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Newsline - October 9, 1997




NEXT YEAR'S BUDGET PRESENTED TO DUMA...

Economics Minister Yakov Urinson and First Deputy Finance Minister Vladimir Petrov addressed the State Duma on 9 October to present the draft 1998 budget before its first reading, RFE/RL's Moscow bureau reported. They argued that the budget is realistic and will help Russia achieve economic growth in 1998. The draft calls for expenditures of 472 billion new rubles ($80 billion), taking into account the planned redenomination of the ruble in January 1998, according to Interfax. Revenues are projected at 340 billion new rubles, with a planned budget deficit of 132 billion new rubles, or 4.8 percent of projected GDP.

...BUT BUDGET COMMITTEE CHAIRMAN NOT IMPRESSED

Following the speeches by Urinson and Petrov, Duma Budget Committee Chairman Mikhail Zadornov of the Yabloko faction reminded Duma deputies that the government has promised imminent economic growth every year since 1995, RFE/RL's Moscow bureau reported on 9 October. Zadornov noted that of the 14 Duma committees that examined the draft budget, only one recommended approving the budget in the first reading. Zadornov acknowledged that the budget is more realistic than the 1997 one, but he questioned some of the assumptions on which it is based. In particular, he expressed doubt that a new tax code can be put into effect by 1 January 1998. Projected revenues in the draft budget are based on that code.

ZYUGANOV CALLS FOR CONCILIATORY COMMISSION, NO-CONFIDENCE VOTE

In a speech to the Duma on 9 October, Communist Party leader Gennadii Zyuganov called for rejecting the budget in the first reading and forming a conciliatory commission representing the government, the Duma, and the Federation Council, RFE/RL's Moscow bureau reported. He repeated his calls for a round table to discuss various government policies, which would include representatives of trade unions, political parties, and the Central Bank as well as government and parliamentary officials. Zyuganov repeated that in a forthcoming Duma session, his faction will support holding a vote of no confidence in the government. After Zyuganov voiced similar plans in a speech to the Duma on 8 October, Yabloko leader Grigorii Yavlinskii questioned the logic of calling for both a no-confidence vote and negotiations with the government.

DUMA DECLARES GOVERNMENT'S PERFORMANCE UNSATISFACTORY

The Duma on 8 October voted by 380 to zero with five abstentions to declare the government's performance during the first nine months of 1997 "unsatisfactory," RFE/RL's Moscow bureau reported. In speeches before the vote, only Our Home Is Russia faction leader Aleksandr Shokhin defended the government's performance, arguing that Russia has made economic progress. Yabloko leader Yavlinskii said a special economic culture has developed in Russia, according to which "banks do not take money from people and invest it in industry; rather, banks take money from the budget and send it to Malta." After the speeches, First Deputy Prime Minister Anatolii Chubais told ITAR-TASS that the government is ready to cooperate with the Duma. But Chubais said Yavlinskii "should remember his own mistakes more often," noting that Yavlinskii predicted two years ago that the government would not bring down inflation.

TALBOTT IN MOSCOW FOR ARMS CONTROL TALKS. U.S. Deput

Secretary of State Strobe Talbott met with Russian Foreign Minister Yevgenii Primakov and Deputy Foreign Minister Georgii Mamedov in Moscow on 8 October, Interfax reported. The START-2 treaty and negotiations on a START-3 accord were the main items on the agenda. The Russian Foreign Ministry said Talbott's visit aims to implement a package of arms control agreements recently signed by Primakov and U.S. Secretary of State Madeleine Albright (see "RFE/RL Newsline," 29 September 1997). Also on 8 October, Talbott met with Duma Speaker Gennadii Seleznev, who indicated that the Duma will ratify START-2 only if experts conclude that the treaty "does not threaten Russia's security." According to the Duma's press service, Seleznev also told Talbott that if NATO had not embarked on expansion plans, the Duma might have ratified START-2 in 1994 or 1995.

INDIAN DEFENSE MINISTER IN MOSCOW

Singh Yadav was upbeat at an 8 October press conference following talks with President Boris Yeltsin and Russian Defense Minister Igor Sergeev the previous day, Reuters and Russian news agencies reported. Yeltsin, who is scheduled to visit India in January 1998, told Yadav that there are "no problems" in Russian-Indian relations. Yadav, who came to Russia primarily for talks on arms sales and military cooperation, also met with Russian Defense Council Secretary Andrei Kokoshin and representatives from the arms exporter Rosvooruzhenie. He is to tour military bases in Moscow and St. Petersburg before departing Russia on 10 October. India is a major buyer of Russian weapons, and Russian government sources indicated that a military cooperation program signed by the two countries in 1994 will be extended beyond 2000, when it is scheduled to expire, "Segodnya" reported on 8 October.

PRESIDENTIAL REPRESENTATION IN CHECHNYA DOWN-GRADED

President Yeltsin on 8 October stripped Security Council Secretary Ivan Rybkin of his duties as presidential representative to Chechnya and appointed one of Rybkin's deputies, Valentin Vlasov, to replace him. Security Council spokesman Igor Ignatev said Rybkin will retain responsibility for negotiations with the Chechen leadership. Rybkin told journalists that in the light of the 43 agreements concluded between Moscow and Grozny, it was logical to downgrade Russia's representation in Chechnya to the level of that in other republics. Rybkin displayed uncharacteristic irritation following the 30 September expulsion from Grozny of the entire Russian federal representation there.

'AVRASIYA' HIJACKERS ESCAPE, FLEE TO CHECHNYA

Two men sentenced to jail terms in Turkey for their role in the January, 1996 hijacking of the ferry Avrasiya in the Black Sea port of Trabzon escaped from jail on 6 October and have fled to Chechnya, according to the "Turkish Daily News" on 9 October. The hijacking staged in an attempt to gain publicity for the victims of the war in Chechnya.

OPPOSITION DOUBTS LEGALITY OF THIRD TERM FOR YELTSIN

Communist Party leader Zyuganov has said presidential spokesman Sergei Yastrzhembskii used "totally groundless" reasoning to argue that President Yeltsin is legally entitled to seek a third term in office, Interfax reported on 8 October. Deputy leader of the Communist Party Valentin Kuptsov and Popular Power faction leader Nikolai Ryzhkov agreed that a third term would be unconstitutional and suggested that Yastrzhembskii's comments were probably intended to test public reaction to a possible Yeltsin candidacy in 2000 (see "RFE/RL Newsline," 8 October 1997). Agrarian Duma faction leader Nikolai Kharitonov called Yastrzhembskii's statements "absurd," adding, "I understand that Yeltsin would like to be president forever, but it is not serious or appropriate for a person of his age to dream of a third term." Constitutional Court Judge Anatolii Kononov remarked that only the court is entitled to make binding interpretations of the constitution.

LUZHKOV SAYS NEW TAX CODE WOULD HURT MOSCOW

Moscow Mayor Yurii Luzhkov says that if the government's proposed tax code is approved, the capital will lose 8 trillion rubles ($1.4 billion) in annual tax revenues, ITAR-TASS reported on 8 October. According to Luzhkov, the code would force Moscow to transfer 70 percent of the taxes collected on its territory to the federal budget, up from 50 percent under current law. He argued that the federal government should increase its tax revenues not by demanding more contributions from the regions but by implementing a policy to boost domestic production. Luzhkov previously complained that the draft 1998 budget would deprive Moscow of compensation payments for the costs of maintaining federal government facilities in the capital. Also on 8 October, Luzhkov met with the U.S. billionaire and philanthropist George Soros and argued that Russia is in need of humanitarian aid.

LENINSK-KUZNETSKII MAYOR ARRESTED

Gennadii Konyakhin, the controversial mayor of Leninsk-Kuznetskii, Kemerovo Oblast, was arrested in Moscow on 8 October on charges of embezzling state property. Following the publication of an investigative series in "Izvestiya" in September, Yeltsin ordered a commission of the Interior Ministry, the Prosecutor-General's Office, and the Federal Security Service to investigate whether "criminals" had come to power in Leninsk-Kuznetskii. Three criminal cases involving Konyakhin were recently opened, according to "Kommersant-Daily" on 9 October. When the mayor flew to Moscow, the Kemerovo Oblast prosecutor reportedly filed embezzlement charges against Konyakhin and informed federal investigators. Liberal Democratic Party of Russia leader Vladimir Zhirinovsky told ITAR-TASS that Konyakhin was in Moscow at his personal invitation and was arrested en route to the Duma to hear a speech by Zhirinovsky.

INVESTIGATORS QUESTION FORMER PRIVATIZATION CHIEF

Investigators from the Moscow Prosecutor's Office on 8 October questioned Former State Property Committee Chairman Alfred Kokh for some two hours, "Kommersant-Daily" reported. Kokh is being investigated for allegedly abusing the powers of his office by accepting $100,000 from a Swiss firm for an unfinished book on privatization. As yet, no criminal charges have been filed against him. The firm is believed to have connections to Oneksimbank, which won several major recent privatization auctions (see "RFE/RL Newsline," 29 September through 2 October 1997). Appearing on Russian Television on 5 October, Kokh said he has finished the book and paid taxes on the $100,000 payment. He has also accused the losers in recent privatization developments of trying to settle scores with him.

PRIMORE GOVERNOR SEEKS SUPPORT FROM FEDERATION COUNCIL

In an appeal to his colleagues in the Federation Council, Primorskii Krai Governor Yevgenii Nazdratenko said federal officials should be held "personally responsible" for discrediting regional authorities, ITAR-TASS reported on 8 October. Nazdratenko argued that at its next session, the Council should ask Yeltsin to consider the issue. He also argued that biased media reports about Primore indicate that "the head of state is being given distorted reports on the situation in the krai, and, I think, not only in our [region]." Moscow-based newspapers and television have frequently reported that Nazdratenko's administration is to blame for persistent energy crises in the krai. On 3 October, Nazdratenko sent a letter to Federation Council Speaker Yegor Stroev arguing that the media are carrying out an "unprecedented campaign to discredit the Primorskii Krai authorities."

AVTOVAZ DIRECTOR OBJECTS TO COMPETITOR'S DEAL WITH FIAT

Aleksei Nikolaev, the president of Russia's largest car manufacturer, AvtoVAZ, says the GAZ factory in Nizhnii Novgorod acted unethically when it signed a recent deal with the Italian company Fiat, "Segodnya" reported on 8 October. Nikolaev argued that GAZ will now assemble types of cars traditionally produced by AvtoVAZ. Meanwhile, the AvtoVAZ board of directors on 2 October agreed to a 10-year plan for paying back taxes and fines estimated at some 8 trillion rubles ($1.3 billion). The company is to pay 100 billion rubles a month toward settling the debt in addition to current monthly tax payments of some 200 billion rubles, according to the 4 October "Kommersant-Daily." A stake of 50 percent plus one share in AvtoVAZ will be transferred to the government and may be sold if the company breaches the payments schedule (see "RFE/RL Newsline," 30 September and 2 October 1997).

BAN ON ETHNIC MOVEMENTS PROPOSED IN DAGESTAN

Unspecified political organizations in Dagestan have called for imposing a ban on political movements representing the interests of the republic's more than 30 ethnic groups, "Nezavisimaya gazeta" reported on 9 October. Advocates of the ban argue that the activities of such movements deepen divisions between ethnic groups. A group of parliament deputies has similarly proposed a ban on political parties active in southern Dagestan in a bid to prevent the escalation of tensions on the frontier with Azerbaijan. On 8 October, Russian Deputy Prime Minister Ramazan Abdulatipov, an ethnic Avar from Dagestan, told Interfax that Moscow must try to avoid repeating in Dagestan the mistakes it made in Chechnya. He said Dagestan is "Russia's main outpost in the south" and the "key to the Caucasus, the Caspian, and the Muslim world."

CIS SECURITY MINISTERS MEET

A session of the CIS Council of Heads of Security and Secret Service Agencies opened in Chisinau on 8 October. Russian Federal Security Service head Nikolai Kovalev told journalists on arrival in Chisinau that the agenda includes terrorism, organized crime, arms and drugs trafficking, and the transit across the CIS to western Europe of illegal emigrants from Southeastern Asia. Kovalev said that foreign intelligence services continue to target the CIS states. He also noted that criminal groups in the various CIS states are integrating faster than the agencies whose aim is to disband them, "Segodnya" reported on 8 October. Addressing the opening session, Moldovan President Petru Lucinschi warned against politicizing multilateral relations among CIS member states, Infotag reported on 8 October.



GEORGIAN INTELLIGENCE TRIED TO FRAME LEADING POLITICIANS

Former businessman Temur Maskhulia told journalists in Tbilisi on 8 October that while he was under arrest earlier this year, senior security officials, including former Security Minister Shota Kviraya, had sought to pressure him into giving false testimony implicating leading politicians, the agency Caucasus press reported. He added that the officials threatened to fabricate charges of treason against him if he did not comply. Maskhulia was asked to testify that Georgian Ambassador to Russia Vazha Lortkipanidze, parliamentary deputy Vakhtang Goguadze, and former Commander-in-chief of Russian troops in Georgia Fyodor Reut were involved in the August 1995 assassination attempt against Eduard Shevardnadze. He was also told to testify that the lion's share of drug-trafficking in Georgia is controlled by Adzhar Supreme Soviet Chairman Aslan Abashidze.

GEORGIAN INTELLIGENCE CHIEF ON TERRORIST INCIDENT

Avtandil Ioseliani told Georgian Television on 8 October that unnamed foreign intelligence services may have carried out the two bomb explosions in the west Georgian town of Zugdidi at the end of September, Interfax reported. A woman was seriously injured in one of the explosions. Alternatively, Ioseliani commented, there may be a link between the explosions and the demand by Georgian displaced persons from Abkhazia for the withdrawal of the CIS peacekeeping force currently deployed in western Georgia. Meanwhile, the Georgian daily "Akhali taoba" has claimed that Georgian President Eduard Shevardnadze's rationale for dividing the National Security Ministry into two separate agencies is intended to undercut the ministry's influence in domestic politics, according to Interfax.

ARMENIAN OPPOSITION ACTIVIST RELEASED

Parliamentary deputy Norayr Khanzadyan, who is the Union for Self-Determination's representative on the Central Electoral Commission, was released from detention on 4 October, Noyan Tapan reported four days later. Khanzadyan had been detained on 1 October in connection with a scuffle between Union for Self-Determination leader Paruir Hairikyan and a former member of the Union, Aramazd Zakarian in the National Assembly building on 18 September (see "RFE/RL Newsline," 6 October 1997). No charges have been brought against Khanzadyan.

AZERBAIJANI PRESIDENT REJECTS CULT OF PERSONALITY

Ramiz Mekhtiev, the head of the presidential administration, summoned government media heads on 5 October to inform them that Heidar Aliyev is "discontent" with the adulation lavished upon him by the local media, Turan reported on 8 October. In particular, Mekhtiev added, Aliyev objects to being referred to as "His Majesty." In an official statement, the presidential press service also castigated the media for engaging in flattery of the president rather than objectively reporting on foreign and domestic policies.

MOVE TO NEW KAZAKH CAPITAL IN DOUBT?

The planned move of the government from Almaty to Aqmola on 23 October is in doubt, an RFE/RL correspondent in Almaty reported on 7 October. The move was originally scheduled to take place on 10 October, but President Nazarbaev postponed it by two weeks in August. Visiting Aqmola on 4 October with Russian Prime Minister Viktor Chernomyrdin, Nazarbaev expressed satisfaction with progress in the construction of new ministries, the parliament, and apartment blocks. He also affirmed that the city will be ready by 23 October. But thousands of apartment buildings are either incomplete or have been built so hastily that they will be unfit for habitation in winter temperatures of minus 50 degrees Celsius. Parliamentary deputies are to be temporarily housed in hotels, government officials in hostels, and technical workers in kindergartens.

KAZAKHSTAN, TURKEY SIGN OIL DEAL

The Kazakh government and the state-owned Turkish oil company TPAO have signed a $750 million contract to develop oil fields in Kazakhstan's Aktyubinsk Oblast, Interfax and the "Wall Street Journal" reported on 9 October. A senior Kazakh official told journalists that the region contains an estimated 45 million metric tons of oil. TPAO and Amoco are to create a joint venture to explore and develop the reserves.

KAZAKH MINERS STRIKE

Several thousand miners and industrial workers in Qaraghandy Oblast went on strike on 8 October, RFE/RL's Almaty bureau reported. The strikers are protesting the planned closure of several coal mines in the oblast.

TURKMEN PRESIDENT BACK IN SADDLE

Saparmurad Niyazov chaired a cabinet session on 6 October to assess the ongoing cotton and grain harvests, Interfax reported. It was Niyazov's first day back at work since undergoing cardiac surgery in Germany on 1 September. Niyazov, who pronounced himself in good shape, also attended a ceremony commemorating the victims of the 1948 earthquake that destroyed Ashkhabad. His mother and brothers were among the victims.




UKRAINE, HUNGARY OPEN NATO MISSIONS

Ukraine and Hungary on 8 October became the first non-NATO countries to establish missions accredited to the Western alliance, ITAR-TASS reported. Ukrainian Ambassador Boris Tarasiuk presented his credentials to NATO Secretary-General Javier Solana during a meeting of the alliance council on 8 October. In his presentation speech, Tarasiuk reaffirmed Ukraine's desire for gradual integration into European and Euro-Atlantic institutions.

UKRAINIAN PARLIAMENT OVERRIDES KUCHMA VETO ON PENSIONS

The Ukrainian parliament on 8 October voted to override a presidential veto of a law that would increase the minimum pension in that country to 70.9 hryvnas ($38) a month, ITAR-TASS reported. President Leonid Kuchma had vetoed the bill saying the government did not have the funds to pay for the increase and that it would "lead the entire budget process into deadlock."

BALTIC ARMY CHIEFS DISCUSS ESTONIAN TRAINING TRAGEDY

Estonian Defense Forces Commander in Chief. Major General Johannes Kert met with his Latvian and Lithuanian counterparts in Riga on 8 October to inform them of the causes of the mid-September accident in which 14 Baltic Peacekeeping Battalion (BALTBAT) troops died, BNS reported. Kert argued that Second Lieutenant Jaanus Karm, the commander of the ill-fated unit, must take responsibility for the tragedy since he had misjudged conditions. Kert also pointed to lack of supervision over the exercises and the violation of safety provisions as the main reasons for the accident. The three army chiefs concluded that control over the observance of discipline during military maneuvers must be tightened. Meanwhile in Tallinn, the security police has announced it considers Karm to be mainly responsible for the deaths of the 14 peacekeepers.

BRITISH TROOPS HOLD MANEUVERS IN POLAND

Some 4,500 troops from the U.K. are holding maneuvers in northwestern Poland, Polish news agencies reported on 8 October. No Polish troops are taking part in the exercise. On a visit to the site of the maneuvers, Britain's junior Defense Minister John Reid reaffirmed London's commitment for Poland to join NATO.

INFLATION RISES IN CZECH REPUBLIC

Consumer price inflation exceeded 10 percent in September for the first time in 26 months, according to the Czech Statistical Office. The rate was put at 10.3 percent, up 0.6 percentage points over August. "Hospodarske noviny" on 9 October quoted a Czech National Bank spokesman as saying the inflation rate is likely to remain around the 10 percent mark for the rest of the year.

SLOVAK GOVERNMENT PROPOSES POLICE "HELPERS" CORPS

Prime Minister Vladimir Meciar's cabinet on 8 October adopted a bill that would establish a "helpers service" for the country's police force. Opposition Christian Democrat and former Interior Minister Ladislav Pittner has voiced his opposition to the bill, which is to be submitted to the parliament. He told "Sme" that the "price of public security should not be the emergence of a police state." Interior Minister Gustav Krajci said the bill would enable designated civilians to wear arm bands and carry special identity cards. He added that the volunteers would be empowered to check identity documents and confiscate weapons. They would be armed with tear gas and truncheons and, in certain cases, would have the right to use handcuffs. The government wants to hire 6,000 volunteers in 1998 and will pay them on an annual basis.

OPPOSITION BOYCOTTS ROUND-TABLE TALKS

The Party of the Democratic Left (SDL) was the only non-governing party to participate in round-table talks with the three ruling coalition members in Bratislava on 8 October. Following the parliament's recent decision not to reinstate Frantisek Gaulieder as deputy, eight opposition parties refused to participate in such talks until the ruling coalition respects the Constitutional Court's decison calling on lawmakers to return Gaulieder's mandate (see "RFE/RL Newsline," 1 October 1997). The agenda of the 8 October talks included the election of the president, the next parliamentary elections, the security situation in the country, and Slovakia's integration efforts. SDL Chairman Jozef Migas said after the two-hour meeting that holding round-table talks without defining goals is "wrong." He added that "it makes no sense and we look ridiculous at home and in the eyes of the world," RFE/RL's Slovak Service reported.

NEW NATO MEMBERS TO CONTRIBUTE 4 PERCENT OF BUDGET?

Citing unnamed NATO sources, the Hungarian daily "Vilaggazdasag" on 9 October reported that an agreement has been reached among NATO members that the alliance's three new member countries--Hungary, Poland, and the Czech Republic--will together contribute 4 percent of the alliance's budget. The daily said this would amount to $12 million annually for Budapest.




SFOR SEEKS TO RESTORE ORDER NEAR DRVAR...

Canadian troops of the NATO-led Stabilization Force were deployed on 7 October to guard a western Bosnian village after Bosnian Croats attacked the homes of Serbian returnees. SFOR said a Croatian official who hit a Canadian soldier with his car was removed from the vehicle and physically restrained by the troops guarding the village of Martin Brod, near Drvar. UN High Commissioner for Refugees (UNHCR) spokesman Kris Janowski said in Sarajevo on 8 October that the violence erupted after the return of 27 Serbs who had fled the Bosnian Croat-held village at the end of the Bosnian war. The UNHCR had organized their return. Janowski said Croatian workmen claiming to have received orders to repair the houses for Croats forced their way into the houses, throwing out the Serbs' belongings and sending the returnees fleeing to a single building in the village.

...AS MOSTAR RADIO SAYS AGREEMENT REACHED

Bosnian Croat Mostar Radio quoted Bosnian Croat police in Drvar on 8 October as saying SFOR troops had erected barbed wire barricades at the entrance to Martin Brod and were barring access to everyone except Drvar police. At a meeting in Drvar, local officials and the UNHCR agreed that the local police will guarantee the security of all people living in Martinbrod. They also agreed that SFOR checkpoints there would be dismantled by 9 October and that the repatriation of former residents will be carried out through agreement between all interested parties. In addition, temporary residence permits for displaced Croats will be canceled if the lists of returnees include the Serbian owners of the homes in which the displaced Croats are residing. The two sides stressed that all necessary conditions must be fulfilled for the return of displaced Croats, mainly to Banja Luka.

SFOR LIFTS BAN ON BOSNIAN FEDERATION ARMY MOVEMENTS

SFOR spokesman in Sarajevo Jan Joosten said on 8 October that following the Muslim-Croatian federation's confirmation that there are no more prisoners of war in the federation, SFOR has lifted its ban on the movement and training of troops from the mainly Muslim Bosnia-Herzegovina Army and from the Bosnian Croat Defense Council. Sarajevo Radio also quoted Joosten as saying that during an SFOR inspection of a civil police station in Mrkonjic Grad , SFOR troops confiscated 10 automatic guns, as well as a considerable amount of other arms and ammunition.

PRO-PALE POLICE REPEL PRO-PLAVSIC OFFICERS

Police loyal to the hard-line Bosnian Serb leadership in Pale early on 8 October foiled attempts by forces loyal to President Biljana Plavsic to seize Interior Ministry facilities in the northern Bosnian towns of Bijeljina, Derventa, Teslic, and Bosanski Brod, SRNA reported. The Pale-based news agency said that "legitimate" Interior Ministry forces were given a timely tip-off from a leader of the "renegade" Banja Luka Public Security Center who did not want to see "fraternal" Serbian blood being shed.

NEW MINES IN JAJCE, EXPLOSIONS IN PRNJAVOR

Banja Luka Srpski Radio on 8 October quoted a local SFOR spokesman as saying new mines have been laid in the Bosnian Croat-held Jajce area. One person lost both legs when one of the mines exploded, the seventh such casualty in recent weeks. A UN International Police Task Force spokesman said that another explosion occurred in the village of Luzani, near Prnjavor, on 4 October following two explosions in the area in September. He confirmed that the bridge over the Sava River to Croatia at Bosanska Gradiska was reopened on 26 September but noted the issue of visas and insurance of vehicles has not been resolved yet. As a result, he said, the reopening of the Bosanska Gradiska border crossing to vehicles has been postponed until final agreement is reached.

OSCE TO POSTPONE ANNOUNCING BRCKO ELECTION RESULTS?

Banja Luka's independent Big Radio has reported that the official results of the local elections in Brcko will be postponed again. The Organization for Cooperation and Security in Europe had announced that the final tally would be announced on 8 October. Teodor Gavric, president of the local electoral commission, said all the votes have been counted and that the reason for the postponement may be the "large number of complaints that the OSCE has received in the meantime."

BOSNIAN CROATS PLEAD NOT GUILTY

All 10 Croats from central Bosnia who handed themselves over to the International Criminal Tribunal for the Former Yugoslavia in The Hague pleaded innocent at their first hearing on 8 October. Four are charged with crimes against humanity and war crimes for heading the Bosnian Croat troops who allegedly killed and tortured Muslim men, women, and children and drove hundreds more from 14 towns in the central Lasva Valley in 1992-1993. The six other suspects are charged with participating in a massacre in the mostly Muslim village of Ahmici, in central Bosnia. If convicted, the 10 face up to life imprisonment (the tribunal does not have a death sentence).

ALBANIA ASKS YUGOSLAVIA TO REOPEN BORDER WITH MONTENEGRO

At an 8 October meeting with Yugoslav charge d'affaires in Tirana Stanimir Vukicevic, Albanian Interior Minister Neritan Ceka requested that Yugoslavia reopen the border crossing point of Hani i Hotit on the shore of Lake Skadar, ATA reported. Ceka informed Vukicevic of measures taken by the Albanian police to strengthen border controls and reestablish order. Vukicevic responded that he would forward Ceka's request to the competent authorities. They also discussed the possibility of opening other border crossing points between Albania and Yugoslavia. Hani i Hotit, the only border crossing point between Albania and Montenegro, was closed as a result of nationwide unrest in Albania last March.

ALBANIAN MAYORS DEMAND MORE INDEPENDENCE FROM CENTER

More than 60 mayors from around the country, meeting in Tirana on 8 October, demanded greater independence from the central government, ATA reported. Albert Brojka, the Mayor of Tirana and the chairman of the National Association of the country's Mayors, proposed that a percentage of income from value-added tax, which was recently raised from 12.5 percent to 20 percent, be transferred to local governments. Meanwhile, workers at the Albanian-Polish shipyard Durres-Gdansk staged a strike on 7 October to demand wage hikes. The Albanians say they are being discriminated against since their Polish counterparts earn 10 times more than they do, ATA reported.

HUNGARIAN FOREIGN MINISTER IN ROMANIA

Laszlo Kovacs and his Romanian counterpart, Adrian Severin, headed the first meeting of the joint commission supervising the implementation of the 1996 basic treaty, RFE/RL's Bucharest bureau reported. The meeting took place in the Romanian capital on 8 October. The commission agreed that representatives of the ethnic Hungarian and Romanian minorities should participate in discussions of the sub-commission supervising the implementation of the treaty's provisions on national minority rights. The nine sub-commissions discussed the "strategic partnership" between the two countries, integration into Euro-Atlantic structures, and the fight against organized crime. Kovacs also met with President Emil Constantinescu.

ROMANIAN GOVERNMENT, MINERS REACH AGREEMENT

Marin Condescu, the leader of the largest miners' trade union, said after his 8 October meeting Prime Minister Victor Ciorbea that a solution has been found to all the miners' grievances (see "RFE/RL Newsline," 7 October 1997). He noted that funding for the six state-owned mining companies has been ensured to the end of 1997 and that a national mining agency overseeing mines still in operation will be set up. Ten mining areas will be turned into "special economic zones." Condescu did not mention the miners' demand for a wage hike, Radio Bucharest reported.

FORMER ROMANIAN PRESIDENT BACKS DEMANDS OF "REVOLUTIONARIES"

Some 500 members of associations representing those who took part in the December 1989 uprising demonstrated in downtown Bucharest on 8 October to protest the government's decision to limit privileges for those claiming to be "revolutionaries," RFE/RL's Bucharest bureau reported. The demonstrators said they will "occupy" one of the capital's main squares until their meeting with Senate Chairman Petre Roman on 9 October. The law on privileges for "revolutionaries" was passed during the presidency of Ion Iliescu, who took part in the 8 October demonstration and denounced the government's intention as a "political diversion." The government argues that many of those enjoying the privileges are not entitled to them. Meanwhile, two former deputy ministers are under investigation for complicity in falsifying "revolutionary certificates."

MOLDOVAN PARLIAMENT DEBATES ELECTORAL LAW

The parliament on 8 October approved the electoral law in its first reading, Infotag reported. The new legislation provides for a proportional system whereby a single nationwide constituency would elect a 101-member parliament. The elections would be held within three months of the expiration of the outgoing legislature's mandate. Parties would have to collect at least 20,000 signatures to register with a new central electoral commission. To gain entry to the parliament, a party would have to receive at least 4 percent of valid votes cast. The law must be approved in its second and third readings by the end of this year, when the mandate of the current parliament ends.

CHISINAU CONSIDERS ENERGY OPTIONS

Deputy Prime Minister Ion Gutu on 8 October said that Moldova's participation in the construction of the Cernavoda nuclear energy complex in Romania is not viable from an economic point of view, RFE/RL's Chisinau bureau reported. An official from the Economics and Reform Ministry told journalists that participation in the Cernavoda complex would involve an investment totaling $ 500 million, which, he said, Moldova does not have. He added that Chisinau would have to pay a higher price for electricity from Cernavoda than that produced in Moldova or imported from other countries. In related news, Infotag reported that Russia's Gazprom company has warned that Moldova will receive only the gas supplies it can afford without applying for credits. Cibotaru said a Moldovan delegation will soon go to Russia for "difficult negotiations" aimed at ensuring "normal supplies" during the coming winter.

BULGARIA ACCUSES RUSSIA OF 'FREE INTERPRETATIONS' IN DIPLOMATIC ROW...

Bulgarian Foreign Ministry spokesman Radko Vlaikov on 8 October accused Russian officials of making "rather free interpretations of some facts while withholding other facts." Vlaikov was responding to Russian Foreign Ministry spokesman Gennadii Tarasov's statement on 7 October that Foreign Minister Yevgenii Primakov's schedule was already full when Bulgarian Foreign Minister Nadezhda Mihailova asked to meet with him at the UN General Assembly Session in New York (see "RFE/RL Newsline," 2 October 1997). Vlaikov said that the meeting had been arranged in advance and that Bulgarian officials had tried repeatedly to confirm it, Reuters reported. Also on 8 October, the Russian Foreign Ministry announced that talks between Russian and Bulgarian diplomats scheduled to take place in Moscow that day have been canceled, Interfax reported.

...AS ALLEGATIONS OF RUSSIAN SPYING ACTIVITIES CONTINUE

Major General Radoslav Peshleevsky, commander of the Bulgarian engineering troops, has denied press reports that he has been recruited by the Russian intelligence services, BTA reported on 7 October. Peshleevsky threatened to sue publications that printed such allegations.




ONE HUNDRED DAYS OF BULGARIA'S CURRENCY BOARD


by Petko Bocharov

One hundred days after Bulgaria introduced a currency board as an emergency measure to restore discipline to monetary policy, officials in Sofia are cautiously optimistic about the effects on the country's economy.

There have been major improvements, explaining why, in contrast to the gloom of three months ago, the prevailing view now is that better times are coming. Even the IMF, which maintains a notoriously austere profile, has expressed satisfaction. Assistant executive director Stanley Fisher recently called Bulgaria's financial stabilization "impressive."

Lost confidence in the country's banks is returning, and private and company deposits in bank accounts are growing. And the foreign currency reserve has tripled to almost 3,8 billion German marks.

Moreover, at the end of September, meetings took place in Sofia between representatives of the government and Moody's, one of the leading consulting companies that define the credit rating of securities and countries. Moody's classification of Bulgaria in 1996 was B-3, which is the lowest grade and in effect means "payment first, then delivery." Now, according to the French bank Paribas and the German investment bank Deutsche Morgan Grenfell, there are strong expectations that Moody's will raise Bulgaria's credit rating to B-1, thus listing it ahead of countries like Turkey, Romania, or Ukraine.

The positive developments strengthen perceptions among the public that the Union of Democratic Forces (ODS), which won a decisive victory over the former communists in the April parliamentary elections, is leading the country in the right direction. Yet no one believes the crisis is over. The wounds inflicted by the former Socialist Party government through its long neglect of reforms are too deep for that.

Bulgarians are bracing for the hardships that are still to come in the reform process. Emil Harsev, a prominent financier who opposed the Currency Board before its implementation, told RFE/RL that the crucial period will be this winter. He says the Bulgarian economy runs in cycles: summer is the season of income, winter the season of expenses. If the board endures the hardship of the cold months, its standing as an instrument of policy will be strengthened for the years ahead, he commented.

The Currency Board was introduced on 1 July, amid high inflation and a deepening economic crisis. It essentially took currency matters out of the hands of the Central Bank.

Harsev, a former deputy governor of the National Bank, says inflation under the currency board has not dropped as low as had been hoped. In January, prices had been rising at a level near hyper-inflation. After the ODS government took power and the currency board was put in place, inflation was about 3.5 percent in July and 5.5 percent in August, instead of the predicted rate of 2 percent.

Prices of consumer goods continue to rise. One reason for this is that privatization has not yet reached the big state monopolies in power supply. Those monopolies deal with the imports of oil, natural gas, and coal; they also own refineries and electrical plants and distribute the products. The result is a "supplier's market" that pushes up inflation.

But Martin Zaimov, the head of the currency board, argues that there is nothing to worry about. Zaimov, who is also vice president of the National Bank, said inflation is and will remain under control. He predicted that the inflation rate will soon fall significantly.

The World Bank apparently shares his optimism. Kenneth Lay, the head of the bank's South-East Europe department, arrived in Sofia at the end of September. His arrival followed the decision, reported at the Hong Kong meetings of the IMF and World Bank, to open negotiations with Bulgaria for a considerable loan.

The author writes regularly for RFE/RL.


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