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Newsline - October 29, 1997




RUSSIAN STOCKS TAKE ROLLER-COASTER RIDE...

The Russian Trading System index rose 3.4 percent on the morning of 29 October after Russian shares lost an average of 20 percent of their value the previous day, ITAR-TASS reported. The plunge on 28 October occurred despite a three-hour halt on the exchange, which was intended to calm the market. According to an RFE/RL correspondent in Moscow, Russian bonds denominated in rubles and foreign currencies also suffered substantial losses. However, government officials and market analysts attributed the decline to turmoil on Wall Street and other world markets, rather than to internal economic or political conditions in Russia. For the last two years, the Russian stock market has posted the world's strongest gains. It was up 160 percent from the beginning of January to 6 October, Reuters reported.

...WHILE OFFICIALS PROMISE TO DEFEND MARKET

Federal Securities Commission Chairman Dmitrii Vasilev cut short an official visit to London because of the sharp downturn on the Russian stock market. On 29 October, he signed an instruction ordering that trading be halted if share values drop by more than 5 percent during a single session, ITAR-TASS reported. First Deputy Prime Minister Anatolii Chubais, speaking in London the previous day, expressed confidence that Russian stocks will post strong future gains, Interfax reported. "The Russian markets held out for a long time and were the last to fall among the emerging markets," he commented. Central Bank Chairman Sergei Dubinin and First Deputy Prime Minister Boris Nemtsov also urged investors not to panic. Nemtsov argued that Russia's economic fundamentals are good and promised that the government and Federal Securities Commission will not allow any "black Tuesdays" or "black Thursdays."

GOVERNMENT APPROVES BUDGET PARAMETERS

The government on 28 October approved the draft 1998 budget parameters agreed by a trilateral commission of government, State Duma, and Federation Council representatives, RFE/RL's Moscow bureau reported. It also approved a package of 10 draft tax laws aimed at increasing revenues in line with new 1998 targets, Russian news agencies reported. The trilateral commission agreed to raise 1998 revenues by 27.5 billion new rubles ($4.7 billion) to 367.5 billion rubles (see "RFE/RL Newsline," 27 October 1997). The proposed tax laws would, among other things, increase the tax on foreign-currency purchases and raise the sales tax on food from 10 percent to 20 percent, the rate levied on other products. In addition, income tax exemptions currently granted to military personnel would be eliminated as of 1 January.

DUMA DELAYS BUDGET VOTE

The Duma Council on 28 October decided to put the revised 1998 budget to a first Duma reading on 12 or 14 November, RFE/RL's Moscow bureau reported. First Deputy Prime Minister Chubais had earlier announced that the budget would receive its first reading on 31 October, and Prime Minister Viktor Chernomyrdin had called on Duma deputies to consider the budget before 1 November. Appearing on NTV, Aleksandr Shokhin, the leader of the pro-government faction Our Home is Russia, argued that the Duma Council delayed consideration of the budget because the Communists and their allies do not want to vote for the budget before 7 November, when demonstrations are planned to mark the 80th anniversary of the Bolshevik Revolution.

TAX CODE DELAYED, BUT NOT WITHDRAWN

Shokhin on 28 October confirmed that the 1998 budget revenues will be based on the tax laws recently proposed by the government, not on a new tax code, as government ministers have previously insisted, RFE/RL's Moscow bureau reported. Duma First Deputy Speaker Vladimir Ryzhkov of Our Home Is Russia said the Duma will consider the package of tax laws on 12 November. Although the tax code appears increasingly unlikely to be adopted by the end of the year, government and parliamentary officials continue to rebuff attempts by Grigorii Yavlinskii's Yabloko faction to have the government withdraw the code. First Deputy Prime Minister Nemtsov told RFE/RL the code will be revised by the trilateral commission that negotiated the 1998 budget.

REGIONS SECURED MANY BUDGET CONCESSIONS...

"Kommersant-Daily" reported on 29 October that regional leaders have secured substantial concessions during the budget negotiations. In addition to making concessions on federal transfers to the regions and funding for supplies to the far north (see "RFE/RL Newsline," 20 October 1997), the federal government agreed to keep in place tax privileges for the republics of Tatarstan and Bashkortostan. Moscow will also receive some compensation payments for the cost of maintaining federal facilities in the capital, although the amount of those payments has yet to be determined. "Kommersant-Daily" argued that the budget concessions to the regions came at the expense of industrial interests, especially the fuel and energy sector. The government needs the support of the regional leaders, who are also members of the Federation Council, in order to win parliamentary approval for the budget.

...BUT 'DONOR REGIONS' STILL NOT SATISFIED

High-ranking officials from several "donor regions," which contribute more to the federal budget than they receive from the center, met in Moscow on 28 October to discuss 1998 budget and tax policy, RFE/RL's Moscow bureau reported. Samara Oblast Governor Konstantin Titov, who also chairs the Federation Council's Budget Committee, told RFE/RL that boosting economic performance will be impossible unless more revenues are allocated to the regions. In particular, the donor regions want a quarter of sales tax revenues (the proposed tax code would allocate all such revenues to the federal government). They also want a greater share of privatization revenues and legislation to force large corporations to pay taxes in the regions in which their branches operate, rather than in Moscow, where most company headquarters are registered. Depending which calculation methods are used, Russia has between 10 and 16 donor regions.

BASAEV NAMED ACTING CHECHEN PREMIER

Before departing for Turkey on 28 October, Chechen President Aslan Maskhadov named former field commander Shamil Basaev as acting prime minister and deputy premier responsible for industry, Russian media reported. Basaev told RFE/RL's Moscow bureau that he stepped down as deputy prime minister in July because of disagreements with Maskhadov over domestic politics. But he said that following a recent telephone conversation, they had "found some common ground." Basaev said his main priority will be to stabilize the internal situation in Chechnya, adding this will require passing a new law on weapons. Maskhadov, meanwhile, told "Kommersant-Daily" of 29 October, that he and Basaev have identical views and that "I cannot work without him."

MOSCOW MAKES CONCILIATORY GESTURES TO GROZNY

Maskhadov's flight to Turkey was delayed for six hours because Russian Federal Border Guard commander General Andrei Nikolaev insisted that the Chechen president undergo customs clearance at another North Caucasus airport, Russian media reported. Russian Prime Minister Chernomyrdin later intervened personally and overruled Nikolaev. The previous day, Russian Interior Ministry troops reopened two checkpoints on the border between Chechnya and Dagestan. The frontier was closed on 25 October following the killing of a Dagestani police official and the kidnapping of eight people. Maverick Chechen field commander Salman Raduev was reportedly behind the kidnapping.

GOVERNMENT SPOKESMEN DEFEND ACQUISITION OF "SUPER-COMPUTERS"

Government spokesman Igor Shabdurasulov on 28 October asked the U.S. not to make an issue of the Russian Atomic Energy Ministry's acquisition of IBM super-computers. Shabdurasulov admitted he is uncertain whether the purchase violates U.S. legislation, but he said the issue was discussed by U.S. Vice President Al Gore and Russian Prime Minister Chernomyrdin in Moscow in September. U.S. State Department spokesman James Rubin had said on 27 October that the U.S. is prepared to compromise if Moscow can prove the computers will be used for civilian purposes, according to AFP. An unnamed Russian Atomic Energy Ministry spokesman told Interfax that the ministry has bought several super-computers for use in nuclear facilities but that the purchase does not contravene U.S. export regulations.

'NOVYE IZVESTIYA' JOURNALIST SACKED

Leonid Krutakov told "Komsomolskaya pravda" on 29 October that the commercial director of "Novye Izvestiya" sacked him after he published an article in "Moskovskii komsomolets" criticizing Security Council Deputy Secretary Boris Berezovskii. According to Krutakov, "Novye Izvestiya" editor Igor Golembiovskii refused to publish that article, which alleged that Berezovskii has diverted hundreds of millions of dollars from the state-run airline Aeroflot. Although Berezovskii has not confirmed that he is helping finance "Novye Izvestiya," he attended a 26 October party celebrating the paper's pilot issue. Golembiovskii told "Komsomolskaya pravda" that Krutakov was asked to resign because he had written an article for a competitor but "not a line" for "Novye Izvestiya." Oneksimbank, which has frequently been criticized in media financed by Berezovskii, is a major shareholder in "Komsomolskaya pravda."

LOCALS PROTEST PLANNED COLONY FOR PRISONERS WITH HIV

More than 6,000 residents of Ardatov, Nizhnii Novgorod Oblast, have signed a petition protesting plans to establish a special prison colony for convicts with the HIV virus, RFE/RL's correspondent in Nizhnii Novgorod reported on 27 October. With nearly 500 registered cases, Nizhnii Novgorod has the third-highest incidence of HIV infection among Russia's 89 regions, after Kaliningrad Oblast and Krasnodar Krai. An estimated 100 prisoners in Nizhnii Novgorod are HIV positive, and officials fear that overcrowded prison conditions could facilitate the rapid spread of the virus. But Ardatov residents say the planned site for the special prison colony is in a residential area, only a few dozen meters from schools. "Rossiiskie vesti" reported on 23 September that law enforcement officials in Pechora, Komi Republic, have decided to create a special prison colony for convicts infected with HIV or tuberculosis.



SIRADEGHIAN ELECTED TO ARMENIAN PARLIAMENT

Vano Siradeghian, the mayor of Yerevan and the controversial chairman of the ruling Armenian Pan-National Movement (HHSh), won the 26 October parliamentary by-election in Hrazdan with 56 percent of the vote, RFE/RL's Yerevan bureau reported . Communist Party candidate Ashot Mikaelian polled 36 percent and independent candidate Ruben Yegorian, considered Siradeghian's main challenger, only 7.5 percent. Voter turnout was some 60 percent. Yegorian, whose elder brother Eduard recently quit the HHSh to form an opposition parliamentary faction, told RFE/RL the election was unfair and that he will submit a list of alleged irregularities to election officials. An unusually large number of senior government officials and police were present at the polling stations.

AZERBAIJAN LINKS CIS INTEGRATION TO KARABAKH CONFLICT

Azerbaijan will not participate in any attempt to achieve greater integration within the CIS until a "just solution" of the Karabakh conflict is reached, Interfax reported on 27 October, quoting a senior government source in Baku. Saying that all CIS member states should be regarded as equal, the official accused Russia of considering the commonwealth as an organization superior to its individual members. He also rejected the proposal to dispatch a CIS peacekeeping force to Nagorno-Karabakh.

POSSIBLE OBSTACLES TO AZERBAIJAN OIL TRANSIT

Speaking on NTV on 27 October, Russian Security Council Deputy Secretary Boris Berezovskii said the beginning of oil shipments from Azerbaijan through the Baku-Grozny-Novorossiisk pipeline is a "shared victory" for Russia and Chechnya and a "stability factor" in Chechnya. But he warned that relations between Moscow and Grozny are still "in crisis." Russian First Deputy Fuel and Energy Minister Sergei Kirienko similarly warned that the agreement between Moscow and Grozny on the tariffs Chechnya receives for the transit of oil is valid only until the end of 1997, according to Interfax. The transit of oil through the pipeline began on 25 October but was halted the next day for 48 hours to coordinate pumping pressure, which differs between the Azerbaijani and Chechen sectors of the pipeline, Turan reported on 28 October.

UKRAINIAN PRESIDENT IN GEORGIA

Leonid Kuchma, who in Tbilisi for a two-day official visit, met with his Georgian counterpart, Eduard Shevardnadze, on 28 October to discuss boosting political and economic cooperation, Russian agencies reported . The two presidents signed a "Declaration of Two," intended as a "counterbalance to unions and alliances within the CIS," according to "Izvestiya" on 29 October. Kuchma dismissed the CIS peacekeeping operation in Abkhazia as "unproductive" and repeated his offer to send Ukrainian peacekeeping troops to the region. He also stressed Ukraine's interest in purchasing Caspian oil from Azerbaijan and in the development of the Traseca transport project linking Central Asia, the Transcaucasus, and Europe.

FIGHTING ON TAJIK-UZBEK FRONTIER

Four Tajik border guards were wounded during the night from 27 to 28 October when their border post was fired on from neighboring Uzbek territory, Russian media reported. Earlier, Uzbek Foreign Ministry spokesman Zafar Ruziev denied Russian media reports that elements within the Uzbek military were aiding and abetting Tajik anti-government forces (see "RFE/RL Newsline," 27 October 1997). On 28 October, a Tajik government delegation headed by Deputy Premier Abdurrahim Azimov was in Tashkent to discuss the incidents. Tajik Presidential Guard commander Gafor Mirzoev told RFE/RL the next day that his troops have "neutralized" the group responsible for the 27 October attack near Tursunzode. Meanwhile, a Russian State Duma delegation visiting Dushanbe told ITAR-TASS that the Russian peacekeeping forces currently deployed along the Tajik-Afghan frontier should remain there as their withdrawal would mean "we lose Central Asia for good," ITAR-TASS reported.

KAZAKH FORMER PREMIER RESURFACES IN PRINT

In an article published in "Finansovye izvestiya" on 28 October, Akezhan Kazhegeldin argued that a degree of state control over the economy is imperative during the initial transition from a planned to a free market economy. But intervention should be limited to "vitally important areas of production," such as housing and food supplies, he commented. Kazhegeldin warned against the emergence of profit-oriented "monopolistic oligarchies" created by a fusion of private and state interests, which he said could cause "chronic instability." In mid-October, Kazhegeldin resigned as prime minister, allegedly on health grounds. President Nursultan Nazarbayev subsequently praised his macroeconomic stabilization policies but slammed his failure to reform the agricultural, industrial, and social sectors.




STOCK MARKET SLUMP HITS REGION

The Tallinn stock market fell 12.46 percent on 28 October, making for a 22 percent decline in the past week. Analysts are divided over whether the current slump on the Estonian market is linked to international trends. In Riga, the index fell some 1.85 percent, while the drop in Vilnius was similar to that in Tallinn. In Warsaw, the share index fell by 9.8 percent. The zloty dropped against the dollar to 3.55, down from 3.44 the previous day. The Prague market was closed for a holiday, but the crown fell against the dollar from 33.25 to 33.63. The Budapest Stock Exchange dropped by 16 percent, which was the biggest single-day loss in its history. The Bucharest index was down 12 percent, while the Ljubljana market dropped 5 percent.

KUCHMA, MARCHUK TO CONTEND 1999 ELECTIONS

Ukrainian President Leonid Kuchma has announced on state television that he will run for a second term in the 1999 presidential elections, provided the country's economic situation does not deteriorate, Interfax reported on 27 October. Former Prime Minister Yevhen Marchuk, who was dismissed by Kuchma in 1996 and is a member of the moderate centrist United Social Democratic Party, has also announced his candidacy. The next day, "Nezavisimaya gazeta" reported that Crimean Tatar activists Mustafa Djemilev and Nadir Bekirov are included on the Popular Rukh party's list of candidates to contend the March 1998 parliamentary elections. Also on 28 October, parliamentary speaker Aleksandr Moroz told ITAR-TASS that Ukraine is not yet ready to abolish the death penalty.

UKRAINIAN ECONOMY CONTRACTS

During the first nine months of 1997, GDP fell by 5 percent compared with the same period in 1996, Interfax reported. But the rate of decline of industrial production has slowed from 6 percent in the first quarter to 2.4 percent for the first nine months. Agricultural output fell by 6.3 percent compared with the first three-quarters of 1996. Consumer prices rose by 6.7 percent, while the comparable figure for last year was 34.8 percent. Foreign trade from January to August 1997 was down 4.5 percent from 1996, at $23.98 billion. Trade with CIS and the Baltic States fell from 63.2 percent of total foreign trade to 53.2 percent.

BALTS TO PONDER RUSSIAN SECURITY OFFER

Presidents Lennart Meri (Estonia) and Guntis Ulmanis (Latvia) are to look carefully at Russia's offer of security guarantees, which they received in writing on 27 October, ETA and BNS reported. Lithuanian President Algirdas Brazauskas has proposed that the three Baltic heads of states meet to discuss the offer. He has also said the presidential Foreign Policy Coordination Council will consider the initiative in the next few days. Meanwhile, Lithuanian Foreign Affairs Minister Algirdas Saudargas told the Polish newspaper "Zycie" that Vilnius will reject the offer. "It is sufficiently clear if we say that we need no such guarantees," he commented. Sergei Prikhodko, Yeltsin's foreign policy adviser, has said Russia expects an "adequate answer" to the offer.

BRAZAUSKAS TESTIFIES IN 1991 PUTSCH TRIAL

Lithuanian President Brazauskas on 27 October gave testimony in a closed courtroom at the trial of six pro-Soviet activists charged with organizing the January 1991 putsch in Vilnius, dpa reported, citing ELTA. Brazauskas was deputy premier and head of the reformed communist Lithuanian Democratic Labor Party at the time of the putsch. He was summoned to the court at the request of the defendants, who include Mykolas Burokevicius, the former head of the Moscow-loyal Lithuanian Communist Party. Brazauskas reportedly said he had little information to offer the court. He also said he did not know who had organized the civilian blockade outside the television tower, where 14 unarmed civilians were shot dead by Soviet troops.

LITHUANIAN PARLIAMENT VOTES TO PERMIT DEPUTY'S ARREST

The parliament on 28 October voted to permit the arrest of Audrius Butkevicius, an independent deputy and former defense minister, who has been charged with corruption. Before the vote, Prosecutor-General Kazys Pednycia produced evidence showing that Butkevicius was impeding an investigation into his case, trying to influence witnesses, and destroying evidence, dpa reported. In August, police caught Butkevicius in the act of accepting $15,000 in cash from a Lithuanian businessman. Butkevicius had allegedly promised to use his influence to press for the closure of a fraud case involving the businessman's company.

BUZEK REVEALS SOME CANDIDATES FOR NEW CABINET

Polish Prime Minister-designate Jerzy Buzek on 28 October announced he has nominated former steel mill chief Emil Wasacz of Solidarity Electoral Action (AWS) to head the key Treasury ministry overseeing privatization. Ryszard Czarnecki, leader of the Catholic group within the AWS, will head the European Integration Committee, while Jacek Janiszewski (AWS) will return to the Agriculture Ministry, where he was once acting head. Freedom Union (UW) leader Leszek Balcerowicz will be a deputy premier and finance minister. Bronislaw Geremek, head of the UW's parliamentary caucus, is slated to head the Foreign Ministry and former Prime Minister Hanna Suchocka (UW) the Justice Ministry. Janusz Onyszkiewicz (UW), a former defense minister, is named to take over that position again. The complete cabinet lineup is expected to be announced on 29 October.

CZECH PREMIER ON COALITION CRISIS

Vaclav Klaus told reporters on 28 October, the 79th anniversary of the founding of the Czechoslovak state, that the Czech Republic is jeopardizing its chances to join NATO and the EU by displaying "political instability". He expressed the hope that the appointment of new interior and foreign ministers will lead to the rapid restoration of stability, CTK reported. At a ceremony marking the anniversary, President Vaclav Havel said the civic solidarity that followed the summer floods shows the "large hidden ethical potential" that "slumbers" in Czech society. He commented that the more solidarity is shown at the grass-roots level, the more it will eventually emerge at the national level as well.

SLOVAK PRESIDENT HOPES FOR RUSSIAN ECONOMIC PROSPERITY

Michal Kovac, in an interview with ITAR-TASS on 28 October, said Slovakia is interested in Russia's implementing market reforms and entering a period of prosperity "as soon as possible." He said relations between the two countries have reached a "high level of development" and have "a wonderful perspective" based on the "further development of democracy and expansion of integration processes in Europe." Kovac also said that Bratislava follows Russian developments carefully and "rejoices at [its] successes and grieves at setbacks."

SLOVAK RULING PARTY ASKS COURT TO RULE ON KOVAC'S TENURE

The Movement for a Democratic Slovakia (HZDS) has called on the Constitutional Court to rule when President Kovac's term in office expires, Reuters reported on 28 October. A spokeswoman for the court said the appeal was submitted by a group of HZDS deputies. She noted there is no legal deadline by which the court has to reach a decision. Kovacs argues his term ends on 2 March 1988, the fifth anniversary of his inauguration, while Premier Vladimir Meciar claims it ends in February 1998, the fifth anniversary of his election.

MECIAR REJECTS DISCUSSING MINORITIES AT GABCIKOVO TALKS

In a letter his Hungarian counterpart, Gyula Horn, Meciar has rejected any discussion of other outstanding bilateral issues at talks on settling the Gabcikovo-Nagymaros dam dispute. Hungarian media reported on 28 October that Meciar said Slovakia is not setting any preconditions for the start of negotiations following the ruling of the International Court in The Hague and that Hungary should also refrain from so doing. The letter came in response to a message from Horn suggesting that the two countries also settle their disputes over the status of minorities and over the reconstruction of a bridge destroyed during World War II.

HUNGARIAN UNEMPLOYMENT REACHES RECORD LOW

According to the Central Statistics Office, unemployment dropped to 8.1 percent in the third quarter of 1997, its lowest level since 1989, Hungarian media reported on 28 October. With 346,000 people registered as unemployed, the figure is 0.5 percent down on the previous quarter and 1.2 percent down on the same period of 1996.




INTERNATIONAL COMMUNITY TO DECIDE FOR BALKING BOSNIAN LEADERS?

Carlos Westendorp, the international community's chief representative in Bosnia, said in Sarajevo on 28 October that major world powers are growing impatient because the Serbian, Croatian, and Muslim members of the joint presidency have not agreed on basic issues such as joint citizenship, a common currency, and state symbols. Hans van den Broek, the EU's commissioner for external affairs, added that the international community may "impose certain measures on the basis of [the] Dayton" agreements if the deadlock continues. Observers noted the Serbs have been the main obstacle to reaching a decision. The governing Bosnian Serb party does not believe in a unified Bosnia and would prefer to partition the country.

MAJOR U.S. ARMS SHIPMENT ARRIVES IN BOSNIA

A U.S. ship delivered some 100 155mm howitzers to Bosnian army authorities at Croatia's port of Ploce on 28 October. Washington sent the artillery pieces in addition to the $100 million-worth of military aid it has promised to the mainly Muslim and Croatian army under the "Train and Equip" program. Critics in western Europe and Russia say that the program upsets the military balance in Bosnia. Washington, for its part, argues there is no balance because the Bosnian Serbs' military structures are still closely integrated with Yugoslavia's.

BOMB HITS BOSNIAN SERB POLITICAL OFFICE

A bomb damaged the headquarters of the ultra-nationalist Serbian Radical Party in Bijeljina on 28 October. There were no injuries. The Belgrade-based Radicals are led by Vojislav Seselj, who led paramilitary units during the wars in Croatia and Bosnia. One week earlier, an explosion in Bijeljina blew up a television transmitter used by hard-liners ("RFE/RL Newsline," 21 October 1997). Meanwhile near Muslim-held Travnik, a sniper killed one ethnic Croat and wounded two more on 27 October. Two Croats were killed by unknown assailants there in August.

MUSLIMS ACCUSE MONTENEGRIN PRESIDENT OF HATE-MONGERING

The Muslim National Council of Sandzak, which represents Yugoslavia's Muslim population, has accused Montenegrin President Momir Bulatovic of spreading "outright hatred and hostility" against Yugoslavia's ethnic Muslims, BETA reported on 28 October. The Council charged that Bulatovic and his backers have repeatedly used inflammatory language at mass meetings to blame Muslims for Bulatovic's loss of the Montenegrin elections on 5 October. The resolution added that state-run Serbian media have helped Bulatovic to spread ethnic hatred.

SKINHEADS INJURE TWO ROMA IN BELGRADE

A group of skinheads severely beat a Romani brother and sister in the Serbian capital on 27 October. Political opposition groups and non-governmental organizations condemned the attack and blamed the government of Yugoslav President Slobodan Milosevic for creating what they called a growing atmosphere of intolerance. The attack came ten days after Belgrade skinheads killed a Romani teenager, which observers called the first murder of a Rom by Serbian skinheads in a hate-crime (see "RFE/RL Newsline," 21 October 1997). Romani spokesmen say skinheads have harassed Roma in Yugoslavia for years.

CROATIAN RIGHTS GROUP ACCUSES TUDJMAN OF RACISM

Spokesmen for the Croatian Helsinki Committee said in Zagreb on 28 October that President Franjo Tudjman made blatantly racist remarks at a meeting of the youth organization of his Croatian Democratic Community two days earlier. The committee charged that Tudjman violated the Croatian Constitution and international agreements when he allegedly referred to the "genetically programmed internal and external enemies of the Croatian state."

MAHATHIR WANTS TO JOIN SLOVENIA ON BOSNIAN MARKET

Malaysian Prime Minister Mahathir Mohamad told his Slovenian counterpart, Janez Drnovsek, in Ljubljana on 28 October that his country is interested in closer cooperation with Slovenia, particularly with its metal industry. He added that Malaysia regards Slovenia's port of Koper as very important for doing business in central Europe. Mahathir also suggested that Slovenia and Malaysia cooperate on the Bosnian market. Kuala Lumpur enjoys close relations with Sarajevo and provided military, economic, and diplomatic support to the Muslims during the Bosnian war.

ALBANIAN DEMOCRATS END HUNGER STRIKE AFTER COMPROMISE OVER TV

Four Democratic Party legislators ended their hunger strike on 28 October after their party reached a compromise with the government coalition at a meeting of the all-party parliamentary media commission (see "RFE/RL Newsline" 22 October 1997). The parties agreed that state radio and television will devote air time to the activities of opposition parties proportional to the percentage of votes each of those parties won in the last elections. The commission also agreed to establish an independent television monitoring body in cooperation with local NGOs, an RFE/RL correspondent reported from Tirana.

DEMOCRATIC PARTY KEEP VETERAN LEADERS

The Democratic Party's National Council has elected a 20-member steering committee, "Rilindja Demokratike" reported on 28 October. Party chairman Sali Berisha will have Genc Pollo, his former presidential press spokesman, as his deputy. Ridvan Bode, another party leader who was prominent in Berisha's government, is secretary-general. Berisha said he wants to begin a dialogue with other conservative parties, stressing that "anti-communism unites us." Observers noted, however, that most other conservative parties are unlikely to accept overtures from the Democratic Party as long as Berisha is its leader.

OWNER OF ALBANIAN PYRAMID GETS FIVE YEARS

A Tirana court on 27 October sentenced Maksude Kadena, owner of the Sude pyramid investment scheme, to five years in prison. Kadena was arrested and charged with fraud in January, one month after her pyramid scheme collapsed. Investigators said some 20,000 people invested a total of $60 million in the scheme. Kadena will have to serve only a total of three years and four months because she turned herself in under an amnesty program.

ROMANIAN 'REVOLUTIONARY' SETS HIMSELF ABLAZE

One of the "revolutionaries" on hunger strike in Bucharest set himself ablaze on 29 October, Mediafax reported. He was taken to the hospital but refused medical care and left the premises shortly after. The "revolutionaries" belonging to the group headed by Dan Iosif are threatening to follow his example, with one striker setting himself on fire each day. On 28 October, the "revolutionaries" belonging to the UNORD association ended their hunger strike following the signing of a protocol with representatives of the ruling coalition. The protocol provides for setting up commissions composed of coalition and UNORD representatives to review the government-proposed amendments to the law on benefits for the "revolutionaries."

YUGOSLAV DEFENSE MINISTER IN ROMANIA

Pavle Bulatovic and his Romanian counterpart, Victor Babiuc, met in Bucharest on 27 October and signed a military cooperation agreement, RFE/RL's bureau in the Romanian capital reported. Bulatovic emphasized that the accord is not directed against any other state. He also met with Foreign Minister Adrian Severin and the chairmen of the parliamentary Defense, Public Order, and National Security Commissions.

FOREIGN INVESTMENT IN ROMANIA

The Agency for Development on 27 October announced that foreign investment in the country since 1990 totals $3.4 billion. An RFE/RL correspondent in Bucharest quoted economic analysts as saying this amount is far lower than in other former communist countries. Also on 27 October, visiting USAID director Brian Atwood said the U.S. will increase assistance for Romanian economic reforms above the $35 million granted in 1997. He also said USAID intends to set up in Romania an information center on accelerating privatization.

RUSSIAN STATE DUMA SPEAKER IN MOLDOVA

Gennadii Seleznev, who is on a three-day visit to Moldova, said after talks with President Petru Lucinschi on 28 October that Russian parliamentary factions will finish examining the basic treaty with Moldova in mid-November. He said he that he believes the treaty, initialed in 1990, will be ratified by the end of 1997. Chairman of the Transdniester Supreme Soviet Grigorii Marakutsa told journalists after his meeting with Seleznev in Tiraspol that the separatists are opposed to the ratification of a document worked out seven years earlier, before the split between Tiraspol and Chisinau. He also said Tiraspol wants to participate in the drafting of a new treaty together with Russia "and Moldova," RFE/RL's Chisinau bureau reported.

BULGARIA WANTS TO KEEP KOZLODUY OPERATING

The government has appealed to international lenders to agree to the continuation of operations at the aging Kozloduy nuclear power plant, citing economic hardships, RFE/RL's Sofia bureau reported on 27 October. In 1993, Bulgaria agreed to close four of the six units at the plant by the end of 1997 in exchange for a $26 million loan.

BULGARIA ADMITS ROLE IN INTERNATIONAL DRUG TRAFFICKING

An Interior Ministry official on 28 October said more than 1,600 Bulgarian citizens have been involved in drug smuggling and 112 Bulgarian firms used as "covers" for international drug trafficking, Reuters reported. Bozhidar Popov told journalists that international criminal groups are involved in those operations. He also said growing drug consumption in Bulgaria is contributing to crime, including murders.




WHEN STATES LOSE CONTROL


by Paul Goble

Diplomats have never found it easy to resolve conflicts. But in recent years, they have faced an ever more daunting obstacle to making peace: the increasing ability of individuals and groups to sabotage whatever accords their governments may agree to.

Nowhere has this problem been greater than in post-communist conflict zones such as the southern Caucasus and the former Yugoslavia. In both regions, the power and authority of political leaders are relatively weak, many individuals and groups in the population are well armed, and many of those groups enjoy the direct or covert support of other governments that benefit from conflict situations.

Such factors reduce the effectiveness of traditional diplomacy except when it is backed by force. But even when they have not prevented diplomatic negotiations, they have defined how governments choose to participate in talks.

Indeed, those factors are probably more important in determining what diplomacy can achieve and what it cannot than is the "extreme nationalism" that outsiders usually invoke to explain why no agreements seem to be possible. But because representatives of major outside powers sometimes do not take those factors into account when they attempt to intervene diplomatically, they often unintentionally lead the governments directly involved to behave in ways that preclude rather than produce peace.

Efforts by the international diplomatic community to resolve the conflict over Nagorno-Karabakh are perhaps the clearest example of that predicament. Neither Baku nor Yerevan is fully in control of its own population, much of which is deeply committed to prolonging the conflict until their particular goals are achieved. Groups in both countries have been willing to undermine efforts to reach agreements in the past, sometimes by passive resistance and sometimes by the use of violence, including attacks on individuals and on economic infrastructure such as pipelines and power networks.

Nor does Yerevan have much leverage over the Karabakh Armenian leadership, which has enormous resources, including the possibility of violence, to undermine any agreement. As a result, some members of the Armenian leadership have been reluctant to agree to anything that might either cost them popular support or ignite violence against themselves. Some Azerbaijanis, for their part, have been willing to support authoritarian measures by their own government in order to create a situation whereby an agreement might be possible, one that would allow oil to flow and to enrich their country.

The fundamental disagreement between the three conflict parties on the relative merits of a "phased" as opposed to a "package" solution to the conflict further complicates the international diplomatic effort to achieve a lasting peace in the region.

Meanwhile, the situation in Bosnia-Herzegovina suggests that, even in an age when non-governmental groups are playing an increasingly large role, the diplomacy of states can achieve a great deal if it is backed by another major resource of today's nation state: the use of force.

NATO-led troops on the ground in Bosnia-Herzegovina have ended most of the violence and given both diplomats and governments there the possibility of dealing with the situation in a non-violent way. This application of force is, of course, by no means certain to solve the situation in the former Yugoslavia. But it has restricted the activities of independent individuals and groups and thus given the states a chance to act in a more traditional way.

The contrast between the cases of the southern Caucasus and the former Yugoslavia has highlighted the importance of building strong political institutions. Unless they exist or have the chance to grow with some protection from outside, individuals and groups living inside those states may make it impossible for anyone to make peace and move on to a better future.


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