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Caucasus Report: November 11, 2004

11 November 2004, Volume 7, Number 43

AZERBAIJAN REJECTS ARMENIAN WARNING OVER KARABAKH TALKS. In an exclusive interview on 9 November with RFE/RL's Armenian Service, Armenian Foreign Minister Vartan Oskanian said that he and his Azerbaijani counterpart Elmar Mammadyarov made "serious progress" during their four rounds of talks on approaches to resolving the Karabakh conflict. Oskanian said it is now possible to begin a second stage of talks building on what was achieved earlier, and that Azerbaijan has signaled its readiness for such talks. "Armenia has already given its positive answer and is ready to resume the negotiations [as early as] tomorrow," Oskanian said.

Since May 2004, Oskanian and Mammadyarov have met four times in Strasbourg and Prague to discuss approaches to resolving the conflict. Whatever provisional consensus they reached was the subject of discussion at a meeting on 15 September between the two countries' presidents, Robert Kocharian and Ilham Aliyev, on the sidelines of a CIS summit in Astana, after which Oskanian said there would be an "interval" before the second stage of his talks with Mammadyarov began. Azerbaijani Deputy Foreign Minister Araz Azimov said in late September that the past meetings with Oskanian had proved "useful" but that further such talks had been postponed "indefinitely" at Armenia's request.

No details have been divulged of the issues on the table in Prague, and that enforced confidentiality has spawned rumors that Yerevan is prepared to withdraw from either three or five of the seven occupied Azerbaijani districts bordering on Karabakh even before a final decision is reached on the future political status of the unrecognized Nagorno-Karabakh Republic.

On 27 October, the Armenian Foreign Ministry issued a formal statement denying such speculation. "Regardless of Azerbaijan's wishes or statements, Armenia's focus during negotiations is on the issue of the status of Nagorno-Karabakh. All other issues are tangential to the status issue, and Armenia views them only in the context of the future status of Nagorno-Karabakh," the statement said. It further underscored that Yerevan "is interested only in a comprehensive resolution of this issue, and its participation in negotiations is conditional on that approach," the statement continued. In other words, Armenia wants the final agreement on a solution to the conflict to address, and stipulate a solution to, all disputed issues, and to specify the order and time frame in which the various points agreed upon will be implemented.

Also in his 9 November interview with RFE/RL's Armenian Service, Oskanian criticized as "a diplomatic error" Baku's insistence on including on the agenda of the UN General Assembly the issue of the resettlement of Armenian families on territory controlled by Armenian forces. He warned that Azerbaijan should not proceed on the assumption that it can continue negotiations on resolving the Karabakh conflict under the aegis of the Organization for Security and Cooperation in Europe (OSCE) Minsk Group while at the same time seeking the assistance of other international organizations in resolving individual issues related to that conflict.

"Either we continue the negotiations within the Minsk Group, trying to reach a solution of the whole problem, or Azerbaijan can take the issue to other instances, seeking separate solutions," Oskanian said. Should Azerbaijan choose the latter approach, Oskanian said, the Azerbaijani authorities will have to negotiate with the Nagorno-Karabakh leadership. "Today the ball is in [Azerbaijan's] court," Oskanian concluded.

But on 10 November Azerbaijani Foreign Ministry spokesman Metin Mirza rejected Oskanian's warning that Azerbaijan should not try to launch a parallel mediation effort as an effort to "torpedo" the negotiating process at a juncture when "favorable conditions" had been created for making progress. He inferred that Yerevan is "seriously concerned" by the prospect of the UN General Assembly debate. And he stressed yet again that Baku will not agree to negotiate with the Nagorno-Karabakh leadership.

President Aliyev similarly argued last week that raising the Karabakh issue in other international forums will not jeopardize the ongoing search for a solution under the aegis of the OSCE Minsk Group, nor does Baku seek to replace the Minsk Group by another mediator, ITAR-TASS reported. Aliyev said Baku simply wants international organizations such as the UN, the EU, and the Council of Europe to "recognize unequivocally that Armenia has occupied part of Azerbaijan's territory," and that this "unfair situation" should be corrected. Touring four southern regions of Azerbaijan on 9 November, President Aliyev said that Baku will not sign a formal Karabakh peace agreement until Armenian forces have retreated from the districts adjacent to Nagorno-Karabakh that they currently occupy, ITAR-TASS reported. "We demand with justification that the seized territory be freed and the occupying forces withdraw," Aliyev said while visiting Astara, where he formally opened a new cargo terminal on the border with Iran. (Liz Fuller)

A GEORGIAN U-TURN ON CORRUPTION? Three years ago, then Georgian Justice Minister Mikheil Saakashvili tried, but failed, to introduce a bill in the Georgian parliament that would have stripped wealthy officials of all assets they could not prove were acquired legally (see "RFE/RL Newsline," 14 August 2001 and "RFE/RL Caucasus Report," 17 August 2001). One month ago, Saakashvili, now president, introduced a draft bill that would grant a sweeping amnesty for companies and individual businessmen who evaded taxes prior to 1 January 2004 but committed no other crimes.

The Georgian government approved Saakashvili's proposed amnesty for tax evaders on 8 October. Presenting the draft, Saakashvili argued that businessmen should not be penalized for the fact that the previous administration created a system in which they had no choice but to underdeclare their incomes and evade taxes, Interfax reported on 8 October.

"Vedomosti" on 11 October quoted Georgian Economy Minister Kakha Bendukidze as explaining that draft bill comprises two simultaneous amnesties: first, businessmen will be absolved of the requirement to pay unpaid taxes incurred prior to the beginning of this year, and second, they will have a 12 month window of opportunity in 2005 to declare and legalize capital and assets they have acquired. They will, however, be required to pay tax on those assets at the rate of 1 percent of their value. Bendukidze said the possibility of legalizing assets extends to persons who made use of their official position to buy up state-owned property, but not to those whose wealth was acquired as a result of dealing in drugs or other illegal activities. Bendukidze said the relevant draft legislation would be submitted to parliament within two weeks, and he predicted the bills would be passed by the end of this year. "Novye izvestiya" reported on 11 October that following passage of the amnesty, police, and tax officials will be forbidden to investigate businessmen's financial activities prior to 1 January 2004.

Georgian businessmen hailed the proposed tax amnesty, noting that in conjunction with the new tax code it would provide a much-needed stimulus to the Georgian economy. But some representatives of NGOs and opposition parties have questioned the fairness of the planned measures. Tea Tutberidze, a leading member of the Liberty Institute, argued on 28 October that the proposed tax amnesty should not extend to persons who held senior positions under former President Eduard Shevardnadze, while a second Liberty Institute member, Levan Ramishvili, advocated exempting parliament deputies, government ministers, regional governors, and judges, Caucasus Press reported. The parliamentary opposition New Rightists-Industrialists faction drafted an alternative bill under which only businessmen, but not former state officials, would be eligible for amnesty, Caucasus Press reported on 3 November. Speaking at his regular Monday press conference, Labor Party Chairman Shalva Natelashvili on 1 November accused President Saakashvili, Prime Minister Zurab Zhvania, parliament speaker Nino Burdjanadze, and other senior officials of having themselves misappropriated tens of millions of dollars that, he alleged, they now propose to legalize by means of the amnesty, Caucasus Press reported. Veteran oppositionist Nodar Natadze was quoted by the paper "Akhali taoba" on 3 November as arguing that people who "stole from the state" and acquired factories at knock-down prices should recompense the government for the losses incurred. Natadze questioned whether the proposed amnesty will in fact revitalize the economy, and suggested that a more effective way of doing so would be to abolish VAT.

Even members of some parliament commissions expressed reservations: David Bakradze, chairman of the Commission on European Integration, objected that a 12 month window of opportunity is too long. He pointed out that theoretically corrupt individuals could increase their assets for most of that time and then declare and legalize them shortly before the deadline expired. Other members of the committee expressed concern that the bill could facilitate money-laundering. Members of the committee on judicial issues pointed out on 4 November that the draft theoretically makes it possible to legalize money received as bribes, which members considered wrong, Caucasus Press reported.

On 5 November, members of the parliament committee on human rights decided to support the bill on condition that the government took into account their proposed amendments, the most important of which entailed freeing persons currently facing charges of tax evasion. By contrast, they argued that persons who accepted bribes and acquired property illegally should not benefit from the amnesty.

On 8 November, President Saakashvili and Prime Minister Zhvania met for two hours with representatives of the parliament majority, not all of whom previously supported the draft unconditionally, and secured their backing for it, Caucasus Press reported. (Liz Fuller)

GEORGIAN EDUCATION MINISTER UNDER FIRE. No less controversial that President Saakashvili's proposed financial amnesty is the ambitious reform of Georgia's education system planned by Education Minister Aleksandre Lomaya. Lomaya has proposed extending basic schooling from 11 to 12 years and introducing sweeping changes to the national curriculum. Specifically, he intends to reduce the number of hours devoted to the study of mathematics, Georgian language and history, and medieval Georgian literature, and to introduce courses on sex education and comparative religion.

Those proposals have triggered a storm of protest: parents and teaching staff alike have repeatedly rallied outside the state chancellery, demanding a meeting with President Saakashvili to explain their objections. Speaking at a press conference on 28 October, Giorgi Amashukeli, president of a national teachers' union, argued that Lomaya's proposed "excessive liberalization" of the curriculum risks producing "a generation of animals" with no knowledge of national traditions. Merab Djibladze, a professor at Tbilisi State University, similarly commented that "in 10 years Georgia will become a developing country in terms of intellectual development," Caucasus Press reported on 13 October.

Moreover, Lomaya's reform entails that in future most subjects will be taught in Georgian even in schools where the majority of pupils are members of Georgia's large Armenian or Azerbaijani minorities. That provision threatens both the survival of schools where teaching has until now been conducted in Armenian, Russian, or Azerbaijani, and the livelihood of teachers employed in those schools whose knowledge of Georgian, like that of their pupils, may be rudimentary.

Political parties from across the spectrum have denounced Lomaya's plans. The extra-parliamentary Labor Party called on President Saakashvili on 27 September to dismiss the entire government for its support of what Labor Chairman Shalva Natelashvili termed the "harmful and anti-national" reform. A second prominent Labor member, Djondi Baghaturia, challenged Lomaya to a televized debate with the aim of pointing out the shortcomings of his proposals, according to "Akhali taoba" on 7 October.

Meanwhile, the opposition New Rightists-Industrialists have collected 70,000 signatures to a petition calling for Lomaya's resignation. That petition was submitted to the state chancellery on 8 November, Caucasus Press reported. But three days earlier, President Saakashvili dismissed the initiative, implying in comments to journalists that signatures were bought. Saakashvili affirmed his complete support for Lomaya, and stressed that teachers will benefit from the reform in terms of higher salaries.

That expression of support failed, however, to mollify critics of the planned reforms. On 9 November, Education Ministry staff found slogans daubed across the façade of the building urging Lomaya to "get out," and the following day some 300 students from the Georgian Technical University forced their way into the ministry building to demand amendments to the reform. The students warned they will launch mass protests unless their demands are met. (Liz Fuller)

QUOTATIONS OF THE WEEK. "We are moving toward democracy, but with ups and downs." -- Armenian Foreign Minister Vartan Oskanian in an interview with RFE/RL's Armenian Service on 9 November.

"We have a new definition of wahhabi in the Caucasus now. Whoever is an enemy (business, ethnic, or personal) of the republican president or the head of the local [branch of the] Federal Security Service is a wahhabi by default." --Yulia Latynina, writing in "Novaya gazeta" No. 79, 25-27 October 2004.

"What is going on in the OSCE is...worth watching, because it is a barometer of the political atmosphere in Europe today." -- OSCE Secretary-General Jan Kubis, quoted by the "Financial Times" on 11 November.

"Russia has always pulled back [from destroying the OSCE] in the past, because they see it is an instrument for promoting stability. But some in Russia argue it is more a nuisance than a help in achieving their objectives." -- Unnamed OSCE diplomat, quoted in ibid.