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Newsline - August 28, 1997


First Deputy Prime Minister Anatolii Chubais has called for strengthening state oversight of investments by "natural monopolies," ITAR-TASS reported on 26 August. Russia's three largest such monopolies are Gazprom, Unified Energy Systems, and the Railroad Ministry, in all of which the state is the largest single shareholder. Chairing a government meeting, Chubais said investments by those three monopolies will amount to 89 trillion rubles ($15 billion) in 1997. That figure is five times the planned total state investment in 1997 and 2.5 times the total foreign investment in Russia last year, according to "Segodnya" on 27 August. "Izvestiya" argued the same day that the huge sums invested by the three monopolies indicate they are prospering at the state's expense. Several ministries are to coordinate investment projects with the monopolies; and beginning in January 1998, the State Statistics Committee will prepare quarterly reports on monopolies' investments.


Addressing a congress of coal industry workers on 27 August, Chubais promised to take steps to end the "intolerable" growth in non-payments to coal enterprises and wage arrears to coal workers, "Nezavisimaya gazeta" reported on 28 August. Noting that coal workers are owed 3.1 trillion rubles ($530 million) in back wages, Chubais said consumers -- mostly power plants -- owe 90 percent of the 9 trillion rubles in debts to coal enterprises. But he expressed optimism that before the end of the year, the World Bank will extend a second loan of $500 million for restructuring the coal industry (see "RFE/RL Newsline," 21 August 1997). "Nezavisimaya gazeta" noted that in recent months, the government has largely met its spending targets for the coal industry. The number of strikes at coal mines has declined from 160 in February to 14 in July and four in August, the daily added.


Meeting in Moscow on 27 August, Hennady Udovenko and his Russian counterpart, Yevgenii Primakov, reviewed progress in implementing agreements reached by Presidents Leonid Kuchma and Yeltsin during their May meeting in Kyiv, Russian media reported. The two ministers also signed a statement stipulating the legal aspects of the border issue. Primakov was quoted as saying that demarcation of the Russian-Ukrainian border is "not an issue for today." Border negotiations are scheduled to continue in the Russian city of Bryansk in September. Udovenko also met with Prime Minister Viktor Chernomyrdin to discuss issues related to bilateral cooperation. Udovenko announced that President Kuchma will visit Moscow in January or February 1998.


Russian Foreign Ministry officials have denied Turkish media reports that Yevgenii Primakov will visit Ankara in the next few months, Interfax reported on 27 August. The officials admitted that Primakov has received an invitation from the Turkish government but said that "neither the date nor the agenda" has yet been decided. AFP on 26 August had quoted an unnamed Russian Foreign Ministry official as stating that Primakov will travel to Ankara in October and that the visit has been planned for a long time. Similarly, Turkish Foreign Ministry spokesman Omer Akbel told journalists in Ankara on 27 August that the visit is expected to take place, the "Turkish Daily News" reported. Akbel also noted that the deployment of Russian S-300 anti-aircraft missiles in Greek Cyprus earlier than planned is a "very grave development."


Ilyas Bogatyrev and Vladislav Chernyaev, employees of the Russian television production company VID who were recently released after being held hostage in Chechnya for two months, have said they "have no particular desire" to testify to Chechen investigators currently in Moscow to determine the circumstances of their release, ITAR-TASS reported. The two men said they do not think there is any point in giving evidence as they are certain that "none of the criminals will be punished." The Chechens are investigating claims by NTV that it paid a $2 million ransom for the release of three of its journalists who were likewise abducted in Chechnya. Chechen leaders have denied those allegations. Russian Security Council Secretary Ivan Rybkin told "Rossiiskaya gazeta" on 27 August that a cash payment was made to people who helped establish where the journalists were being held captive but that no ransom money changed hands.


Khozh-Akhmed Yarikhanov, the president of Chechnya's state oil company Yunko, said on 27 August that he "will never sign" a new draft agreement on the transit of Azerbaijan's Caspian oil via Chechnya, Interfax reported. Yarikhanov said the document, which was delivered to Grozny by Russian First Deputy Fuel and Energy Minister Sergei Kirienko, is "politically charged" and contains "numerous references to Chechnya as a member of the Russian Federation." Chechen Vice President Vakha Arsanov told journalists in Baku on 27 August that he doubts the Baku-Grozny-Tikhoretsk pipeline will be operational by 1 October when the first "early oil" is scheduled to be exported. Arsanov said that Chechnya plans to build a new pipeline from Grozny through Georigia to the Black Sea, Turan reported.


In Moscow, however, Russian Security Council Secretary Rybkin has said preparations have been made for repair work on the pipeline, Interfax reported. He added that the repairs can be completed within three weeks. First Deputy Prime Minister Boris Nemtsov, who is also fuel and energy minister, said Chechen President Aslan Maskhadov has assured him by telephone on 26 August that Grozny will not obstruct repairs.


Yabloko member Oksana Dmitrieva, who heads a State Duma subcommittee on the budget, has described the 1998 draft budget as the first "realistic" budget submitted by the government, ITAR-TASS reported on 27 August. She praised the government for planning to increase expenditures on the health care system and to reduce funds allocated for general supplies to far northern regions, "Kommersant-Daily" reported on 28 August. However, Dmitrieva criticized what she called the "military-police orientation" of the draft budget. She noted that while many state subsidies are to be cut, the government has proposed that the money saved be spent on the "power ministries" rather than on social programs. The Yabloko faction voted against the 1997 budget in all readings in the Duma. Yabloko leader Grigorii Yavlinskii has frequently called on the government to change its spending priorities.


Central Electoral Commission Chairman Aleksandr Ivanchenko has predicted that the coming months will bring a "lively discussion" on amending the electoral law, RFE/RL's Moscow bureau reported on 27 August. Ivanchenko advocates reducing the number of State Duma deputies elected using a proportional representation system. Currently, 225 Duma deputies are chosen from lists submitted by parties that gain at least 5 percent of the vote. The other 225 deputies are elected by a plurality of the vote in single-member districts. Ivanchenko noted that all but one of Russia's 89 regions elect their legislatures using only single-member districts. He also said the legality of the proportional representation system has been contested in several court appeals. The Supreme Court rejected one such appeal in April, but the Constitutional Court has yet to rule on a similar case (see "RFE/RL Newsline," 18 July 1997).


Duma deputy Vladimir Medvedev argued in "Nezavisimaya gazeta" on 28 August that the electoral law should be amended to do away with proportional representation. Medvedev said that half of the Duma should be chosen from professional associations, such as the Union of Lawyers and the Union of Industrialists and Entrepreneurs, instead of from party lists. The other 225 deputies, he said, would be elected in single-member districts, as under the current electoral law. Such a system would "raise the professionalism" of the Duma, Medvedev added. Medvedev belongs to the Russian Regions faction, composed entirely of Duma deputies elected in single-member districts. He also argued against introducing the "imperative mandate" recently proposed by Duma Speaker Gennadii Seleznev, which would allow faction leaders to strip members of their Duma mandates for violating party discipline (see "RFE/RL Newsline," 1 August 1997).


Patriarch of Moscow and All Russia Aleksii II, the head of the Russian Orthodox Church, has spoken out against making Russian legislation conform to "North American norms" on religious activity, ITAR-TASS reported on 27 August. After a meeting with Christoph Schoenborn, the archbishop of Vienna, Aleksii said Russian law should recognize "our own traditions and history." He added that proselytizing should be banned because it attempts to "entice people who profess the religion of their ancestors into a different faith." The Vatican and the U.S. Senate, among others, sharply criticized a proposed law on religious organizations as discriminatory. Yeltsin later vetoed that law in July. Aleksii recently said a revised version of the religion law should retain a clause recognizing the special role of the Russian Orthodox Church in Russian history.


Aleksandr Krutik, commercial director and one of the founders of the Drofa publishing house, was shot dead near his Moscow apartment on 26 August, Russian media reported. Drofa produced more than 2 million textbooks monthly and had a contract to produce some 30 percent of the books ordered by the Education Ministry in 1996 and 1997, according to the 28 August "Kommersant-Daily." The November 1996 murder of Drofa's deputy director-general, Vladimir Vishnyakov, remains unsolved. Members of the Drofa board of directors, which held an emergency meeting on 27 August, believe the killings of Krutik and Vishnyakov indicate that competitors are trying to force Drofa out of the textbook publishing market. Deputy Prime Minister Oleg Sysuev recently warned that Russian schools face a severe shortage of textbooks (see "RFE/RL Newsline," 14 August 1997).


Vsevolod Bogdanov, chairman of the Union of Journalists of Russia, announced on 27 August that subscriptions to all Russian newspapers and magazines for the second half of 1997 totaled some 7 million, down 20 percent on the same period in 1996, "Nezavisimaya gazeta" reported. Moscow-based newspapers suffered the largest drop in circulation. Bogdanov also said some 60 percent of Russian journalists earn less than $100 a month. Aleksei Simonov, head of the watchdog Glasnost Defense Foundation, noted that the press is increasingly forced to serve as "propagandist and agitator" for the investors on whom publications depend to survive, ITAR-TASS reported. Bogdanov called on the state to guarantee the economic independence of the media and vowed to fight to retain tax breaks for the media outlets. The draft tax code proposed by the government would revoke privileges for the media.


Several members of the Tajik opposition were killed by police in Kofarnikhon on 27 August. ITAR-TASS reported that four men were killed in an exchange of fire after they attacked a police roadblock. But United Tajik Opposition leader Said Abdullo Nuri told RFE/RL's Tajik service that local militia shot five UTO members in the back without provocation. At Nuri's request, representatives of the UN and countries that are guarantors of the peace process are currently investigating the matter. Both Nuri and Ali Akbar Turajonzoda have ordered UTO fighters not to respond with violence or any actions that could threaten the peace process.


Speaking at a news conference on 27 August, Kazakh Foreign Minister Kasymjomart Tokayev said his country was concerned about reports that Russia will hold a tender for developing the Caspian shelf, ITAR-TASS reported. Tokayev said part of the shelf to be offered at the tender belongs to Kazakhstan. He added that Almaty will send an official note to Russia to reconsider holding the tender and to conduct negotiations with Kazakhstan first. Tokayev said his government favors consent by all Caspian states before any tenders for oil shares in the Caspian Sea are held.


Six people have so far died as a result of injuries sustained when a bus traveling between Yerevan and the southeastern town of Kapan hit a land mine and caught fire on 22 August, Interfax reported. Mines were laid near the Armenian-Azerbaijani frontier from 1992-94 during fighting for control of Nagorno-Karabakh.


Foreign Ministry spokesman Arsen Gasparyan told journalists in Yerevan on 27 August that a breakthrough in resolving the Karabakh conflict can be achieved only by direct talks between Baku and the Nagorno-Karabakh leadership, ARMENPRESS and Interfax reported. Gasparyan said Armenia considers that measures to promote regional security are crucial to a settlement of the conflict and should be addressed separately in a settlement document. He also criticized the Azerbaijani leadership for "intentionally distorting" the recent proposals made by the Organization for Security and Cooperation in Europe's Minsk Group. On a recent visit to Stepanakert and Yerevan, Frank Lambach, Germany's representative to the Minsk Group, also advocated direct talks between Baku and Stepanakert.


Leading Armenian intellectuals, scientists, and journalists have appealed to President Levon Ter-Petrossyan to pardon Hrant Markaryan, a prominent Dashnak party member and veteran of the Karabakh war, RFE/RL's Yerevan bureau reported on 27 August. Hrant Markaryan is serving a five-year prison term after being convicted in December 1996 of illegal possession of arms. Two years earlier, Markaryan had been arrested, along with other Dashnak party members, on charges of setting up a terrorist group named Dro. The charges of terrorism against Markaryan were subsequently dropped for lack of evidence. Editors of pro-government and opposition newspapers recently addressed a similar plea to President Ter-Petrossyan to pardon Markaryan.


Georgian President Eduard Shevardnadze and members of the Georgian "Apkhazeti" parliamentary faction, which represents ethnic Georgians who fled Abkhazia during the 1992-93 war, attended a session of the Abkhaz parliament in exile held in the Georgian capital on 27 August, RFE/RL's Tbilisi bureau reported, citing BS-Press. Tamaz Nadareishvili, the chairman of the parliament in exile, again argued that Georgia can restore its hegemony over Abkhazia only by force. He criticized the agreement recently signed by Shevardnadze and Abkhaz President Vladislav Ardzinba, which he said had encouraged Abkhazia to assume an even more radical position. The parliament in exile demanded the right to participate at any further Abkhaz-Georgian negotiations. Shevardnadze told the session that Georgia and Abkhazia will soon sign an interim protocol paving the way for Abkhazia's inclusion in a federal Georgian state, Interfax reported.


On arriving in the Belarusian capital on 27 August, Yevgenii Primakov told reporters that he will discuss development of the Russian-Belarusian union as well as the recent detentions of Russian Public Television (ORT) staffers in Belarus. Two ORT journalists --both Belarusian citizens -- remain in jail, while five others have been released under pressure from Russia. Primakov said he has not come to Belarus as the journalists' "defender" and did not want to interfere in the country's internal affairs. But he added that "there is something to be discussed." Earlier, Belarusian President Alyaksandr Lukashenka told reporters that Primakov had been sent to Minsk by Russian President Boris Yeltsin under pressure from Primakov's political rivals, who know that his mission "was doomed to failure." Lukashenka suggested that Primakov's failure in Belarus will be used against him.


Security and Defense Council Secretary Volodymyr Horbulin told reporters in Kyiv on 27 August that President Leonid Kuchma and the government will urge the parliament to more than double defense spending in 1998, UNIAN reported. The government will also appeal to the parliament to allot funds to reform the military. Horbulin proposed that 3.5 percent of the projected gross domestic product, the equivalent of about $1.9 billion be spent on the military next year. The 1997 budget allots 1.5 percent of GDP for defense spending ($811 million). Horbulin also said Kyiv wants to reduce the number of generals from 386 to 280 and that it will watch the progress of Russian military reforms for tips on how to improve its own army amid staff cuts. Some 350,000 people now serve in the Ukrainian military.


Ukrainian Prime Minister Valery Pustovoitenko on 27 August told a visiting Japanese parliamentary delegation that Kyiv wants closer links with Japan, AFP reported. Pustovoitenko said Ukraine is particularly eager to encourage the creation of joint enterprises between the two countries in electronics, construction, and oil exploitation. Juro Saito -- the speaker of Japanese House of Councilors (the upper house of parliament), who is currently in Kyiv with seven other Japanese members of parliament -- said Tokyo intends to help Ukraine with its economic and political reforms. He added that Japan would like to set up a joint Ukrainian-Japanese research center to study the effects of the explosion at the Chornobyl nuclear power station.


Estonian Foreign Minister Toomas Hendrik Ilves has said that relations between his country and Russia appear to be warming, even though Russian officials continue to accuse Estonia of human rights violations. Ilves, who attended the recent Nordic Council security conference in Helsinki, made the comment in an interview published in the Finnish daily "Helsingin Sanomat" on 27 August. The previous day, Russian Deputy Foreign Minister Aleksandr Avdeev had accused the Baltic States, and particularly Estonia, of discriminating against its Russian-speaking minorities (see "RFE/RL Newsline," 27 August 1997). Ilves denied that Estonia discriminates against its Russian speakers. At the same time, he said the government will not give Estonian citizenship to children born in Estonia whose parents are both of Russian nationality.


Martti Ahtisaari has asked the organizers of the Vilnius summit in early September to be allowed to take part as a guest to "stress the difference between his status and that of Belarusian President Lukashenka," BNS reported on 27 August. "This is a very official and very significant wish," a Lithuanian presidential adviser responsible for the Vilnius conference told the news agency. According to BNS, it will be stressed both in conference reports and in participants' conversations with Lukashenka that Belarus must respect its commitments to the Organization for Security and Cooperation in Europe and the Council of Europe in the areas of human rights, democracy, press freedom, and dialogue with the opposition. In addition to Ahtisaari, the presidents of 10 East European countries will be taking part in the summit, together with Russian Prime Minister Viktor Chernomyrdin.


Polish Defense Minister Stanislaw Dobrzanski was quoted by ITAR-TASS on 27 August as saying he can neither confirm nor deny press reports that Russia has proposed Poland purchase 100 Sukhoi-39 fighter jets worth $1billion. He said that Warsaw has not yet started talks on the purchase of the planes and that no official proposals have been made by Moscow. However, enterprises, including from Russia, have already begun making informal proposals, Dobrzanski said. He added it would be possible to speak about a tender for purchasing the aircraft only after the 15-year plan for modernizing the Polish army is approved.


The National Agency for Foreign Investment (PAIZ) on 27 August announced that direct foreign investment in Poland over the last five years totaled more than $16 billion. Nearly $14 billion came from 535 large foreign companies, each of which has invested at least $1 million in Poland. Foreign companies are expected to invest a further $2-3 billion dollars by the end of 1997, PAIZ President Waldemar Dabrowski told journalists. The U.S. and Germany top the list of foreign investors, with $3.2 billion and $1.8 billion, respectively. They are followed by multi-nationals ($1.6 billion), Italy ($1.4 billion), and France ($1.2 billion). Italian auto-maker FIAT heads the list of individual foreign investors; it has already committed $1 billion and plans to invest a further $814 million.


The Czech government on 27 August announced it will privatize or abolish 37 percent of the railroad network in the Czech Republic by 2,000, Czech Television reported. The government also said that some 17,000 railroad workers will be laid off in an effort to reform the inefficient system. Meanwhile, the electricity distribution company Prazska Energetika on 27 August cut off power to the headquarters of the Czech Railroads company. The state railroad owes the power distribution company 304 million crowns ($9 million). Railroad officials told Czech Radio that the blackout at headquarters has not yet affected railroad operations.


For the second consecutive day, the three-party ruling coalition boycotted a special parliamentary session called to discuss the expulsion of deputy Frantisek Gaulieder from the chamber. The parliamentary session was attended only by opposition deputies and had to be canceled because of the lack of a necessary quorum. The parliament stripped Gaulieder of his mandate in December 1996, one month after he left Prime Minister Vladimir Meciar's Movement for a Democratic Slovakia. Gaulieder argues that his mandate was removed on the basis of a forged letter of resignation. The Constitutional Court ruled in July that the parliament acted unconstitutionally, while the U.S. and Western European officials have criticized the decision to expel Gaulieder from the legislature.


There were at least six incidents on 27 and 28 August involving SFOR troops and police loyal to the hard-line Bosnian Serbs under Radovan Karadzic, CNN reported. In Brcko, SFOR troops took up positions around a police station when police loyal to President Biljana Plavsic sought to enter the building, which Karadzic's police control. SFOR troops fired shots into the air to disperse hostile crowds, BETA reported. The town council then asked for a meeting with Robert Farrand, the international community's chief representative there. In Bijeljina, SFOR troops allegedly entered the police station.


In Doboj, Karadzic's police on 27 August retook control of a television relay tower that Plavsic's backers had seized the previous day. Karadzic's men also arrested Milovan Stankovic, a pro-Plavsic member of the Bosnian Serb parliament. SFOR spokesmen denied Serbian media reports suggesting that peacekeepers helped Plavsic's police and that shots were fired during the confrontation. TV Banja Luka and TV Pale are engaged in a fierce competition to dominate the air waves (see "RFE/RL Bosnia Report," 27 August 1997). Since the Bosnian Serbs are largely spread out across rural areas, television is the most effective means of influencing public opinion in the Republika Srpska.


Spokesmen for SFOR said in Sarajevo on 27 August that peacekeepers are studying a request from Yugoslav President Slobodan Milosevic to fly to Bosnian Serb territory. Some observers said he wants to go to Banja Luka, where Plavsic has her headquarters, an RFE/RL correspondent reported from Sarajevo. U.S. Secretary of State Madeleine Albright recently warned Milosevic that he should "get off the fence" and unambiguously support Plavsic if he wants an end to Yugoslavia's international isolation (see "RFE/RL Newsline," 26 August 1997). In Washington, the State Department announced it will make available $9 million in reconstruction aid for Bosnian Serb towns that back Plavsic.


Gojko Klickovic, the prime minister of the pro-Karadzic government, said in Pale on 27 August that his authorities will "not tolerate" Plavsic and will "use all means" to limit the movements of her supporters on territory under Pale's control. In Banja Luka, Col. Mihajlo Mitrovic of the General Staff said that most top-ranking officers in the Bosnian Serb military support Plavsic and that those who do not will be replaced "very soon." In Sarajevo, spokesmen for the OSCE rejected a recent call by the Pale parliament to postpone the local elections slated for 14 September.


The Yugoslav Federal Constitutional Court on 27 August "temporarily suspended" a decision by the Montenegrin election commission blocking the reelection bid of Momir Bulatovic, Montenegro's pro-Milosevic president. The Belgrade court gave the authorities in Podgorica 10 days to appeal the decision (see "RFE/RL Newsline," 15 August 1997). Blagota Mitric, the president of the Montenegrin Constitutional Court, said in Podgorica that the Belgrade court's decision is a violation of Montenegrin and Yugoslav law. Montenegrin Prime Minister Milo Djukanovic, who is Bulatovic's main rival in the ongoing power struggle, argued that the Belgrade court's decision threatens not only the legal system but also the very principles of Montenegrin and Yugoslav statehood.


UN administrators for eastern Slavonia said in Zagreb that 200 Serbian families left eastern Slavonia on 27 August to return to their original homes elsewhere in Croatia. The UN expects that as many as 10,000 Croatian Serbs could follow suit by the end of September. Also in Zagreb, the Foreign Ministry announced that Foreign Minister Mate Granic and his Yugoslav counterpart, Milan Milutinovic, will sign six agreements in Belgrade in September dealing with frontier, economic, and legal issues. In Jerusalem, the Simon Wiesenthal Center appealed to the Israeli government not to go ahead with plans to establish diplomatic relations with Croatia. The Center charged that the Croatian government has yet to repudiate that country's fascist legacy from World War II.


Eduard Selami said he will return to the Democratic Party if its current leadership leaves, "Gazeta Shqiptare" reported on 28 August. Selami was sacked as party leader in 1995 after opposing President Sali Berisha over the question of a constitutional referendum. Meanwhile, Leni Fischer, the chair of the Council of Europe's Parliamentary Assembly, has sent a letter to the Democrats to express solidarity with the hunger strike by former parliamentary speaker Pjeter Arbnori (see "RFE/RL Newsline," 25 August 1997). "Rilindja Demokratike" quotes Fischer as saying that "Arbnori's decision is an indicator that the rights of the opposition are not fully respected in Albania." Arbnori is demanding that the opposition receive one-third of television news air time.


The Constitutional Court on 27 August declared valid the results of the 29 June referendum, in which more than 60 percent of the voters opted for a republic, "Koha Jone" reported. The monarchists had challenged the results and charged the Central Election Commission with fraud. Leka Zogu, the claimant to the throne, is now wanted by police after being involved in a violent demonstration after the referendum (see "RFE/RL Newsline," 26 August 1997).


The government on 27 August dismissed Valerian Stan as head of the government's Control Department for repeatedly displaying a lack of discipline. Earlier the same day, Stan had called a press conference at which he again accused leaders of the Democratic Party of having illegally purchased apartments from the state in 1991-92 at prices below market value (see "RFE/RL Newsline," 3 July 1997). Stan said he intended to resubmit the case when the new prosecutor-general is appointed, RFE/RL's Bucharest bureau reported. The government accused Stan of undermining Prime Minister Victor Ciorbea's authority by bring up the case again without seeking the premier's approval. In an interview with Radio Bucharest on 28 August, Stan said his dismissal was "arbitrary and unjustified."


Sociologist Nicolae Gheorghe, a leading activist for the rights of Romania's Roma community, has said some 500 Roma have left Romania for Ireland in the last six months. Gheorghe, who is a member of that community, says the Roma hope to be able to take advantage of Ireland's "good welfare system and stable economy," Mediafax reported on 26 August. Gheorghe also said intolerance in Romania toward the Roma has increased in recent months because the media has transformed the government's anti-corruption campaign into a "campaign against the 'Gypsy Mafia.'"


Marin Condeescu, the leader of the largest miners' trade union in Romania, says some 40,000 miners have accepted the terms of a government plan whereby they will receive compensation for volunteering to be made unemployed, RFE/RL's Bucharest bureau reported on 26 August. The government had expected only 32,000 miners to accept the offer. But Condeescu said the union expects some 150,000 of its 210,000 members to opt for the plan and to return to the countryside in "Romania's largest work-force migration of the last 30 years." Under the plan, the government is offers 850,000 lei ($120) a month over five years, which exceeds average monthly wages at some mines. The miners can also opt to take a $7,200 lump sum.


Deputy Premier and Industry Minister Alexander Bozhkov, in a 27 August interview with Reuters marking 100 days in office of the new government, said the cabinet is encountering resistance in its attempts to overhaul the economy, boost investments, and crack down on corruption. Bozhkov said there was "resistance from the state administration to speed up privatization" because of reluctance to "part with [state] ownership." In order to counter that resistance, the government is now drawing up sell-off schemes that would involve minimal participation of the administration. Bozhkov also said the legal system must be revised in order to deal with organized crime. He added that although amendments to the penal code were passed by the parliament in July, it will take time for some of them to become effective.


Bulgaria recently received an $85 million installment of a $657 million standby loan approved by the IMF in April, an RFE/RL Washington correspondent reported on 27 August. A spokeswoman for the IMF said the installment has been released to help Sofia implement the economic reforms and stabilization program agreed on earlier this year with the IMF.


by Liz Fuller

Armenian President Levon Ter-Petrossyan arrived in Moscow on 28 August for a three-day state visit. Ter-Petrossyan and his Russian counterpart, Boris Yeltsin, are to sign a new friendship and cooperation treaty. According to Russian Prime Minister Viktor Chernomyrdin, this "major treaty" will "give new impetus" to the already harmonious bilateral relations between Moscow and Yerevan. Another key agreement is expected to be signed by Armenian Energy Minister Gagik Martirossyan and the chairman of Russia's Gazprom, Rem Vyakhirev. That accord provides for the creation of a joint venture to export Russian gas via Georgia and Armenia to Turkey. Armenia will also receive Russian gas for domestic consumption at prices lower than those it paid for gas from Turkmenistan.

The initial agreement between Russia and Armenia on cooperating in the export of Russian natural gas was signed in Moscow in January 1997 by Armenian Prime Minister Armen Sargssian and Chernomyrdin. Some six months later, in late June, Vyakhirev was in Yerevan to discuss the project with Sargssian's successor as Armenian premier, Robert Kocharyan. Vyakhirev hinted at the time that Gazprom might use part of a $2.5 billion credit it had received to finance construction of the new pipeline through Armenia. Under the terms of the agreement to be signed by Gazprom and its Armenian equivalent, Armgazprom, the volume of Russian gas supplies to and via Armenia will increase from 3 billion cubic meters in 1999 to 9 billion cubic meters in 2003. Russia will receive 55 percent of the profits from the joint venture and Armenia 45 percent. Work on construction of an export pipeline and on renovating the existing pipeline network within Armenia will create some 2,000 new jobs initially. That figure may rise to between 7,000 and 10,000.

In addition to underscoring Moscow's enduring interest in mutually advantageous economic cooperation with Armenia, the creation of the joint venture highlights Turkey's increasing dependence on gas imports to meet its growing energy needs. During the ninth meeting of the presidents of Black Sea Economic Cooperation member states in Istanbul in late April, Vyakhirev and Turkish Energy Minister Recai Kutan signed a 25-year contract worth $13.5 billion, whereby Turkey will increase its annual purchases of Russian natural gas from 6 billion cubic meters to 30 billion in 2010. According to Kutan, that amount will cover approximately half of Turkey's total gas needs in 2010; by that time, as a result of the construction of several new gas-fired power-stations, Turkey will rely on natural gas for 38 percent of its total energy requirement (compared with 13 percent now). Russia will thus remain the largest single supplier of gas to Turkey, followed by Iran. (Turkey is the second largest purchaser of Russian natural gas, after Germany.)

Kutan and Vyakhirev also agreed to create two new joint ventures. One of those joint ventures will repair and upgrade the existing pipeline that supplies Russian gas to Turkey via Ukraine, Romania, and Bulgaria. (Turkey will pay $1.5 billion toward the construction of new stretches of pipeline and compressor stations.) The second will build a new pipeline either overland through the Caucasus or from Izobilnaya (100 kilometers east of Krasnodar) via Dzhubga and then under the Black Sea to Samsun on Turkey's Black Sea coast.

Gazprom board member Vladimir Rezunenko told Reuters in March that Gazprom has approached European banks to discuss credits for financing the underwater Black Sea pipeline, the cost of which is estimated at $3.3 billion. The technical difficulties involved in carrying out that project are daunting, however. The 385-kilometer pipeline would be laid at a depth of 2,100 meters in places, making it the deepest in the world. This would mean the diameter of the pipe would have to be quite narrow to withstand both external and internal pressure, which, in turn, would limit throughput capacity.

At a press conference in Moscow in early August, Vyakhirev nonetheless affirmed that Gazprom still intends to proceed with the trans-Black Sea pipeline, but he gave no indication of how long construction might take once funding is secured. The fact that Moscow and Yerevan agreed in January to build the overland pipeline suggests that Gazprom never considered the Black Sea underwater and the Caucasus overland options as mutually exclusive. Nor, apparently, did Turkey. At the Black Sea Economic Cooperation Istanbul summit in late April, Turkish President Suleyman Demirel assured his Georgian counterpart, Eduard Shevardnadze, that Ankara's commitment to the underwater Black Sea pipeline did not mean that the overland alternative through Georgia had been "removed from the agenda." As a transit country, Georgia stands to earn tariffs from the pipeline.