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Newsline - March 10, 2006


FOREIGN MINISTER DENIES SECRET DEAL WITH IRAN
Sergei Lavrov said in Algiers on March 10 that Russia has not made a secret "compromise" agreement with the Iranian authorities for them to enrich uranium on their own territory, Interfax reported (see "RFE/RL Newsline," March 8 and 9, 2006). He noted that during his recent visit to Washington, "U.S. Secretary of State Condoleezza Rice thanked me for briefing her on [the latest Russian-Iranian contacts] and complained that the American press was abuzz with allegations regarding Russia's [alleged] 'compromise' proposal on Iran's research program." He added that Rice asked him to "deny these allegations...at a news conference," which he did. Russia has publicly made an offer to Iran to enrich its uranium on Russian territory. In related news, the Russian Foreign Ministry issued a statement on March 9 in which it called on Tehran to cooperate fully with the International Atomic Energy Agency (IAEA), which recently decided to forward its report on Iran's nuclear program to the UN Security Council. PM

WILL PUTIN'S VISIT TO ALGERIA YIELD AN ARMS DEAL?
President Vladimir Putin is slated to pay a brief visit to Algeria on March 10, French media reported. His trip was reportedly postponed by at least one day and shortened from two days to six hours after the Algerian side declined to give its final approval to a $4 billion arms package, which the Russian arms industry had hoped for (see "RFE/RL Newsline," March 8, 2006). Energy-related issues and Algeria's $4 billion debt to Russia are expected to dominate Putin's agenda. RIA Novosti reported that the arms deal might yet "be finalized after Putin's visit." PM

U.S. STUDY MEETS COOL RECEPTION IN SOME RUSSIAN MEDIA...
The recent study on Russian-American relations by the Council on Foreign Relations (CFR), an influential U.S. think tank, is not in keeping with the views of those people who currently make U.S. foreign policy, izvestia.ru reported on March 9 (see "RFE/RL Newsline," March 6, 2006). The website added that the study, which concludes that the United States should reconsider its definition of Russia as a so-called strategic partner, does not accurately describe Russian domestic realities or the real state of bilateral relations. The Moscow daily "Kommersant" noted on March 6 that the views of the CFR do not reflect those of the administration of President George W. Bush and are unlikely to find support in the White House. PM

...AND FROM THE MINISTER
Foreign Minister Lavrov told izvestia.ru of March 9 that he read the recent report on Russian-U.S. relations and was disappointed that the CFR lent its name to such a negative study. He added that none of the U.S. officials or members of the policy community he met on his recent trip to Washington mentioned the report, which indicates that it has not had much effect on policymakers. PM

EUROPEAN COURT SAYS POLICE MISTREATED RUSSIAN WOMAN
The Strasbourg-based European Court of Human Rights (ECHR) announced in a press release on March 9 that it has awarded 26-year-old Olga Menesheva from Russia more than $42,000 in compensation for police harassment and ill-treatment she suffered in 1999. She reportedly was arrested by three plainclothes police officers investigating a murder in her hometown of Bataisk, in southern Russia. She was then allegedly bundled into a car and taken to a police station, where she was beaten up and threatened with rape and violence against her family. The next day, a judge sentenced Menesheva to five days of detention for resisting arrest. The EHCR says in its ruling that the treatment Menesheva endured during her arrest amounted to torture and that Russian authorities have failed to investigate her claims of ill-treatment. The number of Russian cases judged in Strasbourg rose from 15 in 2004 to 83 the following year (see "RFE/RL Newsline," February 1, 2006). Russian citizens have filed a total of 28,000 complaints with the court since 1998. PM

RUSSIAN LEGISLATURE SLAMS UKRAINIAN CUSTOMS RULES
The Russian State Duma approved a resolution on March 10 denouncing Ukraine's new customs regulations requiring all cargo on the Transdniestrian stretch of its border with Moldova to be cleared by Moldovan customs officers, Russian news agencies reported (see "RFE/RL Newsline," March 8, 2006). Ukraine says that the regulations, which are backed by the European Union, are aimed at curbing illegal trade. The Duma resolution claims, however, that the Ukrainian authorities are seeking to put political pressure on the breakaway Transdniestrian republic. Oleg Morozov, who is the Duma's first deputy speaker, said that "the actions of the Ukrainian-Moldovan side regarding Transdniester have neither economic nor political justification. Instead, they are aggravating the situation in the region." PM

SUPREME COURT RULES IN FAVOR OF PIPELINE
The Russian Supreme Court ruled on March 10 against a complaint by eight environmental organizations and upheld a government decision to build an oil pipeline from eastern Siberia to the Pacific, RIA Novosti reported. Critics charge that the pipeline threatens the ecology of Lake Baikal (see "RFE/RL Newsline," March 7, 2006). PM

OLIGARCH LOSES IN COURT
The Moscow City Court decided on March 10 against an appeal by imprisoned oligarch Mikhail Khodorkovsky and his business partners Platon Lebedev and Andrei Krainov against their May 2005 convictions, RIA Novosti reported (see "RFE/RL Newsline," December 15, 2005, and February 9 and March 8, 2006). Khodorkovsky and Lebedev are serving prison sentences in remote areas, while Krainov received a suspended sentence. PM

SERGEANT RECEIVES SUSPENDED SENTENCE FOR HAZING
A military court in Novosibirsk gave a three-year suspended sentence on March 10 to Sergeant Stepan Khodorov for allegedly beating up Private Valery Makhnovsky in January, RIA Novosti reported (see "RFE/RL Newsline," February 1, 2006). The court concluded that unnamed other commanders tried to cover up the incident but will not press charges against them due to lack of evidence. Some of those commanders have already been disciplined by their superiors. In related news, Defense Minister Sergei Ivanov said in Moscow that hazing is a complex phenomenon and that the possible establishment of a military police force will not be a "magic" solution to the problem (see "RFE/RL Newsline," February 15, 2006). PM

RUSSIAN WEBSITE WARNED OVER MUHAMMAD CARTOONS
The website gazeta.ru says it received a warning on March 9 from the Rosohrankultura federal regulatory agency, which accused it of inciting religious hatred by publishing some controversial Danish cartoons of the Prophet Muhammad. The electronic newspaper says it published the cartoons to accompany an article on the unrest they sparked across the Muslim world. Rosohrankultura could ask a court to take away the newspaper's license following two warnings in one year. At least two Russian newspapers have had to close in the wake of the controversy over the cartoons (see "RFE/RL Newsline," February 15, 16, and 17, 2006). PM

BALKARS STAGE UNAUTHORIZED PROTEST
Following an official ceremony in Nalchik on March 8 to mark the 62nd anniversary of the deportation of the entire Balkar nation to Central Asia on the orders of Soviet leader Joseph Stalin, a group of Balkars staged an unofficial protest against alleged discrimination, kavkazweb.net reported on March 9 citing "Kavkazsky uzel." Specifically, the Balkars demanded modifying the existing internal border in order to "return" to the Balkars villages that fell under Kabardian control following the 1944 deportation, and they protested the new law on municipalities that redesignates as suburbs of Nalchik two Balkar-populated villages that previously had the status of separate municipalities. They also expressed concern over negative demographic trends: the death rate among Balkars exceeds the birthrate by a factor of three. The Balkars currently constitute approximately 10 percent of the total 786,200-strong population of the Kabardino-Balkaria republic (KBR); the Kabardians account for 50 percent and the Russians some 32 percent. Rasul Djappuev, chairman of the self-designated and as yet unregistered State Council of the Balkar People, claimed that the Balkars "have no political rights" and that ethnic Balkar deputies in the republic's parliament "do not defend the interests of the Balkar people." A second organization representing the Balkars recently praised KBR President Arsen Kanokov for his efforts to redress the Balkars' grievances, including over the redistricting law (see "RFE/RL Newsline," March 9, 2006). LF

NEW DAGHESTAN GOVERNMENT LINEUP NOT YET COMPLETE?
Daghestan President Mukhu Aliyev has named 15 members of the republic's new government, kavkazweb.net reported on March 9 quoting "Caucasus Times." In a break with the unwritten agreement that one of the republic's two top positions should go to an Avar and the other to a Dargin (the two largest of Daghestan's ethnic groups), Aliyev, who is an Avar, named Shamil Zaynalov (a Kumyk from the northern town of Khasavyurt) as prime minister, regnum.ru reported on March 6. Zaynalov, who is 59 and heads the republican branch of the pro-Kremlin Unified Russia party, has singled out as his priorities more effective investment programs and reviving viticulture. Of the 15 ministers named by Aliyev, 10 are holdovers from the outgoing government: first deputy prime ministers Nizami Kaziyev and Gitinomagomed Gadjimagomedov; Deputy Prime Minister Vyacheslav Akulinichev; and the ministers of finance (Abdusamed Gamidov); justice (Azadi Ragimov); health (Ilyas Mamayev); labor and social development (Ismail Efendiyev); nationality policy, information and international relations (Bekmurza Bekmurzayev); housing and communal services (Esenbulat Magomedov); and physical culture and sport (Shakhabas Shakhov). Lieutenant General Adilgirey Magomedtagirov was not reappointed to the post of interior minister, which apparently remains vacant. LF

AZERBAIJANI PRESIDENT SAYS DEMOCRACY 'CANNOT BE EXPORTED'
Speaking in Tokyo during a state visit, Ilham Aliyev declared that attempts to "export democracy don't work" and lead only to "social and political problems" and instability, zerkalo.az reported on March 10. Aliyev said the transition to democracy should be an "evolutionary process" that takes into account the "real state of society." During his visit, Aliyev met on March 8 with Emperor Akihito, and also participated in an Azerbaijani-Japanese business forum. LF

AZERBAIJAN'S TALYSH MINORITY ALLEGES LINGUISTIC DISCRIMINATION
Members of the Talysh National Movement have issued a statement claiming that the number of Talysh in Azerbaijan has been deliberately understated, and protesting the failure of the Azerbaijani authorities to provide education, newspapers, regular television broadcasts, and theater performances in the Talysh language, which is related to the Iranian language family, zerkalo.az reported on March 10. The statement claimed that there are currently 1.5 million Talysh in Azerbaijan (out of a population of 8.4 million), and that the findings of the 1999 population census, which estimated the number of Talysh at 79,000, are inaccurate. They said the current twice-weekly 15-minute television broadcasts in Talysh are inadequate, and demanded that the new independent public broadcaster provide greater coverage of Talysh issues. They further complained that no provision is made either for systematically training teachers for those schools where Talysh is taught in the first four grades. Philologist Novruzali Mamedov of Azerbaijan's Academy of Sciences told zerkalo.az that new Talysh-language textbooks have been authored for such schools, but it is not clear when they will be published and in how big a print run. LF

GEORGIAN PRESIDENT ALLEGES 'IDEOLOGICAL WAR'
Addressing representatives gathered in Tbilisi on March 9 of those states (Georgia, Ukraine, Lithuania, Latvia, Estonia, Romania, Moldova, Slovenia and Macedonia) that founded the Community of Democratic Choice in December 2005, Mikheil Saakashvili claimed that "very influential, very rich, very important forces" have launched what he termed an ideological war with the aim of discrediting Georgia in the eyes of the international community, Caucasus Press reported on March 9. He did not elaborate. LF

OPPOSITION PRESSURES GEORGIAN PRIME MINISTER OVER CASH REGISTERS...
Opposiiton parliament deputies joined thousands of traders who congregated outside the parliament building on March 9 to protest the law that took effect on March 1 requiring them to acquire cash registers, Caucasus Press reported (see "RFE/RL Newsline," March 2, 2006). When police moved in to disperse the protesters, they recongregated briefly in front of the state chancellery, then dispersed, vowing to reconvene on March 10. Four opposition parliament deputies demanded a meeting with Prime Minister Zurab Noghaideli, who initially refused to speak with them but backed down a few hours later. But Noghaideli told journalists after that meeting that the law on the mandatory use of cash registers will not be rescinded, Caucasus Press reported on March 10. Noghaideli claimed that the proceeds from the fixed tax that such traders have paid to date never reached the state budget. LF

... AND DEFENSE MINISTER OVER ABOLITION OF MILITARY INTELLIGENCE
Members of the parliamentary opposition demanded on March 7 that Defense Minister Irakli Okruashvili appear before parliament to explain his rationale for abolishing the military intelligence service, Caucasus Press and the independent television station Rustavi-2 reported. Premises belonging to that agency are reportedly being sold; some buildings have allegedly been demolished for redevelopment. LF

KYRGYZ PARLIAMENT SPEAKER AGAINST NO-CONFIDENCE VOTE IN GOVERNMENT
Marat Sultanov told a press conference in Bishkek on March 9 that a parliamentary deputy Iskhak Masaliev's March 7 proposal to hold a no-confidence vote on the government is "reasonable" but untimely, akipress.org reported. Sultanov said that while Masaliev had good reason to suggest a no-confidence vote over delays in supplying the population with new passports, "now is not the time for this." Sultanov added: "But if the problems with passports are not resolved by the end of April, it will be possible to raise the issue of 'no confidence' in the government." Addressing the general issue of relations between the executive and legislative branches, Sultanov said, "We should be constructive opponents." DK

TURKEY RESTRUCTURES KYRGYZ DEBT
Kyrgyzstan and Turkey have signed an agreement to restructure the $47 million debt Kyrgyzstan owes Turkey, akipress.org reported on March 9. Under the deal, Kyrgyzstan will pay the debt over a 33-year period with a three-year grace period and with interest payments calculated on only half of the total amount. Kyrgyzstan's Embassy in Turkey noted that the agreement was reached in the course of March 10-11, 2005 talks with the Paris Club, adding that the signing marks "the final stage of the negotiating process with Paris Club creditors." DK

KYRGYZ PRESIDENT REPLACES HEAD OF NEWS AGENCY
Kurmanbek Bakiev signed a resolution on March 7 removing Kubanychbek Taabaldiev from his post as director of the state-run information agency Kabar, akipress.org reported on March 9. The reason for Taabaldiev's removal was listed as "transfer to other work." His replacement is Oleg Ryabov, formerly the commercial director of the newspaper "Slovo Kyrgyzstana." DK

TURKMEN PRESIDENT DEMOTES FINANCE MINISTER
Saparmurat Niyazov has issued a decree removing Atamurat Berdiev as economics and finance minister, Turkmen TV reported on March 9. Niyazov appointed Berdiev head of the State Tourism Committee. Berdiev had served previously as deputy prime minister and oil and gas minister; he was removed from those posts in December in the course of a government reshuffle (see "RFE/RL Newsline," May 23, July 25, November 2, and December 19, 2005). DK

UZBEK PRESIDENT SIGNS LAW ON EURASIAN ECONOMIC COMMUNITY
Islam Karimov has signed a law enabling Uzbekistan to join the Eurasian Economic Community, ITAR-TASS reported on March 9. Uzbekistan began the entry process last year and the lower and upper houses of parliament ratified the protocol on entry in February. The Eurasian Economic Community's primary objectives are to coordinate efforts to gain admission to the World Trade Organization, to harmonize customs tariffs, and to develop common border regulations. Eurasian Economic Community members are Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. DK

UZBEKISTAN HOSTS SCO DRILL
Uzbekistan hosted a joint antiterrorist exercise dubbed "Vostok-antiterror 2006" (East-Antiterror 2006) from March 2-5 under the aegis of the Shanghai Cooperation Organization (members: China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan), Uzreport.com reported on March 9. The exercise scenario involved special forces and other law-enforcement agencies countering an attempt by terrorists to attack state facilities. The two-stage drill included a command and control exercise and an operation to neutralize terrorists. Officials from China, Kyrgyzstan, Russia, and Tajikistan attended. The report did not provide the strength of the forces involved in the drill or what SCO states they represented. DK

BELARUSIAN REGIME JAILS OPPOSITION LEADER, NINE OTHER CAMPAIGNERS
Courts in Minsk on March 9 handed down 15-day prison sentences to Belarusian opposition leader Vintsuk Vyachorka, the deputy head of the campaign staff for opposition presidential candidate Alyaksandr Milinkevich, and nine other Milinkevich campaigners, finding them guilty of organizing unsanctioned meetings with voters in Minsk the previous day, RFE/RL's Belarus Service reported. Vyachorka, Pyotr Babareka, Uladzimir Hrydzin, Alyaksey Makovich, Alyaksandr Paulouski, and Pyotr Tolar received the sentences from Judge Nadzeya Revutskaya in the Maskouski District Court; Dzmitry Kudrautsau, Artsyom Litsvinko, Syargey Lyantsevich and Alyaksandr Zyalko from Judge Mikalay Trubnikau in the Partyzanski District Court. The 15-day sentence will keep the 10 Milinkevich supporters in jail during the remainder of the campaign for the March 19 presidential election. "The authorities are really very afraid," Milinkevich told RFE/RL. "The success of [our] campaign is obvious. More and more people are getting rid of fear; more and more people do not want to live in humiliation. This can be inferred from the well-attended meetings that we hold. All actions on the part of the authorities testify that they have become hysterical, that they have lost control of their nerves, that the authorities are not even trying to create an illusion of honest elections." JM

BELARUSIAN OFFICIAL EXPLAINS WHY OPPOSITION IS NOT REPRESENTED ON ELECTION COMMISSIONS...
Central Election Commission Chairwoman Lidziya Yarmoshyna told journalists in Minsk on March 9 how territorial election commissions were formed for the March 19 presidential vote, Belarusian Television reported. "Our election commissions are formed by taking into account the extent to which these people are suitable for work in election commissions, to what degree they are respected in some societal circle or another," Yarmoshyna said. "Let's look at our backwater traditional opposition. They are mostly unemployed people. Tell me: Can an unemployed person be respected in society? Of course not." Out of some 74,000 people selected for more than 6,500 precinct election commissions for the presidential ballot, only two reportedly represent opposition parties. In December 2004, the European Union imposed a travel ban on Yarmoshyna, holding her responsible for approving the results of a flawed constitutional referendum and undemocratic parliamentary elections held in October 2004. JM

...AND WHY PRESIDENTIAL CANDIDATES DON'T NEED THEIR HEADS EXAMINED
Speaking to journalists in Minsk on March 9, Yarmoshyna rejected a proposal by opposition presidential candidate Alyaksandr Milinkevich that all presidential candidates should undergo a mental health examination, Belapan reported. Yarmoshyna said the election authorities have no right to set any additional requirements for the presidential contenders except those specified by the Electoral Code. Milinkevich made the proposal earlier this week, in response to President Alyaksandr Lukashenka's speech at the All-Belarusian People's Assembly in Minsk on March 2, at which the incumbent called one of his presidential rivals a "moron." "In light of recent events in which one of the candidates, standing behind a podium, called another a moron, it is high time we get a clinical picture of what is going on," Milinkevich said. He added that the country should be ruled by "an even-tempered person whose words and deeds will not be influenced by the change of seasons, air temperature, or pressure fluctuations." JM

UKRAINIAN PRESIDENT VOWS TO HOLD FAIR ELECTIONS
President Viktor Yushchenko told students at the Shevchenko National University in Kyiv on March 9 that the authorities "have done everything to secure democratic, honest, and transparent elections," the presidential press service reported. Yushchenko also said he finds it deplorable that the people who just 18 months ago were engaged in "shadow politics" -- an apparent reference to the manipulation of the presidential vote that sparked the Orange Revolution and his eventual election -- are now calling on the nation to turn to the past "behind the backs of political leaders." "It is not about choosing colors, it is about a way of life and whether we want to turn back or not," Yushchenko said about the upcoming parliamentary elections on March 26. JM

BOSNIAN SERB JAILED FOR 20 YEARS FOR WAR CRIMES
A court in Bosnia's Republiks Srpska handed down a 20-year prison sentence on March 9 to a former Serbian soldier, Reuters reported the same day. This is the longest war crimes sentence handed down in Bosnia's Republika Srpska. The Banja Luka district court ruled that 48-year-old Milanko Vujanovic was guilty of murdering five Muslim civilians in a village in northern Bosnia in October 1992. "Based on statements by witnesses and material evidence gathered during the investigation it was found that Vujanovic knew these were non-Serbs who were not engaged in the military," the court's ruling said. Two other, unidentified soldiers were also involved in the killings. BW

EU FOREIGN POLICY CHIEF URGES SERBIA AND MONTENEGRO TO MAINTAIN GOOD RELATIONS AFTER REFERENDUM
EU High Representative for Common Foreign and Security Policy Javier Solana on March 9 urged Serbia and Montenegro to maintain good relations regardless of the results of a referendum on independence, Beta reported the same day. Solana said that because Belgrade and Podgorica have extensive cultural, economic and familial ties, it is important that post-referendum relations be "constructive." In remarks reported by B92 the same day, Solana said that, according to the 2002 Belgrade Agreement that redefined relations between Belgrade and Podgorica, Serbia would immediately recognize Montenegro as an independent state should the referendum pass. Serbia and Montenegro's President Svetozar Marovic, who was in Brussels for talks with Solana and other EU officials, added that after the referendum, Serbia and Montenegro should "not only be friends, but connected" in areas that are mutually beneficial. BW

SERBIA AND MONTENEGRO DEFENSE MINISTER SAYS MILITARY WILL NOT INTERFERE IN REFERENDUM
Serbia and Montenegro's Defense Minister Zoran Stankovic said in March 9 that he has received assurances that Belgrade will be admitted to NATO's Partnership for Peace program as soon as it arrests all fugitive war criminals, Beta reported the same day. The assurances, Stankovic said, came from unspecified international officials. Stankovic also said that reforms planned for units stationed on the territory of Montenegro will be suspended until the May 21 referendum on independence. The defense minister also gave assurances that the military will not interfere in the referendum and will respect its outcome. BW

BRITISH LABORATORY CONFIRMS H5N1 BIRD FLU IN SERBIA
Serbian officials announced on March 9 that a British laboratory has confirmed the presence of the deadly H5N1 strain of bird flu in a swan found near the Croatian border, international news agencies reported the same day. The swan was found in Serbia's Sombor region in the north of the country. Dejan Krnjaic, the director of Serbia's Veterinary Institute, said another swan found in western Serbia is also believed to be infected with the H5N1 strain of avian flu (see "RFE/RL Newsline," March 7, 2006). BW

REPORT: SERBS TURN DOWN OFFER TO JOIN KOSOVA GOVERNMENT
Kosova's prime minister-designate, Agim Ceku, unsuccessfully tried to persuade Serbs to join his government on March 9, B92 reported the next day. In discussions with leaders of the Serbian List for Kosovo party, Serbian officials were reportedly offered the posts of agriculture minister and deputy head of the local administrations ministry. B92 reported that Serbian officials turned the offer down. As a result, Ceku's government is almost identical to that of former Prime Minister Bajram Kosumi. Deputy Prime Minister Adema Saljihaja is the only member of Kosumi's cabinet who is not included in Ceku's government, B92 reported. The Kosova assembly is scheduled to vote on the new government on March 10 (see "RFE/RL Newsline," March 9, 2006). BW

TRANSDNIESTER MOVES TO BAN FOREIGN-FUNDED NGOS
Authorities in Moldova's breakaway Transdniester region have banned all foreign-financed NGOs from operating in the region, dpa reported on March 9 citing an Infotag report. According to a statement from the office of Igor Smirnov, the region's self-styled president, foreign-financed NGOs pose "a direct threat to the internal security of Transdniester." The executive order bans foreign financial and material assistance, and makes it illegal for NGOs to receive funds form anonymous sources. If implemented, it would affect approximately a dozen Western-funded human rights groups working in Transdniester, as well as some pro-Moldovan nationalist groups financed by Chisinau, dpa reported. BW

THE BELARUSIAN ECONOMIC MODEL: A 21ST CENTURY SOCIALISM?
The "Belarusian economic model" seems to defy economic theory. An economy entirely consisting of the old, unreformed Soviet industrial base, manages to churn out high single digit growth in gross domestic product (GDP), provides guaranteed monthly income and full, if not always full-time, employment, even as it remains in a state of complete isolation from the modern world. It is this model that causes Belarusians to feel fearful of changes that may unleash a chaos, criminality, and suffering associated with reforms in Russia and Ukraine -- the reference countries for the average Belarusian.

The model is based on three foundations: a favorable valuation of Russian energy, efficient internal controls, and supply-side problems that beset the rest of the former USSR, where most Belarusian output is exported.

Russia charges Belarus $47 per 1,000 cubic meters of gas and $27 per barrel of oil compared to world prices of $230 and $60, respectively. For a country consuming about 20 billion cubic meters of gas per year and 250,000 barrels of oil per day this amounts to direct fiscal support of $6.6 billion annually. Besides consuming oil for its own needs, Belarus is also reselling it in the form of refined products processed at the two refineries whose capacity far exceeds the country's internal needs. Statistics confirm that the country imports about 100,000 barrels a day more than it consumes.

The overall usage of oil began to increase from 2002, the time of the first jump in oil prices, and has continued upward since. According to a study by Belarusian economic expert Leanid Zaika, in 2005 the share of Belarusian exports to Russia and the Commonwealth of Independent States was only 45 percent, compared to the stable 80 percent in the preceding decade. The main user of Belarusian exports (36 percent) is now Europe, by way of buying refined petroleum. Purchased at $27 and sold at $60, this petroleum yields 100 percent profits, or $1.3 billion a year of not even a subsidy, but pure disposable income to the state.

The total effect of the energy price discount amounts to over $7 billion a year, or 30 percent of the nation's GDP. This is a staggering proportion -- even in the United Arab Emirates this share is under 10 percent -- but is it really a subsidy? President Vladimir Putin of Russia thinks so. Marshall Goldman, a Harvard economist, quotes him as affirming the use of energy subsidies for political influence in the near abroad. President Alyaksandr Lukashenka of Belarus disagrees. "The notion that I am supported by the Kremlin is absolutely absurd," he stated earlier this year. According to him, the discount on the Russian fuel is really a barter payment for transit through Belarus, for which Russia nominally pays very little.

Simple arithmetic can check this hypothesis: the $183 per 1,000 cubic meters that Russia loses by selling gas to Belarus equals a transit charge of $18 per 1,000 cubic meters per 100 kilometers. The European average is $2.5. So, by bartering $183 away from the price they could charge, the Russians effectively pay Lukashenka seven times the European average cost of gas transportation. Figures for oil are not readily available, but it is reasonable to expect a comparable valuation.

Whether this is a fair deal is in the eyes of the beholder, but it is the valuation on which the entire Belarusian economy is based. It supports the second main feature of the Belarusian model -- its relatively effective management. Lukashenka, who portrays himself as an anticapitalist crusader, is in fact the country's chief businessman. He presides over a company that has reached the scale of a nation. Almost all Belarusians work for the state enterprise, run by the "vertical," a hierarchy of administrators appointed by the president. This state-owned corporation, Belarus Inc., is a multiline conglomerate with revenues of about $25 billion that would place it in the top segment of the Fortune 500 list. It employs over 4 million workers and controls the services, health-care, and education sectors.

While controls disintegrated in Russia and Ukraine, in Belarus they were preserved and even improved by introduction of the vertical and appointment of the personally loyal corps. As Zaika points out, for some time this created a competitive advantage -- while the dilapidated Russian competitors went through catastrophic reforms, their output fell, creating a gap in supply of low-quality, cheap goods, which Belarusian enterprises were able to fill. Exports to Russia were stable throughout most of the Lukashenka reign, helped in part by an arrangement that some payment for Russian energy comes in the form of Belarusian products.

Two significant risks threaten this model. First, is the risk of a repricing of the energy valuation if Russia gains a controlling stake in Beltranshaz, Belarus's gas-transport company. Deprived of its transit monopoly, Belarus would lose a key bargaining advantage and could be forced to pay higher rates. In practice, however, the current valuation is likely to continue, as political considerations will likely prevail as long as Belarusian policies remain in the Russian wake. Even so, Lukashenka has made statements implying that he fully understands his dependency on Russian energy and is seeking solutions with nuclear reactors and more frugal energy use.

A greater risk comes from within the system. In the 12 years of Lukashenka rule there has been no investment to modernize the 1950s asset base that is now 80 percent worn out. The oil windfall of recent years has been spent, not invested in the future. In the meantime, Russian competitors are beginning to gather fruits of the painful restructuring, and foreign competitors produce in low-cost locales. This is beginning to show in the numbers -- Zaika's study cites 2005 decreases between 10 percent and 70 percent in key Belarusian exports to Russia, and inventories of unsold products are growing. As the industrial output declines, the Belarusian GDP relies increasingly on refining Russian oil for speculation.

This opens the future for several scenarios. One could be called "Singaporization." Lee Kwan Yu ruled Singapore for 30 years as a dictator but he also opened the country up for trade, welcomed foreign investors, guaranteed their rights, and achieved the level of living that surpassed that of Britain by using a mix of market economy and state planning. The Belarusian regime is well positioned to do the same, more likely seeking partners in the East than in the West, but its insecurity about foreign investors and bad reputation may impede this scenario.

Another scenario is a complete change of power. Besides being unlikely, it also poses the danger of energy repricing, as in Ukraine. The disintegration of internal controls that scenario would provoke could mean a delayed period of chaos and potential return to populism.

Finally, conserving the current arrangement is also possible, as long as Russia does not challenge the status quo in exchange for political subservience. This would not remove the problem of the worn-out assets and obsolete technologies, but it seems to be the bet the Belarusian president is making at the moment.

(Siarhej Karol, a chartered financial analyst, is a financial manager at American International Group (AIG), a global financial services company.)

TWO DIE IN EASTERN AFGHANISTAN CLASH
A suspected neo-Taliban insurgent and a woman have died in fighting in the Chaparhar district of eastern Afghanistan's Nangahar Province, AP reported on March 9. Nangahar officials said a U.S. warplane attacked a building where an unknown number of guerrillas had barricaded themselves after several hours of ground fighting with Afghan and U.S. forces. The air strike reportedly ended the battle. Nangahar Province police spokesman Ghafor Khan said the bodies of the woman as well as a wounded child were found in a house near the battle in Nangahar's Chaparhar district. He said both were apparently shot. Khan said several of the guerrilla fighters who were hiding in the bombed compound escaped before the air strike. Only one body thought to be a militant was found in the house. MR

U.S. HELICOPTER REPORTED DOWN IN SOUTHERN AFGHANISTAN
Local officials in southern Afghanistan said a U.S. helicopter crashed in the Wardak Province southwest of Kabul, China's Xinhua news agency reported on March 9. It was unclear what kind of helicopter went down, and U.S. military officials in Afghanistan have yet to confirm the crash despite reports from area officials. "The incident occurred around noon and it crashed inside Wardak Province," said Ghazni Province police chief Abdul Rahman Sarjang, who offered no further details. Wardak Province police chief Pacha Gul Bakhtiary also reported the crash, saying local authorities were searching for wreckage. "Police have yet to spot the wreckage or identify the reason behind the incident or if there were any casualties," Bakhtiary said. MR

ANTIDRUG FORCES DESTROY THOUSANDS OF ACRES OF POPPIES IN AFGHANISTAN
Antinarcotics officials said they destroyed 7,500 acres of poppy crops in southern Afghanistan during February as part of a ramped-up campaign against narcotics, the Afghan Pajhwok news agency reported on March 9. Kandahar Provincial Governor Asadollah Khaled said the drug crops were destroyed in six districts of Kandahar Province: Dand, Maywand, Reg, Daman, Arghandab, and Zari. The governor vowed to eradicate poppy fields elsewhere in the restive province as the antidrug campaign in his area enters its fourth and final stage. The government is offering wheat seeds and fertilizer to farmers who abandon poppy cultivation. Mohammad Hasan, a cooperative officer at the Kandahar Agriculture Department, told Pajhwok that seeds and fertilizer were given to about 14,000 growers in the Arghandab and Zari districts. MR

AFGHAN UNIVERSITY CHANCELLOR POSSIBLE CANDIDATE FOR TOP UN SEAT
Kabul University Chancellor Ashraf Ghani Ahmadzai is in the running to succeed UN Secretary-General Kofi Annan, Japan's Kyodo news agency reported on March 9. Kabul University official Sima Ghani said Ahmadzai, a former Afghan finance minister, "is a possible candidate." Ghani said Ahmadzai, currently in the United States for medical treatment, was told informally by the UN secretary-general's office that he is a contender to succeed Annan, whose second five-year term as head of the UN ends later this year. Born in 1949, Ahmadzai holds a doctorate from Columbia University and was the finance minister for the transitional government of Afghanistan from 2002 to 2004. He has also worked as a special adviser on Afghanistan to the United Nations and the World Bank. MR

IRAN NUCLEAR REPORT TO BE CONVEYED TO UN SECURITY COUNCIL
Muhammad el-Baradei, director-general of the International Atomic Energy Agency (IAEA), announced at a March 8 news conference in Vienna that he will report Iran to the United Nations Security Council soon, according to the nuclear watchdog's website (http://www.ieae.org). "I will convey my report, as requested by the February Board, to the Security Council today or tomorrow," he said. El-Baradei said it is up to the Security Council to decide how to proceed, and he referred to his own action as "simply a new phase of diplomacy." BS

IRANIAN OFFICIALS REACT TO IAEA MOVE WITH THREATS, OBFUSCATION...
Supreme National Security Council official Ali Asqar Soltanieh said in Vienna on March 9 that Iran will continue to cooperate with the IAEA, IRNA reported. Comments by his colleague, Javad Vaidi, one day earlier were viewed by some observers as a threat. "The U.S. may be able to deal a blow to us, but it should also be prepared to receive a blow," Vaidi said, according to IRNA on March 8. "If the U.S. prefers this option, it is free to choose." "The New York Times" and other Western media quoted him as saying: "The United States may have the power to cause harm and pain. But it is also susceptible to harm and pain. So if the United States wants to pursue that path, let the ball roll." Vaidi also said Iran prefers "compromise and cooperation" to resolve the nuclear crisis, IRNA reported. He said Tehran is trying to determine how to proceed. In live broadcasts from Vienna and Tehran, officials downplayed the significance of being reported to the Security Council, state television reported. "There was no resolution, no referral, and there was no consensus," Abdul-Reza Rahmani-Fazli of the Supreme National Security Council said, adding that el-Baradei's actions are "a purely administrative procedure." This state of affairs, he continued, shows the peaceful nature of Iranian activities. BS

...AND THEN WITH DEFIANCE
The real reason for opposition to Iran's nuclear program, Supreme Leader Ayatollah Ali Khamenei told the Assembly of Experts in Tehran on March 9, is that the United States is trying to retard the country's scientific development, state television reported. Khamenei warned that if Iran forsakes nuclear energy, "the Americans will then start speaking about [a ban on] university research; therefore, the issue is not only about nuclear energy, it is about an enemy consistently seeking a pretext to prevent the progress, strength, and well-being of Iran." In Poldokhtar and Kuhdasht in western Iran the same day, President Mahmud Ahmadinejad said Iran wants peace and tranquility, but it "will never surrender to bullying and unfair decisions of the arrogant powers," state radio reported. Parliamentary speaker Gholam-Ali Haddad-Adel said on March 9 that Iran has cooperated with the IAEA, state television reported. He said Iran will not succumb to American pressure, which he said is contributing to Iranians' hatred. He also linked the nuclear issue with Iranian independence. BS

INFLUENTIAL IRANIAN COLUMNIST CALLS FOR NPT WITHDRAWAL
Hussein Shariatmadari, Supreme Leader Khamenei's representative at the Kayhan Institute, has called for Iran to withdraw from the Nuclear Non-Proliferation Treaty (NPT) in light of the IAEA decision to report his country to the Security Council. In his column in the March 9, "Kayhan," Shariatmadari wrote that he predicted previously that Washington and its allies are powerless versus Iran, and the Security Council cannot act on the U.S. threat. Reporting Iran to the Security Council is a violation of IAEA regulations and the NPT, he wrote, and the treaty is therefore annulled. He asked whether continuing membership in the NPT is "justified, and added, "Is it not yet time for the nuclear officials of our country to leave the NPT on the basis of 'expediency,' in order to safeguard the country's 'honor,' by taking a step based on 'wisdom'?" The words in quotation remarks refer to what Supreme Leader Khamenei declared are the state's guiding principles. BS

MORE THAN 50 ARE ARRESTED IN CONNECTION WITH SOUTHWESTERN IRANIAN BOMBINGS
Intelligence and Security Minister Hojatoleslam Gholam-Hussein Mohseni-Ejei said on March 9 that more than 50 people have been arrested in connection with bombings in southwestern Khuzestan Province over the last year, IRNA reported. Speaking prior to a cabinet session being held in the Luristan Province city of Khoramabad, Mohseni-Ejei said the detainees have ties to Iran's external enemies. BS

...AND THE CASE IS NOT CLOSED
Referring to the previous week's execution of two people in connection with bombings in Ahvaz, Interior Minister Hojatoleslam Mustafa Purmohammadi said this does not bring the issue to a close, "Aftab-i Yazd" reported on March 9. He added that the security situation in Khuzestan had no bearing on President Ahmadinejad's cancellation of a visit there; rather, heavy rains precluded the use of helicopters for transportation. Asked about his failure to provide evidence of British involvement that he had promised previously, Purmohammadi said. "In security and intelligence issues, evidence is discussed in intelligence parlance." He added: "That is not a legal parlance so that one would dispatch documents. If we have to establish the point by using legal parlance, they must allow us to go to the area and carry out investigations in order that we can present documents that are considered acceptable by a court." Purmohammadi's background in the intelligence and security field was a cause of concern during his parliamentary confirmation, and his comments suggest that he still thinks in those terms. BS

SECURITY IN EASTERN IRAN TO BE IMPROVED
Speaking at the Mersad military base in Kerman Province, Interior Minister Purmohammadi told a gathering of police commanders and governors-general from the eastern part of the country that the security situation in that part of the country will improve soon, "Iran" reported on March 4. "In order to provide and develop security, the military, law enforcement, security, and service arrangements will change in the eastern parts of the country," he said. Iran's eastern provinces have been plagued by drug smugglers, and gangs sometimes kidnap people to exchange them for imprisoned cohorts or secure ransoms. Sunni Baluchi insurgents also are active in the southeast. BS

OPENING SESSION OF IRAQI PARLIAMENT DELAYED
Iraqi political parties announced on March 9 that the opening session of the new Iraqi parliament, slated for March 12, has now been delayed by a week, RFE/RL's Radio Free Iraq (RFI) reported. The announcement came after the presidency council met with Prime Minister-Designate Ibrahim al-Ja'fari, National Assembly Speaker Hajim al-Hasani and his deputies, and the head of Iraq's Supreme Court. The session will now open on March 19. The delay met a request from Shi'ite leaders, who had sought more time to allow parties to negotiate key government positions. Al-Sharqiyah television reported that Deputy Prime Minister Ahmad Chalabi is expected to be named economics minister in the incoming government, giving him control over the energy committee. KR

IRAQI INTERIOR MINISTRY EXONERATES SECURITY SERVICES IN BAGHDAD CASE
The Interior Ministry said on March 9 that it has exonerated security services under its control of any role in the kidnapping earlier this week of some 50 employees of a private security firm in Baghdad, Al-Sharqiyah television reported on the same day (see "RFE/RL Newsline," March 9, 2006). The ministry said that it continues to investigate the incident and vowed to track down the perpetrators. KR

IRAQI GOVERNMENT HANGS 13 INSURGENTS
Iraq executed 13 convicted terrorists on March 9 after the men confessed to taking part in "crimes against Iraqis," RFE/RL's Radio Free Iraq (RFI) reported on the same day. At least one of the convicted men, a former police officer from Mosul, confessed to having worked with Syrian insurgents. KR

U.S. TO MOVE DETAINEES, TRANSFER ABU GHURAYB PRISON TO IRAQIS
The U.S. military announced on March 9 that it will transfer all detainees from the Abu Ghurayb prison to a new prison compound in western Baghdad in the next few months and relinquish control over Abu Ghurayb to the Iraqi government, international media reported the same day. General Peter Pace, chairman of the Joint Chiefs of Staff, told reporters in Washington that it will be several months before the new detention center is complete. "Then it'll be up to the Iraqi government as to what they want to do" with Abu Ghurayb, "The New York Times" reported. Abu Ghurayb was notorious in Iraq even before the U.S. abuse scandal broke out in 2004. Thousands of Iraqis passed through the prison under Saddam Hussein's rule and the prison gained a reputation for the torture and execution of prisoners. KR

IRAQI JOURNALIST KILLED
Insurgents gunned down a journalist working for Baghdad TV in Iraq on March 8, Reporters Without Borders announced in a March 9 statement. Munsif al-Khalidi was shot dead while driving his car between Baghdad and Mosul. Reporters Without Borders said al-Khalidi was the 83rd journalist to be killed in Iraq since March 2003. He is the third journalist working for the pro-Sunni television channel to be killed in the past two years, the website said. KR

IRAQI PARLIAMENTARIAN CRITICIZES U.S. DEFENSE SECRETARY'S REMARKS
Parliamentarian Hajim al-Hasani told Al-Jazeera television in a March 9 interview that U.S. Defense Secretary Donald Rumsfeld's remarks on relying on Iraqi security forces to fight a civil war were "not right by any standards." Rumsfeld told the Senate Appropriations Committee on March 9 that should civil war break out in Iraq, the United States plans to "have the Iraqi security forces deal with it to the extent they're able to." Al-Hasani said Rumsfeld's comments were "a recipe for encouraging a civil war," adding: "According to the U.S. administration, the Iraqi armed forces are not qualified at present to take over the security file, control the situation, and enforce law.... So, why is the [U.S.] Secretary of Defense changing the position that he announced a few days ago at the U.S. Congress, in which he said that the Iraqi internal security units or National Guard are not qualified to replace U.S. troops?" Al-Hashani contended that many Interior Ministry and army forces place their political and sectarian loyalties over loyalty to the nation. "We believe that [these security forces] will not be fair, sincere, or qualified to control security or enforce the law," he said. KR

IRAQI DEFENSE, FOREIGN MINISTRY STAFFERS DISPUTE ALLEGATIONS OF IRANIAN INTERFERENCE
Iraqi Deputy Foreign Minister Labid Abawi told the London-based newspaper "Al-Hayat" that U.S. Defense Secretary Rumsfeld's allegations that Iran is interfering in Iraq "do not express the official Iraqi position," the daily reported on March 9 (see "RFE/RL Newsline," March 8, 2006). "We deal with Iran based on Iraq's interests and our information confirms that there is no evidence there is such infiltration or interference [in order] to inflame sectarian sedition in our country," said Abawi. A prominent member of Iraqi Hizballah and Defense Ministry advisor, Hasan Sari, called for the formation of an Iraqi committee to refute Rumsfeld's allegations. "Iran supported the Iraqi opposition groups, including Kurdish forces, during Saddam Hussein's rule and gave them aid in exceptional circumstances. But now and after the downfall of Saddam's rule, there is no Iranian support of any kind anymore. There are no Iranian weapons, armed Iranian elements, or Iranian training in support of the armed militias in Iraq," Sari told "Al-Hayat." KR

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