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Newsline - May 12, 1998




YELTSIN OUTLINES FOREIGN POLICY PRIORITIES...

President Boris Yeltsin on 12 May outlined the main goals of Russian foreign policy in a 45-minute address to Foreign Ministry officials, RFE/RL's Moscow bureau and ITAR-TASS reported. Yeltsin named the top priorities as preserving the country's territorial integrity, ensuring its national security, democratizing society, carrying out unspecified reforms, and integrating the Russian economy into the world economy. He said Russian diplomats and politicians have an opportunity to influence global events for the better in today's "multipolar" world, adding that in current conditions, "there is no place for dictates by one country, even the most powerful." Yeltsin also spoke of the importance of Russian cooperation with the U.S. and again called on diplomats to help persuade the State Duma to ratify the START-2 arms control treaty, which, he said, would help Russia achieve "total balance" with U.S. nuclear arsenals, ITAR-TASS reported. LB

...SAYS INDIA 'LET US DOWN' BY CONDUCTING NUCLEAR TESTS

Yeltsin also commented that India "let us down" by conducting nuclear tests two days earlier, ITAR-TASS reported. The president, who is scheduled to visit India later this year, said that "by working in a diplomatic way" he hopes to dissuade India from conducting more tests. Russian Deputy Atomic Energy Minister Viktor Mikhailov said the tests could be "the start of new spiral in the development of nuclear weapons for so-called threshold countries." Mikhailov emphasized that Russia has not helped India to develop nuclear bombs, but he added there is a possibility Russia will supply nuclear reactors to Indian power plants. BP

YELTSIN ON NATO

In his speech to the Foreign Ministry, Yeltsin expressed the hope that Russian cooperation with NATO will transform that organization into an alliance that "strengthens" rather than "threatens" European security, RFE/RL's Moscow bureau reported on 12 May. Reaction to the U.S. Senate's vote on NATO membership for Poland, Hungary, and the Czech Republic has been muted in Russia; Foreign Ministry officials did not comment for several days (see "RFE/RL Newsline," 6 May 1998). The Russian Defense Ministry on 7 May issued a statement saying the U.S. made a "fatal mistake" in approving NATO expansion plans, which, it said, will impede START-2 ratification by Russia, Interfax reported. Meanwhile, AFP on 11 May quoted the Danish Defense Ministry as saying a Russian platoon will take part in NATO military exercises in Denmark from 18- 29 May. It will be the first participation by Russian troops in military exercises under the alliance's Partnership for Peace program. LB

ATOMIC ENERGY MINISTER ON IRAN, NUCLEAR TECHNOLOGY

In an interview with Ekho Moskvy on 11 May, Yevgenii Adamov again confirmed that the nuclear technology sold by Russian to Iran for the Bushehr nuclear reactor cannot be used for military purposes. But Adamov said he has no doubts that Iran is trying to acquire the potential to produce nuclear weapons, noting that its specialists in that field were trained in Western, not Russian, universities. And he conceded that it is important to provide financial incentives to Russian nuclear specialists to dissuade them from accepting offers of employment abroad. LF

FINANCE MINISTRY OFFICIAL RENEWS TALK OF JOB CUTS

First Deputy Finance Minister Aleksei Kudrin on 10 May announced that the government will implement plans to eliminate 200,000 jobs in the state sector, mostly in the bureaucracy, Reuters and AFP reported. Speaking in Kyiv as a Russian delegate to the annual meeting of the European Bank for Reconstruction and Development, Kudrin said the downsizing plans are part of an effort to reduce federal expenditures by 68 billion rubles ($11 billion) this year. Kudrin first announced the planned layoffs in late March. But Sergei Kirienko, then acting prime minister, said no such policy had been discussed, and Yeltsin dismissed reports of the massive downsizing as "an invention or a provocation" (see "RFE/RL Newsline," 27 March and 2 April 1998). In an interview published in "Kommersant-Daily" on 8 May, Kirienko said "we must live within our means..., we will get nowhere if we do everything in the old way." LB

YELTSIN SIGNS LAW ON ELECTRICITY GIANT

Yeltsin has signed a law regulating the distribution of shares in the electricity giant Unified Energy System (EES), Interfax reported on 8 May. Officials, including Anatolii Sliva, the president's representative in the Federation Council, have sharply criticized the law, but Yeltsin was forced to sign it after both houses of the parliament overrode his veto. Among its most controversial points is a provision saying that foreign shareholders may own no more than 25 percent of the company's shares. The number of shares currently in foreign hands is estimated at 28 percent to 30.6 percent, and it is unclear how the law's provision on foreign ownership will be enforced. LB

NEWSPAPER SAYS LAW SPELLS TROUBLE FOR CHUBAIS

"Kommersant-Daily" argued on 12 May that the law on EES shares will lend support to efforts to remove Anatolii Chubais as chief executive of the company. The law transfers to regional authorities the management of one- third of the state-owned shares in EES, which would leave the federal government in control of fewer than half of the shares. Although some regional leaders have hailed Chubais's appointment as head of the company, others are opposed, including Federation Council Speaker Yegor Stroev and Orenburg Oblast Governor Vladimir Yelagin. Meanwhile, "Kommersant-Daily" noted that newly appointed Fuel and Energy Minister Sergei Generalov has replaced Prime Minister Kirienko as chairman of the collegium of state representatives in EES. Generalov worked in the Menatep Bank before he joined the government, and the newspaper said unnamed bureaucrats are describing Generalov as a "counterweight" against Chubais in the energy sector. LB

CENTRAL BANK PUTS COMMERCIAL BANK UNDER TEMPORARY MANAGEMENT...

The Central Bank has introduced a special administration to manage Tokobank for the next two months, Russian news agencies reported on 8 May. Central Bank First Deputy Chairman Andrei Kozlov said the move is aimed at preventing liquidity problems from becoming "major difficulties" at one of Russia's 20 largest commercial banks. Vladimir Stolyarenko, first deputy head of the Imperial Bank, has been appointed provisional chief executive of Tokobank. Imperial Bank is linked to the gas monopoly Gazprom and is one of Tokobank's largest creditors. Unnamed sources in Tokobank told the 12 May "Kommersant-Daily" that the temporary administration plans to draw up an inventory of the bank's assets and pass the information to a potential buyer. LB

...WHILE MOVE DRAWS MIXED REACTION

Shortly after the Central Bank announced its decision to put a provisional administration in place at Tokobank, the U.S. rating agency Moody's said it may downgrade the credit ratings of nine Russian banks, "Kommersant-Daily" reported on 12 May. Tokobank President Pavel Nefidov told Interfax on 8 May that the Central Bank made a "hasty decision" that could hurt the Russian banking system. He noted that Tokobank is one of Russia's main recipients of foreign loans. ("Kommersant-Daily" said the bank owes some $500 million to Western creditors.) Meanwhile, the European Bank for Reconstruction and Development, which owns a 9.6 percent stake in Tokobank, issued a statement on 9 May welcoming the Central Bank's decision, AFP reported. LB

YELTSIN LIKELY TO SKIP TSAR'S REBURIAL

Viktor Aksyuchits, an adviser to Deputy Prime Minister Boris Nemtsov, says Yeltsin is unlikely to attend the reburial ceremony for Nicholas II in St. Petersburg on 17 July, Russian news agencies reported on 8 May. Nemtsov heads a government commission that is planning the funeral. Earlier on 8 May, Yeltsin met with Patriarch of Moscow and All Russia Aleksii II, the head of the Russian Orthodox Church. According to Aksyuchits, the patriarch will not be present at the funeral either. Pavel Ivanov, a medical doctor who has studied the remains, told NTV on 10 May that scientific tests have proven beyond all doubt that the bones are those of Nicholas and his family. But Church officials have expressed doubt about the authenticity of the remains. Moscow Mayor Luzhkov also spoke out recently against holding a state funeral for the tsar (see "RFE/RL Newsline," 7 May 1998). LB

LEBED CONFIDENT OF VICTORY IN KRASNOYARSK...

Former Security Council Secretary Aleksandr Lebed appeared relaxed and self-assured during an appearance on NTV on 10 May, one week before the second round of the gubernatorial election in Krasnoyarsk Krai. Lebed outpolled the incumbent, Valerii Zubov, by 10 percent in the first round. Responding to allegations that he is seeking the governor's post merely as a stepping stone for a future presidential bid, Lebed said he will not run for president until he has improved the Krasnoyarsk economy, adding that he does not know how many years he will need to accomplish that task. The krai electoral commission has issued warnings to both Lebed and Zubov about possible campaign violations and may attempt to annul the election. According to "Kommersant-Daily" on 12 May, Lebed's representatives persuaded the Krasnoyarsk Krai Court to overturn only one of the two warnings issued to his campaign staff (see "RFE/RL Newsline," 7 May 1998). LB

...AS IS INCUMBENT GOVERNOR

Appearing on NTV on 10 May, Zubov appeared nervous but said the momentum has swung in his favor going into the runoff election. He admitted that Moscow Mayor Yurii Luzhkov's support for his candidacy was not "effective" and explained that residents of the regions have a "complex" attitude toward the capital. Several political consultants from Moscow have come to Krasnoyarsk to help Zubov during the final stages of the campaign, NTV reported. The governor is stressing his own accomplishments and portraying Lebed as a dangerous man who has no policy agenda and whose campaign is being financed by shady characters. Zubov has taken credit for persuading the federal authorities to release funds to Krasnoyarsk. Although Yeltsin's spokesman criticized Zubov's recent "ultimatum" to the president (see "RFE/RL Newsline," 5 and 6 May), the federal government allocated 50 million rubles ($8.1 million) to Krasnoyarsk, "Segodnya" reported on 7 May. LB

BASHKORTOSTANI PRESIDENT SET FOR EASY RE- ELECTION

Murtaza Rakhimov appears to be headed for an easy victory in the presidential election to be held in Bashkortostan on 14 June. The republican electoral commission has denied registration to two would-be opponents: former republican Prime Minister Marat Mirgazyamov and banker Rafis Kadyrov, "Kommersant- Daily" reported on 12 May. The commission has already excluded another vocal critic of Rakhimov from the race (see "RFE/RL Newsline," 7 May 1998), leaving just two candidates: Rakhimov and Bashkortostani Forestry Minister Rif Kazakkulov. The latter appears to be running for president only in order to give the appearance of an alternative to the incumbent, the newspaper argued. Under similar circumstances, Federation Council Speaker and Orel Oblast Governor Yegor Stroev and Mordovian President Nikolai Merkushkin won re-election with more than 95 percent of the vote (see "RFE/RL Newsline," 27 October 1997 and 16 February 1998). LB

BUDDHIST BOOK SCANDAL MAY INFLUENCE BURYAT ELECTIONS

With the 21 June presidential elections in Buryatia approaching, the issue of a Tibetan Atlas of Medicine lent to a US organization for an exhibition is being kept alive," "Kommersant-Daily" reported on 12 May. The book will be on exhibition for one year or so in the U.S. and will undergo restoration there. Buddhists fear it will not be returned in its entirety, and some presidential candidates are using the issue for their own ends. One such candidate is a former prime minister of Buryatia, Vladimir Saganov, who has sided with the Buddhists in calling for the book's return and criticizing President Leonid Potapov for allowing the book to leave the republic. Buddhists make up about one-fifth of the population of Buryatia. BP

SEARCH FOR PRESIDENTIAL ENVOY CONTINUES

Russian law enforcement agencies investigating the 1 May abduction of Yeltsin's envoy to Chechnya, Valentin Vlasov, are now concentrating their search on the border area between Chechnya and Dagestan and have established contact with the kidnappers, "Izvestiya" reported on 12 May. The Chechen authorities have expressed their displeasure that Russian officials failed to inform them before making contact with the kidnappers. Chechen Deputy Prosecutor-General Magomed Magomadov warned that if Russia were to pay the ransom demanded by the kidnappers, it would be helping "finance organized crime" in Chechnya. LF

CHECHNYA RATIFIES PEACE TREATY WITH RUSSIA

The Chechen parliament on 11 May ratified the treaty on peace and the principles of bilateral relations signed one year earlier by Russian President Yeltsin and his Chechen counterpart, Aslan Maskhadov, ITAR-TASS reported. Speaking at the ratification ceremony, Maskhadov affirmed that Chechnya will continue to develop its relations with Russia on the basis of that treaty, which the Chechen side argues is tantamount to an official recognition of Chechnya's independence from the Russian Federation. LF

CHECHEN PRESIDENT, PRIME MINISTER DISAGREE ON DAGESTAN

Maskhadov also made clear that while he defends Chechnya's right to independence, he "deeply respects the choice of the peoples of Dagestan and Ingushetia" that their republics remain part of the Russian Federation, Interfax reported. But Chechen acting Prime Minister Shamil Basaev has again stressed that the ultimate objective of the recently established Congress of People of Chechnya and Dagestan is the unification of those two republics. In an interview published in "Nezavisimaya gazeta" on 12 May, Dagestani Nationalities Minister Magomedsalih Gusaev argued that no more than 5 percent of the members of any single ethnic group in Dagestan espouse separatist ideas. He added that those people "entertain the illusion that Islam is the cure for all ills." Gusaev rejected predictions that Dagestan will break away from Russia within two years. LF




ARMENIAN OPPOSITIONIST OFFERED KEY POSITION

President Robert Kocharian has offered David Vartanian, a senior member of the opposition National Democratic Union (AZhM), the post of head of the oversight service within the presidential administration, RFE/RL's Yerevan bureau reported on 11 May, quoting a member of the AZhM board. The presidential press service has declined to confirm or deny that report. The AZhM protested that the March presidential elections, in which its chairman Vazgen Manukian polled 12 percent of the vote in the first round, were neither free nor fair. LF

AZERBAIJANIS PROTEST MOSCOW MURDER

Azerbaijani police on 11 May dispersed some 50 people who planned to stage a protest outside the Russian embassy in Baku following the 7 May murder of an Azerbaijani trader at Moscow's Luzhniki stadium market, Turan reported. "Nezavisimaya gazeta" reported on 12 May that Azerbaijani traders at the market are being stripped of their licenses. LF

KYRGYZ SECURITY MINISTRY REPORTS ON WAHHABIS

Misir Ashirkulov said at a 11 May press briefing that his ministry has discovered evidence that Islamic fundamentalists are working in Kyrgyzstan, ITAR-TASS and Interfax reported. Ashirkulov confirmed reports by the newspaper "Vecherny Bishkek" that raids by the ministry's special forces have uncovered materials connected to Wahhabis and to an Uyghur separatist movement called For Free Eastern Turkestan. The Ittipak Uyghur group told RFE/RL's Kyrgyz service on 5 May that they have no knowledge of the existence in Kyrgyzstan of For Free Eastern Turkestan. ITAR-TASS and Interfax quoted Ashirkulov as saying Kyrgyzstan will cooperate with Russia, Uzbekistan, and Tajikistan in fighting fundamentalism (see "RFE/RL Newsline," 6 May 1998). However, RFE/RL correspondents present at the briefing were unable to confirm that statement. BP

ECONOMIC COOPERATION ORGANIZATION CONVENES IN ALMATY

At the end of the 10-member Economic Cooperation Organization (ECO) summit in Almaty on 11 May, the member nations released a declaration calling for the establishment of a bank of commerce and trade and a joint air company as well as the abolition of tariffs on trade between ECO members, RFE/RL correspondents, ITAR- TASS, and IRNA reported. The declaration also said the member nations will intensify efforts to combat illegal narcotics smuggling. The rotating presidency of the ECO was passed from Turkmen President Saparmurat Niyazov to Kazakh President Nursultan Nazarbayev. The member states are Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan, and Uzbekistan. BP

ECO LEADERS HIGHLIGHT PRIORITIES

Kazakh President Nazarbayev said his country's trade with other ECO member states amounted to $1.12 billion in 1997, down on the previous year, and argued that most-favored nation status should be granted to those states, Interfax reported. At a meeting of four out of the five Caspian littoral states, Nazarbayev maintained his country's position on dividing the Caspian into sectors, while Turkmen President Saparmurat Niyazov said the sea should serve the interests of peace and cooperation. Ousted Afghan President Burhanuddin Rabbani called for support from the ECO in restarting the Afghan peace talks. Referring to oil and gas pipeline projects and improved transportation links between the countries, Uzbek President Islam Karimov said the ECO "has not reached a level where all of its projects can be put into practice." BP




PUSTOVOYTENKO GIVES UP PARLIAMENTARY SEAT

Ukrainian Prime Minister Valeriy Pustovoytenko, elected as a parliamentary deputy on the Popular Democratic Party ticket, announced on 11 May that he is giving up his parliamentary seat and remaining in the government, ITAR- TASS reported. Ukraine's law forbids officials from holding posts simultaneously in the government and parliament. Environment and Nuclear Safety Minister Yuriy Kostenko, elected on the Popular Rukh ticket, has resigned his post to take up his parliamentary seat. On 12 May, the new parliament convened for the first time. To date, the Central Electoral Commission has registered 430 deputies and ordered elections to be repeated in nine single-mandate constituencies. JM

UKRAINE RECEIVES EBRD AID TO SHUT DOWN CHORNOBYL

Ukraine and the European Bank for Reconstruction and Development (EBRD) have signed agreements granting Kyiv $120 million to help reinforce the crumbling concrete sarcophagus around Chornobyl's fourth reactor, ITAR-TASS and Reuters reported on 11 May. Meanwhile, Premier Pustovoytenko and Volodymyr Horbulin, secretary of the Security and Defense Council, have stressed Kyiv's stance that Ukraine will not close the Chornobyl plant until the G-8 releases the funds necessary for the closure. Russian Minister of Atomic Energy Yevgenii Adamov has said those demands "can be qualified as nuclear blackmail." Reuters quoted Adamov as saying that "Chornobyl is not absolutely safe but is roughly on the same level as other similar atomic stations on the CIS territory." . JM

BELARUS PLEDGES TO LIBERALIZE PRICES, EXCHANGE RATE

Pyotr Prakapovich, chairman of the Belarusian National Bank, told the EBRD annual meeting in Kyiv on 11 May that Belarus plans to liberalize prices and lift controls on the exchange rate by the end of this year, Reuters reported. Prakapovich stressed that the most complicated task will be to liberalize exchange rate policies. He said the bank's priority is to maintain current economic growth, which Belarus claims reached 10 percent last year. JM

ESTONIA, U.S. START ECONOMIC TALKS

Estonian and U.S. delegations have launched so-called economic consultations within the framework of the U.S.-Baltic partnership charter, BNS and ETA reported on 11 May. Included on the agenda are Estonia's negotiations with the World Trade Organization and its bid to become a full member of the Organization for Economic Cooperation and Development. Estonia is the first of the three Baltic States to begin economic consultations with the U.S. JC

LATVIAN PARLIAMENT VOTES TO KEEP DEATH PENALTY

Ignoring calls by President Guntis Ulmanis to abolish the death penalty, lawmakers on 11 May voted in the third and final reading of a new criminal code against doing away with capital punishment. Ulmanis had placed a moratorium on the death penalty in September 1996, and more recently the parliamentary Legal Commission had proposed banning capital punishment altogether. Latvian Foreign Minister Valdis Birkavs was quoted by BNS as criticizing the vote. He said it meant that his country is not taking "pragmatic steps" to gain EU entry. The EU does not demand an end to the death penalty to qualify for entry, but Latvia promised to scrap the law when it joined the Council of Europe in 1995. JC

HOLOCAUST SURVIVOR DEFENDS LILEIKIS

Shifra Grodnikaite, one of the witnesses requested to testify in the case of alleged Lithuanian war criminal Aleksandras Lileikis, has told "Lietuvos rytas" that Lileikis was not a murderer, Reuters reported on 11 May. "Aleksandras Lileikis saved me at the risk of his own life," said Grodnikaite, who was arrested in Vilnius at the start of the Nazi occupation and now lives in Denver, Colorado. According to Grodnikaite, Lileikis knowingly overlooked her Jewish origins and subscribed to a fake story that she was the illegitimate daughter of a priest. The trial of Lileikis, who is accused of having handed over Jews to Nazi death squads during World War II, was postponed in March to allow the testimony of Grodnikaite and another defense witness to be gathered. It is expected to begin next month. JC

POLISH MINERS PROTEST PLANNED JOB CUTS

Some 1,000 miners on 11 May protested the government's plans for restructuring the coal mining industry, "Zycie Warszawy" reported. The protest took place outside the building where a parliamentary commission was discussing the restructuring plan. The government intends to cut nearly 130,000 jobs over the next four years. The protesters demanded the resignation of Deputy Premier Leszek Balcerowicz and Deputy Economy Minister Janusz Szlazak, who are seen as the main advocates of the restructuring plan. JM

HAVEL UNDERGOES SURGERY TO CLOSE TRACHEOTOMY APERTURE

Surgeons on 11 May successfully closed an aperture in the throat of Czech President Vaclav Havel, which had been made during a tracheotomy performed on the president last month in Innsbruck to help him breathe more easily, AFP reported. CTK said doctors hope Havel can be released from hospital later this week. Also on 11 May, Havel pardoned the two Roma who attacked the far-right Republican Party leader Miroslav Sladek at a recent rally in Novy Bor. Presidential spokesman Ladislav Spacek said the president "cannot agree" with the form of the Romas' protest but "can understand their motives." He also said the president "appreciated" the fact that the Roma were protesting Sladek's insults not only against the Romani community but also against Havel and his wife. MS

MECIAR ON POSSIBLE POST-ELECTION CRISIS

Slovak Prime Minister Vladimir Meciar on 11 May said he will seek an amendment to the constitution aimed at preventing a crisis after the September parliamentary elections. Parliamentary chairman Ivan Gasparovic told journalists that the amendment would grant the parliament or its chairman the power to designate the new prime minister. Under the constitution in its current form, the premier must be appointed by the president. Since March, however, the legislature has repeatedly failed to elect a successor to Michal Kovac, RFE/RL's Bratislava bureau reported. MS

HUNGARY'S SOCIALISTS HOPE T0 STAY IN POWER...

Gyula Horn, chairman of the ruling Socialist Party, said on 11 May that his party has good chances in the second round of elections since its candidates are leading in 113 out of the 175 single-mandate constituencies where a second ballot is to be held. He asked the Socialists' coalition partner, the Free Democrats (SZDSZ), to withdraw their candidates in all constituencies, except for the two in which the SZDSZ is leading. Asked about the possibility of a "grand coalition," Horn said "in politics nothing can be ruled out," but emphasized that the Socialists will not make any advances to their main center-right challenger, the Federation of Young Democrats-Hungarian Civic Party (FIDESZ-MPP). MSZ

...WHILE OPPOSITION DETERMINED TO OUST GOVERNMENT

FIDESZ-MPP deputy chairman Janos Ader said on 11 May that his party's candidates will step down in the second round in favor of the Independent Smallholders (FKGP) candidates who fared better in the single-mandate constituencies. He added, however, that "there is nothing else to discuss with the FKGP." Smallholders' chairman Jozsef Torgyan said the FIDESZ-MPP can form a government only with the FKGP, adding that his party is ready to withdraw its candidates in favor of the FIDESZ- MPP only if it has a role in a new government. Both FIDESZ- MPP and the FKGP have ruled out involving the far-right Hungarian Justice and Life Party (MIEP) in opposition consultations. The MIEP seems set to enter the parliament for the first time. MSZ




NATO TO REVIEW ALL OPTIONS ON KOSOVA

NATO Secretary-General Javier Solana said at a meeting of the West European Union on Rhodes on 11 May that representatives of the Atlantic alliance will decide on 13 May whether to take a more active role in containing the crisis in Kosova. He added that "we have not ruled out any possibility." Solana said that so far "the only thing we have done is to ask our military authorities to do preliminary planning of potential help to [Macedonia] and Albania in order to help them control their borders and.. prevent any spillover" of the low-intensity conflict. German Defense Minister Volker Ruehe added that possible options include establishing a no-fly zone over Kosova and sending observers to the area. Ruehe said that there is no need to send a large force to patrol the Kosova-Albania border because there is no evidence of major arms smuggling. PM

WESTENDORP WARNS THAT CONFLICT MAY SPREAD

Carlos Westendorp, who is the international community's chief representative in Bosnia, said at the UN in New York on 11 May that the conflict in Kosova could spread elsewhere in the region, which, he added, "may have a very negative influence on Bosnia." Westendorp suggested that any intensification of the fighting could lead to an exodus of refugees, many of whom might head for Bosnia. The Spanish diplomat added that NATO troops in Bosnia and elsewhere may find themselves involved in the fighting if a full-fledged war breaks out in Kosova. Westendorp noted that Bosnia itself is entering "a turbulent period" because of efforts by the international community to help refugees return to their homes in areas under the control of another ethnic group. PM

HOLBROOKE STILL EMPTY-HANDED

Richard Holbrooke, the previous U.S. special envoy to the former Yugoslavia, and his successor, Robert Gelbard obtained no results from their talks with Yugoslav President Slobodan Milosevic in Belgrade on 11 May, which was their second meeting with him in three days (see "RFE/RL Newsline," 11 May 1998). Holbrooke noted that "the distance between the two sides is very great" but added that "we will continue on the instructions and with the encouragement of Secretary of State [Madeleine] Albright and President Bill Clinton to try to fill in the gaps." In a statement, Milosevic slammed the outside "interference" and "pressure" being applied to his country. PM

ILIESCU BACKS MILOSEVIC

Romanian former President Ion Iliescu said in Belgrade on 11 May that Milosevic's policy toward Kosova is "fair." The Romanian opposition leader added that Kosova is "an internal problem for Serbia and Yugoslavia," and that the international community has no right to intervene unless Belgrade asks it to do so. In recent months, Romanian businessmen have gone on trial for smuggling gasoline to Serbia during the time that Iliescu was president and sanctions were in force against Belgrade. It has emerged at the trials that the government knew about the smuggling. PM

KOSOVAR KILLED IN PRISHTINA

Police deliberately shot an elderly Kosovar onlooker during an early morning raid on a neighboring house on 12 May, Reuters reported, quoting the man's family. Serbian police refused to comment on the story. The previous day, the key road linking Prishtina and Peja remained closed for the fourth straight day because of fighting in the area, RFE/RL's South Slavic Service reported. In Mitrovica, police spokesmen said that the police have arrested seven Kosovars wanted for "terrorism" in conjunction with recent clashes between the Kosova Liberation Army (UCK) and the paramilitary police. In Peja, the prosecutor's office launched proceedings against 13 Kosovars on similar charges in conjunction with an attack on the police station in Ponoshec. PM

MONTENEGRO TO TRY TO UNSEAT MILOSEVIC

Svetozar Marovic, who is speaker of the Montenegrin parliament and a member of the governing Democratic Socialist Party, said in Budva on 11 May that Montenegrin deputies to the federal parliament will lodge a motion after the 31 May Montenegrin parliamentary elections to remove Milosevic from office. Marovic stressed that Milosevic treats the army like "his private property" and is ruining Yugoslavia internationally through his "xenophobic policies." The speaker added that Montenegrins "will not go to war for Kosova" but also that Montenegro "will not give it up," the Belgrade daily "Novosti" reported. In Podgorica, election officials announced that 10 parties have qualified for a place on the ballot and that 458,340 voters are registered, which is 3,000 voters fewer than in the second round of last year's presidential vote, RFE/RL's South Slavic Service reported. PM

CROATIAN DIPLOMAT BLASTS RULING IDEOLOGY

Davor Bekic, who is ambassador to the UN in Geneva and one of Croatia's leading diplomats, told "Vecernji list" of 9 May that Croatia must adopt a clear policy toward Bosnia and support the unity of that country if Zagreb hopes to avoid problems with the Muslims and with the international community. Without mentioning President Franjo Tudjman or the governing Croatian Democratic Community by name, Bekic charged that the country's political culture is backward and that prominent politicians whitewash Croatia's fascist past. He added that such politicians follow an ideology that attempts to be both socially radical and staunchly nationalist "and that, in other words, is national- socialist, or Nazi." PM

NO-CONFIDENCE VOTE AGAINST CROATIAN GOVERNOR

The legislature of Dubrovnik-Neretva county approved a vote of no confidence in Governor Jure Buric in Dubrovnik on 11 May in connection with his role in the ongoing scandal surrounding the Dubrovacka Banka. In the Sarengradska Ada area near Ilok, Yugoslav soldiers briefly detained two Croatian citizens. The area is one of several pockets belonging to Croatia but now on the northern, or Serbian, side of the Danube following a change in the river's course. Serbia treats the pockets as disputed territory and has periodically sent army patrols into the areas, RFE/RL's South Slavic Service reported. And in Osijek, Croatian police arrested a Serb suspected of involvement in three murders in Vukovar following the fall of that town to Serbian forces in November 1991. PM

BOMB ATTACK ON ALBANIAN JOURNALIST

A bomb slightly injured four children on 10 May at the Vlora home of "Koha Jone" correspondent Zenepe Luka. Local police Chief Rebani Memsuhi said that the 5 kilogram bomb was the largest explosive device used in the southern city since the unrest ended in the second half of 1997. He added that "the attack, which aimed at physically eliminating Zenepe Luka's family, was also directed at the free press." The explosion occurred just hours after the Democratic Party officials had refused to admit her to a party rally but had relented following an appeal by Organization for Security and Cooperation in Europe ambassador Daan Everts. Addressing the rally, Democratic legislator Azem Hajdari called Luka a "slut" and an associate of gang leader Zani Caushi. Luka became well known during the 1997 revolt, when she was one of only a handful of reporters in the city. FS

ROMANIA DECRIMINALIZES HOMOSEXUALITY

The government on 7 May approved a draft law decriminalizing homosexual relations. The draft, which has yet to be approved by the parliament, states that homosexual relations are punishable only if minors under the age of 14 are involved or if rape takes place. Under the existing penal code, homosexual relations are punishable if they constitute a "public offense" and can carry a sentence of up to seven years. Romania has been repeatedly criticized by international human rights organizations and the Council of Europe for classifying homosexuality as a criminal offense. The Romanian Orthodox Church and extreme nationalists parties and public organizations are opposed to decriminalizing homosexual relations. MS

MOLDOVAN SECRET SERVICES PREVENTED MIG DEAL LEAK

Moldova's secret services have prevented an attempt by a former Defense Ministry official to smuggle classified documents out of the country. The documents contained details of contracts to sell MiG fighters to the U.S. and South Yemen. Last year, Moldova sold 21 MiG-29 fighters to the U.S; in 1994, it sold four fighters to South Yemen. The official tried to get the documents to a country whose name has not been revealed "in the interests of the investigation," ITAR-TASS reported on 11 May, citing the press service of the Moldovan Ministry for State Security. MS

BULGARIAN PRESIDENT IN CHINA

President Petar Stoyanov and his Chinese counterpart, Jiang Zemin, met in Beijing on 11 May and signed a declaration on strengthening bilateral relations, dpa reported. They also signed agreements on cooperation in telecommunications, culture, science, and education. Stoyanov said Bulgaria will remain faithful to its "one China policy" and will not establish formal relations with Taiwan. Accompanied by a large delegation of businessmen, Stoyanov is scheduled to meet with Premier Zhu Rongji and parliamentary chairman Li Peng on 12 May. MS

'OPEN WAR' BETWEEN CRIME-FIGHTING CHIEFS IN BULGARIA

The shooting of a policeman in Sofia last weekend has exacerbated what the Bulgarian media call an "open war" between Interior Minister Bogomil Bonev and Prosecutor-General Ivan Tatarchev. Tatarchev recently released a special report criticizing widespread police brutality toward suspects in detention. The ministry said the report was "exaggerated" and Bonev demanded Tatarchev's resignation, an RFE/RL correspondent in Sofia reported. Meanwhile on 11 May, a journalist for "Trud" who specializes in investigating organized crime was seriously hurt when acid was thrown in her face at a bus stop in Sofia. Ana Zaharova was hospitalized, while the attacker managed to escape in a car that was waiting for him, Bulgarian Radio reported. MS




YOUNG RUSSIAN GOVERNMENT FACES SAME OLD PROBLEMS


by Laura Belin

With the formation of Prime Minister Sergei Kirienko's government nearly complete, it is clear that President Boris Yeltsin has made good on his promise to promote a new generation of politicians. In the process, he has handed a stunning victory to the group informally known as the "young reformers."

Yeltsin resisted demands from powerful businessmen such as Boris Berezovskii to exclude Deputy Prime Minister Boris Nemtsov from the new government. Oleg Sysuev (at 45, the eldest of the deputy prime ministers) is ideologically close to Nemtsov, and Deputy Prime Minister Viktor Khristenko left his native Chelyabinsk Oblast for a Finance Ministry post last July, when that ministry was headed by then First Deputy Prime Minister Anatolii Chubais. With Yeltsin's blessing, Chubais became chief executive of Russia's electricity monopoly, Unified Energy System.

Supporters of Chubais and Nemtsov have predicted that at last the Russian government will give economic reform a decisive push. But Kirienko's team will face major obstacles in implementing its policy initiatives.

The government's most urgent task is a familiar one. Owing to poor tax collection and revenue shortfalls caused by the slump in oil prices, the government continues to have trouble meeting its basic obligations. Last summer, pension arrears were settled with much fanfare. But early this year, those arrears began to pile up again--even though the government used questionable statistical techniques to keep pensions lower than the level apparently required by a new law.

The Finance Ministry has already proposed cutting 1998 budget expenditures by more than 12 percent. Kirienko has pledged to boost revenues as well, but making up for lost revenues will be more difficult for his government than it was for his predecessor's. In 1997, the government plugged some budget holes by expanding its privatization program. The biggest sale, that of a 25 percent stake in the telecommunications giant Svyazinvest, brought in nearly $1.9 billion.

The State Property Ministry has already raised its privatization revenue targets for 1998 by more than 80 percent. The first major sale is scheduled for late May, when a 75 percent stake in the oil company Rosneft goes on the auction block. The minimum bid has been set at some $2.1 billion.

The government may never see that money, however. Since last November, an auction for a stake in the oil company Slavneft and two attempts to sell a stake in the Eastern Oil Company have all failed because fewer than two bids were submitted. (Russian law requires at least two bids for a privatization auction to be valid.)

History could well repeat itself in the Rosneft auction. Two of the three major potential investment consortia have suggested they will not take part in the auction because of the high price tag. If the Rosneft sale falls through, the government is unlikely to meet its targets for proceeds from other major privatization deals, such as the planned sale of a 24 percent stake in Svyazinvest.

In the meantime, the government is seeking other sources of cash. Russia floated a DM 1.25 billion ($682 million) Eurobond in March and a 750 billion lira ($425 million) Eurobond in April. Finance Ministry officials have said another Eurobond may be issued in June. The ministry also recently signed an agreement on a $1.5 billion loan from the Export-Import Bank of Japan.

Those efforts will help pay pensions and wages to state employees, but not without substantial costs in the future. Unlike tax revenues or proceeds from privatization sales, loans must eventually be paid back with interest.

Even if the government manages to improve tax collection and meet its budgetary obligations, far-reaching economic reforms will require changes in Russian legislation. Kirienko's cabinet is not well positioned to persuade the State Duma to back such changes.

The Communist Party, which along with allied groups holds a near majority in the Duma, will likely be in no mood to compromise. The showdown over Kirienko's confirmation embarrassed party leaders, who appeared either unable to enforce party discipline or insincere in their opposition to Kirienko's candidacy. Several dozen deputies elected to the Duma as Communists supported the prime minister in the third and decisive vote. But Yeltsin rewarded neither them nor their preferred "experienced managers" with senior economic posts. To add insult to injury, the president handed a plum job to Chubais, probably the politician most hated by the leftist opposition.

Furthermore, Kirienko's team may not be able to count on the once reliable allies of Viktor Chernomyrdin's government. Aleksandr Shokhin, the leader of the Our Home Is Russia Duma faction, told Interfax on 7 May that his faction no longer considers itself responsible for the government's actions. Yeltsin did not heed any of the faction's recommendations on cabinet appointments. Nor did he appoint any ministers representing Vladimir Zhirinovsky's Liberal Democratic Party of Russia, which, like Our Home Is Russia, backed Kirienko's confirmation unanimously in the final Duma vote.

Yeltsin has the power to ignore the Duma's wishes when appointing the government. But the constitution gives him no such luxury when it comes to adopting legislation. Resentment over the composition of the new cabinet will further complicate efforts to pass a new tax code by the end of the year. Yeltsin's appointment of Ilya Yuzhanov as land policy minister suggests that the standoff between the legislature and the executive over the land code will continue. And Sysuev, who failed twice in 1997 to persuade the Duma to approve reductions in social benefits, is unlikely to improve on that record this year.


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