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Western Press Review: Chechen Reconstruction And World Economic Issues

By Ron Synovitz and Jolyon Naegele

Prague, 30 January 1997 (RFE/RL) - Several Western newspapers today are commenting on issues surrounding Chechen reconstruction and the republic's relations with Moscow. Economic issues from the Baltics to the Balkans also fill the columns of Western newspapers.

FINANCIAL TIMES: Russia should accept the inevitability of Chechen independence

An unsigned editorial in today's edition says: "It would be wise for Russia to swallow its pride and accept the inevitability of Chechen independence." Saying that Russia has lost the war in Chechnya, the paper advises Russians to "admit that the empire is over, settle for a generous deal" to keep oil flowing in the Transneft pipeline through Chechnya, and "help to rebuild the Chechen ruins."

The paper says Moscow should be "mightily relieved" that a relatively moderate figure, Aslan Maskhadov, has won Chechnya's recent presidential election. But the editorial concludes that Maskhadov has been elected on a platform of "outright independence," and that this will be the bottom line for future negotiations with Moscow.

LOS ANGELES TIMES: Chechnya's oil pipelines are Maskhadov's strongest weapon

In today's edition, Vanora Bennet describes the search for ways to restore the Chechen economy as "the most immediate question likely to strain relations with Moscow." Bennet describes Maskhadov's approach as "a cautious central course." She notes that Maskhadov rejects the Russian idea of setting up a so-called "free economic zone" in Chechnya that would give investors relief from Russian taxes. Instead, she says Maskhadov wants a similar Chechen-run scheme to attract foreign investors.

Bennet writes that Maskhadov also wants war reparations from Russia and that he will ask for a cut of profits from Russian oil pipelines running through Chechnya to help pay for reconstruction. But Bennet predicts that Maskhadov will not try to divert the oil from Russia altogether, as other Chechen politicians want to do.

Bennet quotes Maskhadov's spokesman as saying that the newly-elected president's first move will be to negotiate a temporary economic deal with Russia on the payment of pensions it owes to Chechens who had spent their lives working for the Soviet Union. Moscow has promised about $8 million in pensions but before the elections had only paid out about $1 million.

Bennet says that Chechnya's oil pipelines are Maskhadov's strongest weapon to make Russia keep its promises of quick pension payments.

INTERNATIONAL HERALD TRIBUNE: Chechnya will need many years to recover from Russia's brutality

An unsigned editorial in today's edition says: "Russia has a moral obligation to help" in the reconstruction of Chechnya. But the newspaper tells readers not to expect Russian aid soon." According to the IHT, the most promising areas for agreement are where the interests of both Russia and Chechnya can be jointly served, "such as the routing of an oil pipeline from Azerbaijan through Chechnya toward the West." The IHT says: "Maskhadov seems wise enough not to rub Russia's nose in its defeat, but to concentrate instead on rebuilding Chechnya." The newspaper concludes: "Chechnya will need many years to recover from Russia's brutality. At least now the process can get under way."

DIE WELT: Yeltsin would waste an opportunity if he stands firm on the issue of Chechnya's status

A commentary by Mathias Brueggmann says it is to be feared that Boris Yeltsin will stand firm on the issue of Chechnya's status and only release financing for reconstruction if the Chechens agree to remain within the Russian Federation. Brueggmann says that Yeltsin would thus waste an important opportunity.

Economic Issues

FINANCIAL TIMES: Lithuania moves to scrap currency board as Bulgaria moves to create one

In an article, Edward Luce notes the irony of Lithuanian moves to scrap its currency board regime at the same time that Bulgaria is being pressured by the International Monetary Fund to create a currency board.

Luce explains that under Lithuania's currency board, the local currency (litas) has appreciated 25 percent against the U.S. dollar in the last 18 months. He says the Lithuanian government is planning to switch to a "crawling peg" system in a few weeks, and that the change could trigger similar moves in Estonia and Latvia.

The "crawling peg" system fixes the currency against the U.S. dollar but pre-announces small monthly devaluations. Luce says this enables an economy to adjust to more competitive exchange rates without unleashing inflation through large one-off devaluations.

Luce quotes a London-based trader as saying that Bulgaria still needs a currency board to restore its battered reputation and reassure investors that it will not default on its foreign debt.

INTERNATIONAL HERALD TRIBUNE: Eastern pyramid schemes are symptomatic of lack of experience in Western-style investment

Writing today about Albania's collapsing pyramid schemes, Edmund Andrews says that the trend "fits neatly with a pattern that has now bedeviled almost every formerly Communist country in Europe."

Andrews says the wave of swindles in eastern Europe is "symptomatic of their lack of experience in Western-style investment." He says: "Popular understanding is limited, regulatory protections are almost non-existent and many people are willing to grasp at straws because they are in dire economic straits. But Andrews also quotes economic analysts who say that the life cycle of eastern pyramid schemes may be coming to an end as investors learn from their mistakes. One analyst, Jens Reuter of the Munich-based Sudost Institute, is quoted as saying that "Albania was almost the only (eastern) country that had not gone through something like this, and it may be the last."

SUEDDEUTSCHE ZEITUNG: Turkey wants financial assistance that is being blocked by Greece

Josef Joffe comments in the Munich daily on the economic motives behind a threat by Turkish Foreign Minister Tansu Ciller to veto NATO's proposed eastward expansion unless her country is admitted as a full-fledged member of the European Union. Joffe writes that this "is symptomatic of an increasingly frayed relationship." He says: "Only in bad marriages does one threaten with extremes like moving out; in good marriages, one does not point a pistol at one's partner's chest.... All of this causes a rise in concern in the West rather than sympathy."

Joffe says that while Ciller waves the veto threat, "everyone knows what she really wants: not full EU membership but rather the already promised financial assistance that is being blocked by none other than Greece." Joffe says that the West must offer Turkey adequate incentives to maintain good conduct. Otherwise, he says, NATO will play Turkish Prime Minister Necmettin Erbakan's game. Joffe concludes that there is nothing Erbakan would rather see than the isolation and Islamization of his country.