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Newsline - July 9, 1997


Following NATO's decision on 8 July to extend invitations to the Czech Republic, Hungary, and Poland to join the alliance, Russian officials repeated that Moscow is strongly opposed to NATO's plan to admit new members. Speaking in Moscow, Foreign Minister Yevgenii Primakov again said Russia considers NATO expansion "perhaps the biggest mistake since the end of the Cold War," Russian news agencies reported. Deputy Prime Minister Valerii Serov, who is heading the Russian delegation in Madrid, also confirmed that Russia has not altered its stance against NATO enlargement. Meanwhile, former Security Council Secretary Aleksandr Lebed told Interfax that he is not concerned about NATO expansion. Lebed argued that the Baltic States are unlikely ever to become NATO members. He added that "the rich and well-fed will never threaten the poor and the hungry."


President Boris Yeltsin interrupted his vacation in Karelia to issue a decree instructing the government to pay all debts to the armed forces within two months and all wage arrears to state employees by 1 January 1998, Russian media reported on 8 July. Yeltsin recently told Prime Minister Viktor Chernomyrdin that the government should pay back wages by 1 October (see "RFE/RL Newsline," 3 July 1997). The Finance Ministry estimates that wage arrears to state employees total 11 trillion rubles ($1.9 billion): 2.5 trillion to workers in the industrial sector and 8.5 trillion to "social" employees (including doctors and teachers). Government debts to soldiers and civilian personnel of the Defense Ministry totaled 4.2 trillion rubles at the beginning of June. Yeltsin pledged that the government will not resort to printing money to pay back wages, Interfax reported.


Prime Minister Chernomyrdin on 8 July criticized the Finance Ministry for poor control over budget expenditures, ITAR-TASS reported. Chairing a meeting of a presidential commission on tax collection in Moscow, Chernomyrdin said that the Finance Ministry has been unable to ensure that budget funds are spent properly in the regions. Federal officials have frequently charged that regional and local leaders misappropriate federal funds, in particular those allocated to pay wages of state employees. First Deputy Prime Minister Anatolii Chubais, who is also finance minister, is a member of the commission on tax collection, but he recently began a three-week vacation and did not attend the commission's 8 July meeting.


Yeltsin on 8 July signed a decree changing the rules for oil exports, Interfax reported. The decree aims to improve tax collection from oil companies. According to First Deputy Fuel and Energy Minister Sergei Kirienko, oil companies that owe taxes will be required to automatically pay part of the proceeds from oil exports into the federal budget. Meanwhile, State Tax Service head Aleksandr Pochinok told journalists in Moscow that the oil companies LUKoil, Yukos, and Sibneft are complying with agreed schedules for paying off their tax debts, as is the automobile producer AvtoVAZ, ITAR-TASS reported.


Another presidential decree issued on 8 July creates an interdepartmental government commission to oversee the implementation of production-sharing agreements. Under the 1995 law on such agreements, companies may invest in developing approved natural resource deposits in exchange for a percentage of the resources extracted in the future. First Deputy Prime Minister Boris Nemtsov, who is also fuel and energy minister, will head the new commission.


State Duma Speaker Gennadii Seleznev has been elected deputy chairman of the Parliamentary Assembly of the Organization for Security and Cooperation in Europe, ITAR-TASS reported on 8 July. He will hold that post for three years. Addressing the assembly on the final day of its annual session in Warsaw, Seleznev said the Russian parliament is opposed to "NATO-centrism" and also to attempts to make NATO the "bedrock of European security." Russian officials have repeatedly called for broadening the OSCE's role in European security matters.


The state-run network Russian Television (RTR) has decided not to air a scheduled series of programs on journalism called "Chetvertaya vlast" (The Fourth Estate), RFE/RL's Moscow bureau reported on 7 July. The series was produced with funding from Internews, an U.S.-based non-government organization that promotes independent electronic media. The first show, which included segments on how Chechen rebels "won the information war" and whether journalism is compatible with espionage, was supposed to have its premiere on 29 June. It again failed to be broadcast on 6 July, even though the show's producers agreed to remove the segment on Chechnya at the network's request. Recently appointed RTR Deputy Chairman Mikhail Lesin, a founder and former top executive of the Video-International advertising firm, made the final decision to cancel the series, according to "Kommersant-Daily" on 8 July.


Igor Rodionov says he supports State Duma Defense Committee Chairman Lev Rokhlin's plans to create an All-Russian Movement to Support the Army, Military Science, and Defense Industry, Interfax reported on 8 July. Rodionov, whom Yeltsin fired in May, said that while serving as defense minister he had concluded that "the country's political leadership is indifferent toward issues of the country's defense capacity." The new movement is to hold its first meeting on 9 July. Rokhlin recently issued an open appeal slamming Yeltsin's policies toward the military (see "RFE/RL Newsline," 25-27 June 1997). Although the appeal was sharply condemned by various top officials, the pro-government movement Our Home Is Russia delayed a decision on whether to expel Rokhlin until after the Duma's summer recess.


Ten Russian policemen were killed and several more seriously injured on 8 July when a remote-controlled bomb exploded as the bus in which they were traveling drove past, Russian media reported. Also on 8 July, five Chechens were forcibly abducted in North Ossetia from a Grozny-bound bus. Leading Chechen officials termed the kidnapping a provocation aimed at destabilizing the entire region and demanded the Chechens' immediate release. Chechen President Aslan Maskhadov said the abduction was intended to sabotage Chechen independence. He claimed that foreign intelligence services may have been involved in this and other recent incidents. A spokesman for the French organization Medicins sans Frontieres told Reuters on 8 July that a French aid worker was recently abducted in the Ingushetian capital, Nazran.


The first session of the Russian-South Korean commission on trade, economics, science, and technology ended in Seoul on 8 July, Russian media reported. Agreement was reached on Russia's paying its debt to South Korea in raw minerals, helicopters, and military hardware. South Korea was also given the lease on 330 hectares of land in the Nakhodka free economic zone. More than 100 South Korean firms are expected to participate in the construction of a "technological park" producing electronic goods, foodstuffs and light-industrial products as well as processing lumber. Russia hopes other countries will join in the development of the zone, which is located close to Russia's deep-water port of Vostochnyi and is expected to eventually produce goods worth $2 billion each year. The second session of the talks starts on 9 July.


Gohar Ayub Khan met with Russian Deputy Prime Minister Vladimir Bulgak on 8 July, Russian media reported. Bulgak said Russia was anxious to receive repayments on the $180 million in loans made to Pakistan during the Soviet era. The two leaders also discussed possible Russian participation in energy projects and port construction in Pakistan. Khan later met with Russian Foreign Minister Yevgenii Primakov to talk about Afghanistan. Primakov said he hoped that Pakistan's involvement in Afghanistan would not be a repetition of the Soviet experience, noting it was impossible for one "force" to control the situation in that country. Khan asked for Russian help in mediating Pakistani-India problems and noted that the proximity of large forces along that border could spark a war involving nuclear weapons.


Russia may supply Iran with two more VVER-1000 "light water" reactors in addition to the one that is to be provided for the first block of the Bushehr nuclear power station under a January 1995 agreement, ITAR-TASS reported on 8 July. Some 750 Russian specialists are currently engaged in construction work at Bushehr; the reactor is being assembled in Russia. The plant is scheduled to go on line in four years. Iranian Vice President Reza Amrollahi, who heads the country's atomic energy organization, told Iranian Television on 7 July that Iran is interested in expanding cooperation with Russia in the atomic energy sector, specifically in the construction of more nuclear power stations. He stressed these would be used exclusively for peaceful purposes. Russia and Iran recently signed an agreement on safety measures at Bushehr.


St. Petersburg Governor Vladimir Yakovlev says Defense Minister Igor Sergeev supports his proposal to create an experimental battalion in St. Petersburg for youths who refuse to perform military service, RFE/RL's correspondent in St. Petersburg reported on 8 July. More than 5,000 young men are registered as conscientious objectors in St. Petersburg. Although Article 59 of the constitution guarantees the right to perform alternative service, the State Duma has not yet passed a law on it. Under Yakovlev's proposal, youths participating in the experiment would serve for three or four years instead of the two years required for military service. They would live at home and work on city improvement projects or in hospitals. However, there are fears in St. Petersburg that the experimental battalion could become an "elite formation" for children of wealthy businessmen and influential officials.


The Kaliningrad city legislature has voted to allow the city administration to borrow 6 billion rubles ($1 million) from the Kaliningrad oblast budget to pay teachers' wages and summer vacation benefits, ITAR-TASS reported on 8 July. A city-run sports complex will be the collateral for the loan. Although the Kaliningrad Oblast administration has loaned the city funds before, this is the first time officials have demanded that such a loan be guaranteed with city property.


Speaking at a press conference in Yerevan on 8 July to mark his first 100 days in office, Robert Kocharyan urged the expansion of cooperation with Russia, especially in the economic sphere, ITAR-TASS reported. Kocharyan said an Armenian delegation is currently holding talks in Moscow with Gazprom representatives on creating a joint company to export Russian gas to Turkey via Armenia. Kocharyan greeted Russian President Boris Yeltsin's proposal to set up a Russian-Armenian-Azerbaijani government commission to investigate Russian arms shipments to the Caucasus, Armenian agencies reported. Kocharyan also called for direct talks between Baku and Stepanakert on resolving the Nagorno-Karabakh conflict. He rejected the assertion by Yerevan Mayor Vano Siradeghyan that government ministers should be political figures, not professionals, arguing that this is appropriate for Western Europe but not for Armenia.


Officials at the Geneva headquarters of the World Trade Organization said on 8 July that Azerbaijan has submitted a formal request to join the organization, according to Reuters. Negotiations on Azerbaijan's accession to the organization are likely to last at least two years, and Baku will be required to demonstrate a commitment to opening up its economy to foreign goods and services. Azerbaijan is the 13th former Soviet republic to request WTO membership. Only Turkmenistan and Tajikistan have not yet done so.


Spokesman Igor Shabdurasulov told journalists on 8 July that the Russian government does not intend to take any action in response to Turkmenistan's demand for the annulment of a recent agreement between two Russian oil companies and the Azerbaijan state oil company SOCAR to explore the Kyapaz oil field. Ashgabat claims that the oil field lies in its sector of the Caspian Sea. Shabdurasulov said the two Russian oil companies, LUKoil and Rosneft, should decide on their own whether to suspend participation and what their obligations are to SOCAR and Turkmenistan. The Russian Foreign Ministry considers the Kyapaz deal "a purely commercial one," a spokesman told Interfax.


President Saparmurat Niyazov signed a decree on 7 July relieving the Minister of Agriculture Pirguly Adayev as well as the governor and all local officials of Akhal Province of their duties, RFE/RL correspondents reported. Akhal Province, where the capital Ashgabat is located, is one of the country's two major grain producing regions. This year, the province will meet only 35 percent of its target figure for grain output Niyazov told the Akhal officials and the minister that they were fired because of incompetence, mismanagement, fraud, and nepotism. Official figures show Turkmenistan will meet only 50 percent of its target for grain in 1997.


Two miners accused of organizing an unsanctioned demonstration in Karaganda in June to protest pension reforms (see "RFE/RL Newsline," 17 June 1997) have been put under "administrative arrest." according to ITAR-TASS on 8 July. Vladimir Karpov and Vyacheslav Sheigarchuk were sentenced to 15 and seven days in jail, respectively. The men were originally fined one month's pay, but the Karaganda town council subsequently decided to put them in jail. The miners' union says this is a clear violation of the due process of law because there was no court hearing. Miners object to the government's decision to raise the age at which they become eligible for pensions to 63. They note that few miners live to reach that age.


Tursunbek Akunov, the leader of the Kyrgyz Human Rights Movement, has been sentenced by a Bishkek court to 15 days in jail for organizing an unsanctioned meeting, RFE/RL correspondents reported on 9 July. Eleven other people arrested in connection with the demonstration were freed after receiving a warning from the same court.


NATO leaders invited the Czech Republic, Hungary, and Poland to join the Western alliance at a historic summit in Madrid on 8 July. NATO leaders rejected a strong appeal from France, Italy, and other states to also extend invitations to Romania and Slovenia. But a communique said NATO will review the enlargement process in 1999 and that the door remains open for former Communist states to join in the future. The statement specifically mentioned Romania and Slovenia and also praised the "progress achieved towards greater stability and cooperation" by the Baltic States. U.S. President Bill Clinton hailed NATO's decision as the "dawn of a new Europe" that is undivided, democratic, and peaceful. U.S. Defense Secretary William Cohen said NATO will send officials to the three states to devise plans for upgrading their infrastructures, communications, and other systems to enable them to become full members of the alliance.


The Czech Republic, Hungary, and Poland welcomed with "deepest satisfaction" the invitation to become members of NATO. Czech President Vaclav Havel, flanked by Polish President Aleksandr Kwasniewski and Hungarian Premier Guyla Horn, read a statement to reporters in Madrid just minutes after NATO Secretary-General Javier Solana announced the 16 NATO countries had decided to take in the three new members. The Central European statement said the move is in recognition of the "tremendous efforts" undertaken by their societies following the collapse of communism in 1989. The leaders said they are very proud that the transformations of their political and economic systems have made them eligible for NATO membership. Havel also said the three hope that the parliaments of the 16 NATO countries will ratify their accession in time for them to become full members by April 1999, the 50th anniversary of the founding of the alliance.


Romanian President Emil Constantinescu said the Madrid communique "acknowledges the exceptional efforts" made by Romania over the last seven months. He added that Bucharest must now "continue with the reforms and the democratization process." Romanian Premier Victor Ciorbea noted that "everything humanely possible" was done to join in the first wave but noted that the gap left by the previous government between Romania and the other contenders was too large to bridge in seven months. Prime Minister Janez Drnovsek said in Ljubljana that his country "hopes the process of enlarging NATO will continue and that Slovenia as a candidate will be treated independently, on its own merits, and not as part of a group." He added that he fears that "a further enlargement will be delayed if troubles with other countries arise."


Estonian Ambassador to NATO Juri Luik expressed satisfaction over the mention of the Baltic States in the communique, according to ETA. "This is just what we needed," he commented. RFE/RL's Latvian service reported that Janis Jurkans, the former Latvian foreign minister and a current member of the parliamentary Foreign Affairs Committee, said the decision to invite just three countries to join came as no surprise to Latvia, which, he stressed, is still not prepared for such a step either military or economically. BNS reported that Lithuanian diplomats expressed cautious optimism, saying that "in theory, a stronger declaration could have been expected, but even such a compromise is not bad." Presidents Lennart Meri (Estonia), Guntis Ulmanis (Latvia), and Algirdas Brazauskas (Lithuania) are due to meet with their Czech, Hungarian, and Polish counterparts in Madrid on 9 July.


Leaders of NATO and its 28 partnership countries have inaugurated the Euro-Atlantic Partnership Council, RFE/RL's correspondents in Madrid reported on 9 July. The new group includes countries seeking alliance membership, several neutral countries, and former Soviet republics. Russia is also a member but, as a protest against NATO's expansion, decided to send only a deputy prime minister to head its delegation at the inaugural ceremony. NATO Secretary-General Solana said the new council "can open a new chapter in our relationship" and help guarantee peace in the region. The council takes its place alongside an expanded NATO and a new Russia-NATO partnership council. It will have a permanent Secretariat at NATO's Brussels headquarters.


Ukraine and NATO signed a partnership agreement in Madrid on 9 July. Before the signing, Ukrainian President Leonid Kuchma told a news conference he is satisfied with the agreement. He said Ukraine "obtained what it wanted" and that he discussed the content of the agreement with Russian President Boris Yeltsin and Prime Minister Viktor Chernomyrdin. He also said the agreement was "modeled" on the Russia -NATO Founding Act, signed in May. Kuchma said that he did not expect any disagreement with Russia over the issue of relations between Ukraine and NATO. In his view, the agreement corresponds to the national interests of both Ukraine and Russia. Meanwhile, in Kyiv, a newly formed group of Ukrainian parliamentary deputies have protested the country's impending partnership with NATO. A total of 187 deputies from various political parties are reported to have joined an anti-Nato movement over the past few weeks called "Ukraine Outside of Nato."


Anti-NATO parliamentary groups in Belarus, Ukraine, and Russia have issued a statement urging the three countries to join efforts in the near future to counteract the alliance's expansion, Interfax reported. The statement says that NATO expansion means the U.S. and its allies "consider force or threat of force as the main factor in international relations." NATO is "creating division lines and barriers in Europe to return to the policy of spheres of influence, expansion and dictatorship typical for the periods preceding World War I and World War II," according to the statement. The Anti-NATO group will call on the presidents and governments of Belarus, Ukraine, and Russia to hold "consultations, urgently working out efficient joint programs to counteract" NATO expansion.


Vladimir Meciar said in Madrid on 8 July that he prefers the "smaller" version of NATO expansion rather than the option of inviting five countries other than Slovakia to join. He noted that if Romania and Slovenia had acceded now, a second wave of expansion would likely have been put off indefinitely. Meciar argued that the NATO decision shows the alliance practices double standards--one set for Slovakia and one for its neighbors. He added that the security of Slovakia will not be weakened by NATO expansion, RFE/RL's Bratislava office reported.


Ukrainian Justice Minister Serhiy Holovaty on 8 July demanded a meeting with President Leonid Kuchma, saying he wants confirmation that market reforms and the campaign against corruption will continue. Holovaty told journalists he is concerned that reforms in Ukraine are being stalled. He described the reform process as "only show, but no concrete action." Holovaty also accused officials responsible to Acting Prime Minister Vasyl Durdinets of blocking an anti-corruption campaign. Durdinets has recently criticized Holovaty for failing to fight corruption. There was no immediate comment from Kuchma, who is in Madrid attending the NATO summit.


The two men who operated the crane at the Talsi firefighters' celebration, at which eight children died and many others were injured, have been charged with manslaughter caused by negligence, BNS reported on 8 July. The crane was used to hoist a basket that was intended to carry only four people but was filled with some 30 children (see "RFE/RL Newsline," 30 June 1997). Chief prosecutor Olgerts Sabanskis said the charges were preliminary. If convicted on those charges, the two men would face up to two years in prison or a fine equivalent to 20 minimum monthly wages.


A state of emergency was declared in the Moravian city of Ostrava on 8 July, Czech media reported. More than half of the city of 350,000 inhabitants is under water. Most of northern Moravia is flooded, and the floods have begun to spread to southern Moravia. Parts of the city of Olomouc have had to be evacuated. Ten people are reported to have been killed, while many more are missing. Czech officials estimate damage totaling 10 billion crowns ($300 million). Meanwhile, Polish police say that the death toll in floods in southern Poland rose to seven on 8 July. Deputy Interior Minister Zbigniew Sobotka told journalists that the situation could get worse. He said 10,000 homes have been flooded and 6,000 people evacuated.


Lawmakers on 8 July approved a bill on judicial reform and amendments to the penal code, Hungarian media reported. A new court of appeal. and a National Judicial Council guaranteeing the independence of courts from the government are to be set up. Under the penal code amendments, eligibility for parole for those serving life sentences is to be considerably more difficult; in some cases, a minimum of 30 years in prison will have to be served. In addition, car theft will be more strictly punished. Also on 8 July, the parliament approved a bill transforming the state-owned MTI news agency into a share-holding company. The chairman of MTI is to be appointed by the prime minister from among recommendations submitted by the company's Owners' Advisory Council.


Officials of the Council of Europe and the Organization for Security and Cooperation in Europe issued a report in Warsaw on 8 July, in which they called the recent Albanian parliamentary vote "acceptable." The study noted that some 73% of eligible voters turned out, despite "irregularities" that included shoot-outs at polling places. Catherine Lalumiere, the Council of Europe's representative for the elections, said the election proved that Albanians "want to get out of chaos and put an end to violence." She added that the politicians must now put their differences behind them and work together if they want Albania to receive international aid again.


Election officials in Tirana reported on 8 July that there are still no results from seven electoral districts and that the final, nation-wide total may not be available for weeks. Fatos Nano, the Socialists' prime minister-designate, nonetheless said he wants to name his government by 20 July. But President Sali Berisha's Democrats have not made clear what sort of policy they will conduct as the leading opposition party. Nor has Berisha said when he will resign the presidency, although news agencies reported on 8 July that he has already begun to move his belongings out of the president's office. The previous day, the Socialists nominated Rexhep Mejdani, a little-known professor of mathematics, as their candidate to replace Berisha. The parliament elects the president, whose position the Socialists have promised to make less powerful.


The Western alliance issued a statement in Madrid on 8 July saying that NATO "will not tolerate any recourse to force or violence" in Bosnia. Observers said this is a clear warning to opponents of embattled Republika Srpska President Biljana Plavsic not to try to oust her by force. The U.S. and its major allies had earlier expressed support for Plavsic, and SFOR has increased patrols in and around her stronghold of Banja Luka. The statement in Madrid also said there cannot be any "lasting peace without justice" in the former Yugoslavia, and called on Croatia, Bosnia-Herzegovina, and Serbia to arrest the approximately 70 indicted war criminals still at large on their respective territories. The text repeated the international community's warning that the former Yugoslavs' implementation of the Dayton agreement will be a "prerequisite for continued assistance" to the three republics.


Aleksa Buha, the head of the governing Serbian Democratic Party, told the Belgrade daily "Blic" on 8 July that protection has been increased for Radovan Karadzic and Gen. Ratko Mladic, who are the two most prominent indicted war criminals in the former Yugoslavia. Buha warned that those who guard the men "will not sit on their hands" in the face of possible moves by the U.S. or NATO to capture the two and take them to The Hague (see "RFE/RL Newsline," 7 July 1997). Karadzic lives in Pale, while Mladic was last seen in public in Belgrade in June. AFP reported on 8 July, however, that Mladic is vacationing in the Montenegrin coastal village of Rezevici Rijeka, where he is allegedly accompanied by 15 bodyguards.


Biljana Plavsic has turned down Serbian President Slobodan Milosevic's offer to host a meeting between her and Momcilo Krajisnik, the Serbian member of the Bosnian joint presidency. Plavsic said in Banja Luka on 8 July that "there is nothing to discuss" with Milosevic, who "has already destroyed everything of value in Serbia." Earlier that day, Plavsic met with Gen. Pero Colic, her army chief of staff, who reaffirmed the military's support for Plavsic as commander-in-chief. He also pledged to respect the decisions she makes as president. Pro-Milosevic media in Belgrade had previously carried the text of a letter, allegedly written by Colic, criticizing Plavsic's dissolution of the parliament. Colic told the pro-Milosevic Belgrade daily "Vecernje novosti" on 8 July that foreigners must not interfere in Bosnian Serb affairs.


The OSCE Parliamentary Assembly, meeting in Warsaw on 8 July, urged that rapes committed during the war in the former Yugoslavia be prosecuted by the International Criminal Tribunal in The Hague, Reuters reported. The assembly noted that charges of rape had been withdrawn in a number of cases as victims dared not give evidence. In a statement issued after its four-day session, the assembly requested the "OSCE and participating states ensure that war crimes in the form of rape are referred to the International Criminal Tribunal for the Former Yugoslavia and are given equal treatment as other grave war crimes."


In Podgorica, Prime Minister Milo Djukanovic said Serbia and Montenegro must be equal partners in the Yugoslav federation. Djukanovic charged that Milosevic has been undermining Montenegro's position, an RFE/RL correspondent reported from the Montenegrin capital on 8 July. In Zagreb, Croatian Foreign Minister Mate Granic said his country now accepts that UN civilian administrators will stay on in eastern Slavonia until 15 January 1998. In Belgrade, Jacques Klein, the UN's chief administrator in eastern Slavonia, said that federal Yugoslav citizens will not need a visa to go to that region once it returns to Croatian control on 15 July, the Belgrade daily "Danas" reported.


Razvan Temesan, the former president of Bacncorex, was detained on 8 July by Bucharest police. He is suspected, among other things, of having approved in 1992 the payment of $1.8 million to a private company at a lower exchange rate than the official one. Temesan is known to be close to former President Ion Iliescu. The Pro TV private channel reported that Temesan says he is a "political prisoner" and has denied any wrong doing. He is also reported to have begun a hunger strike.


Representatives of the government and the trade unions on 8 July signed an agreement on settling the labor dispute that began several days previously (see "RFE/RL Newsline," 7 July 1997), BASA-press reported. Under the terms of the agreement, wage arrears will be paid by 27 July and compensation to cover cost-of-living increases will be paid to policemen by October. The executive will also compensate those sectors of the population hardest hit by increases in energy prices. Trade union leader Ion Godonga said the protests will resume if the government fails to honor its commitments.


Vladimir Slonari, Dimitrii Uzun, and Ilya Trombitskii announced on 8 July that they have quit the Socialist Unity-Edinstvo faction in the parliament, Infotag and BASA-press reported. Trombitskii was expelled from the party shortly after the expulsion of Slonari and Uzun (see "RFE/RL Newsline," 7 July 1997). They said their decision was due to a "difference of principles," and they attacked the anti-reform stance of Socialist Unity-Edinstvo. The three said they support the idea of early elections if the parliament continues to block reforms. Slonari said that by failing to support President Petru Lucinschi, Socialist Unity-Edinstvo is "pushing the president to rightist postures." He also predicted that the faction will lose more deputies. Twelve out of its 28 deputies elected in 1994 have already quit.


Ivan Kostov on 8 July said organized crime in Bulgaria is threatening to destroy the authority of the state and has already virtually replaced that authority in some regions, Reuters reported. Interior Ministry secretary Bozidar Popov told the agency that Russian mafia were also operating in the country with the help of local criminal groups, sometimes "using Bulgarian frontmen to buy estates and hotels." He said Russian criminal groups were involved in drug dealing and trafficking with women, who are sent to work as prostitutes in neighboring Greece and Turkey. Those groups, he said, also include citizens of former Soviet republics such as Ukraine and Georgia as well as Chechnya.


The EU Executive Commission on 8 July approved a $770,000 emergency aid package for medical supplies to Bulgaria, saying difficulties in delivering medical aid to Bulgaria have been exacerbated by the "chaotic political climate" there since 1989. The commission said medical supplies are among Bulgaria's most urgent needs--both in hospitals and at government-run institutions for the elderly and children. It added that although elections recently brought the anti-Communist opposition to power, there is no prospect of a quick solution to current problems, BTA reported.

Chubais and His Clan Face Russian Reality

by Donald N. Jensen

Yeltsin's recent government shakeup has been widely perceived as a major step toward economic reform. In its first 100 days, the new government has improved tax collection, proposed a simplified tax code, ordered public officials to disclose their financial holdings, and sought to reassert Kremlin control over independent-minded regional governors. While those are undoubtedly laudable goals, the shakeup also marks the continued consolidation of power by the driving force behind the new government--First Deputy Prime Minister Anatolii Chubais--and the financial-industrial oligarchy supporting him. That network includes banks such as Oneksimbank, Most, and Menatep; oil companies such as Yukos and Sidanko; and national media organs such as NTV, "Segodnya," and "Komsomolskaya pravda."

The government shakeup follows a year of steadily increasing influence for Chubais and his clan and has enabled him to gain the upper hand over other clans, informal political alliances, economic interest groups, and media organs that dominate Russian politics. Since the 1996 presidential elections, Chubais has chalked up several achievements. He was named head of the Presidential Administration and subsequently used his friendship with President Boris Yeltsin's daughter to control access to the president and depose arch-rivals former presidential bodyguard Aleksandr Korzhakov and former Security Council Secretary Aleksandr Lebed. He took advantage of Yeltsin's illness last fall to strengthen his relations with key businessmen. And he used his connections in the West and with international financial institutions to ensure money flows to the cash-starved government.

Despite those successes, Chubais's preeminence is not unchallenged. There is considerable overlapping of interests among elite clans, and alliances are constantly shifting. Two competing clans, moreover, continue to pose a threat. On the one hand, Prime Minister Viktor Chernomyrdin's clan favors maintaining significant state ownership over the country's large natural monopolies--gas, electricity, and railroads--and rebuilding Russia's high-technology sector. Key clan members are the Gazprom, Rosneft, and LUKoil companies, the banks Imperial and Inkombank, and Deputy Prime Minister and Interior Minister Anatolii Kulikov. On the other hand, Moscow Mayor Yurii Luzhkov's clan favors increased government financing of the regions and domestic industries. Its clout rests on the city's interests in virtually every major business and real estate enterprise in the capital as well as its widespread investment in other regions in the Russian Federation. Largely because of those ties, Luzhkov has good relations with other members of the Federation Council, many of whom oppose Chubais's efforts to reduce the authority of regional leaders.

Chubais is also confronted with other problems that may ensure his dominance is short-lived. First, divisions may be emerging among his supporters. Industrialist and Deputy Security Council Secretary Boris Berezovskii and Oneksimbank President Vladimir Potanin, both firmly in the Chubais camp for the past year, waged a public battle for control over Sibneft in May. Tensions are also reported between Berezovskii and media mogul Vladimir Gusinskii, another Chubais ally. Moreover, Chubais is also not assured of continued backing by First Deputy Prime Minister Boris Nemtsov, who has presidential aspirations and an independent political base.

Second, the implementation of Chubais's economic program has run into stiff opposition from the natural monopolies. For example, although the government abolished an agreement giving the Gazprom management a permanent proxy vote on the state's 40% shareholding and ordered a reorganization of the state regulatory commission, it has been unable to force Gazprom to yield its monopoly on pipelines. The new government's rhetoric has already begun to change: after his mixed success battling with Gazprom, Nemtsov praised the preservation of the state's role in managing that firm.

Third, as he recovers from his health problems, Yeltsin--whose usual style has been to strike a balance between his lieutenants to prevent any one side from gaining too much power--has shown signs that he is reserving the right to rein in Chubais. Chubais's move from the Presidential Administration to the government, where he is politically exposed, could give Yeltsin the room for maneuver to reduce Chubais's role should government policies become too unpopular.

It is very doubtful that the rise of the Chubais clan is an unalloyed victory for "reform." In May, the Finance Ministry again requested "competitive" bids from commercial banks for the right to grant government guaranteed loans to the state on extremely favorable terms. The winners were banks supporting Chubais; the rules governing the bidding ensured opponents never had a chance. Chubais also sided with bankers pressing for permission from the Central Bank to act as share dealers in 1998, when new stock market regulations go into effect.

For the West, too, there are perils. The recent Harvard aid scandal showed how foreign assistance, in this case favoring a group close to Chubais, almost inevitably becomes entangled in Russia's clan wars. Russian foreign-policy decisions--such as how to transport Caspian oil--also tend to reflect the agenda of whatever clan is dominant at any given moment, rather than national interests. Most important, it is unclear how the growing concentration of wealth in a few hands, unregulated by the rule of law, will further the development of a democratic state, which, as Chubais's clan stresses, Russia so desperately needs.

The author is associate director of RFE/RL's Broadcasting Division.