Volume I No. 4(18 December
1996) No. 3(4 December 1996) No. 2(20 November
1996) No. 1(6 November 1996)
RUSSIAN FEDERATION EXECUTIVE BRANCH
Allow me to introduce the next president
Sergei Stepashin deserved better than this. He clearly accepted the position of prime minister only hesitatingly in May, but once given the job he did attempt to function normally, despite the nearly constant interference in government affairs by various factions anxious to create toeholds for leverage in the upcoming elections. While there are few accomplishments one can point to during his tenure as prime minister, he did secure the required international loans and prevent further internal destabilization. Stepashin's main problem seems to have been that he was judged by the Kremlin to be politically unreliable. His dismissal signals that the government's mandate to protect the reform process is no longer of primary importance. At issue now is the survival of the "Family."
Most analyses suggest that the Kremlin had two concerns with Stepashin. Dagestan, and the re-emergence of Shamil Basaev, raised the question of Stepashin's ability to resolve the conflict in the North Caucasus. Having lost his job as head of the Federal Security Service (FSB) in 1995 over the mishandling of a Chechen hostage raid, Stepashin is perceived to be weak on the Chechen issue. That alone probably would not have prompted his dismissal however. It has been widely reported that Yel'tsin sought the removal of Stepashin as soon as news broke of the alliance between Moscow Mayor Yuri Luzhkov's Fatherland movement and the regional All-Russia movement. The Kremlin apparently wanted Stepashin to exert federal pressure on the regional governors who belong to All-Russia, in order to prevent the alliance with Fatherland.
Much of the most credible commentary regarding Yel'tsin's dismissal of Stepashin attributes electoral motives to the decision. In addition to preventing the consolidation of hostile political movements, control over both media and financial resources is key to providing positive electoral outcomes. While the apparat, in the person of Alexandr Voloshin, has launched personal attacks on Luzhkov and his financial supporter Vladimir Gusinsky, the force of government is required to have substantial impact on their economic resources. Stepashin was reportedly asked to fire the head of Gazprom, which owns 49 percent of Gusinsky's NTV, and to cancel NTV's broadcast license. (ARGUMENT I FAKTY, 3 Aug 99; FBIS-SOV-1999-0804, via World News Connection) While the Putin-led government has not yet moved to fulfill these purported Kremlin requests, Yel'tsin did issue a decree which transferred 35 percent of Gazprom's stock to the state in order to "ensure the country's economic security." (INTERFAX, 1020 GMT, 9 Aug 99; FBIS-SOV-1999-0809, via World News Connection)
Stepashin's most recent post-government move, to align with Grigori Yavlinsky's Yabloko party, seems to confirm the Kremlin's concerns about his political intentions. Yavlinsky has never been a supporter of the Yel'tsin regime and would be unlikely to provide Yel'tsin and his extended "Family" with the much-needed guarantees of immunity should he succeed Yel'tsin as president.
The man Yel'tsin named to replace Stepashin, Vladimir Putin, was brought to Moscow by Anatoli Chubais following the 1996 presidential elections. Prior to the move, Putin, who spent many years in the KGB, was first deputy mayor to Anatoli Sobchak. In an interesting side note, Sobchak just recently returned to Russia after spending several months abroad for medical treatment. His absence delayed prosecutorial inquiry into a corruption probe of the St. Petersburg administration. Sobchak reportedly returned after receiving assurances from then acting Procurator General (and Putin's new Justice Minister) Yuri Chaika. These assurances have been likened by some to immunity, although Sobchak claims that Chaika only promised to deal with him in accordance with the law. (INTERFAX, 16 Jul 99; via nexis)
Putin joined the presidential administration in 1996 as a deputy to Pavel Borodin, with whom he is said to have long been friends. (MOSCOW NEWS, 10 Oct 96; via nexis) By 1998, Putin had been named to head up the FSB, which seemed in relative decline compared to the Stepashin-led Ministry of the Interior (MVD).
Putin's fortunes apparently turned at about the time a strong counterattack was needed against Procurator Skuratov's investigations into Kremlin corruption. A report in Novye izvestia (9 Apr 99; via nexis) describes the workings of the FSB's 12 Department, which "monitors" the activities of leading officials and, Novye izvestia claims, made the compromising video of Skuratov, which provided the pretext for Yel'tsin's dismissal of the procurator.
Regardless of the manner in which Putin proved himself to the Yel'tsin "Family," it has become clear that he has joined the tight circle of close advisers. An analysis of the workings of this Kremlin clique in Obshchaya gazeta (No. 29, July 1997; via nexis) notes that Putin joined Voloshin, Tatiana Dyachenko and Anatoli Chubais in weekly meetings with the prime minister during Stepashin's regime. (It is unlikely that this was the practice during Primakov's tenure.)
Putin's mandate as prime minister could not be more clear: Use the authority of the government to ensure the defeat or marginalization of the Kremlin's political opponents and assist in the creation of the most favorable conditions possible for the "Family" to select the next president of Russia. Yel'tsin, in introducing Putin, suggested he would make an appropriate successor president, but Yel'tsin endorsements are ambivalent and fleeting pronouncements. Perhaps Putin will survive until next year and retain the support of the Kremlin, perhaps he will be needed as a convenient scapegoat for some as yet unknown scandal. What is likely is that the "Family" will plow ahead, rather ham-handedly attempting to control the many pesky democratic variables that an election entails.
The desperation of the president and his advisers suggests that there is far more at stake than a concern for historical legacy and investigations of financial misappropriations. Apparently, the Family must ensure a sympathetic successor because the next occupant will have access to damning information. So, while Yel'tsin's latest personnel maneuver united both critics and sympathizers from all ends of the political spectrum to denounce his actions as "madness" (Nemtsov) and "100 percent lunacy" (Zyuganov), their diagnosis is incorrect. This is not insanity, it is instinct, survival instinct.
by Susan J. Cavan
The Russian government has long been able to use an aggressive foreign policy as a means both to extract political concessions from Western nations and to ensure the continued flow of aid to its ailing and corrupt economy. An explosive scandal implicating high authorities in Moscow, however, appeared likely to undermine Russian credibility in West, and, paradoxically, to give the Kremlin fewer reasons to make pro-Western gestures abroad. As aid appeared threatened, Russian President Boris Yel'tsin dropped all pretenses of cooperation, going so far as to promise a renewed "fight with the West."
Bank loans imperiled by scandal
Russia's attempts to restructure its debt to the West and receive critical IMF funding were imperiled in late August by credible reports that the Russian Mafia had stolen and laundered billions of dollars from previous credits. Congressmen charged with regulating the American banking industry called for a moratorium on future IMF payments.
The scandal, first brought to light in a series of reports in The New York Times, erupted just as Russian officials were attempting to parlay Moscow's recent diplomatic cooperation with the West into new loans. It appeared likely to discount efforts to portray the Russian government as a friend worthy of continued Western support.
On 19 August The New York Times reported that, from October 1998 to March 1999, $4.2 billion had flowed through a Bank of New York account purportedly controlled by reputed Russian gangster Semyon Yukovich Mogilevich. (The New York Times, 19 Aug 99; via nexis) The funds went to a variety of businesses listed on American and Russian stock exchanges. Later reports suggested that close associates of President Boris Yel'tsin might have been involved in diverting the funds from Western loans. (The Independent, 27 Aug 99; via nexis)
The report seemed likely to derail a major Russian argument for debt relief -- namely, that the Russian economy had been so badly ravaged by the currency devaluation of August 1998 that new aid was needed. Authorities suspected that the hard currency moving through the Bank of New York account had come from the $4.5 billion in loans the IMF offered in the wake of the currency crash, which authorities said was spent within weeks of its transfer.
On the day the first New York Times article appeared, Aleksandr Livshits, Russia's envoy for relations with the G-7, pleaded that Russia needed to "balance its economic and political relations with Western partners due to changes [that] occurred in Russia after the August 1998 crisis." In an apparent reference to Russian diplomacy during the Kosovo war, Livshits said Russia had demonstrated its helpfulness in resolving military and economic crises. (ITAR-TASS, 1610 GMT, 19 Aug 99; FBIS-SOV-1999-0819, via World News Connection)
A $640 million tranche of current IMF loans was due to be released in September, but Jim Leach, chairman of the banking committee of the US House of Representatives, called for a moratorium on all lending, and promised a thorough investigation of the Bank of New York. "The question," Leach said, "is whether they were unwittingly duped or were willing facilitators in what may be the greatest example of kleptocratic governance in modern history." (THE INDEPENDENT, 27 Aug 99; via nexis)
The financial scandal erupted shortly before Yel'tsin was to appear in Bishkek for a meeting with representatives of Central Asian nations, a venue in which Russian officials are inclined to make anti-Western statements of the sort not usually heard during visits to Brussels. It was therefore difficult to assess whether Yel'tsin's belligerent tone among his Asian cohorts was business as usual, or whether the threats to Western aid caused him to feel less restrained than ever.
Before Yel'tsin's trip east, the Russian government had been steadily pursuing its long-term (and effective) strategy of playing its post-Cold War ties for more concessions from the West. For at least five years, the Russian government has been able to use weak positions in ongoing relations as hostages for changes that suit it. The Start-II and Start-III treaties, for example, are of little relevance to Western security since they promise to cull an arsenal of Russian ballistic missiles that has already been ravaged by poor maintenance. Russian officials, such as State Duma Foreign Affairs Committee Chairman Vladimir Lukin, were nonetheless determined to link the treaties' approval to American concessions on a new antiballistic missile system for Japan. (RFE/RL NEWSLINE, 19 Aug 99)
In a similar vein, Russian Foreign Ministry spokesman Vladimir Rakhmanin insisted again that the future of his nation's cooperation with NATO depended on the alliance acting in accord with the wishes of the United Nations Security Council. Although Russia was extended the right to attend sessions of the Russian-NATO Permanent Joint Council on the understanding that Moscow would have a "voice, not a veto," Rakhmanin insisted that Russia 's relations with the alliance would remain frozen (with the exception of work in Kosovo) until "the alliance fully take[s] into account our lawful interests and concerns and strictly follow[s] the provisions of the Russia-NATO founding act." (INTERFAX, 1128 GMT, 5 Aug 99; FBIS-SOV-1999-0805, via World News Connection)
by Chandler Rosenberger
* * * * *
Multipolarism rides high at Shanghai-Five
At the fourth Shanghai-Five (Russia, China, Kazakhstan, Kyrgyzstan and Tajikistan) meeting in Bishkek on 23-24 August, Russia sang what is rapidly becoming that same old tune. Unsurprisingly, the dominant theme was improvement of regional security through increased economic and security cooperation. More simply put, the theme was multipolarism. Over the past few months, Russia has taken every opportunity to hammer home its policy. In Bishkek, Yel'tsin himself made the most blatant jab at unipolarism saying that he was "ready to fight" the "westerners" who supported a unipolar world. Russian Foreign Minister Igor Ivanov later tidied up Yel'tsin's statement saying that Russia "has and will come out against 'unipolarism' in the future." (TASS, 1202 GMT, 25 Aug 99; via nexis)
Since the first meeting of the group in Shanghai in 1996, the five nations have progressively made efforts to improve relations first through border demilitarization and now through economic and security cooperation efforts. Russia and China, who act as the Five's elder siblings, separately have been mending bilateral fences over the past few years, most notably through their strategic cooperative partnership and economic trade initiatives. (See The NIS Observed, 12 Jul 99) Under the new Bishkek Declaration signed this month, the Shanghai-Five nations will have irregular meetings between their governments at the foreign and defense levels to exchange views. The next meeting has already been scheduled for May 2000 in Dushanbe, Tajikistan. (XINHUA, 0908 GMT, 25 Aug 99; FBIS-SOV-1999-0826, via World News Connection)
Much ado ... has changed nothing
The Japanese rumor mill is churning again amidst a government reshuffling which has placed a Sakhalin-born statesman at the helm of the Japanese embassy in Moscow. In late August, the Japanese press reported that Japan was "considering" a compromise "interim" Russo-Japanese treaty that excluded a solution to the Kurile Islands territorial issue. (JAPAN ECONOMIC NEWSWIRE, 24 Aug 99; via nexis) According to the Japanese government, the rumor was false and consultations with Russia on the issue will be continued later in the fall. A similar rumor that surfaced last fall was also false. The contentious territorial issue has stymied Russo-Japanese relations throughout the 1990s and has been compounded by recent US efforts to develop a Theater Missile Defense (TMD) system in Japan.
Minoru Tamba's appointment as the new ambassador to Russia could be a Japanese attempt to reinvigorate Russo-Japanese talks. Tamba, who is currently the Japanese first deputy foreign minister in charge of Russian affairs, was Japan's lead negotiator during the 1997 Yel'tsin-Hashimoto meetings at which the two nations agreed to resolve the territorial issue and conclude a peace treaty by 2000. He is highly regarded by his Russian counterparts as an "experienced career diplomat, well-versed in Russian affairs." (ITAR-TASS, 0735 GMT, 13 Aug 99; FBIS-SOV-1999-0813, via World News Connection) In essence, Tamba may be someone with whom Russia can work; however, even if he is, he is crippled by time and will, since he will not assume his post until October, and Yel'tsin is still stalling on a fall summit date.
by Sarah K. Miller
DOMESTIC ISSUES & LEGISLATIVE BRANCH
Stepashin to stand in single-member district in Petersburg
Not willing to risk inclusion on a party list as the only vehicle for entering the Duma, former prime minister Sergei Stepashin has announced he will run for election in his home Krasnoselsky district in St. Petersburg. The new electoral law now allows the first three names on party lists to run simultaneously in single-member districts, and the party powerful of all colors are taking advantage of this. Across the board the same small group of politicians is on the lists and in the districts, guaranteeing that the inner circle of charmed and influential politicians continues to shrink day by day, election by election. (INTERFAX, 0955 GMT, 17 Aug 99; FBIS-SOV-99-0817, via World News Connection)
Putin's candidacy sails through Duma
After the gut-wrenching and posturing Duma debates over Yel'tsin's previous candidates for prime minister, Vladimir Putin's speedy confirmation was almost anticlimactic. Duma chairman Gennadi Seleznev said that deputies did not want to "aggravate the situation" and so Putin was confirmed. What is the "situation" which the Duma did not want to aggravate? Seleznev mentioned the deteriorating state of affairs in the North Caucasus as well as the nation's chronic financial problems. (NTV, 1500 GMT, 9 Aug 99; FBIS-SOV-1999-0809, via World News Connection)
Another explanation is that Yel'tsin, and this Duma, are lame ducks. The Duma is engrossed in preparations for the upcoming elections, and because the government will have to resign upon the seating of the new Duma anyway, who cares who is prime minister? Not that this Duma has been particularly cooperative with the Yel'tsin administration in the past anyway, but with elections looming even less cooperation can be expected in the future.
CEC chairman discusses election rules
Campaigns are not legally allowed to commence until the president has issued his decree naming the date for the Duma elections. Yel'tsin has established that 19 December 1999 will be the election date. Registration has now begun, but only for those parties, associations or blocs that registered one year prior to the election date. The justice ministry qualified 139 parties, blocs, etc. which may now register for the elections in December. This solves, for now, the question as to whether Moscow Mayor Yuri Luzhkov's Fatherland party should be qualified to run ... almost. There remains discussion over the definition of "one year." Luzhkov's party registered on 19 December 1999, but the question is whether 18 December 1999 should be the cut-off date. Presently, the 19th is the official date, so Fatherland is in the race.
Because Yel'tsin has named the date for the upcoming elections, the qualified electoral associations and blocs must now collect 200,000 signatures or make an "electoral deposit" of two million rubles in order for the Central Election Commission (CEC) to register the candidates; however, according to the law, this cannot begin before 25 September. Registered party lists will be provided to the media and will be posted on the Internet, as will copies of candidates' income declarations for 1998, details on any pending criminal charges, and information on whether the candidate holds a foreign passport. With the help of the government, the CEC plans to verify the information provided by the candidates and parties.
With regard to the parties themselves, whomever they chose to place in the first, second, or third place on their lists is their business. However, if anyone from the top three positions on the party list resigns of his "own accord," the whole list will be disqualified. Also, if more than 25 percent of the electoral list voluntarily drops out, the entire list will be disqualified. (Federal Information Systems Corporation, OFFICIAL KREMLIN INTERNATIONAL NEWS BROADCAST, 24 Aug 99; via nexis)
by Michael DeMar Thurman
Kosovo campaign fallout
Fallout from Operation Allied Force continues. With the exception of the Russian peacekeeping contingent in Kosovo, Russia-NATO relations essentially have been frozen since April. Russia's actions include boycotting the NATO-sponsored Peace Shield '99 exercise, establishing new budget priorities, reorganizing air defense missile production, and calls for a more visible naval presence. Russia's post-NATO bombing campaign actions reflect its continuing frustration at being unable to affect events on the world stage to the extent desired.
Russia skips peacekeeping maneuvers
Russia boycotted Peace Shield '99, a multinational peacekeeping exercise staged under NATO's Partnership for Peace program. Peace Shield '99, staged at the Yavorsky training range outside Lvov, Ukraine in August, involved over 1,300 servicemen from 14 NATO and East European countries. Seven other countries sent military attachés to observe. The 11-day exercise's objectives involved training a multinational contingent in peacekeeping operations following an ethnic conflict. (ITAR-TASS, 1744 GMT, 4 Aug 99; FBIS-SOV-1999-0804, via World News Connection) Peace Shield started in 1995 as a bilateral US-Ukraine peacekeeping exercise, and by 1998 Russia participated for the first time. (ITAR-TASS, 1148 GMT, 4 Feb 98; FBIS-UMA-98-035, via World News Connection) Computers drove the exercise's scenario, so the military impact of Russia's absence probably was negligible. Russia's non-participation was a political statement against NATO's bombing campaign.
Funding levels said to remain at 1999 numbers
Events in Yugoslavia also prompted Russia's political leadership to announce new budget priorities. Former Prime Minister Sergei Stepashin stated Russia needs "eyes and ears in space," and Russia's defense capability is no longer comparable to other countries. (ITAR-TASS, 1210 GMT, 6 Aug 99; FBIS-SOV-1999-0806, via World News Connection) Russian President Boris Yel'tsin also said year 2000 armed forces funding would not fall below 1999 levels. (INTERFAX, 0803 GMT, 6 Aug 99; FBIS-SOV-1999-0806, via World News Connection) In addition, Finance Minister Mikhail Kasyanov supports maintaining defense spending at 1999 levels and funding peacekeeping operations in Kosovo. (ITAR-TASS, 0844 GMT, 6 Aug 99; FBIS-SOV-1999-0806, via World News Connection) However, previous economic crises led to austerity measures which precluded fully funding Russian defense budgets. Meager, underfunded defense budgets will prevent any significant change to Russia's defense posture.
Air defense contractors plan joint production efforts
Russian air defense producers also seized upon NATO's bombing campaign to announce plans for more capable Surface-to-Air Missiles (SAMs). Rossiyskaya gazeta reported Russia's air defense developers have reorganized themselves around the Almaz Science and Production Association, Russia's air defense design bureau. Approximately 20 companies plan via joint efforts to produce systems capable of countering US and NATO airpower. The systems are intended for homeland defense and competition in the arms export market. The corporation plans to update the S-300 SAM to a more capable S-400, and offer the S-300 for foreign sales. (ROSSIYSKAYA GAZETA, 6 Aug 99; FBIS-SOV-1999-0806, via World News Connection)
Navy commander calls for return to Mediterranean
Following NATO's bombing campaign, the Russian Navy commander, Admiral Vladimir Kuroedov, called for the Navy's return to the Mediterranean. Kuroedov noted the significant number of sea-launched cruise missile and aircraft attacks which could be opposed with SAMs launched from Russian Navy vessels. He also highlighted the political impact of a forward naval presence in volatile spots. (INTERFAX, 1304 GMT, 7 Aug 99; FBIS-SOV-1999-0807, via World News Connection) Kuroedov is probably reminiscing about the days when the Soviet Navy patrolled the Mediterranean. Despite the commander's aspirations, the Russian Navy's ability to influence events outside of coastal waters with conventional weapons is limited. Although early press reports announced preparations to send up to seven Russian ships to the Adriatic during Operation Allied Force, Russia only sent one reconnaissance ship. Recently Russian naval units have maintained a limited training cycle and would be hard-pressed to sustain a fleet outside of normal operating areas. Nonetheless one ship gave Russia an inexpensive way to demonstrate support for a "traditional" ally.
While budget concerns might limit training to some degree, exercises do continue. The Baltic Fleet commenced large-scale maneuvers dubbed "West-99" with mine identification training off Baltijsk and Leningrad. In all, 40 Navy vessels, 40 logistics ships, and 50 aircraft were scheduled to participate. An amphibious assault was also scheduled along with gun and missile firings. (ITAR-TASS, 0943 GMT, 3 Aug 99; FBIS-SOV-1999-0803, via World News Connection) These exercises appear similar to previous Northern, Black Sea, and Pacific fleet maneuvers.
by LCDR James J. Duke Jr.
NEWLY INDEPENDENT STATES CIS
Persistence is a virtue
In his first success as CIS executive chairman, Yuri Yarov has reduced his CIS executive staff by 50 percent, leaving 711 staff positions within the executive structure. (TURAN, 1440 GMT, 6 Aug 99; FBIS-SOV-1999-0806, via World News Connection) However, this year-long project was the easy part: The substantive issues of economic and military cooperation remain unresolved. During the past two CIS meetings of heads of state and government, these issues were lost in the political fray caused by polarization among the CIS member states. (See The NIS Observed, 14 Jul 99)
If persistence doesn't work, call in the big guy
With another set of CIS meetings quickly approaching in October, Yarov has begun to take a different approach to getting things done. After meeting with Yel'tsin in late August, he has announced that the CIS Free Trade Zone (FTZ) will begin on 1 January 2000, since a number of presidentially supported "tasks" depend on FTZ implementation. (ITAR-TASS, 0821 GMT, 19 Aug 99; FBIS-SOV-1999-0820, via World News Connection) By taking this approach, Yarov has unabashedly confirmed his subservience to the Russian president. But, he has also shown that he knows how things really get accomplished in the CIS. In order for the FTZ to function, all 12 members of the CIS must theoretically approve the FTZ. At the last CIS Heads of Government meeting in June, WTO standards created an impasse between Customs Union members and non-Union members. Yarov's unilateral announcement on the heels of his meeting with Yel'tsin carries weight since Russia is a key Customs Union member. Thus, if Yel'tsin supports FTZ, then the chances of some form of a Free Trade Zone being implemented in January 2000 -- regardless of how ineffective it may be -- are raised.
by Sarah K. Miller
UKRAINE United we stand ... for now
Four of the candidates opposing President Leonid Kuchma in October's presidential election have apparently been watching the polls. On 25 August, Parliament Speaker Oleksandr Tkachenko, former speaker and Socialist leader Oleksandr Moroz, former Prime Minister Yevhen Marchuk, and Cherkasy Mayor Vlodymyr Oliynyk announced the formation of a joint candidacy. The four announced that they would pool their resources to improve the chances that one of them will win in the first round. (DEUTSCHE-PRESSE AGENTUR, 1208 CET, 25 Aug 99; via nexis) Although they gave no specifics about how this would be done, they said it would ensure that one of them wins on 31 October.
Tkachenko explained, "In response to our move, one of our candidates -- whom we will name later -- will get a vast majority of votes, and the second round will not be needed." The joint candidate will reportedly be announced by the middle of October. (KYIV POST, 24 Aug 99)
Whether the four can actually choose one of them to represent this new coalition is the first major question, of course. But it is the second question that may be the most difficult to deal with: If they did choose one of them, would anyone care?
Oliynyk is a local politician new to the national spotlight. Moroz is clearly the most popular of the group, but his support in opinion polls has generally registered only in the single digits. Tkachenko appears to be viewed negatively by most potential voters, at least in public, receiving under three percent of the support in most polls, while Marchuk is well-known but his candidacy has simply not caught fire. Despite the media frenzy that appears to have greeted the announcement of this coalition, it is possible that the coalition candidate may be unable to challenge even Communist Party leader Pyotr Simonenko or Progressive Socialist Party head Natalya Vitrenko, not to mention Kuchma. Although polls are often unreliable, particularly when dealing with leftist candidates, most Ukrainians seem to echo what one pensioner told a reporter from Reuters, "I am not for anyone. No one does anything for ordinary people." (REUTERS, 20 Aug 99; via Russia Today) Kuchma shouldn't have anything to worry about. What's the point in changing the president if the change won't change anything?
Where, oh where, has our hryvnya gone?
The hryvnya plunged again this month -- albeit temporarily this time. Although the currency had been stable for several months, it took only a gentle nudge from the energy sector to send it into decline once again. On 6 August, the currency dropped as low as 5.25 to the dollar, from its previous level of 3.9. (ASSOCIATED PRESS, 1209 EDT, 6 Aug 99; via nexis) The major culprit was later said to be the country's fuel shortage. National Bank Chairman Viktor Yushchenko explained, "The reason is not in the hryvnya, and not in the currency market. It's in the increased demand for dollars to sign new fuel import deals."
Following its prescribed IMF medicine, Ukraine refused to intervene in the currency market until finally purchasing almost $10 million to help stop the decline. As of 13 August, the hryvnya had stabilized at 4.54 to the dollar, slightly inside the government's exchange corridor of 3.4 - 4.6.
The currency problems, however, have made it even more difficult for Ukraine to pay both its internal and external debt, and caused Moody's to warn investors of a possible debt default by Ukraine. (FINANCIAL TIMES, 27 Aug 99; via nexis)
Ukraine has admitted that the country does not have enough cash reserves to pay its debts, but is counting on the next tranches of its IMF and World Bank loans to stave off debt default and help it pay a portion of its wage arrears. The country is also counting on using some of its sugar harvest to pay pensioners, and a significant portion of its grain harvest to pay energy suppliers. It may be counting its chickens a little early, however. The grain harvest season has been hampered by a lack of fuel, making it likely to be the worst since the country's independence, and the IMF tranche is anything but a certainty.
The country's coal miners, meanwhile, aren't counting on anything. The Independent Miners' Trade Union has threatened to interrupt coal supplies if back wages, totaling over $400 million, are not paid by September. (RFE/RL NEWSLINE, 16 Aug 99) This would only exacerbate the energy crisis, of course, and perhaps nudge the hryvnya into yet another decline.
It is worth noting that despite the energy crisis, which is helping to worsen the economic crisis, there was no action this month on the promise by G-7 nations to help Ukraine finish construction of two new nuclear reactors at the Rivne and Khmelnitsky plants.
BELARUS Who, oh who, is our president?
The situation in Belarus just gets stranger ... or more frightening, depending on your point of view. On 27 August, the Belarusian opposition declared Semyon Sharetsky to be the lawful president of Belarus. Sharetsky, who fled to Lithuania after being threatened with arrest by the KGB in Belarus, announced from Vilnius that he is now in the process of forming a new government, and that Alyaksandr Lukashenka is now an "ordinary citizen." (BALTIC NEWS SERVICE, 27 Aug 99; via nexis) According to the 1994 Belarusian constitution recognized by Sharetsky and most Western countries, Lukashenka's term of office expired on 20 July.
Lukashenka, still in Minsk, ignored Sharetsky's statement. Belarus did, however, protest the assistance being given to Sharetsky by Lithuania -- most notably armed guards and housing -- saying the actions may damage relations between the two countries. (LIETUVOS RYTAS, 26 Aug 99; BBC Summary of World Broadcasts, via nexis) Lithuania largely ignored Belarus' statement.
Meanwhile, Mikhail Chyhir, the former Belarusian premier and opposition activist, remains in prison in Minsk, charged with larceny but not officially indicted. At the same time, Uladzimir Antonaw, head of the Young Front (the youth branch of the Belarusian People's Front) recently fled to Poland and requested asylum. He explained that he believed his life to be in danger. (BELAPAN, 1125 GMT, 4 Aug 99; BBC Summary of World Broadcasts, via nexis)
Against this backdrop, the OSCE is planning to mediate talks between the president's working group and representatives of the opposition. If Lukashenka can just delay the talks for a while, perhaps he'll win by default; there simply won't be any opposition representatives left with whom to talk.
MOLDOVA My buddy, my pal
Just when it seemed that Ukraine's decision to reduce the amount of electricity supplied to Moldova had worsened relations between the two, the countries last week took an important step forward. On 18 August, Presidents Petru Lucinschi and Leonid Kuchma signed two major documents: a border treaty and a protocol detailing a small territory swap between the countries. These two documents have been bones of contention for several years.
The protocol calls for transferring an eight-kilometer section of the Odessa-Reini highway from Moldova to Ukraine. In exchange Moldova receives seven kilometers of the road around the village of Kopanka, and access to the port of Giurgiu on the Danube for building an oil terminal. (ITAR-TASS, 1856 GMT, 18 Aug 99; FBIS-SOV-1999-0818, via World News Connection)
After signing the border treaty, Lucinschi said fixing the border and exchanging contested territories are "of vital importance for human beings, for families, for companies, for businesses. This is what has been casting a shadow on our relations so far." (UKRAINIAN TV FIRST PROGRAM, 1800 GMT, 18 Aug 99; BBC Summary of World Broadcasts, via nexis) He explained, however, that more work needs to be done. These documents, he said, "give the possibility of settling other bilateral issues, including Ukrainian property in Moldova and Moldovan property in Ukraine." (ITAR-TASS, 2107 GMT, 19 Aug 99; BBC Summary of World Broadcasts, via nexis)
by Tammy Lynch
Everyone wins in Dagestan?
The Russian military has shown that it can push Shamil Basaev's motley band of fighters out of Dagestan. Admittedly this represents a leap forward from the humiliations of 1995 and 1996, but Russia still lacks any semblance of a political strategy to cope with the challenges of ethnic animosities, economic deprivation, and religious extremism.
The current operation has been advantageous for all the governments involved. Moscow has shown that it can do something besides embezzle foreign aid. In Chechnya, President Maskhadov watches as his main rivals' forces and prestige are crippled by the attack. In Dagestan, President Magomedali Magomedov eliminates his opposition and directs popular outrage over the Basaev raid at the local religious sects. Everybody wins.
As early as June and July the federal authorities started to conduct operations against the forces of field commanders Shamil Basaev and Khattab which operated in the northern part of Chechnya bordering Dagestan. It seemed at the time that the air strikes against them were coordinated with the Chechen president, Aslan Maskhadov. (See The NIS Observed, 14 Jul 99) In early August Basaev and Khattab took over several villages in Dagestan and held an assembly that called for a union of Dagestan and Chechnya. These actions provoked a further set of reprisals against them.
From the start of the operation, the prospect of destroying other armed opposition groups delighted members of Dagestan's regional government. The secretary of the Dagestani Security Council, Akhamednadi Magdigadzhiev, suggested that the "stabilization measures" should be applied throughout the republic to establish order "once and for all." (ITAR-TASS, 1152 GMT, 18 Aug 99; FBIS-SOV-1999-0820, via World News Connection) Dagestan's government has come under criticism for its use of corrupt and authoritarian measures to stifle peaceful avenues of political opposition, thereby creating a breeding ground for various fanatical paramilitary groups. (See Magomedkhan Magomedkhanov, "Dagestan: Rents in the Fabric of Government," Perspective, March-April 1998) Shamil Basaev's outing offered the authorities an opportunity to "eliminate" other centers of religious resistance to the state.
After two weeks of shelling, Basaev announced that his followers would retreat into Chechnya to regroup. Since they were in the area, units of the interior and defense ministries "mopped up" several other villages. The offending areas had proclaimed an Islamic republic after a failed coup attempt in the spring of 1998 under the leadership of Nadir Khachilaev. They had persisted in relative calm until the events of the last few weeks and had refused to join with Basaev. (Jamestown Foundation MONITOR, 31 Aug 99) Still the opportunity was ripe for "cleaning" and a few more God-forsaken villages were summarily "eliminated." All in the name of combating terrorists and "Wahhabis" -- a religious sect rapidly becoming the favorite bogey of the Central Asian states that is directed from abroad and determined to overrun the state. In short, "trotskyites."
Although the federal government may think it has tidied up sufficiently, there is no reason to suppose that the fighting will end here. The Dagestani government has distributed arms to a 24,000-volunteer militia. They, together with the Russian military, are "exposing militant sympathizers from among the local residents." (RUSSIAN REGIONAL REPORT, 26 Aug 99, via World News Connection) The local population has taken to this task with relish -- raiding mosques, arresting suspects, breaking television relays that carried religious programs. Magomedov has announced his intention to tighten a 1997 law outlawing Wahhabis. TASS reported that local Wahhabis have trimmed their beards to avoid being mistaken for members of Basaev's group. (ITAR-TASS, 0646 GMT, 19 Aug 99; FBIS-SOV-1999-0819, via World News Connection) Now, anyone might be a Wahhabi in disguise. This hardly represents a victory of liberal democracy over medieval fanaticism! More like a victory of fire and metal over human flesh.
For its part Maskhadov's government showed great restraint, equanimity even, towards the deaths of its citizens under the command of a war hero and a former deputy prime minister. Maskhadov declared a state of emergency in Chechnya and called up reservists. He also reinforced the border with Dagestan: Against the possibility of Russian attack? Or a Basaev retreat? One wonders. (INTERFAX, 1703 GMT, 21 Aug 99; FBIS-SOV-1999-0821, via World News Connection) The recently appointed minister of foreign affairs of Chechnya, Ilyas Akhmadov, said that his government views the fighting in Dagestan as Russia's internal affair. However, it disputes the claim that Chechnya exports religious extremism to Russia. (GROZNISKY RABOCHIY, 19 Aug 99; FBIS-SOV-1999-0830, via World News Connection) If some Chechens are participating in the fighting, Akhamadov suggests there is little the government can do about it. After all, "we can not deprive them of the right to do what they want with their life. Each man has a right to his grenade."
by Miriam Lanskoy
Will Russia be rewarded for bad behavior?
Presenting one possible explanation for Russia's continued attempts to claim Baltic abuses of human rights, a report by Russia's non-governmental defense and foreign policy council states the belief that the West will not grant security guarantees to the Baltic states if there are bad relations between the states and Russia. Should this expectation be thwarted and NATO be expanded to include Estonia, Latvia and Lithuania, Russia would view such a move as an "increase of direct military threats." This may create another "district of tension" in the center of Europe, the report adds. (BALTIC NEWS SERVICE DAILY REPORT, 1300 GMT, 2 Aug 99)
ESTONIA Language law amendments promulgated in part
While there had been a substantial amount of discussion on proposed amendments to the language law which would mandate fluency in Estonian in both the public and private sectors, at the end of July the government of Estonia opted to implement amendments affecting only employees in the public sector. Under the amendments promulgated, public servants, medical personnel, service personnel and sole proprietors must be able to use Estonian in offering their goods and services. (BALTIC NEWS SERVICE DAILY REPORT, 1600 GMT, 27 Jul 99) Provisions of the law requiring private sector employees to be fluent in Estonian have been suspended until they have been "elaborated and altered to meet EU requirements," according to Prime Minister Mart Laar. (INTERFAX, 1558 GMT, 28 Jul 99; via World News Connection)
The mysterious case of the missing rights abuses
Expecting residents to speak the language of the country in which they reside is just one of the purported violations of human rights decried by the Russian government. Yet while the government at large may continue to fly that banner, some Russian officials have left the parade. Anatoli Tupikin, deputy minister and leader of the delegation from the Russian Ministry of Culture to Estonia, says he has "not observed any political barriers in the development of our cultural cooperation," (RADIO TALLINN NETWORK, 1200 GMT, 30 Jul 99; via World News Connection) Clearly, then, ethnic identity is not in danger. Is there, perhaps, political persecution?
Not according to the Russian embassy or the Ministry of Foreign Affairs (although the Duma has a different perspective). The arrest of Oleg Morozov, a Russian activist in Estonia who refused to register for a residence permit, and is therefore living in the country illegally, is not seen by the foreign ministry as being politically motivated. (BALTIC NEWS SERVICE DAILY REPORT, 1600 GMT, 3 Aug 99) Alas, Sergei Glotov, head of the Russian delegation to the Council of Europe Parliamentary Assembly (PACE) and a Duma deputy, disagrees. Glotov called on the PACE president, Lord Russel Johnston, "to put an end to serious violations of human rights in Estonia," claiming that Morozov was arrested because he organized protests to defend the rights of ethnic minorities. Glotov further claimed that Russian Embassy representatives were not allowed to meet with Morozov, an accusation refuted by the embassy itself, which announced that a diplomat had met with Morozov and the latter had no complaints. (BALTIC NEWS SERVICE DAILY REPORT, 1300 GMT, 6 Aug 99) Morozov claims, in the face of Estonian laws to the contrary, that he does not need to apply for a residence permit because he was born and reared in Estonia.
When Morozov began a hunger strike to demand the status of political prisoner during his 20-day administrative sentence, the embassy offered no assistance or support of his claim of persecution. "It is effectively possible to defend only those persons who recognize the laws of their country of residence," an embassy statement explained. (BALTIC NEWS SERVICE, 1722 GMT, 10 Aug 99; via World News Connection)
Even the Estonian United People's Party (EUPP), one of the country's two leading parties representing the Russian-speaking population, issued an appeal that flew in the face of Morozov's claim. On 11 August the EUPP asked all persons without residence permits to legalize their stay in Estonian. The party also appealed to the Estonian government to improve the process by which non-citizens could legalize their status. (BALTIC NEWS SERVICE DAILY REPORT, 1600 GMT, 11 Aug 99) The EUPP supports the integration of Russian speakers into Estonian society.
Doctors at the Mustamae hospital in Tallinn examined Morozov during his hunger strike and said there had been no damage done, although they did recommend he begin to eat. Officials at the Russian Ministry of Foreign Affairs and the Russian Embassy in Tallinn also advised Morozov to end his protest. (BALTIC NEWS SERVICE DAILY REPORT, 1300 GMT, 16 Aug 99). Morozov did end his protest at the end of his sentence, but the story has not ended. The government has offered him a residence permit, if he applies, and Morozov continues to stand by his refusal.