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Newsline - June 5, 1997


President Boris Yeltsin has outlined his priorities for a "realistic and transparent" 1998 budget in a message to the government, Russian and Western agencies reported on 4 June. Yeltsin called for improved tax collection and said the budget deficit should be cut to 0.5% of GDP in 1998, excluding the costs of servicing Russia's internal and external debt. He called for a budget deficit of zero in 1999--again, excluding debt servicing costs. Deputy Presidential Chief of Staff and former Finance Minister Aleksandr Livshits told reporters that in order to avoid income shortfalls in 1998, the government may auction off state-owned shares in companies that owe taxes. Meanwhile, the State Duma on 4 June approved a government proposal to form a working group on preparing the 1998 budget that will include government and parliamentary representatives, ITAR-TASS reported.


Yeltsin met with heads of 20 Russian regions for three hours on 4 June to discuss various aspects of domestic and foreign policy, Russian news agencies reported. Among other things, Yeltsin called on the regional leaders to support housing reform and pledged to meet with top regional officials more regularly. The Kremlin appears to be stepping up efforts to keep regional leaders, who are also deputies in the Federation Council, in the president's camp. First Deputy Prime Minister Anatolii Chubais told Kommersant-Daily on 3 June that he talks with, on average, three or four regional leaders a day and never refuses a governor's request for a meeting. This year, the Federation Council has been more willing to approve laws passed by the State Duma against the Kremlin's wishes.


The Duma on 4 June passed a draft law, proposed by Vladimir Zhirinovsky's Liberal Democratic Party of Russia, calling for the resumption of trade with Iraq in violation of international sanctions, Reuters and Russian agencies reported. The law advocates purchasing oil and petroleum products from Iraq and supplying that country with equipment and spare parts, according to Interfax. Duma Deputy speaker Sergei Baburin told RFE/RL's Moscow Bureau he hoped that the Federation Council would support the draft law, but that is considered unlikely. Even if the upper house does approve it, Yeltsin is certain to impose a veto. An unnamed Russian Foreign Ministry spokesman told Interfax that the law is "absolutely inconsistent with international standards and the Russian Constitution."


The Duma also passed a law giving Moscow's Red Square the status of national cultural heritage, Russian news agencies reported on 4 June. The law, approved by 269 votes to three, bans reconstruction or new construction on the square. In April, the Duma passed a resolution denouncing as "vandalism" proposals to remove Vladimir Lenin's body from the mausoleum on Red Square. Also on 4 June, the Duma passed a resolution calling on the Latvian parliament to release Alfreds Rubiks, former first secretary of the Latvian Communist Party's Central Committee, from prison.


The Duma on 4 June adopted a resolution to "strengthen state monitoring of the activities of Russian Public TV [ORT]," ITAR-TASS reported. The resolution instructs the Audit Chamber to examine the financing and use of federal property at the 51% state-owned network, which broadcasts nationwide on Channel 1. The Duma also instructed the State Tax Service to examine ORT's compliance with tax laws. The resolution called on the government to provide all necessary information for the audits and to conclude a trust agreement for managing the state's shares in ORT. Duma deputies have repeatedly objected to ORT's news coverage, which frequently portrays the lower house of the parliament in an unfavorable light. In March, deputies stripped the network's journalists of their Duma accreditation for one month.


Eleonora Mitrofanova, a member of the Audit Chamber, says that commercial banks earned at least 4 trillion rubles ($690 million) in 1996 at the expense of the state budget by making loans to the Finance Ministry, Interfax reported on 4 June. She said the ministry has repeatedly used bank loans to cover its expenses and repaid the loans using budget funds. Mitrofanova said the procedure constituted an "improper" use of funds, since the ministry was in effect amending budget expenditures "in favor of the banking system" without approval from the parliament. Meanwhile, Audit Chamber Deputy Chairman Yurii Boldyrev recently told Argumenty i fakty (no. 22) that the Pension Fund, Obligatory Medical Insurance Fund, Social Security Fund, and Employment Fund have squandered 370 billion rubles during the first five months of 1997 alone.


The government has issued a directive naming new heads of nearly 30 government commissions whose chairman were dismissed during the March cabinet reshuffle, Russian news agencies reported on 4 June. First Deputy Prime Minister Anatolii Chubais will be in charge of commissions on financial and lending policies, foreign debt, revising tax law, and government grants to the media. First Deputy Prime Minister Boris Nemtsov will run commissions on reforming Russia's social benefits system and on reburying the family of the last tsar, Nicholas II. Interior Minister Anatolii Kulikov will head the government's anti-drug commission. Economics Minister Yakov Urinson will be in charge of commissions on exports and on matters related to the World Trade Organization, while CIS Affairs Minister Aman Tuleev will head a commission on Russian-Tajik cooperation.


First Deputy Prime Minister Nemtsov earned about 92.5 million rubles ($16,000) in 1996 and another 435 million rubles so far this year in royalties from his book The Provincial, Russian news agencies reported on 4 June. Documents submitted to the State Tax Service also show that Nemtsov owns 1,000 square meters of land in Nizhnii Novgorod, with an estimated value of 6 million rubles, and a Russian-made car purchased in 1992, worth about 25 million rubles. Nemtsov has been an outspoken supporter of a presidential decree demanding that top officials release income and property declarations. Yeltsin recently declared his own income and property holdings (see RFE/RL Newsline, 2 June 1997).


Nemtsov has denied Russian media reports that the government plans to cut the income of working pensioners, ITAR-TASS reported on 4 June. He admitted that the government has sent Yeltsin a "very tough draft decree, which we do not like at all" to help stabilize pension payments. But he said he hoped the Duma would pass proposed laws on reforming Russia's social benefits system so that Yeltsin would not need to sign the pension decree. Izvestiya claimed on 4 June that the government "intends to solve the pensions problem at the expense of pensioners." The paper said a draft presidential decree would put a ceiling on the total income a working pensioner could earn and still receive a state pension.


After talks in Moscow on 4 June with his Chechen counterpart Movladi Udugov, Russian First Deputy Prime Minister Nemtsov said an agreement on the export of Azerbaijan's Caspian oil from Baku via Chechnya to Novorossiisk, scheduled to begin on 1 October, is ready for signing, Russian agencies reported. Nemtsov did not disclose details, and it is unclear whether Chechnya will receive the standard Russian tariff of $2.70 per barrel or the higher rate that it has demanded. Udugov and Russian Security Council Secretary Rybkin reached agreement on 3 June on a plan to finance Chechen reconstruction whereby other Russian regions and former Soviet republics (except Ukraine) will provide aid to Chechnya in exchange for writing off their debts to Russia, Russian media reported.


As thousands of coal miners in the northern city of Vorkuta (Komi Republic) took to the streets on 4 June demanding that Yeltsin and the government resign, First Deputy Prime Minister Chubais promised to disburse 150 billion rubles ($260 million) in emergency government funds to Vorkuta starting on 5 June, RFE/RL's Moscow bureau reported. Chubais, who also heads the government's Interdepartmental Commission on the Socioeconomic Problems of Mining Regions, acknowledged that the money would not cover all wage arrears but said it would help ease tensions and pay vacation expenses for miners' children. Chubais sharply criticized a commission from the Fuel and Energy Ministry and the state coal company Rosugol for failing to resolve the crisis in Vorkuta sooner. Workers at Vorkuta's nine mines, who have not been paid since last fall, declared an open-ended strike on 1 June.


According to the State Statistics Committee, some 720,000 Russian citizens participated in strikes during the first five months of 1997, five times more than the number of strikers during the same period in 1996, Izvestiya reported on 4 June. The main demand of the strikers is payment of back wages. Strikes lasting longer than one day were held at more than 14,600 enterprises and organizations. The data indicate that more than 92% of all strikes this year have been called at educational institutions. The largest number of teachers' strikes were in Omsk, Chita, Kirov, and Smolensk Oblasts and in Krasnoyarsk Krai.


In a 3 June interview on Moscow Television, Federal Security Service (FSB) director Nikolai Kovalev called on Russians working for foreign security services to offer to become double agents, Russian news agencies reported the next day. Kovalev said prospective double agents could call a special telephone number in Moscow. He promised to guarantee the anonymity of volunteers and even to allow them to keep the money they received from foreign security services. Kovalev also warned that the FSB will find and arrest those who do not offer to become double agents. The FSB claims to have caught 39 Russians employed by foreign services in 1995 and 1996, Reuters reported.


A Polish court has delayed a decision on whether to extradite former presidential adviser and Moscow Deputy Mayor Sergei Stankevich to Russia, RFE/RL's correspondent in Warsaw reported on 4 June. The court asked Russian law enforcement authorities to produce within two months evidence that Stankevich took a $10,000 bribe in 1992. Meanwhile, former Moscow Mayor Gavriil Popov published an open letter in Gazeta Wyborcza appealing to Polish authorities not to extradite Stankevich.


German journalist Gisbert Mrozek is preparing a Supreme Court appeal to protest the verdict handed down against a soldier who shot his wife, journalist Natalya Alyakina, Nezavisimaya gazeta reported on 5 June. Alyakina was killed in Budennovsk in June 1995, and the soldier who fired the fatal shots was given a two-year suspended sentence in July 1996. Mrozek, who claims the investigation into his wife's death was incomplete, recently lost an appeal in a military court (see RFE/RL Newsline, 30 May 1997).


After meeting in Moscow on 4 June with Russian First Deputy Foreign Minister Boris Pastukhov, Sergei Shamba said Abkhazia wants an extension of the mandate of the CIS peacekeeping force currently deployed along the border between Abkhazia and the rest of Georgia, Russian agencies reported. Shamba said their withdrawal would hinder a political solution to the conflict and that Abkhaz troops would immediately take their place, possibly supported by units from the Confederation of Peoples of the Caucasus. In Tbilisi, parliamentary chairman Zurab Zhvania rejected Russian presidential spokesman Sergei Yastrzhembskii's charge that the 30 May Georgian parliament resolution setting conditions for the peacekeepers' continued presence constituted "blackmail." Georgian presidential press spokesman Vakhtang Abashidze said that Eduard Shevardnadze has again appealed to the Russian leadership to implement the decision taken at the March summit of the CIS heads of state to broaden the peacekeepers' mandate.


Parliamentary chairman Zhvania expressed support on 4 June for the creation of a Caucasian inter-parliamentary assembly modeled on the Organization for Security and Cooperation in Europe, ITAR-TASS reported. This idea has been discussed intermittently in recent years and was again raised on 31 May by Chechen delegates to a conference of North Caucasus leaders in Kislovodsk (see RFE/RL Newsline, 2 June 1997). Segodnya on 4 June reported that the creation of a Caucasian equivalent of the OSCE with international status was discussed during talks the previous day between Chechen First Deputy Prime Minister Movladi Udugov and Russian Security Council Secretary Ivan Rybkin. This suggests that Russia aspires to leadership of the proposed organization. Some Georgian parliamentary deputies have argued that Russia should not be granted membership.


UN Secretary-General Kofi Annan said on 4 June he favored extending the mandate of the UN Mission of Observers in Tajikistan, which expires on 15 June, RFE/RL's Tajik Bureau reported. Annan also said that following the formal signing of the Tajik peace accord, the UNMOT mandate will have to be adjusted and its numbers revised. Currently, there are some 70 UN personnel in Tajikistan. The signing was scheduled to take place on 13 June but has been postponed due to the Tajik opposition's insistence that prisoner exchanges begin beforehand and that a building be found in Dushanbe in which the proposed reconciliation council can convene.


The opposition labor movement issued a statement on 4 June demanding that President Nursultan Nazarbayev, the government, and the parliament step down, Interfax reported. According to the statement, the government is not serving the "lawful interests of the country" and neglects the will of the people, who "have been driven to poverty and are starving." Members of the movement participated in the 30 May demonstration outside the government building in Almaty, and several of the movement's leaders were put in jail for 15 days for their part in the unsanctioned rally. The movement plans to picket the government building again soon.


China National Petroleum Corporation beat out American companies Texaco and Amoco and the Russian company Yuzhny Most for a 60% stake in the Aktyubinsk oil field, ITAR-TASS and the Financial Times reported. The 4 June announcement added that the Chinese company will invest $4.3 billion in the project and will also construct a 3,000 km pipeline from the western Kazak oil field to China's Xinjiang Province. The Chinese company will contribute $3.5 billion to the pipeline project.


The Kumtor Gold Company, a joint venture of the Kyrgyz state gold company Kyrgyzaltyn and Canada's Cameco, announced on 4 June that it extracted more gold in the first five months of 1997 than planned, Interfax reported. The company intended to extract 3.8 tons of gold between January and May, but Kumtor head Len Homeniuk said the figure for that period was 4.2 tons. The projected output for 1997 is 12.75 tons, but Homeniuk noted the total may exceed 13 tons.


Ukrainian Defense Minister Alexander Kuzmuk told ITAR-TASS on 4 June that Ukraine has decided to keep several bomber aircraft that it was intending to sell to Russia. Kuzmuk said that Ukraine had planned to sell Russia 25 Tupolev Tu-160 and Tu-95MS bombers as agreed upon two years ago, but he added that the two countries have been unable to settle on a price for the aircraft. Russian Deputy Prime Minister Valerii Serov said Russia might decide against purchasing the planes because it has no funds for repairs. Kuzmuk neither confirmed nor denied that Russia has backed out of the sale. He said only that "the question has been suspended" and "it is unclear when it will be settled."


The Crimean parliament on 4 June protested against upcoming Sea Breeze naval exercises in the Black Sea, dpa reported. It accused the Ukrainian government of allowing Crimea to become a "test bed" for NATO plans. Russia has also criticized the NATO-backed exercises, in which Ukrainian forces will participate along with troops from the U.S., Bulgaria, and Romania. Also on 4 June, the parliament voted to name Anatoli Franchuk as prime minister of the autonomous province. Ukrainian President Leonid Kuchma approved the dismissal of Premier Arkady Demidenko and his replacement by Franchuk the previous day.


Trade union spokesman Yuri Berdnik told journalists in Kyiv on 4 June that more than 2,000 Ukrainian miners are striking over wage delays and working conditions. The miners' strike began on 30 May and has paralyzed 19 mines in the eastern part of the country. According to Berdnik, the striking miners are owed more than $2 million in back pay. The Ukrainian government reportedly owes a total of $819 million to some 600,000 miners.


Alyaksandr Lukashenka has signed a decree ordering his government to implement the recently signed union charter with Russia, Belapan reported on 4 June. The decree calls, among other things, for drafting a joint defense policy for Russia and Belarus. Meanwhile, Russian President Boris Yeltsin said at a meeting with regional leaders in Moscow on 4 June that Russia and Belarus may have a common currency in the future as a result of the union charter.


The government has approved a program for 1997-1998 that gives priority to regional development and foresees annual economic growth at 4-5% and annual inflation at 10-12%, ETA reported on 4 June. The main foreign-policy goals are admission to the EU, cooperation with NATO within the framework of the Partnership for Peace program, and continued participation in peacekeeping operations. Also on 4 June, the government approved the principles of a so-called three-pillar pension system based on guaranteed state pensions and mandatory and voluntary payments by individuals. The voluntary "pillar" is to be implemented in 1998 and the mandatory one after 2000. A government official noted that a new system was needed because of the "increasing median age" of the population, according to ETA.


The parliament has confirmed Talavs Jundzis as defense minister, BNS reported on 4 June. Jundzis was Latvia's first defense minister following the country's restoration of independence in 1991. He replaces Andrejs Krastins, who resigned at the beginning of May following accusations of having concluded fuel purchase deals at prices disadvantageous to the state (see RFE/RL Newsline, 9 May 1997). Meanwhile, President Guntis Ulmanis has sent a letter to Prime Minister Andris Skele urging that the naturalization process be simplified. He called for reducing the naturalization fee from 30 lats ($60) to 3 lats, exempting students from paying the fee, and abolishing the six-month limit for people to reapply if they fail the naturalization exam, Reuters and BNS reported.


The government has dismissed Lt.-Col. Algirdas Jurkevicius as commissioner for military transit, BNS reported on 4 June. The decision was taken following reports that Jurkevicius abused his powers by signing transit licenses for Russian military vehicles to cross Lithuania. Only Russian military trains are allowed to transit the country. Jurkevicius was appointed by the government in June 1995.


Speaking on 4 June at a sanctuary in Kalisz dedicated to Polish clergy who were sent to the Nazi death camp at Dachau, in Germany, Pope John Paul paid tribute to the millions of Jews who died in World War II. The pope, who is on an 11-day visit to Poland, reminded his audience of what he called the "common heritage" of Jews and Poles in Poland. Earlier the same day, he addressed some 100,000 people at an open air mass in Kalisz, saying a nation that allows abortion has no future and deserves to be called a "barbarian civilization." Abortion is expected to be a significant issue in the parliamentary elections in September. The parliament, dominated by post-communists, passed a law last October easing restrictions on abortions. But the Constitutional Court has ruled against parts of the law and called on the parliament to review the legislation. The Democratic Left Party has said it may propose a referendum on abortion.


Czech Prime Minister Vaclav Klaus told journalists in Prague on 4 June that the government will seek a vote of confidence within the next week. The opposition Social Democrats said recently that they will seek a vote of no-confidence in Klaus's cabinet. Earlier the same day, Josef Lux--chairman of the Christian Democratic Union, a ruling coalition partner--was quoted in Lidove Noviny as saying there is growing tension in the Czech Republic over perceived government mismanagement of the economy and that Klaus's resignation would solve the problem. Lux later said he was misquoted, but the divides within the three-party coalition are deepening. President Vaclav Havel said on 4 June he is alarmed by the latest political developments.


President Michal Kovac on 4 June named Zdenka Kramplova as foreign minister, Slovak media reported. Presidential spokesman Vladimir Stefko said Kramplova, the first woman to hold that position, was a senior civil servant in the Foreign Ministry and headed the government office until January. Kramplova will be officially appointed by Kovac on 11 June. She replaces Pavol Hamzik who resigned at the end of last month citing the domestic political situation and the failed referendum on NATO membership and direct presidential elections. Meanwhile, parliamentary chairman Ivan Gasparovic arrived in Washington on 4 June for two days of talks with U.S. congressmen that will focus on NATO enlargement, RFE/RL's Washington correspondent reported.


Seven bilateral agreements were signed on 3 June during Moldovan Prime Minister Ion Ciubuc's first visit to Budapest, Hungarian media reported. The sides signed an intergovernmental agreement on extradition and cooperation in combating organized crime, terrorism, and drug trafficking. Other agreements cover industry, agriculture, transportation, culture, and science. Ciubuc and his Hungarian counterpart, Gyula Horn, said they want to improve economic cooperation and increase last year's $24.5 million turnover in bilateral trade. Ciubuc pledged to help promote Hungarian goods in other CIS markets.


The opposition Independent Smallholders staged a rally in Budapest on 4 June commemorating the anniversary of the 1920 Trianon treaty, in which Hungary lost two-thirds of its territory, Hungarian media reported. Smallholders Deputy Chairman Zsolt Lanyi said it was a mistake of the government to include the inviolability of state borders in recent basic treaties Hungary has concluded with its neighbors. He called upon citizens to vote in the 1998 elections for a government that would be "Hungarian and Christian." At a separate rally in Buda Castle, Hungarian Justice and Life Party leader Istvan Csurka said Hungary does not have problems with its neighboring states but rather with its own "satellite elites, [who are] the traitors of the homeland."


All political parties have condemned an apparent assassination attempt on President Sali Berisha on 4 June inear Durres. Twenty-five-year-old Ilir Ceta, whom the president's office called "an extremist,." has been identified as the attempted assassin. It is unclear whether Ceta managed to throw a grenade that did not go off or whether a presidential bodyguard grabbed the explosive before Ceta could toss it. The Interior Ministry has launched an investigation, and Prime Minister Bashkim Fino has announced additional security measures for candidates in the upcoming parliamentary elections. Berisha said it was a terrorist act aimed at destabilizing Albania. Meanwhile, some opposition journalists suggested that Berisha's supporters might have staged the whole incident.


The Vienna-based International Helsinki Federation for Human Rights issued a press release on 4 June calling for more foreign troops to be sent to Albania. The group says additional soldiers are necessary because of what the statement called the recent "politically motivated bombings in Tirana" (see RFE/RL Newsline, 3 and 4 June 1997). The statement said the authorities are using those explosions as an excuse to justify the state of emergency, which the opposition wants lifted in order to ensure a fair election campaign. The Helsinki group said that, in any event, the prospects for the June vote appear "dim," given what it called "the legal barriers to running in the elections, the lack of a free media, and the fact that half of Albania is controlled by heavily armed gangs, some of which are run by the Democratic Party." The statement did not mention, however, that the armed gangs controlling much of the south oppose the Democrats.


Foreign Minister Lamberto Dini said in Palermo on 4 June that his country is planning to increase its military presence in Albania in the two weeks leading up to the elections. Its goal is "to guarantee safety in all areas where voting takes place. After the elections, which we want to be free, fair and honest, the military presence will be ended swiftly," the minister said. Dini had no immediate details of how many more soldiers would be sent or whether other countries taking part in the force would deploy additional troops. Italy has contributed some 2,500 soldiers to Operation Alba, which began deploying in April.


Representatives of the five successor states to the former Yugoslavia ended three days of meetings in Brussels on 4 June. They failed once again to agree on the division of Yugoslavia's properties and other assets, an RFE/RL correspondent reported from the Belgian capital. Belgrade wants to keep the bulk of the wealth and argues that the others should get less because they voluntarily left Yugoslavia. The others, for their part, want the assets divided on the basis of the republics' pre-1991 payments to the federal budget, to which Slovenia and Croatia were the principal contributors.


Zeljko Raznatovic, better known as Arkan, held a press conference in Belgrade on 4 June to criticize CNN's program "Wanted," which was broadcast worldwide this week. Arkan charged that the half-hour broadcast was full of mistakes, and he threatened to sue CNN, Belgrade media report. Arkan said: "I have been charged, tried, and sentenced by CNN. Does CNN have a jail of its own?" The program presented alleged evidence of Arkan's involvement in war crimes in Croatia and Bosnia and described his close links to Serbian President Slobodan Milosevic. It asked rhetorically why the Hague-based war crimes tribunal has not indicted him, even though Croatia and Bosnia have both called for his arrest and trial. Interpol has issued an arrest warrant against Arkan for various criminal activities predating the Yugoslav conflict. On 5 June, CNN said it stands by its story and noted that Arkan has refused to be interviewed by the network.


In Pristina, the trial continues of 15 ethnic Albanians on terrorism charges. Some of the defendants admitted on 4 June to possessing arms illegally. Also in Pristina, Parliamentary Party leader Adem Demaci warned Kosovars against holding too many political meetings in the runup to the shadow-state's December elections, an RFE/RL correspondent reported. Demaci said that too much talking could undermine the unity of the ethnic Albanians. He pledged to set up a National Council of all Kosovars should his party win the elections. Meanwhile in Belgrade, 12 Serbian families from eastern Kosovo staged a protest against what they said was abusive treatment by Serbian officials in Kosovo. The families came originally from Slovenia and elsewhere in the former Yugoslavia and resettled in Kosovo when the country split up, the BETA news agency reported.


Opposition parties on 4 June announced the formation of a committee to monitor the presidential elections later this month, an RFE/RL correspondent reported from Zagreb. The committee held its first session immediately and warned that better controls are needed to make sure there is no tampering with ballot papers. The number of papers already printed for this year's election exceeds by some 1.5 million the total printed in 1995, according to the committee. Meanwhile, Social Democratic candidate Zdravko Tomac said in Zagreb that a big turnout is needed on 15 June to deny President Franjo Tudjman an outright victory and to force him into a runoff. In Rijeka, the Liberals' Vlado Gotovac charged the governing Croatian Democratic Community with turning political life into an empty ritual.


Ion Iliescu, former president and chairman of the Party of Social Democracy in Romania, on 3 June sharply criticized deputy Iosif Boda, who had earlier demanded the resignation of PDSR deputy chairman Adrian Nastase, RFE/RL Bucharest's bureau reported. Boda ran the 1996 election campaign of Iliescu, who said he intended to apologize to the PDSR for having imposed Boda on its lists for last year's elections. Boda promptly received a warning from the party. Iliescu acknowledged that the party is divided into several groups that are "fighting one another for the leadership." Deputy Chairman Teodor Melescanu, who was proposed as a possible replacement for Iliescu last month (see RFE/RL Newsline, 9 May 1997), defended Boda, saying that "everybody is entitled to a personal opinion."


The government on 4 June approved an ordinance for the privatization of all state-owned companies within three months and of firms owned by local governments within half a year. The mechanism of ordinances enables the government to implement legislation without the parliament's prior approval, though the legislature eventually has to approve it. The government also approved an ordinance on the Law of Foreign Investment providing for considerable advantages for investors from abroad, including low taxes on capital-gains repatriation. Also on 4 June, Poul Thompsen, the IMF chief negotiator for Romania, began a three-day visit to Romania, which was described as "routine." He met with Premier Victor Ciorbea and the ministers in charge of the economic sector.


Experts representing the two sides involved in the Transdniestrian conflict resumed negotiations in Chisinau on 4 June, Infotag reported. The meeting was the first held since the signing in Moscow on 8 May of the memorandum on ways to settle the Moldovan conflict. The two sides discussed setting the agenda for future talks. Work will now begin on the document stipulating the breakaway region's special status. Russian, Ukrainian, and OSCE mediators who are members of the Joint Control Commission also attended the meeting.


Asen Diulgerov, the new head of the Privatization Agency, says he wants to see heavy fines imposed on regional governors and managers of state-owned companies who interfere with the privatization process. Diulgerov told reporters in Sofia on 4 June that the agency has proposed fines of up to 5 million leva ($5,300) and that the proposal will soon be considered by the parliament. International financial institutions have accused local administrators and state managers with ties to the Bulgarian Socialist Party of obstructing privatization. An RFE/RL Sofia correspondent said the Socialists still control local administration in many towns because they did well in the local elections held in 1995. Also on 4 June, the parliament approved the pegging of the lev to the German mark.


by Liz Fuller and Harry Tamrazian

For more than six years, Armenia's ruling Pan-National Movement [HHSh] has dominated politics in that country. But in recent months, splits within the movement have become increasingly apparent, prompting leaders of the movement to concede it no longer qualifies as a ruling party.

The HHSh was created in 1989 from the Karabakh Committee, set up by a handful of Armenian academics the previous year, to coordinate Armenian support for the drive by the predominantly ethnic Armenian population of Azerbaijan's Nagorno-Karabakh Autonomous Oblast to achieve unification with Armenia. The movement obtained a majority in the post-communist Supreme Soviet elected in the summer of 1990, and its leader, Levon Ter-Petrossyan, was elected president the fall of the following year.

Although popular support for the Armenian leadership plummeted between 1992 and 1994 as a result of economic collapse, successive attempts by opposition parties--including the Union for National Self-Determination, headed by veteran dissident Paruir Hairikyan, and former Prime Minister Vazgen Manukyan's National Democratic Union--to create a lasting opposition coalition failed. The only serious threat to the HHSh was the Armenian Revolutionary Federation--Dashnaktsutyun (ARFD). Banned by Ter-Petrossyan in December1994 for alleged involvement in terrorist activities, the ARFD was unable to field candidates in the July1995 parliamentary elections.

The Republic bloc, comprising the HHSh and four smaller parties, won 114 of the 190 seats in the new parliament. But the ban on the ARFD, in conjunction with violations of voting procedure, led some opposition politicians to question the legality of the poll. Ruben Mirzakhanyan, chairman of the Ramgavar party, argued that the HHSh's hold on power rested on an elaborate network of patron-client relationships permeating the national and local governments as well as the police. In December, 1995, Ter-Petrossyan appeared to be distancing himself from the HHSh, which, he said, should form the nucleus of a broader right-wing party.

The disputed presidential poll of September 1996, in which Ter-Petrossyan was narrowly re-elected with 51.75% of the vote, served to split the HHSh into two camps: the "bureaucrats" grouped around former Prime Minister Hrant Bagratyan, former national security adviser Davit Shahnazaryan, and parliamentary legal affairs committee chairman Eduard Yegoryan; and powerful shadow economic interest groups backed by former Interior Minister Vano Siradeghyan (now mayor of Yerevan) and Defense Minister Vazgen Sargsian.

Two months ago, political forces began to realign after it became apparent that the president might consider dissolving the current parliament and holding early parliamentary elections. In early April, Ter-Petrossyan initiated talks with ARFD representatives, which observers in Yerevan predict will culminate in that party's re-legalization. If that happens, the Dashnaks could once again emerge as the strongest opposition party.

In late May, Hairikyan announced that he no longer recognizes Vazgen Manukyan as leader of the opposition National Alliance created in September 1996 to support Manukyan's presidential candidacy. Also in late May, Bagratyan, whose aggressive free-market policies earned him the nickname of the "Armenian Gaidar," launched his own liberal political party, Azatutyun. Several ranking members of the HHSh have already defected to that party, while Hairikyan and other opposition leaders have also indicated they are willing to cooperate with the liberals.

On 30 May, the Yerevan branch of the HHSh met to prepare for the movement's congress to be held in June. Some members may break away at that meeting to align themselves either with the liberals or conceivably even with Manukyan. Many of the movement's leaders have expressed concern that the HHSh has lost its political clout and can no longer be considered the ruling party. Some have suggested that they may seek a vote of no confidence in the government of Prime Minister Robert Kocharyan, the former president of Nagorno-Karabakh, who is not a HHSh member. Such a move would bring the HHSh into open conflict with Ter-Petrossyan.

In an implicit challenge to the president to choose to side with either the HHSh or the prime minister, parliament deputy speaker and ranking HHSh member Ara Sahakyan told the HHSh's newspaper Haik on 3 June that the chairman of the ruling party should be Ter-Petrossyan. Observers in Yerevan suggest that a conflict between the HHSh and Kocharyan is inevitable, particularly since the latter's campaign to wipe out tax evasion is likely to impact on the economic interests of many HHSh members. But the strong backing Kocharyan enjoys both from the president and from the ARFD makes him the probable victor. And since Ter-Petrossyan has stressed he will not seek a third term as president, Kocharyan is well placed to succeed him in the 2001 elections. Harry Tamrazian is deputy director of RFE/RL's Armenian Service.