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Newsline - June 24, 1998




OFFICIALS SAY TALKS WITH IMF SUCCESSFUL

Unified Energy System chief executive Anatolii Chubais on 24 June said talks between Russian and IMF officials on the disbursement of a $670 million loan tranche "ended successfully," ITAR-TASS reported. IMF First Deputy Managing Director Stanley Fischer described his meeting with Russian Prime Minister Sergei Kirienko as "highly constructive." Reuters quoted Kirienko's spokesman as saying Fischer agreed to recommend that the board approve the release of the tranche, which is part of a four- year $10 billion loan. Chubais predicted the board will consider the negotiations on 25 June. Meanwhile, Chubais suggested on 23 June that talks over a possible stabilization loan worth $10 billion to $15 billion may take one to two months. He added that such a loan may come from several sources, including foreign commercial banks, foreign governments, the World Bank, and the IMF, Reuters reported. LB

CHUBAIS OPPOSED TO BREAKING UP GAZPROM...

Chubais also announced on 23 June that Russian and IMF officials discussed the issue of splitting up Russia's "natural monopolies" in the energy sector during negotiations over a possible stabilization loan, RFE/RL's Moscow bureau reported. The "New York Times" and several Russian newspapers have reported that the IMF wants Russia to separate the production and transportation divisions of the gas monopoly Gazprom and the electricity monopoly Unified Energy System (EES). Chubais argued that such a proposal was "erroneous" for Gazprom and said the government will stand by its opposition to breaking up the company, Russian news agencies reported. As for EES, Chubais claimed that President Boris Yeltsin issued a decree in April 1997 on separating the company's power generating facilities from its transmission facilities. That transformation will take two to three years, he added. LB

...AS OFFICIAL SAYS IMF NOT DEMANDING COMPANY BE SPLIT

Deputy Finance Minister Oleg Vyugin, who is involved in the negotiations with the IMF, told Interfax on 23 June that the fund is not making the breakup of Gazprom a condition for granting a new stabilization loan to Russia. However, he acknowledged that IMF experts "raise that topic from time to time." Vyugin argued that raising more budget revenues would allow Russia to take a "tough" stance in negotiations with international financial institutions. He added that "if those natural monopolies would regularly pay their taxes in full, then there would be no question about breaking them up or any other restructuring." LB

KIRIENKO OUTLINES TAX PROPOSALS...

Prime Minister Kirienko promised during an expanded cabinet session on 23 June that the government is seeking to reduce taxes on industry but will intensify its efforts to collect taxes owed by individuals and legal entities, RFE/RL's Moscow bureau reported. The premier called for an end to "double standards" on tax collection and decried the public "uproar" that, he said, accompanies each effort by the authorities to fight tax evasion. He warned delinquent taxpayers that there will be lawsuits against tax evaders, bankruptcies, and property seizures. Kirienko also said foreigners working in Russia earn some $5 billion in untaxed income. The government approved the "anti-crisis program," which calls for spending cuts of 42 billion rubles ($6.8 billion) and revenue increases of 20 billion rubles. (ITAR-TASS initially reported erroneously that the plan calls for boosting revenues by $20 billion.) LB

...FAVORS INTRODUCING SALES TAX

As part of a policy to "shift the tax burden from industry onto consumption," Kirienko told journalists on 23 June that he supports the introduction of a sales tax to increase regional budget revenues, RFE/RL's Moscow bureau reported. He did not propose a single nationwide tax but said regional authorities should be allowedc to impose sales taxes of 5- 10 percent if they so desire. (Those taxes would not alter the value-added tax of 20 percent already levied on most Russian goods.) Sales taxes are easier to collect than taxes on industrial enterprises, which often conduct much of their business in barter transactions rather than cash. In a telephone interview with RFE/RL, Stanford University Professor Mikhail Bernshtam said "it would be difficult to think of a worse measure" than increasing taxes on consumption, which, he argued, would be detrimental to the Russian economy. LB

GOVERNMENT TURNS UP PRESSURE ON DUMA

Prime Minister Kirienko warned on 23 June that if the Duma does not approve the government's anti-crisis program, it will depress budget revenues and could provoke a "global economic crisis," RFE/RL's Moscow bureau reported. He said the government will submit to the parliament some 20 draft laws that are needed to implement the program. However, few political observers expect the State Duma to approve all of the laws before the summer recess, as Yeltstin and Kirienko have demanded. Even though the draft laws have not yet arrived in the Duma, representatives of various factions have already begun to criticize some of their provisions, RFE/RL's Moscow bureau reported on 24 June. Our Home Is Russia faction leader Aleksandr Shokhin told Interfax the same day that "not all the [government- backed] measures" are likely to be passed by the Duma. LB

COMMUNISTS UNIMPRESSED BY ANTI-CRISIS PROGRAM

Influential members of the Communist Party, which along with allied groups has a near-majority in the Duma, have criticized the government's anti-crisis plan. Speaking at the 23 June cabinet session, Duma Economic Policy Committee Chairman Yurii Maslyukov said the government "has no new ideas," adding that Russia can "forget about prospects for economic growth" for several years, Interfax reported. Duma Legislation Committee Chairman Anatolii Lukyanov said "many solutions [proposed by the government] are unacceptable for the Duma" and discounted speculation that "threats" could influence deputies to approve the entire plan, Reuters reported. Communist Party leader Gennadii Zyuganov criticized Yeltsin for "initimidating and threatening the State Duma" and then leaving the cabinet session without listening to parliamentary representatives. Both Zyuganov and Duma Speaker Gennadii Seleznev, also a Communist, told Interfax that they believe a sharp devaluation of the ruble is likely. LB

GOVERNORS HAVE DOUBTS ABOUT PROGRAM'S IMPLEMENTATION

Regional leaders have for the most part praised the government's anti-crisis program, but many have expressed skepticism about the government's ability to implement that plan, RFE/RL's Moscow bureau reported on 23 June. Kemerovo Oblast Governor Aman Tuleev told RFE/RL that some points in the program have been under discussion for two years and predicted that the plans will not be carried out rapidly this time either. Saratov Oblast Governor Dmitrii Ayatskov, Samara Oblast Governor Konstantin Titov, and St. Petersburg Governor Vladimir Yakovlev all told ITAR-TASS that the plan contains good proposals and that the main challenge will be to put those into effect. Federation Council Speaker Yegor Stroyev praised the anti-crisis program, which, he claimed, is the first recognition by the president and government that state regulation must play a role in stabilizing the economy. LB

GOVERNMENT OFFICIAL OUTLINES PROPOSALS ON PENSIONS

Yevgenii Gontmakher, the head of the department on social protection in the government apparatus, outlined some proposals to tackle the problem of pension arrears in an interview with RFE/RL's Moscow bureau on 23 June. Gontmakher said that pension arrears now total 9 billion rubles ($1.5 billion) and that in some regions pensions are paid with a delay of up to a month. He said the government is to submit to the parliament a law to alter the procedure for making contributions to the Pension Fund, as well as legislative amendments to introduce fines for employers that do not make pension contributions. He also said the government is seeking to delay further indexation of pensions until pension arrears are cleared. Under a law that went into effect in February, the government is to adjust pensions quarterly. LB

RUSSIA CANNOT FULFILL TREATY ON DESTROYING CHEMICAL WEAPONS

Russia will be unable to destroy its chemical weapons by 2008, according to Stanislav Petrov, the head of chemical and biological defense forces, Interfax reported on 23 June. The Chemical Weapons Convention requires Russia to destroy its stockpiles by 2008. Russia's program sets a deadline of 2005, but Petrov says that owing to underfunding, "at least an additional five years" will be needed. Despite aid from the U.S. and Germany, foreign assistance may constitute only 5 percent of the program's total cost of 32.7 billion rubles ($5.3 billion), Petrov claimed. Lieutenant-General Valerii Kapashin, director of the program for chemical arms destruction, agreed that Russia will miss the deadline but said "there is nothing criminal" in using a provision of the convention allowing an additional five years, Reuters reported on 23 June. Russia has the world's largest chemical weapons stockpile, estimated at 40,000 tons. BT

TOP OFFICIALS DECLARE 1997 INCOME

The official government newspaper "Rossiiskaya gazeta" on 23 June published information about the income and property declarations of top Russian officials. Yeltsin declared income of some 1.95 billion old rubles ($325,000) in 1997, a sevenfold increase on his earnings the previous year. According to the 24 June edition of the "Moscow Times," a Kremlin spokesman refused to comment on the steep increase in the president's income. Prime Minister Kirienko claimed to have earned some 752 million old rubles in 1997. Deputy Prime Ministers Boris Nemtsov, Viktor Khristenko and Oleg Sysuev declared incomes of 555 million old rubles, 177 million old rubles, and 137 old rubles, respectively. Fuel and Energy Minister Sergei Generalov, who joined the cabinet in April, declared nearly 4.4 billion old rubles, more than any other government official. In 1997, Generalov was a vice president of the Menatep Bank. LB

SAMARA GOVERNOR DOUBTS CHERNOMYRDIN'S PRESIDENTIAL PROSPECTS

Samara Oblast Governor Konstantin Titov, the Our Home Is Russia (NDR) movement's deputy chairman for economic issues, does not consider NDR leader and former Prime Minister Viktor Chernomyrdin a promising presidential candidate, "Nezavisimaya gazeta" reported on 24 June. Earlier this month, Titov said he sees only two "realistic" candidates for the presidential election in 2000: Yeltsin and Moscow Mayor Yurii Luzhkov. In addition, the Samara branch of the NDR has in recent months expressed differences with the NDR leadership in Moscow. The Samara governor was a close ally of Chernomyrdin and was first deputy chairman of the NDR from its creation in May 1995 until the movement's last conference in April. Other regional leaders have also distanced themselves from Chernomyrdin since Yeltsin sacked him as prime minister in late March (see "RFE/RL Newsline," 7 May 1998). LB

CHECHNYA DECLARES STATE OF EMERGENCY

On 23 June President Aslan Maskhadov declared a three-week state of emergency and a night curfew, Russian media reported. Security Minister Kazbek Makhashev told local television that the restrictions are necessary because of the deteriorating crime situation in Chechnya, in particular the clashes in central Grozny on 21 June, in which National Security Service commander Lecha Khultygov and the chief of staff of maverick field commander Salman Raduev's army were killed. Russian commentators have rejected the official Chechen statement describing the shootings as "a tragic accident." "Segodnya" reported that the shootings occurred shortly after Raduev had harshly criticized the Chechen leadership in a speech to demonstrators on Grozny's central square. "Kommersant-Daily" on 23 June pointed out that Khultygov tried to prevent Raduev's supporters from occupying the Grozny television building and that he had also incurred displeasure through his resolute struggle against hostage-taking. LF

CHUVASH PRESIDENT WANTS ABDULATIPOV AS NATIONALITIES MINISTER

Nikolai Fedorov said at a government session on 23 June that former Russian Deputy Prime Minister Ramazan Abdulatipov should be appointed Minister for Regional and Nationality Policy in place of Yevgenii Sapiro, ITAR-TASS reported. Fedorov argued that the nationalities question "requires a special approach" and "wisdom" and that Abdulatipov embodies those qualities. Fedorov had earlier criticized Sapiro's appointment to replace Vyacheslav Mikhailov. LF

WORKERS STAGE PROTESTS IN PRIMORE

Workers in the defense industry led energy sector workers and employees of some budget-funded organizations in protests across Primorskii Krai on 23 June, RFE/RL's correspondent in Vladivostok reported. Workers from defense industry enterprises that are owed large sums by the government initiated the protests, which involved demonstrations outside official buildings and temporary blockades of a railroad and a major highway in the krai. Some local observers estimated that tens of thousands participated in the protests, but the Primore branch of the Interior Ministry put the number at 8,000. Contrary to reports in Moscow-based media that the protesters were demanding payment of wage arrears, RFE/RL's correspondent said political demands dominated the protests. In particular, demonstrators called for Yeltsin's resignation and the temporary transfer of most powers to the federal parliament. LB

CENTRAL ELECTORAL COMMISSION DOUBTS FAIRNESS OF BASHKIR ELECTION

Central Electoral Commission Chairman Aleksandr Ivanchenko on 23 June called for investigating whether all candidates seeking to compete in the 14 June presidential election in Bashkortostan were granted equal conditions for opening campaign funds, "Kommersant-Daily" reported on 24 June. Ivanchenko said his commission will look into the matter and will announce its conclusions at an upcoming Supreme Court hearing. Two would-be candidates are seeking to have the election result overturned, saying they were unfairly barred from the competition (see "RFE/RL Newsline," 15 and 23 June 1998). Speaking to journalists in Moscow on 23 June, Bashkir President Murtaza Rakhimov defended the conduct of the election and cast doubt on whether the Supreme Court will be objective in its consideration of the case, RFE/RL's Moscow bureau reported. LB




TURKEY, U.S. CRITICIZE IMPUTED ARMENIAN THREAT...

Turkish Foreign Ministry spokesman Necati Utkan told journalists on 23 June that Armenian Foreign Minister Vartan Oskanian's imputed threat that Armenia may consider annexing Nagorno-Karabakh "reveals the real intentions and uncompromising attitudes of the Armenian government," according to the "Turkish Daily News." Utcan added that "the fundamental fault in the unresolved Nagorno-Karabakh conflict is Armenia's." The previous day, U.S. State department spokesman James Rubin had termed Oskanian's alleged statement "disturbing" and "unacceptable." Oskanian had told journalists on 17 June that if Azerbaijan continues for a period of years to reject a settlement of the conflict based on compromise, Armenia would have to consider all alternative options, including the possibility of reunification with the unrecognized Nagorno-Karabakh Republic. LF

...WHILE ARMENIAN OFFICIALS DENY SUCH A THREAT WAS MADE

President Robert Kocharian told journalists in Yerevan on 23 June that he thinks Oskanian's statement was taken out of context and misinterpreted, Armenpress and Interfax reported. Kocharian said Armenia "does not reject a solution to the Karabakh conflict" and hopes that resumed peace negotiations will yield a solution acceptable to all parties. Armenian Foreign Ministry spokesman Arsen Gasparian similarly told Snark that it is "unfortunate that one segment from Oskanian's statement has been taken out of context and is being characterized in ways that are unfounded." He, too, stressed Armenia's determination to resolve the conflict peacefully. " Also on 23 June, the Karabakh Foreign Ministry issued a statement saying that Oskanian's insistence that Yerevan is not currently raising the issue of either independence for Karabakh or its unification with Armenia is consistent with Yerevan's rejection of any preconditions for resuming the negotiating process, Noyan Tapan reported. LF

U.S.-ARMENIAN BILLIONAIRE TO HELP FUND IRAN- ARMENIA-GEORGIA HIGHWAY

President Kocharian told journalists on 23 June that U.S.-Armenian billionaire Kirk Kerkorian has donated $85 million toward the construction of a highway linking Iran and Georgia's Black Sea ports of Poti and Batumi, RFE/RL's Yerevan bureau reported. The highway will cut 50 km from the shortest route from the Persian Gulf to the Black Sea at present. Kocharian said the project has already been approved by Georgian President Eduard Shevardnadze, and he expressed hope that the EU will provide the rest of the sum in its TRACECA project. Kerkorian, who has just completed his first-ever visit to Armenia, is also said to have allocated $15 million to complete reconstruction of the area around Gyumri, Armenia's second-largest city, devastated by the 1988 earthquake. LF

GEORGIA ACCUSES ABKHAZIA OF ARMED INCURSIONS

The Georgian Foreign Ministry has issued a statement accusing Abkhaz armed detachments of attacking villages in Georgia's Zugdidi and Tsalendjikha Raions, according to an RFE/RL correspondent in Tbilisi on 24 June. Speaking to Georgian journalists, Abkhaz President Vladislav Ardzinba warned that if the White Legion Georgian partisan organization continues its operations in Abkhazia's Gali Raion, Abkhazia may create its own legion to engage in similar activities on Georgian territory. LF

GEORGIAN ELECTION CONTROVERSY CONTINUES

In the repeat by-election in the southeastern district of Lagodekhi on 21 June, the candidate of the ruling Union of Citizens of Georgia (SMK) defeated his rival from the Socialist Party by 80 votes, according to Caucasus Press. The SMK had demanded repeat elections, claiming that the Socialist Party candidate's victory by an equally slim margin in the first round of voting was due to mass violations. Socialist Party chairman Vakhtang Rcheulishvili has alleged that the second round was also falsified. He noted that local authorities had threatened reprisals against members of the local Azerbaijani minority who voted in the first round for the Socialist candidate. Meanwhile, Socialist Party deputy Tengiz Djushia told Caucasus Press that he will bring criminal charges against several SMK supporters who physically attacked him outside a polling station on 21 June. LF

U.S. CRITICIZES AZERBAIJANI ELECTION LAW

U.S. State Department spokesman James Rubin on 22 June expressed the hope that the Azerbaijani leadership will amend the Law on the Central Electoral Commission passed in May, Turan reported. Rubin said that in its present version, the law "is not sufficiently representative of the whole political spectrum and will limit the ability of the opposition parties to play a role in the election process." Rubin also called on the Azerbaijani leadership to ensure all presidential candidates have access to the print and electronic media in accordance with OSCE standards. LF

KYRGYZ LAWMAKERS RAISE RETIREMENT AGE...

The Legislative Assembly of the Kyrgyz parliament adopted an amendment to the law on pensioners raising the retirement age by six months every year over the next six years, RFE/RL correspondents reported on 22 June. The current retirement age for men is 60 and for women 55. The chairwoman of Kyrgyzstan's Social Fund, Roza Uchkempirova, told a news conference in Bishkek on 23 June that there are now 543,000 pensioners in the country. Those continuing to work after they reach the eligible age for retirement will receive 50 percent of their pension. ITAR-TASS reported on 23 June that only 15 percent of the funds necessary to pay pensions are available in the state budget. BP

...WHILE UNEMPLOYMENT REACHES DANGEROUS LEVELS

While freeing up some $23 million from the state budget, the amendment to the law on pensioners is bound to add to the problem of unemployment in Kyrgyzstan, according to RFE/RL's Kyrgyz Service. The chairman of the parliament's Committee on Social Affairs, Jangoroz Kanimetov, said on 22 June that out of a population of 4.65 million, 2.38 million are of working age but only 1.88 million are considered active. This contradicts the registered unemployment figure of 54,000 and an unofficial government estimate of 100,000. On 20 June, the chairman of Kyrgyzstan's Patriotic Party, Nazarbek Nyshanov, claimed there are currently 1.2 million unemployed in the country. BP

FORMER KAZAKH PREMIER CLEARED OF FINANCIAL ABUSE

An investigation carried out by the Kazakh National Security Ministry has cleared former Prime Minister Akezhan Kazhegeldin of using his position for personal financial gain, Interfax and RFE/RL correspondents reported. Committee chairman Alnur Musaev said on 22 June in Astana that the property worth millions of dollars that Kazhegeldin owns was acquired through commercial ventures before he joined the government in 1994. The findings of the investigation were released one week after Kazhegeldin hinted he may transform his Union of Manufacturers and Entrepreneurs into a political party. Such a move may pave the way for Kazhegeldin's nomination as a candidate for the 2000 presidential elections. BP

TAJIK LAWMAKERS ENDORSE BAN ON POLYGAMY

The Tajik parliament has upheld the ban on polygamy, the Russian newspaper "Trud" reported on 20 June. The debate among Tajik lawmakers was described as "heated." Nonetheless, they voted to keep in place the existing law and to impose a fine equal to 500 minimum wages or two years in a forced labor camp for those who break law. "Trud" claims that half of the men in Tajikistan over 40 have two wives. BP




POLAND, BULGARIA JOIN EXODUS OF ENVOYS FROM BELARUS

Shortly after five EU countries and the U.S. recalled their ambassadors from Minsk, Poland and Bulgaria have announced they are also withdrawing their envoys for consultations. Meanwhile, following the examples of the U.S. and Germany, France has told the Belarusian ambassador to Paris to leave for Minsk in order "to notify the Belarusian authorities of the negative reaction of the French leadership" over the eviction of diplomats from their residences at Drazdy, ITAR-TASS reported. JM

BELARUS UNWILLING TO SEEK FOREIGN DIPLOMATS' RETURN

Belarusian Foreign Minister Ivan Antanovich told journalists on 23 June that Belarus does not intend to take any steps toward securing the return of the recalled envoys, ITAR-TASS reported. "As a minister, I have no intention of taking care of their moving problems," AFP quoted Antanovich as saying. He said Belarus was "ready for compromise from the very beginning" but the relocation of diplomats has been intentionally placed "on the level of an all-European scandal." He added that the EU cannot reconcile itself to the November 1996 referendum in Belarus, "where the [Belarusian] people supported different persons than the EU did." JM

ANTANOVICH SAYS PROBLEM OF HUMAN RIGHTS IN BELARUS 'FAR-FETCHED'

Addressing a Chamber of Representatives session devoted to human rights, Foreign Minister Antanovich said the problem of human rights in Belarus is "far-fetched" owing to Belarus's refusal to accept the Western model of society that "is being imposed by the U.S.," Belapan reported on 23 June. Antanovich said the current hearings are an "eloquent example" that observing human rights is a priority of Belarus's domestic and foreign policy. Presidential administration chief Mikhail Myasnikovich criticized the U.S. for drawing up its annual reports on human rights in Belarus only on the basis of materials provided by the opposition. And Belarusian Security Council Secretary Viktar Sheyman accused "foreign sponsors " of helping "ideologists of the Belarusian opposition to create and impose on people propaganda myths oriented toward weakening the [Belarusian] statehood and undermining socio-economic stability." JM

KUCHMA VOWS TO CONTINUE STEERING ECONOMY BY DECREE

Ukrainian President Leonid Kuchma has said his recent economic decrees are not part of a "temporary campaign" but rather were planned, Ukrainian Television reported on 23 June. He added that he may also enact an amended budget for this year by decree. A cut in the budget deficit is the IMF's major condition for granting a $2 billion credit to Ukraine. Kuchma's economic management by decree is due to the paralysis of the activities of the Supreme Council, which has devoted the past six weeks to a dozen unsuccessful attempts to elect its speaker. Kuchma's latest decree raised the minimum wage by 10 hryvni ($5) to 55 hryvni. JM

CENTRAL BANKER SAYS UKRAINE NOT BANKRUPT

Ukrainian National Bank head Viktor Yushchenko on 23 June said that Ukraine is not a bankrupt state and has problems only with current payments, Ukrainian Television reported. He commented that the situation of Ukraine's hard currency market is "controllable and stable," while the current negotiations with the World Bank and the IMF are "correct and productive." Yushchenko's statement comes in response to growing public concern over the government's ability to pay interest rates on domestic and foreign state bonds, which have been the main source of financing Ukraine's budget deficit. JM

U.S., EU HAIL LATVIAN CITIZENSHIP LAW AMENDMENTS...

The U.S. government has welcomed the Latvian parliament's decision to amend the country's citizenship law (see "RFE/RL Newsline," 23 June 1998). State Department spokesman James Rubin said in a written statement today that by taking that action, Latvia has moved closer to a society in which peoples of all backgrounds and beliefs can live together in harmony. He added that the move furthers Latvia's aspirations to integrate into European and trans-Atlantic structures. The European Commission commented that the amendments meet the recommendations made by the OSCE and address "one of the priorities in Latvia's preparations for EU membership.... The entry into force of this legislation will greatly facilitate the integration of minorities in Latvia." JC

...WHILE RUSSIA SAYS CHANGES ONLY 'PIECEMEAL'

Speaking to reporters at a Baltic Sea conference in Nyborg, Denmark, on 23 June, Russian Foreign Minister Yevgenii Primakov said that the amendments to Latvia's citizenship law constitute only a "piecemeal" solution. But Primakov added that his government will have to look at the text of the amended law before passing final judgment. Russian Foreign Ministry spokesman Vitalii Makarov told Interfax in Moscow the same day that the amendments are not "some sort of breakthrough" but rather a "correction of undemocratic laws." He added that they are also "far from being fully in line with recommendations by OSCE High Commissioner on National Minorities Max van der Stoel." JC

POLISH GOVERNMENT ADOPTS EU ENTRY PROGRAM

The Polish cabinet on 23 June approved a "national program on the preparation for the EU membership," "Rzeczpospolita" reported. The document provides for adjusting Poland's legislation and economy to EU regulations by 2002. Committee for European Integration head Ryszard Czarnecki said Poland is not going to seek many transition periods in which the country does not abide by EU regulations while adapting to EU standards. Czarnecki commented that he is not surprised by statements that the EU may not be expanded until after 2005. And he also noted that the EU preparation program provides for introducing travel visas for citizens of Belarus and Ukraine but did not specify when. JM

HAVEL SETS DATE FOR CONVENING NEW PARLIAMENT

President Vaclav Havel has set the date of the first session of the new parliament for 7 July, CTK reported on 23 June. The same day, Karel Brezina, a chief aide to Social Democratic Party (CSSD) leader Milos Zeman, said Zeman intends to contact "all parties represented in the parliament" in order to conduct coalition talks. The chairman of the Christian Democratic Party (KDU-CSL), Josef Lux, told Vaclav Klaus, leader of the Civic Democratic Party (ODS), that his formation still favors a coalition with the CSSD. Klaus told journalists later that he believes "personal animosities" must not hinder talks and that the best solution would be a coalition of "non-left parties." MS

DATE SET FOR SLOVAK ELECTIONS

After meeting representatives of parliamentary parties, parliamentary chairman Ivan Gasparovic told state radio on 23 June that the elections to the legislature will be held on 25-26 September, CTK reported. In other news, Foreign Ministry spokesman Milan Tokar told an RFE/RL correspondent in Bratislava that Foreign Minister Zdenka Kramplova has no intention of resigning in order to become ambassador to Sofia, as alleged by Bulgarian media. Tokar said the reports were "fabricated" and stressed that ambassadorial appointments can be made only by the president. Slovakia currently does not have a president. MS

SLOVAKIA REJECTS U.S. CRITICISM OF ELECTION LAW

A statement released by the Slovak Foreign Ministry on 23 June rejected U.S. criticism of the recently amended election law (see "RFE/RL Newsline, 23 June 1998), RFE/RL's Bratislava bureau reported The ministry said that high-ranking Slovak officials have on several occasions :made it clear that the elections will be "free, democratic, and fair" and that they will be "in line with OSCE standards for monitoring elections in member countries." At the same time, the statement said the fact that "Slovakia has been repeatedly asked to make possible the presence of OSCE monitors" during the elections was "unjustified." MS




HOLBROOKE GIVES MILOSEVIC 'LAST CHANCE'

Richard Holbrooke, who is the U.S. ambassador-designate to the UN, arrived in Prishtina on 24 June to meet with Kosovar leaders and to visit the embattled community of Decan. The previous day, he told Yugoslav President Slobodan Milosevic in Belgrade that he must implement all the demands of the international Contact Group and that time is running out. Holbrooke gave reporters no details of his long meeting with Milosevic but said that his message to everyone on his current Balkan tour is that "we're at a critical moment in the crisis surrounding Kosova and we are here to prevent the fighting escalating into a general war." PM

MOSCOW WANTS MILOSEVIC TO KEEP PROMISES

Milosevic also met with Russian Deputy Foreign Minister Nikolai Afanasievskii, who told the Yugoslav leader that the situation in Kosova is "extremely difficult" and that both sides must end the violence. Afanasievskii added that Milosevic must implement the promises he made to Russian President Boris Yeltsin one week earlier (see "RFE/RL Newsline," 17 June 1998). PM

MACEDONIA, GREECE AGAINST INTERVENTION

Prior to arriving in Belgrade, Holbrooke met on 23 June with Kosovar shadow-state President Ibrahim Rugova and Macedonian President Kiro Gligorov in Skopje. Gligorov told Holbrooke that there is still time for a diplomatic solution to the Kosovar crisis. The Macedonian president later told reporters that Holbrooke does not consider Macedonia to be "part of the Kosovar problem," "Nasa Borba" reported. In Athens, Macedonian Foreign Minister Blagoje Handziski and his Greek counterpart, Theodoros Pangalos, said they oppose NATO intervention in Kosova and favor a diplomatic solution. Pangalos warned Western countries against meddling in Balkan affairs and said that "enough blood has flowed in the Balkans because of [Westerners'} amateurism." He added that Milosevic has already met four out of five demands by the Contact Group and cannot withdraw his forces as long as "separatists" do not stop the violence. PM

NANO WARNS OF 'BALKANIZATION OF EUROPE'

Albanian Prime Minister Fatos Nano told the "Sueddeutsche Zeitung" of 23 June that NATO intervention is necessary to support diplomatic efforts and prevent Milosevic from killing his own civilian population. Nano warned Western Europeans against thinking that they can ignore the Kosovar crisis because "the Balkans are far away. All Europe runs the risk of becoming Balkanized" if Kosova spins out of control. The prime minister stressed that peace and stability in the Balkans are not possible as long as Milosevic, whom he called "old-fashioned, dogmatic, and Stalinist," remains in power. Nano added that Serbia is sorely in need of "an explosion of democracy" like the one that most of Eastern Europe experienced at the end of the 1980s. PM

SLOVENIAN SECURITY COUNCIL DISCUSSES KOSOVA

Prime Minister Janez Drnovsek's National Security Council discussed "the crisis situation in Kosova and its possible consequences for Slovenia's security," "Nasa Borba" reported on 24 June. President Milan Kucan said at a press conference to mark the seventh anniversary of Slovenia's independence that Kosova needs internationally guaranteed autonomy. He added that Kosova is not an internal affair of Serbia's because it could affect the stability of the Balkans and all of Europe. Kucan stressed that the conflict between "democracy and totalitarianism," and not "the nationalisms of individual peoples," was responsible for the dissolution of Yugoslavia. He added that this process is continuing and that the Montenegrin people alone can decide Montenegro's future "on the same basis that the Slovenes" determined their own course. PM

SOLANA TELLS RUGOVA TO NEGOTIATE...

Rugova told NATO Secretary General Javier Solana in Brussels on 24 June that NATO should provide "some kind of protection in Kosova so that massive massacres and massive ethnic cleansing are prevented.... Kosova has the right to become independent as it's part of a country that has dissolved." Solana, however, told his visitor "emphatically [and] categorically" that Rugova must "return to the negotiating table [with Milosevic] immediately and without preconditions." The Kosovars refuse to sit down with Serbian officials as long as the repression continues. Meanwhile, Reuters reported from NATO headquarters that alliance officials are becoming less disposed toward launching air strikes against Serbia and stress instead "the need for more information about the situation on the ground." The officials say that Serbia faces a determined armed insurgency and that NATO does not want to play into the hands of the Kosova Liberation Army in its fight for independence. PM

...MEETS WITH BULGARIAN FOREIGN MINISTER

Nadezhda Mihailova and NATO Secretary-General Javier Solana met in Vienna on 22 June at a NATO workshop and discussed the conflict in Kosova, BTA reported. Mihailova stressed the importance Bulgaria attaches to finding a political solution to the conflict. But Solana and General Wesley Clark, the supreme allied commander in Europe, who also attended the meeting, made it clear that the alliance is considering all options for dealing with the Kosova crisis. U.S. Ambassador to Sofia Avis Boheln, visiting a hospital in Tran that is being reconstructed with U.S. aid, denied rumors that the reconstruction is related to the Kosova conflict, an RFE/RL correspondent in Sofia reported. A joint U.S.-Bulgarian military exercise is scheduled to take place near Tran from 30 July to 7 August. MS

IZETBEGOVIC WANTS DAYTON AGREEMENT IMPLEMENTED OR CHANGED

Bosnian President Alija Izetbegovic told "Vecernje novine" of 23 June that the Dayton agreement will have to be changed if Serbian and Croatian officials block the implementation of Dayton after the September general elections. He stressed that no single ethnic group's representatives should be allowed to hamstring "the functioning of the state." In Pale, the governing body of Radovan Karadzic's Serbian Democratic Party selected Momcilo Krajisnik to run for re-election as the Serbian member of the joint presidency. The party placed Dragan Cavic at the head of its list of candidates for the Republika Srpska legislature and Slobodan Bijelic at the top of the slate for the joint Bosnian parliament. And in Banja Luka, officials of the Republika Srpska and Croatia signed an agreement on the return of refugees. PM

FINAL ALBANIAN ELECTION RESULTS ANNOUNCED

A spokesman for the Central Election Commission said in Tirana on 23 June that the governing Alliance for the State (ASH) won the local by-elections in the municipalities of Vlora, Patos, Roskovec, and Ura Vajgurore, while the opposition Union for Democracy (BPD) won in Kavaja (see "RFE/RL Newsline," 23 June 1998). ASH also won in six smaller communities, while the BPD won in three, "Gazeta Shqiptare" reported. FS

OSCE DECLARES BALLOT FAIR

OSCE Ambassador Daan Everts said on 23 June in Tirana that the elections were a "significant improvement over the 1997 extraordinary parliamentary elections in terms of voting climate and election administration." But he added that the 52 percent turnout was disappointing. Owen Masters, who is the elections rapporteur for the Council of Europe, said that "by and large, these elections have been conducted in a fair and democratic manner." At the same time, a joint OSCE and Council of Europe statement stressed that "there is a need for the state to make structural improvements in the system of voter registration." FS

ROMANIAN INTELLIGENCE SERVICE ON SECURITATE FILES

Mircea Ghiordunescu, deputy director of the Romanian Intelligence Service, says most of the files of Securitate informers who were Communist Party (PCR) members were destroyed during the communist era, RFE/RL's Bucharest bureau reported.on 23 June. Ghiordunescu said a PCR plenum decided in 1967 that PCR members who were secret police informers would not have files. He added that between 1971 and 1979, some 270,000 files of PCR informers were destroyed and that between 22 December 1989 and 26 March 1990 more than 27,000 files "disappeared" from the Securitate records, which are now kept by the Romanian Intelligence Service. Meanwhile, the Senate on 23 June failed to debate the last article of a law on access to Securitate records, MS

MOLDOVAN REFORMS MINISTER ON 'ECONOMIC BANKRUPTCY'

Deputy Prime Minister and Economic Reforms Minister Ion Sturdza says the country's economy is "on the brink of bankruptcy," RFE/RL's Chisinau bureau reported on 23 June. Sturdza told a forum of Moldovan businessmen that in the past, ministries did not really take into account budgetary constraints and that as a result, Moldova now has a huge foreign debt of $1.3 billion, as well arrears in the payment of wages and pensions. He said the country's foreign debt amounts to 60 percent of GDP and that an "anti-crisis program" is about to be launched. Sturdza said the government will cease subsidizing loss- making sectors, such as energy, and many agricultural enterprises that are no longer able to pay their debts to the state budget. MS

UZBEK PRESIDENT IN BULGARIA

Islam Karimov met with President Petar Stoyanov and Prime Minister Ivan Kostov in Sofia on 23 June to discuss economic cooperation, an RFE/RL correspondent reported. Karimov said that a project for a highway linking Europe to Asia is "not a fantasy, but reality." The two sides are due to sign several accords on economic cooperation and tourism during Karimov's visit. Also on 23 June, President Petar Stoyanov received visiting Turkish parliamentary chairman Hikmet Cetin, with whom he discussed joint economic projects, bilateral relations, and the Kosova conflict. MS




ENVOYS REFUSE TO DANCE TO LUKASHENKA'S MUSIC


by Jan Maksymiuk

The Drazdy residential compound north of Minsk was built in a pine forest in the late 1940s for the Minsk nomenklatura. In the early 1990s, its wooden houses became the residences of two dozen ambassadors to the newly established Republic of Belarus. After the 1994 presidential elections, Drazdy also became the residence of President Alyaksandr Lukashenka. This month, the compound made the headlines as the setting for the most bizarre diplomatic conflict in modern history, which journalists have dubbed the "sewer war."

In late April, foreign diplomats living at Drazdy were notified that they would have to move out owing to urgent repairs to the compound's utility systems. Nobody took this warning very seriously, particularly since most ambassadors had extended their leases until the end of 2001. But the ambassadors subsequently received an order to move out by 10 June. To add weight to the written word, the authorities dispatched a team of workers to weld shut the gate to U.S. Ambassador Daniel Speckhard's residence. They left the compound only after the diplomat, alerted by his wife, arrived with a group of reporters.

On 10 June, Lukashenka stepped in and extended the eviction deadline by one week, saying the move was in response to Speckhard's request that the diplomats be given time to pack their belongings. The latter strongly denied having made such a request. In fact, together with other Western ambassadors, he demanded that Belarus observe the Vienna convention on the treatment of diplomatic representatives. Lukashenka later hinted that he did not feel comfortable living in close proximity to Western diplomats.

That hint was unexpectedly confirmed on 17 June, when the Drazdy site was declared the "residence of the president of the Republic of Belarus" and a sign to that effect appeared over the main entrance. The ambassadors were to be allowed to stay in the compound but were to have the status of "guests of the Belarusian president," as a deputy foreign minister put it. As such, they would have to apply for special passes to the compound for both themselves and their guests. The same deputy foreign minister also warned that would have to suffer "a lot of inconveniences" in connection with the repairs. Water, electricity, and telephone services were promptly cut off from diplomatic residences, and a ditch was dug in front of the compound's gates to prevent the diplomats from entering the area by car.

Until that time, the ambassadors had behaved as Lukashenka wanted them to behave: they had protested but had essentially accepted his rules of the game and tried to adapt. They had declared themselves ready to suffer hardships during the repairs. But they had not suspected that the Belarusian authorities would force them to "float in sewage," as Foreign Minister Ivan Antanovich had graphically described their prospective lot one week earlier. The diplomats appear to have finally lost their patience when it became evident that there was no office where they could apply for entry permits to the compound. On 22 June, six nations--Britain, France, Germany, Greece, Italy, and the U.S.--recalled their ambassadors for consultations.

For people in the West, Lukashenka's apparent motive for the eviction order is the most baffling aspect of the diplomatic row. Has he really risked an international scandal simply to enlarge his own residence? Belarusian independent journalists would answer in the affirmative, having repeatedly stressed that Lukashenka, a former collective farm director, manages Belarus's affairs like those of a kolkhoz--in a callous, authoritarian, and uncivilized manner. It seems he cares no more about foreign ambassadors than he does about Belarusian kolkhoz workers.

But his attempt to humiliate Western envoys may also be guided by personal revenge. Owing to his dictatorial ways and numerous violations of human rights, Belarus has become almost completely isolated in the West. Few Western statesmen will risk shaking hands with Lukashenka today. This is undoubtedly a festering wound to the pride of the self-styled leader of the East Slavic world, who some observers claim is still aspiring to the Kremlin throne. And that wound prompts him to hit back wherever and whenever he can.

Apart from expressing indignation and outrage, the West has virtually no means to punish Lukashenka. The Belarusian economy is virtually independent of the West; therefore, economic sanctions would have no impact. On the other hand, the Drazdy debacle has shown Lukashenka that he is fully at the mercy of Russia, Belarus's only ally. Moscow supports Lukashenka's blatantly undemocratic regime while claiming to build democracy at home. But it cannot be ruled out that the Kremlin will undertake a mediation mission to try to curb Lukashenka's diplomatic vagaries.


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