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Newsline - February 8, 1995

On 7 February Interfax continued to publish excerpts from the 27-page report on the Chechen war by presidential advisers Emil Pain and Arkady Popov. The survey says Dudaev was able to arm his forces by giving large payoffs to "smart traders clad in military uniform." The authors reject the theses that weapons were plundered by Dudaev's militants or extorted from Russian servicemen under duress. The survey calls for further research into the question of who supplied the Dudaev regime with sophisticated weapons, such as anti-aircraft weapons and rocket launchers. Investigators must also examine how Dudaev was able to export oil through Russian pipelines and use the money to buy weapons, and why the federal authorities allowed special flights into and out of Grozny for suspicious cargoes when international agencies warned that illicit drugs were being shipped through Chechnya. Many in Moscow may have received kickbacks, the authors conclude. -- Robert Orttung, OMRI, Inc.

Russian federal troops have suffered nearly 5,000 casualties in Chechnya, Interfax reported on 6 and 7 February, quoting "power" ministry sources. Some 907 have been killed in action, while more than 3,400 troops have been wounded and another 456 are either missing in action or unidentified dead. The Ground Forces have suffered the heaviest losses, with 537 servicemen killed and around 2,000 wounded. At the same time, a group of experts headed by Russian Human Rights Commissioner Sergei Kovalev estimated that 25,000 civilians have been killed in Grozny. Ostankino's "Vremya" estimated that about 195,000 people have fled their homes as a result of the fighting. -- Doug Clarke and Julia Wishnevsky, OMRI, Inc.

Economic Freedom Party Chairman Konstantin Borovoi told a news conference in Moscow on 7 February that he had sent President Boris Yeltsin a proposal for a new Chechen peace plan comprising a ceasefire, a Russian troop withdrawal, and the establishment of a demilitarized zone, but had received no response. Borovoi, who reportedly met with Chechen President Dzhokhar Dudaev near Grozny on 2 February, predicted that Russian troops in Chechnya would soon be defeated, and that Chechnya would gain international recognition "within a few months," Interfax reported. -- Liz Fuller, OMRI, Inc.

The Council of Europe overreacted to the Chechnya events when it voted to defer Russia's application, Foreign Ministry spokesman Grigorii Karasin told Interfax on 7 February. He said Russia's candidacy should be considered in a broader perspective. In that context, he mentioned Russia's cooperation with the OSCE mission to Chechnya. Expressing a contrary view, Irina Khakamada, leader of the 12 December Liberal Democratic Union faction in parliament, said, "The Russian parliamentary delegation did an incredible thing in achieving adoption in Strasbourg of a 'softened' resolution by the Council of Europe on the situation around Chechnya." She said the speech by Human Rights Commissioner Sergei Kovalev was instrumental in "changing the sentiments of European MPs," who "were shocked by the position taken by Vladimir Zhirinovsky, who spoke like an open adherent of government actions in Chechnya." -- Michael Mihalka, OMRI, Inc.

Yeltsin's annual address to parliament, which was originally scheduled for January, will take place on 16 February. A "presidential source" told Interfax Yeltsin will discuss military reform and may return to the idea of giving the Russian Army General Staff new functions and detaching it from the Defense Ministry. The Security Council discussed this issue in January. The president will also criticize those who failed to enact the proposals he advanced in the previous year's address. In that speech, he stressed the need to reform local government by fall 1994. -- Robert Orttung, OMRI, Inc.

For the second time, the Federation Council failed to ratify a state of emergency decree for Ingushetia and North Ossetia issued by Yeltsin, Interfax reported on 7 February. Only 76 of the necessary 90 deputies supported the motion. The Council failed to ratify Yeltsin's first decree on 3 February. Without the Federation Council's approval, the decree becomes invalid in three days. The prospects for a compromise between the president and the Federation Council are uncertain, Piotr Shyshov, head of the Council's Defense Committee, told AFP. "We are asking for an in-depth revision of the text, as the war situation [in neighboring Chechnya] demands strict and concrete measures." -- Robert Orttung, OMRI, Inc.

Grigorii Yavlinsky, a liberal economist who is the front-runner in most opinion polls on the presidential elections, suggested that the results may be rigged in favor of President Boris Yeltsin, RFE/RL reported on 7 February. Yavlinsky noted that, under the electoral draft law, votes will be cast by the Central Election Commission appointed by the president, leaving no room for independent control over its activities. Asked whether he is going to appeal to European human rights agencies, Yavlinsky replied that such bodies should hire at least one translator to enable them to read Russian laws and evaluate them on their own. Meanwhile, a growing number of Russian public figures have voiced doubts that the next presidential elections will even take place in June 1996, as scheduled. -- Julia Wishnevsky, OMRI, Inc.

As the Komi Republic's new parliament held its first session on 7 February, miners in Vorkuta staged a 24-hour warning strike in protest against nonpayment of wages and poor working conditions, Russian media reported. The privatized Vorgashurskaya mine, the largest pit in the area, did not participate. Miners in Rostov have been on strike since 1 February, and the Russian Coal Industry Workers' Union, which has about 1 million members, scheduled a nationwide one-day strike for 8 February. Miners' leaders say if the government does not heed their demands, they will begin an indefinite strike on 1 March and press for early presidential elections and the resignation of the government, Nezavisimaya gazeta reported on 7 February. Following a meeting with Prime Minister Viktor Chernomyrdin and First Deputy Prime Minister Anatolii Chubais on 7 February, the general director of the state coal association "Rosugol" said the prime minister had promised to find extra funds for the industry. -- Penny Morvant, OMRI, Inc.

The IMF failed to reach an agreement with Russia in the latest round of talks on a $6.4 billion standby loan, but both Russian and IMF officials remain optimistic, international agencies reported. IMF head Michel Camdessus stressed that Russia badly needs a "strong, coherent, and credible" economic program, but gave no schedule for a possible completion of the talks. Russia hopes to close an important gap in its proposed 1995 budget with over $10 billion in funds from international agencies. The State Duma's decision to raise the minimum wage from $5 to $13 a month erected a major roadblock to the talks, according to Russian presidential aide Aleksandr Livshits. However, the Federation Council is expected to reject the increase. The Duma would then need a three-quarter majority to pass the bill again. Other obstacles include the failure of Russia to liberalize oil exports, expenses associated with the Chechnya war, a threatened miners' strike, flawed macroeconomic assumptions for the budget bill, and the fact that budget decisions sometimes emanate from the president's private office and catch the government unawares. The IMF talks are scheduled to resume again within two weeks. -- Michael Mihalka, OMRI, Inc.

The budget committee of the Russian State Duma has finalized the key numbers of the 1995 draft budget which was approved in the second reading on 25 January, Interfax reported on 7 February. Committee chairman Mikhail Zadornov told Interfax that with the approval of the 1.5% special tax for supporting agriculture and coal mining, the key indices are: revenue--248.3 trillion rubles (4,133 rubles/$1), spending--175.2 trillion, deficit--73.2 trillion rubles or 29.5% of expenditures. Zadornov said an additional 5.3 trillion rubles collected in the form of a special tax, will be directed to "needy branches of the economy," which the committee will discuss in more concrete terms on 13-14 February. Zadornov expects the third reading of the draft budget on 17 or 22 February. -- Thomas Sigel, OMRI, Inc.

International Industrial Bank Chairman Sergei Pugachov said a fixed ruble rate would promote the creation of a black currency market, an increase in illegal transactions by non-banking structures, and would result in a federal tax revenue decline. The comments came during a 7 February Financial Information Agency interview with top bank managers. Avtobank Chairwoman Natalya Raievskaya said a fixed rate would first affect industrial enterprises and then the banking system. Banks would also suffer losses on hard currency operations, she added. Most Bank Chairman Boris Khait said the government must publish and justify the financial reasons for such a move before implementing a fixed rate. Neftyanoi Bank Deputy Chairman Stanislav Balakin commented that the introduction of a fixed ruble rate is a "totally unrealistic task" due to high inflation and economic instability. At the same time, the Russian bankers said they intended to "support any governmental decision in order to not rock the economy." Meanwhile, MICEX trading held steady on 7 February as the market closed at 4,133 rubles to $1. -- Thomas Sigel, OMRI, Inc.

A unified CIS air defense system will be one of two items on the agenda of the CIS Defense Ministers' Council meeting in Almaty on 10 February, Interfax reported. Russian Defense Minister Pavel Grachev is to chair the meeting. At present, only Russia and Armenia have formally combined their air defense efforts. The second topic was said to be an agreement on CIS external borders. -- Doug Clarke, OMRI, Inc.

Russian First Deputy Prime Minister Oleg Soskovets arrived in Kiev on 7 February for another round of negotiations between Russia and Ukraine, Ukrainian radio reported. Soskovets held talks with Ukraine's First Deputy Prime Minister Yevhen Marchuk. Issues under discussion included: the treaty on friendship and cooperation; implementation of bilateral agreements; the Black Sea Fleet; and problems in economic relations. Nearly all disputes over the broad treaty on friendship and cooperation have been resolved, and President Yeltsin should visit Ukraine no later than March to sign the agreement, Interfax reported. Marchuk said the biggest problem has been settling Ukraine's energy arrears to Russia. -- Ustina Markus, OMRI, Inc.

Poland's two ruling parties, meeting on 7 February, have agreed to remove Prime Minister Waldemar Pawlak from office and replace him with Jozef Oleksy of the Democratic Left Alliance (SLD). Oleksy, a former communist party chief in Biala Podlaska voivodship and the minister charged with trade union relations in Poland's last communist government, is currently Sejm speaker. Under the new agreement, the Polish Peasant Party's Jozef Zych will take over Oleksy's post in the parliament leadership in exchange for the PSL's relinquishing the premiership. The deal was one of three proposed by Pawlak (who suggested as alternatives that SLD leader Aleksander Kwasniewski assume the posts of deputy prime minister and foreign minister or that the PSL leave the government entirely). Talks on the composition of the new government begin on 8 February. The coalition expects to make the changes through a "constructive no-confidence vote," one of the few constitutional options that does not require the president's approval. A spokesman indicated on 7 February that the president would sign the 1995 budget if a new government were formed under a new prime minister. "If there were changes in the government, the issue of dissolving the Sejm would probably not have the same urgency," the spokesman was quoted as saying by Gazeta Wyborcza. -- Louisa Vinton, OMRI, Inc.

SLD leader Aleksander Kwasniewski has stressed that the coalition would now form a "new government" rather than make personnel changes in the old cabinet. The SLD said in a communique that new ministers would be chosen for their "professionalism and high ethical standards." That has been interpreted to mean that cabinet members currently facing corruption allegations (including Foreign Trade Minister Leslaw Podkanski and Customs Office chief Ireneusz Sekula) will be removed. Public administration chief Michal Strak is also likely to step down. The PSL is promising to drive a hard bargain on the division of cabinet posts, particularly key economic ones, so the formation of the new government could take several weeks. But the imminent change at the top suggests that the balance of power in the government has shifted away from the PSL to the SLD. This could spell an end to the paralysis afflicting official policy since the Pawlak government took power in late 1993. Movement on privatization and other issues could help blunt charges from the Solidarity opposition that selecting a former communist as prime minister signifies "recommunization." -- Louisa Vinton, OMRI, Inc.

Parliament Speaker Oleksander Moroz says a controversial draft law on the separation of government powers, submitted by President Leonid Kuchma and approved by parliament at its first hearing in December, is not ready for a second debate in mid-February as planned, Interfax-Ukraine reported on 7 February. Moroz told Interfax the previous day that he was unsatisfied with the work of the commission set up to define the main points of contention in the draft legislation and with suggestions made by parliament deputies. Moroz said he disagreed most with the suggestion to abolish the post of prime minister and turn over its authority to the president. Kuchma last week also came out in favor of retaining the post of premier. -- Chrystyna Lapychak, OMRI, Inc.

The Ukrainian government and the Central Bank have requested permission from the parliament to put another 25 trillion unbacked Ukrainian karbovantsi into circulation to meet outstanding payments for energy and fuel deliveries, pay wages and pensions, and finance this year's spring sowing, Interfax-Ukraine reported on 7 February. The request was prompted by the recent price liberalization ordered by President Leonid Kuchma and the parliament's failure to debate the 1995 budget, according to a letter sent to the parliament. The government estimates that the emission would cause the monthly inflation rate to jump to 30-35% in February, over 15% in January. The exchange rate of the karbovanets is expected to fall to 131,000 karbovantsi to $1 in February and 150,000 in March, if the emission is approved (the current rate is 118,400 karbovantsi to $1). The request opposes the president's efforts at introducing tight fiscal policy measures to cut the country's budget deficit and reduce inflation. -- Chrystyna Lapychak, OMRI, Inc.

Ukrainian Radio reported on 7 February that a U.S. government delegation headed by Thomas Simons, the State Department's coordinator of assistance to the newly independent states, met with parliament speaker Oleksandr Moroz. Simons was quoted as saying that a great deal of progress has been made toward economic reform in Ukraine. He met the previous day with President Leonid Kuchma. The delegation arrived in Minsk on 7 February. During its visit, the U.S. Congress is expected to debate aid to Belarus from an $800 million fund set up on 25 May 1994 to help the former Soviet republics. Concern has been expressed that the Republican-dominated congress is considering cutting the aid program. -- Ustina Markus, OMRI, Inc.

Belarusian President Alyaksandr Lukashenka has sent a bill on chemical weapons to the Belarusian parliament for ratification, Belarusian Television reported on 6 February. The convention forbids the development, sale and proliferation of chemical weapons and also calls for the destruction of such weapons. This is the first convention which calls for the complete destruction of a whole category of weapons. The convention calls for the government to work out a plan for the liquidation of all chemical weapons within 30 days of its ratification. -- Ustina Markus, OMRI, Inc.

A delegation from the French Defense Ministry's Strategic Affairs Department, headed by Deputy Director General Alain Faupin, began a tour of the Baltic States on 6 February, BNS reported the following day. It held discussions with Lithuanian parliament deputies in Vilnius on national defense concepts and cooperation between the Baltic States. On 7 and 8 February, the delegation visits Riga for meetings with representatives of the Latvian Defense Ministry, the National Defense Academy, and State Presidential Adviser on Military Issues Col. Dainis Turlais. -- Saulius Girnius, OMRI, Inc.

The Estonian State Statistics Office has announced that the consumer price index in January increased by 3.5% over December, BNS reported on 7 February. Prices of goods rose by 2.9% (food by 3.8% and manufactured items by 1.6%), while the price of services increased by 4.2%. Meanwhile, the Lithuanian Statistics Department reported that inflation in January reached 5.7%, mainly owing to a 8.7% increase in food prices. Prices for tobacco and alcohol increased by 2.7%, for transportation and communication by 2.5%, and for housing expenses by 2.2%. -- Saulius Girnius, OMRI, Inc.

CSCE Commissioner on Minorities Max van der Stoel, on a visit to Bratislava from 6-7 February, said Slovakia should offer education in both the Slovak and Hungarian languages. Slovak President Michal Kovac assured Van der Stoel that parents would be free to choose schools for their children, and he agreed that an independent committee should be set up to deal with education questions, Slovak and international press report. Van der Stoel said that the signing of the Slovak-Hungarian basic treaty will help bring stability to Central Europe. He stressed that the document should be signed by 21 March, the scheduled date for signing the Pact on Stability in Europe. Van der Stoel also met with Prime Minister Vladimir Meciar, parliament chairman Ivan Gasparovic, and leaders of several opposition parties. Discussions focused on territorial divisions in Slovakia. -- Sharon Fisher, OMRI, Inc.

Hungarian Prime Minister Gyula Horn on 7 February nominated Budapest Bank President Lajos Bokros as finance minister and Gyorgy Suranyi, current head of the Central European International Bank, as Hungarian National Bank chairman, MTI reports. Bokros and Suranyi, both in their early 40s, are regarded as competent and independent-minded. Bokros is a former Hungarian Socialist Party parliament deputy, while Suranyi belongs to no party but supports the HSP's coalition partner, the Alliance of Free Democrats. The nomination of two respected bankers is designed to restore confidence in Hungary's financial management structure and to reassure foreign investors that the government will carry on with economic reforms. The AFD approved the nominations, but the coalition partners still have to reach agreement on a candidate for the post of minister without portfolio charged with overseeing privatization. -- Edith Oltay, OMRI, Inc.

The Hungarian Constitutional Court has ruled that several paragraphs of a 1992 law on compensating people deported during World War II for political reasons were discriminatory and therefore unconstitutional, Magyar Hirlap reports on 7 February. The court ruled that the law's description of deportations for racial, religious, or political reasons as "mere deprival of liberty" was arbitrary. It also nullified the provision giving only those victims compensation who were forced to work in combat troops while denying it to those who were in noncombat units or were sentenced without a fair trial. The court called on the parliament to draft a new law by 30 September 1995 compensating all those left out of the reparation process. -- Edith Oltay, OMRI, Inc.

The New York Times on 8 February quotes UN spokesmen as saying that during the first four days of the month, 62 helicopter sorties took place apparently from bases in Serbia to Srebrenica, in eastern Bosnia, where Bosnian Serbs have stepped up attacks in recent weeks. Some of the helicopters were reported to have flown "in military formation." The U.S. is demanding a UN investigation and wants to know why UN monitors were denied access to Serbian airfields at Surcin and elsewhere during that time. If it can be proved that the flights indeed came from Serbia, economic sanctions could automatically be reimposed on that country. Meanwhile, Vjesnik reports UN sources in Croatia as saying the number of flights of airplanes and helicopters from the Krajina Serb base at Udbina is increasing. -- Patrick Moore, OMRI, Inc.

The Clinton administration has apparently done another flip-flop on Bosnia, The New York Times reports on 8 February. During December and January, Washington cultivated direct contacts with the Bosnian Serbs at Pale and Assistant Secretary of State Richard Holbrooke was said to be the "architect" of that policy. But after failing to persuade Bosnian Serb leader Radovan Karadzic to cooperate in reaching a settlement, Holbrooke is now quoted as saying that "there is no point in shuttling up the hill from Sarajevo to Pale to listen to the kind of crap which is dished out by Karadzic." -- Patrick Moore, OMRI, Inc.

AFP reported on 7 February that Serbian President Slobodan Milosevic has rejected French and EU calls for a Yugoslav-area summit, calling it "a waste of precious time." He also ruled out Belgrade's recognition of Croatia and Bosnia, saying such a move "would prejudge fundamental solutions," Tanjug reported. Reuters quoted rump Yugoslav Foreign Minister Vladislav Jovanovic as saying that such recognition was "out of the question." Croatian and Bosnian officials have long called for Serbia to recognize them in their internationally valid frontiers as proof that Belgrade has given up on plans to carve out a Greater Serbia at its neighbors' expense. Hina cites Croatian Foreign Minister Mate Granic as noting that President Franjo Tudjman would attend a summit "provided the meeting is organized and thoroughly prepared." He also pointed out the connection between holding a summit and the participants' recognition of one another's frontiers. -- Patrick Moore, OMRI, Inc.

Tanjug on 7 February reported that Russian Deputy Premier Oleg Davydov and rump Yugoslav authorities signed a bilateral trade accord paving the way for Russian deliveries of kerosene and gas to the rump Yugoslavia until 2010. Davydov was on an official visit to the Serbian capital. Reuters quotes him as saying Russia will deliver kerosene even if the UN Sanctions Committee, monitoring the international embargo against Belgrade, were to signal its disapproval. "Should the UN Sanctions Committee fail to accept our decision, the only way out for us would be to leave the committee, or find a way of carrying out those deliveries," he commented. -- Stan Markotich, OMRI, Inc.

The leaders of the four ruling parties met on 7 February to resolve a dispute triggered by the Party of Romanian National Unity leader Gheorghe Funar's attacks on President Ion Iliescu and his position on Hungarian minority demands for autonomy, Radio Bucharest reports. The four parties agreed to "actively support" the presidential institution and Iliescu's role in defending "[Romanian] independence, sovereignty, and territorial integrity" and in ensuring that the country's laws and constitution" are respected. Funar, who accused Iliescu of failing to fulfill those duties, said after the meeting that the positions of the PRNU and the Party of Social Democracy in Romania (the major coalition partner) on the country's Hungarian national minority continue to differ. Presidential spokesman Traian Chebeleu, in reply to Funar, said the government would have to "explain how it can work with a party whose leader expresses extremist views unacceptable to public opinion in Romania and abroad." RFE/RL's correspondent in Bucharest reported on 7 February that 53 coalition deputies asked the parliament to reject recent Hungarian demands for autonomy. -- Michael Shafir, OMRI, Inc.

Negotiations between Hungary and Romania on the bilateral treaty resumed in Budapest on 7 February. Romanian Foreign Ministry spokesman Mircea Geoana told RFE/RL's correspondent in Bucharest that the document may be completed and signed before the end of March. He said the recent tensions in Romanian interethnic relations have had a negative impact on ties with Hungary, but he added that he did not believe those tensions are crucial. Radio Bucharest quoted Hungarian Foreign Ministry spokesman as saying that Budapest was ready to accelerate negotiations with both Romania and Slovakia and that the basic treaties could be signed in March. Radio Bucharest's correspondent in Budapest said on 8 February that the negotiations have been "constructive" but that national minority rights (one of the two main issues over which the two sides disagree) remain a sticking point. He noted that Hungary wants a separate document detailing the rights of the Hungarian minority in Romania. -- Michael Shafir, OMRI, Inc.

The Bulgarian Transport Ministry has trebled the charges for bus and truck transits through Bulgaria, dpa reported on 6 February. The new fees are 24,000 leva ($360) plus a highway fee of 64 leva ($1) per kilometer. Passenger cars are exempted from the transit payment but have to pay a highway fee of 6 leva per kilometer. The Transport Ministry said the increases are due to the steep devaluation in 1994 of the Bulgarian currency. -- Stefan Krause, OMRI, Inc.

Albanian police have seized 3 kilograms of heroin in the country's biggest-ever drug haul, Gazeta Shqiptare reported on 8 February. Four Turkish citizens were arrested in possession of the drug on 6 February. The haul has an estimated West European market value of about $500,000. The newspaper also noted that the consumption of heroin, virtually unknown in Albania until 1993, has somewhat increased. The first proof of heroin usage in Albania since the end of communism was the case of a 17-year-old girl admitted to the hospital for an overdose in early 1994. -- Fabian Schmidt, OMRI, Inc.

International agencies reported on 7 February that the prison terms of four ethnic Greeks sentenced for espionage and illegal possession of arms will likely be lifted by the Supreme Court. Gramoz Pashko, leader of the opposition party Aleanca Demokratike, said he is "confident" the court will make the right decision, adding that Tirana should take a more flexible attitude toward its ethnic Greek minority. Supreme Court chief judge Zef Brozi, who will preside over the trial, said a recent government move to lift his immunity may have been aimed at preventing him from freeing the four. The parliament voted against lifting his immunity. Greece has demanded the release of the four prisoners as a precondition for reestablishing normal diplomatic relations. -- Fabian Schmidt, OMRI, Inc.

[As of 12:00 CET]

Compiled by Victor Gomez and Jan Cleave