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Newsline - August 8, 1997




RUSSIAN, TURKMEN PRESIDENTS MEET...

On 7 August, Russian President Boris Yeltsin held a two-hour summit meeting in Moscow with his Turkmen counterpart Saparmurad Niyazov. The meeting succeeded in resolving some, but not all, problems in bilateral relations. In a joint communique, the two presidents pledged to upgrade bilateral relations on the principle of equal partnership, and to draft economic accords on protecting mutual investment and avoiding dual taxation in order to broaden economic cooperation. Yeltsin accepted an invitation from Niyazov to visit Turkmenistan in spring 1998.

... DISCUSS OIL...

Specifically, Yeltsin told Niyazov that the signing in early July of an agreement between Azerbaijan's state oil company SOCAR and the Russian oil companies Rosneft and LUKoil to develop the Kyapaz oil field, ownership of which is contested by Turkmenistan, was "a mistake" resulting from the failure of the Russian oil companies involved to inform the Russian president and government of their intentions, according to ITAR-TASS. (This disclaimer lacks conviction insofar as Russian First Deputy Prime Minister Boris Nemtsov discussed the deal with Azerbaijani President Heidar Aliyev prior to the signing and was present at the signing ceremony.) Yeltsin noted that the positions of Russia and Turkmenistan concerning the legal status of the Caspian Sea "are quite close," and that both countries agree on the need to expedite the signing by all Caspian littoral states of a convention based on international law formalizing the status of the Caspian.

... AND GAS...

"Nezavisimaya gazeta" on 8 August quoted Niyazov as telling journalists after his meeting with Yeltsin that their primary topic of discussion was the market for natural gas, of which Russia and Turkmenistan together control 68 percent of world reserves. Niyazov claimed that "Russia fully supports Turkmenia" and will not insist on a monopoly on the extraction and transportation within the CIS of natural gas. Niyazov also said that Yeltsin endorsed the unilateral annulment by the Turkmen government of the Russian-Turkmen joint venture Turkmenrosgas. He explained that Turkmenrosgas had been abolished because it had failed to engage as planned in exploration, development and investment, according to DPA. Niyazov said he and Yeltsin had reached agreement on creating a new joint venture to supply Turkmen gas to the CIS market, but in an implicit contradiction, he accused Russia of "squeezing Turkmenistan out of the CIS gas market."

... BUT NO EXPORT AGREEMENT REACHED

Speaking at a joint news conference with Niyazov, Rem Vyakhirev, head of Russia's giant Gazprom, which controls the gas pipeline network, said that although Russia no longer needs Turkmen gas, the company would continue its cooperation with Turkmenistan in order to prevent the country's population from "starving to death," Interfax and NTV reported. Niyazov told journalists that during a meeting on 6 August with Vyakhirev and Russian Prime Minister Viktor Chernomyrdin he had failed to reach agreement on the export of Turkmen gas via Russia to Europe, but that Russia had offered to continue exporting Turkmen gas to other CIS member states, whose combined unpaid debts to Turkmenistan for gas supplies amount to billions of dollars. Russia and Turkmenistan are in competition to increase their exports of natural gas to Turkey.

RUSSIA BANS FURTHER EXPORTS OF KAZAKH GAS

Vyakhirev also announced at the press conference that Gazprom will "under no circumstances" allow Kazakhstan to continue to use the Russian export pipeline network to export natural gas to world markets, AFP and Interfax reported. Vyakhirev argued that "surrendering one's market when there is insufficient [export] capacity is ... a crime against Russia.."

CRITICISM OF ONEKSIMBANK IN PRESS INTENSIFIES

Several newspapers have attacked Oneksimbank over some 5.5 trillion rubles ($950 million) in customs duties said to be held in Oneksimbank accounts (see "RFE/RL Newsline," 7 August 1997). "Moskovskii komsomolets" on 7 August said those funds alone could pay off about one-tenth of wage arrears owed by the state. (Government officials have said recent sales of government stakes in Svyazinvest, the Tyumen Oil Company, and Norilsk Nickel are needed to pay wage arrears.) The paper also reminded readers that Oneksimbank President Vladimir Potanin was first deputy prime minister dealing with economic matters from August 1996 until March 1997. "Segodnya" on 7 August also slammed Oneksimbank for making money from customs duties, asking rhetorically on whose money Oneksimbank had won recent privatization auctions. Owned by Vladimir Gusinskii's Media-Most, "Segodnya" has sharply criticized Oneksimbank since the Svyazinvest sale (see "RFE/RL Newsline," 29, 31 July 1997).

"IZVESTIYA" VIEWS LATEST DEVELOPMENTS

Although Oneksimbank is a major shareholder in "Izvestiya," that paper's business supplement "Finansovye izvestiya" on 7 August argued that the "hasty" sale of a 38 percent stake in Norilsk Nickel "clearly contradicted Russian state interests." Attempts by government officials to postpone the auction were both "fair" and "economically correct," the paper said. A company linked to Oneksimbank won the controversial Norilsk auction (see "RFE/RL Newsline," 4-7 August 1997). A separate commentary in the 7 August "Izvestiya" blamed government policies of the past two years for failing to establish fair conditions for the sales of state assets. By way of example, the paper cited the deal under which Stolichnyi Bank acquired a controlling interest in Agroprombank last November. That arrangement was either "unwise" or a straightforward "give-away" by the government, "Izvestiya" said. (Stolichnyi Bank, now called SBS-Agro, partly finances "Kommersant-Daily.")

YELTSIN PROMISES RUBLE REDENOMINATION WILL NOT CREATE "VICTIMS"

Yeltsin has promised that unlike monetary reforms of the Soviet and post-Soviet period, the upcoming redenomination of the ruble will not hurt Russian citizens. Beginning on 1 January 1998, three zeroes will be taken off the ruble (see "RFE/RL Newsline," 4-5 August 1997). In an 8 August nationwide radio address, Yeltsin promised the reform will not involve any "victims" or "confiscations" and will make it easier for people to calculate and plan their spending. He added, "With this currency reform we declare firmly that we have conquered inflation. We have it firmly under control. The ruble will not be devalued again."

TWO NEW ASTRONAUTS JOIN "MIR" CREW

Russian astronauts Anatolii Solovev and Pavel Vinogradov joined one U.S. and two Russian astronauts aboard the space station "Mir" on 7 August after their Soyuz capsule docked with the station. In the coming weeks, Solovev and Vinogradov are to attempt repairs to the Spektr module, damaged in a 25 June collision with a cargo shuttle. However, vital repairs to the station's oxygen generating system will have to wait until late September, when a U.S. space shuttle will bring a new part to "Mir." Reuters quoted Russian Space Agency head Yurii Koptev as saying oxygen canisters on board "Mir" can supply enough oxygen to last 70 days.

NO BREAKTHROUGH IN LATEST ROUND OF RUSSIAN-CHINESE BORDER TALKS

The latest session of the Sino-Russian joint demarcation commission, which met in Beijing from 21 July to 4 August, failed to resolve outstanding disputes over the eastern section of the border, "Nezavisimaya gazeta" reported on 8 August. The previous day, Interfax quoted Primorskii Krai Deputy Governor Vladimir Stegnii as saying China had agreed not to claim Russian territory near the Tumannaya River--an apparent breakthrough. However, RFE/RL's correspondent in Beijing reported on 7 August that neither Chinese officials nor the official Xinhua news agency had confirmed Stegnii's statement. Stegnii told "Nezavisimaya gazeta" that he was misquoted by Interfax. Speaking to journalists in Moscow on 7 August, Russian Foreign Ministry spokesman Valerii Nesterushkin said Russia and China have agreed on three-fourths of their border and still hope to complete the demarcation process by the end of 1997.

FUTURE OF CIS AFFAIRS MINISTRY IN DOUBT

More than a month after Yeltsin appointed then CIS Affairs Minister Aman Tuleev as governor of Kemerovo Oblast, the fate of the CIS Affairs Ministry remains in doubt, "Izvestiya" reported on 7 August. Tuleev's successor has not yet been appointed, and the acting head of the ministry, Vasilii Shcheglovskii, is considered to lack authority among CIS leaders. Among those rumored to be considered for CIS affairs minister are State Duma Deputy Speaker Sergei Baburin, Yeltsin's representative in the Constitutional Court Sergei Shakhrai, Our Home Is Russia Duma faction leader Sergei Belyaev, and Duma First Deputy Speaker Aleksandr Shokhin, also of Our Home Is Russia. Of those four politicians, only the outspoken opposition figure Baburin has denied that he is being considered for the post. A plan to downgrade the CIS Affairs Ministry into a department within the Foreign Ministry is also under consideration, according to "Izvestiya."

RUSSIAN PRINTERS REPORTEDLY SHUN KORZHAKOV'S MEMOIRS

State Duma deputy Aleksandr Korzhakov, Yeltsin's former bodyguard and confidant, is having trouble finding a printer for his memoirs, "Kommersant-Daily" reported on 8 August. Representatives of the Interbuk publishing house say several printers initially expressed interest in Korzhakov's book, but all have retracted their orders in recent weeks. Interbuk Deputy Director Sergei Goncharenko claimed that pressure from unnamed law enforcement agencies was being brought to bear on the printers. However, Korzhakov told "Kommersant-Daily" that he is confident his book will nonetheless appear in Russian within one week. Excerpts from the memoirs, published in the "Times" of London on 3 August, portray Yeltsin as having a chronic drinking problem and depict the president's behavior during various foreign visits as embarrassing and erratic.

INDIGENOUS PEOPLES CALL FOR BOYCOTTING CELEBRATIONS IN KAMCHATKA

The Council for the Revival of Kamchatka Itelmens (an indigenous Paleo-Siberian ethnic group) has decided to boycott the upcoming celebrations of the 300th anniversary of Kamchatka becoming part of the Russian empire, "Segodnya" reported on 7 August. The council called on groups representing other indigenous peoples to boycott the celebrations as well. A statement adopted by the Itelmens argued that it is time for Russia to admit that it captured Kamchatka as a colony, without trying to portray seizure of territory and "genocide" of indigenous peoples as a "noble gesture." About 1,400 Itelmens remain in Kamchatka Oblast out of an estimated population of 15,000 when Russia first colonized the area. Most villages populated by Kamchatka's indigenous peoples are in Koryak Autonomous Okrug, which makes up the northern part of the oblast. "Segodnya" noted those villages are afflicted with high rates of unemployment and alcoholism.

GARBAGE BEING REMOVED IN VLADIVOSTOK

Vladivostok workers have begun clearing an estimated 27,000 tons of garbage from the city's streets, ITAR-TASS reported on 7 August. Primorskii Krai Governor Yevgenii Nazdratenko recently invited Vladivostok's striking garbage collectors to sign a contract with the krai administration and promised them 9 billion rubles ($1.6 million) toward paying wage arrears. Vladivostok Mayor Viktor Cherepkov denounced Nazdratenko's "interference" in the strike, but attempts by the city administration to organize alternative brigades to clear the garbage met with little success. Meanwhile, on 8 August Cherepkov met with representatives of other municipal workers on strike in Vladivostok, who have staged numerous demonstrations outside the city administration building since 21 July, ITAR-TASS reported. The mayor promised to allocate some 15 billion rubles toward paying back wages, and the workers agreed to end their strike on 11 August.

TATARSTAN'S CONSTITUTIONAL WATCHDOG TERMS GOVERNMENT RESOLUTION UNCONSTITUTIONAL

Tatarstan's Constitutional Oversight Committee has recommended that several key elements of a government resolution adopted in May should be overturned, an RFE/RL correspondent in Kazan reported on 6 August. The resolution was highly controversial because the republic's government sought to raise funds to increase the minimum wage for government employees by sacking 47,000 workers. In a decision published on August 6 in "Respublika Tatarstan," the Constitutional Oversight Committee says the government's resolution violates Tatarstan's Constitution and labor law. The Committee calls on the government to review the measure and bring it into conformity with the republic's legislation.

RYBKIN IN GROZNY

Russian Security Council Secretary Ivan Rybkin met in Grozny on 7 August with Chechen first deputy prime minister Movladi Ugudov to discuss the planned meeting between Yeltsin and Chechen President Aslan Maskhadov, Russian and Western agencies reported. Rybkin subsequently told journalists that preparations for the meeting, which is to take place within the next week, are almost complete. He said both sides are concerned that previously signed agreements are not being implemented. In Moscow, Yeltsin's press spokesman Sergei Yastrzhembskii said the upcoming meeting "will not be easy," but that the signing of a bilateral power sharing agreement is planned, ITAR-TASS reported. Also on 7 August, Maskhadov delivered a new ultimatum to kidnappers to release all those whom they have abducted by 10 August, AFP and Interfax reported.




GEORGIAN POLITICIAN THREATENS MILITARY ACTION IN ABKHAZIA

Tamaz Nadareishvili, the chairman of the Tbilisi-based Abkhaz parliament in exile, has said that if the Georgian government fails to take decisive steps to resolve the Abkhaz conflict before 31 August, the parliament in exile will act independently to restore Tbilisi's control over Abkhazia by force, the Georgian newspaper "Rezonansi" reported on 7 August. Nadareishvili was addressing the leaders of military units subordinate to the parliament in exile in the west Georgian town of Zugdidi. Russian Foreign Minister Yevgenii Primakov, who is currently vacationing in Sochi, is likely to meet there in the next few days with Abkhaz President Vladislav Ardzinba, and in Tbilisi on 14 August with Georgian President Eduard Shevardnadze to discuss Yeltsin's most recent Abkhaz peace proposals.

KAZAKH, KYRGYZ, UZBEK PRIME MINISTERS MEET

At a one-day meeting of the Inter-State Council of the Central Asian Union held in Almaty on 7 August, the prime ministers of the three member states -- Kazakhstan, Kyrgyzstan, and Uzbekistan -- signed 10 agreements, including regulations on immigration and railroad tariffs, Interfax reported. The three premiers postponed the signing of agreements on international road haulage and energy, and failed to address coordinating taxation systems and value-added tax. Speaking at a joint press conference afterwards, Kazakh Prime Minister Akezhan Kazhegeldin termed the meeting "productive" and said it proved that integration among Central Asian states is possible, according to an RFE/RL correspondent in Almaty.




SUPPORT FOR BELARUSIAN PRESIDENT HIGH

A poll conducted by the Minsk-based Independent Institute for Social, Economic and Political Research indicates that more than 45 percent of Belarusian voters would vote for incumbent President Alyaksandr Lukashenka if the presidential elections were held now, Interfax reported on 7 August. More than half of the respondents said they hoped Lukashenka would take the country out of the economic crisis. Some 3.5 percent of respondents said they wanted to see former Parliamentary Chairman Stanislau Shushkevich as president.

RUSSIA CRITICAL OF NAVAL EXERCISES IN BLACK SEA

Russian Defense Minister Igor Sergeyev said in Moscow on 7 August that Russia will not take part in international naval exercises which will be held later this month in the Black Sea on Ukraine's initiative, Itar-Tass reported. The exercises, called Sea Breeze-97, are scheduled to be held off Crimea's coast. They will involve ships from Ukraine, the U.S. and other countries. Russia has repeatedly criticized the exercises in the past. Sergeyev said the Russian military does not understand the aim and tasks of these exercises. Nevertheless, Sergeyev also said he has a positive attitude to joint undertakings by the navies of Russia and Ukraine. He said Russia and Ukraine have decided to conduct their own joint naval exercises, which he said would have "a peace-keeping character."

NEW LATVIAN GOVERNMENT CONFIRMED BY PARLIAMENT

The government of new Latvian Prime Minister Guntar Krasts was formally voted into power by parliament on 7 August, BNS reported. Krasts leads a six-party coalition that ranges from nationalists to left-of-center parties. His government was supported by 73 deputies in the 100-seat parliament; his coalition has 67 seats. Krasts, economy minister in the previous government, said he would stick to the strict monetary and budget policies of former Prime Minister Andris Shkele. He also has vowed to accelerate economic reforms and strive for Latvia's membership in the European Union and NATO.

LATVIA PROTESTS RUSSIAN TAX AUTHORITIES' ACTIONS

Einar Repshe, the president of the Bank of Latvia, told journalists on 7 August that the activities of St. Petersburg tax police might negatively affect Russian-Latvian economic relations. His comments came after the police froze the accounts of 14 Baltic banks, including eight from Latvia. Viktor Kononov, a Russian tax police official told journalists on 7 August that the 14 Baltic banks failed to pay value added taxes amounting to some 200 billion rubles to the Russian federal budget. Theodoras Tveriyonas, Latvia's Chairman of the Association of Commercial Banks, said on 7 August that it is "absurd" to suspend payment transactions from accounts of Latvian banks because of non-paid taxes He said the value added tax should be paid by bank customers, rather than by the banks. The Latvia Foreign Ministry has asked the Russian Foreign Ministry for an explanation.

LITHUANIAN PRESIDENT WANTS REGULAR NEIGHBOR SUMMITS

Lithuanian President Algirdas Brazauskas told journalists on 7 August that he would like next month's conference organized by the Lithuanian and Polish presidents to turn into "a regular event." The presidents of Finland, Estonia, Latvia, Ukraine and Belarus, and the Russian prime minister are to take part in the 5-6 September conference in Vilnius. The conference is titled "Coexistence of Nations and Good Neighborly Relations as a Guarantor of Security and Stability in Europe." Brazauskas met with the organizing committee for the conference on 7 August. Petras Vaitiekunas, foreign policy adviser to the Lithuanian president, told BNS that the idea of adopting a joint declaration at the conference "has been given up." He said only very general and "empty" phrases could be included in such a communique because of the different stances of the participating states on many issues.

SWEDISH PRIME MINISTER IN POLAND

Goran Persson on 7 August visited Poland's devastated southwestern regions to determine how his country can help in reconstruction after the recent floods. A Polish Foreign Ministry spokesman told journalists Persson wanted first-hand information on the situation. Persson flew by helicopter to flood-hit provinces of Walbrzych and Opole to inspect the scope of damage. He was accompanied by Polish Prime Minister Wlodzimierz Cimoszewicz.

POLISH TV BOARD NAMING SURROUNDED BY CONTROVERSY

Poland's National Radio and Television Council (KRRiT), the electronic media watchdog, on 7 August appointed seven people linked to ruling coalition political parties to public television's new supervisory board. The move raised concern over news media freedom before next month's parliamentary elections, Reuter reported. "People connected to the ruling coalition have a seven-person controlling package and can do what they want. This does not augur well," said KRRiT head Boleslaw Sulik. Sulik, linked to the opposition, was outvoted by KRRiT members allied with government parties. Allies of the ruling parties also were appointed to the supervisory board of public radio. The board of public television appoints the management and shapes program policies.

ANOTHER CZECH COALITION ROW IN THE OFFING

The Christian Democratic Union (KDU-CSL), one of the three Czech government parties, on 7 August sent a letter to Foreign Minister Josef Zieleniec, who is a member of Prime Minister Vaclav Klaus's Civic Democratic Party. In the letter, the KDU-CSL asked the foreign ministry to explain why it has refused offers of foreign aid from abroad in the wake of recent catastrophic floods. The letter was sent by Parliament foreign chairman Josef Holan of the KDU-CSL. The third coalition party, the Civic Democratic Alliance (ODA), said on 7 August that it considers the KDU-CSL's request for an explanation to be "justified." The government's chief representative for flood relief, Environment Minister Jiri Skalicky of the ODA, on 7 August rejected a claim by a foreign ministry spokesman that he was in charge of deciding about using various offers of aid. Deputy Foreign Minister Jan Winkler told journalists on 7 August that his ministry registered and positively reacted to all such offers.

CZECH BANK LODGES COMPLAINT AGAINST SLOVAKIA

The daily "Pravo" reported on 7 August that the first Czech-Slovak court dispute since the division of the Czechoslovak Federation in 1993 will begin in the international arbitration court in Washington. The Czechoslovak Commercial Bank (CSOB), two-thirds of which are owned by the Czech state, has lodged a complaint against the Slovak Republic for its failure to repay the bank a debt of approximately 11 billion crowns of the Slovak Inkasni bank, which was guaranteed by the Slovak Finance Ministry four years ago. The Washington court has already called on both sides to name their representatives to a three-member senate of arbitrators. The court proceedings in Washington could last up to two years. The dispute could be handed over to the International Court of Justice in the Hague if Slovakia does not comply with a court ruling.

SLOVAK PRESIDENT, CZECH SENATE CHAIRMAN MEET

Slovak President Michal Kovac and Czech Senate Chairman Petr Pithart met at the Strbske Pleso holiday resort in the High Tatra mountains on 7 August, to discuss the situation in the two countries. No details of their discussion were released to the press. They agreed to meet again next week, the Czech Senate press office told CTK. Kovac and Pithart are both spending their holidays in the Slovak mountains.

HUNGARIAN POLITICIANS' FUTURE TROUBLED BY PhD DISSERTATION?

Data protection commissioner Laszlo Majtenyi ruled that doctoral dissertations of Prime Minister Gyula Horn and Independent Smallholders' Party chairman Jozsef Torgyan should be made available to the general public, Hungarian media reported on 8 August. Journalists who sought access to the texts were refused by the Academy of Sciences. Horn said he has no objection, and that he is "standing by" his 1977 dissertation on Yugoslav economic policy. Torgyan's dissertation, written in 1954, deals with the post World War II peace treaties, and praises the "extremely generous attitude displayed by the Soviet Union regarding reparations to be paid by Hungary." It stresses that contrary to "treaty-breaching imperialists," the Soviet Union fought to establish a fair burden for small states. Smallholder adviser Andras Varhelyi said the attempt to discredit Torgyan is part of a "disgusting political campaign."




STOLEN MISSILES FOUND IN ALBANIA

Albanian police and army experts on 7 August found some 15 stolen surface-to-surface and surface-to-air Chinese Silkworm-type missiles in Lazarat near Gjirokaster. The police know who stole the missiles from an underground tunnel on 20 July and are on the thieves' trail (see "RFE/RL Newsline, 23 July 1997). Defense Minister Sabit Brokaj said in Tirana that the crooks planned to dismantle the missiles and sell them in Greece, but that increased security along the border thwarted their plans.

GANG WAR RAGES IN VLORA

Some 100 masked gunmen paraded down Vlora's main street in military vehicles and shot in the air in a show of force on 7 August. A gun battle with a rival gang ensued, sending ordinary citizens fleeing to their homes for cover. Two members of one gang were wounded. Fellow gang members sealed off the hospital where the two were taken lest the rival gang try to take revenge on the wounded men. Interior Minister Neritan Ceka said on 6 August in Tirana that a special police force has gone to Vlora to collect information on the gangs.

CLINTON PLEDGES HELP FOR ALBANIA

U.S. President Bill Clinton has sent Prime Minister Fatos Nano a letter in which he promises to back the reconstruction and democratization of Albania, news agencies reported from Tirana on 7 August. Clinton wrote that "the United States and our partners in the international community are ready to assist your government in its pursuit of meaningful political and economic reform necessary to restore normal conditions in your country. Your pledge to include the broad spectrum of political forces in the governing process is very encouraging in light of the political polarization that has afflicted your society. The civil unrest and economic uncertainty affecting your country present your government with a tremendous task."

KOSOVO LIBERATION ARMY CLAIMS RESPONSIBILITY FOR SHOOTINGS

The clandestine Kosovo Liberation Army (UCK) issued a statement in Pristina on 7 August in which it said it carried out the recent shootings of two Serbian policemen and an ethnic Albanian close to the Serbian authorities (see "RFE/RL Newsline," 5 August 1997). The statement added that the UCK "will continue with actions until the complete liberation of the ethnic [Albanian] territories" is achieved. It warned the international community not to wait and react "too late, after the massacre that threatens the Balkans." Up until late 1996, the UCK carried out only occasional and random attacks, such as spraying Serbian cafes with gunfire.

HALF A LOAF FOR HOLBROOKE

U.S. envoy Richard Holbrooke met in Lukavica on Bosnian Serb territory on 7 August with the three members of the Bosnian joint presidency: the Muslim Alija Izetbegovic, the Croat Kresimir Zubak, and the Serb Momcilo Krajisnik. Holbrooke secured agreements to reestablish a joint telephone system and to authorize new ambassadorial appointments, but failed to secure one on war criminals or refugees. The ambassadors will include 13 Muslims, 11 Serbs and eight Croats, plus one joint appointment by Izetbegovic and Zubak. The U.N. posting goes to a Muslim, Washington to a Serb, and Tokyo to a Croat. But even if the new ambassadors take up their posts, the three sides do not have a common foreign policy for them to implement. Holbrooke promised sanctions and other punishments for those who do not help enforce the Dayton agreement.

SERBIAN REFUGEES APPEAL TO HOLBROOKE

The Belgrade-based Society for Refugee Assistance wrote to Holbrooke on 7 August to appeal for a permanent solution to their plight, an RFE/RL correspondent reported from the Serbian capital. The refugees say they need both money and the strict implementation of the Dayton agreement, which would enable them to go home. At the start of the decade, Serbian leader Slobodan Milosevic incited the Serbs of Croatia and Bosnia to go to war with their neighbors so that the Serbs could "remain in Yugoslavia." He refuses, however, to give Serbian refugees from those two republics Yugoslav citizenship or the prospect of a new life in federal Yugoslavia.

REPUBLIKA SRPSKA OPPOSITION UNITES

Some 15 opposition political parties pledged in Banja Luka on 7 August that they will work together during and after the parliamentary elections that President Biljana Plavsic has slated for 10-12 October, an RFE/RL correspondent reported from that northwest Bosnian town. The parties promised that, if they win the vote, they will set up a government of experts to guarantee constitutional government and the independence of the judiciary, and to fight organized crime. Also in Banja Luka, an aide to Plavsic said that she will set up her own political party -- the Serbian Party of the Republika Srpska (SSRS) -- on 8 August. The Serbian Democratic Party (SDS) recently expelled her for having challenged Radovan Karadzic and the rest of the Pale-based leadership. She helped found the SDS in 1990.

NEWS FROM THE FORMER YUGOSLAVIA

Officials from the Croatian government, the U.N. administration in eastern Slavonia, and local governments in that region signed an agreement in Zagreb on 7 August to regulate the reintegration of eastern Slavonia's schools into the Croatian educational system. In Belgrade, the Croatian embassy filed a formal protest with the Yugoslav Foreign Ministry over the desecration of Croatian graves in Vojvodina and the mistreatment of ethnic Croats in Zemun. In Luxembourg, the EU Presidency announced the EU will monitor the September Serbian elections only if it is allowed to monitor the entire process and if all parties have free access to the media. The government has invited monitors but wants to impose restrictions on their work.

ROMANIAN PRIME MINISTER ANNOUNCES "TEST OF FIRE" FOR REFORMS

Following criticism by the IMF on the slow pace of liquidation or privatization of state-owned unprofitable enterprises, Prime Minister Victor Ciorbea on 7 August announced the government is closing down 17 enterprises. Close to 30,000 people will lose their jobs as a result of the decision, RFE/RL's Bucharest bureau reported. Ciorbea said this was the "test of fire" for the government's reform program. Those laid off will receive compensation equal to between six and 12 months wages. Among the liquidated enterprises are three refineries, which have been producing well beyond Romania's consumption needs and have accumulated large arrears to the state budget. To speed up the liquidation process, energy deliveries to the 17 enterprises are being stopped as of 8 August.

ROMANIAN LABOR PROTEST

The IMF chief negotiator for Romania, Poul Thomsen, told the private TV channel Pro TV on 7 August that he proposed to the government to offer compensation of more than 12 monthly salaries to those laid off to avoid labor unrest. But Radio Bucharest, on 8 August, already reported on several outbursts of protest. Some 5,000 workers at the Petrotel refinery in Ploiesti broke windows at the company's headquarters and chanted "we are not guilty, we want to work." The protesters were joined by some 800 workers from the Vega refinery, which like Petrotel, is slated for liquidation. Mediafax reported that workers at the Romfosochim enterprise in Valea Calugareasca blocked the railway and stopped traffic between Bucharest and Galati, as well as between Bucharest and Iasi. On the other hand, the leader of the largest miners' trade union confederation called off a warning strike after negotiations yesterday with Prime Minister Victor Ciorbea.

ROMANIA'S "KING OF GYPSIES" DEMANDS HOLOCAUST COMPENSATION

Florin Cioaba, who calls himself "king" of Romania's Roma community, is demanding that Germany pay more than 350 million marks in compensation for the extermination of Gypsies at Auschwitz-Birkenau, Mediafax reported on 6 August. Cioaba told a press conference that representatives of the Roma communities from Hungary, Poland, Greece, Austria, Germany and Romania last week decided at a meeting in Auschwitz to set up a Parliament of European Roma to defend the interests of the communities in Europe. Cioaba says 10,100 Gypsies were exterminated at Auschwitz-Birkenau.

CHISINAU-TIRASPOL NEGOTIATIONS STALLED

Anatol Taranu, the head of the Moldovan delegation at the negotiations under way with the Transdniestrian separatists, says the discussions are stalled because of Tiraspol's refusal to accept Article 1 in the draft proposed by the three mediators, RFE/RL's Chisinau bureau reported on 7 August. Taranu said the draft mentions a "special status" for the breakaway region in a sovereign and "territorially indivisible Moldova." Vladimir Grigoriev, a representative of the Transdniester delegation, told Infotag and BASA-press that Tiraspol was ready to accept the formula of a "common state" agreed on in Moscow last May. But Grigoriev said Tiraspol has its own interpretation of the formula and sees no reason to accept the draft of the mediators. He said the draft diverges from what the Chisinau and Tiraspol leaders agreed to in Moscow

MOLDOVAN COMMUNISTS APPEAL TO FORMER CPSU MEMBERS

The Central Committee of the Party of Communists of Moldova on 6 August appealed to former CPSU members to join its ranks, Infotag reported. The party's first secretary, Vladimir Voronin, said former membership of the CPSU would be recognized by his formation as counting for seniority. He attacked leaders of states that were included in the former USSR, saying that they "strive to erase from the minds of the people notions such as communism and socialism, the rule of the people, Lenin, October." Voronin also announced that his party has collected the 200,000 signatures necessary to force a debate in the parliament on holding a referendum on the law of land tradability. The law, which Voronin's party opposes, was approved by the legislature.

OTHER MOLDOVAN POLITICAL DEVELOPMENTS

The Peasant Christian Democratic Party of Moldova (PTCDM) on 7 August decided to join the right-wing Democratic Convention of Moldova (CDM) alliance, BASA-press reported. For this purpose, the PTCDM has left the Alliance of Democratic Forces (AFD). Two other former AFD members, the Ecologist Party and the Women's Christian Democratic League, had left that alliance in order to join the CDM, which also includes the Popular Christian Democratic Front, the Moldovan Party of Rebirth and Conciliation and a group of leaders who recently left the Moldovan National Peasant Party. Also on 7 August, the Ministry of Justice officially registered the Moldovan Civic Party headed by Vladimir Slonari, who left the Socialist Unity-Edinstvo faction. The new party defines itself as "centrist."

BULGARIAN SOCIALISTS CRITICIZE TEACHING OF RELIGION IN SCHOOLS

The opposition Socialist Party on 7 August criticized the government's decision to give pupils the option of studying religion in school. The party said the introduction of religion in classes would lead to "greater alienation on an ethnic and religious basis," RFE/RL's Sofia bureau reported. They warned against infringing on the separation of state and church. The official press agency BTA reported on 6 August that in the new school year beginning in September, pupils aged 7 to 10 will be able to study religion once a week with theology teachers, if they want to do so.


8 August


IMF TEAM SAYS GEORGIA'S SAFETY NET 'UNSUSTAINABLE'


By Robert Lyle

A team of experts from the International Monetary Fund (IMF) has told Georgian authorities that the country's social support system is "unsustainable" because it is not providing adequate protection to the most vulnerable.

The team came to that conclusion after working with the government at its request to help design a better social support mechanism.

In its report, a summary of which was released by the fund, the IMF team said Georgia had already made great strides by scrapping its old social system when it gained its independence and instituting pay-as-you-go systems for social security, unemployment and health.

The Georgian safety net currently costs the equivalent of about 3 percent of GDP (gross domestic product) or about one-third of the state budget. Among measures already successfully implemented, the IMF team pointed to the rise in retirement ages from 55 to 60 years for women and from 60 to 65 for men instituted in early 1996. While that move had the unintended immediate effect of increasing the pension rolls -- as many as 50,000 previously unregistered elderly took advantage of the grandfathering provisions to get in under the deadline -- it will eventually reduce the number of pensioners by about 40 percent.

At the same time, the team said that by targeting social benefits on the poorest and most vulnerable of the population, Georgia has been able to increase benefits generally in line with government wages, including a 15 percent increase in benefits last January 1st, increasing payments on average by about 100 percent in real terms.

Still, says the team, benefit levels remain low, with the standard monthly rate of 9.8 lari (7.70 dollars) only one-tenth the official minimum subsistence level. According to that standard, said the team, "all employees of the public sector, for whom the monthly average wage is only lari 35, are destitute."

However, the team added, the official poverty standard is "misleading" because it is based on the situation before reforms and before the major price adjustments since 1992. First, it said, an alternative basket of food with the same calorie content can be assembled easily for 35 lari a month.

More importantly, the IMF team said a recent household survey indicates that cash incomes constitute only a "small proportion of total household incomes," especially among the poorest.

"It is therefore misleading to base poverty assessments solely on cash incomes, which are generally very low," the team said. When allowance is made for in-kind income -- trading of goods, etc. -- the income distribution for the country becomes much more even.

With this, the team said it estimates that about 25 to 30 percent of the Georgian population is living below the poverty line, considerably fewer than the official estimate of 65 percent of the people.

Nevertheless, the team said there is reason for concern because the "considerable reliance" among the citizenry on subsistence production and other informal activities "confirms the stresses the population has experienced since transformation to a market-based system."

The IMF experts said that many people in Georgia have managed to maintain living standards at about subsistence levels with support from relatives and by depleting their assets -- remedies the team says provide "only short term relief."

"This situation is unsustainable," the IMF team concluded, and requires improvements in the size and coverage of benefits.

The team recommended further modifications to better target vulnerable groups which have been missed by the present system, for example, large families and single mothers.

To better concentrate the benefits on the most needy, and make them high enough to provide real protection, the IMF team recommended further tightening of eligibility criteria, using income tests to weed-out people with high incomes, and improved benefit administration.

The team also gave government officials ideas about redesigning the country's pension system to put it on a sound financial footing. One proposal involves shifting the pension system to a defined-contributions scheme based on individual contributions. However, the team cautioned. such a scheme -- now popular in the west -- would imply a "substantial loss of payroll tax collections, initially placing an insupportable burden on the budget to finance the continued retention of present safety net provisions."

For now, the team said, the emphasis should continue to be placed on sustaining an adequate safety net for the elderly without compromising the budget.

As to the country's economy in general, the IMF team said Georgia has made "major strides in stabilization and structure reform after a period of acute economic crisis," and said it expects economic growth this year to reach 10 percent.

Robert Lyle is an RFE/RL correspondent in Washington.


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