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Newsline - July 2, 1997




FORMER FSB CHIEF APPOINTED JUSTICE MINISTER

President Boris Yeltsin has appointed former Federal Security Service (FSB) director Sergei Stepashin justice minister, Russian news agencies reported on 2 July, citing the presidential press service. Yeltsin also sacked suspended Justice Minister Valentin Kovalev, who "Sovershenno sekretno" recently alleged to have ties to organized crime. Stepashin was removed as FSB head following the failed attempt to resolve the hostage crisis in Budennovsk (Stavropol Krai) in June 1995. More than 100 people were killed in the effort to free the hostages and capture the Chechen hostage-takers.

TULEEV APPOINTED GOVERNOR OF KEMEROVO

Yeltsin has appointed Aman Tuleev governor of Kemerovo Oblast and simultaneously removed him as CIS affairs minister, RFE/RL's Moscow bureau reported on 1 July. Tuleev was reportedly appointed at his own request, after notifying government officials recently that he plans to contest the gubernatorial election in Kemerovo scheduled for 19 October. Tuleev chaired the Kemerovo legislature before running for president in 1996. He withdrew from the presidential race shortly before the June election and backed Communist Party leader Gennadii Zyuganov. Tuleev replaces Governor Mikhail Kislyuk, whom Yeltsin appointed in 1991. Tuleev is likely to retain the post as governor in October; analysts give Kislyuk no chance of winning his former job back. There was no word on whether trade union leaders in Kemerovo will go ahead with an oblast-wide strike planned for 11 July.

PRESIDENTIAL ADMINISTRATION DEFENDS DYACHENKO'S APPOINTMENT

The presidential press service released a statement on 1 July defending the recent appointment of Yeltsin's daughter Tatyana Dyachenko as presidential adviser, Russian news agencies reported. Duma Speaker Seleznev claimed that Dyachenko's appointment violated the law on the civil service, which bans nepotism. However, the official statement dismissed Seleznev's objection as "legally inadequate," noting that the president is technically not a civil servant and is therefore not subject to restrictions on appointing close relatives. But in an interview with Ekho Moskvy, Seleznev dismissed that argument as "legalistic evasion." Meanwhile, Interfax reported on 1 July that an attorney who resides in Moscow Oblast has filed a Supreme Court appeal challenging the legality of Dyachenko's appointment (see also "End Note" below).

CHUBAIS ACCUSED OF RECEIVING SUSPICIOUS INTEREST-FREE BANK LOAN

"Izvestiya" on 1 July charged that First Deputy Prime Minister Anatolii Chubais received a loan from Aleksandr Smolenskii's Stolichnyi Savings Bank under suspicious circumstances. The newspaper alleged that in February 1996, Stolichnyi Bank extended a five-year, interest-free loan worth 14.5 billion rubles ($2.9 million) to the Center for the Defense of Private Property, which Chubais had created shortly before. The center reportedly put up no collateral for the loan, the stated goal of which was the "development of civil society." The bank credits were allegedly used to speculate on the lucrative treasury bill market. "Izvestiya" also claimed that Chubais helped Stolichnyi win a November 1996 competition to acquire Agroprombank and implied that Chubais's contacts with international financial organizations have helped Stolichnyi to participate in programs run by the European Bank for Reconstruction and Development and the World Bank. Since 1991, "Izvestiya" has almost always supported Chubais .

CHERNOMYRDIN, SELEZNEV DISCUSS CONVENING SPECIAL DUMA SESSION

After meeting with State Duma Speaker Gennadii Seleznev on 1 July, Prime Minister Viktor Chernomyrdin announced that some Duma committees and a conciliatory commission of government and parliamentary representatives will continue to work on proposals to cut 1997 budget spending and social benefits, Russian news agencies reported. Chernomyrdin said that if a compromise on the proposed cuts is reached, the government will formally request that the Duma interrupt its summer recess to consider the proposals. Meanwhile, Seleznev told journalists that a final date for convening a special Duma session cannot be set until the government revises the proposed legislation and submits it to the relevant Duma committees. The Duma rejected the government-backed budget cuts and reductions in social benefits in the final days of its spring session (see "RFE/RL Newsline," 24 and 25 June 1997).

LUZHKOV CRITICIZES GOVERNMENT'S PRIORITIES

Moscow Mayor Yurii Luzhkov has again criticized the government's domestic policy priorities. In a 1 July interview with RFE/RL's Moscow bureau, he said First Deputy Prime Minister Chubais and his allies have mistakenly made reform of housing and municipal services their top priority. Luzhkov believes the government's main goal should be reviving domestic industry, which he said will make it easier to address other issues, including housing reform. Luzhkov also repeated his opposition to Russian policy toward Ukraine. In particular, he objects to "renting our own city" by leasing port facilities in Sevastopol, where the Black Sea Fleet is based. With regard to Duma Defense Committee Chairman Lev Rokhlin's recent appeal to the president, Luzhkov said he highly respects Rokhlin and understands the hardships in the armed forces but would not "dramatize the situation."

YAVLINSKII CONDEMNS "CORPORATE CAPITALISM," TAX CODE

Yabloko leader Grigorii Yavlinskii says the government's policies are creating "corporate capitalism" in Russia, which "has nothing in common with a democratic state, open society and free market economy," RFE/RL's Moscow bureau reported on 1 July. In particular, Yavlinskii criticized the draft tax code, which the Duma recently passed in the first reading. He described the proposed code as a "repressive document" containing many provisions that violate citizens' rights guaranteed in the constitution, the civil code, and the family code. For instance, he said the tax code would allow the tax police to carry out interrogations and would impose a presumption of guilt against those suspected of tax evasion. Yavlinskii also argued that the government's "superficial economic activity" would not prevent declines this year in GDP by 2%-3%, industrial production by 4%-5%, and agricultural output by up to 10%, Interfax reported.

MINISTER ORDERS INSPECTION OF ALL NUCLEAR RESEARCH REACTORS

Atomic Energy Minister Viktor Mikhailov has ordered thorough inspections of all Russian nuclear reactors used for research to be conducted over the next several months, Interfax and AFP reported on 1 July. The order was prompted by the recent fatal accident at the Arzamas-16 center in Nizhnii Novgorod Oblast (see "RFE/RL Newsline," 18, 23, and 30 June 1997). An investigative commission has already concluded that human error and flawed procedures at the center caused the accident. Ministry spokesman Georgii Kaurov said the inspections will involve a "complete verification, from the instruction booklets to the equipment." Mikhailov's order does not apply to reactors at ordinary nuclear power plants.

TATARSTAN ACQUIRES CONTROLLING STAKE IN KAMAZ

The board of directors of the truck manufacturer KamAZ on 1 July voted to transfer 43% of the company's shares to the government of the Republic of Tatarstan and to appoint First Deputy Prime Minister Ravil Muratov as chairman the KamAZ board, the Kazan bureau of RFE/RL's Tatar-Bashkir service reported. President Mintimer Shaimiev, who attended the meeting, said his government is entitled to the shares because it assumed more than 3 billion rubles ($520,000) in KamAZ's debts. He also pledged that his government will guarantee loans and investments in KamAZ to turn around the loss-making company. In October, Shaimiev negotiated a reduction in KamAZ's back taxes with high federal government officials. A special government commission on tax collection had threatened to force the company into bankruptcy (see "OMRI Daily Digest," 16, 24, 25, and 31 October 1996).

KOZYREV PROTESTS FALSE MEDIA REPORTS

State Duma deputy and former Foreign Minister Andrei Kozyrev has claimed that someone in the Interior Ministry is trying to discredit him by leaking false reports to the media, RFE/RL's Moscow bureau reported on 1 July. In news coverage of the recent murder of Rosinterbank deputy president Stanislav Alymov, major Russian television networks and the Interfax news agency reported that Alymov was an assistant to Kozyrev. However, Kozyrev told RFE/RL that he had no contact either with Alymov or Rosinterbank, adding that the murdered man was an assistant to Duma deputy Aleksandr Kozyrev of Vladimir Zhirinovsky's Liberal Democratic Party of Russia (LDPR). (In the last year, several assistants to LDPR Duma deputies believed to have links to organized crime have been murdered.) Andrei Kozyrev said he has asked the Procurator-General's Office to investigate the source of the media reports.




CHERNOMYRDIN DENIES SANCTIONING ARMS SHIPMENTS TO ARMENIA

Russian Prime Minister Viktor Chernomyrdin on 1 July told journalists that neither he nor any other member of the Russian government approved arms supplies to Armenia, ITAR-TASS reported. "Izvestiya" the same day claimed to possess documentation proving Chernomyrdin sanctioned arms shipments to Armenia between 1994-1996 (see "RFE/RL Newsline," 1 July 1997). Russian government spokesman Igor Shabdurasulov told Interfax that in March the government had submitted to the Chief Military Prosecutor's office documentary evidence that it complied with a directive issued by Russian President Boris Yeltsin on 9 September 1993 to suspend all arms deliveries to both Armenia and Azerbaijan pending a peaceful solution of the Karabakh conflict. (At the time, Karabakh Armenian forces had just launched a major offensive.) Shabdurasulov said the "unauthorized activities of numerous ministries or officials" are still being investigated.

GEORGIAN COMMANDOS KILLED IN ABKHAZIA

Five members of a Georgian commando unit allegedly subordinate to the Georgian security service and one Abkhaz soldier were killed in a skirmish early on 1 July near the border between Abkhazia's Gulripsh Raion and the rest of Georgia, Interfax reported, quoting an Abkhaz Interior Ministry official. Also on 1 July, Russian Security Council deputy secretary Boris Berezovskii proposed "new ideas" about a possible solution of the Abkhaz conflict during talks with President Eduard Shevardnadze in Tbilisi, according to Reuters.

RUSSIAN-ARMENIAN ECONOMIC AGREEMENTS SIGNED

At the first session of the Russian-Armenian intergovernmental commission on economic cooperation on 1 July in Yerevan, Russian Deputy Prime Minister Valerii Serov and Armenian Premier Robert Kocharyan signed seven agreements, including one on restructuring Armenia's debt to Russia, Armenian agencies reported. Serov termed the agreements "pragmatic" and said that Russia believes economic relations with Armenia should be "mutually supplementary and mutually beneficial," Noyan Tapan reported. Following parallel talks with Armenian government officials, Gazprom chairman Rem Vyakhirev said agreement was reached on resuming Russian gas supplies to Armenia and that talks on the export of Russian gas to Turkey via Georgia and Armenia are continuing.

CHECHEN PRESIDENT IN BAKU

Aslan Maskhadov on 1 July was in Baku on a "working visit" for talks with Azerbaijani President Heidar Aliev, RFE/RL's Baku bureau reported. The two presidents refused to speak to journalists after their meeting. Chechen press spokesman Kazbek Akhmedov said that they had not signed any agreements. He added that the question of exporting Azerbaijan's Caspian oil via Chechnya was not discussed but said a trilateral agreement between the Russian Fuel Ministry, the Chechen oil company Yunko, and the Azerbaijani state oil company SOCAR would be signed in Moscow after the successful conclusion of Russian-Chechen accords on customs and banking. Chechen First Deputy Prime Minister Movladi Udugov told Interfax on 1 July that talks with Russian officials in Moscow had yielded consensus on almost all points of both accords.

AZERBAIJANI PRESIDENT ASSESSES NATIONAL SECURITY MINISTRY

Speaking at a ceremony in late June to mark the anniversary of the National Security Ministry, Heidar Aliyev said that body's primary tasks are to liberate "occupied territories" and to gather information about Armenia, according to Turan on 30 June and the "Turkish Daily News" on 1 July. Aliyev said that at least one political party in Azerbaijan is controlled by a foreign intelligence service. He accused the intelligence services of Russia, Iran, Turkey, and Georgia of interference in Azerbaijan's internal affairs. He also called for strengthening control over the country's borders to prevent drug trafficking via Azerbaijan. "Akhali taoba" on 1 July quoted a senior Azerbaijani frontier official as claiming that Georgia is illegally selling Armenia part of the crude oil it receives from Azerbaijan.

KYRGYZ FOREIGN MINISTER REPLACED

President Askar Akayev dismissed Roza Otunbayeva as foreign minister on 1 July, according to RFE/RL correspondents in Bishkek. Otunbayeva is replaced by Muratbek Imanaliyev, who until now was the head of the International Department of the presidential administration. He served as foreign minister from 1990-91 and was later ambassador to China. Otunbayeva, who was previously ambassador to Canada and then the U.S, was named as ambassador to Great Britain; however, there is no Kyrgyz embassy in London. According to Interfax, she requested to be relieved of her duties as foreign minister.

TAJIK PRESIDENT IN SAUDI ARABIA

Imomali Rakhmonov arrived in Saudi Arabia on 30 June at the start of a four-day visit, according to ITAR-TASS. Rakhmonov and a delegation of Tajik businessmen and government officials held talks in Jeddah on 1 July with the chairman of the Islamic Development Bank and the secretary-general of the League of the Islamic World. Discussions centered on ways to improve cooperation following the official end of the civil war in Tajikistan. Rakhmonov met with King Fahd on 2 July to discuss Saudi-Tajik relations. The Tajik president is also scheduled to visit Mecca to make the "umra" or little Hajj.

UN EXPRESSES CONCERN OVER DRUG TRADE IN KAZAKSTAN

A UN official monitoring the drug trade in Kazakstan voiced alarm at increasing drug use in Kazakstan and at the country's role as a transit point for narcotics heading westward, Reuters reported on 1 July. The official cited marijuana cultivation as the leading problem in Kazakstan's fight against the drug trade. He also said Kazakstan has the potential to become the leading producer of marijuana in the world. Nurlan Abdirov, the head of Kazakstan's State Drug Control Committee, said marijuana is currently being cultivated on at least 138,000 hectares of land, mostly in the Chu Valley region of southeastern Kazakstan. Abdirov pointed out that law enforcement officials in 1996 confiscated 12 tons of drugs being shipped westward via Kazakstan. In the first five months of 1997, officials have already seized more than 17 tons. Abdirov also noted that other drugs have made their way into Kazakstan, including opium, LSD, and heroin.

KAZAK PRESIDENT PRAISES PARLIAMENT

Nursultan Nazarbayev, addressing the parliament at the close of its second session, has expressed satisfaction with the progress toward implementing reforms, according to Interfax. Nazarbayev noted that during the nine-month session, the parliament adopted more than 150 draft laws. He added that the overhaul of the civil service has saved the country about 3 billion tenge ($40 million) to date. He cited an Economics and Trade Ministry report predicting a 0.5% growth in GDP in the first six months of 1997 and 2% industrial growth. By year's end GDP may have increased by 2%, the president predicted.




UKRAINIAN PRIME MINISTER REPORTED TO HAVE RESIGNED

Igor Gritsiak, an aide to Prime Minister Pavlo Lazarenko, was quoted by the Russian RIA News Agency on 1 July as saying Lazarenko has tendered his resignation. Reuters, however, said President Leonid Kuchma's office could not confirm that Lazarenko has offered his resignation and said no decree has been issued on the subject so far. Meanwhile, "Eastern Economist" reported on 2 July that according to unofficial sources, Lazarenko was released from the hospital on 30 June. He was hospitalized on 19 June after being diagnosed as suffering from thrombo-phlebitis. The same source said Kuchma has already signed a decree dismissing Lazarenko that will be issued shortly.

WORLD BANK WANTS UKRAINE TO SIGN AGREEMENT WITH IMF

Newly appointed World Bank Director for Belarus and Ukraine Paul Sigelbaum warned Ukrainian President Kuchma on 1 July that the bank will not be able to cooperate with Ukraine in restructuring several sectors of the economy if the country fails to sign an agreement with the IMF, UNIAN reported. Kuchma replied that Ukraine has not yet violated any of its agreements with the IMF and has "even followed the conditions on the size of the budget deficit." He said he is optimistic about the prospects for continuing cooperation with the IMF. The World Bank may disburse about $1 billion for reform of the energy and finance sectors, agriculture, and the government apparatus.

OFFICIAL SAYS UKRAINE CANNOT AFFORD TO CLOSE DOWN UNPROFITABLE MINES

Nikolai Ivanov, an official at the state company overseeing the closure of money-losing mines in Ukraine, told Interfax on 1 July that Ukraine cannot afford to close 40 money-losing coal mines this year, as planned. He said Ukraine has received only a fraction of the money promised for the project. According to Ivanov, shutting the first 28 pits would cost 960 million hryvna ($525 million). He said even if the company receives the 238 million hryvna due under the 1997 state budget, it will be able to shut only five or six mines. The World Bank has given Ukraine the first half of a $300 million loan to underwrite the program of restructuring the coal industry. World Bank Director for Ukraine and Belarus Sigelbaum said after visiting the Donetsk coal mining region that the closure program would go ahead but that its pace may be slowed by lack of funding.

CZECH PRESIDENT VISITS CHORNOBYL

Vaclav Havel on 1 July became the first president from a country other than Ukraine to visit the Chornobyl nuclear power plant, Ukrainian and Czech TV reported. He met with directors of the station and walked the streets of the abandoned city of Prypiat, near Chornobyl. Havel told reporters afterward that the site is a testimony to the lack of mankind's humility in face of nature. At a ceremony where he received an honorary doctorate from Kyiv National University, Havel said he considers Ukraine an integral part of Europe on account of both its history and its values.

BELARUSIAN FOREIGN MINISTER IN CUBA

Ivan Antanovich, who is on a three-day official visit to Cuba, handed over to his Cuban counterpart, Roberto Moraina, a personal message from Belarusian President Alyaksandr Lukashenka to Cuban leader Fidel Castro, ITAR-TASS reported. The text of the message has not been made public. At the meeting, Antanovich said Belarus is especially interested in Cuba's experience of surviving in complicated conditions and its ability to find its own path, notwithstanding pressure from outside.

ESTONIAN PARLIAMENT PASSES AMENDMENTS TO LAW ON ALIENS

The parliament on 1 July passed amendments to the law on aliens granting the right to apply for permanent residence permits to non-citizens, BNS reported. Under the amended law, aliens who applied for a temporary residence permits before 12 July 1995 will be eligible to request permanent residency. It is estimated that the amendment will apply to some 200,000 aliens, mostly from Russia and other CIS countries. In addition, the amended law abolishes the provision allowing residence permits to be issued to only 1,000 residents of EU member states each year. The opposition Pro Patria Union opposed the amendments on the grounds that they will "dilute Estonia's strict citizenship and aliens policy."

LATVIAN AGRICULTURE MINISTER RESIGNS

Roberts Dilba on 1 July submitted a letter of resignation to Prime Minister Andris Skele following charges by the Prosecutor's Office that he violated the anti-corruption law, BNS reported. Dilba had failed to declare shares in two companies when filling out an income declaration (see "RFE/RL Newsline," 27 June 1997). Skele said he will accept Dilba's resignation but added he wants the minister to continue working until his successor is appointed "because there is plenty of work and important tasks remain." The premier also told Radio Latvia that a "crisis could hit his government if more ministers left their posts, " Reuters reported. Interior Minister Dainis Turlais resigned on 30 June over the tragic accident in which eight children plunged to their death during a firefighters' celebration in Talsi (see "RFE/RL Newsline," 1 July 1997).

LITHUANIAN PARLIAMENT OVERRIDES PRESIDENTIAL VETO OF RESTITUTION LAW

The parliament on 1 July voted by 80 to 24 with 15 abstentions to override President Algirdas Brazauskas's veto of the controversial law on the restitution of property, BNS reported. Last month, Brazauskas returned the law to the parliament with suggested amendments. He must now sign the legislation within three days. Ceslovas Jursenas, leader of the opposition Labor Democratic Party's caucus, said he plans to collect signatures among lawmakers requesting that the Constitutional Court make a ruling on the law. Also on 1 July, the parliament founded a special commission aimed at solving problems related to the Ignalina nuclear power plant. The commission will provide help to employees of the plant or residents living nearby and deal with environmental questions.

URANIUM TRAFFICKING SUSPECTED IN POLAND

The Polish daily "Rzeczpospolita," citing unofficial sources, reported on 1 July that Polish secret services have picked up the trail of illegal uranium traffickers operating in Poland. The paper said several intelligence officers offered to pose as undercover "buyers" to catch the traffickers but their superior refused, saying such an operation would cost millions of dollars. A spokesman for the secret services refused to comment on the report, saying only that the department has dealt with four cases of illegal uranium trafficking over the past seven years. Police have previously reported secret transactions in Poland involving uranium and plutonium but there has so far been no evidence that radioactive material enabling the fabrication of a bomb has transited or been delivered to Poland.

AMERICAN JEWISH COMMITTEE BACKS POLAND'S NATO MEMBERSHIP

An official of the American Jewish Committee (AJC) told journalists in Warsaw on 1 July that his organization backs Poland's efforts to join NATO, despite a controversy over the restitution of Jewish property. Meanwhile, leaders of the Israeli-based World Jewish Restitution Organization (WJRO) have linked their group's support to demands that Warsaw steps up its efforts to give back Jewish property seized by the communists after World War Two. The seizure of Jewish properties came after most of Poland's Jews were killed by Nazi forces during the war. The WJRO is linked with another U.S.-based group, the World Jewish Congress. Polish officials fear their stance could harm chances of the U.S. Senate's ratifying Poland's admission to NATO.

SLOVAKIA SAYS EU MEMBERSHIP IS PRIORITY

The government on 1 July said securing EU membership is one of the basic priorities of its foreign policy. A Slovak Foreign Ministry statement, issued to mark Luxembourg's accession to the EU chairmanship on 1 July, says Slovakia believes relations between the union and Slovakia will strengthen further during Luxembourg's EU chairmanship. It also says Bratislava believes Luxembourg will ensure that membership talks are started simultaneously with all EU associate member states. Slovakia has been criticized for shortcomings in its democratic development and has been given by EU representatives until November to introduce necessary reforms.

SLOVAK DOMESTIC DEVELOPMENTS

The government on 1 July ordered the withdrawal from schools the controversial school textbook "The History of Slovakia and Slovaks" by the priest Milan Durica, TASR reported. The book, published under the EU Phare program, has been criticized by EU officials as glorifying the war-time Slovak state and including anti-Semitic remarks. Also on 1 July, Alexander Toth, an elementary school teacher from Roznava, eastern Slovakia, was fired because he issued bilingual school-leaving reports to ethnic Hungarian students instead of only Slovak ones, the opposition paper "Sme" reported. Toth was accused of violating the state language law in preparing the bilingual certificates. Meanwhile, the government has dismissed police president Jozef Holdos and appointed Banska Bystrica district police director Petr Nemec as his replacement. No explanation was given for the move.




CLASH BETWEEN ALBANIAN SOCIALIST LEADER, MONARCHISTS

Socialist Party leader Fatos Nano and Leka Zogu, the claimant to the throne, exchanged sharp accusations over the election results on 1 July. Nano argued in Tirana that only 20% of the electorate may have voted for the monarchy in the 29 June referendum. Leka, who says that up to 60% voted in favor of him, charged that Nano is trying to steal his victory, "Gazeta Shqiptare" reported on 2 July. Leading writer Ismail Kadare said in Paris that monarchy has no roots in Albania and that people voted for it because they "hate the governing political class," "Dita Informacion" reported. Meanwhile, the Central Election Commission announced official preliminary results for 50 out of the 115 districts. According to this tally, 40% voted for a constitutional monarchy and 60% for a republic, "Gazeta Shqiptare" reported on 2 July.

ALBANIAN DEMOCRATIC PARTY ACCUSES SOCIALISTS OF FRAUD

Democratic Party chairman Tritan Shehu and presidential spokesman Genci Pollo, sharply accusing the Socialist Party of having manipulated the parliamentary elections, have demanded a new vote in the south. The Democrats' "Rilindja Demokratike" suggested the OSCE was involved in the fraud. The newspaper claimed on 2 July that Organization for Security and Cooperation in Europe mediator Franz Vranitzky thanked the OSCE monitors for their "understanding for the widespread irregularities." According to first official parliamentary election figures for 50 electoral districts, the Socialist Party has won 47.6% of the votes, the Democratic Party 30%, the monarchist Legality Movement 3.32%, the ethnic Greek Human Rights Party 2.21% and the Democratic Alliance 2.01%, "Gazeta Shqiptare" reported.

ALBANIAN INTERIOR MINISTRY ELITE FLEES COUNTRY

Interior Minister Belul Celo, his deputy Agim Shehu, and presidential guard commander Xhait Xhaferi left Albania between 30 June and 1 July, "Dita Informacion" reported. Celo asked Prime Minister Bashkim Fino for a three-day "vacation," which he intended to spend at his home in Fier. Instead, however, he reportedly took a plane to Athens. The daily claims that he was accompanied by other high-ranking Interior Ministry officials. Meanwhile in Tirana, a prison revolt started when prisoners took four policemen hostage in the evening of 1 July. Interior Minister Spartak Ngjela suggested that the prisoners had voted for the Socialists in the hope of being freed. They staged a revolt when freedom was not forthcoming, "Gazeta Shqiptare" reported.

BOSNIAN SERB PRESIDENT SAYS REPUBLIKA SRPSKA THOROUGHLY CORRUPT...

Biljana Plavsic said on Banja Luka Television on 1 July that Radovan Karadzic and his lieutenants conduct widespread illegal trade and that she intends to expose them and establish the rule of law (see "RFE/RL Newsline," 1 July 1997). She said "the consequence of [the corruption] is an enormous accumulation of wealth by a relatively small number of our population. Do they think that the rest of the population will be their slaves?" Plavsic added that federal Yugoslav officials are also involved in the dealings, an RFE/RL correspondent reported from Banja Luka. She stood by her earlier decision to sack Interior Minister Dragan Kijac and indicated that she also wants Prime Minister Gojko Klickovic to go. Plavsic further threatened to dissolve the parliament. She warned that the international community will abandon the Bosnian Serbs unless they get rid of their corrupt leaders.

...AND HER OWN PARTY TRIES TO OUST HER

The leadership of the Serbian Democratic Party (SDS) met in Pale on 1 July to launch proceedings aimed at ousting Plavsic. The party told her either to return to Pale and withdraw her decision against Kijac or else to resign from the presidency, an RFE/RL correspondent reported from Pale. The SDS leaders said they will ask the parliament to censure Plavsic when that body meets on 4 July. The Bosnian Serb constitution, however, says that a president can be ousted only in a popular referendum. Meanwhile in Belgrade, the pro-Milosevic tabloid daily "Vecernje novosti" charged that Plavsic and her family have received large amounts of money paid into alleged Swiss bank accounts by unknown sources in the U.S., BETA said on 2 July.

WORLD BANK LOAN TO CROATIA INDEFINITELY POSTPONED

Following lengthy discussions, World Bank officials agreed on 1 July to a request by the U.S. to postpone indefinitely a $30 million loan aimed at improving the investment climate in Croatia, an RFE/RL correspondent reported from Washington. The U.S. requested the move because of what it called Croatia's poor record in implementing the Dayton agreement and in allowing ethnic Serb refugees to return to their homes. Croatia denies the charges and says that it does not need the loan anyway. Meanwhile in Mostar, U.S. envoy Robert Gelbard threatened to cut off all aid to the Mostar area unless local Croats form joint police forces with the Muslims. He also lambasted the local Croatian police for tolerating widespread trafficking in drugs, stolen cars, and other goods.

UPDATE FROM FEDERAL YUGOSLAVIA

Macedonian Prime Minister Branko Crvenkovski arrived in Belgrade on 2 July with a high-powered economic delegation. Also in the Serbian capital, federal Interior Minister Zoran Sokolovic said on 1 July that Yugoslavia will try war criminals itself and that the constitution prohibits delivering Yugoslav citizens to the Hague-based war crimes tribunal. Sokolovic denied that the Dayton agreement obliges Belgrade to extradite indicted persons to the court. Elsewhere, Croatia officially protested to the Yugoslav authorities after Belgrade basketball fans attacked the Croatian embassy. Police took half an hour to arrive and stop the vandals, who moved on the building after Yugoslavia scored a last-minute victory over Croatia in European championships in Spain. And in Podgorica, the Montenegrin parliament approved an opposition proposal to require state officials to disclose their property holdings and for this information to be published.

ROMANIA BECOMES MEMBER OF CEFTA

Romania officially became a member of the Central European Free Trade Agreement on 1 July, RFE/RL reported. President Emil Constantinescu has described CEFTA membership as a kind of rehearsal for joining the EU. He noted that CEFTA functions in accordance with EU rules and that this will help ease Romania's bid for EU membership. He also said Romania will be able to regain access to CENTRAL AND EASTERN EUROPEan markets because of its membership in CEFTA. Bucharest signed the necessary accords for CEFTA membership in April. Meanwhile, Vojka Ravbar, CEFTA's current president and Slovenia's state secretary for international economic relations, said he expects membership negotiations with Bulgaria to start later this month. Other current members of CEFTA include Hungary, the Czech Republic, Poland, and Slovakia. Countries that have expressed interest in joining are Latvia, Lithuania, Estonia, Macedonia, and Ukraine.

BULGARIA IMPLEMENTS CURRENCY BOARD ON SCHEDULE

Bulgaria on 1 July pegged its currency, the lev, at 1,000 to 1 German mark as part of a plan agreed with the IMF to bring about fiscal discipline and ease inflation, RFE/RL reported. The currency board system prevents the Bulgarian National Bank from lending to the government or refinancing the country's troubled commercial banks. It also requires that each lev in circulation be fully backed by hard-currency reserves in the central bank. Prime Minister Ivan Kostov said the currency board will speed up economic transition and the goal of eventually joining the EU. Implementation of the plan by 1 July had been seen in international financial circles as the first test of Kostov's ability to bring about free market reforms. "Duma," the newspaper of the opposition Socialist Party, complained that the currency board is stripping Bulgaria of its independence.

SOFIA DENIES WRONG-DOING IN ARMS SMUGGLING CASE

A Bulgarian weapons manufacturer and the Trade Ministry in Sofia have denied any wrong-doing in an alleged attempt by two Lithuanian nationals to sell surface-to-air missiles (SAMs) to undercover U.S. agents. The agents were posing as arms brokers for a Columbian drug cartel. The ministry admitted to RFE/RL that a U.S. firm called Phoenix Arms International, which was represented by one of the arrested men, was given permission to purchase missiles from Bulgaria's state-owned Armimex in December 1996. The ministry says the deal did not go through because payments were never made. Bulgarian authorities say Aleksandr Darichev, who was recently arrested in Florida by U.S. agents, worked as a representative of Phoenix Arms International. The ministry also says Darichev's firm presented all the documentation needed to legalize the purchase.




REACTIONS TO DYACHENKO'S APPOINTMENT AS YELTSIN'S IMAGE ADVISER


by Floriana Fossato

The Moscow press showed relief, rather than surprise, over the 30 June decision of Russian President Boris Yeltsin to name his younger daughter, Tatyana Dyachenko, as his official image adviser. Two influential pro-government newspapers, "Segodnya" and "Kommersant-Daily," ran front-page articles on 1 July saying Dyachenko's appointment had long been expected. They said it helps to clarify Dyachenko's role at a time when her public profile is increasing, particularly during Yeltsin's foreign trips.

Those comments echo Dyachenko's own statement following her appointment. After the official announcement by Yeltsin's press secretary Sergei Yastrzhembskii at a Kremlin news briefing, Dyachenko said her appointment "removes the whole ambiguity of my situation." The Russian media have consistently reported that the 37-year-old Dyachenko has played an influential political role behind the scenes at least since last year's presidential election campaign.

In a commentary titled "Legalization," "Kommersant-Daily" reminds readers that at the first press conference following Yeltsin's re-election, Viktor Ilyushin, then presidential first aide, said Yeltsin's advisory election team would be preserved. He praised Dyachenko for her role as a "communication channel" to the president. At her first news briefing, Dyachenko said that for her "it is easier to tell the president unpleasant things, since it is easier for him to hear them from me than from others." "Kommersant" concludes that "even after her appointment, Dyachenko remains Yeltsin's daughter and this is her main strong point."

Dyachenko, who for months has been named in opinion polls as one of most influential figures in Russian politics, was already rumored to have an office in the Kremlin and to control access to the president. Since Yeltsin resumed his political activities following the heart ailment that disrupted his first months in office after re-election, Dyachenko has become increasingly visible, particularly during official foreign trips. She was in Baden-Baden, Germany, in April, when Yeltsin met with German Chancellor Helmut Kohl. And she was part of the Russian delegation in Paris in May, when Yeltsin signed the Founding Act defining relations with NATO.

Yastrzhembskii declined to say why Yeltsin made the appointment now, saying only that the president took the decision "when he considered it necessary." But "Segodnya" commented that after the recent trips abroad, it was imperative to clarify Dyachenko's role. The newspaper added that it was also becoming increasingly difficult to explain to the public her inclusion in official Russian delegations.

Meanwhile, some observers say Dyachenko's appointment is likely to provoke angry reactions from Yeltsin's opponents, especially in the Communist- and nationalist-dominated parliament. Those opposed to the president have constantly criticized Dyachenko for allegedly supporting their main enemy, First Deputy Prime Minister Anatolii Chubais, and for manipulating the president since his re-election, particularly during his long illness.State Duma Chairman Gennadii Seleznev, a Communist, told the Interfax news agency that Dyachenko's appointment violates the law on the civil service, which prohibits appointing close relatives of officials to top state positions.

Dyachenko said at her news briefing that she "does not have personal ambitions" and that she has assured her husband--who, she said, opposed her appointment--that she will work in the Kremlin only for the next three years, until the end of her father's second and, under the constitution, last term.

"Kommersant-Daily" said that this may indeed prove to be the case, judging from what it called the unusual openness with which Dyachenko answered journalists' questions. The paper commented that Dyachenko looks "too candid...in comparison with experienced politicians." But it also noted that after obtaining a Kremlin post, Dyachenko may well acquire the "political clout" she does not seem to have now.

Some observers also point out that many Russians will likely disapprove of the appointment and may be concerned that it signals the onset of a wave of nepotism. Recently, Yeltsin appointed the husband of his elder daughter to head the state airline, Aeroflot.

Muscovites questioned by RFE/RL's Moscow bureau said that Dyachenko appears to be a "sincere and strong woman" and may prove effective in her new job. But others criticized her appointment, saying it "diminishes Yeltsin's authority." The author is an editor at RFE/RL's Moscow bureau.


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