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Newsline - November 11, 1997




RUSSIA, CHINA PRESS IRAQ TO COOPERATE WITH UN

Meeting in Beijing on 10 November, the foreign ministers of Russia and China, Yevgenii Primakov and Qian Qichen, called on the Iraqi leadership to resume cooperation with the UN weapons inspectors, Russian media reported. They also called for restraint on the part of "all nations concerned" in order to preclude a recourse to arms. On 11 November, Russian presidential press spokesman Sergei Yastrzhembskii likewise criticized Baghdad's obstruction of the UN weapons inspectors but added that Russia "decisively" opposes using Iraq's defiance of the UN Security Council "as a cover for military strikes against Baghdad and Iraq," Western agencies reported. LF

YELTSIN VISITS CHINA'S NORTHEAST...

On 11 November, President Boris Yeltsin spent the last day of his China visit in the northeastern city of Harbin, which was the center of the country's Russian community last century, when Russia helped build the Chinese Eastern Railway. Yeltsin met with the 50 or so Russians who remain in the city. Yeltsin said he went to Harbin to help develop economic relations between his country and China. With a population of some 9 million, Harbin ranks as the fifth largest city in China and is a major industrial center situated close to the frontier with Russia. BP

...AFTER SONG AND DANCE IN BEIJING

Reuters quotes Yeltsin's spokesman Yastrzhembskii as revealing that President Jiang Zemin sang Russian songs and danced with Yeltsin's daughter and adviser Tatyana Dyachenko to the strains of Tchaikovsky's "Sleeping Beauty" at a state banquet in Beijing on 10 November. Also participating in the festivities were Russian First Deputy Prime Minister Boris Nemtsov and Chinese Deputy Prime Minister Li Lanqing, who reportedly sang "Moscow Nights" together. But at a press conference on 9 November, the two appeared out of harmony when Li claimed they have much in common but was interrupted by Nemtsov's pointing out that "we Russians are democrats." Nemtsov and Li did, however, salvage a multi-billion dollar deal for Russia to help construct a nuclear power plant in China. A final agreement is expected to be signed by the end of 1997. BP

CENTRAL BANK MEASURES DESIGNED TO RESTORE CONFIDENCE...

Central Bank Chairman Sergei Dubinin and First Deputy Prime Minister Anatolii Chubais announced on 10 November that recent turmoil on the Russian stock and bond markets prompted the Central Bank to impose "temporary" measures, RFE/RL's Moscow bureau reported. The bank raised the annual refinancing rate from 21-28 percent and commercial banks' reserve requirements for foreign currency from 6-9 percent. Appearing on NTV, Dubinin said the "preventive" measures, along with a new exchange rate policy, are designed to increase trust in the ruble and "make purchases of foreign currency unprofitable" (see "RFE/RL Newsline," 10 November 1997). He added that the Central Bank's gold and foreign-currency reserves, which totaled $22.6 billion as of 1 November, are sufficient to keep the exchange rate stable. LB

...BUT MARKET CONTINUES TO FALL

The Russian Trading System Index declined by 8.3 percent on 10 November following the announcement of the new Central Bank measures, and leading Russian stocks continued to decline in value the following day. The most liquid corporate stocks dropped by 15 percent or more, according to "Kommersant-Daily" on 11 November. Russian treasury bills and longer-term government bonds also declined on 10 November. It was unclear why the steep declines on the stock market did not lead to a halt of the Russian Trading System. The Russian Federal Securities Commission recently announced that trading will be halted if average share values decline by more than 5 percent in a single session. A few days later, officials said declines of at least 7.5 percent will lead to a halt. LB

IMF OFFICIAL IN MOSCOW

After meeting with Chubais, Dubinin, Prime Minister Viktor Chernomyrdin, and other top officials, IMF First Deputy Managing Director Stanley Fischer on 10 November praised the decision to raise interest rates. He said the move dispelled potential doubts about the Russian government's commitment to stable inflation levels and exchange rates, Russian news agencies reported. Fischer confirmed that the IMF believes the crucial task for the Russian government is to tighten control over budget revenues and expenditures. He added that a recently delayed $700 million loan issue to Russia will not be released before early 1998. Meanwhile, Chubais told reporters that the government has drafted a plan to "radically" improve tax collection. He gave no details, saying Chernomyrdin is expected to approve the plan soon. LB

DUMA COMMITTEE APPROVES TAX LAWS, REVISED BUDGET

The State Duma Budget Committee on 10 November recommended that the lower house of the parliament approve a package of tax laws and the revised 1998 budget in the first reading, ITAR-TASS reported. The government recently submitted the tax laws, which are intended to provide extra revenues to cover increased 1998 spending projections. Those increases were approved during recent negotiations between government and parliamentary representatives (see "RFE/RL Newsline," 29 October 1997). The Duma Council on 11 November announced the lower house will consider the tax legislation and the budget in the first reading at a 13 November plenary session, ITAR-TASS reported. LB

MEDIA SPIN ON BEREZOVSKII'S DISMISSAL

Media outlets close to former Security Council Deputy Secretary Boris Berezovskii continue to speculate that his dismissal could have grave consequences for his main rivals, First Deputy Prime Ministers Chubais and Nemtsov (see "RFE/RL Newsline," 6 November 1997). Russian Public Television news commentator Sergei Dorenko on 8 November argued that by firing Berezovskii, Yeltsin has left Chubais and Nemtsov with no one to complain about or blame for policy failures. NTV anchor Yevgenii Kiselev made similar remarks during a broadcast the following day. "Nezavisimaya gazeta," which is partly financed by Berezovskii's LogoVAZ group, argued on 10 November that "however you look at it, Berezovskii's dismissal is advantageous most of all for Berezovskii himself." In contrast, Nikolai Svanidze of state-run Russian Television, which is close to Chubais, on 9 November cited various Western commentators as praising the decision to sack Berezovskii. LB

COMMANDER ANNOUNCES CUTS IN INTERIOR MINISTRY TROOPS

Colonel-General Leontii Shevtsov, the commander of the Interior Ministry troops, announced on 10 November that the number of troops subordinated to that ministry will be cut to 220,000 by 1999, ITAR-TASS reported. The Interior Ministry troops have already been reduced from 440,000 in 1992 to 257,000 today, Shevtsov said. "Kommersant-Daily" reported on 11 November that plans are under way to reorganize and change the functions of forces subordinated to the Interior Ministry, the Emergency Situations Ministry, and the Federal Border Service. Citing an unnamed Defense Ministry source, Interfax reported on 8 November that Defense Council Secretary and Chief Military Inspector Andrei Kokoshin has been discussing restructuring plans with top officials from those bodies as well as from the Defense Ministry. LB

SERGEEV SAYS MOLDOVAN FIGHTER PLANES CAN'T CARRY NUKES

Defense Minister Igor Sergeev on 10 November denied that MiG-29C jets recently sold by Moldova to the U.S. can carry nuclear weapons, Russian news agencies reported. The U.S. has purchased 21 MiG-29C fighter jets from Moldova in order to prevent "rogue states," such as Iran, from buying them (see "RFE/RL Newsline," 5 and 6 November 1997). U.S. Defense Secretary William Cohen claimed the jets are capable of launching nuclear missiles. Sergeev dismissed that claim as an "outright lie," saying hardware enabling the Moldovan MiGs to carry nuclear weapons was removed in 1989. A statement released by the Russian Air Force corroborated Sergeev's remarks. LB

LUZHKOV SUES 'RUSSKII TELEGRAF'

Moscow Mayor Yurii Luzhkov has filed a libel lawsuit against the newspaper "Russkii telegraf," the mayor's office told Interfax on 10 November. Arkadii Murashev, a member of Yegor Gaidar's party Russia's Democratic Choice, is quoted in the newspaper's 28 October issue as saying Luzhkov is the "biggest entrepreneur in the city, who has everyone else under his thumb." Luzhkov's court appeal claims the accusation is false and has damaged the mayor's honor, dignity, and business reputation. He is demanding that the newspaper publish either a retraction or proof of the accusation. LB

VLADIVOSTOK MAYOR ANNOUNCES RESIGNATION

During a live radio address on 11 November, Viktor Cherepkov surprised local observers and politicians by announcing that he will soon resign and call new mayoral elections, RFE/RL's correspondent in Vladivostok reported. He told journalists later that after leaving office, he plans to continue to fight local corruption and to write his memoirs. Cherepkov, a longtime political enemy of Primorskii Krai Governor Yevgenii Nazdratenko, was elected mayor in 1994 but ousted by Nazdratenko later that year. Since being reinstated by presidential decree in September 1996, Cherepkov has continued to clash with Nazdratenko's supporters. Most recently, he rebuffed an attempt by the krai legislature to remove him from office. Some observers have charged that the rivalry between Cherepkov and Nazdratenko has exacerbated Primore's economic problems, including rampant wage arrears and frequent energy crises. LB

SOBCHAK HAS SURGERY IN PARIS

Former St. Petersburg Mayor Anatolii Sobchak underwent heart surgery in Paris on 10 November, Interfax reported. Sobchak's wife, Duma deputy Lyudmila Narusova, told the news agency that the former mayor is in satisfactory condition and plans to return to St. Petersburg following his recovery. She denied Russian customs agents' statements to ITAR-TASS that Sobchak and Narusova had flown to New York. Law enforcement officials want to question Sobchak in connection with a corruption investigation against his former associates. The Prosecutor-General's Office told Interfax that since no charges have been filed against Sobchak, he is not prohibited from traveling abroad. Investigators have not been allowed to see him since 3 October, when he fell ill during an interrogation. LB

CHECHNYA IMPOSES ISLAMIC DRESS FOR WOMEN

Female students and women working in the state sector in Chechnya must in future conform with the Islamic dress code, Vice President Vakha Arsanov announced on Chechen television on 10 November. Managers who fail to enforce this requirement will be dismissed. Three days earlier, Arsanov banned the production and sale of alcoholic drinks in Chechnya, according to Interfax. LF

CHERNOMYRDIN MEETS WITH TATAR PRESIDENT

Prime Minister Chernomyrdin met with Mintimer Shaimiev in Moscow on 10 November to discuss the economic situation in Tatarstan and cooperation between the Tatar and federal governments, RFE/RL's Kazan bureau reported. Russian government spokesman Igor Shabdurasulov told journalists later that Chernomyrdin has called for drafting an economic recovery program for Tatarstan's debt-ridden KamAZ truck factory, Russian agencies reported. A Russian government delegation to Vietnam on 17 November will include KamAZ management representatives. Vietnamese and Japanese companies have recently expressed interest in concluding joint ventures with the plant. LF



GEORGIAN AUTHORITIES TRY TO PREVENT FUGITIVES' CONGRESS

Several thousand police were deployed around the Philharmonia building in Tbilisi on 11 November to prevent a congress of representatives of the ethnic Georgians forced to flee Abkhazia and South Ossetia during the fighting in both regions from 1990-1993, CAUCASUS PRESS reported. Two of the congress's organizers were detained by police, while the meeting has convened in other, smaller premises. Georgian President Eduard Shevardnadze had on 10 November criticized the congress, whose delegates want to protest the Georgian leadership's failure to achieve political settlements of either conflict that would allow them to return home. They also intend to demand Shevardnadze's resignation. LF

ARMENIAN RULING PARTY BACKS PRESIDENT'S KARABAKH POLICY

Vano Siradeghyan, the chairman of the Armenian Pan-National Movement (HHSh), told an RFE/RL correspondent in Yerevan on 10 November that the movement has pledged its support for President Levon Ter-Petrossyan's strategy for resolving the Karabakh conflict. Ter-Petrossyan met behind closed doors on 8 November to discuss the peace process with the movement's board and the leaders of the five smaller parties aligned with the HHSh in the ruling Hanrapetutyun coalition. Siradeghyan said the Armenian leadership's decision not to reveal details of the latest peace plan proposed by the Organization on Security and Cooperation in Europe's Minsk group "plays into the hands of the opposition. " But he added that it is "premature" to disclose particulars. LF

ARMENIAN SECURITY MINISTER OPPOSES UNILATERAL CONCESSIONS

Interior and Security Minister Serzh Sarkisyan told journalists in Yerevan on 10 November that he favors an "honorable peace" with Azerbaijan that is not based on unilateral concessions, RFE/RL's Yerevan bureau reported. Sarkisyan, who was born in Nagorno-Karabakh, downplayed suggestions of a rift between the president and the power ministers over how best to resolve the conflict. Sarkisyan also said President Ter-Petrossyan's decision in November1996 to merge the Interior and Security Ministries has contributed to a reduction of the shadow economy's activities and a substantial increase in tax collection, according to ARMENPRESS. LF

ARMENIAN GOVERNMENT REVISES ECONOMIC FORECAST

The Armenian Finance and Economics Ministry has revised its forecast for 1997 following the government's failure to meet macroeconomic targets in the first ten months, RFE/RL's Yerevan bureau reported. GDP growth has been revised downward from 5.7 percent to 3.3 percent. Annual inflation is now expected to reach 21 percent, while a 10 percent rate was originally forecast. The ministry has also proposed that the government cut budget expenditures by 11 percent or 17 billion drams ($34 million) since the volume of international loans is lower than expected. The proposed cutbacks will largely affect government investments and expenditures other than social entitlements. LF

BULGARIA WANTS TO BUY, RE-EXPORT AZERBAIJANI OIL

Visiting Foreign Minister Nadezhda Mikhailova signed a protocol on regular consultations with her Azerbaijani counterpart Hasan Hasanov, Turan reported on 10 November. Mikhailova discussed with both Hasanov and President Heidar Aliyev the possibility of Bulgaria's purchasing Azerbaijani oil and the transportation of Caspian oil to Europe via Bulgaria. Hasanov agreed that some Azerbaijani oil exported via the Western pipeline to the Georgian port of Supsa could be shipped by tanker to Bulgaria, according to CAUCASUS PRESS. Mikhailova also said Bulgaria wants to accede to the transport agreement concluded by Azerbaijan, Georgia, and Ukraine within the framework of the TRASECA project. LF

KARIMOV SAYS UZBEKISTAN FOLLOWS ITS OWN PATH

Uzbek President Islam Karimov said in an interview published in "Izvestiya" on 11 November that Uzbekistan is not following any particular model of development but rather is discovering "its own potential." He said his policies are leading to a gradual change in the mind-set of the people, which will eventually allow greater social freedoms. Currently, "order and free elections" are most important, he noted. With regard to Uzbekistan's estrangement from Russia, Karimov denied that development was "by design." He noted that Russia usually conducts trade by barter but that Uzbekistan is interested in cash. BP

KYRGYZSTAN SETS UP INVESTMENT AGENCY

Kyrgyzstan has established an Agency for Foreign Investments, Interfax reported on 10 November. The new agency is aimed at managing "important sectors of the national economy" and is a condition for receiving a $44 million loan from the Asian Development Bank. In other news, Prime Minister Apas Jumagulov criticized the delays in adopting the 1998 budget, saying it will have a "negative effect on the economic situation in the country." The budget foresees a deficit of 4.2 percent, compared with a projected 1997 deficit of 5.6 percent. The budget will be increased by 253 million som ($15 million) to total 7.84 billion som, half of which is targeted for the public sector. The parliament recently rejected the first draft of the budget. BP




BALTIC PRESIDENTS SAY "NO" TO MOSCOW...

The presidents of the three Baltic States have formally rejected Russia's offer of security guarantees in a statement echoing the position already expressed by the countries' Foreign Ministries. "Unilateral security guarantees do not correspond to the spirit of the new Europe," they declared after their semi-annual summit in the Lithuanian resort of Palanga on 10 November . At the same time, the three leaders welcomed Russia's intention to improve relations with the Baltics. They also stressed that Estonia, Latvia, and Lithuania are equally ready to begin EU membership talks in 1998. JC

..WHILE BALTIC PREMIERS PRESS FOR EU ENTRY IN HELSINKI

Meanwhile in the Finnish capital, the Latvian and Lithuanian premiers were lobbing hard in a bid to persuade their Nordic counterparts to support the simultaneous start of EU entry talks with the Baltics, BNS reported on 10 November. Guntars Krasts stressed the Latvian position that Baltic unity will be endangered if only Estonia is admitted to such talks. His Estonian colleague, Mart Siimann, supported simultaneous negotiations but added that the Baltics still believe "one is better than none." Finland continues to support the European Commission's recommendation that only Estonia begin entry talks, while Sweden and Denmark say they will propose that Latvia and Lithuania be included in the first wave. JC

BIGGEST DROP TO DATE ON TALLINN STOCK EXCHANGE

The TALSE index plummeted nearly 20 percent on 10 November, the biggest drop in its 18-month history, ETA reported. During the turbulence of the past few weeks, the index has lost more than half of its value. Analysts say the most recent slump was caused by continued panic selling among investors. Shares in the Tallinn Pharmaceuticals Plant fell 35.5 percent within the first hour of trading, following claims in a local newspaper that the company lied about its ventures in Russia. Stocks in the banking sector followed the trend, with Hoiupank suffering the biggest loss (28 percent). JC

GERMAN EXPERT SEES HOPE FOR UKRAINIAN PRIVATIZATION

A senior analyst at Deutsche Bank Research told RFE/RL on 10 November that despite the apparent impasse between President Leonid Kuchma and the parliament over privatization, there may still be some forward movement, even though large-scale privatization is likely to remain stalled until after the March 1998 elections. Jurgen Conrad said that Kuchma and lawmakers may reach a compromise about the pace of privatization either through the president's sacrificing privatization chief Volodymyr Lanoviy or through a compromise on some other issue. PG

BELARUSIAN OPPOSITION LAUNCHES CHARTER-97

Some 100 prominent Belarusian political, cultural, and academic figures have signed a new manifesto, Charter-97, to promote democracy in their country, RFE/RL's Belarusian Service reported on 10 November. Modeled on the Czechoslovak Charter-77, issued 20 years ago in Prague, the new group seeks to unite opposition to President Alyaksandr Lukashenka and to seek the establishment of democracy in Belarus. PG

POLISH PREMIER OUTLINES PROGRAM, WINS CONFIDENCE VOTE

Prime Minister Jerzy Buzek outlined his program to the parliament on 10 November and won a 260 to 173 vote of confidence in his new government, PAP reported. Buzek said his government will pursue four major goals: improving living standards, reforming government structures, increasing national security, and reinforcing moral values in society. He said that his government is committed to "make up for time lost" during the previous left-of-center government and to make sure that 1997 will be "remembered as the year when we began to repair the country and made a final break with a bad past." PG

OFFICIALS SAY IRAQ CAN'T USE POLISH PLANE FOR GERM WARFARE

Officials at the WSK Mielec factory in Poland told PAP on 10 November that reports in the London "Sunday Times" suggesting the Iraqi government has adapted a Polish crop-dusting plane in order to engage in germ warfare are implausible. The officials said the plane is noisy, slow, and easily detected, rendering it unsuitable for that purpose. PG

CZECH PREMIER SAYS ECONOMY IS GROWING

Prime Minister Vaclav Klaus told a Washington press conference on 10 November that the Czech Republic's economy is growing, albeit at a slower rate that he expected. He said that the trade union demonstration against his government on 8 November reflects disappointment about the country's economic situation but does not represent a crisis or a threat to his leadership or his party. Klaus said he expects to lead his Civic Democratic Party in the next elections, which he said will not take place before the year 2000. PG

CZECHS MARCH AGAINST RACISM

Many Czech ministers and parliamentary deputies joined some 5,000 people in a 10 November protest against the murder of a Sudanese student by a Czech skinhead, CTK reported. From his hospital bed, President Vaclav Havel sent a message to the demonstrators deploring what he called the "government's obvious deficiency in paying insufficient attention to the problem" of racism in Czech society. PG

SLOVAK PRESS STEPS UP CAMPAIGN AGAINST NEW TAX

Newspapers in Bratislava on 10 November published a joint protest against a government plan to increase value-added tax on publications. The statement said any such tax would restrict freedom of the press by forcing many papers to close. The newspapers indicated they will leave part of their front pages blank in the days leading up to the parliamentary debate on this subject. That debate is now scheduled to take place within the next few days. PG

SLOVAKIA WANTS HUNGARY TO BUILD SECOND DANUBE DAM

Slovak Agricultural Minister Peter Baco said in Budapest on 10 November that if Hungary does not build a second dam at Nagymaros, Slovakia will unable to ensure peak performance of the Gabcikovo hydropower plant, Hungarian media reported. Following bilateral talks on the implementation of the Hague International Court of Justice's ruling on the Gabcikovo-Nagymaros project, Janos Nemcsok, the head of the Hungarian delegation, rejected the Slovak demand that Hungary build a second dam. He said Budapest his country will provide three alternatives to the Slovak proposal within two weeks. The two sides have six months to agree on how to implement the Hague court's verdict. MSZ




BOSNIA'S IZETBEGOVIC REJECTS CROATIAN OFFER

Alija Izetbegovic, the Muslim member of the Bosnian joint presidency, said on 10 November that Croatia's proposals for closer political and economic ties would compromise Bosnian sovereignty and hence are unacceptable (see "RFE/RL Newsline," 5 and 7 November 1997). State-run Radio Bosnia added that Sarajevo will draw up a counter proposal and present it to Zagreb. Muslim leaders earlier suggested that Croatia's proposals for a customs and monetary union are problematic. Western diplomats suggested to Reuters that Croatia's draft is aimed at diverting international and Muslim attention from stalled talks on Bosnia's access to Croatia's port of Ploce. PM

SFOR TAKES OVER BOSNIAN SERB POLICE HEADQUARTERS

International peacekeepers took control of a hard-line Bosnian Serb elite police base in Doboj on 10 November and confiscated weapons. The peacekeepers declared the unit of paramilitaries and bodyguards dissolved and said any police officers wanting to keep their jobs would have to enlist in a new program drawn up by UN police monitors. Observers suggested that SFOR wanted to publicly humiliate the hard-liners as the 22-23 November legislative elections draw near. Meanwhile in Plavsic's stronghold of Banja Luka, Canadian police officials announced a gift of $70,000 toward training for pro-Plavsic police. PM

BRUSSELS BLEAK ON BOSNIA

EU foreign ministers meeting in Brussels on 10 November issued a statement saying progress toward democracy in Bosnia is "extremely slow," especially in the Republika Srpska. The text noted an improvement in Croatia's cooperation with the Hague-based war crimes tribunal but slammed Zagreb's and Belgrade's poor records in facilitating the return of refugees. The ministers charged that Yugoslavia is not living up to its obligations under the Dayton agreement to promote human and minority rights, particularly in Kosovo. The document added that of the countries under review, Macedonia alone has made progress in protecting human and minority rights. PM

MUSLIMS KILLED NEAR FRONT LINE

A UN police spokesman said in Sarajevo on 10 November that two Muslim males were killed and two more assaulted the previous day near the former front line at Jelovo Brdo in the Tuzla area. Police want to question Milan Becarevic, a Serbian former policeman, in conjunction with the incidents. PM

TURKEY HELPS RESTORE MOSTAR BRIDGE

Turkish and Bosnian officials signed an agreement in Ankara on 10 November whereby Turkey pledged $1 million to help reconstruct the Mostar bridge over the Neretva River. Hungarian engineers have begun rebuilding the four-centuries-old structure and have found large pieces of the original bridge still intact on the riverbed. The UNESCO-registered bridge was a symbol of the multiethnic character of Bosnia-Herzegovina until Croatian gunners destroyed it at the end of 1993. PM

SLAVONIAN SERBS BOYCOTT SCHOOLS

Serbian parents prevented their children from attending 18 out of 22 primary and secondary schools in eastern Slavonia on 10 November to protest the introduction of Croatian textbooks as part of the gradual reintegration of the Serb-held enclave into Croatia. Croatian Education Minister Liljana Vokic met with Serbian representatives and agreed that teachers could use the Cyrillic alphabet and the Serbian variant of Serbo-Croatian in their teaching. She also pledged to respect a previously agreed five-year moratorium on the teaching of the history of the former Yugoslavia since 1990, an RFE/RL correspondent reported from Vukovar. PM

TUDJMAN'S PUTS OFF ISRAELI VISIT

President Franjo Tudjman's planned trip to Israel in December has been postponed indefinitely, the Vienna daily "Die Presse" reported, citing Zvi Rav-Ner of the Israeli Foreign Ministry. Two Israeli legislators criticized the planned visit, saying that some of Tudjman's writings and statements are anti-Semitic (see "RFE/RL Newsline," 7 November 1997). Both Zagreb and Jerusalem agreed to the postponement after the debate in the legislature. Tudjman has put off a trip to Israel on two previous occasions. PM

CROATIAN REGIME CRITIC SACKED AS PROFESSOR

Slobodan Prosperov Novak, the president of Croatia's PEN Club and a professor at Zagreb University, has lost his teaching job, Croatian dailies reported on 10 November. Novak charged that the authorities sacked him because of his outspoken criticism of President Tudjman. Dean Stipe Botica, for his part, said Novak was let go because he neglected his teaching obligations during his frequent speaking tours abroad. PM

BELGRADE WILL NOT PAY REPARATIONS

Kosta Mihajlovic, Belgrade's representative at the talks between former Yugoslav republics on dividing the former federation's assets and debts, said on 10 November that the Federal Republic of Yugoslavia did not wage war on Croatia or Bosnia and will not pay reparations to them. Outgoing U.S. Ambassador to Croatia Peter Galbraith suggested that Zagreb and Sarajevo sue Belgrade for billions of dollars in damages (see "RFE/RL Newsline," 10 November 1997). PM

KOSOVAR LEADER WANTS "ACTIVE RESISTANCE"

Parliamentary Party leader Adem Demaci said in Pristina on 10 November that Kosovar policies of passive resistance have failed. He called for the formation of a joint organization of all Kosovar political parties and for the launching of a new strategy of "active citizens' resistance," an RFE/RL correspondent reported from Pristina. He did not elaborate, however (see also "End Note," "RFE/RL Newsline," 6 November 1997). PM

ROMANIAN PRESIDENT MEETS WITH RULING COALITION

Representatives of the ruling coalition on 10 November told Emil Constantinescu that they support a rapid reshuffle of the government and streamlining the cabinet in order to accelerate the privatization process, RFE/RL's Bucharest bureau reported. National Peasant Party Christian Democratic leader Ion Diaconescu said his party will co-opt Premier Victor Ciorbea in its leadership body in order to strengthen his authority. Former President Ion Iliescu handed to Constantinescu an open letter accusing the government of "non-democratic behavior" and "arrogance," saying his party may refuse to participate in such consultations in the future if there is no change of behavior. Constantinescu also met with the leaders of the Greater Romania Party and the Party of Romanian National Unity. MS

FORMER ROMANIAN DEFENSE MINISTER ON TRIAL

The trial of General Victor Stanculescu and seven other defendants accused of fraud began in a Bucharest military court on 10 November, RFE/RL's Bucharest bureau reported. Stanculescu is accused of having embezzled $8 million in connection with the import of high-tech telephones for the military in 1990, at which time he was defense minister (see "RFE/RL Newsline," 21 April 1997). The defense asked the court to stop the proceedings because the crimes attributed to Stanculescu were committed before the current constitution was passed in 1991. MS

INFLATION SOARS IN ROMANIA

The National Statistics Commission on 10 November said inflation in October reached 6.5 percent, nearly double the rate registered the previous month (3.3 percent). The annual inflation rate in October was 169.2 percent, RFE/RL's Bucharest bureau reported. MS

CHISINAU, TIRASPOL SIGN COOPERATION AGREEMENT

Moldovan Prime Minister Ion Ciubuc and Transdniester separatist leader Igor Smirnov met in Chisinau on 10 November to sign an agreement "on the organizational principles of social and economic cooperation," RFE/RL's Chisinau bureau reported. Experts from the two sides will devise joint "mechanisms, forms, and methods" for implementing cooperation in those areas, a statement released by the Moldovan cabinet said. Smirnov said it is "too bad" the two sides cannot agree so easily on political matters, where, he said, differences "remain significant." A spokesman for Smirnov told BASA-press that Tiraspol will "discuss political issues with President Lucinschi and economic problems with Premier Ciubuc." MS

COURT RULES MOLDOVAN PARLIAMENT'S MANDATE ENDS IN FEBRUARY

The Constitutional Court on 10 November ruled that the legislature's mandate ends on 27 February 1998. The ruling came following a request by deputy Vladimir Slonari for clarification of Article 16 of the basic law, which stipulates elections must be held within three months of the expiration of the parliament's mandate. Some deputies interpreted the article to mean that the legislature's mandate runs out on 29 March, four years after the present parliament's first session, rather than 27 February, four years after the elections. In other news, the Agrarian Democratic Party has expelled 15 deputies who joined the pro-presidential Movement for a Democratic and Prosperous Moldova, Infotag reported. MS

BULGARIAN PRESIDENT ON ORGANIZED CRIME

Petar Stoyanov said in a televised interview on 10 November Bulgaria's number one problem is organized crime, an RFE/RL correspondent in Sofia reported. Stoyanov called on Interior Minister Bogomil Bonev and Prosecutor General Ivan Tatartchev to put aside personal differences and unite in crime fighting. Bonev argues that corruption is widespread among top prosecutors and judges, while Tatartchev maintains Bonev has launched a populist, unjustified campaign against prosecutors and judges. MS




OBSTACLES TO RESOLVING KARABAKH CONFLICT


by Liz Fuller

Since the spring of 1992, the Organization on Security and Cooperation in Europe's Minsk Group has sought to mediate a political solution of the Nagorno-Karabakh conflict. Azerbaijan has accepted the most recent peace plan drafted by the Minsk Group co-chairmen and presented to the three conflict parties in September. Armenia has accepted it as a basis for further talks but has expressed reservations, while Nagorno-Karabakh has rejected it. Those stances throw into doubt U.S. diplomats' optimistic predictions that a formal accord ending the conflict may be signed by the end of 1997.

There are five obstacles to a solution of the conflict, two of which are political and three procedural or logistic. The first is Nagorno-Karabakh's future political status vis-a-vis the Azerbaijani government. Arkadii Ghukasyan, the unrecognized republic's president, has said repeatedly he will never agree to any status that subordinates Karabakh to Baku. He advocates "horizontal ties" between the two territories, without specifying precisely what he means by that. A confederative arrangement, for example, would preserve Azerbaijan's territorial integrity, which the OSCE insists must be enshrined in any settlement document. Azerbaijani President Heidar Aliyev has proposed the "broadest possible autonomy" for Karabakh, but the very concept of "autonomy" is discredited throughout the former USSR as bestowing only minimal rights and benefits.

The second political obstacle is resistance in both Armenia and Azerbaijan to any substantive concessions. In response to President Levon Ter-Petrossyan's relentlessly pragmatic arguments in favor of a compromise that would entail less than outright independence for Karabakh, Armenia's opposition parties branded him a traitor to national interests and demanding his resignation. Azerbaijan's Round Table opposition coalition similarly rejected the most recent Minsk Group peace proposal, which it perceives as aimed at forcing concessions from Baku that could result in "loss of control over Nagorno-Karabakh." And Ter-Petrossyan's proposal to submit any peace agreement for public endorsement before it is signed could derail a settlement at the final stage.

The first procedural or logistic obstacle is Azerbaijan's insistence that the conflict is international, rather than internal, and resulted from Armenia's "aggression" against Azerbaijan. Claiming that Yerevan is the aggressor and therefore the logical negotiating partner, Baku has consequently refused to engage in direct talks with the Karabakh Armenian leadership.

The second logistic obstacle is the timetable for resolving the conflict. The most recent draft peace plan proposed by the OSCE is based on the "phased" or "step-by-step" approach. In other words, it envisages a series of measures that would begin with the withdrawal of Armenian forces from six occupied districts of Azerbaijan, the repatriation of the enclave's Azerbaijani population, and the deployment of an international peacekeeping force to prevent a resumption of hostilities. Formal negotiations on Karabakh's future status would begin only after those and other measures have been implemented.

The "phased" approach has been endorsed by Baku but rejected by the Karabakh Armenians. They argue that it obliges them to cede their only bargaining chip--the occupied territories -- and offers them no firm guarantee of receiving anything in return. They reason that once they withdraw from the districts in question, Baku may refuse to begin negotiations. Instead, the Karabakh Armenians favor a "package" solution to the conflict whereby all contentious issues (troop withdrawal, repatriation, deployment of international peacekeepers, Karabakh's future status) are simultaneously resolved within one framework document.

Closely linked to the choice between the "packet" and "phased" approaches is the need to guarantee Karabakh's security against the possibility of a renewed Azerbaijani attack. Ghukasyan and Armenian First Deputy Foreign Minister Vartan Oskanian both argue that the international community should give Armenia--and possibly other states--an official mandate to act as guarantors of Karabakh's security. (Ghukasyan mentioned Russia, France, the U.S., "and possibly Iran" in this context.) The OSCE recently sent a group of military officers to tour the region and assess the needs of an OSCE peacekeeping force. Ghukasyan doubts, however, that the organization's member states would agree to provide more than a "purely symbolic" military force, which would be deployed for a limited period and which might withdraw in the event of a mass assault by Azerbaijani troops.

Finally, an additional obstacle to a settlement is Iran. By virtue of its geographical position and its harmonious relations with Armenia, Tehran is keenly interested in resolving the conflict. But since it is not an OSCE member, there is no forum within which it may formally participate in the peace process. (Part of the rationale for enlisting the Conference on Security and Cooperation in Europe, the OSCE's predecessor, to help resolve the Karabakh conflict was to exclude Iran. In February and March1992, the Iranian authorities succeeded in mediating two separate cease-fire agreements, both of which collapsed almost immediately.) Specifically, Tehran says the deployment of military forces as part of a settlement of the conflict would be potentially destabilizing, according to Armenian Democratic Party leader Aram Sargsian. It is therefore doubtful whether any peace agreement that does not have Tehran's imprimatur could bring lasting stability to the region.


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