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Newsline - July 1, 1998




KIRIENKO URGES DUMA TO APPROVE GOVERNMENT PROGRAM...

Prime Minister Sergei Kirienko warned State Duma deputies on 1 July that failure to approve urgent legislative measures could have dire consequences for the Russian economy, RFE/RL's Moscow bureau reported. He described the government's anti-crisis program, a package of more than 20 draft laws, as a "depoliticized" plan to cut spending and boost revenues. He defended plans to reduce taxes on industry and increase consumption taxes, which, he noted, can more easily be collected. Kirienko also said the government will consider "constructive proposals" for amending the laws, ITAR-TASS reported. He called for creating a conciliatory commission of government representatives and deputies from the Duma and Federation Council, which would revise the laws approved by the Duma in the first reading. A similar commission hammered out a compromise on the 1998 budget, but the government has been unable to stick to that budget. LB

...FOLLOWING TALKS BEHIND THE SCENES TO DRUM UP SUPPORT

Kirienko has met with several prominent Duma deputies from opposition ranks in recent days, seeking their support for the government's anti-crisis program. He held talks with Communist Party leader Gennadii Zyuganov on 27 June and met two days later with Duma Economic Policy Committee Chairman Yurii Maslyukov and Duma Budget Committee member Yurii Voronin, both Communists. On 30 June, the premier met with Popular Power faction leader Nikolai Ryzhkov, ITAR-TASS reported. The government-backed laws cannot be approved by the Duma without at least some support from the Communists and their allies, the Agrarian and Popular Power factions. Meanwhile, citing unnamed sources in the business community, Interfax reported on 30 June that Kirienko met with leading Russian businessmen at government headquarters. The names of those who attended the meeting are not available. LB

DUMA SET TO BACK ONLY PART OF PROGRAM QUICKLY

Our Home Is Russia faction leader Aleksandr Shokhin on 1 July predicted that only six or seven of the government- backed draft laws will be approved by mid-July, RFE/RL's Moscow bureau reported. In a speech to the Duma, he called for a conciliatory commission to prepare a comprehensive package for parliamentary approval in the fall. President Boris Yeltsin and Prime Minister Kirienko have urged the Duma to approve the entire program this month. Communist Party leader Gennadii Zyuganov expressed support only for the parts of the program that, he said, would reduce the tax burden and promote the development of industry. Grigorii Yavlinskii said his Yabloko faction is willing to work on the government proposals but will slowly and carefully analyze the draft laws. He called on the government to act without waiting for decisions by the Duma, which, he said, could take months. LB

STROEV CONCERNED ABOUT ANTI-CRISIS PLAN'S EFFECT ON REGIONS

Federation Council Speaker Yegor Stroev on 30 June expressed concern about some of the government's proposed measures to stabilize the economy, RFE/RL's Moscow bureau reported. In particular, he criticized a proposal to change the distribution of income tax revenues, which now go entirely to regional authorities. The government wants 40 percent of income tax revenues to go to the federal budget and has proposed the introduction of a sales tax to help regional and local governments compensate for lost income tax revenues. But Stroev noted that the anti-crisis program calls for forcing regional governments to finance more projects even as it calls for diverting income tax revenues to the federal government. Prime Minister Kirienko is to address a session of the Federation Council on 9 July, before the upper house votes on the government-backed draft laws. LB

FIVE OIL COMPANIES FACE REDUCED ACCESS TO EXPORT PIPELINES

Deputy Prime Minister Viktor Khristenko announced on 30 June that beginning on 1 July, the government will reduce access to oil export pipelines for five companies that have not paid their tax debts, ITAR-TASS reported. The five are Bashneft, Sidanko, Tyumen Oil Company, Tatneft, and Onako. The IMF, which is negotiating with Russian officials a possible multibillion- dollar stabilization loan, has long supported measures to force oil companies to pay their tax debts. But according to the 27 June edition of the "Moscow Times," the government directive linking oil export quotas to repayment of tax debts makes an exception for companies that are exporting oil in order to repay foreign loans. LUKoil and Yukos are among the oil companies that have borrowed abroad and used oil exports to secure such loans, the newspaper said. LB

DISMISSAL OF AIDE FUELS NEW SPECULATION OVER THIRD TERM FOR YELTSIN

"Kommersant-Daily" argued on 30 June that by firing Sergei Shakhrai as his representative in the Constitutional Court, Yeltsin has signaled that he plans to run for re-election again in 2000. No official reason was given for Shakhrai's dismissal, which came two days after Shakhrai endorsed Moscow Mayor Yurii Luzhkov for the presidency (see "RFE/RL Newsline," 30 June 1998). In an interview published in "Izvestiya" on 1 July, Shakhrai claimed that he was fired because he told Yeltsin on 20 May that "he cannot run in the [2000] elections." Shakhrai's replacement, Mikhail Mityukov, told the 1 July edition of "Moskovskii komsomolets" that the decision to replace Shakhrai was made "about a month ago." The Constitutional Court is to rule later this year on whether Yeltsin has the right to seek a third term (see also "End Note" below). LB

NIKOLAEV RECRUITS SUPPORT FOR NEW MOVEMENT

Duma deputy Andrei Nikolaev, the former director of the Federal Border Service, attended the founding conference of the St. Petersburg branch of his new political movement on 30 June. Nikolaev said he considers trade unions strong allies of the Union of Popular Power and Labor, which will hold its founding congress in Moscow on 8 July, an RFE/RL correspondent in St. Petersburg reported. Nikolaev's movement is expected to become the core of a pro- Moscow Mayor Luzhkov bloc for the next elections to the Duma. He told journalists that he hopes for an alliance with all "centrist or left-center" parties and movements for those elections, which are scheduled for December 1999. He also expressed respect for Yabloko leader Grigorii Yavlinskii, with whom, he said, he is on good terms. LB

ENVIRONMENTALIST'S TREASON CASE FINALLY GOES TO COURT...

The St. Petersburg Prosecutor's Office has referred the criminal case against retired Navy Captain Aleksandr Nikitin to the city court, Interfax reported on 30 June. Nikitin is charged with treason, revealing state secrets, and falsifying documents while working for the Norwegian environmental group Bellona. He was arrested in February 1996 after writing two chapters for a Bellona report on the risk of radioactive pollution from nuclear submarines in Russia's Northern Fleet. Nikitin has said he used only public sources to write the report. His defenders also say the case against him is based on secret documents. In that event, the case would be in violation of Russian law (see "RFE/RL Newsline," 19 May 1998). LB

...AS NEW BOOK CONCLUDES HE REVEALED NO STATE SECRETS

Three retired vice admirals--Yevgenii Chernov, Viktor Khrantsev, and Leonid Zhdanov--have published a book about the Nikitin case based on two years of their own research, an RFE/RL correspondent in St. Petersburg reported on 29 June. Speaking to journalists, Chernov refused to reveal either the name of the publisher or the size of the book's print run. The authors concluded that all of the information Nikitin provided for the Bellona report was published before in books or in the Russian press. The vice admirals also argue that the naval experts who determined that the Bellona report contained state secrets had an interest in seeing Nikitin prosecuted, since they themselves were involved in Navy policies that posed a risk of radioactive contamination on the Kola Peninsula (Murmansk Oblast). LB

GOVERNMENT APPROVES PLAN TO RESTRUCTURE DEFENSE INDUSTRY

By 2005, the defense sector will be reduced from its current 1,700 to 600-700 enterprises, Prime Minister Kirienko announced on 29 June, adding that the remaining enterprises will produce civilian products and compete for state military contracts, "Russkii telegraf" reported. The measure is part of the government's program to restructure the defense industry, which calls for spending 2.1 billion rubles ($339 million) from the 1998 federal budget. Of that sum, 632 million rubles are to be used as credit for conversion projects, 508 million rubles for financing private projects, and 1.019 billion as subsidies for converting enterprises. On 26 June, Finance Minister Mikhail Zadornov told the Duma that mutual debts between the government and the defense sector amounting to 6 billion rubles ($967 million) will be written off and that remaining government debts to defense enterprises will be cleared within one to one-and- a-half months (see "RFE/RL Newsline," 16 February and 8 April 1998). BT

DUMA REJECTS ECONOMIC AMNESTY BILL

By three votes, the Duma on 26 June rejected a draft law on amnesty for economic crimes in its third reading Interfax reported. The law would have granted amnesty to those who transfer illegally-earned funds from foreign accounts to Russian banks. Duma Legislation Committee member Nikolai Shaklein (Popular Power faction) argued that the law is too vague and would allow criminals to escape punishment without returning significant amounts of money to Russia. Liberal Democratic Party leader Vladimir Zhirinovsky voted against the law, saying it would encourage the "shadow economy." Earlier, he had supported it, claiming the return of some $500 billion from foreign accounts could "stabilize the economy for many years," ITAR-TASS reported. Meanwhile, Interior Minister Sergei Stepashin met with the Association of Russian Banks on 30 June to discuss measures to combat crime in the banking sector, "Kommersant-Daily" reported. BT

REGIONAL LEGISLATURES VOTE NO CONFIDENCE IN YELTSIN

The Yaroslavl Oblast Duma on 30 June became the third regional legislature to express its displeasure with Yeltsin in recent weeks. Deputies voted by 35 to four with one abstention to vote no confidence in Yeltsin and to support the State Duma's decision to launch impeachment proceedings. The Yaroslavl legislature's statement said Yeltsin is incapable of "stabilizing the situation and leading the country on the path of steady development and high quality of life," Interfax reported. The Ryazan Oblast Duma on 27 May unanimously adopted an appeal asking Yeltsin to resign, "Nezavisimaya gazeta" reported on 1 July. The Sakhalin Oblast Duma passed a similar appeal on 25 June. According to "Nezavisimaya gazeta," the legislatures of Tula and Belgorod Oblasts are to consider similar resolutions. LB

CHECHEN PRESIDENT TARGETS ABDUCTIONS, OIL THEFTS

Speaking on Chechen television on 30 June, Aslan Maskhadov vowed that within 20 days, the Chechen security forces will put an end to kidnappings and illegal oil refining, which is said to be worth 20 million rubles ($3.3 million) a month, Interfax reported. Under the state of emergency introduced eight days ago, Maskhadov has placed all ministries on increased alert and appointed two of his close associates to head the presidential administration and presidential guard. Also on 30 June, Chechnya's Sharia court ruled blood feud murders illegal and punishable by the death sentence. Russian observers have argued that fear of revenge killings was the primary factor preventing a more ruthless crackdown on abductions in Chechnya. "Kommersant-Daily" on 1 July quoted Chechen spokesmen as denying that the security measures were prompted by fear of a coup against Maskhadov (see also "RFE/RL Caucasus Report," Vol. 1, No. 18, 30 June 1998). LF

RUSSIA REJECTS CHECHEN STANCE ON UN, OSCE

Russian Foreign Ministry spokesman Vladimir Rakhmanin told journalists on 30 June that Chechnya is not entitled to apply for UN membership as it is a subject of the Russian Federation, Interfax reported. Rakhmanin also said that only the federal government is competent to review the status of the OSCE mission in Chechnya and that there are "no serious reasons" for doing so. The previous day, Chechen Foreign Minister Movladi Udugov had said that Chechnya intends to seek UN membership. He also threatened to expel the OSCE mission if it does not formally apply to the Chechen government within 15 days for a new mandate. LF




GEORGIA PREPARES TO BEGIN GUARDING FRONTIERS...

Georgian border troops on 1 July began preparations to assume sole responsibility for guarding the country's land and sea borders, which since 1992 have been jointly patrolled by Georgian and Russian forces. Georgian Frontier Guard Commander Valerii Chkheidze told journalists in Tbilisi on 29 June that Georgia will assume responsibility for guarding its 12 km territorial waters on 16 July and its land border with Turkey in September. An agreement to this effect was initialed in Moscow on 27 June. LF

...AMID ABKHAZ, RUSSIAN RESERVATIONS

Abkhaz Defense Minister Vladimir Mikanba on 30 June warned that "Abkhazia as a sovereign state will not allow patrol ships of a country with which it is in conflict enter its territorial waters," according to Interfax. Mikanba suggested that Russian border guards should continue to protect Abkhazia's sea borders until relations with Georgia are clarified. In Moscow, former Russian Federal Border Service director Andrei Nikolaev said the withdrawal of Russian border troops from Georgia is tantamount to the "loss of Russia's strategic position in the Caucasus." LF

ROMANIAN PRESIDENT IN BAKU

Emil Constantinescu and President Heidar Aliyev met for two hours in Baku on 30 June for talks focusing primarily on Romania's potential role as a transit country for exports of Azerbaijani Caspian oil. Constantinescu pointed out that existing terminal and refining facilities at Romania's Black Sea port of Constanta have a handling capacity of 31 million metric tons per year. Aliyev agreed that the Baku-Supsa-Constanta route could function as one of several, together with the Baku- Novorossiisk and Baku-Ceyhan pipelines, according to Turan. The two presidents also discussed the potential for cooperation within the Black Sea Economic Cooperation Organization and the EU "Silk Road" project. A declaration on further cooperation and inter-governmental agreements on cargo traffic and exchange of information by the two countries' official news agencies were signed. LF

DATE SET FOR AZERBAIJANI PRESIDENTIAL ELECTIONS

The newly elected Central Electoral Commission has scheduled the upcoming presidential elections for 11 October, Turan reported on 30 June The previous day, 17 of the 18 members already appointed to the commission elected Jafar Veliev as chairman. Veliev, who also chaired the previous commission, vowed that the body will do its best to ensure that the presidential elections are free and fair. He added that the commission will create all conditions necessary for the participation of international observers. The OSCE is expected to send 140 such observers. LF

AZERBAIJANI EX-PRESIDENT INTERROGATED

Former President and Azerbaijan Popular Front Party chairman Abulfaz Elchibey was questioned for three hours on 30 June by the Azerbaijani Interior Ministry's Department to Combat Organized Crime, Turan reported. A ministry spokesman said that the questions focused on Elchibey's aide Gabil Mamedov, who was arrested on 14 June on fabricated charges of illegal possession of arms, and on a document entitled "Meeting Tactics of the Opposition." That document was confiscated during a search of the premises of the opposition newspaper "Chag" on 16 June. LF

IMPRISONED FORMER AZERBAIJANI DEFENSE MINISTER ON HUNGER STRIKE

Rahim Gaziev, who was extradited from Russia to Baku in April 1996, embarked on a hunger strike on 22 June to demand a public retrial, Caucasus Press reported on 30 June. Gaziev was sentenced to death in absentia in 1994 on charges of embezzlement, illegal possession of arms, and surrendering the towns of Lachin and Shusha to Armenian forces in May 1992. LF

ARGENTINEAN PRESIDENT IN YEREVAN

Carlos Menem and his Armenian counterpart, Robert Kocharian, discussed economic cooperation, regional issues, and cooperation within the framework of international organizations during Menem's one-day visit to Yerevan on 30 June, RFE/RL's Yerevan bureau reported. The two presidents signed a joint declaration on the "fundamentals of friendly relations" and pledged their support for the Argentinean Bridas oil and gas company's participation in the planned construction of a gas pipeline from Iran to Armenia. Inter-ministerial agreements on cooperation in the peaceful use of nuclear energy, health care, culture, and education were also signed. Kocharian told journalists that the two presidents "understood each other correctly," having "very close or identical" views on all issues discussed. Kocharian visited Argentina in May 1996, while still president of the unrecognized Nagorno-Karabakh Republic. LF

NAZARBAYEV ADDRESSES PARLIAMENT ON ECONOMY

Kazakh President Nursultan Nazarbayev told a joint session of the parliament on 30 June that the country must become less dependent on the fluctuations of the world financial market, Interfax reported. Nazarbayev said small and medium-size businesses must be developed, the tax system made more flexible to benefit the internal market, and value-added tax revised. Nazarbayev also said industries producing consumer goods and all banks except the National Bank must be privatized. And he commented that the Asian financial crisis "has not left Kazakhstan unaffected," mentioning that prices for Kazakhstan's main exports--oil and nonferrous metals--have dropped on world markets. The Kazakh president said the government needs to take measures to support exporters through tariffs, adding that he favors diversifying exports. BP

KYRGYZSTAN RECEIVES ANOTHER IMF LOAN

The board of the IMF approved an economic structural adjustment facility (ESAF) loan for Kyrgyzstan, Interfax reported on 29 June. Kyrgyzstan will receive between $20-36 million annually for the next three years. Finance Minister Talaibek Koichumanov said the money will be used to support the national currency. An RFE/RL correspondent based in Washington describes an ESAF loan as "available to the poorest members of the IMF [and] given at a 0.5 percent interest rate with five-and-a half year grace period." BP

LAST UTO FIGHTERS BEGIN TO RETURN TO TAJIKISTAN

A group of some 150 fighters from the United Tajik Opposition who had been stranded in Afghanistan crossed the lower Pyanj River into Tajikistan on 1 July, RFE/RL correspondents and ITAR-TASS reported. Their repatriation is being overseen by the UN observer mission to Tajikistan, Russian border guards, and the joint peace-keeping force. Some 500 fighters have been waiting for more than a year to return home, following the signing of the Tajik peace accord in Moscow last June. BP




BELARUSIAN PRESIDENT OFFENDS MOSCOW

Russian Foreign Ministry spokesman Vladimir Rakhmanin said on 30 June that Moscow is waiting for the Belarusian government to explain what he called "an inappropriate reference to Russia" by Alyaksandr Lukashenka, Interfax reported. Speaking at the CransMontana forum in Switzerland at the weekend, Lukashenka criticized "countries firing at their parliaments from tanks," an apparent reference to Boris Yeltsin's attack on the Russian White House in October 1993. In another indication that Minsk is not above insulting Russia, Belarusian Prime Minister Sergei Ling noted the same day that Russia owes Minsk some $2 billion for exports in 1997 but said that Belarus is prepared to provide assistance to enterprises in two Russian cities on which Belarusian industry depends, Interfax reported. PG

MINSK TO RETAIN 'COMMANDING HEIGHTS' OF BELARUS ECONOMY

Also on 30 June, Belarusian Prime Minister Ling announced that his government plans to maintain central control over the "commanding heights" of the economy, Interfax reported. He said that such control would be maintained even if firms were partially privatized. And he commented that government assistance to 38 large state enterprises in 1997 has brought the government revenues twice as large as the investment. PG

UKRAINE COMPLAINS ABOUT RUSSIAN HUMAN RIGHTS ABUSES

The Ukrainian embassy in Moscow on 30 June asked the Russian authorities to investigate what it called human rights abuses in the Russian capital, the Ukrainian embassy in Washington told RFE/RL. Ukrainian Foreign Ministry spokesman Viktor Nahaychuk said in Kyiv that Ukrainians working in Moscow have been mistreated or even beaten by local police because they lost or were unable to obtain residence permits from the city administration. PG

UKRAINE'S FINANCE MINISTRY FINDS MISUSE OF FUNDS AT CHERNOBYL

Finance Ministry inspectors have identified massive misuse of clean-up funds at the Chornobyl nuclear plant, ITAR-TASS reported on 1 July. The government press service said that approximately 10 million hryvnas ($5 million) have been embezzled, misappropriated, or misused. After levying fines on officials involved, the auditing service has taken control over all monies in the fund. PG.

UKRAINIAN FARMERS DEMAND LAND REFORM

Approximately 400 Ukrainian farmers demonstrated in Kyiv on 30 June to call for the passage of reform legislation that would allow them to buy and sell land freely, give them expanded assistance, and create a single tax on agricultural production, Interfax reported. PG

UKRAINE BATTLES DRUG, SEX TRADES

Ukraine's security service announced on 30 June that its officers have seized more than 8.5 tons of drugs and arrested 140 drug dealers since last year, Kyiv's "Segodnya" newspaper reported. Meanwhile, Nina Karpacheva, the head of the parliamentary human rights commission, told ITAR-TASS that one in every five of the nearly 500,000 Ukrainian women who have moved to Western Europe since independence have become employed in the sex industry. PG

LATVIAN PRESIDENT OPPOSES REFERENDUM ON CITIZENSHIP LAW CHANGES...

Guntis Ulmanis has described the bid to hold a referendum on the citizenship law amendments as "pre-election populism" and "dishonest" (see "RFE/RL Newsline," 29 June 1998), BNS reported on 30 June. Ulmanis told journalists that the passage of the amendments is "one of the most important and responsibility-filled accomplishments of the incumbent parliament" and will prompt the government and parliamentary parties to adopt laws in line with the "desire to strengthen the status of the Latvian language." If voters supported a referendum on the issue, he argued, it would signal their wish to start a dialogue with the authorities and, moreover, political parties would be obliged to voice their exact opinions on the issue. Also on 30 June, Ulmanis informed the Central Electoral Committee of the suspension of the amendments' enactment pending the collection of signatures in support of a plebiscite. JC

...WHILE PREMIER SAYS IT'S NECESSARY

Guntars Krasts, meanwhile, has backed such a referendum, saying it is necessary because Latvia is about to introduce norms that do not exist in other European countries, BNS reported on 30 June. "If we are making a European-scale experiment, we should know the people's opinion," he told reporters. Krasts's Fatherland and Freedom Party initiated the referendum bid last month. Latvia's Way has said that Krasts's suitability as premier would be seriously called into question if he supported the initiative, while the opposition Democratic Party Saimnieks noted it may propose a no confidence vote in the government if Krasts does not oppose the referendum bid. A Russian Foreign Ministry spokesman said in Moscow on 30 June that "radicals" in Latvia are "playing the nationalist card" ahead of the elections. He added that the Latvian people should opt for measures recommended by the international community, Interfax reported. JC

POLAND TO REFORM COAL, STEEL INDUSTRIES

In order to meet EU requirements, the Polish cabinet on 30 June decided to push ahead with plans to reform the key coal and steel industries, PAP reported. The plans call for cutting some 105,000 jobs in the coal industry by the year 2002 and reducing output from 137 million tons a year to 112 million tons. To cushion the impact of this cutback, Warsaw has asked the World Bank for a $1 billion loan. The plan also calls for cutting employment by 50,000 in the steel industry while maintaining current output levels. The same day, some 30 farmers held a sit-in at the Finance Ministry to demand higher subsidies, which the EU has opposed. PG

GRAND COALITION IN CZECH REPUBLIC?

The chairman of the Social Democratic Party (CSSD), Milos Zeman, said after talks with the leader of the Civil Democratic Party (ODS) Vaclav Klaus on 29 June that there is a "possibility" that an "agreement" would be reached on forming a government in which "the strongest [parliamentary] parties will have a significant position." Klaus said after the talks that he no longer rules out the possibility that the ODS would tolerate a minority government including only CSSD ministers. However, after meeting Zeman the same day, Christian Democratic Party leader Josef Lux said a "center-left" coalition as well as a "grand coalition" are now becoming possible owing to "notable concessions from the Social Democrats," Reuters and AP reported. MS

PLANS TO CUT SIZE OF CZECH ARMY

Defense Minister Michal Lobkowicz on 29 June submitted to the National Security Council a plan that would cut Czech army troops from 81,000 to 60,000 by 2003, CTK reported. Lobkowicz told journalists the reduction will not affect the army's "combat core" but will target "white-collar jobs, senior officers, and conscripts." Chief of Staff Jiri Sedivy said that by 2001, the Czech military will set up a "fully professional" rapid deployment force. That force could be deployed within 20 days, he said. MS

SLOVAKIA'S HUNGARIANS PROTEST DISCRIMINATION

Thousands of ethnic Hungarian pupils on 30 June protested new government regulations that they consider discriminatory, Reuters reported. Pupils handed back their end of term reports after the Ministry of Education ordered the reports to be issued in the Slovak language only. The ministry, which is run by the ultra-right Slovak National Party, also intends to amend existing legislation to make the teaching of history and geography in national minority schools in Slovak obligatory and to require that books used in teaching be approved by the ministry. MS

HUNGARIAN PARLIAMENT APPROVES NEW CABINET STRUCTURE

By a vote of 207 to 47 and 45 abstentions, the parliament on 30 June approved a bill whereby the new cabinet will have 13 ministries (instead of 12 until now) and two ministers without portfolio. The Socialist and Free Democrat opposition criticized that provision of the bill that splits the Culture and Education Ministry into an Education Ministry and a National Cultural Heritage Ministry, saying the latter does not express the variety of cultures in Hungary. In other news, former Prime Minister Peter Boross is to become Prime Minister-designate Viktor Orban's national security adviser, "Magyar Hirlap" reported on 1 July. MSZ




SERBIA CLAIMS SUCCESS IN BELACEVAC OFFENSIVE

Serbian police officials on 30 June said they have retaken villages near the Belacevac coal mine that were previously controlled by the Kosova Liberation Army (UCK). Yugoslav army tanks were used in the offensive, AP reported. Serbs have resumed operation of the strategic Belacevac mine as well, according to Reuters. The mine is just west of Prishtina and supplies two nearby power plants. Reports say at least three Albanians were killed and seven wounded in the battle, although most of the UCK fighters are reported to have escaped the area. Thousands of inhabitants have fled Belacevac and two nearby towns, RFE/RL's South Slavic Service reported. Elsewhere, five Albanians died in battles with Serbian forces near the Albanian border west of Djakovica, according to Serbian police. The UCK is reported to have launched an attack at the village of Drenoc, near Klina, and attacked a Serbian military convoy on the Prizren-Shtime road. FS

SERBIAN OFFICIALS SAYS KIJEVA IS NEXT TARGET

Veljko Odalovic, the Serbian governor of Kosova, said that the siege around the village of Kijeva will be lifted soon, Reuters reported on 30 June. Odalovic said that Serbs "cannot justify that in our own state we have people being held as hostages." There are some 220 Serbs in Kijeva, which has been encircled by UCK forces for more than a week. Serbian forces, in turn, have surrounded the UCK. Yugoslav army helicopters strafed the UCK troops on 29 June. Western officials have said Kijeva is a flash point and warned that an attempt by Serbian forces to secure the village will result in a blood bath. PB

HOLBROOKE SAYS PEACE MISSION CONTINUES

U.S. envoy Richard Holbrooke said that attempts to defuse the situation in Kosova continue, although it is "on the edge of becoming an emergency," Reuters reported. Holbrooke, speaking from Oslo, said diplomatic efforts are "intense and ongoing," pointing to the meeting by the U.S. ambassador to Macedonia, Christopher Hill, with Yugoslav President Slobodan Milosevic in Belgrade on 30 June. No details of the meeting are known. Hill is scheduled to meet with ethic Albanian leaders in Prishtina on 1 July. Holbrooke said no clear chain of command exists within the UCK, so it is difficult to negotiate a cease-fire. In Moscow, Russian Foreign Ministry spokesman Vladimir Rakhmanin said the UCK must not be involved in any peace talks. PB

ANNAN PROPOSES TO EXTEND UN MANDATE FOR PREVLAKA

UN Secretary-General Kofi Annan proposed in New York on 29 June that the mandate of the UN monitoring mission for the Prevlaka peninsula (UNMOP) be extended for another six months. The UNMOP mandate runs out on 15 July. Annan has urged Belgrade and Zagreb to settle the border dispute (see "RFE/RL Newsline," 30 June 1998). Croatia's ambassador to the UN, Ivan Simonovic, said that Zagreb will demand confirmation by the UN Security Council that Prevlaka is Croatian territory as a precondition for extending the mandate. FS

YUGOSLAVIA BLAMES COURT FOR SERB'S SUICIDE

The Yugoslav Justice Ministry sent a formal protest on 30 June to the International War Crimes Tribunal at The Hague over the suicide of accused war criminal Slavko Dokmanovic (see "RFE/RL Newsline," 29 June 1998), Tanjug reported. The Justice Ministry said it holds the tribunal responsible for his death owing to negligence in his care and surveillance. Dokmanovic's attorney in Belgrade said his client had been severely depressed for several weeks and had received treatment for his condition. PB

CROATIA'S SERBS APPROVE OF RETURNEE PROGRAM

Vojislav Stanimirovic, a leader of the Serbian community in Croatia, said in Vukovar on 30 June that he welcomes the program adopted by the Croatian parliament on 26 June that seeks to facilitate the return of Serbian refugees to Croatia, AFP reported. Stanimirovic said the program does not take into account all problems faced by returnees but that it is important to implement the plan quickly. He said he thinks conflicts may arise when Serbs return to Croatia to reclaim their pre-war homes. PB

ALBANIAN SECRET SERVICE CHIEF SAYS HIS PREDECESSORS COMMITTED MURDER

Secret Service (SHIK) chief Fatos Klosi told the parliament on 30 June that he has evidence proving that the SHIK was involved in illegal activities after former President Sali Berisha failed to push through a new constitution in 1994. Klosi said that SHIK executed people without trial and spied on almost all prominent opposition politicians as well as Supreme Court Chief Judge Zef Brozi, trade union activists, and the Albanian branch of the Soros Foundation. He added that his predecessor, Bashkim Gazidede, received his orders directly from Berisha, "Koha Jone" reported. FS

WORLD BANK REPORT SHOWS ALBANIAN CORRUPTION RAMPANT

According to a World Bank report presented to a conference in Tirana on 30 June, Albania is the most corrupt country in Europe. In a survey, more than 70 percent of entrepreneurs in Albania admitted bribing customs officials, while some 60 percent said they pay bribes for the installation of telephone lines. Just under 50 percent said they pay bribes for construction licenses or to the tax authorities. Thirty-three percent of those who have been tried admitted to having paid bribes to court clerks, 22 percent to defense lawyers, some 10 percent to judges and prosecutors, and 5 percent to prison officials, "Gazeta Shqiptare" reported. FS

ROMANIA TO ACCELERATE REFORMS

Prime Minister Radu Vasile, addressing a conference organized by "The Economist" in Bucharest on 30 June, said the "most dangerous adversary" of the reform process is the "trade unions-state managerial alliance." He said he is determined to accelerate the reform process "even if this means the end of my political career." Vasile said the state bureaucracy is "the mainspring of corruption" but is aided also by "ambiguous legislation" passed by successive governments, which, he said, leaves room for conflicting interpretation. He pledged to pass legislation encouraging foreign investments and said the inflation rate in 1999 will be 22 percent, about half of that forecast for this year, RFE/RL's Bucharest bureau reported. The same day, the National Statistical Board said GDP in the first half of this year has declined by 9.4 percent compared with the same period last year. MS

ROMANIAN PARLIAMENT REJECTS HOMOSEXUAL DECRIMINALIZATION

The Chamber of Deputies on 30 June rejected government-proposed amendments to the penal code to decriminalize homosexual relations. The amendment was five votes short of the required 172 majority, because some deputies representing the ruling coalition were not present during the vote. They had earlier spoken out against the amendment. Justice Minister Valeriu Stoica said that the coalition will discuss the "lack of discipline" that prompted the failure, adding that the draft will be resubmitted to the parliament in the fall. The Parliamentary Assembly of the Council of Europe, which recently took Romania off its "special list" of countries it monitors, has been urging Bucharest to bring its legislation into line with European standards. MS

BULGARIA TIGHTENS ANTI-DRUG LEGISLATION

The government on 29 June approved amendments to the penal code that drastically step up punishment for the cultivation of narcotic plants, the production of narcotics, and the sale of drugs in schools, BTA reported. Ring leaders of groups engaged in narcotic cultivation and production will be liable to prison terms from 20 years to life and to fines ranging from 300 to 500 million leva ($167,000- $278,000). Selling drugs in schools and army bases will be punished by 15-20 years in prison and by fines of 300-500 million leva. MS




SHAKHRAI SEEMS UNFAZED BY DISMISSAL


by Floriana Fossato

Sergei Shakhrai, sacked by President Boris Yeltsin as presidential representative at the Constitutional Court, does not seem to regret losing his long-time job.

On the contrary, Shakhrai has given the impression to journalists that he is satisfied that his statements at the weekend have had the desired effect. He has suggested that he can now join a bloc of political forces preparing to support Moscow Mayor Yurii Luzhkov in the 2000 presidential elections.

Shakhrai was long regarded in Moscow as one of Yeltsin's more loyal officials. Observers therefore were surprised when, at a weekend congress of his almost forgotten Party of Russian Unity and Accord, Shakhrai said that in preparation for the next parliamentary and presidential elections, the party should shift its political allegiances to Luzhkov's camp.

Shakhrai also criticized the presidential administration for underestimating the threat of presidential impeachment procedures that the State Duma is trying to initiate.

According to Shakhrai, deputies' demands for a parliamentary debate on Yeltsin's impeachment will garner the support of at least two-thirds of Duma deputies, as required by the constitution for the formal start of impeachment procedures. The Kremlin. meanwhile, has brushed off the Duma's threat of impeachment.

Sergei Markov, director of the Moscow Institute of Political Studies, told RFE/RL that because of the provisions of Russia's Constitution, the impeachment bid is "purely theoretical." Even if at least 300 of the Duma's 450 members support a formal indictment of Yeltsin, the charges against the president--including instigating the collapse of the USSR, launching the war in Chechnya, or ruining the Russian economy--are unlikely to be deemed valid by the Supreme Court.

Shakhrai, one of the main authors of the 1993 constitution, is well aware of the difficulties that Yeltsin's foes could face. The start of the impeachment commission "will become a reality when parliamentary work on the government anti-crisis project reaches a dead-end and only the dissolution of the Duma and early parliamentary elections will break the [deadlock]," he commented

According to the constitution, the president cannot disband the lower house of the parliament if the Duma has adopted a motion on impeachment.

Shakhrai also said that Yeltsin would be "unelectable" if he decided to run again in the year 2000. In an interview with "Russkii telegraf," he said the president "cannot announce his decision to run if he does not want everyone to laugh at him."

This fall, the Constitutional Court will examine the possibility that Yeltsin, taking advantage of a Constitutional loophole, will run again. According to Markov, "it is clear that Yeltsin has decided some time ago to run and that his decision is opposed by influential business and financial tycoons who are now trying to put pressure on him in different ways, including with the impeachment threat, in order to discourage him."

Shakhrai said that the next parliamentary elections, scheduled for December 1999, will "determine two leading candidates for the presidency: Luzhkov and Krasnoyarsk Krai Governor Aleksandr Lebed." The result, he said, will "help" the powerful oligarchs who backed Yeltsin's re- election bid in 1996" to take a final decision on the candidate they will support in the next election.

Shakhrai seems to have put his stakes on Luzhkov. According to "Russkii Telegraf," the "usually careful" Shakhrai may have decided "that the Kremlin boat is sinking and the moment has come to leave it."

Shakhrai told "Kommersant" that his party will most likely compete in the next parliamentary elections as part of a coalition of political movements close to Luzhkov. Luzhkov has repeatedly said he will not participate in the presidential election, but few observers are inclined to believe him.

"Russkii Telegraf" argued that Luzhkov is unlikely to express gratitude to Shakhrai. In 1993, Shakrai's party gained some 6.7 percent of the vote in Duma elections. But in the 1995 parliamentary elections, it gained just 0.36 percent and did not make it to the Duma.

So far, the Moscow mayor has not commented on Shakhrai's announcement. The author is an RFE/RL correspondent based in Moscow.


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