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Newsline - December 30, 1997




RUSSIA, CHINA SIGN NUCLEAR DEAL

Russian First Deputy Prime Minister Boris Nemtsov departed China on 30 December, one day after attending the signing ceremony of a nuclear power facility deal worth an estimated $3 billion. Russia will provide two VVER-1000 reactors for the Lianyungang nuclear facility in eastern China. Russian Atomic Energy Minister Viktor Mikhailov, also at the signing ceremony, had called the deal "the contract of the century," according to a 28 December report from ITAR-TASS. Mikhailov noted after the signing that Russia's victory in the tender for the project proved the country's ability to compete on the world market. ITAR-TASS also reported that the Lianyungang plant will require another four reactors, possibly offering Russia further opportunities to sell reactors and other equipment to China. BP

YELTSIN TO TAKE TWO-WEEK VACATION

President Boris Yeltsin will leave Moscow on 5 January for a two-week vacation in Valdai (Novgorod Oblast), Russian news agencies reported on 29 December. The vacation was scheduled after Yeltsin recently fell ill and spent two weeks at the Barvikha clinic. The president's doctors and Kremlin officials have said Yeltsin is recovering from an ordinary viral infection. They have repeatedly denied rumors that Yeltsin's latest illness is connected to his past heart problems. LB

PRIMAKOV ON NATO, IRAN, HIS OWN FUTURE

In an extensive interview published in "Nezavisimaya gazeta" on 30 December, Russian Foreign Minister Yevgenii Primakov complained of "a tendency to turn the Russia-NATO Council into a debating club" rather than a forum for resolving disagreement and achieving the maximum degree of rapprochement. He again expressed his opposition to NATO membership for the Baltic states, stressing that Russia's objections are not so much strategic as "moral-political", given that the Russian population would find it difficult to accept the use by another military bloc of the infrastructure created by the USSR. Primakov again insisted that the Russian government is not supplying Iran with nuclear technology, but conceded that he could not "totally exclude" the possibility of individual scientists supplying such technology clandestinely. Lastly, Primakov again rejected persistent rumors of his imminent resignation, affirming that Yeltsin trusts him. LF

KEMEROVO COAL MINERS DEMAND ACTION

An emergency congress of coal miners in the Kuznetsk basin (Kemerovo Oblast), the largest in Russia, on 29 December resolved to organize a general strike if the federal government does not help the region's coal sector by 15 January, RFE/RL's Moscow bureau reported. Kemerovo Governor Aman Tuleev told RFE/RL in a telephone interview that the miners want a government commission to come to Kemerovo. He noted that they are demanding not new promises, but only that the government keep earlier pledges on funding for the coal sector. On 22 December, some 250 miners from the Kuznetsk basin blocked the Trans-Siberian Railroad for about 10 hours. That protest ended after Fuel and Energy Minister Sergei Kirienko promised that the government would send 13 billion rubles ($2.2 million) to the region. However, only 5 billion rubles have since arrived in Kemerovo. LB

CHUBAIS SAYS COAL INDUSTRY FULLY FINANCED THIS YEAR

First Deputy Prime Minister Anatolii Chubais announced on 29 December that the government has met 1997 budget targets on financing the coal industry, Russian news agencies reported. Speaking in Moscow to an interdepartmental government commission on socio-economic problems of Russia's coal-mining regions, Chubais said 6.479 trillion rubles ($1.1 billion) has been allocated to the coal sector this year. Owing to poor tax collection, the government substantially reduced 1997 expenditures in many areas. However, Chubais claimed funding for the coal sector was not affected by those cuts and conformed to original 1997 spending plans. LB

SIBNEFT PAYS TAX DEBTS OF OMSK REFINERY...

The Sibneft oil company, part of Boris Berezovskii's business empire, met a 25 December deadline for paying 644.8 billion rubles ($108 million) in debts owed to the federal budget by its subsidiary, the Omsk Oil Refinery, State Tax Service chief Aleksandr Pochinok announced on 26 December. He said the Omsk refinery still owes some 427 billion rubles in fines and penalties, but expressed hope that the company will stay current on its tax payments in 1998, ITAR-TASS reported. The government's commission on tax and budgetary discipline recently ordered the Omsk refinery to pay its debts by 25 December or face penalties including the possible seizure and sale of company assets (see "RFE/RL Newsline," 18 December 1997). LB

...BUT NOT ENTIRELY IN CASH

Aleksandr Meling, the general director of the Omsk Oil Refinery, told ITAR-TASS on 29 December that the refinery's tax debts were paid partly in cash and partly through offsets against debts owed to the refinery by government agencies, including the Defense Ministry. Under a recent presidential decree that takes effect on 1 January, the government will be prohibited from canceling taxes owed by enterprises against other debts owed to those enterprises (see "RFE/RL Newsline," 10 November 1997). LB

ANGARSK PETROCHEMICAL COMPANY FAILS TO MEET DEADLINE

The press service of the Sidanko oil company, part of the Oneksimbank empire, says it has transferred 550 billion rubles ($92 million) to the federal budget toward paying the tax debts of its subsidiary, the Angarsk Petrochemical Company, ITAR-TASS reported on 30 December. Like the Omsk Oil Refinery, Angara was ordered to pay its tax debts, estimated at 766 billion rubles, in full by 25 December. Petr Karpov, acting head of the Federal Bankruptcy Administration, warned on 29 December that the property of the Angara company may be seized and sold if the debts are not paid, RFE/RL's Moscow bureau reported. An aide to First Deputy Prime Minister Chubais announced on 29 December that Chubais has instructed various government agencies to begin procedures to force Angara to pay its debts. LB

ELECTRICITY GIANT SAYS IT HAS PAID DEBTS

The press service of the electricity giant Unified Energy System (EES) claimed on 29 December that the company has paid its tax debts in full, Interfax reported. The government's commission on tax and budgetary discipline ordered EES to pay some 600 billion rubles ($100 million) in debts to the federal budget by 31 December. LB

COURT REJECTS CHALLENGE TO SIBNEFT PRIVATIZATION

The Moscow Arbitration Court on 25 December turned down a legal challenge to the May privatization of a 51 percent stake in the Sibneft oil company, Reuters and ITAR-TASS reported. The KM-Invest company, which is part of the Oneksimbank empire, sought to annul the auction after being excluded from the bidding for the Sibneft stake. The Financial Oil Company, which is part of Boris Berezovskii's business empire, won that auction. The Moscow Arbitration Court had ordered that the controlling stake in Sibneft be impounded pending the resolution of the case (see "RFE/RL Newsline," 23 December 1997), but those shares have now been released. KM-Invest plans to appeal the ruling. LB

ZYUGANOV PREDICTS IMMINENT OUSTER OF CHUBAIS

Communist Party leader Gennadii Zyuganov told journalists on 29 December that First Deputy Prime Minister Chubais's "days [in the government] are numbered," Interfax reported. He argued that the government will fail to pay all wage arrears to state employees and that Chubais will consequently be forced to leave the government by the end of January. After Zyuganov made similar remarks on 25 December, Chubais told Interfax that Zyuganov's "plans for me and my own [plans] do not coincide." The same day, First Deputy Prime Minister Nemtsov also denied that Chubais will soon leave the government, RFE/RL's Moscow bureau reported. LB

LUZHKOV SAYS DEPENDENCE ON IMF IS 'NATIONAL DISGRACE.'

Moscow Mayor Yurii Luzhkov claimed on 29 December that Russia's economic policy goals are formed by foreign institutions and termed the situation a "national disgrace," Interfax reported. He said U.S. Vice President Al Gore and IMF Managing Director Michel Camdessus should not be able to "praise or scold" Prime Minister Viktor Chernomyrdin for government decisions. Letters sent to Chernomyrdin by Camdessus and World Bank president James Wolfensohn recently sparked a scandal (see RFE/RL Newsline, 18, 19 and 23 December 1997). In addition, Luzhkov charged that the IMF member states want Russia to "remain a source of raw materials for the civilized world." He also argued that in order to improve the standard of living in Russia, capital must be channeled from what he called the "parasitic sector of the economy" to the manufacturing sector. LB

BEREZOVSKII ASSAILS 'BOLSHEVIK' MENTALITY OF CHUBAIS

Boris Berezovskii lashed out at Chubais during a 24 December press conference, RFE/RL's Moscow bureau reported. He again accused Chubais of having a "Bolshevik" mentality, which, he said, was well-suited for the first stage of Russian economic reforms. However, he claimed that the second stage of Russian reforms requires "super-professionalism." Berezovskii also said western financial institutions should not "dictate" policy demands to the Russian government, ITAR-TASS reported. Media partly financed by Berezovskii, including the Russian Public Television network and "Nezavisimaya gazeta," have accused Chubais of using his contacts with the World Bank and the IMF to put pressure on Chernomyrdin. Chubais is believed to have played an important role in persuading Yeltsin to fire Berezovskii from the Security Council in November. LB

CHUBAIS RETURNS FIRE

In an interview published in "Izvestiya" on 24 December, Chubais claimed that Berezovskii's frequent allegations about "Bolshevism" conceal his true goals. Chubais argued, "Berezovskii naively thinks [his] whole problem is with Chubais. The problem is that no authorities in Russia (if they are civilized) will ever allow themselves to be transformed into a housemaid for big business." He recalled an interview Berezovskii gave the "Financial Times" in autumn1996, in which Berezovskii boasted that he and six other bankers controlled half the Russian economy. LB

DUMA APPROVES AMNESTY

The State Duma on 24 December approved an amnesty proposed by Yeltsin in order to reduce prison overcrowding. Some 35,000 convicts will be released from prison under the amnesty, mainly men over age 60, pregnant women, mothers of young children or women over age 55, inmates who have tuberculosis, and veterans who participated in armed conflicts during their military service. Repeat offenders and those convicted of the most serious violent crimes will not be covered by the amnesty. The measure will affect another 365,000 convicted criminals, either by shortening their prison terms or by commuting punishments that do not involve serving time in prison. The measure need not be approved by the Federation Council or by Yeltsin, since the constitution grants the Duma the sole right to adopt amnesties. LB

UPPER HOUSE FAILS TO OVERRIDE VETO ON VETERANS' BENEFITS

The Federation Council on 24 December failed to override a presidential veto of an amendment to the law on veterans, ITAR-TASS reported the next day. The amendment would have expanded the definition of a "veteran of labor" and thereby increased the number of citizens eligible for certain benefits. Yeltsin vetoed the measure after the government calculated that the amendment would entail paying out an additional 12 trillion rubles ($2 billion) annually. Government officials have called for restructuring social benefits payments to provide financial support only to those living in poverty rather than to whole categories of citizens. LB

ADVERTISING FIRM HIRES BOOK SCANDAL CASUALTY

Former State Property Minister Maksim Boiko has been appointed general director of the Video-International advertising firm, ITAR-TASS reported on 24 December. Boiko, an ally of First Deputy Prime Minister Chubais, served in the cabinet for just three months before being sacked for receiving a $90,000 payment as a co-author of an unpublished book on privatization (see "RFE/RL Newsline," 17 November 1997). Video-International has close ties to the Kremlin and produced the television commercials for Yeltsin's 1996 re-election campaign. One of the firm's founders, Mikhail Lesin, was appointed deputy chairman of the fully state-owned Russian Television network in June. LB

PRESIDENT OF CHUVASHIA RE-ELECTED

Nikolai Fedorov was re-elected as president of Chuvashia on 28 December with some 56.5 percent of the vote compared to 35 percent for his main rival, Valentin Shurchanov, the leader of the Communist Party's branch in Chuvashia. The three other presidential candidates each gained less than 2 percent of the vote. According to an RFE/RL correspondent who visited Chuvashia during the presidential campaign, local observers predicted Fedorov's victory but had expected that he would be forced to contest a runoff election against Shurchanov. (Fedorov won December 1993 presidential elections in Chuvashia only in the second round, and even then he gained less than 30 percent of the vote.) Before he became president of Chuvashia, Fedorov was Russia's justice minister, and some observers believe he has ambitions to return to high politics. LB

NORTH OSSETIAN PRESIDENTIAL ELECTION PREVIEW

A group of academics in Vladikavkaz have addressed an appeal to President Akhsarbek Galazov, former rector of the North Ossetian State University, not to seek a second term in the presidential elections scheduled for 18 January, RFE/RL's North Caucasus correspondent reported on 29 December. Recent opinion polls show that 60 per cent of those questioned intend to vote for Russian State Duma deputy Aleksandr Dzasokhov. Only 10 per cent favor Galazov. Twelve potential candidates have been registered for the poll. LF

DAGESTAN DEMANDS EXTRADITION OF BUINAKSK GUNMEN

Dagestan's State Council on 29 December demanded that Chechen President Aslan Maskhadov hand over the gunmen responsible for the 22 December attack on a Russian army facility in the Dagestani village of Buinaksk, Interfax reported. Russian Interior Ministry forces on 22 December had surrounded, but then failed to apprehend, the gunmen. The commander of the North Caucasus Military District, Colonel-General Viktor Kazantsev, told journalists on 23 December that he suspected Khottab, the Jordanian field commander still under arms in Chechnya, of masterminding the attack. Maskhadov denied on 27 December that any citizens of Chechnya had participated. LF



TAJIKISTAN, IRAN SIGN DEFENSE ACCORD

Tajik Defense Minister Sherali Khairulloyev and his Iranian counterpart Rear-Admiral Ali Shamkhani signed a letter of understanding on defense cooperation in Tehran on 29 December, ITAR-TASS and IRNA reported. Shamkhani said Iran would provide logistical and technical training to military personnel in Tajikistan in order to "consolidate peace and stability in the region." The defense accord is the first Tajikistan has signed with a non-CIS member state. BP

UNITED STATES CAUTIOUS ABOUT IRAN-TURKMEN PIPELINE

The United States took a cautious view of the official opening of a pipeline bringing natural gas from Turkmenistan to Iran, according to AFP and ITAR-TASS. The Korpedzhe-Kurdkui pipeline will eventually stretch into Turkey and make Turkmen gas available to Europe but must run across Iran. U.S. State Department spokesman James Foley said on 29 December America will "carefully examine" any proposals for pipelines through Iranian territory but added that construction of the Korpedzhe-Kurdkui line began two years before the U.S. adopted a law imposing sanctions on any company doing business with Iran or Libya, and therefore does not "appear to constitute sanctionable activity." BP

AZERBAIJANI EX-PARLIAMENT SPEAKER: "Aliyev IS NO CHURCHILL."

In a statement to RFE/RL's Azerbaijani Service on 21 December, former parliament speaker Rasul Guliev accused Azerbaijani President Heidar Aliyev of systematically liquidating those persons who engineered his return to power in Baku in June, 1993. Guliev said that he had believed that Aliyev could transform Azerbaijan as Churchill had transformed Britain and Adenauer -- Germany, but that instead Aliev's policies had led to serious defeats in the Karabakh war. Guliev said that the rift between himself and Aliyev stemmed from disagreements during the budget debate in March, 1996, and Guliev's criticism one month later of immoderate adulation of the president. Guliev was constrained to resign in September, 1996, and was stripped of his deputy's mandate on 16 December. Azerbaijani human rights activivists have protested that move as illegal in a letter to the Supreme Court, Turan reported on 27 December. LF

GEORGIA EXTRADITES KURDISH ACTIVIST TO TURKEY

A spokesman for the Moscow-based Front for the National Liberation of Kurdistan, which is loosely aligned with the banned PKK (Kurdistan Workers' Party), suggests that the Georgian authorities were motivated by economic considerations when they agreed to extradite to Turkey Suleyman Koc, a member of the Turkish National-Democratic Party, "Nezavisimaya gazeta" reported on 30 December. Koc had fled to Georgia to avoid a ten-year prison sentence in Turkey, and had worked at a Tbilisi center for Georgia's 40,000 ethnic Kurds, who are concerned that his extradition may herald a crackdown on FNLK activities in Georgia. LF




KUCHMA: UKRAINE TO PROMOTE SMALL BUSINESS

President Leonid Kuchma told a Kyiv conference on 27 December that he intends to issue a decree in the near future that will help to promote small business in Ukraine, Interfax reported on 29 December. He said that he would simplify registration procedures, taxation, and reporting to government agencies. And Kuchma added that he had directed the Ukrainian government to deregulate most business activities within 30 days. PG

UKRAINIAN POPULATION CONTINUES TO DECLINE

As a result of rising death rates and falling birth rates, the population of Ukraine declined by approximately 400,000 people in 1997, the State Statistics Committee announced on 26 December. The country's population now stands at 50.48 million, down from 50.85 million a year ago. PG

TRIALS AND TRIBULATIONS IN BELARUS

A Minsk court on 29 December found two organizers of a 23 November demonstration guilty of violating a decree of President Alyaksandr Lukashenka, RFE/RL Belarus Service reported. Supreme Soviet deputy Valeriy Shchukin was sentenced to ten days' imprisonment while Belarusian People's Front vice chairman Lyavon Barshchewskiy was fined 30 million rubles (approximately $1,000). Meanwhile, the trials of deputy Henadz Karpena and Lyudmila Hraznova on similar charges were postponed. Also postponed was the trial of ORT journalist Pavel Sheremet and his cameraman who are charged with illegally crossing the Belarus-Lithuanian border. Sheremet is ill. PG

LUKASHENKA TO "SPONSOR" BELARUS ART

President Alyaksandr Lukashenka said on 29 December that his government is prepared to finance culture and art but will not "sponsor mediocrity," Interfax reported. But in a speech to the country's leading cultural figures, he lashed out at the failure of some cultural groups to use state subsidies "properly" and noted that "artists,' writers' and composers' work has become less efficient. The Belarusian cultural elite more and more rarely causes the community to rejoice in their remarkable success." PG

LATVIAN PRESIDENT: IMPROVED TIES WITH RUSSIA POSSIBLE

In a nationwide radio address 29 December, President Guntis Ulmanis said that he saw reason to hope for improved relations between the Baltic states and Russia, ITAR-TASS reported. Ulmanis also said he would continue to promote discussions on the integration of residents of Latvia who are not citizens. And he said that Latvia needs to increase its military spending if it is to be taken seriously as a candidate for NATO membership. The Latvian leader acknowledged that life has not improved for many in his country, but he expressed the hope that the number of those who are nostalgic for the past would not increase in the new year. PG

POLISH PRESIDENCY CALLS FOR BETTER COORDINATION WITH GOVERNMENT

Presidential advisor Ryszard Kalisz on 29 December called on the government to allow representatives of the presidency to participate in cabinet meetings. He pointed out that misunderstandings between the presidency and the government in drafting legislation could be avoided if there was better coordination between both institutions. Last week, President Aleksander Kwasniewski returned two government-sponsored bills to parliament (see "RFE/RL Newsline" 29 December 1997). In November, Prime Minister Jerzy Buzek wrote to Kwasniewski that he saw no need for presidential representatives to attend cabinet meetings, ending a seven-year tradition. FS

NEW CZECH PREMIER PROPOSES GOVERNMENT TO FORMER COALITION

Josef Tosovsky on 29 December proposed a list of government ministers to the three former coalition partners. Despite criticism from his predecessor and Civic Democratic Party (ODS) Chairman Vaclav Klaus, Tosovsky included former Finance Minister Ivan Pilip, Deputy Foreign Minister Michal Lobkowitz and Ivo Sanc, the mayor of Kutna Hora, in his proposal. The three ODS members are outspoken critics of Klaus and are unacceptable to the ODS leadership. Several other proposed cabinet members are non-partisan. Tosovsky said he selected the group on the basis of their expert knowledge and ability to work as a team. Tosovsky invited the heads of the former coalition to talks on 30 December, but Klaus declined to attend, sending his deputy Libuse Benesova instead. FS

PRAGUE, BONN LAUNCH RECONCILIATION FUND

Czech Foreign Minister Jaroslav Sedivy and Germany's ambassador to the Czech Republic Anton Rossbach formally agreed in Prague on 29 December to launch a joint reconciliation fund on 1 January 1998. Germany will pay $80 million and the Czech Republic -- $14 million over the next four years. The fund will compensate Czech victims of the Nazi-regime and finance projects linking the Czech and German peoples. It will also provide for pensioners' homes and sanatoriums for about 8,500 Czech survivors of the Holocaust. Both sides had signed a declaration of reconciliation on 20 January 1997 and agreed to create the fund by the end of the year. Germany, however, delayed the move because of opposition from Sudeten German groups, who wanted to be included in the fund's administration. Prague rejected such participation, arguing that these groups never recognized the declaration. FS

CZECHS INCREASINGLY IN FAVOR OF NATO MEMBERSHIP

Fifty-three percent out of 1,118 Czechs polled by the state statistical office IVVM, support NATO membership. The results, published on 23 December, indicate that support for the Czech Republic's military integration has risen considerably since November, when the last poll showed only 43 percent support. The number of undecided respondents fell from 28 to 20 percent over the same time period. It was the strongest pro-NATO result in an IVVM poll since Prague was invited to begin membership talks in July. FS

ONE THIRD OF HUNGARY'S PRISONERS COMPLAIN ABOUT HUMAN RIGHTS ABUSES

One third out of 700 prisoners questioned in a survey said they were subject to police abuses. The results of the poll, conducted by the Hungarian Helsinki Committee and the Institute of Juridical Politics and the Constitution, was published on 23 December. The poll also found that foreign prisoners, gypsies and young offenders were more often exposed to police violence than others. The human rights groups also criticized poor conditions and overcrowding of the prisons. FS

HUNGARY ENDS ANONYMITY FOR AIDS SUFFERERS

A new law will take effect on 1 January, obliging people tested HIV-positive to give identification to the health authorities. The law covers altogether fifty contagious diseases. According to the World Health Organization, Hungary had 265 cases of full-blown AIDS in September. Human rights groups and former Health Minister Judit Csehak have expressed concern that the new law may be counterproductive and scare people away from AIDS tests, fearing stigmatization. FS

HUNGARY'S GREENS ADVERTISE FOR ELECTION CANDIDATES

The Green Party has launched an advertising campaign in daily newspapers, seeking parliamentary candidates for the upcoming elections. The Greens, who gained less than one percent in the 1994 parliamentary elections, are short of members. Party chairman Zoltan Medvecki told Reuters on 29 December that "We don't think our members are the wisest people in the country so we would like to give a chance to the most suitable candidates." FS




SERBIAN RIOT POLICE END KOSOVAR PROTEST

Hundreds of heavily-armed riot police, who were backed up by water cannon and armored vehicles, baton charged ethnic Albanian students staging a peaceful protest march in Pristina on 30 December. The students want the government to restore Albanian-language education, particularly at Pristina University. The Serbian authorities have frequently used force to break up Albanian protests in recent years (see "RFE/RL Newsline," 29 December 1997). The "Frankfurter Allgemeine Zeitung" reported on 29 December that young people in Kosovo are increasingly becoming radicalized and sympathetic to the clandestine Kosovo Liberation Army. This is the result of the continued failure of the moderate Kosovar leadership to achieve any of its basic goals aimed at restoring the province's autonomy. PM

KOSOVARS TO VOTE IN MARCH

Kosovo shadow-state President Ibrahim Rugova announced in Pristina on 24 December that parliamentary and presidential elections will take place on 22 March. Rugova added that the Kosovar leadership took the decision to hold the vote after consulting with what he called the Kosovars' foreign friends. He said that Kosovo's international position is stronger now than it was in 1992, when the last vote took place. Rugova pointed out that 14 seats in the 144-seat legislature are reserved for Serbs, who make up approximately ten percent of the province's population. Rugova called on local Serbs to take part in the vote. The Serbian authorities regard the shadow state and its activities as illegal. PM

EU ENDS TRADE BENEFITS FOR BELGRADE

Officials of the EU announced in Brussels on 29 December that the EU will continue to extend trade benefits to Bosnia and Croatia in 1998 but not to President Slobodan Milosevic's Yugoslavia. A statement said that Belgrade has failed to cooperate sufficiently in the regional peace process, to solve the Kosovo question, or to honor EU recommendations on democratization. Macedonia also will no longer receive the trade benefits, but this is because it recently concluded a bilateral agreement with the EU and hence moves into a better type of relationship with Brussels. PM

RADICALS WALK OUT OF SERBIAN PARLIAMENT

The Serbian Radical Party's Vojislav Seselj and his supporters stormed out of the legislature on 29 December after that body refused to consider the Radicals' demand for an investigation of the 21 December presidential vote (see "RFE/RL Newsline," 29 December 1997). The coalition, which lacks an overall majority, nonetheless agreed to an opposition demand that legislative proceedings be televised in order to receive opposition consent to convene parliament, an RFE/RL correspondent reported from Belgrade. PM

YUGOSLAV PARLIAMENT APPROVES BUDGET

The federal legislature also met on 29 December and passed a $1.6 billion budget for 1998. The sum represents 9.13 percent of the GNP and an increase of five percent over the 1997 budget. Some two-thirds of the 1998 budget goes to the military, mainly to pay salaries, an RFE/RL correspondent reported from Belgrade. The military had originally requested a larger sum. On 30 December, however, parliament did not meet as scheduled. Instead, its electoral commission looked into challenges to the validity of the election of numerous opposition deputies, BETA news agency reported. PM

YUGOSLAV GOVERNMENT "PLEASED" WITH MEDIA

Federal Information Secretary Goran Matic said in Belgrade on 29 December that no former Yugoslav republic has enjoyed such a "media boom" as have Serbia and Montenegro, the Belgrade daily "Danas" reported. Matic called "tendentious" claims by the EU and others that there are restrictions on the media in Serbia. PM

DJUKANOVIC TO BECOME MONTENEGRIN PRESIDENT

Parliament decided in Podgorica on 29 December that President-elect Milo Djukanovic will take office on 15 January, an RFE/RL correspondent reported from the Montenegrin capital. Meanwhile in Belgrade, a spokesman for the pro-Milosevic federal prosecutor's office challenged the legality of Djukanovic's election. Djukanovic favors greater autonomy for Montenegro vis-a-vis Belgrade. PM

A TECHNOCRATIC GOVERNMENT FOR BOSNIAN SERBS?

Mladen Ivanic, Republika Srpska President Biljana Plavsic's nominee for prime minister, told RFE/RL on 29 December that the Bosnian Serbs need a national unity government of experts. He added that forming a government of professionals who stand above politics is the only way to bring the Republika Srpska out of its present crisis. Meanwhile in Podgorica, Plavsic told the daily "Pobjeda" that the Bosnian Serbs' main need is for unity. PM

GANIC NEW BOSNIAN FEDERAL PRESIDENT

Ejup Ganic, a Muslim, will succeed Vladimir Soljic, a Croat, as president of the federation for 1998, an RFE/RL correspondent reported from Sarajevo on 29 December. The change comes as part of a normal rotation of the presidency between Croats and Muslims. PM

BOSNIA HAS EVIDENCE OF ARKAN'S CRIMES

Smail Cekic, the head of Bosnia's war crimes commission, said on 28 December that the government has ample proof of the involvement of Serbian paramilitary leader Zeljko Raznatovic, better known as Arkan, in war crimes against non-Serb civilians. Cekic added the recent theft of evidence against Arkan in Sweden will not affect the case against the warlord (see "RFE/RL Newsline," 29 December 1997). PM

ALBANIAN OPPOSITION PROTESTS VISIT OF GREEK DEFENSE MINISTER

Democratic Party leader Sali Berisha protested the visit of Greek Defense Minister Akis Tsohatzopoulos on 29 December, Enter reported. Berisha claims that the presence of Greek troops on the territory of Albania constituted a violation of its sovereignty. The Albanian government rejected the claims. Albania hosts Greek soldiers as part of a bilateral cooperation accord. The Greek army is assisting Albania in the reconstruction of a military hospital as well as in training and equipment. Before arriving in Albania, the Greek minister said in Sarajevo that Greece will participate in future peacekeeping work in Bosnia and help with reconstruction. FS

MORE BOMB EXPLOSIONS IN SOUTHERN ALBANIA

The tenth bomb explosion near Gjirokaster within one month destroyed a bridge over the Drinos River on 27 December. The blast also damaged a number of buildings, but no injuries have been reported. The previous day another explosion destroyed the office of a doctor who is a member of the Socialist Party, ATSH reported. Interior Minister Neritan Ceka called the recent series of bomb blasts "organized political crimes aimed at giving the impression that order has not been restored in Albania," according to AFP. He also claimed that "the opposition is conducting a policy of banditry and inciting the population to keep weapons and cause explosions." FS

ROMANIAN TRANSPORT MINISTER RESIGNS

Transport Minister Traian Basescu handed in his resignation on 29 December after Prime Minister Victor Ciorbea asked him to take back critical statements or to step down. The move followed statements by Basescu published the same day by "Evenimentul Zilei," in which he implied that the government was incompetent. Basescu had said in an interview that the "government did not have the strength to take important decisions" and criticized the "useless 18-hour long sessions" of Ciorbea's cabinet. He added that "this cabinet is far away from making the reforms at the level that was requested by foreign institutions, such as the World Bank and IMF." Also on 29 December, new Foreign Minister Andrei Plesu was sworn in. Plesu replaces Adrian Severin, who resigned over unproven claims that several party leaders and newspaper editors were spies. FS

ROMANIA HOLDS EUROPEAN RECORD FOR INFANT MORTALITY

Twenty-seven out of 1,000 live born children die in Romania, according to data presented by President Emil Constantinescu on public television on 23 December. Due to inadequate post-natal care, 70 percent of the deaths occur in the first 28 days of life. Romania has 2,605 AIDS infected children. Most of the AIDS cases are blamed on poor hospital hygiene, unscreened blood transfusions and lack of disposable syringes in the communist era. Most of the 100,000 children in state institutions are not orphaned, but abandoned. In 1997 alone, about 5,000 children were abandoned by their parents. There are an estimated 4,300 children living on Romania's streets, most of whom fled violence at home. Romania was a European leader in infant mortality before World War II. FS

ROMANIAN AGRICULTURAL MINISTRY BANS FISHING IN DANUBE DELTA

The Agricultural Ministry banned fishing in the Danube Delta and surrounding lakes on 29 December to prevent over-fishing. Governor Andrei Svoronos said the move was intended to protect fish species in the ecologically endangered region. He estimated that 14,000 tons of fish were caught this year, 11,400 tons more than authorized. He blamed "mafia networks" for overfishing the region and thus endangering the survival of several other species, especially birds. In other news, painter and philosopher Corneliu Baba died in Bucharest on 29 December at the age of 91. FS

FORMER ROMANIAN PROSECUTOR DENIES AUTHORIZING INCINERATING REVOLUTION VICTIMS

Communist-era deputy chief prosecutor Gheorghe Diaconescu has denied that the Romanian judiciary approved the incineration of the bodies of 40 anti-communist protesters killed in Timisoara on 16 and 17 December 1989. Dictator Nicolae Ceausescu's wife, Elena, had ordered the disposal of the bodies, which had been left at the local hospital morgue on 18 December. Overnight they were loaded onto a refrigerated truck and taken to Bucharest for incineration and then disposed of via the drains. The head of the current military court Dan Voinea claims that Diaconescu authorized the incineration. Judicial officials had identified the bodies and issued individual certificates for each death. FS




1997: Another Busy Year for the IMF in the Post-Communist World


by Michael Wyzan

The International Monetary Fund (IMF) continues to play the dominant role in providing financial support for the balance of payments of post-communist and developing countries. The fund has the dual role of providing such support and of encouraging economic reform by attaching stringent conditions to its loans.

In 1997 the IMF approved new credits for Albania, Armenia (actually, the second annual loan under a three-year facility), Azerbaijan, Bulgaria, Croatia, Estonia, Georgia (an identical situation to Armenia's), Kyrgyzstan, Latvia, Macedonia, Mongolia, Romania, Tajikistan, and Ukraine.

Among the transition countries not listed, some - including Kazakhstan, Lithuania, Moldova, and Russia - attempted during the year to qualify for the release of tranches under existing loans. The Visegrad countries have had sufficiently strong private capital inflows not to rely on the IMF for balance-of-payments support, although Hungary was awarded a two-year loan in March 1996, which it has not drawn upon.

The IMF suspended lending in1995 to Belarus and Uzbekistan out of dissatisfaction with their weak reform efforts, in the latter case citing the restrictive foreign exchange regime introduced that year. Two further striking cases are Federal Yugoslavia and Turkmenistan. The former has been under UN sanctions and is not yet a member of the IMF; the latter is a member, but has not been sufficiently reformist to quality for support.

Bulgaria and Romania won large new loans in April (in this endnote, all agreements are dated based on when hey received approval from the IMF's Executive Board), as new, reformist governments vowed to put their predecessors' sluggishness behind them. The Bulgarian loan is supposed to provide $657 million over 14 months, while the Romanian one is slated to provide $414 million over 13 months. Subsequently, the fund pronounced itself satisfied with Bulgarian economic policy, and released additional loan tranches in July, August, and December.

Romania's relations with the fund in1997 were problematic, however. In the summer the IMF criticized the size of the budget deficit, continuing high inflation, and price controls on energy and food products. It was especially concerned about the slow pace of liquidation and privatization of state enterprises, prompting the government to announce in August the closure of 17 enterprises. That move led to the Fund's releasing of the second tranche in September.

The IMF remains concerned about slow privatization and high inflation in Romania. However, a privatization decree issued on 21 December, if passed by parliament in February, may help convince it to release the next tranche in early 1998.

Albania received $12 million from the IMF in November for "emergency post-conflict assistance." In August, the IMF HAD set as conditions for renewed lending that the authorities close the remaining pyramid schemes, privatize or liquidate two of three state banks, reform the civil service, create an agricultural land market, improve tax collection, raise tax rates, and cut government spending. Agreement was held up until November by legal problems involving the closure of the pyramids. Tajikistan received a similar, $10 million, loan in December.

At the other end of the spectrum are Estonia and Latvia, which both received standby loans late in 1997 - worth $22 million and $45 million, respectively - which they do not intend at present to draw upon.

Relations between the IMF and Croatia made headlines in an unusual way in1997. Under pressure from the United States, the fund in July refused to release a $40 million loan tranche. The U.S. cited Zagreb's balking at releasing war criminals to the Hague. Those individuals were apprehended and dispatched to the Netherlands in October, and the IMF approved the release of the money, but Croatia then decided it did not need the funds after all.

Russia and Ukraine, two of the IMF's biggest borrowers, experienced ups and downs in their relations with it IN 1997. In October, the fund, citing poor tax collection, announced that it would not release a $700 million tranche of a loan to Russia until early 1998. However, an IMF mission in December recommended releasing it, citing progress in that area.

Ukraine received a one-year, $542 million standby loan in August. That is not as good news as it seems, since Kyiv and the IMF had been negotiating over a $2.9 billion, three-year loan, but in the end the fund decided that reform progress had been insufficient.

Relations with the IMF mirror the overall direction of transition economies. Relations remain on track between the fund and the Transcaucasian states, even though Georgia and Azerbaijan were slow starters on reform. In contrast, the IMF, citing problems with privatization, energy pricing, and the budget deficit, postponed from June until July releasing one loan tranche to Moldova (an early CIS reformer); it then delayed until early 1998 releasing the next one.

*Michael Wyzan is an economist living in Austria.


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