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Newsline - January 12, 1998




SPOKESMAN EXPLAINS YELTSIN'S ABSENCE FROM TV

Presidential spokesman Sergei Yastrzhembskii told ITAR- TASS on 9 January that Boris Yeltsin has not been shown on television during his vacation in Valdai because "it isn't possible to pester the president all the time." He added that "vacation is vacation." However, Yastrzhembskii said television footage of the president will be released sometime during the week of 12 January. Kremlin officials have repeatedly denied that a serious health problem is keeping Yeltsin out of public view. Daily official statements continue to emphasize that the president remains "active" in Valdai, holding telephone conversations, working with documents, and engaging in various forms of exercise. Yeltsin is scheduled to return to work full time on 19 January. LB

YELTSIN VETOES TWO TAX LAWS

Yeltsin has vetoed amendments to the law on excise duties that would have introduced such charges on vodka, beer, tobacco, gasoline, automobiles, and oil transports, ITAR-TASS reported on 11 January. According to government estimates, the amendments would have raised 1998 revenues by 450 million rubles ($75 million) a month. However, executives in the energy sector and some Russian media have strongly opposed the proposed excise duty on oil transports in particular. Also on 11 January, the presidential press service announced that Yeltsin has vetoed a law that would have raised the tax on foreign-currency purchases from 0.5 percent to 1 percent. In Yeltsin's veto message to the parliament, he said both laws are inconsistent with Russian legislation. The laws vetoed by Yeltsin were among nine laws submitted to the parliament by the government in order to increase 1998 budget revenues. LB

GOVERNMENT, KREMLIN AT ODDS OVER POLICY?

Yeltsin's latest vetoes suggest that some presidential advisers are at odds with government officials over some economic policy matters. In an interview published in "Izvestiya" on 10 January, Economics Minister Yakov Urinson acknowledged there is occasional conflict between officials in the government and presidential administration over economic policies. He added that "one would like to believe that it's not political games that lie behind all this but, if you like, objective differences of opinion." Presidential economic adviser Aleksandr Livshits recently criticized First Deputy Prime Minister Anatolii Chubais's work on a government commission on tax and budgetary discipline. Livshits also alleged that government officials have leaked sensitive information to international financial organizations (see "RFE/RL Newsline," 19 December 1997). LB

MINISTER ON CAUSES FOR POOR TAX COLLECTION

In the same interview with "Izvestiya," Economics Minister Urinson acknowledged that the government failed to improve tax collection in 1997. However, he argued that the head of the State Tax Service, Aleksandr Pochinok, was not to blame. (Pochinok, seen as an ally of Chubais, was appointed last April.) Rather, Urinson said, the poor tax collection stemmed from the failure to reform the tax system and secure adoption of a new tax code. In addition, Urinson continued, the government did not make the work of its commission on tax and budgetary discipline more effective, "so that it would be more profitable for people to pay taxes than to evade them." Urinson denied persistent speculation that Prime Minister Viktor Chernomyrdin is frequently at odds with First Deputy Prime Ministers Chubais and Boris Nemtsov. LB

TWO DOZEN FIRMS PAY TWO-THIRDS OF ALL TAXES

State Tax Service head Pochinok told Interfax on 9 January that more than two-thirds of tax revenues come from Russia's 17 largest companies and about six major banks. A new special agency within the tax service will focus on those large taxpayers, he said. Meanwhile, Moscow Mayor Yurii Luzhkov claimed on 8 January that 30 percent of all budget revenues contributed by Russian regions to the federal government in 1997 came from the city of Moscow. Luzhkov said Moscow's contributions to the federal budget totaled 52.6 trillion old rubles ($8.8 billion). LB

ANOTHER COMMITTEE CREATED ON STATE MONOPOLY ON ALCOHOL

Yeltsin has signed a decree creating a State Committee for Enforcing the Monopoly on Alcohol Production, which will be charged with "ensuring the state monopoly on the production of and trade in ethyl alcohol and alcoholic products," ITAR-TASS reported on 10 January. The same decree abolished the Federal Service for Enforcing the State Monopoly on Alcoholic Products, which was created nearly two years ago in place of the state inspectorate for ensuring the state monopoly on alcoholic products. Previous presidential decrees on the state monopoly on alcohol have not been enforced (see "OMRI Daily Digest," 2 January 1997). Meanwhile, Yeltsin signed a law substantially raising taxes on alcohol imports, production and sales, ITAR-TASS reported on 11 January. LB

BEREZOVSKII DEFENDS CHUBAIS...

Former Security Council Deputy Secretary Boris Berezovskii spoke out in defense of First Deputy Prime Minister Chubais at a Russian-U.S. investment symposium at Harvard University, Interfax reported on 11 January. In remarks to the symposium, U.S. financier George Soros had accused Chubais of aiding the development of "bandit capitalism" in Russia by organizing the misappropriation of state property. Berezovskii, whose LogoVAZ empire acquired lucrative stakes in several privatized companies in recent years, argued that Soros's allegations were unfair and tactless. He noted that Chubais and his allies succeeded in redistributing property in Russia without bloodshed. Berezovskii and Chubais were allies until July 1997, when a consortium involving Berezovskii failed to win a major stake in the telecommunications giant Svyazinvest. Since then, Berezovskii and media financed by him have repeatedly attacked Chubais (see "RFE/RL Newsline," 23 and 30 December 1997). LB

...SAYS WEALTHY SHOULD HELP CREATE MIDDLE CLASS

At the same investment symposium, Berezovskii also said large financial and industrial groups in Russia should take steps to help create a middle class, Interfax reported on 11 January. He added that the number of Russians living in poverty must be reduced "so they don't hang us." Berezovskii said he will work to ensure that the 1999 parliamentary elections are not a repeat of the December 1995 elections to the State Duma. In 1995, the Communist Party gained far more votes than any other party. In December 1997, Berezovskii joined the political council of the Socialist Party of Russia, which is headed by Security Council Secretary Ivan Rybkin. An electoral bloc headed by Rybkin gained less than 2 percent of the vote in the 1995 parliamentary elections. LB

GOVERNMENT CALLS FOR TOUGHER ADVERTISING STANDARDS

The government on 8 January approved proposals to strengthen regulation of the advertising market, especially advertisements of alcohol, tobacco, and medical products, Russian news agencies reported. The measures, which were prepared by the State Anti- Monopoly Committee, include proposed amendments to the law on advertising and new procedures on registering medicines, to be adopted by the Health Ministry. State Anti-Monopoly Committee head Natalia Fonareva also urged the government to try to block efforts by some Duma deputies to weaken the ban on television advertising for alcohol and tobacco products. LB

LATEST IMF TRANCHE TO PAY DEBTS TO DEFENSE INDUSTRY

First Deputy Finance Minister Aleksei Kudrin told Interfax on 9 January that the government will spend the latest $667.5 million loan tranche from the IMF mostly on paying debts to the defense industry. He estimated that those debts total more than 20 trillion old rubles ($3.3 billion). Kudrin claimed defense industry workers will receive wages owed to them within the next six months, although he acknowledged that it will take longer to settle all government debts for defense orders. The IMF board approved the latest tranche on 8 January. LB

DEFENSE MINISTRY EXPLAINS FAILURE TO PAY BACK WAGES

The Defense Ministry says it is having trouble paying all back wages owed to military personnel, which were supposed to be settled by the end of 1997, because of funding shortfalls in other areas of the defense budget. According to a ministry statement published in the official military newspaper "Krasnaya zvezda" on 10 January, some funds earmarked for paying debts in soldiers' wages and financial benefits have been spent on other areas, such as financing the draft, military hospitals, and payments to officers laid off. Meanwhile, Defense Ministry officials told ITAR-TASS on 9 January that the Finance Ministry also contributed to problems in settling the wage debts on time by allocating funds to the Defense Ministry only on 30-31 December, rather than earlier in the month. LB

AIR FORCE TURNS TO UNCONVENTIONAL SOURCES OF FUNDS

The Russian Air Force raised more than $25 million in 1997 by renting out military equipment, Reuters reported on 9 January, citing an interview published the same day in "Krasnaya zvezda." Major-General Nikolai Anisimov, who heads the financial department of the air force, told the newspaper that leasing military aircraft to private firms or to other branches of the armed forces accounted for most of the "unconventional" financing. He said more money could be raised in the future by renting out some of the air force's hangar and storage space and by charging commercial rates for private treatment at military hospitals and vacations in military resorts. LB

HEAD OF RUSSIA'S LARGEST HOTEL KILLED

Yevgenii Tsimbalistov, the director-general of the massive Hotel Rossiya in Moscow, was shot dead in his apartment building on 9 January. Police believe the murder was a contract killing. Tsimbalistov became director of the hotel in 1995, after his predecessor was murdered. According to ITAR- TASS, the Hotel Rossiya, which has more than 3,000 rooms, is owned by the Moscow city government. The murder of Tsimbalistov is the latest in a string of apparent contract killings in the capital's hotel industry. Last November, the director-general of the Sovintsentr hotel and trade complex was shot dead, Reuters reported. In November 1996, an assailant killed U.S. citizen Paul Tatum, who was involved in an ownership dispute over the Radisson- Slavyanskaya Hotel. Those crimes remain unsolved. LB

MORE RUSSIAN-CHECHEN TALKS

A Russian government delegation headed by Deputy Prime Minister Ramazan Abdulatipov held talks in Grozny on 10 January with Chechen acting Prime Minister Shamil Basaev and other government officials on a timetable for economic reconstruction and on upgrading the status of Grozny's Sheikh Mansur airport, Russian agencies reported. Georgii Kurin, Russian presidential representative in Chechnya, said that establishing a free economic zone in Chechnya is a necessary precondition for stabilization, according to ITAR-TASS. Basaev warned that "Chechnya expects Russia to fulfill its obligations, especially in the economic sphere [so that] cooperation in other areas will develop successfully." But Chechen Deputy Prime Minister Akhmed Zakaev told Interfax on 10 January that he thinks further Russian-Chechen talks are "pointless" since Russia "has not met a single commitment" made to Chechnya in the past 18 months. LF

YELTSIN TO MEET WITH NORTH CAUCASUS ELDERS

On his return from Grozny to Moscow on 10 January, Abdulatipov told journalists that Russian President Boris Yeltsin will meet with North Caucasus elders in late January to discuss the "complicated and extremely contradictory" situation in the region, Russian agencies reported. Abdulatipov said that preparations for this meeting have been under way for some time and that "it will be a very useful dialogue." He said the meeting may be held either in Moscow, or in Stavropol or Makhachkala, the capital of Dagestan. LF

BASAEV PRESENTS CABINET NOMINATIONS

Acting Chechen Prime Minister Shamil Basaev on 11 January met with President Aslan Maskhadov to discuss the 22 nominations to his new government, ITAR-TASS reported. First Deputy Prime Minister Movladi Udugov is expected to be named foreign minister, field commander Ruslan Gilaev defense minister, and Basaev's brother, Shirvani, minister of power and fuel. It is unclear whether Maskhadov will cede to Shamil Basaev the post of premier, which he currently occupies. On 10 January, Russian presidential envoy Petr Marchenko told ITAR-TASS that the outgoing Chechen government has failed to perform adequately and that its orders are frequently ignored by former field commanders. Marchenko said this trend undermines the authority of the Chechen leadership (see also "End Note" below). LF




KARABAKH FOREIGN MINISTER SAYS PRESSURE "INADMISSIBLE"

Meeting with visiting U.S. Congressman Frank Pallone on 9 January in Stepanakert , Naira Melkumian said that attempts to impose an "unacceptable" solution to the Karabakh conflict on the unrecognized Nagorno- Karabakh Republic are "inadmissible," Noyan Tapan reported. She called for direct talks between Stepanakert and Baku and for the signing of a tripartite cease-fire agreement, which, she said, would expedite the peace process. Affirming that a "strategy to isolate Karabakh is counterproductive and will not work," Pallone pledged to try to convince Congress that supporting self- determination for Karabakh is not detrimental to U.S. Caspian oil interests, according to a 10 January press release by the Armenian Assembly of America. LF

ARMENIAN SECURITY COUNCIL MEETING UPDATE

Armenian First Deputy Foreign Minister Vartan Oskanian told "RFE/RL Newsline" on 9 January that despite extensive discussions, Armenian and Karabakh leaders failed to reach a "definite common position" on resolving the conflict at the 7-8 January Armenian Security Council session. But he added that they will continue talks to that end. Yerevan has accepted "phased" peace plan proposed by the co- chairmen of the Organization on Security and Cooperation in Europe's Minsk Group as a basis for future talks, but Stepanakert continues to insists on a "package" solution that would resolve all contentious issues, including the enclave's future status and international security guarantees, in a single framework document. LF

JAPAN TO BUILD OIL REFINERY IN GEORGIA

Japan's Itochu Corporation will sign a $300 million contract in Tbilisi later this month to build an oil refinery at the Black Sea port of Supsa, Interfax reported on 10 January, quoting Georgian International Oil Company President Giorgi Chanturia. The refinery will be located close to the terminal of the Baku-Supsa export pipeline, which is currently under construction, and will have an annual capacity of 3 million metric tons. It will produce fuel oil for electric power stations, diesel fuel, gasoline, and petrochemicals for both domestic consumption and export to Ukraine and Turkey. Itochu signed a memorandum of understanding with Georgia in September 1997, which covers investment in and modernization of hydro-electric power stations in Georgia. LF

GEORGIA, GREECE SIGN DEFENSE COOPERATION AGREEMENT

Visiting Athens on 8-10 January, Georgian Defense Minister Vardiko Nadibaidze met with Greek President Constantinos Stephanopoulos and Foreign Minister Theodoros Pangalos, Russian media reported. Nadibaidze and his Greek counterpart, Apostolos Tsochatzopoulos, signed a cooperation agreement on exchanging information, joint maneuvers, and the transfer next month of a Greek patrol boot to the Georgian coast guard. Tsochatzopoulos stressed that Georgia and Greece are located in the same geo-political region and that greater interaction between them will contribute to countering regional instability. Greece signed a similar defense cooperation agreement with Armenia in July 1997. LF

U.S.-AZERBAIJANI MINING AGREEMENT IN QUESTION?

Vasif Halilzade, the deputy head of Azerbaijan's State Precious Metals Institute, has hinted that the Azerbaijani government may cancel a $500 million contract with a U.S. consortium to explore and develop the country's gold, silver, and copper deposits, AFP reported on 9 January citing Turan. Halilzade said RV Investment Group Services LLS has taken no steps to date to implement the contract , which was signed last summer (see "RFE/RL Newsline," 21 and 25 August 1997). LF

HOSTAGE CRISIS RESOLVED IN TAJIKISTAN...

Rahmon Sanginov and his followers on 10 January freed five hostages after securing freedom for three of their compatriots held by the Tajik government, RFE/RL correspondents in Dushanbe reported. Three days earlier, Tajik militia had detained three of Sanginov's men for carrying arms, prompting Sanginov to set up a road block outside eastern Dushanbe. As representatives of the Tajik government and National Reconciliation Commission were negotiating the men's release on 10 January, Sanginov's group took five hostages in downtown Dushanbe, one of whom was the city's deputy mayor. The exchange of hostages for prisoners was made on the evening of 10 January. BP

...WHILE NURI SAYS NO MORE HELP FROM HIS GROUPS

Chairman of the National Reconciliation Commission Said Abdullo Nuri warned on 12 January neither the commission nor the United Tajik Opposition, which Nuri also heads, will intervene again to resolve a hostage crisis, RFE/RL correspondents in Dushanbe reported. Members of the commission and the UTO have taken part in negotiations with hostage takers and/or kidnappers on several occasions.. Nuri said anyone engaging in such illegal activities will be on their own in the future. BP




UKRAINIAN ECONOMIC PERFORMANCE LAGS

Prime Minister Valeriy Pustovoitenko said on 9 January that Ukraine's GDP had fallen by approximately 4 percent in 1997, an improvement from the 10 percent decline in 1996 but one that still leaves Ukraine near the bottom of post- communist countries in terms of economic growth, Interfax reported. According to the European Bank for Reconstruction and Development, Ukraine's economic performance in 1997 put that country in 23rd place among the 25 former communist countries the EBRD monitors. Only Turkmenistan and Albania performed worse. PG

BELARUS PRESIDENT UPBEAT ON ECONOMIC PROSPECTS

President Alyaksandr Lukashenka and his government are predicting that Belarus will have an 8 percent growth rate in 1998, with monthly inflation falling to below 2 percent, presidential press secretary Valeriy Tolkachyov told Interfax 9 January. But many international observers are skeptical about whether those figures reflect economic reality. PG

BELARUSIAN TV ACCUSES OPPOSITION OF PLOTTING COUP

Belarusian state television's "Rezonans" program on 11 January broadcast what it said was a report from an unidentified source claiming that the country's opposition movement has worked out a 12-month plan to prepare and stage a coup d'etat against President Lukashenka. Lyavon Barshchevskiy, a leader of the Belarusian Popular Front, dismissed that charge as "a fantasy." PG

LATVIA RECORDS LOWEST INFLATION AMONG BALTICS

Of the three Baltic States, Latvia recorded the lowest inflation rate last year, with consumer prices rising by 7.0 percent, BNS reported on 9 January. Inflation in Lithuania reached 8.4 percent and in Estonia 12.5 percent. Latvian Finance Minister Roberts Zile attributed the lower than expected inflation rate to the balanced budget and the Bank of Latvia's tough monetary policies and strict supervision of commercial banks. JC

RIGA TO SELL SHARES IN TEN MAJOR COMPANIES

The Latvian Privatization Agency plans to sell privatization vouchers in at least 10 large and medium-sized state enterprises this year, BNS reported on 11 January. Those companies include the distillery Latvijas Balzams, the gas supplier Latvijas Gaze, and the shipping company Latvijas Kugnieciba. The third issuance of stocks in the oil concern Ventspils Nafta is also slated to take place in 1998. Janis Naglis, director-general of the Latvian Privatization Agency, said Ventspils Nafta stocks could be sold on foreign exchanges by the fall. So far, Unibanka is the only Latvian company to have put up its stock for sale abroad. JC

LITHUANIAN COURT RULES ON TRANSFER OF POWER

The Lithuanian Constitutional Court has ruled that the government must temporarily surrender its authority when the new president is sworn in, ITAR-TASS and BNS reported on 10 January. Within 15 days of taking office, the president must request a formal answer from the parliament as to whether it has confidence in the prime minister. In the event of a negative response, the cabinet must resign. The court ruling follows a government request to clarify the relevant passages in the constitution and the law on the government. President-elect Valdas Adamkus is to take office on 25 February. Meanwhile, the Electoral Commission announced on 9 January that, according to the final results of the 4 January run-off, Adamkus received 50.37 percent of the valid ballots and Arturas Paulauskas 49.63 percent. JC

KWASNIEWSKI SAYS POLAND TO BE FIRST EAST EUROPEAN STATE IN NATO

At a press conference in New Delhi on 10 January, Polish President Aleksander Kwasniewski said Poland will become the "first East European state" to join NATO, PAP reported. In other remarks during his visit, he said that Warsaw will support India's efforts to secure a seat as a permanent member of the UN Security Council. He expressed the hope that New Delhi will back Poland as a rotating Security Council member at the next General Assembly meeting. Poland's commitment to the United Nations was highlighted on 9 January when the UN announced that Warsaw was now contributing more troops (1,084) to UN peacekeeping operations than any other member state. PG

PROBLEMS AT POLISH BORDER?

Both Belarus and the Russian Federation protested on 9 January to Warsaw that new rules imposed by Polish officials are creating long lines at the border, PAP reported. Belarusian Deputy Foreign Minister Nikolai Buzo said the new rules "came as a surprise for us." Russian Foreign Ministry spokesmen later said that "emergency consultations" solved the problem, ITAR-TASS reported the same day. Polish officials responded that Warsaw has not made some concessions suggested by the Russian side. PG

MAIN CZECH PARTIES AGREE ON EARLY ELECTIONS

The Civic Democratic Party (ODS), the Social Democratic Party (CSSD), the Christian Democratic Party, and the Communist Party of Bohemia and Moravia have agreed to hold early elections in the first half of 1998, CSSD leader and parliamentary chairman Milos Zeman told the press on 11 January. However, the parties' leaders failed to agree on whether the elections would be called by dissolving the parliament or by expressing no-confidence vote in the government by refusing to approve any of its bills, CTK reported. Zeman said one more meeting will be held before a scheduled gathering of party representatives with President Vaclav Havel on 22 January. Prime Minister Josef Tosovsky said he is not sure that his cabinet will be endorsed by the parliament, adding that in such a case, he will refuse to form another government. MS

KLAUS'S PARTY TO SPLIT

Members of the dissenting faction within the ODS are to meet on 17 January in Litomysl, eastern Bohemia, to prepare to form a new political party, former Interior Minister Jan Ruml said on 11 January. The same day, the rebels were joined by one more prominent politician. Anna Roeschova, the chairwoman of the Chamber of Deputies' Immunity Committee, told CTK that she will leave the ODS to join the new party. In other news, the National Statistic Office reported on 9 January that the annual inflation rate in 1997 rose to 10 percent, compared with 8.6 percent in 1996. MS

HUNGARIAN SMALLHOLDERS ACCUSE BLAIR OF FAVORITISM

The Independent Smallholders Party (FKGP) says that a recent letter from British Prime Minister Tony Blair to his Hungarian counterpart, Gyula Horn, welcoming the latter as an ally at the 1999 NATO summit amounts to interference in the upcoming Hungarian elections, Hungarian media reported on 10 January. As the U.K. currently holds the EU presidency, Blair's remarks can be interpreted by Hungarian voters to represent the position of the EU, the statement concludes. Meanwhile, former FKGP deputy chairwoman Agnes Nagy Maczo, who was dismissed from the party last October, announced on 9 January that various non-parliamentary clubs and parties have established the New Alliance for Hungary. The group is not a political party but will field candidates in the elections. MSZ

HUNGARY MAKES PROGRESS IN PAYING ITS DEBTS

Hungarian National Bank President Gyorgy Suranyi told "Nepszabadsag" on 10 January that Hungary has reduced its gross foreign debt from $33 billion in 1995 to $22 billion at present and its net foreign debts from $21 billion in 1995 to $10.5 billion. He noted that the bulk of privatization revenues were used to repay the debts and stressed that the trend was sustainable. Meanwhile, a report by the London-based Economist Intelligence Unit says the stability of the country's institutions and the advanced state of its reforms put Hungary in first place on the list of countries aspiring to EU membership. MSZ




MONTENEGRO'S BULATOVIC REFUSES TO YIELD POWER

Outgoing President Momir Bulatovic on 11 January told Belgrade media loyal to his mentor, Yugoslav President Slobodan Milosevic, that he will not give up his office to reform-minded President-elect Milo Djukanovic on 15 January as scheduled. Bulatovic called for mass demonstrations to begin in Podgorica on 12 January: "As we have exhausted all other means, we decided, in the interests of defending the Federal Republic of Yugoslavia, democracy, and rule of law in Montenegro, to call on citizens for a peaceful and dignified civic resistance." Bulatovic and his backers have repeatedly hinted that their mass protests, which are a Milosevic trademark, could become violent. On 10 January, Bulatovic supporters demanded the formation of an "interim government" that would not include Djukanovic's backers, an RFE/RL correspondent reported from Podgorica. PM

STATE OF EMERGENCY IN MONTENEGRO?

Blagota Mitric, the president of the Montenegrin Constitutional Court, said in Podgorica on 10 January that President Bulatovic might use the mass protests as an excuse to declare a state of emergency and prolong his own rule. Meanwhile, Yugoslav Defense Minister Pavle Bulatovic told Montenegrin media that the army will not intervene in the growing political crisis. Minister Bulatovic stressed that the conflict must be solved in peaceful and democratic way. PM

YUGOSLAV ARMY WANTS LINKS TO NATO

Chief-of- Staff General Momcilo Perisic said that "if Yugoslavia insists on staying outside [NATO's] Partnership for Peace [program], it will remain isolated, which will certainly have a negative impact on its future prosperity.... If Yugoslavia follows new world trends, it will acquire the means to be integrated into Europe." The pro-Milosevic Belgrade daily "Vecernje Novosti" on 12 January quoted Perisic's remarks, which appear in the new book "Silence is Criminal, Too," by Svetlana Petrusic. PM

NEW YUGOSLAV FOREIGN MINISTER

Prime Minister Radoje Kontic on 9 January named Milosevic loyalist Zivadin Jovanovic to succeed Milan Milutinovic, the new Serbian president, as Yugoslav foreign minister. PM

KOSOVO SERBS DEMAND "PROTECTION"

Serbs in Drenica, west of Pristina, demonstrated on 9 January to demand that President Milosevic protect them against the growing strength of the clandestine Kosovo Liberation Army (see "End Note," "RFE/RL Newsline," 9 January 1998). It is unclear if the protest is a spontaneous act by worried citizens or part of an orchestrated campaign--like those Milosevic used in Croatia in 1991 and in Bosnia in 1992--to provide an excuse for intervention by Serbian troops and paramilitaries. Meanwhile in Pristina, leaders of the Bozur Society of Serbs and Montenegrins in Kosovo announced on 11 January that Bozur will stage rallies "to help make Milosevic aware of the situation in Kosovo." Bozur also plans to send a delegation to talk to Milosevic. And near Klina on 9 January, unidentified gunmen killed a Serb. PM

WESTENDORP BACKS PLAVSIC'S PRIME MINISTER

Carlos Westendorp, the international community's chief representative in Bosnia, said in Banja Luka on 11 January that the international community urges the Bosnian Serbs to support Mladen Ivanic, who is Republika Srpska President Biljana Plavsic's nominee for prime minister (see "RFE/RL Bosnia Report," 7 January 1998). Westendorp added that "We wish [Ivanic] good luck in forming a new government and we will help him.... The absence of a government is harmful to the interests of the people." The hard-liners based in Pale have repeatedly rejected Ivanic's candidacy. PM

MUSLIMS DISMISS ZUBAK'S CHARGES

Mirza Hajric, a spokesman for Bosnian Muslim leader Alija Izetbegovic, said in Sarajevo that recent anti-Muslim remarks by Bosnian Croat leader Kresimir Zubak are aimed at promoting Zubak's standing with the top leadership in Zagreb, "Oslobodjenje" reported on 11 January (see "RFE/RL Newsline," 6 January 1998). Hajric argues that Zubak is echoing the anti-Muslim views of the Zagreb leadership in order to ensure his own election as head of the governing Bosnian Croat party, the Croatian Democratic Community, which is in practice a branch of the governing Croatian party of the same name. PM

CROATIA'S UNIONS THREATEN STRIKE

Representatives of Croatia's leading labor unions said in Zagreb on 9 January that they will urge their members to launch street protests if the government does not act to alleviate the effects of the 22 percent value-added tax, which took effect on 1 January (see "RFE/RL Newsline," 6 January 1998). Also in Zagreb, a government spokesman said that the authorities will take steps to ensure that merchants do not take advantage of VAT to raise their prices independent of the tax, an RFE/RL correspondent reported from the Croatian capital. PM

WHO OWNS CROATIA'S BIGGEST DAILY?

An unidentified bidder bought a majority share in the pro-government Zagreb daily "Vecernji list" on 9 January. Spokesmen for independent journalists said they suspect that government supporters are behind the sale in an effort to allow the government to keep control of the paper while appearing to be encouraging privatization. PM

POLICE CHIEF KILLS COLLEAGUE IN NORTHERN ALBANIA

Tropoja police chief Fatmir Haklaj on 9 January shot and killed Shaqir Hoxha, his counterpart at the local border police post. Officials at the local state prosecutor's office said Haklaj was avenging the killing of his brother earlier in the week in a blood feud between the two influential families, "Shekulli" reported. Local policemen, however, denied there is a blood feud between the Haklaj and Hoxha families, "Gazeta Shqiptare" reported on 11 January. The same day, Interior Minister Neritan Ceka, speaking on state-run television, denied opposition charges that a recent wave of killings in Tropoja is politically motivated (see "RFE/RL Newsline," 8 January 1998). Tropoja and other northern regions are centers of the ancient Albanian custom of the blood feud. FS

ALBANIANS HAVE ELECTRICITY DEBTS TOTALING $52 MILLION

The Albanian Energy Corporation (KESH) said that by the end of last year, customer debts for electric energy reached $52 million, "Dita Informacion" reported on 11 January. The largest debtors are state-owned companies and private households. KESH lacks funds to develop its power grid, and Albania is currently subject to frequent power shortages. FS

SOLUTION TO ROMANIAN COALITION CRISIS IN SIGHT?

After a 11 January meeting of the coalition leaders, Razvan Popescu, the chief of the government's Department for Public Information, said things are "moving in the direction desired by the government, meaning that the Democratic Party will remain in the coalition." The meeting was called after the National Liberal Party (PNL) offered to mediate between the Democrats and the National Peasant Party Christian Democratic (PNLCD). Popescu dismissed media speculation that the meeting discussed replacing Premier Victor Ciorbea. Later on 11 January, President Emil Constantinescu met with the leaders of the PNL and PNLCD. The president's office also denied that Ciorbea's replacement has been discussed, saying the focus of the discussions was on speeding up reform. MS

ROMANIAN NATIONAL CURRENCY DROPS

The value of the national currency dropped by 4.2 percent during the past week. On 9 January, dealers ended up exchanging the leu at a rate of 8,650-8,800 to $1. Some observers attribute the sharp drop to the looming government crisis. Also on 9 January, the National Board for Statistics announced that the inflation rate in 1997 was 151.4 percent, while the value of the national currency dropped by 84.4 percent, RFE/RL's Bucharest bureau reported. MS

MOLDOVAN RIGHTISTS LAUNCH ELECTION CAMPAIGN

Some 2,000 people attended the launching of the election campaign of the Democratic Convention of Moldova (CDM) in Chisinau on 10 January, RFE/RL's bureau in the Moldovan capital reported. The CDM was set up on 19 June 1997 by the Moldovan Party of Rebirth and Conciliation, led by former President Mircea Snegur, and by the Christian Democratic Popular Front, headed by Iurie Rosca. The CDM was later joined by the Moldovan Ecologist Party, the Christian Democratic Women's League and by a wing of the National Peasant Party of Moldova. Snegur, who like Rosca is a CDM co-chairman, told the gathering that Moldova has yet to change its regime, because at present it is ruled by a "neo-communist government." Rosca said that only "a rightist political force can be an alternative to the current rule of the left." MS

RUSSIAN OFFICIAL SAYS NO WITHDRAWAL FROM TRANSDNIESTER YET

Vasilii Kravtsov, Russian deputy minister for CIS affairs, said in Tiraspol on 10 January that his country will not withdraw its forces from the Transdniester before the conflict between the separatists and Chisinau is fully settled, BASA-press reported. Kravtsov, who visited the Russian troops stationed in the region, said he doubted any one could predict when that would happen. Also on 10 January, Stefan Kitsak, military counselor to separatist leader Igor Smirnov, said on Transdniestrian television that "nationalist forces" in Chisinau are "preparing an invasion" of the Transdniester and that only a strong Transdniestrian army can forestall those intentions. His speech marked the sixth anniversary of the passage by the Transdniester Supreme Soviet of a law on setting up a separatist military force, RFE/RL's Chisinau bureau reported. MS

RIVAL RALLIES MARK ANNIVERSARY IN BULGARIA

Government and opposition rallies on 10 January marked the first anniversary of the storming of the parliament by demonstrators protesting the rule of the Socialist Party, an RFE/RL correspondent in Sofia reported. No violent incidents were reported. Earlier the same day, the building of the parliament was opened to the public on the order of parliamentary chairman Yordan Sokolov. On 9 January, Prosecutor-General Ivan Tatarchev ordered an investigation into allegations that former Premier Zhan Videnov personally ordered police forces to beat up demonstrators in January 1997. At a press conference in Sofia, Videnov did not deny the allegations, saying he was "not running away from responsibility." MS




WHO CONTROLS CHECHNYA?


by Liz Fuller

On 1 January 1998, Chechen President Aslan Maskhadov acquiesced to maverick field commander Salman Raduev's repeated demands that he dismiss his cabinet. Acting Prime Minister Shamil Basaev, notorious for his leading role in the June1995 Budennovsk hostage- taking, was charged with forming a new government. That move will inevitably fuel the ongoing debate in the Russian media about the extent of Maskhadov's control over his unruly countrymen and the alignment of domestic forces opposed to him.

A former Soviet army colonel who served as chief of staff to President Dzhokhar Dudaev, Maskhadov won the adulation of the forces serving under his command during the 20-month war against Russia. Meeting with then Russian Security Council Secretary Aleksandr Lebed in August 1996, Maskhadov signed the agreements that in effect ended hostilities and paved the way for extended talks on Chechnya's future status vis-a-vis Moscow. Many Russian politicians made no secret of their desire to see Maskhadov, whom they considered pragmatic and open to reason, elected president of Chechnya rather than one of the more radical and unpredictable former field commanders, such as Basaev.

But since his presidential election triumph in January 1997, Maskhadov has become increasingly perceived as having only limited authority. The real power, most observers agree, lies with the 18-strong Field Commanders' Council headed by Vice President Vakha Arsanov. By contrast, neither the parliament, the government, nor most political parties exercise significant influence on political developments.

The former field commanders, each of whom established control over a specific district of Chechnya during the war, have thus emerged as a counterbalance and complement to the "teyps" (clans) that until late1994 were the single most important social and political entity. (There is a strict hierarchy among the more than 150 Chechen teyps, the most numerous and powerful of which, the "benoy," is one of the 20 or so oldest and most respected such groups.)

This is not to assert that the power of the teyps has been totally eclipsed or that teyp membership carries no clout. Various teyps still control foreign policy and the oil sector, for example. Maskhadov's own faction is supported by Chechen businessmen from the smaller teyps who made their fortunes in Russia during the war. And two other groups jockeying for power are likewise teyp-oriented: the former Dudaev faction, which also includes representatives of some Ingush teyps; and that of Dudaev's deputy president, writer Zelimkhan Yandarbiev, and former chairman of the Chechen Oil Company, Khozh-Akhmet Yarikhanov, both of whom reportedly enjoy the support of the richest and noblest teyps.

This latter faction also includes radical field commander Raduev and First Deputy Prime Minister Movladi Udugov, who, lacking teyp support, is engaged in building an alternative power base in the form of the Islamic Path party, which he heads. In August 1997, Yandarbiev and Raduev founded the Warriors of Freedom movement, which is composed of some 1,000 war veterans and opposes any compromise approach to securing Chechnya's formal independence from the Russian Federation. The visible erosion of Maskhadov's authority dates from May 1997, when he and Russian President Boris Yeltsin met in Moscow to sign a formal treaty on peace and bilateral relations. That move reportedly so outraged the Field Commanders' Council that its members contemplated a coup to depose Maskhadov. In early July, Shamil Basaev, at that time perceived as Maskhadov's most influential supporter within the council, resigned from his post as deputy premier. Basaev himself declined to comment on his motives, but one observer has claimed that Basaev's directives were routinely ignored and that he was not consulted when decisions were taken on matters within his competence.

In late September, Vice President Arsanov, described by one Russian journalist as "unpredictable, single-minded, and ruthless," spontaneously ordered the expulsion of the entire Russian mission in Grozny. That move highlighted his role as what Ivan Rybkin, Lebed's successor as Security Council secretary, termed "the tail that controls the fox." One month later, in a possible bid to preclude further destabilizing moves by Arsanov, Maskhadov named Basaev first deputy prime minister and empowered him to act as premier during Maskhadov's private visits to Turkey and the U.S.

It is unclear whether Maskhadov will continue to combine the posts of president and prime minister as he has done until now, despite objections from the Field Commanders' Council. Since Arsanov reportedly exercises full control over domestic political and economic issues, Basaev may find himself frustrated and side-lined if Maskhadov appoints him prime minister. Moreover, Basaev would be unable to prevent the further erosion of Maskhadov's dwindling authority.

Meanwhile, Yandarbiev, Raduev and Udugov, united by their pathological antipathy to Russia, await an opportune moment to realize their shared objective of establishing an Islamic state in the North Caucasus. Maskhadov's avowed commitment to dialogue with Moscow is the single largest impediment to that objective.


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