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Newsline - January 15, 1998




CHERNOMYRDIN FAILS TO ATTEND CABINET MEETING

Prime Minister Viktor Chernomyrdin did not attend a 15 January cabinet meeting that he was scheduled to chair. An unnamed government aide told Reuters that Chernomyrdin has gone to the Barvikha clinic, where President Boris Yeltsin spent two weeks in December. However, government spokesman Igor Shabdurasulov denied that Chernomyrdin was at the sanitarium, saying the premier was working on documents at home. Earlier, a government spokeswoman confirmed that First Deputy Prime Minister Anatolii Chubais chaired the cabinet meeting, but she claimed to have no information on Chernomyrdin's whereabouts. The prime minister returned to Moscow on 14 January after visits to Turkmenistan and Tajikistan. Chernomyrdin underwent heart bypass surgery in 1992, before he was appointed prime minister, but he has had no apparent health problems in recent years. LB

YELTSIN UNHAPPY WITH DELAYS ON START-2 RATIFICATION

Yeltsin is not pleased that the State Duma has repeatedly delayed consideration of the START-2 arms control treaty, presidential spokesman Sergei Yastrzhembskii told ITAR-TASS on 15 January. He said Yeltsin believes the postponements harm the interests of the Russian armed forces, prospects for further reductions in strategic offensive weapons, and Russian-U.S. relations. U.S. President Bill Clinton is scheduled to visit Moscow in 1998, but both Russian and U.S. officials have said that visit should be held only after Russia ratifies START-2. The Duma is not scheduled to consider the treaty during the first half of the year (see "RFE/RL Newsline," 13 January 1998). LB

RYBKIN IN GROZNY

As head of a government delegation to Grozny on 14 January, Russian Security Council Secretary Ivan Rybkin met with Chechen President Aslan Maskhadov and acting Prime Minister Shamil Basaev. Discussions focused on short-term measures to enhance cooperation, specifically Russian economic assistance. Also discussed was a possible visit to Chechnya by Chernomyrdin to pave the way for Russian President Yeltsin's planned trip. Rybkin told journalists later he believes a constitutional law should be adopted giving Chechnya the status of either a full or associate member of the Russian Federation. Also on 14 January, the Russian Security Council issued a statement denying media reports that the State Duma voted two days earlier to cut federal spending on Chechnya, ITAR-TASS reported. LF

ABDULATIPOV WARNS AGAINST "STARVING" CHECHNYA

Addressing Duma deputies on14 January, Russian Deputy Prime Minister Ramazan Abdulatipov called for increased funding for reconstruction in Chechnya, arguing that a "hungry and angry Chechen is dangerous both to Russia and to Chechnya." Abdulatipov said Russia wasted the time that has elapsed since the signing in August 1996 of the Khasavyurt accords, which postponed a decision on Chechnya's future status within the Russian Federation. He added that if delays in expediting reconstruction of the Chechen infrastructure continue, "in one year [radical field commander Salman] Raduev will come to power in Grozny," an RFE/RL correspondent in Moscow reported. LF

DUMA CONCERNED ABOUT DEFENSE INDUSTRY, AVIATION

The Duma on 14 January approved a resolution demanding that state support for the military-industrial complex be raised to a level that would provide for Russia's security, ITAR-TASS reported. The resolution instructed the Audit Chamber to examine how funds earmarked for conversion of defense industry enterprises have been spent. It also argued that at his next meeting with the president, prime minister, and Federation Council speaker, Duma Speaker Gennadii Seleznev should call for the president and government to stop "ignoring appeals from the State Duma...concerning the armed forces, defense industry, and Russian science." Also on 14 January, the lower house called for the government to create an independent commission to investigate airplane accidents. A resolution on the "critical situation in Russian aviation" said such a commission should include members of the Russian Academy of Sciences and Duma deputies. LB

REALLOCATION OF DUMA COMMITTEES DELAYED

Duma Speaker Seleznev announced on 14 January that the leaders of the seven registered Duma factions have agreed to leave the current distribution of committee chairmanships in place until the parliament approves the 1998 budget, RFE/RL's Moscow bureau reported. He added that the issue would not be considered before March. Under the January 1995 agreement on committees, which was to expire this month, the Communist faction was allowed to appoint heads of nine Duma committees. Our Home Is Russia, Liberal Democratic Party of Russia, and Yabloko factions were given four committees each, the Popular Power faction three, and the Agrarian and Russian Regions factions two each. Our Home Is Russia has since sought unsuccessfully to remove Lev Rokhlin, who was expelled from the faction last September, from the post of Defense Committee chairman. LB

NUMBER OF BANKS CONTINUES TO DECLINE

Central Bank Deputy Chairman Aleksandr Turbanov announced on 14 January that Russia had 1,697 commercial banks as of 1 January, Interfax reported. In 1995, there were more than 2,500 such banks in Russia. Turbanov said 43 percent of Russian banks currently have less than 1 million ECU in registered capital ($1.1 million). He noted that in order to receive a license, new banks are now required to have registered capital of at least 4 million ECU. He added that beginning on 1 January 1999, all banks will be required to have at least 1 million ECU in registered capital or else lose their banking licenses. Turbanov advised banks that currently do not meet this requirement to consider merging with larger institutions. According to Central Bank Deputy Chairman Denis Kiselev, licenses were revoked from some 330 Russian banks in 1997, ITAR-TASS reported on 13 January. LB

NEW LIMITS ON FOREIGN BORROWING BY BANKS

In response to the turmoil on international financial markets, the Central Bank has changed its regulations on foreign borrowing by commercial banks, "Russkii telegraf" reported on 14 January. Commercial banks will now be allowed to borrow a maximum of 400 percent of their registered capital, or 28 percent of their total assets, from foreign banks. Central Bank Deputy Chairman Kiselev told "Russkii telegraf" that the change is designed to ward off a potential crisis if foreign creditors lose confidence in the Russian banking system. He added that the new rule merely limits the growth of foreign borrowing by Russian banks and will not require them to reduce current borrowing levels. However, the newspaper reported that some bankers believe the Central Bank changed its rules because on international financial markets, loans to Russian commercial banks are competition for Russian government bonds. "Russkii telegraf" is fully owned by Oneksimbank. LB

FOREIGN-CURRENCY RESERVES DEPLETED BY MARKET TURMOIL

Central Bank Chairman Sergei Dubinin announced on 13 January that the bank's gold and foreign-currency reserves totaled $18 billion as of 1 January, about the same level as at the beginning of December 1997, Russian news agencies reported. The Central Bank's gold and foreign-current reserves totaled nearly $25 billion in September, but the bank spent billions in subsequent months to support Russian treasury bills (GKOs) and prevent a significant devaluation of the ruble. Dubinin expressed the hope that by the end of 1998, yields on GKOs will fall from 31-32 percent currently to 15-18 percent. At the height of the market instability in November, GKO yields reached 45 percent. LB

PUBLIC TRUST IN RUBLE LOW

Also on 13 January, Dubinin said more must be done to increase the public's trust in the ruble, ITAR-TASS reported. He noted that Russian citizens' cash holdings in U.S. dollars are now estimated at $30 billion. He did not specify how the authorities plan to achieve greater trust in the ruble. The recent redenomination, which took three zeroes off the ruble, was in part designed to increase trust in Russia's currency and facilitate the "dedollarization" of the economy. LB

KEMEROVO MINERS STAGE WARNING STRIKE

Workers at all coal mines in Kemerovo Oblast staged a one-day warning strike on 15 January, an RFE/RL correspondent in Kemerovo reported. The miners, many of whom are owed several months of wages, are demanding more financial support for the coal industry. Kemerovo's Kuznetsk coal basin is the largest in Russia. In an interview with RFE/RL's Moscow bureau on 14 January, Kemerovo Governor Aman Tuleev described the strike as "madness," saying it will mainly harm the interests of the miners. Tuleev recently held negotiations with Prime Minister Chernomyrdin and other government officials in Moscow. A government commission to be chaired by Fuel and Energy Minister Sergei Kirienko will fly to Kemerovo on 19 January. Speaking to RFE/RL, Tuleev particularly praised First Deputy Prime Minister Chubais's work to secure financing for the coal industry. LB

COMMISSION BLOCKS PROPOSED REFERENDUM IN ROSTOV

The Rostov Oblast Electoral Commission has refused for a third time to register an opposition group seeking to hold a referendum asking voters whether they trust Rostov Oblast Governor Vladimir Chub. The commission ruled that the wording of the proposed question is open to multiple interpretations, "Kommersant-Daily" reported on 14 January. The two previous attempts to register a group supporting the referendum were rejected for the same reason. The Communist-backed opposition in Rostov has sought to hold the referendum on Chub on 29 March, the same day legislative elections are scheduled in the oblast. Chub was appointed governor of Rostov by Yeltsin in 1991 and won a September 1996 election to retain his post. However, supporters of Chub's Communist opponent charged that the 1996 election was marked by widespread fraud. LB

UKRAINE RATIFIES TREATY WITH RUSSIA

By a vote of 317 to 27, Ukrainian lawmakers ratified a friendship treaty with Russia on 14 January. President Leonid Kuchma and his Russian counterpart, Boris Yeltsin, signed the treaty last May following years of bilateral disputes over the division of the former Soviet Black Sea Fleet. The document reaffirms the countries' borders and thereby reduces Moscow's chances of claiming Crimea or its port city Sevastopol, as several Russian politicians have advocated. The Ukrainian parliament has yet to consider ratifying several agreements on the fleet, which are expected to face considerable opposition among lawmakers. PB

YELTSIN PLEASED WITH RATIFICATION OF TREATY

Russian presidential spokesman Sergei Yastrzhembskii told Interfax on 14 January that Boris Yeltsin welcomed the "convincing ratification" of the treaty by the Ukrainian parliament and expects the Russian parliament to "give equally convincing support" to the document. The Russian State Duma is scheduled to consider the treaty in early February. Although Duma First Deputy Speaker Vladimir Ryzhkov predicted on 14 January that the treaty will be ratified, the document is expected to meet with vocal opposition from some Duma members, including Vladimir Zhirinovsky's Liberal Democratic Party of Russia faction and Popular Power faction co-leader Sergei Baburin. They have called for more transmissions of Russian television broadcasts in Ukraine. Baburin has also warned that Russia will pave the way for Ukraine's possible accession to NATO if it ratifies a treaty renouncing all claims on Ukrainian territory. LB

SPOKESMAN SAYS YELTSIN NOT PREJUDICED AGAINST BALTICS

Also on 14 January, Yastrzhembskii said that Yeltsin wants a "constructive dialogue" with the leaders of the Baltic States, Interfax and BNS reported on 14 January. The Russian news agency quoted Yastrzhembskii as stressing that Yeltsin has "no prejudices" against any of the Baltic leaders and that Russia intends to continue to develop relations with the Baltic States. Yastrzhembskii pointed to progress in Russian-Lithuanian relations but noted that ties with Estonia and Latvia are not developing well because the rights of ethnic Russians in those countries are being violated. JC

ADAMKUS SAYS KALININGRAD "INTERNATIONAL PROBLEM"

Lithuanian President-elect Valdas Adamkus told the Polish weekly "Wrpost" that the status of Kaliningrad Oblast remains an "international problem," BNS reported on 14 January. Adamkus explained that statement by noting that "at the Potsdam Conference, the great powers transferred Kaliningrad to the administration of the USSR, but only temporarily--in other words, until such a time when a decision is made as to what is to be done further." He argued that problems related to the region should be resolved by international organizations, while stressing that cooperation with "all neighbors" is indispensable for peace "in this part of Europe." By contrast, incumbent President Algirdas Brazauskas last month distanced himself from challenges by Lithuanian politicians regarding Kaliningrad's status. Such challenges, Brazauskas said, "complicate our relations with neighboring countries and, of course, with Russia." JC




ARMENIAN PREMIER RULES OUT SUBORDINATING KARABAKH TO BAKU

Speaking to journalists in Yerevan on 14 January, Robert Kocharian again rejected any settlement of the Karabakh conflict that would entail the subordination of the unrecognized Nagorno-Karabakh Republic to Azerbaijan, RFE/RL's Yerevan bureau reported. Kocharian argued that a confederation in which Azerbaijan and Nagorno- Karabakh would have equal status is the optimum way of preserving Azerbaijan's territorial integrity, according to Noyan Tapan. He acknowledged that serious differences emerged within the Armenian leadership over Karabakh at the 7-8 January Security Council session, adding that such differences are "a normal phenomenon." But Kocharian denied a press report that his resignation was discussed at the Security Council session (see "RFE/RL Newsline," 14 January 1998). LF

GEORGIAN OFFICIALS RESPOND TO MAFIA CHARGES AGAINST DIPLOMAT

Georgian parliamentary chairman Zurab Zhvania and parliamentary Commission for Foreign Affairs chairman Kakha Chitaia have expressed their support for the country's diplomatic corps while acknowledging shortcomings in its work, Caucasus Press reported on 14 January. The two officials were responding to a statement by parliamentary Commission on State and Legal Affairs chairman Mikhail Saakashvili accusing Georgian Ambassador to Italy Begi Tavartkiladze of neglecting his duties and of ties with "dubious" Italian financial circles. LF

AZERBAIJAN DENIES SELLING MISSILES TO PERU

Azerbaijan's Ministry of Defense has officially denied allegations in the "Washington Times" on 12 January that Azerbaijan has sold to Peru air-to-air missiles worth $8 million, Turan reported on 14 January. "The New York Times" on 7 January had cited a Human Rights Watch report that gun-runners from Azerbaijan, Turkmenistan, Ukraine, and Bulgaria had transported arms to Hutu and Tutsi militants in Burundi. LF

AZERBAIJANI OIL OUTPUT DOWN, BUT EXPORTS UP

Azerbaijan in 1997 met its oil production target of 9.02 million metric tons, down 0.9 per cent on 1996 levels, Interfax reported on 12 January. In an interview with "Nezavisimaya gazeta" two days later, Natik Aliev, the president of the state oil company SOCAR, admitted that the target for extraction of natural gas was not met. Aliyev disclosed that in 1997 Azerbaijan exported a record quantity of oil, the lion's share of which went to Iran, Georgia, and Dagestan. (That oil was extracted by SOCAR, not by any of the international consortia of which SOCAR is a member.) Aliyev said that domestic consumption of oil has fallen since SOCAR began demanding pre-payment for deliveries to all domestic customers, except the Ministries of Defense and Agriculture. LF

AZERBAIJANI PRESIDENT NAMES EXPERTS TO NEGOTIATE WITH TURKMENISTAN

Heidar Aliyev has appointed a group of oil officials and diplomats to conduct talks with Turkmenistan on delineating the dividing line between the Azerbaijani and Turkmen sectors of the Caspian, Turan and Interfax reported on 13 January . Foreign Minister Hasan Hasanov told journalists that it may prove easier for the five Caspian littoral states to reach agreement on the disputed status of the Caspian after the sea's median line is delineated. Visiting Ashgabat on 13 January, Russian Prime Minister Chernomyrdin expressed the hope that all disputes related to Caspian Sea resources will be resolved this year. LF

RUSSIAN PREMIER IN TURKMENISTAN ...

On the second day of his visit to Ashgabat, Chernomyrdin on 14 January failed to reach agreement with Turkmen President Saparmurat Niyazov on the resumption of Turkmen natural gas exports via Russia. Niyazov rejected Russian offers to purchase 25 billion cubic meters of gas for resale to Ukraine or to pay $32 in transit tariffs per thousand cubic meters of Turkmen gas exported to Ukraine via Russia. But both Niyazov and Gazprom board chairman Rem Vyakhirev, who accompanied Chernomyrdin, hinted that a compromise on export tariffs may be reached, but not earlier than within one month. LF

... AND TAJIKISTAN

In Dushanbe on 14 January, Chernomyrdin and Tajik President Imomali Rakhmonov signed several bilateral agreements, including one on defense cooperation in 1998. Talks focused on Tajikistan's request for membership in the CIS customs union and a possible 500 million ruble ($85 million) Russian loan to Tajikistan. Tajik Prime Minister Yakhye Azimov told Interfax on 13 January that a "financial injection" is needed to enable Tajikistan to honor previously signed bilateral agreements with Russia. But Russian Deputy Prime Minister Valerii Serov said Russia could not agree to such a loan before adoption of the 1998 budget. Serov also said that complete stabilization of the political situation in Tajikistan is necessary before Russia can complete construction of the Rogun hydro-electric power station, in which it has a 50 percent stake. LF

KAZAKH OPPOSITION CONDEMNS CHINESE REPRESSION OF UIGHURS

Members of the AZAT, AZAMAT, and ATTAN-Kazakhstan movements convened a press conference in Almaty on 14 January to condemn the execution last month in China's Xinjiang Autonomous Region of 13 young Uighurs for their alleged involvement in terrorist and separatist activities, RFE/RL's Almaty bureau reported on 15 January. Leaders of the ethnic Uighur minority in Kazakhstan have sent a written protest to the Chinese Embassy in Almaty. The Kazakh opposition activists called on the Kazakh government to sever all economic and other relations with China until the oppression of ethnic Uighurs in Xinjiang ends. LF




UKRAINIAN COURT TO RULE ON DEATH PENALTY

Chief Justice Ivan Tymchenko has said the Constitutional Court will rule whether capital punishment is constitutional, RFE/RL reported on 14 January. Tymchenko did not say when the ruling would be made. The Council of Europe has threatened to suspend Ukraine if it continues carrying out the death penalty. Kyiv pledged to stop executions when it joined the council in 1995. The following year, however, well over 100 executions took place in the country. PB

BELARUSIAN DISSIDENT PLANS DRIVE AGAINST LUKASHENKA

Exiled opposition leader Zianon Paznyak said his organization, the Belarusian Popular Front, will soon hold petition drives in a bid to force out President Alyaksandr Lukashenka. Paznyak told the Polish paper "Zycie" in Washington that this plan may be the reason the government recently claimed the opposition was planning a coup attempt (see "RFE/RL Newsline," 12 and 14 January 1998). Paznyak said the government considers the petition drive a "dangerous development" and intends to prevent it. PB

"SVABODA" TO BE PUBLISHED UNDER NEW NAME

"Svaboda" editor Ihar Hermianchuk has said he will begin publishing a tri-weekly newspaper called "Naviny" (News), ITAR-TASS reported on 14 January. Hermianchuk said the first edition will appear on 16 January and will have the same editorial content as "Svaboda," which was shut down by the Belarusian government last fall (see "RFE/RL Newsline," 25 November 1997). "Svaboda" was the country's largest-circulation opposition newspaper. "Naviny" will initially be available for purchase only at kiosks. PB

DIPLOMATS MEET WITH LUKASHENKA

President Lukashenka has told a group of ambassadors in Minsk that his country has "many serious problems" with the EU and the Council of Europe, Interfax reported on 14 January. "I think you have realized that putting limits on contacts and [other] ...forms of pressure are counterproductive," he told them. Lukashenka said he hoped that the Organization on Security and Cooperation in Europe's mission in Belarus (see "RFE/RL Newsline," 13 January 1998) will respect "the Belarusian people's sovereign rights." PB

ESTONIA'S HANSAPANK MERGES TO CREATE LARGEST BANK IN BALTICS

Estonia's largest commercial bank, Hansapank, has announced it will merge with Hoiupank, the country's third-largest such bank, ETA and BNS reported on 14 January. The new bank will be the largest in the Baltic States, with assets totaling $1 billion. Shares in Hansapank and Hoiupank led Estonia's stock market boom last year but lost in value when the market crashed last fall. According to dpa, analysts claim Hansapank will benefit more from the deal, as it was forced to postpone a share issue at the end of 1997 owing to the depressed stock prices. The merger must still be approved by the shareholders of both banks and by the Bank of Estonia. JC

LITHUANIA, U.S. SIGN INVESTMENT TREATY

Lithuanian and U.S. officials, meeting in Washington on 14 January, signed an investment treaty intended to help expand trade between the two countries, Reuters reported. The treaty guarantees the right to invest on terms no less favorable than those accorded domestic investors in most business sectors, the news agency quoted the U.S. Trade Representative's Office as saying. JC

TENSIONS CONTINUE IN NORTHERN POLAND

Hundreds of people in the northern city of Slupsk attended the funeral of a 13-year-old boy who died allegedly after being beaten by police (see "RFE/RL Newsline," 13 January 1998), AFP reported on 14 January. The boy's death sparked two nights of riots that left dozens injured and property damaged. Nearly 100 people were arrested. The situation in the industrial town remains tense. Meanwhile, a federal investigation is to be conducted. PB

CZECH GOVERNMENT AGREES ON HOW TO DISSOLVE PARLIAMENT

The cabinet on 14 January approved a bill on state-owned land that will be submitted to the Chamber of Deputies to be tied to a confidence vote, Premier Josef Tosovsky told journalists. Rejection of the bill or failure to discuss it within 90 days will trigger the constitutional mechanism for dissolving the parliament (see "RFE/RL Newsline,"13 January 1998). The government also discussed a first draft of its program, to be submitted to the parliament's approval, and assigned the task of drawing up a second version to several groups of ministers, CTK reported, citing government spokesman Vladimir Mlynar. MS

DIVERGENT VIEWS ON CZECH RATIFICATION OF NATO ENLARGEMENT

Petr Necas, the chairman of the Chamber of Deputies' Defense and Security Commission and a member of the Civic Democratic Party (ODS), said on 14 January it is essential that the ratification of Czech membership in NATO take place before early elections scheduled for June. He said it cannot be ruled out that the Social Democrats (CSSD), who are demanding a referendum on joining NATO, will win those elections. But Social Democrat leader Milos Zeman told CTK that it would be a "blatant diplomatic blunder" if the step were taken before all NATO countries have ratified the alliance's enlargement. Polls show that the CSSD has a good chance of winning the next elections. MS

SLOVAK POLL SHOWS OPPOSITION AHEAD

A public opinion survey conducted by the Institute for Public Affairs confirms the 1997 trend in which Premier Vladimir Meciar's Movement for a Democratic Slovakia (HZDS) lost much of its former political backing, Reuters reported. The HZDS, with 25.7 percent support, is trailing the opposition Slovak Democratic Coalition (31.1 percent). The HZDS's coalition partners are not faring well either. The far-right Slovak National Party is supported by 6.8 percent, while the far-left Workers Party would fail to pass the 5 percent threshold for parliamentary representation if elections were held now. The opposition Party of the Democratic Left and the Hungarian Coalition are backed by 11 percent each. MS

SLOVAKIA SEEKS TO MEND TIES WITH HUNGARY

Foreign Ministry spokesman Milan Tokar on 14 January said Bratislava has proposed that the foreign ministers of the two countries meet in Budapest on 22 January, Reuters reported. One day earlier, citing unidentified Slovak sources, the Hungarian daily "Nepszabadsag" reported that Slovak Foreign Minister Zdenka Kramplova was due in Budapest on 22 January. MS

GABCIKOVO-NAGYMAROS SETTLEMENT STILLS HANGS IN BALANCE

Government commissioner Janos Nemcsok on 14 January told the parliamentary Environment Commission that Hungary has not committed itself to the construction of a new hydroelectric power plant to replace the abandoned project. He added that it would not do so before the completion of studies showing the likely impact of the new project on the environment and its economic costs, the daily "Nepszava" reported on 15 January. But a source close to the negotiations told an RFE/RL correspondent in Bratislava on 14 January that the sides are nearing an agreement. The source said Hungary is proposing to build a power plant between Szob and Budapest instead of completing the originally planned dam (see also "RFE/RL Newsline," 13 January 1998). MS




POLICE BAN DEMONSTRATIONS IN MONTENEGRO

Some 8,000 supporters of outgoing President Momir Bulatovic clashed with police in Podgorica on 14 January, an RFE/RL correspondent reported from the Montenegrin capital. The protesters tried to storm government buildings and attacked police with hand grenades, leaving 45 policemen and six demonstrators injured. Police regained the upper hand only when special units arrived. Interior Minister Filip Vujanovic said on 15 January that Bulatovic's supporters have proven themselves to be violent, and he banned further demonstrations. Vujanovic appealed to "all government and intellectual circles in Serbia" who might be able to help calm the situation in Montenegro to do so. PM

POLITICAL STANDOFF CONTINUES IN MONTENEGRO

Talks in Podgorica between Bulatovic, who is an ally of Yugoslav President Slobodan Milosevic, and reformist President-elect Milo Djukanovic ended inconclusively on 14 January. Bulatovic remained adamant that the 19 October 1997 presidential vote was rigged and called the election "a real crime that the Montenegrins will not forget." Yugoslav Prime Minister Radoje Kontic, who led mediation efforts, said he will continue to try to negotiate an end to the stalemate. PM

U.S. SLAMS BULATOVIC, MILOSEVIC

Robert Gelbard, the U.S. special envoy to the former Yugoslavia, said in Belgrade on 15 January that Washington "is deeply concerned and the international community...deeply offended by the absolutely outrageous behavior by...Bulatovic in inciting these illegal riots.... I hold him responsible along with his collaborators for this outrageous, illegal behavior." Gelbard added that he also holds "Milosevic responsible for supporting these demonstrations [and] for not restraining his colleague Mr. Bulatovic...." Gelbard said on 14 January in Sarajevo that Secretary of State Madeleine Albright warned Milosevic in a telephone conversation the previous weekend not to disrupt the peaceful transition of power in Montenegro. PM

MONTENEGRO APPEALS TO MAJOR POWERS

On 14 January, Montenegrin Foreign Minister Branko Perovic sent a letter to the ambassadors of Western countries and Russia asking them to take "urgent diplomatic steps" with the Belgrade authorities to calm the political situation in Montenegro. In related news, "Nasa Borba" reported on 15 January that Djukanovic will visit Washington in February. PM

ETHNIC ALBANIANS TO JOIN NEW MONTENEGRIN GOVERNMENT

Representatives of the Democratic Union of Albanians and the Democratic League (two ethnic Albanian political parties represented in the Montenegrin parliament) told BETA news agency in Ulcinj on 15 January that the two parties will join the new Montenegrin government. Votes of Montenegro's Albanian and Muslim minorities played a key role in enabling Djukanovic to defeat Bulatovic. PM

EASTERN SLAVONIA RETURNS TO CROATIA

President Franjo Tudjman said in Zagreb on 14 January that his government will continue its policies aimed at peacefully reintegrating eastern Slavonia into Croatia once Croatian sovereignty is restored on 15 January. Tudjman noted that international aid will be vital in ensuring the return of 70,000 Croatian refugees who fled the region when the Serbs conquered it in 1991. Meanwhile in Vukovar, ethnic Serbian political leaders Milorad Pupovac, Vojislav Stanimirovic and Milos Vonjnovic called on Zagreb to regain the confidence of the Serbs by respecting Croatia's commitments in the 1995 Erdut agreement to preserve basic rights for the Serbs, an RFE/RL correspondent reported from Vukovar. PM

BOSNIAN SERB TV BACK ON AIR

Hard-line supporters of Radovan Karadzic resumed television broadcasting from Pale on 14 January. Two transmitters beamed the private station's programs to an area approximately 8 miles wide around Pale, which includes eastern Sarajevo. NATO peacekeepers took control of TV Pale's former transmitters and relay stations last fall and gave responsibility for Bosnian Serb state-run TV to supporters of Republika Srpska President Biljana Plavsic in Banja Luka. PM

ALBANIAN GOVERNMENT DENIES PLANS TO SACK JUDGES

Spokesmen for President Rexhep Meidani on 14 January denied reports that the Socialist-led government plans to sack a large number of judges and prosecutors who were trained in six-month crash courses in 1993 and appointed by the previous Democratic Party government (see "RFE/RL Newsline," 23 December 1997). The spokesmen dismissed demands by some of the judges, who are on hunger strike, for a new law requiring all judges to have university law degrees to be repealed. The spokesmen said that the new legislation will apply only to people appointed to the bench in the future. They added that the law protects the judges and prosecutors appointed by the Democrats since it allows them to appeal to the Supreme Court against disciplinary measures. FS

OSCE CALLS ON ALBANIAN DEMOCRATS TO PARTICIPATE IN PARLIAMENT

Gerard Stoudman, the director of the OSCE Office for Democratic Institutions and Human Rights, on 14 January dismissed calls by the Democratic Party for early elections, "Gazeta Shqiptare" reported. Stoudman, at the end of a three-day visit to Tirana, also called on the Democrats to end their boycott of the legislature and to participate in drafting a new constitution. He stressed that the document needs broad public support. Democratic Party leader Sali Berisha, however, said that his formation will not return to parliament simply "to serve as window-dressing for the government." FS

ROMANIAN DEMOCRATS WITHDRAW SUPPORT FROM PREMIER CIORBEA

The National Council of the Democratic Party on 14 January withdrew its support from Premier Victor Ciorbea, saying a new government should be formed by another premier. The council also tasked the party leadership with negotiating the new cabinet's reform program with the members of the current coalition. The deadline for ending those negotiations is 31 March, and the party will quit the coalition if they are not successfully concluded by then. The council ignored an appeal by President Emil Constantinescu, who urged the Democrats not to dismember the coalition, RFE/RL's Bucharest bureau reported. Democratic Party leader Petre Roman criticized the National Peasant Party Christian Democratic (PNTCD) for promoting the large-scale restitution of property to former owners and for alleged pro-monarchy sympathies. MS

COALITION PARTNERS REACT TO DEMOCRATS' DECISION

PNTCD chairman Ion Diaconescu, said the Democrats' decision amounted to "blackmail, demagogy, and hypocrisy." He said the government's records show that the Democrats never raised with the cabinet the issues they are now complaining about. He added that the Democrats will be held responsible by the public for halting the reform process and the struggle against inflation as well as for promoting an atmosphere of instability that will discourage foreign investors, RFE/RL's Bucharest bureau reported. On 15 January, Diaconescu told Radio Bucharest that the probable solution to the crisis is early elections. National Liberal Party leader Mircea Ionescu-Quintus said a change of government at this point would lead to "stagnation." MS

MOLDOVAN OPPOSITION PARTY WANTS TO BAN KGB COLLABORATORS FROM RUNNING

Simion Certan, the co-chairman of the Democratic Forces Alliance (AFD), told journalists in Chisinau on 14 January that the alliance proposes that "former secret collaborators and informers of the [Soviet-era] KGB" be banned from running in the elections scheduled for later this year. Certan said the parliament must pass legislation forcing the Security Ministry to disclose the names of those candidates who are former secret service collaborators or informers. He said he will initiate an amendment to the electoral law to that end, BASA-press reported. According to Certan, the ban should extend to deputies elected in 1994 on the lists of the Agrarian Democratic Party of Moldova and the Socialist Unity-Edinstvo bloc, who "are responsible for the present state of affairs in Moldova." MS

WORLD BANK LOAN TO MOLDOVA

The World Bank's International Development Association (IDA) on 14 January approved a $5 million loan to Moldova to develop a cooperative rural banking system, an RFE/RL correspondent in Washington reported. The loan carries no interest charges and is repayable over 35 years. The IDA is a World Bank affiliate that helps the poorest nations. MS

BULGARIAN PREMIER CONSIDERS RETALIATION OVER RUSSIAN GAS SUPPLIES

Ivan Kostov says Bulgaria might reduce Russia's gas transit across its territory if Gazprom curtails deliveries for Bulgarian consumption, ITAR-TASS reported on 14 January. Kostov said Russia annually pumps 8 billion cubic meters of gas to Turkey, Serbia, Greece, and Macedonia through Bulgaria. Meanwhile, the opposition Socialist Party has submitted a motion of non-confidence in the government, citing the cabinet's bungled talks with Gazprom as one of the reasons. It is unclear whether the other opposition parties represented in the legislature will support the motion, which is to be debated in late January. MS




YELTSIN ORDERS CABINET TO KICKSTART ECONOMY


by Stephanie Baker

President Boris Yeltsin has ordered the government to ensure that 1998 is the first year Russia records solid economic growth, but his finance minister has cast doubt on whether that goal can be realized.

After meeting with First Deputy Prime Minister Boris Nemtsov at a holiday retreat in northwestern Russia on 13 January, Yeltsin issued a statement saying he is instructing the government take steps to ensure Russia achieves 2-4 percent growth in 1998.

Yeltsin called for the government to push through a new tax code this year and reduce tax rates to stimulate the economy. He also urged the government to take steps to bring down interest rates in order to allow private sector lending to get off the ground.

But Finance Minister Mikhail Zadornov said in an interview published the same day that he doubts whether the country can achieve economic growth in 1998. "To be honest, I am not a big optimist about economic growth in 1998.... I think the [1998] parameters will roughly follow figures for 1997," he told the Russian daily "Nezavisimaya Gazeta."

Zadornov's comments put him at odds with the rest of the government. Prime Minister Viktor Chernomyrdin told a cabinet meeting last week that promising year-end economic results mean that Russia is well placed to achieve growth this year. And First Deputy Prime Minister Anatolii Chubais has said that 2 percent growth in 1998 is realistic.

According to preliminary figures, Russia's gross domestic product was up a modest 0.4 percent in 1997, the first time the country recorded economic growth since the collapse of the Soviet Union. But Zadornov said the recent market crisis had thrown a wrench into the government's economic plans. As he put it: "The market crisis of October-November has thrown Russia back at least half a year." The Finance Minister said it would take a minimum of three months to bring down interest rates.

The global financial crisis that began last October has hit Russia hard, as foreign investors fled both the country's debt and equity markets. Yields on treasury bills jumped to 45 percent in November, before coming down to the current level of roughly 32 percent. But yields are still well above pre-crisis levels of 17 percent.

Central Bank chairman Sergei Dubinin told State Duma deputies on 13 January that foreign investors withdrew $8 billion from the debt and equity markets during the last few months of 1997. He said the bank's hard currency and gold reserves stood at $18 billion as of 1 January 1998, unchanged from 1 December. In September, reserves stood at $25 billion.

As Dubinin put it: "Foreign investors have now calmed down, and practically no money is being taken out of Russia." But he admitted that foreigners were by and large still staying away from the Russian market, which was keeping T-bill yields high.

The market crisis has jacked up the government's cost of borrowing, putting a squeeze on the federal budget. Zadornov said the government would not resort to borrowing to cover budget holes as long as yields on treasury bills remain at current levels. He said the Finance Ministry will continue to place only enough treasury bills on the market every week to retire old debt.

Zadornov said the first quarter of 1998 will be difficult for the budget due to the high cost of borrowing on domestic markets and an expected drop in tax collection rates in January and February. Russia has been struggling to boost tax collection rates, which were dismally low all last year.

Zadornov also said his ministry will press ahead with tax reform and submit a revised tax code to the Duma by the end of January, taking into account proposals from deputies. In his words: "We think that, together with the State Duma, we will succeed in finalizing the draft tax code and passing its basic parts in the first half of the year."

With Duma elections scheduled for 1999 and a presidential election slated for 2000, observers have noted that 1998 is the last year the government can hope to push through tax reform. The author is a Moscow-based RFE/RL correspondent.


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