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Newsline - October 2, 1997




YELTSIN AMBIGUOUS ON POSSIBLE THIRD TERM

After stating unequivocally in September that he will not seek a third term, President Boris Yeltsin said on 2 October that aides have urged him not to comment. Asked during a visit to Nizhnii Novgorod if there is any chance he will seek a third term, Yeltsin told reporters: " My friends and colleagues have forbidden me from talking about this. Why are you pushing me so early?" Russia's constitution, adopted in 1993, limits the president to two terms in office, but some commentators have suggested the Kremlin is looking for a loophole allowing Yeltsin to run again. Speculation has centered on the fact that Yeltsin was first elected in 1991 under the Soviet-era constitution. He has therefore served only one term under the new constitution. State Duma Speaker Gennadii Seleznev said on 2 October that a third Yeltsin term is a bad idea. Interfax quoted Seleznev as saying Yeltsin's two terms "are quite enough."

SELEZNEV ACCUSES YELTSIN OF PROVOKING CONFRONTATION

Seleznev told a news conference on 1 October that Yeltsin's hints that he will disband the Duma are provoking a conflict, an RFE/RL correspondent in Moscow reported. Yeltsin criticized Duma deputies on 29 September for holding up passage of the 1998 federal budget and a new tax code, rejecting the government's welfare reforms, and supporting a land code that prohibits the sale of farmland. Seleznev said Yeltsin's remarks are counterproductive and merely serve to further galvanize the Duma against Yeltsin. "The president must understand that every shout brings a reaction and that deputies will be considering the laws he proposed with bias and irritation," Seleznev told reporters. However, Seleznev indicated he was not in favor of a vote of no confidence in the cabinet, saying the feud between Yeltsin and legislators should not be brought to the "point of explosion."

PROSECUTOR-GENERAL TO INVESTIGATE KOKH

The Moscow Prosecutor-General's Office on 1 October launched a criminal investigation into former privatization chief Alfred Kokh after allegations that he may have done favors for a major bank. Moscow Deputy Prosecutor-General Yurii Syomin told ITAR-TASS that the investigation will focus on abuse of power. He cited suspicions over a $100,000 advance Kokh received from the Swiss firm Servina Trading for a book yet to be published and media allegations that the firm has links to Oneksimbank, which is controlled by Kokh's close friend, Vladimir Potanin. Syomin also told Ekho Moskvy that Kokh has not been charged but there are grounds for suspicion. Kokh told "Kommersant Daily" in an interview published the same day that he sees nothing suspicious about his relationship with Potanin. He insisted his book will be published soon.

CHUBAIS DEFENDS KOKH

First Deputy Prime Minister Anatolii Chubais defended Kokh, saying the probe into his long-time ally is the work of Kokh's former friends in the big banks angry about the auction of Svyazinvest, Interfax and ITAR-TASS reported. "Kokh's an honest man," Chubais said in televised remarks. "Well-paid-for lies are being reprinted...from one banker's newspaper to the other's [and broadcast] from one television channel to the other.... But they're still lies." In July, Oneksimbank led a consortium that was awarded a 25 percent stake in Svyazinvest in what was Russia's biggest-ever sale of a state asset. Chubais said the probe into Kokh is the latest move in attacks by disappointed Svyazinvest bidders, Reuters reported.

SKURATOV ORDERS REVIEW OF CORRUPTION CASES

Continuing Russia's crackdown on corruption, Prosecutor- General Yurii Skuratov on 2 October issued an order re-opening corruption cases dropped in recent years, Interfax reported. Skuratov will send a team of "most experienced workers" to the regions where there are cases of corruption, his aide Aleksandr Zvyagintsev said. He said the decision came after Skuratov's recent meeting with President Yeltsin, in which the two discussed ways to prevent criminals from infiltrating the country's political structure. The latest anti-corruption drive comes after "Izvestiya" published allegations in September that the mayor of Leninsk-Kuznetsk has a criminal past. A special investigative unit from the Prosecutor-General's Office is due in Leninsk-Kuznetsk by the end of the week to probe charges against Gennadii Konyakhin, "Izvestiya" reported on 1 October.

RUSSIAN DEFENSE MINISTER MEETS WITH NATO COLLEAGUES

Igor Sergeev arrived in Maastricht on 1 October to attend an informal two-day meeting of NATO defense ministers. Sergeev met with his Greek counterpart, Akis Tsohatzopoulos, to discuss Turkey's ongoing protests over the planned delivery to Greek Cyprus of Russian S-300 anti-aircraft missiles, "Nezavisimaya gazeta" reported. Sergeev told Interfax that he plans to exchange views with his NATO counterparts Russian President Boris Yeltsin's proposal that NATO gradually be transformed into a political alliance in the framework of the OSCE. Other topics of discussion were bilateral military, political, and technical issues, the situation in Bosnia and the reduction of conventional forces in Europe. Sergeev is also to meet with NATO Secretary-General Javier Solana.

IS RUSSIA LOSING PATIENCE WITH GROZNY?

Russian Deputy Prime Minister Ramazan Abdulatipov held talks with President Aslan Maskhadov in Grozny on 1 October. The two leaders agreed that the staff of the Russian representation in Chechnya be allowed to return to Grozny. The approximately 80 staff members were forced to leave Grozny for Mozdok in neighboring North Ossetia during the night of 30-September to 1 October on orders from Chechen Vice President Vakha Arsanov (see "RFE/RL Newsline," 1 October 1997). Speaking at a press conference in Moscow the same day, Russian Security Council Secretary Ivan Rybkin said Yeltsin's insistence that he will not sign an inter-state treaty with Chechnya has triggered "hysterics" in Grozny. He termed the expulsion of the Russian delegation "a thoughtless move" on the part of the Chechen leadership. He also implicitly criticized Maskhadov for not overruling Arsanov.

CHERNOMYRDIN ANNOUNCES NEW PENSION INDEXATION PLAN

Prime Minister Viktor Chernomyrdin announced on 1 October the introduction of a new pension indexation plan that, he said, will in effect raise pensions payments, according to ITAR-TASS. Chernomyrdin said under the new plan, which will take effect on 1 February 1998, pensions will be based on "real labor contributions." Yeltsin recently signed a law raising pensions by 10 percent as of 1 October and by another 10 percent as of 1 December.

NEMTSOV INDICATES GOVERNMENT FLEXIBLE ON BUDGET

First Deputy Prime Minister Boris Nemtsov said in Nizhnii Novgorod on 1 October that despite the government's ongoing battle with the State Duma over the 1998 budget, he expects a compromise to be reached by the end of the year, Interfax reported. Nemtsov said Russian legislators understand that "a bad budget is better than none at all." He added that the government is ready to work with legislators on revising the budget draft, according to Interfax. The first reading of the budget in the Duma is scheduled for 9 October. Legislators, even from the pro-government Our Home is Russia faction, have been critical of reductions in state investments and subsidies for regions. Government officials have said they are ready to negotiate on all major elements of the budget, except for the key figures for revenues and the deficit.

..SAYS CAR MANUFACTURER ON BRINK OF BANKRUPTCY

Nemtsov warned that Russia's biggest car manufacturer, AvtoVAZ, could soon face bankruptcy unless it agrees to pay its huge debt to the state, Reuters reported. Nemtsov issued an ultimatum to the car producer to either agree to a plan of payments to the treasury or face bankruptcy by mid-October. AvtoVAZ-- the producer of Russia's most popular car, the Lada-- declined comment on Nemtsov's remarks, according to Reuters. The company is among the government's major debtors. According to the State Tax Service, it owes more than 8 trillion rubles ($1.3 billion ). The company reached a preliminary agreement with the government on debt restructuring in May. Shareholders then voted in August to double charter capital through a new share issue, paving the way for a controlling stake to be transferred to the government as collateral against the firm defaulting. But AvtoVAZ deputy chief executive Konstantin Sakharov said at the end of August that negotiations are still continuing about such a transfer.

NEMTSOV SLAMS MASS MEDIA

Nemtsov also said in Nizhnii Novgorod that the Russian mass media are no longer objective, an RFE/RL correspondent reported. Nemtsov singled out NTV and Russian Public Television, which, he said, "only reflect the opinion of certain people whom everyone knows." (Security Council Deputy Secretary Boris Berezovskii is considered a highly influential figure at ORT, while NTV is owned by Vladimir Gusinskii's Media-Most group.) Nemtsov also commented that most people in Nizhnii Novgorod prefer to receive their news from RFE/RL and Radio Mayak.

KURIL ISLANDS ASK FOR FINANCIAL HELP FROM JAPAN

Japanese Deputy Foreign Minister Minoru Tamba has received a request from the deputy administrative head of the Southern Kuril region for loans, Russian media reported. Tamba concluded his three-day visit to the island of Kunashir on 2 October; he is the highest ranking Japanese official to visit the Kuril Islands since the end of World War II. Meanwhile in Nizhnii Novgorod, Boris Yeltsin said on 2 October that he wants to discuss a peace treaty when he meets with Japanese Prime Minister Ryutaro Hashimoto in Krasnoyarsk on 1-2 November. Tamba will also be present at those talks. Yeltsin added that "we are going to touch on all issues, including territorial questions." A dispute over ownership of the Kuril Islands is a major reason for Russia and Japan not signing a treaty ending World War II.

"MIR" GETS NEW COMPUTER

A new computer has been installed on the "Mir" space station and is expected to be fully operational by 2 October, Russian media reported. The new computer was brought to the station by the U.S. shuttle "Atlantis" to replace older computers that have failed several times since the 25 June collision of a Russian cargo ship with "Mir." The "Atlantis," which is docked with the station, kept the space station's solar panels oriented toward the sun while the computer was turned off. One Russian cosmonaut and one U.S. astronaut took a five-hour space walk to bring a "cap" to the area where there is a suspected puncture caused by the collision.



ARMENIAN OPPOSITION LEADER PLEADS NOT GUILTY

In his final speech to the Supreme Court, Vahan Hovannisyan, one of the leaders of the banned Dashnak party (HHD), again affirmed his innocence, RFE/RL's Yerevan bureau reported on 1 October. Hovannisyan is charged with calling for the overthrow by force of the present leadership. Hovannisyan said law enforcement agencies have found no evidence of his guilt. He demanded his and other defendants' acquittal. Hovannisyan and 30 other HHD members and supporters were arrested in July 1995 on charges of plotting a coup d'etat and murdering two policemen. The state prosecutor has demanded a seven-year prison sentence for Hovannisyan. Hovannisyan described the trial, which began in March 1996 and has been condemned as politically motivated by human rights groups, as "political punishment" for his party.

VETERAN ARMENIAN DISSIDENT ASSESSES POLITICAL SITUATION

Speaking at a press conference in Yerevan on 1 October, the leader of the Union for Self-Determination, Paruir Hairikyan, predicted that recent splits within both the Hanrapetutyun bloc (which has a majority within the Armenian parliament) and the opposition National Accord will result in a realignment of political forces, Armenian agencies reported. Hairikyan cited the findings of a poll conducted by the union according to which the Communist Party is the most popular political party in Armenia, followed by the opposition National Democratic Union, the Union for Self-Determination, the Dashnak Party, and the ruling Armenian Pan-National Movement. The poll further established that President Levon Ter-Petrossyan's popularity rating has fallen to 14.7 percent. In last year's presidential elections he polled 51 percent of the vote.

ARMENIA SOON TO JOIN COUNCIL OF EUROPE?

Hovannes Igityan, the chairman of the Armenian parliament's Committee on Foreign Affairs, predicted on 1 October that the issue of his country's full membership in the Council of Europe (will be soon resolved "positively." Igityan said that of the three Transcaucasian states, Armenia has the best chances of joining the council, according to RFE/RL's Yerevan bureau. Igityan, who headed a recent Armenian delegation to Strasbourg, said a council commission on human rights will visit Armenia on 23 October, after which the council will decide on whether to recommend Armenia to the final stage of the admission process. Igityan said he personally thinks it expedient that Armenia and Azerbaijan be admitted to the council simultaneously. In April, the council adopted a resolution making membership for the Transcaucasian states contingent on tangible progress in resolving the Abkhaz and Karabakh conflicts.

AZERBAIJAN DEMANDS EXTRADITION OF RUSSIAN JOURNALIST

Anatolii Naumov, a member of the editorial staff of the St. Petersburg newspaper "Chas Pik," is being held in solitary confinement awaiting extradition to Azerbaijan on charges of extortion, according to "Segodnya" and "Izvestiya" on 1 and 2 October. A Russian citizen and graduate of Leningrad State University, Naumov had worked as deputy editor of a Russian-language newspaper in Baku. He returned to St. Petersburg in December 1996.

COMPLICATIONS OVER REPATRIATION OF TAJIK REFUGEES IN AFGHANISTAN

The repatriation of some 7,000 Tajik refugees in northern Afghanistan has been complicated by fighting in that area, according to ITAR-TASS and Interfax. Refugees near the city of Mazar-i-Sharif are now caught in the fighting between the Taliban movement and the anti-Taliban coalition forces. Their proposed route of return, through the Uzbek city of Termez, is no longer open following the Taliban capture of the Afghan town of Khairaton, on the river bank opposite Termez. The border in that area has been sealed by Uzbek border guards. The refugee camp was accidentally hit during an air assault on 1 October that left one person dead and 10 wounded. A contact group for implementing the peace agreement in Tajikistan has appealed to the UN for help. It is looking for an alternative route through Turkmenistan for the refugees.

KAZAKH PREMIER REASSURES INVESTORS

Amirjan Kosanov, the press secretary of Prime Minister Akezhan Kazhegeldin, has passed on a message from the premier to foreign investors telling them they "need not be worried about their investments," Reuters reported on 1 October. Kazhegeldin, currently in a hospital in Switzerland, said reforms in Kazakhstan are "irreversible." Kosanov also responded to rumors of Kazhegeldin's dismissal from office, saying "the question of [Kazhegeldin's] resignation or retirement is a question for the president."

MAFIA'S GROWING INFLUENCE IN TURKMENISTAN

Mukhammed Nazarov, the chairman of the National Security Committee, said mafia organizations are exploiting the country's current problems to make a profit, Interfax reported on 30 September, quoting an interview in the daily "Neitralny Turkmenistan." So far this year, the committee has brought 138 people to trial for economic crimes. Nazarov also criticized "some structures" that are using their connections with foreign partners to smuggle "cotton fiber, car oil, gas condensate, alcohol, gold, silver, mercury, and non-ferrous materials" out of Turkmenistan. He noted that the committee's work has resulted in the confiscation of narcotics worth $5.5 billion since the beginning of 1997.




BELARUS TO RELEASE ORT JOURNALIST?

President Alyaksandr Lukashenka says the police have completed their investigation into Russian Public Television (ORT) journalist Pavel Sheremet, Interfax reported on 1 October. Lukashenka indicated that Sheremet may be allowed to leave the Hrodna detention center, where he has been held since August, pending trial. But the same day, the Justice Ministry revoke the license of one of Sheremet's lawyers, prompting ORT's other legal adviser to resign from the case.

YELTSIN BLOCKS LUKASHENKA'S VISIT TO RUSSIAN REGIONS

The Russian authorities have in effect blocked Belarusian President Lukashenka's plans to visit Lipetsk and other Russian regional capitals by denying clearance for his plane, Russian media reported 2 October. The orders reportedly came from President Boris Yeltsin himself. Yeltsin said in Nizhnii Novgorod the same day that "I am warning governors about one thing. They are forbidden to invite heads of other states without the president's permission." This is the second time Moscow has moved to block a Lukashenka visit to a Russian regional capital. Last summer, Moscow pressured Kaliningrad leaders to put off a visit by the Belarusian president.

LUKASHENKA CALLS FOR BETTER CIS COOPERATION

Addressing the opening session of the CIS Inter-State Economic Committee in Minsk on 1 October, Belarusian President Lukashenka predicted that the CIS may "fall apart" within two or three years unless its policies become more effective, according to Interfax. Specifically, Lukashenka advocated more systematic implementation of decisions adopted by the CIS and the creation of new forms of economic integration such as transnational corporations, financial-industrial groups, and joint ventures. He said that the harmonious development of economic relations within the CIS is impossible without measures to ensure the smooth functioning of the four-country Customs Union and to promote free trade and a common market for goods, services, and capital.

UKRAINIAN PRESIDENT READY TO SIGN ELECTION LAW, PAY PENSIONS

Leonid Kuchma will sign the new election law as soon as it reaches his desk, one of his senior aides told ITAR-TASS on 1 October. The same day, the president himself told pensioners that his government will pay all pension arrears within the next few months, Ukrainian media reported.

NEARLY HALF OF ALL UKRAINIANS HAVE NO MONEY FOR FOOD

Forty-five percent of all residents of Ukraine do not have enough money to purchase basic food stuffs, according to a poll of 4,500 people carried out by the Kyiv International Institute of Sociology. Forty-nine percent said they have no problems buying enough food but lack the funds for clothing. Only one Ukrainian resident in 20 said his financial situation is stable, ITAR-TASS reported on 1 October

ESTONIAN PRESIDENT SLAMS DEFENSE MINISTRY OVER MILITARY TRAGEDY

At a 1 October session of the State Defense Council, Lennart Meri criticized the Defense Ministry in connection with the tragic accident in mid-September in which 14 members of the Baltic Peacekeeping Battalion (BALTBAT) perished, ETA and BNS reported. Meri said the ministry has failed to draft legislation in accordance with government schedules, pointing out there is still no legislative framework for BALTBAT. He also criticized the government's decision to order the security police to consider bringing charges against several officers, including Major-General Johannes Kert, the commander of the defense forces. Meri has so far refused to accept Kert's resignation over the tragedy. Meanwhile, Premier Mart Siimann has threatened to step down if Meri continues to defend Kert, RFE/RL's Estonian service reported.

LITHUANIAN PARLIAMENTARY CHAIRMAN DENIES KGB TIES

Vytautas Landsbergis on 1 October categorically denied having collaborated with the Soviet-era KGB, BNS reported. He was responding to press reports about a session of a parliamentary commission investigating deputies' possible ties with secret services abroad. According to the daily "Respublika," four former KGB agents told the commission they will testify in court that Landsbergis willingly cooperated with the Soviet secret service during the 1950s. "The second oldest profession of mankind, after prostitution, is false testimony," Landsbergis said in a letter from Iceland, where he is currently on an official visit. The parliamentary chairman intends to run in the December presidential elections.

SOLIDARITY DECIDES ON CANDIDATE FOR PREMIER

Solidarity Electoral Action (AWS) has decided on a candidate for the post of prime minister but has not released his name to the press, PAP reported on 1 October. AWS leader Marian Krzaklewski, who has repeatedly said he does not want the job, commented that his party would "prefer an arrangement that does not involve party leaders in the government lineup." But he added that the AWS wants to control the Ministries of Internal Affairs, Treasury, and Finance and that it would like the deputy prime minister's slot to go to whichever coalition party does not have the premiership.

POLAND SEEKS VOICE ON NATO NUCLEAR STRATEGY

Deputy Defense Minister Andrzej Karkoszka was quoted by "Trybuna" as saying that Poland wants to participate fully in NATO's nuclear planning committee after Poland becomes a member of the alliance. While Karkoszka repeated Polish support for NATO's current policy of not deploying nuclear weapons on the territory of new members, his remarks are likely to alarm many Russians who oppose NATO's eastward expansion.

CZECH AIR FORCE HAS LOW COMBAT ABILITY

The combat ability of the Czech air force has fallen below 50 percent and the ability of its aircraft to serve for training purposes is under 45 percent, according to documents that the army's Supreme Command provided to the parliamentary Defense and Security Committee, CTK reported on 1 October. Air force commander General Ladislav Klima conceded that austerity measures in the air force, implemented since 1 September due to the lack of fuel , have been unprecedented in the history of Czechoslovak and Czech aviation. In related testimony to the committee, chief of staff Jiri Nekvasil told deputies that Soviet-era MiG 23 fighters are to be phased out of the air force and replaced by 12 Czech-made L-39 ZA aircraft. He said the air force will keep its MiG-21 fighters, which have a longer life-span than the MiG-23s.

KLAUS FAVORS ABOLITION OF LAW BANNING NOMADIC LIFESTYLE

Prime Minister Vaclav Klaus told CTK on 1. October he favors a Communist Party proposal to repeal a 1958 law banning people from leading a nomadic way of life. The law, when passed was aimed primarily at the country's Roma population to ensure that they could no longer travel about the country in caravans. He says this is the first time the government had unconditionally agreed with a proposal from the Communists. Meanwhile, a member of the Canadian Council for Immigration and Refugees is in the Czech Republic on a two week fact-finding mission on the situation of Roma.

MECIAR RULES OUT FOREIGN MONITORING OF SLOVAK ELECTIONS

Prime Minister Vladimir Meciar on 1 October rejected opposition demands that international observers be invited to monitor next year's parliamentary elections. Speaking on Slovak Television, Meciar said "Slovakia is not in the position of Albania, where international monitors are required for elections." He pledged that government and state institutions will not interfere in the elections. He also conceded that his party does not have sufficient support from other parties to change the law to enable elections to be held by majority vote in a single round.

HUNGARY HANDS OVER MINORITY REPORT TO SLOVAKIA

Hungarian Ambassador to Slovakia Jeno Bors on 1 October presented Slovak Foreign Minister Zdenka Kramplova with a Hungarian government report comparing the status of the Slovak minority in Hungary with that of the Hungarian minority in Slovakia, TASR reported. Slovakia has repeatedly requested that Hungary draw up the comparative study. Kramplova said that although she is prepared to reschedule her postponed discussions in Hungary, originally to be held on 18 September, "the Slovak side is still waiting for adequate, matching steps by the Hungarian side that would help restore the atmosphere of mutual trust [and] enable the dialogue to continue at the level of foreign ministers."




WESTENDORP SAYS PALE TV BROADCASTS MIGHT RESUME...

International mediator for Bosnia Carlos Westendorp on 1 October said broadcasts may still be allowed from the hard-line Bosnian Serb stronghold of Pale. He made the remarks shortly after the NATO-led stabilization force (SFOR) seized control of four television transmitters in areas controlled by Bosnian Serb hard-line supporters of indicted war crimes suspect Radovan Karadzic at Westendorp's request (see "RFE/RL Newsline," 1 October 1997). Westendorp said international officials are still considering issues related to television broadcasting in the Bosnian Serb entity. The transmitters were seized after Pale broadcast allegedly altered film footage to suggest that the war crimes tribunal at The Hague is anti-Serbian.

...WHILE DISPUTE EMERGES OVER WHO WILL BROADCAST

NATO Secretary-General Javier Solana said the transmitters will remain under the control of Bosnian Serb President Biljana Plavsic's faction. Plavsic said the seizure was justified, but she appealed in a letter to Westendorp to allow the resumption of alternating broadcasts by Pale and Banja Luka. Her chief foe, Karadzic ally Momcilo Krajisnik, warned that SFOR's seizure of the transmitters could lead to an "uncontrollable response" among the Bosnian Serb public.

RUSSIA DENIES NATO'S CLAIM THAT RUSSIAN TROOPS PARTICIPATED

Russian Defense Minister Igor Sergeev, speaking in Maastricht on 1 October, said Russian troops were only present as observers when SFOR troops seized the transmitters. "Observation from two posts, and that is all the Russian peacekeepers did, can hardly be described as participation in an operation," Sergeev told reporters.

MORE UNREST IN BELGRADE...

For the second consecutive night, Serbian riot police on 1 October used batons to break up a peaceful Belgrade demonstration against the ouster of Zoran Djindjic, the city's first non-communist mayor in 50 years, and the editors of Studio B, an independent radio and TV station. Police made arrests and injured several people in their attack on the crowd, which was estimated at 10,000, about half the size of the crowd the previous night. Djindjic is calling for more protests on 4 October, one day before the second round of Serbia's presidential elections.

...AND IN KOSOVO

At least 30 Kosovar students required hospital treatment after Serbian riot police used tear gas to stop a peaceful march by ethnic Albanian students in Pristina on 1 October demanding the readmission of ethnic Albanians to Pristina University. Tanjug reported that "a number of organizers of the alleged student protest were detained, including self-proclaimed chancellor of the outlawed university Ejup Statovci." The Kosovo Information service says police beat Statovci and Vice Rector Ahmet Geca while detaining them. Police also detained the four leaders of the student union. Elsewhere, police used force to disperse protesters in Pec, Prizren, Gnjilane, Mitrovica, and Urosevac. They also beat and detained protesters in Decani and Djakovica. The students have called off further protests. Meanwhile, the U.S. and the EU issued a joint condemnation of the use of force by Serbian riot police against the demonstrators in Belgrade and in Kosovo (see "RFE/RL Newsline," 1 October 1997).

RUGOVA CALLS FOR AN END TO PROTESTS

Kosovar leader Ibrahim Rugova later condemned the Serbian police intervention against the protesters. He said on Albanian Television that he will demand that the protests be stopped, "as they may explode into dangerous situations with serious consequences for Kosovo and the region." Rugova added that despite the violence and continuous Serbian repression, ethnic Albanians are "determined to realize their independence through peaceful means." The Serbian government later issued a statement saying the sole obstacle to implementing the 1996 agreement on reinstituting Albanian language education in Kosovo is "separatism." "Serbia will never allow the existence of a separate Albanian state of Kosovo with a separate education system and university," the government commented.

ALBANIA EXPRESSES CONCERN OVER KOSOVO DEVELOPMENTS

The Albanian Foreign Ministry on 1 October said it is following with concern the latest developments in Kosovo. "The Foreign Ministry of Albania supports every movement to defend Albanian education in Kosovo, which is one of the fundamental rights of every nation," according to a statement broadcast on Albanian Television. The Foreign Ministry called on Belgrade to avoid the use of violence and repressive measures against the students and the Albanian population and to create opportunities for the free expression of their views.

PRELIMINARY RESULTS OF BOSNIAN LOCAL ELECTIONS

The Organization for Security and Cooperation in Europe on 1 October released the first results of the 13-14 September municipal elections. In Tuzla, the second-largest city of the Muslim-Croatian federation, the civic-oriented Joint List '97, led by Mayor Selim Beslagic and his allies, won a majority of seats, beating the ruling Muslim Party of Democratic Action (SDA). A Muslim-led coalition won in Hadzici, near Sarajevo. In Bosanski Brod, which is held by the Bosnian Serbs, the Serbian Democratic Party came in first, followed by the Bosnian branch of the Croatian Democratic Alliance. In Rogatica, which is also held by the Bosnian Serbs, a coalition of Muslim-led parties took 21 seats and three Bosnian Serbian parties won a total of 28 seats.

ROMANIAN SENATOR DISCIPLINED OVER SECRET FILES PROPOSAL

The Disciplinary Commission of the National Peasant Party Christian Democratic (PNTCD) on 1 October suspended Senator Ticu Dumitrescu's membership in the party for one year . On several occasions in September, Dumitrescu criticized the party leadership for procrastination over a draft law on accessing the files of the former communist secret police. He insinuated that PNTCD chairman Ion Diaconescu, deputy chairman Nicolae Ionescu-Galbeni (who also chairs the parliament's commission supervising the Intelligence Service), and other PNTCD deputies want to block access because of their past. A Senate commission has approved an urgent debate on Dumitrescu's draft law but said the debate must await the commission's revisions to the bill. Premier Victor Ciorbea on 1 October said access to the Securitate files will be possible "within two months," RFE/RL's Bucharest bureau reported.

CHISINAU-TIRASPOL NEGOTIATIONS TO TAKE PLACE IN MOSCOW

Moldovan presidential adviser Anatol Taranu says that during Russian Deputy Prime Minister Valerii Serov's visit to Chisinau on 22-23 September, it was agreed that negotiations between Chisinau and Tiraspol will take place in Moscow in the future, RFE/RL's Chisinau bureau reported on 1 October. Taranu told an RFE/RL correspondent that the first round of negotiations in Moscow will be held on 6 October.

MOLDOVAN PARLIAMENT APPROVES AMENDMENT TO DEFENSE LAW

The parliament on 1 October passed an amendment to the defense law stipulating that the defense minister is appointed by the president on the premier's recommendation, Infotag reported. Under the former version of the law, the defense minister was appointed by the parliament on the president's recommendation. Grigorii Bratunov, the chairman of the parliament's Commission for National Security and Public Order, said the amendment will avert situations such as that in 1996, when former President Mircea Snegur dismissed Defense Minister Pavel Creanga without the premier's consent, triggering a constitutional crisis. In other news, Dumitru Diacov, the leader of the pro-presidential For a Prosperous and Democratic Moldova Bloc, said the government must be immediately reshuffled. He threatened to make public the names of ministers allegedly involved in corruption if there are no cabinet changes, BASA-press reported.

BULGARIA CRITICIZES RUSSIA...

Foreign Minister Nadezhda Mihailova on 1 October said Bulgaria is "disturbed" by Russian Foreign Minister Yevgenii Primakov's refusal to meet with her during the UN General Assembly session in New York. Upon her return from the session, Mihailova said the refusal was "indicative" of Moscow's "unwillingness or inability to use...civilized methods" in relations with other states, BTA reported. She said that "civilized countries" conduct "international relations through dialogue and at the negotiating table."

...EXPLAINS RUSSIA'S ABSENCE FROM DEFENSE CONFERENCE

Deputy Foreign Minister Stefan Tarfov on 1 October told reporters that Russia has not been invited to participate in a conference of defense ministers from southeastern Europe because the planned talks on military preparations for NATO membership would be of no interest to Moscow, Reuters reported on 1 October. He pointed out that Russia has no plans to join the organization. BTA reported that the Russian embassy in Moscow has sent a diplomatic note expressing concern over what it described as the recent Bulgarian tendency to restrict Russian participation in regional meetings. The note said that "Russia views the Balkans and southeastern Europe...as a vital sphere of its interests." The conference is due to begin on 3 October with the participation of U.S. Defense Secretary William Cohen.




THE PARADOXES OF PRIVATIZATION


by Paul Goble

Transferring ownership from the state to private persons will not, in itself, guarantee the emergence of a market economy. Indeed, it may not even constitute privatization in the sense of the word typically employed in the West.

That was the unsettling message of Grigorii Yavlinskii, the leader of the Yabloko faction in the Russian State Duma, during his recent visit to Washington. Speaking at the Carnegie Endowment for International Peace, Yavlinskii noted that 82 percent of all enterprises in the Russian Federation no longer belong to the state. But he suggested that at the same time, few are privately owned. In fact, their new "owners" are the old communist-era managers. And those people consider their new possessions to be more like the collective farms of the past than the private enterprises of a market economy. That is, they do not seek to maximize their profit in competition with other firms but rather to maximize their immediate personal wealth and to gain additional subsidies from the state.

In order to line their own pockets, they sell off assets created by others rather than investing in their own enterprises to improve the future position of the firm. As a result, Yavlinskii said, investment in the Russian Federation is likely to decline some eight to ten percentage points this year instead of rising, as Moscow routinely claims. Such disinvestment not only pushes any turnaround in the Russian economy further into the future but also means that any future growth will start at a far lower level and with far fewer available resources than is the case in capitalist countries following a down-turn.

In order to secure additional state subsidies, the new "owners" behave much as they did in the past. They form alliances with state bureaucrats who can provide them with both resources and protection from other owners as well as from other government bureaucrats who may be grouped against them and their allies in the state apparatus.

According to Yavlinskii, such alliances mean that both the "owners" and the bureaucrats with whom they are allied generally oppose any real reform lest it challenge both their incomes and power. And as in communist times, those alliances entail additional costs as well.

Neither the owners or the bureaucrats want to face the prospect of social upheaval that bankruptcies or massive unemployment might produce. As a result, both work to keep enterprises in operation even when the efficiencies of the market dictate that many older and inefficient firms should be allowed to fail and their resources reallocated to better use.

And both work to hide unemployment. Yavlinskii argued that real unemployment in Russia is equal to the number of people not being paid--some 25 percent of the total labor force-- and not to the much lower figure put out by the Russian government. But neither the government nor the firms have the funds to compensate those laid off or the political will to deal with the massive social dislocation caused by such lay-offs.

For all these reasons, Yavlinskii suggested, privatization has not been the panacea that many in both Russia and the West had expected. Instead, privatization--as carried out under Russian conditions--has often had the effect of reinforcing rather than undermining Soviet-styles of economic activity.

But if privatization has not yet led to a free market and a dynamic Russian economy, Yavlinskii implied that it is a necessary, if not sufficient, measure. He also suggested that any retreat from a commitment to private ownership and a free market would be even more disastrous than the current situation.

What Russia needs, Yavlinskii said, is the political will to stand up to the social pressures opposing a shift from collective-farm style ownership to genuine private property. It also requires the state institutions capable of making possible such a transformation, he added.

Until Russia has both, Yavlinskii concluded, its economy and even more its political system will remain mired in their currently disastrous state.


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