Caucasus Report: February 10, 2003

TWO CANDIDATES PULL OUT OF ARMENIAN PRESIDENTIAL RACE. Former Armenian Prime Minister Aram Sargsian announced in a televised address on 8 February his decision to withdraw his candidacy for the 19 February presidential election, RFE/RL's Armenian Service reported. Sargsian called on his supporters and fellow members of his Hanrapetutiun party to back People's Party of Armenia (HZhK) Chairman Stepan Demirchian. He characterized his decision as an electoral alliance between Hanrapetutiun and the HZhK and a bid to revive the now defunct Miasnutiun bloc that won a majority in the 1999 parliamentary elections. That bloc was jointly led by Demirchian's father and predecessor as HZhK chairman, Karen, and by Sargsian's brother and predecessor as premier, Vazgen Sargsian. Both men were among the eight victims of the October 1999 parliament shootings.

Observers in Yerevan interpret Sargsian's withdrawal from the ballot as a major boost for Demirchian, who had already emerged as the top challenger to incumbent President Robert Kocharian (see "RFE/RL Caucasus Report," Vol. 6, No. 5, 31 January 2003). Two separate opinion polls summarized in the Armenian press on 8 February indicate that the gap between Kocharian and Demirchian is narrowing. "Aravot," which is sympathetic to former President Levon Ter-Petrossian, claims that of 700 people it polled, only 22 percent said they would vote for Kocharian, 7 percent fewer than the previous week, whereas Demirchian's rating has risen to 15 percent. A poll by the pro-opposition Tanik organization summarized in "Haykakan zhamanak" put the two men neck-to-neck, with support for Demirchian at 22 percent, only 1 percentage point behind Kocharian.

Both polls placed National Unity Party Chairman Artashes Geghamian in third place, with 7 percent and 12 percent, respectively. Communist Party of Armenia Chairman Vladimir Darpinian announced on 5 February he was quitting the race in Geghamian's favor, but Garnik Markarian of the Socialist Armenia bloc, whom some commentators also had expected to step down and endorse Geghamian's candidacy, has declined to do so.

Kocharian will therefore face eight rival candidates (compared with 11 in 1998), rather than a single candidate backed by the opposition, which he has repeatedly said he considers the most favorable scenario for him.

Speaking in Talin on 7 February, National Democratic Union Chairman Vazgen Manukian (who was backed by most opposition parties in 1996, and is now contesting his third consecutive presidential election) sought to reassure voters that the failure of the 16 opposition parties that aligned last fall to agree on a single presidential candidate does not necessarily work in Kocharian's favor. Manukian argued that the existence of several opposition candidates should result in a larger aggregate vote against Kocharian. (Liz Fuller)

WHY DID BABICH QUIT AND WHO WILL SUCCEED HIM? On 8 February, Mikhal Babich formally announced that he has resigned as Chechen prime minister. But no successor has yet been named either for Babich, or for Chechen Finance Minister Sergei Abramov, whose resignation one month ago triggered the disagreement between Babich and Chechen administration head Akhmed-hadji Kadyrov, which appears to have culminated in Babich's transfer to another, as yet undisclosed post.

On 13 January, Babich complained that without consulting him, Kadyrov had approved Abramov's letter of resignation and named Abramov's deputy, Eli Isaev, to succeed him. Chechen Prosecutor Vladimir Kravchenko pointed out that in doing so, Kadyrov violated a Russian presidential decree empowering the Chechen prime minister to propose ministerial candidates. Babich, for his part, ignored Kadyrov's decree and named his own preferred candidate, Deputy Finance Minister Abdula Ibragimov, as acting finance minister. Kadyrov, who on 14 February criticized Babich's initial complaint as "a provocation," on 16 February annulled Babich's decree appointing Ibragimov acting minister and rejected Babich's proposal that Finance Ministry official Andrei Bykov be named as minister (see "RFE/RL Newsline," 14, 15, and 17 January 2003).

A former first deputy governor of Ivanovo Oblast, Babich, who is 33, was named Chechen premier less than three months ago (see "RFE/RL Newsline," 13 November 2002). Some Russian observers have linked his appointment with the discovery by the Russian Audit Chamber that huge sums of money allocated for reconstruction in Chechnya over the previous two years were embezzled. Those observers have suggested that Babich's brief was to determine how and by whom that money was stolen, but that that task was rendered far more difficult by the 27 December car-bomb attack on the Chechen government building in Grozny that destroyed much of the relevant documentation and killed 11 Finance Ministry staffers. "Ekspert," on the other hand, claimed on 20 January that Babich managed to piece together details of the thefts and was "horrified" by his findings.

"Izvestiya," however, linked the public disagreement between Kadyrov and Babich to rumors that Kadyrov was under a cloud. The paper reported on 15 January that several weeks earlier, Defense Minister Sergei Ivanov, Federal Security Service Director Nikolai Patrushev, and Russian Interior Minister Boris Gryzlov sent a joint memorandum to Russian President Vladimir Putin demanding Kadyrov's dismissal on the grounds of unspecified "dubious" activities before the planned 23 March referendum on the new Chechen draft constitution. But "Nezavisimaya Gazeta" on 17 January claimed that memorandum to Putin was written not in December but four months ago -- which would mean before the hostage-taking at a Moscow theater by Chechen radicals in late October, and before the date for the proposed referendum was set.

"Gazeta" on 16 January attributed the dispute between Kadyrov and Babich to the fact that Babich reportedly wrote to Russian Prime Minister Mikhail Kasyanov on 10 January to request that his government be given responsibility for spending at least part of the 3.7 billion rubles ($116.2 million) allocated for reconstruction in Chechnya in the 2003 Russian budget. Kadyrov's appointment of a new finance minister, the paper suggested, was Kadyrov's way of putting Babich in his place.

Whatever the catalyst may have been for the dispute between Kadyrov and Babich, Kadyrov announced on 23 January that it had been resolved during a four-hour meeting in Moscow the previous day between himself, Babich, Babich's predecessor Stanislav Ilyasov (who is now federal minister for reconstruction in Chechnya), and Russian envoy to the South Russia Federal District Viktor Kazantsev (see "RFE/RL Newsline," 24 January 2003). Kadyrov then departed on a week-long visit to Libya and Jordan -- and within days of his return, announced that Babich would be dismissed.

The question thus arises: was Kadyrov lying when he said on 23 January that he and Babich had papered over their differences? Or did something happen during Kadyrov's absence from Russia that triggered a radical reassessment of the situation?

At a 24 January meeting with Central Election Commission Chairman Aleksandr Veshnyakov, President Putin criticized preparations for the 23 March referendum, citing comments by "our colleagues in other countries" that many Chechens are unaware of the provisions of the new draft constitution they will be required to approve. That criticism implicitly contradicted Kadyrov's assertion during talks two days earlier with Parliamentary Assembly of the Council of Europe rapporteur on Chechnya Lord Frank Judd that "almost everything is ready" to conduct the referendum and that 50,000 copies of the new draft constitution would soon be distributed. (According to the findings of last year's disputed census, the Chechen population is a little over 1 million. ITAR-TASS on 6 February quoted Ilyasov as saying that 540,000 copies of the draft laws have been printed in Russian and 40,000 in Chechen.) Could Putin's comments about the alleged faulty preparations have been intended to serve as the rationale for a postponement of the plebiscite? If so, then Judd's threat to resign if the referendum took place as scheduled unwittingly sabotaged the possibility of a postponement by creating a situation in which the delay would inevitably have been interpreted as capitulation in the face of his ultimatum, rather than an independent policy decision on the part of the Kremlin.

A second possible explanation for the reversal over Babich is that he was "sacrificed" as a reward to Kadyrov for unpublicized pledges he may have managed to extract from the Chechen diaspora in Jordan to desist from providing funding for Chechen President Aslan Maskhadov.

Finally, an analysis written for grani.ru and reposted on 7 February on chechenpress.com suggests a third hypothesis. Its author, Evgenii Ikhlov, suggests that Kadyrov has become "the tail that wags the dog," having convinced Moscow that he alone can guarantee relative stability in Chechnya. Consequently, according to Ikhlov, the Kremlin no longer has any choice but to accede to Kadyrov's demands.

But, if that is the case, why the delay of several days, first in Babich's formal resignation, and then in naming his successor? Kadyrov said on 5 February that Babich would step down, and that agreement had been reached on who would replace him. Ilyasov told a Russian State Duma commission on 6 February that the new Chechen premier would be named within two days. But on 7 February, Interfax quoted Ilyasov as saying that the meeting between himself, Kadyrov, and presidential envoy to the South Russia Federal District Kazantsev at which the announcement of the new premier was to be made has been postponed.

That delay could reflect high-level disagreement over the optimum candidate. Two names have been mentioned as possible replacements for Babich. One is Nikolai Aidinov, a former deputy chairman of the Chechen-Ingush ASSR Council of Ministers who is currently Chechnya's representative in Moscow. "Kommersant-Daily" on 6 February described Aidinov as the perfect choice, but according to "Izvestiya" the same day, he has turned down the offer. The second is Kazantsev's deputy Aleksandr Korobeinikov. (Liz Fuller)

AZERBAIJAN, IMF MOVE TO RESOLVE DISPUTE OVER STATE OIL FUND. Azerbaijan and the IMF have reached an interim agreement on expenditures from the State Oil Fund, according to the "RFE/RL Azerbaijan Report" on 4 February. Under that agreement, changes will be made to the law on the state budget so that expenditures to be financed from the State Oil Fund will be included as a separate item in the annual budget. The agreement also stipulates that parliament will approve proposals on how monies from the fund should be spent. But Azer Mehdiev, president of the Association for Economic Development, pointed out that that apparent concession on the part of the Azerbaijani leadership lacks seriousness insofar as the parliament merely rubber stamps the draft budget prepared by the presidential administration.

Making the Oil Fund's transactions fully transparent was one of the conditions the IMF set last year for disbursal of a new $100 million loan tranche for Azerbaijan. The second was the abolition of a proposed differentiated tax scale intended to encourage investment in the most impoverished raions of the country. Relations between the IMF and the Azerbaijani government have been strained for several years (see "RFE/RL Caucasus Report," 17 May 2002). The IMF is reportedly also concerned that Baku wants to use some part of the $700 million accumulated in the Oil Fund to finance its share of the construction costs for the planned Baku-Tbilisi-Ceyhan oil export pipeline. (Almaz Nasibova/Liz Fuller)

QUOTATIONS OF THE WEEK. "When people have fought as these people have done -- with all the horror of the war and hatred, with all roots of the conflict running deep -- the conflict cannot be settled by giving them a sheet of paper and ordering them to vote. Conflicts are settled by reconciliation, by lengthy and difficult political dialogues, by a consensus. And the constitution should come from the consensus, not the other way around." -- Parliamentary Assembly of the Council of Europe rapporteur on Chechnya Lord Frank Judd, explaining why he believes the referendum, currently scheduled for 23 March, on a new Chechen draft constitution and election legislation should be postponed (from an interview published in "Nezavisimaya Gazeta" on 31 January).

"Harassment of the media is just not acceptable from the rulers of a country that has pledged to European bodies to do everything it can to respect press freedom." -- Reporters sans Frontieres Secretary-General Robert Maynard commenting on the media situation in Azerbaijan. Quoted by Turan on 31 January.

"How come there are 11 presidential candidates in a small country like this?" -- Unidentified man in the Armenian town of Sevan, meeting on 1 February with opposition presidential candidate Vazgen Manukian (quoted by RFE/RL's Armenian Service).