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Daily intelligence briefing on the former Soviet Union

Published every business day since 1993

Tuesday, October 31, 2000

States, which put the first man on the moon, have joined hands. It is inevitable that these two great countries work together to take the space exploration into the new millennium." The ISS is a 16-nation project aimed at realizing humanity's dream of living in space. As well as Russia and the United States, the ISS includes Canada, Brazil, Japan and member countries of the European Space Agency.

Pope's Case Suspended Over Poor Health

· The trial of Edmond POPE, a former Naval intelligence officer turned businessman, suspected of espionage was suspended today for at least two days due to the deteriorating health of POPE. He is suffering from pain in his joints, which is a condition of a rare form of bone cancer. POPE's lawyer, Pavel ASTAKHOV, said, "Today's symptoms ¾pains in joints and bones¾are identical to the disease POPE is suffering from, a rare form of bone cancer." He was taken directly from the courtroom to his prison cell. He was refused a request for a medical check a week ago. The court rejected medical documents on Monday because they were written in English. POPE has been held in Moscow's Lefortovo prison since April and his wife has said he could die if Russian authorities continue to deny him treatment. POPE denies charges of gathering secret data on a high-speed torpedo. US President Bill CLINTON and POPE's Pennsylvanian Congressman have both urged Russia to free the businessman. POPE could serve 20 years in prison if convicted. Russian President Vladimir PUTIN

Russian Federation


Russia Accidentally Launches Four Missiles

· Russian officials are searching for one of four short-range rockets accidentally launched from a Siberian military base on Monday. The rockets were rounds from a Grad launcher, a truck-mounted weapon that can fire 40 of the 9 1/2 foot-long rockets up to 21 miles in devastating rows. The Associated Press reports that at least two people were injured when the rockets were accidentally fired at a facility in the Kochenevo district of the Novosibirsk region, located about 1,750 miles east of Moscow. One rocket exploded on the spot, while two more were found nearby unexploded, Russia's government RTR Television said. One of the unexploded rounds was found in the town of Kochenevo. The fourth missile still remains at large. Officials are trying to determine where the fourth missile landed.

Russia-US Make Space History

· Russia and the US made space history today as they launched a white, orange and grey Soyuz TM-31 rocket from Kazakhstan's Baikonur Space Center carrying two Russians and one American headed for the International Space Station (ISS). American William SHEPHERD and Russians Yuri GIDZENKO and Sergei KRIKALYOV will become the first crew for the ISS. They are due to connect with the ISS on Thursday and are scheduled to stay on the station for four months. NASA head Daniel GOLDIN said after the launch, "We are going to be in space with people circling the earth forever. We will build bases on Mars, the moon and asteroids. Instead of pointing missiles at each other or competing with each other, we learn from each other." Valery ALAVERDOV, deputy head of the Russian Space Agency said, "This is a big achievement. Russia, which put the first man in space, and the United

Today's News Highlights


Russia Resumes WTO Talks

Novokutznetsk Raises Output

European Republics

Belarus Not Pushing Reforms

Adamkus Approves New Cabinet

South Caucasus & Central Asia

Investment In Georgian Oil-Gas

Protest Against Kocharyan

Russian Arms To Armenia

Kyrgyz Election Criticism Grows




October 31, 2000

Intercon's Daily

said it was up to the court to decide.


Russia Resumes WTO Entry Talks

· On Monday, Russia resumed talks on joining the World Trade Organization (WTO) with the US, Canada, and European Union countries, the Russian Economic Development and Trade Ministry said. The talks, taking place in Geneva, focus on tariff policy and agricultural issues. Russia applied to enter the WTO in 1993. US Trade Representative Charlene BARSHEFSKY said earlier this month that Russian President Vladimir PUTIN had intensified efforts to get his country into the world trade body and expressed the hope the next US administration would bring Russia into the trading system. But US trade officials have said it could take several years for Russia to complete the entry process.

Romania Hopes To Boost Exports To Russia

· National Association of Importers and Exporters (ANEIR) President Mihai IONESCU predicted that Romanian exports to Russia could double to $100 million by end-2000 following new export accords between companies in the two states. He said, "This week, 20 local manufacturers signed with Russian firms contracts worth $50 million." IONESCU said the bulk of exports to Russia would consist of furniture, wine, clothing, chemicals and canned vegetables. Romania exports to Russia amounted to $48 million in the first seven months this year, 88.2 percent up from the year-ago period. Romania's overall exports rose by around 25.4 percent in the first eight months of this year from the 1999 period, with about 64 percent going to EU countries, Reuters reports as the latest statistics. Officials say Romania's economy will register an export-led recovery this year, with exports expected to grow towards a record-high $10 billion. Romania has predicted gross domestic product growth of 1.5 percent after three years of contraction.

Ruble = 27.83/$1.00 (NY rate)

Ruble = 27.87/$1.00 (CB rate)

Ruble = 23.68/1 euro (CB rate)


Fuel-Power Conference Opens

· A conference to aimed at developing Russia's

fuel and power sector opened under an international forum in St. Petersburg. Ministers of energy and natural resources, directors of Russian gas giant Gazprom, St. Petersburg Governor Vladimir YAKOVLEV and Leningrad region administration chief Valery SERDYUKOV are expected to address delegates. Those attending will discuss investment policy, state regulation of the sector, prospects for reorganization of oil production, problems in the gas and coal industries, development of the oil processing and petro-chemicals sector and nuclear power engineering.

Novokuznetsk Raises Output

· Russia's Novokuznetsk Aluminium Smelter today announced that it raised its output to 209,379 tons in the first nine months of this year from 204,379 tons in the same period of 1999. Novokuznetsk spokeswoman Marina PEREVERZEVA said that this volume included 10,486 tons of aluminum alloys, a fourfold increase from the first nine months of last year. Novokuznetsk, the country's fifth largest producer of primary aluminum, has been declared bankrupt and put under external management. Russky Alyuminy, the plant's major creditor, which owns Russia's largest smelters Bratsk, Krasnoyarsk, and Sayansk, controls Novokuznetsk's sales. The bankruptcy case was brought by local utility Kuzbassenergo, which claimed Novokuznetsk owed it around 1.5 billion rubles ($53 million) in unpaid debts for electricity. But the company's management has recognized only 30 million of this debt at a creditors meeting. Kuzbassenergo is still trying to press its original claim and to contest the decision of the creditors' meeting in different courts.

European Republics

Lukashenko Says Not To Rush Reforms

· Belarus President Alexander LUKASHENKO told newly elected parliamentary deputies not to rush market reforms. "One cannot throw people into the chaos of market," he said. The opposition boycotted the first parliamentary election held since LUKASHENKO dissolved the legislature, extended his term and increased his powers through a referendum in 1996. The West blasted the election as unfair. Voting must be held again in 13 of the 110 parliamentary constituencies be

When you need to know it as it happens




October 31, 2000

Intercon's Daily

cause turnout was too low to validate results. In 56 other constituencies a runoff vote must be held, Reuters reported. The West has reduced ties with Belarus to a minimum, accusing its government of cracking down on political freedoms and neglecting much needed economic reform. Talking to the deputies LUKASHENKO blamed the country's economic woes on high oil prices and pledged to raise average monthly salaries to the equivalent of $95 by the autumn of next year from the current average of $50 to $60.

Lithuanian New Cabinet Approved

· Lithuanian President Valdas ADAMKUS on Monday gave his formal approval to the Cabinet of incoming Prime Minister Rolandas PAKSAS, who must now win a parliament vote to take office. ADAMKUS said he signed a decree appointing Lithuania's 11th post-Soviet government, a group of mostly pro-Western, fiscal conservatives that will face the task of pushing forward the country's NATO and European Union (EU) bids. "The cabinet was formed based only on the principal to serve Lithuania's people, strengthen the well-being of the state and the people, and take care of state security," he said. PAKSAS said he would present his program on Friday to parliament, which will have seven days to vote on it. He appointed deficit hawk Jonas LIONGINAS as his Finance Minister, a post he held during PAKSAS' previous term as prime minister last year. His Economics Minister will be Eugenijus MALDEIKIS, who also held the same position in last year's government. Both are prominent members of the laissez faire Liberal Union party that PAKSAS heads, which won second place in the October 8th general election and is now in a minority coalition with the center-left New Union. The coalition named Lithuania's Ambassador to neighboring Poland for the last six years, Antanas VALIONIS, as Foreign Minister. Linas LINKEVICIUS, Lithuania's Ambassador to NATO, was named Defense Minister. With Lithuania hoping to get an invitation to join NATO at the alliance's next summit, due by 2002, and aiming to join the European Union in 2005, LINKEVICIUS and VALIONIS will have their work cut out for them, Reuters reported. Lithuania was disappointed by NATO's decision to leave it out of their first Cold War expansion, which took in Poland, the Czech Republic, and Hungary in 1999.

South Caucasus & Central Asia

Georgia To Invest $450M In Oil-Gas Output

· President of the state oil company Saknaftobi Revaz TEVZADZE on Friday stated that Georgia will need to invest $450 million to increase its crude oil and gas output in the next five years. Saknaftobi is committed to $120 million of that sum, with the rest coming from ventures with foreign companies. TEVZADZE said, "Our goal is to bring oil production in Georgia to a minimum of 1.2 million tons in 2005."

Georgia produced a total of 542,000 tons of crude in 1995 to 2000, including 113,000 in 1999. Saknavtobi has estimated the country's recoverable crude oil resources are 580 million tons, including about 200 million tons in Black Sea offshore deposits. TEVZADZE said that US-Georgian joint venture Frontera Eastern Georgia had already invested over $35 million in prospecting and extracting oil in the east of the country, and intended to invest another $80 million until 2005. Another US-Georgian joint venture, Anadarko-Georgia, which has recently begun exploration work on Georgia's Black Sea shelf plans to invest $89 million in Georgia in the next five years. TEVZADZE said that Georgia wanted to become not only a producer and exporter of crude but also of refined products, which would bring more profits to the state's coffers. Georgia has an oil refinery, GAOR, with a capacity of 120,000 tons of oil products per year, run by a US-Georgian joint venture. A total of seven joint ventures are involved in drilling for and producing hydrocarbons in Georgia, including two, British-Georgian joint venture Ninotsminda and Swiss-Georgian Ioris Veli, which are engaged in drilling and producing natural gas.

Protestors Demand Kocharyan's Resignation

· In response to the nation's grim economic situation, nearly 10,000 people protested in Yerevan on Monday, demanding the resignation of President Robert KOCHARYAN. Arkady VARTANYAN, the rally's organizer and leader of the 21st Century Association, which is not represented in parliament, was detained by police, along with his lawyer and a reporter from A-1 Plus Television. The police said that the demonstration was unsanctioned. VARTANYAN, a businessman, has recently become involved in politics, exploiting popular discontent over the government's economic policy. The

When you need to know it as it happens




October 31, 2000

Intercon's Daily

rally on Yerevan's central square was one of the largest opposition rallies in Yerevan recently over the government's failed attempts to revive the moribund economy. VARTANYAN said, "The current government has shown its inability to lead the nation. We mustn't allow the destruction of the Armenian nation." Armenia's economy has taken a severe decline since the collapse of the Soviet Union and the affects of the Nagorno-Karabakh conflict with neighboring Azerbaijan. KOCHARYAN has ignored earlier calls for his resignation.

Azeri Concern Over Russian Arms In Armenia

· According to US State Department official Richard Bauer, Russia is transferring its military from Georgia to Armenia in strict compliance with the agreement reached at the Organization of Security and Cooperation in Europe (OSCE) summit in Istanbul last year. By November 13th, Russia will have transferred 76 units of its military hardware from Georgia's Akhalkalaki military base to Armenia's Gyumri. Meanwhile, in a statement given October 26th, Azeri Defense Minister Safar ABIYEV expressed his concern over a large number of Russian military units transferred to Gyumri. He said that the Russian military transfer to Armenia, including the deployment of a significant number of jet fighters, has already had a negative impact over the years. "Russia's military alliance with Armenia, which continues to violate its neighbor's territorial integrity, is a real threat to the entire South Caucasus. It damages prospects for peaceful settlement of the Armenia-Azerbaijan conflict and undermines the peace process, to which Russia itself, along with the United States and France, is a co-chair," said Azeri Ambassador in Washington Hafiz PASHAYEV.

Criticism Of Kyrgyz Election Escalates

· The Kyrgyz Central Electoral Commission has announced that Askar AKAYEV, "is now president and remains so." According to preliminary figures, AKAYEV earned 74.3 percent of the vote, easily surpassing the needed 50 percent. The Organization for Security and Cooperation (OSCE) criticized

the poll as inadequate in a statement entitled simply, "Kyrgyz presidential election fails international standards." The OSCE listed dozens of procedural breaches, including heavy state pressure on the media, which gave AKAYEV 99.2 percent of airtime in newscasts. It cited two examples of ballot stuffing discovered on election-day and said voter registers were marked with identical signatures in four regions¾an indication of either multiple voting or ballot box stuffing. "The media environment was characterized by an overwhelming tendency of state-owned and government-oriented private media to exhibit an overt bias in favor of the incumbent president." Tolekan ISMAILOVA, head of the coalition for democracy and civil society said, "Askar AKAYEV won dishonestly…Voters were not given the right to choose." However, Russia's Igor SHESTAKOV praised the election. He said, "Our general impression is that the poll was conducted at the highest level. There were no breaches of the rules." Final election results are expected Friday.

Protestors have staged demonstrations blocking a main road in Bishkek, alleging vote fraud and demanding a recount. A regional official explained, "The protest is in its second day. They've closed the road from Osh to Bishkek, there's no traffic moving and they are claiming that [Omurbek] TEKEBAYEV won the election." Authorities stated that TEKEBAYEV came in second, receiving 14 percent. Emil ALIYEV, a member of TEKEBAYEV's election team, said there had been as many as 2,000 protesters, and said similar actions were under way in the north of the country. Meanwhile, the Associated Press reported that police detained several election observers who had planned to testify about alleged fraud surrounding Sunday's presidential election. ALIYEV said that police had detained three observers working for the opposition in the Talaskaya region. Seven other observers have not reported to his headquarters as planned. He added that some observers had been arrested before voting began on Sunday.

Paul M. Joyal, President, Editor in Chief Clifton F. von Kann, Publisher

Oleg D. Kalugin, Content Advisor Jennifer M. Rhodes, Principal Editor

Tatyana Kortova, Contributing Editor

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