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Newsline - October 15, 1997


First Deputy Prime Minister Anatolii Chubais announced on 15 October that Prime Minister Viktor Chernomyrdin will resign if the State Duma approves a vote of no confidence, after which "everything will be in the hands" of President Boris Yeltsin, Russian news agencies reported. Speaking to a meeting of the State Property Ministry, Chubais said that "deputies in several weeks will have either to drop their decision or prepare for new [parliamentary] elections." He added that government experts calculate that a no-confidence vote could mean that Russian companies' shares trading on European financial markets lose $300-400 million in value. The same day, First Deputy Fuel and Energy Minister Sergei Kirienko warned that a no-confidence vote would harm the economy by causing a 30-50 percent drop in share values for Russian energy companies, ITAR-TASS reported. The Duma is to debate the confidence motion on 15 October.


Appearing on NTV on 14 October, Duma Speaker Gennadii Seleznev, a prominent Communist, warned that if Prime Minister Chernomyrdin steps down, Yeltsin could appoint Chubais prime minister. Chubais is far more disliked by the left opposition in the Duma deputies than is Chernomyrdin. The constitution gives the president the right to dissolve the Duma if deputies refuse three times to approve his nominee for prime minister. Interfax quoted Seleznev as saying that Duma deputies "are prepared to work and find common ground with the prime minister," who, according to Seleznev, supports many of the Duma's positions. "The worst injustice is that by removing the prime minister we will still have to deal with the same deputy prime ministers and ministers with whom the differences are the greatest," he added.


The Duma on 15 October rejected a proposal by Liberal Democratic Party of Russia (LDPR) leader Vladimir Zhirinovsky, which would have allowed deputies to cast secret ballots on the upcoming confidence motion, ITAR-TASS reported. Zhirinovsky has announced that the LDPR faction will not support the no-confidence motion. His proposal would have allowed government opponents to vote against the motion without losing face. However, Duma procedures require open voting on confidence motions. Communist deputy Igor Bratishchev said the communist faction will insist on a roll-call vote.


Grigorii Yavlinskii's Yabloko faction, which has repeatedly called for voting no confidence in the government, is at odds with communist deputies over the wording of the motion to be submitted to the Duma, RFE/RL's Moscow bureau reported on 15 October. Yabloko and the Communists have proposed different drafts of the statement, which outlines why the Duma is dissatisfied with the government. Reuters quoted Yavlinskii as saying that the Communists' motion criticizes market reforms, while Yabloko believes the government should do more to establish a market economy. If Yabloko's 46 deputies back the no-confidence motion, it is expected to pass. It is unclear whether the Communist, Popular Power, and Agrarian factions can find enough allies from other factions or independents to attain the necessary 226 votes if Yabloko and the Communists are unable to agree on an acceptable wording.


The Federation Council on 15 October adopted a resolution calling for cooperation between the president, government, and both houses of the parliament. The resolution says that the upper house shares the concerns of Duma deputies over Russia's current condition and the implementation of economic reforms. It calls for a "round table" representing all branches of government, political parties, regional leaders, and trade unions. (Communist politicians and their allies have repeatedly called for such a round table.) Although the resolution does not directly address the upcoming no-confidence vote in the Duma, Federation Council Speaker Yegor Stroev and other influential members of the upper house told journalists on 15 October that Russia would not benefit from a government crisis. Noting that he recently met with Communist Party leader Gennadii Zyuganov and Seleznev, Stroev predicted that the crisis will be resolved, RFE/RL's Moscow bureau reported.


An unnamed government official told ITAR-TASS on 15 October that if the Duma is dissolved and new parliamentary elections called, the procedures for conducting those elections are likely to be changed. The official said Yeltsin could issue a decree eliminating the current system of proportional representation whereby half of the 450 Duma deputies are elected. Kremlin strategists believe that proportional representation benefits opposition parties and that pro-government candidates have better prospects if they campaign in single-member districts. Neither Yeltsin nor the government has the right to change the law on parliamentary elections, adopted in 1995, without parliamentary approval. Article 90 of the constitution stipulates that the president cannot issue decrees that contradict federal laws.


Russian Security Council Secretary Ivan Rybkin, Nationalities Minister Vyacheslav Mikhailov, and the chairman of the Duma Committee on Nationalities, Vladimir Zorin, addressed a closed Duma session convened on 14 October to consider two draft accords on Russian-Chechen relations. Rybkin stressed the need for "great patience" in the negotiating process and expressed regret that Grozny had decided not to send a delegation to attend the hearings. He called on the "legally elected Chechen parliament" to engage in a dialogue with the Duma. But in Grozny, the Chechen parliament issued a statement affirming that Chechnya's sovereignty is "permanent and not subject to division." The statement also warned against attempts to "drag Chechnya into Russia," Interfax reported. In an interview in "Nezavisimaya gazeta" on 15 October, Chechen First Deputy Prime Minister Movladi Udugov stressed again that by signing the 12 May peace treaty, Russia formally acknowledged Chechnya is an independent state.


The Moscow city government will stop paying maintenance costs for federal facilities if compensation payments for the capital are not added to the planned 1998 budget expenditures, Mayor Yurii Luzhkov announced on 14 October. Luzhkov charged that the plan to deprive Moscow of the compensation payments is a "political measure" taken by some government officials against him, Russian news agencies reported. He called for signing contracts between city and federal institutions on maintenance payments for federal facilities. In addition, the Moscow Property Committee is to draft regulations on federal institutions' rent payments whereby Moscow would reduce its contributions to the federal budget if federal institutions fell into debt to the city.


Major-General Vyacheslav Ovchinnikov, the head of the prison department of the Interior Ministry, says some 1,179 Russian convicts have HIV (the virus that causes AIDS), an almost fourfold increase over 1996, ITAR-TASS reported on 14 October. Ovchinnikov said 74,000 prisoners are infected with tuberculosis. Yeltsin has proposed that the Duma amnesty some prisoners, including those infected with tuberculosis, although opponents have warned that such an amnesty could lead to a major outbreak of tuberculosis in Russia. Ovchinnikov also expressed doubt that a rapid transfer to the jurisdiction of the Justice Ministry will solve the main problem of the prison system, which, he said, is a lack of financing, Reuters reported. But Justice Minister Sergei Stepashin told journalists the same day that the transfer will be completed by the end of 1998 (see "RFE/RL Newsline," 21 August and 13 October 1997).


Ovchinnikov also announced on 14 October that 846 Russian prisoners are currently on death row, Interfax reported. He predicted that the number of criminals sentenced to death could grow to 5,000 over the next three years, although he noted that no executions of Russian prisoners have been carried out since Yeltsin declared a moratorium in August 1996. In his recent speech to the Council of Europe summit, Yeltsin said Russia will continue to observe a ban on capital punishment in accordance with recommendations of the Council of Europe (see "RFE/RL Newsline," 13 October 1997). But Russian courts may still hand down death sentences. A court in the Jewish Autonomous Oblast on 14 October sentenced two men to death for planning and carrying out a hired killing.


Governor Yegor Stroev, the speaker of the Federation Council, continues to benefit from the way the gubernatorial campaign in Orel Oblast is being conducted, an RFE/RL correspondent in Orel reported on 14 October. Only Stroev and collective farm head Vera Yenina have been registered for the 26 October election. Supporters of two other would-be candidates have appealed to the Orel Oblast Court. Those candidates are Vladimir Isakov of the Liberal Democratic Party of Russia and Vladimir Kapustyanskii, who is supported by the regional branch of Yegor Gaidar's party Russia's Democratic Choice. Although the court is legally obliged to resolve the case within 72 hours, court hearings have dragged on for 12 days. The delay helps Stroev, since unregistered candidates may not engage in campaign activities. Valerii Savin, the chairman of the Orel Oblast Duma's Legislation Committee, told RFE/RL that the case is likely to reach the Supreme Court eventually.


The Justice Ministry of the Republic of Khakassia has restored the registration of the Evangelical Lutheran Mission in the republic, the Keston News Service reported on 10 October. Khakassian authorities recently revoked the mission's registration, citing Russia's new religion law (see "RFE/RL Newsline," 3 October 1997). The Justice Ministry reversed the decision following complaints by two pastors working for the mission. But in a meeting with the pastors, Nikolai Volkov, the Khakassian official in charge of religious affairs, pledged to continue trying to close down the mission and warned the pastors not to seek help from outside the republic. According to Pastor Vsevolod Lytkin, Volkov said staff working for Prime Minister Chernomyrdin had called his office to inquire about the case. The mission continues to hold Lutheran services.


Russian Foreign Ministry spokesman Valerii Nesterushkin on 14 October condemned Turkish media statements alleging Russia has "aggressive intentions toward Turkey and the eastern Mediterranean," Interfax reported. The "Turkish Daily News" on 11 October had quoted Russian Ambassador to Greek Cyprus Georgii Muradov as saying that if Turkey attacked ships carrying S-300 missiles to Cyprus via the Turkish straits, Moscow would consider such an attack a "reason for war." Two days later, ITAR-TASS quoted Greek Deputy Foreign Minister Ioannis Cranidiotis as saying the S-300 anti-aircraft missiles will be deployed on Cyprus only "after the summer of 1998," which, he said, allows time for the demilitarization of the divided island. Under the original purchase agreement, the S-300s were to be delivered to Cyprus in early 1998.


Arkadii Ghukasyan, the president of the unrecognized Nagorno-Karabakh Republic, held talks in Moscow on 13 October with Duma Speaker Seleznev and the leaders of four Duma factions, including Gennadii Zyuganov of the Communists, Russian media reported. In an interview in "Kommersant-Daily" on 15 October, Ghukasyan said he met with "understanding" at the talks. At the same time, he stressed the Russian Foreign Ministry has "a monopoly" on mediating a solution to the Karabakh conflict and regards the Organization on Security and Cooperation in Europe's Minsk Group as the optimal forum for such mediation. He also said he neither shares nor approves Armenia's current "superconstructive" approach to resolving the Karabakh conflict. Meanwhile, the Karabakh presidential press service on 14 October issued a denial that Ghukasyan had said in an interview with Ekho Moskvy that Karabakh "is ready to submit to Azerbaijan's authority," Noyan Tapan reported.


During a week-long visit to Baku, Vakha Arsanov held talks with Prime Minister Artur Rasi-Zade and Deputy Premier Abbas Abbasov to discuss economic cooperation, in particular Azerbaijani assistance in restoring the Chechen oil, power-generating, and machine-building sectors, Turan and Russian agencies reported. Before departing for Tbilisi on 14 October, Arsanov met with President Heidar Aliev, who called for a peaceful solution to all conflicts in the Caucasus. Arsanov and Aliyev also discussed the possibility of building an oil export pipeline from Grozny through Georgia to the Black Sea.


At meetings in Strasbourg on 10-11 October on the sidelines of the Council of Europe summit, Eduard Shevardnadze (Georgia), Heidar Aliyev (Azerbaijan), and Petru Lucinschi (Moldova) affirmed their support for Ukrainian President Leonid Kuchma's proposal to convene a summit of Baltic and Black Sea leaders in Crimea in 1999. Kuchma made the proposal in Vilnius in early September at a meeting of CENTRAL AND EASTERN EUROPEan leaders. In a statement released by the Azerbaijani Foreign Ministry on 14 October, the four presidents called for greater cooperation among themselves in order to build a "stable and secure Europe." Georgia, Azerbaijan, and Ukraine created an informal alignment in late 1996 as a counterbalance to the CIS.


Meanwhile, Kuchma told journalists in Almaty, where he arrived on 14 October for an official visit, that the CIS "in its current form" has exhausted itself as an institution, ITAR-TASS reported. Kuchma was particularly critical of the customs union of four countries within the CIS, which, he said, is a serious obstacle to trade within the commonwealth as a whole.


Also on 14 October, Leonid Kuchma met with his Kazakh counterpart, Nursultan Nazarbayev, Russian agencies reported. At a joint press conference, Nazarbayev characterized bilateral relations as "amicable" and affirmed that the two countries have the same views on all global problems, according to Interfax. He also said that Kazakhstan will consider any option for exporting its oil, including via Ukraine. The two presidents signed a declaration on bilateral cooperation, and five inter-governmental agreements were signed, including one designating an area of Kazakhstan in which parts of Ukraine's Zenit rockets will fall back to earth. Several Kazakh Senate members, including Engels Gabbasov, protested that accord at a meeting with Kuchma on 15 October, RFE/RL's Almaty bureau reported. Gabbasov said he opposes allowing Ukraine or any other CIS state to use Kazakh territory for military experiments.


The 2,000 Achisay Polymetal plant workers prevented by police from continuing their protest march to Almaty have refused an offer by the governor of Southern Kazakhstan Oblast to pay some of the wage arrears they are demanding, RFE/RL's Almaty bureau reported on 15 October. The protesters continue to hold out for full payment of back wages totaling 100 million tenges (some $1.35 million). They warn they will seek the ouster of President Nazarbayev if their demands are not met by 16 October. The plant's administration has begun paying wage arrears from January and February to staff members not taking part in the protest march.


Nazarbayev on 14 October issued a decree naming Baltabek Quandiqov, the director of the Kazakhstan Kaspishelf Consortium, as president of Kazakhoil, RFE/RL's Almaty bureau reported. Observers had predicted that Nazarbayev's son-in-law Timur Kuligov, who is deputy head of Kazakhoil, would be promoted to that position following the 10 October appointment of the company's former director, Nurlan Balgimbaev, as prime minister. Also on 14 October, Grigorii Marchenko, an economist tasked with creating a national stock market, resigned because of delays in launching the market, Reuters reported.


Addressing the opening session of the parliament on 14 October, Askar Akaev said attracting private investment is one of the government's top priorities over the next three years, ITAR-TASS reported. Increased investment is one of the main pillars of the 1998-2000 economic stabilization program to be drawn up by the government and the IMF. Akaev noted that GDP grew by 19.2 percent over the first nine months of this year and exports by 10 percent. At the same time, he noted that trade with other CIS states has fallen by 20 percent. He warned that the government will cease privileged subsidies to large and medium-sized enterprises in 1998. More than 50 percent of all the country's enterprises are either idle or unprofitable.


Speaking at a press conference in Ashgabat on 14 October at the end of Iranian Foreign Minister Kamal Kharrazi's two-day visit, Turkmen Foreign Minister Boris Shikhmuradov said Turkmenistan will not offer for tender oil and gas deposits located on the border between the two countries' sectors of the Caspian, Interfax reported. Shikhmuradov said Ashgabat and Tehran will jointly exploit those deposits with the possible participation of foreign companies. The two foreign ministers also affirmed their support for the creation of a coalition government in Afghanistan in which all warring factions would be represented, ITAR-TASS reported.


Independent Radio Twist resumed broadcasting on 15 October following protests by the opposition and the payment of what the Slovak Telecommunication agency said the station owed, Slovak media reported. Radio Twist co-owner Andy Hryc joined opposition parties in saying that the shutdown was politically motivated (see "RFE/RL Newsline," 14 October). Hryc promised, however, that the action will have no impact on the radio's independent stance, which has been criticized by Premier Vladimir Meciar.


Alyaksandr Lukashenka on 14 October issued a decree limiting the tax exemptions for Ford Motor Company investments there to five years, Belarusian Radio reported. Earlier, Lukashenka has issued a decree, approved by the parliament, granting those exemptions without any cut-off date. In other news, Lukashenka's government has found itself in another dispute with Moscow. Minsk wants to impose highly restrictive "security fees" on the transit of cars from the West to Russia, but Russia opposes that measure, ITAR-TASS reported on 14 October. The new regulations are likely to be discussed when Lukashenka meets with Russian President Boris Yeltsin in Moscow on 22 October at a summit that will also include Kazakhstan's Nursultan Nazarbayev and Kyrgyzstan's Askar Akayev.


According to Kyiv's Studio One Plus One television on 14 October, Kyiv hopes to attract private capital to pay for the retrieval and sale of thousands of tons of metal now lying in the contaminated zone around the Chornobyl nuclear power plant. The television station did not indicate how the metal would be cleaned or where the funds for the project might come from.


The parliament on 14 October approved by 61 to 21 votes the law on customs tariffs, ETA and BNS reported. In a compromise between the opposition and the governing coalition, the law allows the government to levy customs duties on specified goods for six months. Initiated by the coalition rural parties, the bill has long been a source of controversy. Advocates maintain the legislation will protect local producers and is necessary (even if the tariffs themselves are not) for Estonia's membership in the EU and World Trade Organization. Opponents say the bill will cause the price of foodstuffs to rise and will harm Estonia's image abroad. Estonia imports roughly half of its foodstuffs, of which two-thirds come from the EU. Since Tallinn has free trade agreements with Latvia, Lithuania, and Ukraine, the tariffs will most likely impact on food imports from the U.S., Russia, and Poland.


Lithuanian Deputy Minister of Internal Affairs Romas Kilikauskas has sharply criticized Belarus for not preventing illegal immigrants from Third World countries from crossing into Lithuania, an RFE/RL correspondent reported on 14 October. Kilikauskas was speaking at an international conference in Prague on measures to prevent illegal migration to and within Europe. He noted that Belarusian President Alyaksandr Lukashenka recently backed out of signing a cooperation agreement with Lithuania and other countries to prevent illegal migration across Belarus. Kilikauskas said the "vast majority" of illegal immigrants enter Lithuania from Belarusian territory. Vilnius demands the right to send them back to Belarus, he said.


Solidarity Electoral Action (AWS) has named the 57-year-old academic Jerzy Buzek as its candidate for prime minister, Western news agencies reported on 15 October. The previous day, the AWS and the Freedom Union denounced as "illegal" a contract signed on 12 October by the outgoing Polish government calling for the purchase of missiles from Israel worth $600 million. The two parties said they will reverse the deal after they assume power. The U.S. has strongly opposed that deal.


Czech President Vaclav Havel and his Hungarian counterpart, Arpad Goncz, declared in Prague on 14 October that there are "many good reasons" for their countries and Poland to expand cooperation as they move toward NATO membership, CTK reported.


The parliament on 14 October rejected the government's proposal that the 16 November referendum include only the question on NATO accession (see "RFE/RL Newsline," 14 October 1997), Hungarian media reported. The opposition is insisting that the plebiscite include both the question on accession and two questions on land ownership by foreigners. Also on 14 October, the government announced it will ask the Constitutional Court to clarify whether the court's 13 October decision excludes the possibility of conducting the referendum on NATO accession alone. Meanwhile, US Ambassador to NATO Robert Hunter said in Budapest that it is Hungary's internal affair to choose how to demonstrate its commitment toward NATO membership.


Croatian and Bosnian negotiators failed on 14 October in Zagreb to reach an agreement on Bosnia's use of Croatia's Adriatic port of Ploce. Croatia rejected a U.S. proposal for Bosnia to have a long-term free-trade zone in the port, which is Bosnia's natural outlet to the sea. The issue has bedeviled relations between Zagreb and Sarajevo for several years. Croatian authorities fear that Bosnia may seek to annex Ploce, which Croatian politicians cannot accept. The Bosnian authorities, for their part, will not cede transit rights to Croatia through Bosnia's coastal fishing village of Neum, which bisects Dalmatia, without concessions by Zagreb over Ploce.


A spokesman for the Croatian Democratic Community (HDZ) said in Mostar on 14 October that his party does not accept the results of the September local elections. The spokesman said it is "absurd" that the HDZ received a majority of the total votes cast but won only a minority of the seats on the city council. Officials from the Organization on Security and Cooperation in Europe, which supervised the vote, have promised a recount. But U.S. Ambassador to Bosnia Richard Kauzlarich said in Mostar that he does not expect the recount to produce different results from the first tally, an RFE/RL correspondent reported from Mostar. Meanwhile in Split, "Feral Tribune" on 13 October published what it called new evidence that Croatian President Franjo Tudjman agreed with the Belgrade leadership in 1991 to partition Bosnia.


James Pardew told Worldnet Television in Washington on 14 October that the Bosnian Serb army (VRS) remains stronger than the Bosnian Federation's military, despite Washington's "Equip and Train" program to aid the latter. Pardew denied charges made in the former Yugoslavia and in some Western media that the U.S. program has tipped the balance in favor of the Muslims and Croats. He charged that the VRS remains superior to its rivals because it is "just an extension" of the Yugoslav military, on which it can call for assistance at any time.


Officials of the Russian gas monopoly Gazprom said in Moscow on 14 October that they may suspend deliveries to Yugoslavia if that country does not pay at least part of its $250 million debt to Gazprom, Belgrade media reported. Observers noted that the suspension of gas deliveries would coincide with the onset of winter. Meanwhile, Yugoslav Deputy Prime Minister Nikola Sainovic and Serbian Prime Minister Mirko Marjanovic held talks in Moscow with Prime Minister Viktor Chernomyrdin, but no details of the discussions have been released to the press.


The Serbian Interior Ministry on 14 October announced that "Albanian separatists mounted an armed terrorist attack" with automatic rifles and grenades on a police station near Pec, in Kosovo. Property was damaged but no one injured. This is the third attack on that station this year and one of many armed assaults since January on Serbian government buildings in various localities across Kosovo. The Kosovo Liberation Army has claimed responsibility for most of the incidents.


A local court in Tetovo on 14 October sentenced both Mayor Alajdin Demiri and City Council President Vehbi Bexheti to two-and-a-half years in prison. The court ruled they had violated a Constitutional Court order in July by refusing to remove an Albanian flag from the city hall. The Constitutional Court had earlier ruled that only the Macedonian flag could be flown from public buildings under most circumstances. In September, ethnic Albanian officials in Gostivar were sentenced on similar charges (see "RFE/RL Newsline," 18 September 1997). Ethnic Albanians make up about 20 percent of the total population of Macedonia but form a compact majority in the western part of the country.


Milan Kucan said in Ljubljana on 15 October that his country's election the previous day to a seat on the UN's most important body is a form of international recognition for what he called Slovenia's achievements in world affairs. Kucan added that his country now has both an opportunity to present its views to the world and a responsibility for international crisis spots. In the 14 October vote in New York, Slovenia beat out Macedonia for the non-permanent seat held by a country from Eastern Europe.


The Democratic Party on 13 October issued a declaration condemning the sacking of university rectors and their alleged replacement by Socialist Party loyalists, "Rilindja Demokratike" reported. The Democrats claim that Prime Minister Fatos Nano himself fired the rectors in violation of the principle of university autonomy. It is unclear how many of Albania's seven rectors are affected by the apparent purge. At the National Opera and Ballet, Director Agron Xoxe began a hunger strike on 15 October to protest his dismissal, which, he says, is politically motivated. At the State Control Commission, 41 commission members were dismissed on 13 October. Meanwhile, "Rilindja Demokratike" reported that the Prosecutor-General's Office has launched proceedings against some 300 people involved in recent anti-government protests.


Prosecutor-General Shkelqim Gani on 14 October dropped charges against communist-era President Ramiz Alia, former Interior Ministers Hekuran Isai and Simon Stefani, and former Prosecutor-General Qemal Lame. The previous Democratic government had charged the four with genocide and crimes against humanity in connection with the persecution and killing of dissidents who tried to flee the country illegally. Gani said he based his decision on a recent Supreme Court verdict pardoning all other 32 senior ex-Communists whom the Democrats had sentenced on the same charges. The Court ruled that the ex-Communists cannot be sentenced on such charges because their actions were not criminal under the law in force at the time.


Former President Sali Berisha on 14 October accepted an invitation from Nano to participate in the international aid donors' conference on Albania, scheduled to take place in Rome on 17 October. Observers said Nano extended the invitation to help offset the bad impression the government made in September when President Rexhep Meidani refused to let Berisha on the plane carrying Meidani and Italian leaders to the funeral of Mother Teresa in Calcutta.


President Emil Constantinescu, in an 14 October address on nationwide radio, urged the country to overcome "misunderstandings, confusion, and unnecessary tensions," RFE/RL's Bucharest bureau reported. Constantinescu said Foreign Minister Adrian Severin would have to resign if his allegations on foreign agents in political parties and the media proved inaccurate. Constantinescu also referred to the ongoing hunger strike of " 1989 revolutionaries," who are protesting the government's intention to amend the law granting them various privileges. Constantinescu, who met with the protesters on 13 October, said their situation is critical and must be tackled "with maximum seriousness." He said society is indebted to the protesters and must honor their past deeds as well as help them out of their difficult economic situation.


Following Constantinescu's appeal, Prime Minister Victor Ciorbea met with the protesters, Radio Bucharest reported. A spokesman for the "revolutionaries" said Ciorbea had pledged to withdraw the amendment to the law submitted earlier that day to the Chamber of Deputies. Dan Iosif, a counselor to former President Ion Iliescu and a leader of the protesters, said the protesters will end their strike only if they receive assurances that a joint commission of representatives of the "revolutionaries" and the government will examine the case of each "revolutionary" to verify that he qualifies for the privileges. Four protesters have so far been hospitalized during the nine-day hunger strike.


Several thousand members of the Alfa trade union confederation marched in Bucharest on 14 October to protest declining living standards. Former President Iliescu and other leaders of the Party of Social Democracy in Romania joined the protest. Union leader Bogdan Hossu told Vlad Rosca, chief of the government's office for relations with the unions, that the government must take immediate measures for social protection. He said the unionists are "fed up with theoretical discussions" and with the incompetence of some ministers. Hossu handed Rosca a long list of demands, RFE/RL's Bucharest bureau reported.


Ion Ciubuc met with his Russian counterpart, Viktor Chernomyrdin, in Moscow on 14 October to discuss the 22-23 October CIS summit in Chisinau and bilateral economic relations, RFE/RL's Chisinau bureau reported, citing an official government press release. Meanwhile, opposition leaders accused President Petru Lucinschi of attempting to make Moldova politically and economically subservient to Russia. Former President Mircea Snegur said the holding of the CIS summit in Chisinau is proof of Lucinschi's goal. Iurie Rosca, the leader of the Christian Democratic Popular Front, said the Chisinau CIS summit and the CIS security heads' recent meeting in the Moldovan capital show Lucinschi is trying to bring about the country's " incorporation into a Russian-dominated economic, political, military, and informational sphere."


Valeriu Pasat on 14 October met in Tiraspol with Igor Smirnov, the leader of the breakaway Transdniester region, ITAR-TASS reported. The two leaders discussed confidence-building measures in the security zone separating the two sides' troops. According to the news agency, the talks concentrated on the agreement mediated by Russian Deputy Prime Minister Valerii Serov during his September visit to Moldova, whereby the security zone set up in 1992 would be reduced in size. ITAR-TASS noted this would do away with the need to bring Ukrainian peacekeepers to the security zone, despite the accord with Kyiv on the presence of those troops.


Bogomil Bonev told RFE/RL on 14 October that his country has developed a strategy for combating illegal immigration. Bonev, who is attending the international conference in Prague on illegal immigration, said Bulgaria has already implemented the recommendations of earlier meetings of European interior ministers on the issue. He said Sofia has harmonized the country's legislation with that of other states and introduced visa restrictions for nationals of countries considered to be sources of illegal immigration. Bonev expressed the hope that the Czech Republic will not take "hasty measures" to introduce visa restrictions for Bulgarian citizens. This was a reaction to Czech Interior Minister Jan Ruml's earlier statement that his country is considering introducing restrictions for citizens of some East European states.


by Michael Wyzan

The European Commission's decision to recommend that Estonia, rather than Latvia or Lithuania, be among those countries invited to begin EU accession negotiations has been criticized by Lithuanian officials, who claim the decision was based on outdated data. While Lithuania's economy is in some respects lagging behind those of the other two Baltic States, Vilnius is beginning to close the gap, especially with Latvia.

At the end of 1996, Lithuania's economy was growing faster than Latvia's, its inflation was almost identical to Latvia's (and below Estonia's), and its unemployment rate lay between those of its two Baltic neighbors. However, it remained poorer and more dependent on trade with the CIS. And it also had a substantial budget deficit (about 3 percent of gross domestic product), while Estonia had a tiny surplus and Latvia only a small deficit.

In 1996, Lithuania's GDP grew by 3.6 percent, compared with 4.3 percent in Estonia and 2.3 percent in Latvia. Consumer prices rose by 13.1 percent from December 1995 through December 1996; the equivalent figures were 15 percent in Estonia and 13.2 percent in Latvia. Unemployment in Lithuania in December 1996 was 6.2 percent, compared with 4.1 percent in Estonia and 7.2 percent in Latvia. In the same month, Lithuania had an average monthly wage of $173, Estonia $260, and Latvia $242.

In 1996, 40.5 percent of Lithuania's imports came from the EU and 36.2 percent from the CIS; the equivalent figures for exports were 33.4 percent and 45 percent. By contrast, only 17.5 percent of Estonia's imports in 1996 originated in the CIS, while 25.2 percent of its exports went there. Lithuania received only $41 in cumulative foreign direct investment per capita from 1989 to 1996, compared with $516 in Estonia and $310 in Latvia.

There has been little change in the countries' performance so far this year. During the first quarter of 1997, Lithuanian GDP was 2.4 percent above the level in the same period of1996--similar to Latvia's growth rate, but well below Estonia's. Lithuanian inflation in the 12 months to August 1997 was 8.7 percent, compared with10.8 percent in Estonia and 8.6 percent in Latvia.

The most recent unemployment figures available are 5.4 percent in Lithuania and 7.3 percent in Latvia in August and 4.7 percent in Estonia in July. The average monthly gross wage in July was $215 in Lithuania, $250 in Estonia, and $230 in Latvia.

Lithuania shares with Estonia large and growing trade and current account deficits. In the first quarter of 1997, Lithuania had a $232 million current account deficit, compared with $134 million during the same period in 1996. Through the first two quarters, the trade deficit was $825 million, whereas it was $500 million during the first half of 1996.

One way to assess a country's economic development is to examine the foreign reserves of the central bank: if those funds are rising, inflows elsewhere in the balance of payments are more than making up for unbalanced current transactions. At the end of August, the Bank of Lithuania's reserves (including gold) were at a post-independence high: $1.09 billion, or the equivalent of three months of imports. Estonia has also experienced foreign-reserve growth this year, despite an even faster increase in its current account deficit.

The growing current account imbalance is one of the main reasons why the Lithuanian government has decided to jettison its currency board and fixed exchange rate. IMF Managing Director Michel Camdessus, visiting Vilnius on 3 October for the Bank of Lithuania's 75th anniversary celebration, described the board as a "useful straight jacket" and called for tight monetary policy once a more flexible regime is in place.

If economic performance does not markedly distinguish Lithuania from Estonia, what about progress on structural reform? In assessing Lithuania's merits as a potential candidate for EU membership, the European Commission stressed poor financial discipline at enterprises, a backward agricultural sector, and a weak banking system. It also cited the need for further progress on price liberalization, large-scale privatization, enterprise restructuring, and bankruptcy proceedings.

The government, for its part, stresses that privatization of all but the biggest enterprises is complete and that the financial system weathered the banking crisis in mid-1995.

As a report card on the areas in need of further improvement in Lithuanian economic policy, the European Commission's assessment is useful. Less convincing, however, is its argument that Estonia is so far ahead of Lithuania (and Latvia) in those areas that the EU should begin negotiations only with the former. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria.