commander Europe, met with Azerbaijani President Heidar Aliev, who assured him of Baku's intention to expand cooperation with NATO, Interfax reported. Ralston also met with Foreign Minister Vilyat Quliev and Defense Minister Colonel General Safar Abiev. Ralston advocated a peaceful solution to the Karabakh conflict, saying force should be used only as a last resort. He added that NATO does not intend to become involved in mediating a solution to that conflict. LF
 GEORGIAN PRESIDENT WARNS ADJAR LEADER...Addressing a government session in Tbilisi on 16 October, Georgian President Eduard Shevardnadze harshly criticized the leadership of the Adjar Autonomous Republic for its chronic failure to transfer tax revenues to the central budget, Caucasus Press and Interfax reported. Interfax quoted him as warning that "whoever in Adjaria is dreaming about breaking away from Georgia must forget [such aspirations]." Georgian Finance Minister Mirian Gogiashvili said Adjaria's failure to transfer 3 million laris ($1.38 million) to Tbilisi last month was one of the reasons for Georgia's failure to meet its budget revenue targets in September. (The total shortfall was 8 million laris.) Georgian Minister of State Avtandil Djorbenadze traveled to Batumi last month in an apparently unsuccessful attempt to persuade Adjar State Council Chairman Aslan Abashidze to meet his financial commitments to the central budget. LF
 ...WHOSE SUPPORTERS RETALIATEParliament deputy Sandro Bregadze, who represents Abashidze's Revival Union, told parliament on 16 October that Shevardnadze's warning to the Adjar leadership was "dangerous," inappropriate coming from the president, and "aimed at splitting the country," ITAR-TASS and Caucasus Press reported. He added that he intends to raise in parliament the question of Shevardnadze's impeachment. But Revival Union faction head Djemal Gogitidze expressed doubts that a majority of parliament deputies would support a bid to impeach the president, Caucasus Press reported. He predicted that they are more likely to favor amending the constitution to allow Shevardnadze to seek a third presidential term. LF
 GEORGIA DEPLOYS MORE POLICE ON INTERNAL BORDER WITH SOUTH OSSETIAThree more police checkpoints have been set up in Gori Raion, which borders on the unrecognized republic of South Ossetia, Georgian Interior Minister Koba Narchemashvili said on 16 October, according to Interfax. He said the increased Georgian police presence in the district is intended to prevent the smuggling of stolen cars and will facilitate the detention of Georgian-Ossetian criminal gangs. At the same time, he stressed that the Georgian action is on a much smaller scale than the ongoing anticrime sweep in the Pankisi Gorge. Narchemashvili welcomed reports that the South Ossetian police have launched their own anticrime operation (see "RFE/RL Newsline," 16 October 2002). Also on 16 October, Caucasus Press quoted North Ossetian President Aleksandr Dzasokhov as saying that Georgia will not launch a Pankisi-style anticrime and antiterrorism operation in South Ossetia. He added that during talks in Tbilisi on 12 October, he assured Shevardnadze that the joint Russian-Georgian peacekeeping force in South Ossetia is perfectly capable of keeping crime in check. LF
 ABKHAZIA ACCUSES GEORGIA OF DEPLOYING WEAPONRY IN KODORI GORGEGeorgia has moved air-defense systems and other military equipment into the upper reaches of the Kodori Gorge, Interfax on 16 October quoted Abkhaz First Deputy Premier and Defense Minister Raul Khadjimba as saying. Khadjimba said the Abkhaz leadership interprets that deployment as preparation for large-scale hostilities against Abkhazia. LF
 KAZAKH CUSTOMS OFFICIALS INTERCEPT RADIOACTIVE CARGOKazakh customs officials prevented the export to China last month of almost 900 kilograms of radioactive waste, Interfax and AP reported on 16 October. The material was in sacks hidden under the floorboards of a truck owned by a private Russian firm. LF
 KYRGYZ PROSECUTOR-GENERAL SACKEDPresident Askar Akaev dismissed Prosecutor-General Chubak Abyshkaev on 16 October and named Myktybek Abdyldaev, deputy head of the Defense and Security Department within the presidential administration, to succeed him, akipress.org reported. That agency said Akaev's decree did not specify the grounds for Abyshkaev's dismissal. But ITAR-TASS and Interfax both claimed he was fired for failing to comply with orders issued at a Security Council session in May calling for a thorough investigation of the clashes between police and protest marchers in Aksy Raion in March (see "RFE/RL Newsline," 23 May 2002). LF
 SUPPORTERS OF JAILED FORMER KYRGYZ VICE PRESIDENT DETAINED, RELEASEDFour supporters of former Vice President Feliks Kulov were briefly detained in Osh on 16 October for participating in an unsanctioned meeting to demand Kulov's release from prison, RFE/RL's Kyrgyz Service reported. Meanwhile, 32 people with the same objective are continuing hunger strikes in towns across the country. LF
 AFGHAN REPRESENTATION IN TAJIK AUTONOMOUS REGION TO BE UPGRADED TO CONSULATEAfghanistan's President Hamid Karzai has formally asked the Tajik government to approve the upgrading of the Afghan representation in the Gorno-Badakhshan Autonomous Oblast (GBAO) to the status of consulate, representation head Muhammad Ishoq told GBAO Chairman Alimamad Niyozmamadov, according to Asia Plus-Blitz on 16 October. The representation was opened two years ago and has facilitated the transport of humanitarian aid via Tajikistan to Afghanistan. LF
 TURKMEN PRESIDENT TIGHTENS CONTROL OVER FOREIGN-CURRENCY RESERVESPresident Saparmurat Niyazov issued a decree on 16 October intended to prevent a repeat of last month's theft of some $41.5 million from the Turkmen Central Bank's hard-currency accounts (see "RFE/RL Newsline," 23 September and 8 October 2002), Interfax and ITAR-TASS reported. In future, all hard currency transactions in connection with foreign-trade contracts must be signed by Niyazov himself, the chairman of the Bank's board, and the head of the State Development Fund. The decree also instructs Turkmen commercial banks to close immediately all correspondent accounts in foreign banks and to make foreign payments through the correspondent network of the Central Bank and the State Bank for External Transactions, according to ITAR-TASS. LF
 TURKMENISTAN IMPOSES BAN ON PRIVATIZATION OF OIL, GAS SECTORSPresident Niyazov told guests at an official banquet that privatization of Turkmenistan's oil-and-gas sectors will not be permitted for the next 15 years, ITAR-TASS reported on 16 October. He noted that those sectors constitute the foundation of the country's economy and provide some 70 percent of revenues. Nor will the state-owned railways and air-transport companies be privatized soon, Niyazov continued, although privatization will continue in the textile industry and agricultural sector. LF
 UZBEKISTAN ABOLISHES STATE MONOPOLY ON INTERNET ACCESSThe Uzbek government has lifted restrictions on Internet access, according to "Vedomosti" on 15 October. Users are no longer obliged to use only the centralized state Internet provider UzPAK. LF
CENTRAL AND EASTERN EUROPE
 BELARUS'S LOWER HOUSE TO QUESTION PROSECUTOR-GENERAL ABOUT DISAPPEARANCESThe Chamber of Representatives has endorsed a motion by deputy Valery Fralou to question Prosecutor-General Viktar Sheyman about investigations into the disappearances of some of President Alyaksandr Lukashenka's major political opponents in 1999-2000, Belapan reported on 16 October. In particular, Fralou wants to know who gave the orders to arrest and subsequently release Dzmitry Paulichenka, the commander of an elite police unit, who was alleged to be in charge of a death squad involved in the abduction and murder of opposition politicians Yury Zakharanka and Viktar Hanchar, businessman Anatol Krasouski, and journalist Dzmitry Zavadski (see "RFE/RL Poland, Belarus, and Ukraine Report," 12 June and 28 August 2001). Fralou also wants Sheyman to explain why the whereabouts of journalist Dzmitry Zavadski are still unknown despite the arrest and conviction of his alleged kidnappers this past March. Fralou is expected to raise the issue of disappearances at a parliamentary hearing on 23 October. Sheyman is among the officials invited to speak at the hearing. JM
 FOUR UKRAINIAN LAWMAKERS SUSPEND MEMBERSHIP IN MAJORITY...Four deputies from the People's Power caucus have suspended their membership in the recently created pro-government parliamentary majority pending a parliamentary investigation into an alleged attack on their colleague, deputy Volodymyr Sivkovych, UNIAN reported on 16 October. The majority numbers 225 deputies as a result. Sivkovych, an independent lawmaker, maintains that he and Russian businessman Konstantin Grigorishin were attacked on 12 October by armed individuals in civilian clothes, purportedly police officers, when their automobile was stopped for a police check. Grigorishin was later arrested, reportedly on charges of illegally possessing a gun and "packets of white powder assumed to be cocaine," according to Interfax. The Verkhovna Rada set up an ad hoc commission on 15 October to investigate the incident. JM
 ...AS SPLIT IN PARLIAMENT CONTINUES TO GROWThe Verkhovna Rada on 17 October failed to place discussing the current political situation in Ukraine, a motion proposed by opposition groups, on the current session's agenda, UNIAN reported. The motion was supported by 205 deputies, 21 votes short of the number required for approval. The parliament also did not endorse a proposal by Our Ukraine to change parliamentary regulations to prohibit lawmakers from voting for absent colleagues using their magnetic voting cards. The opposition alleged that such cases of voting took place on 26 September (see "RFE/RL Newsline," 27 September 2002). Despite the controversy, parliamentary speaker Volodymyr Lytvyn has signed several legislative acts adopted that day, UNIAN reported on 17 October. JM
 UKRAINIAN JOURNALISTS CONFIRM EXISTENCE OF GOVERNMENT CENSORSHIPFour well-known Ukrainian journalists said during a briefing at RFE/RL's office in Washington, D.C., on 16 October that the recently launched independent trade union of journalists in Ukraine (see "RFE/RL Newsline," 7 October 2002) was a response to the government-imposed censorship on journalistic work in the country. The four -- Yuliya Mostovaya, Yevhen Hlibovitskyy, Andriy Shevchenko, and Roman Skrypin -- said that 300 reporters from throughout Ukraine have joined this new trade union because they believe they can no longer freely practice their profession. According to Hlibovitskyy, major media outlets are merely sideline businesses for a few oligarchs who are economically and politically dependent on President Leonid Kuchma, and thus subject to government interference on content issues. Skrypin observed that "censorship is a strangling snake," adding that managers simply order reporters not to run news items if they have received telephone calls from President Kuchma's office. Mostovaya described a basic government censorship technique, known as "temnyk," whereby reporters are issued written orders on how to treat, or ignore, political and business topics of the day. JM
 ESTONIAN EDUCATION MINISTRY NAME-CHANGE BILL APPROVEDWith 53 votes in favor, the parliament passed a bill on 16 October that would change the name of the Health Ministry to the Education and Science Ministry on 1 January 2003, ETA reported. Education Minister Mailis Rand said the name change would demonstrate to the public and foreign partners that the state considers science and research priorities for the development of the state. As part of the plan, the ministry would establish a new science policy department. SG
 LATVIA, BULGARIA SIGN FREE-TRADE AGREEMENTEconomy Ministry State Secretary Kaspars Gerhards and Bulgaria's Ambassador to Poland Lachezar Petkov signed a free-trade agreement in Riga on 16 October, BNS reported. It provides for free trade in industrial goods and reduces or totally abolishes customs taxes on agricultural products. As part of the agreement, in the event that either country becomes a member of the European Union the other will annul the agreement without making claims over resulting losses. In the first six months of this year, Latvia imported goods worth 2.78 million lats ($4.5 million) from Bulgaria and exported goods worth 141,000 lats. SG
 LITHUANIAN FOREIGN MINISTER REQUESTS SCHENGEN GUARANTEESAntanas Valionis told Danish Foreign Minister Per Stig Moeller and EU Enlargement Commissioner Gunter Verheugen in Copenhagen on 16 October that Lithuania should be given specific dates, timetables, and action plans to follow that would ensure the country's full membership in the Schengen zone, BNS reported. Valionis stressed that Lithuania has worked to join the Schengen agreement throughout its membership negotiations with the EU. Valionis noted that Lithuania will evaluate Russia's suggestion of visa-free transit by high-speed trains only after it has joined the EU and has received assurances that implementing the proposal would not hinder its plans to join the Schengen treaty. He also mentioned the suggestion made by President Valdas Adamkus in Berlin on 10 October that Lithuania should be admitted to the Schengen zone before gaining EU membership. SG
 POLISH PARLIAMENT PARALYZED OVER PRIVATIZATION ROWThe Sejm on 16 October ground to a halt after deputy Gabriel Janowski from the opposition League of Polish Families took the rostrum to protest the privatization of the Warsaw-based Stoen electricity distributor and then refused to leave it, Polish media reported. Speaker Marek Borowski postponed the debate until the morning of 17 October. The government announced on 15 October that it has struck a deal under which the German RWE concern will buy an 85 percent stake in Stoen for 1.5 billion zlotys ($364 million). The League of Polish Families' protest against the deal was supported by the Peasant Party (PSL), a coalition partner of the ruling Democratic Left Alliance (SLD). The PSL said in a statement that the Stoen privatization deal violates the PSL-SLD coalition agreement. Janowski remained in the parliamentary session hall overnight and was reportedly physically removed on the morning of 17 October. JM
 CONFERENCE IN WARSAW SAID TO START POLITICAL DIALOGUE IN UKRAINE...The two-day conference "Ukraine in Europe" with the participation of Ukrainian officials and opposition activists (see "RFE/RL Newsline," 16 October 2002) concluded in Warsaw on 16 October with what Polish President Aleksander Kwasniewski cautiously termed the possible beginning of a "thread of dialogue" between the Ukrainian government and the opposition, Polish media reported. "A success of this conference is in inaugurating the dialogue between the [Ukrainian] authorities and the opposition," Ukrainian presidential administration chief Viktor Medvedchuk told journalists. Our Ukraine leader Viktor Yushchenko also said the conference has proved that "dialogue is the only way out of Ukraine's crisis, the gravest in the past 11 years." JM
 ...WHILE KUCHMA WARNS OPPOSITION AGAINST PRESENTING 'ULTIMATUMS'Ukrainian President Leonid Kuchma came to Warsaw on 16 October, after the conference ended, and met with Kwasniewski and EU foreign policy chief Javier Solana, who also participated the Warsaw forum on Ukraine. "I honestly think the course Ukraine is taking now is not getting it closer to the European institutions; it is taking it farther away," Solana said at a joint news conference with Kuchma and Kwasniewski. Kuchma said he supports dialogue between the government and oppositions groups, but ruled out yielding to what he called "ultimatums," apparently referring to opposition demands for his resignation. "I always was and am open to dialogue, and not something else. If the other side wants dialogue and not just sinecures, then we can talk. If the talks are about sinecures and not about Ukraine, then there will be no accord," Polish Television quoted Kuchma as saying. JM
 CZECH PRESIDENT WARNS AGAINST NEW DIVISION OF EUROPE...Czech President Vaclav Havel said on 16 October that if the European Union does not expand, it could lead Europe to a new Iron Curtain-style division, CTK reported the same day. "If the great, currently planned enlargement were to be postponed by several years, it would start to be very dangerous for all of Europe," Havel told journalists after a meeting with Czech Foreign Minister Cyril Svoboda. Havel said a psychological barrier would emerge in Europe between the 15 current EU members and the rest of the continent. "This would be an impulse for a wave of various nationalist and populist movements that would make use of this in one way or another," Havel said. BW
 ...AND IMPLORES IRISH TO VOTE 'YES' IN EU REFERENDUMHavel also joined the presidents of Hungary, Poland, and Slovakia in appealing to Irish voters to approve the Nice Treaty allowing for EU expansion, Czech media reported on 16 October. In a joint statement, the presidents said Irish rejection of the treaty, which introduces reforms crucial to the enlargement process, would be "a great disappointment." Irish voters rejected the treaty in June 2001, prompting a second referendum that is scheduled for 19 October. BW
 EC REPORT COULD TURN PAGE ON BENES DECREES FOR CZECH REPUBLICThe Czech Republic has welcomed a European Commission report concluding that the post-World War II Benes Decrees are not an obstacle to Czech entry to the EU, CTK reported on 16 October, citing Foreign Minister Svoboda. "We said in Brussels on [15 October] that we have no problem with the conclusions of the report," Svoboda said. Experts from the European Commission and the Czech Foreign Ministry have been working on the report since May. The European Commission withheld publication of the 12-page report pending official Czech reaction. Once the report is published, the issue of the Benes Decrees will be closed as far as Brussels is concerned, Enlargement Commissioner Guenter Verheugen said on 11 October. Under decrees issued by Czechoslovak President Edward Benes after World War II, ethnic Germans, Austrians, and Hungarians were expelled and their property confiscated, and crimes against them were amnestied. Some German and Austrian politicians have insisted the decrees violate EU legislation and must be abolished before Czech accession. BW
 CZECH LAWMAKERS EXTEND MILITARY AND PEACEKEEPING PRESENCEThe Chamber of Deputies approved plans for a Czech field hospital to remain in Afghanistan until the end of this year, CTK reported on 16 October. A team of 20 Czech doctors will then stay on to work as part of an international field hospital for another 12 months. The lower house also extended the stay of a Czech antichemical-warfare unit in Kuwait until the end of 2003 and prolonged the mission of Czech peacekeepers in Bosnia and Kosova until the end of 2002. BW
 SLOVAK CABINET GETS DOWN TO WORKPrime Minister Mikulas Dzurinda presided over the new center-right government's first cabinet meeting on 16 October, the same day President Rudolf Schuster appointed Dzurinda's 15-member team (see "RFE/RL Newsline," 16 October 2002), TASR reported. The meeting focused primarily on preparing a draft budget and a governing manifesto, according to the news agency. In the area of foreign policy, Foreign Minister Eduard Kukan said the most important challenges facing Slovakia are completion of EU accession talks and receiving a NATO invitation at the November Prague summit. The new coalition government comprises the Slovak Democratic and Christian Union (SDKU), the Hungarian Coalition Party (SMK), the Christian Democratic Movement (KDH), and New Citizens Alliance (ANO). BW
 ONE IN THREE SLOVAKS SATISFIED WITH ELECTION RESULTSApproximately one-third of Slovak citizens are satisfied with the results of the September general elections, TASR reported on 16 October, citing an opinion poll released the same day. In a Focus poll of 1,089 respondents conducted on 1-8 October, 10.7 percent said they are very satisfied, while 25.4 percent said they are "rather" satisfied with the balloting. Some 14.3 percent said they are very unhappy with the results, while 16.8 percent are more dissatisfied than satisfied. Some 45.1 percent believe the new center-right coalition will be good for Slovakia, while 38.1 percent said the government will be bad for the country's future. BW
 HUNGARY'S SOCIALISTS THREATEN FIDESZ WITH EARLY ELECTIONSSocialist Party Chairman Laszlo Kovacs on 16 October told reporters that if the opposition FIDESZ party does not endorse constitutional amendments necessary for Hungary's EU accession, then early elections should be held, Hungarian dailies reported. Those amendments include subsumption of some Hungarian laws to EU legislation, electoral legislation, central-bank status, and citizens' rights, among other things. Kovacs said Hungary's EU accession is a historic opportunity and all resistance to it must be overcome. "If in no other way, then the will of voters should be solicited," he added. FIDESZ parliamentary group leader Janos Ader told MTI news agency that his party is prepared for such a challenge and accused the government of having no concept of how to attend to the nation's affairs. Free Democrat Chairman Gabor Kuncze said early elections would signal political instability at a time when the nation should display unity. Meanwhile, the FIDESZ leadership decided on 16 October that its representatives will attend four-party consultations next week on amending the constitution, according to "Magyar Hirlap." MSZ
 TWO-THIRDS OF HUNGARIANS BACK EU ACCESSIONSome two-thirds of Hungarians support accession to the EU, according to a poll conducted in August-September by M&H Communications, "Magyar Nemzet" reported on 17 October. The poll included 1,016 adults in five Hungarian cities. Only 17 percent of those questioned said they would like to take up a job in the EU, and then only if they could not find a suitable job in Hungary. The respondents agreed that successive governments have failed to inform the population on the consequences of EU membership. Sixty percent of respondents said they believe their income will increase following accession in the long run, while 12 percent said their income will likely decrease after EU membership. One in five said food prices will increase, and 23 percent anticipated a rise in the price of property. MSZ
 MONTENEGRO TO CHOOSE A PRESIDENTIn the next in a series of elections in former Yugoslavia, Montenegrins will vote for a president on 22 December, international and local media reported on 16 October. President Milo Djukanovic has already made it clear that he will seek another term. He is campaigning as a pro-European, reform-minded candidate who defends Montenegrin interests against Belgrade. His critics consider him corrupt but have never proved such charges in court. Many of his opponents in the Socialist People's Party (SNP) are tainted by years of association with the regime of former President Slobodan Milosevic. The contours of the political landscape will become clearer after 20 October, when Montenegrin voters select a new parliament. PM
 FEUD CONTINUES OVER SERBIAN PARLIAMENTARY SEATSThe Yugoslav Constitutional Court ruled on 16 October that the ousted members of the Serbian parliament who belong to the Democratic Party of Serbia (DSS) must be reinstated, RFE/RL's South Slavic and Albanian Languages Service reported (see "RFE/RL Newsline," 10, 12, and 13 June and 29 July 2002). The deputies lost their seats in June, ostensibly because of poor attendance but essentially as a result of a power struggle between Yugoslav President Vojislav Kostunica (DSS) and his archrival, Serbian Prime Minister Zoran Djindjic of the Democratic Opposition of Serbia (DOS) coalition. But also on 16 October, Slobodan Vucetic, who heads the Serbian Constitutional Court, said the Yugoslav court has no jurisdiction in the matter, according to the report. Djindjic expressed a similar view. Cedomir Jovanovic, who heads the DOS faction in the parliament, added that the legislature will not respect the federal court's decision. Djindjic's Democratic Party charged that the federal court is controlled by people close to Kostunica. PM
 KOSOVA ELECTRIC COMPANY CUTS OFF OSCE OVER UNPAID BILLSThe Kosova Energy Corporation (KEK) has disconnected the offices of the OSCE in several buildings because of over $73,000 in unpaid bills, AP and dpa reported from Prishtina on 16 October. An spokeswoman for the UN civilian administration (UNMIK) said that "some of the debt has been unpaid for up to 14 months." Almost 60 percent of KEK's customers owe it money, which it needs to buy electricity as winter approaches. In July, a fire damaged one of Kosova's main power plants (see "RFE/RL Newsline," 22 July 2002). KEK was at the center of a financial scandal earlier this year (see "RFE/RL Newsline," 2 May 2002). PM
 BOSNIAN NATIONALIST PARTIES CRY FOULRepresentatives of the three nationalist parties that won the most votes in the recent general elections said the Bosnian election commission is trying to deprive them of their victories in applying complex electoral legislation for assigning legislative seats, AP reported from Sarajevo on 16 October (see "RFE/RL Newsline," 8 October 2002). The legislation assigns most seats on the basis of proportional representation while reserving about 25 to 29 percent of the mandates as "compensation" for all parties that participated in the vote. Dusan Stojcic of the Serbian Democratic Party (SDS) said the commission is ignoring the will of the people in granting seats to smaller parties. Veso Vegar of the Croatian Democratic Community (HDZ) argued that Bosnia needs stable parliamentary majorities to carry out reforms. Sefik Dzaferovic of the Muslim Party of Democratic Action (SDA) charged that the commission is not strictly enforcing the laws. Zeljo Bosnjak of the Election Commission replied that, "This is not elections engineering. This is simply what the law says. Maybe some parties were too fast [in declaring] election victories." PM
 INTERNATIONAL REPRESENTATIVE SLAMS CALL FOR PARTITION OF BOSNIAPaddy Ashdown, who is the international community's high representative in Bosnia, strongly criticized a commentary by William Pfaff in the 10 October issue of the "International Herald Tribune," RFE/RL's South Slavic and Albanian Languages Service reported from Sarajevo on 16 October. In a letter to the paper's editors, Ashdown said Pfaff's call for a partition of Bosnia is dangerous and unacceptable. Pfaff argued that the recent Bosnian elections showed that the 1995 Dayton peace agreement has failed and that voters favor nationalist agendas. He added that the best approach now would be to give part of Bosnia to Serbia and part to Croatia, while turning the rest into a Muslim ministate with international guarantees. In the past, Britain's Lord David Owen and other observers have also criticized Dayton and called for reconsidering partition. But as Germany's Konrad Adenauer Foundation pointed out on 9 October, the nationalist parties did well in terms of the percentage of votes they won on 5 October but the SDS and HDZ won fewer votes in absolute terms than they did in 2000. PM
 INDICTED CROATIAN GENERAL TOO SICK TO TRAVEL?Doctors for retired General Janko Bobetko said in a statement in Zagreb on 17 October that he is bedridden and too ill to travel, AP reported. The 83-year-old Bobetko reportedly suffers from heart problems, diabetes, a leg injury, and stress. The international war crimes tribunal has indicted him and wants him to appear before it in The Hague. The Croatian government has asked the tribunal to reconsider its decision (see "RFE/RL Newsline," 16 October 2002). PM
 FORMER ALBANIAN QUEEN HOSPITALIZEDA spokesman for the former royal family said in Tirana on 17 October that Queen Geraldina Zog, 87, has been hospitalized for a lung condition, AP reported. She has been suffering from lung problems that doctors say are the result of her recent move from the plains in South Africa to Tirana. Her husband, King Zog, died in 1961. Queen Geraldina is of Hungarian origin. PM
 ROMANIAN NATIONAL BANK GOVERNOR PREDICTS LOWER YEAR-END INFLATION RATESpeaking at a Romanian-British economic forum in London on 16 October, Romanian National Bank Governor Mugur Isarescu said that, by the end of the year, Romania's inflation rate will be less than 18 percent, or three to seven percentage points lower than original estimates, Mediafax reported. He based his estimate on the 11.4 percent inflation recorded for the first nine months of this year. However, Economist Intelligence Unit expert on Romania Joan Hoey commented that there are still uncertainties regarding Romania's method of calculating inflation, as the percentage of families' average utilities expenditures are underrated and price hikes could significantly influence the inflation rate. A recent Deutsche Bank estimate predicted a 21.5 percent inflation rate and 4 percent economic growth for Romania this year. ZsM
 RUSSIAN DAILY SEES CONFLICT REPORTEDLY ARISING BETWEEN RUSSIAN AND ROMANIAN ORTHODOX CHURCHES"Nezavisimaya gazeta" reported on 16 October that a conflict of interest is emerging between the Russian Orthodox and the Romanian Greek Orthodox churches on the territory of Moldova, Romanian Radio reported. The Russian daily argued that by registering the Bessarabian Metropolitan Church, Moldovan authorities acceded to resolutions proposed by the Parliamentary Assembly of the Council of Europe in order to leave the door open for future integration with European structures. The article entitled "Bessarabia Vs. Moldova" claimed that Romanian authorities do not recognize Moldova as a separate state, do not recognize Moldovan history and culture, and that they intend to include Moldova in Romania's sphere of influence. It further accused Romania of financing "the rebirth of the church" in the Romanian diaspora and of paying the salaries of the Bessarabian Church's clergy. The article argued that the official recognition of the Bessarabian Church creates a "dangerous precedent for separating the churches." ZsM
 PREMIER INSISTS THAT EUROPEAN INTEGRATION REMAINS A MOLDOVAN PRIORITYMoldovan Premier Vasile Tarlev said on 16 October that European integration is one of the country's priorities, because Moldova is "a European country," an RFE/RL correspondent in Chisinau reported. Foreign Minister Nicolae Dudau likewise said Moldova's relations with the European Union are based on the government's foreign-policy strategy that sets European integration as a primary goal. The two officials were responding to comments made by European Commission Chairman Romano Prodi in which he told the Italian daily "La Stampa" of 15 October that the EU's expansion will stop at the borders of Russia, Ukraine, and Moldova. ZsM
 RUSSIA TO OPEN CONSULATE IN TRANSDNIESTER?Citing confidential sources, Flux reported on 16 October that the Russian Federation had begun diplomatic procedures for opening a consulate in Transdniester. According to the reports, Russian Ambassador to Chisinau Pavel Petrovskii spoke with Moldovan President Vladimir Voronin about the issue on 11 October, after the Russian Duma adopted a decision to open a consulate. Ukraine's Verkhovna Rada is also expected to vote by the end of this week on opening a consulate in Tiraspol. Previously, both the Moldovan authorities and opposition parties opposed the opening of foreign consulates in Transdniester, as doing so would mean official recognition for the breakaway region. ZsM
 BULGARIA HOSTS STABILITY PACT ECONOMIC FORUMSpeaking at the Stability Pact for Southeast Europe's economic forum in Sofia on 15 October, Deputy Stability Pact Coordinator John Riddle said that cross-border cooperation on infrastructure projects and the creation of a free market would lead to prosperity and long-term stability in the region, BTA reported. Riddle pledged that the Stability Pact will continue to support projects for border-area integration, strengthening institutions, democratization, and transport and energy projects. In his address, Economy Minister Nikolay Vasilev underscored that the 5 percent average economic growth in Southeast Europe is greater than the European average. According to Vasilev, stable prices, low budget deficits, low inflation, and low direct taxes are the basis for the region's future development. He admitted, however, that all countries in the region face high unemployment and low foreign investment. UB
 BULGARIAN INTERIOR MINISTRY CHIEF SECRETARY WILL NOT RUN FOR SOFIA MAYORInterior Ministry Chief Secretary Boyko Borisov said on 16 October that he has no intention of running for Sofia mayor in next year's local elections, bnn news agency reported. Legislators of the ruling National Movement Simeon II on 12 October proposed Borisov as a candidate to run against incumbent Mayor Stefan Sofiyanski. Sofiyanski and Borisov rank among the most popular officials in the country. UB
 FOUR WORKERS INJURED IN MISSILE-DESTRUCTION INCIDENTFour workers were injured in a blast that occurred during the destruction of Scud missiles at an ordnance factory in Veliko Tarnovo in north-central Bulgaria on 16 October, bnn news agency reported. The injured workers were hospitalized and the Defense Ministry has announced that they are in stable condition. In related news, some 100 people blocked a key highway in the vicinity of Veliko Tarnovo to protest the destruction of missile warheads at an army training ground in the area. UB
 TWO HUNGARIAN DIPLOMATS KILLED IN CAR ACCIDENT IN BULGARIATwo Hungarian diplomats -- Military Attache Tibor Hegyi and Consul Tamas Gali-Hirling -- died when the vehicle they were traveling in spun off a highway outside Sofia on 16 October, BTA reported. The Bulgarian driver survived the accident unharmed. Preliminary investigations have determined that the accident was not the result of any criminal wrongdoing. In other news, Hungarian President Ferenc Madl paid an official visit to Sofia on 15 October, meeting with parliamentary speaker Ognyan Gerdzhikov and Stanimir Ilchev, the chairman of the parliamentary Foreign Policy, Defense, and Security Committee. UB
 COW PATTIES IN HOUSTONBy Daniel Kimmage
With the United States an inveterate oil glutton and Russia a bounteously endowed producer of the stuff, perhaps the most surprising fact about the recent U.S.-Russia Commercial Energy Summit was that it was the first of its kind. Held in Houston, Texas, on 1-2 October, the summit was a forum for high-level talks on cooperation between the U.S. and Russian oil industries. Its organizers could hardly have hoped for a more dramatic context. The oil-rich Persian Gulf region is rife with talk of war; Americans are increasingly concerned about their country's dependence on energy sources in the Middle East; and Russia is emerging as one of the world's premier oil exporters.
The Houston summit boasted a blue-ribbon guest list, including U.S. Commerce Secretary Donald Evans and Energy Secretary Spencer Abraham, Russian Energy Minister Igor Yusufov and Economic Development and Trade Minister German Gref, and a plethora of heavy-hitting Russian oil executives, including Yukos head Mikhail Khodorkovskii and Tyumen Oil Company (TNK) President Semen Kukes.
Although it produced no bombshell agreements, the summit did serve to highlight tentative steps toward greater cooperation. Russian oil giant Yukos, which has already delivered three test shipments of crude to the United States, declared that such cargos are economically viable. Next month, TNK will make a 285,000-barrel delivery to the U.S. Strategic Petroleum Reserve through an American intermediary. And Rosneft signed a letter of intent with the U.S. company Marathon Oil to ship oil to the United States beginning in late 2003, Energy Intelligence Group reported on 4 October.
But Russia is literally on the other side of the world from the United States, making shipments to U.S. ports costly. More, Russia's inconveniently located oil reserves require extensive pipelines, and the country's existing network is already overburdened. Investments could alleviate these difficulties, but the sums needed are sobering. "Kommersant-Daily" reported on 2 October that Commerce Secretary Evans spoke in his introductory remarks to the summit of the need to invest $10 billion in the Russian oil industry -- annually. And American executives stressed that investments will hardly be forthcoming without production-sharing agreements, which the Russian Duma has been loathe to approve.
The specter of Iraq -- where Russia already has substantial interests and the United States would like to see sweeping changes -- haunts any U.S.-Russian oil dialogue, although summit participants soft-pedaled the issue. For now, sanctions have put most Russian projects in Iraq on hold, including LUKoil's $20 billion deal to develop the West Qurna oil field. Currently doing business in Iraq are Zarubezhneft -- which has concluded $45 million in contracts over the last six years and has $95 million more in the works -- and Slavneft, with $52 million in Iraqi contracts, according to "Ekspert," No. 31.
Recently, Iraq has dangled a $40 billion cooperation agreement before Russia, but its chances of bearing fruit under current conditions are nil. Moreover, if conditions change, competition for a piece of the Iraqi pie will likely include an entirely new cast of characters.Writing in "The Washington Post" on 30 September, Eugene Rumer of the Institute for National Strategic Studies boldly stated on the eve of the summit, "The latest Iraq crisis is an opportunity these Russian oilmen must have been praying for -- a chance to sell out [Iraqi President Saddam] Hussein in exchange for a piece of Iraqi oil and a new partnership with Washington." But the "Financial Times" cautioned on 4 October, "There are those in Washington who believe that Russia could substitute for Saudi Arabia in the oil market. They are wrong.... Russia faces enormous transport problems in getting its oil...to export markets. This makes shipping it to the U.S. profitable only at times of high oil prices, as now."
"Rossiiskaya gazeta," the official newspaper of the Russian government, was predictably enthusiastic about the summit, writing on 2 October about "creating a new economic commonwealth that in the near future could perhaps become a counterweight to OPEC." U.S. Ambassador to Russia Alexander Vershbow completed the diplomatic pas de deux the same day, writing in "Kommersant-Daily" that "the Houston meeting [showed that] the energy sector, energy security, and business cooperation are emerging as the key areas of development in Russian-American relations."
Other eyes were on Houston as well. In a 3 October editorial in the Saudi-owned daily "Al-Sharq Al-Awsat," al-Sirr Sayyid Ahmad wrote that the summit was part of a Russian-American strategy to "deprive OPEC of its control over international oil markets." Despite these plans, Ahmad felt confident that Saudi Arabia's "low production costs, high reserve-to-production ratio, excellent export facilities, and port accessibility...will stymie the expected Russian competition."
With the question mark over Iraq's future and all that goes with that fact looming large on the horizon, most of this expert commentary rings somewhat premature. What the Houston summit hinted at, however, was the emergence of a new context for Russian-American relations, as Vershbow wrote. For decades, that context was a basic and epic clash between two utterly different approaches to organizing humankind's affairs. Soviet leader Nikita Khrushchev quarreled with then-U.S. Vice President Richard Nixon in the so-called Kitchen Debate in 1959, and each year missiles rolled demonstratively through Red Square. The first post-Cold War decade, with its unfounded expectations and unformed partnership, left both countries groping for a new leitmotif.
Though usually short on results, blue-ribbon events are good for leitmotifs, and the Houston summit boasted its share of rhetorical bonhomie. Gref shed his usually dour image and appeared before a rodeo crowd dressed in cowboy attire. Yukos magnate Khodorkovskii tossed cow patties in a traditional Texan competition. Khodorkovskii finished last, leading a Russian delegate to remark -- with what irony we'll never know -- that the oligarch "doesn't have any experience throwing shit yet."
Slinging cow patties might lack the grandeur of the struggle between communism and capitalism, and it might seem a drastic comedown from the soaring rhetoric of the hoped-for postcommunist future, but with America's business still business, and oil and natural gas Russia's most desirable commodity, Khodorkovskii and other Russian magnates might yet have plenty of chances to sharpen their skills in this, and other, arenas.
Daniel Kimmage is the new editor of "RFE/RL Business Watch."