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Newsline - July 14, 1998




RUSSIA TO RECEIVE $14.8 BILLION PACKAGE THIS YEAR

Russia will receive $14.8 billion in loans from the IMF, World Bank, and Japan this year, officials announced on 13 July. The IMF will loan Russia $12.5 billion in 1998, the bulk of which ($11.2 billion) will constitute a new stabilization loan. The first disbursement of $5.6 billion may occur soon after a 20 July meeting of the IMF's board of directors. The World Bank will extend $1.7 billion in loans to Russia this year, $800 million of which was agreed during the past two weeks. Japan has also agreed to loan Russia $600 million this year. The stabilization package also includes a combined $7.8 billion in loans to Russia from the IMF, World Bank, and Japan next year. Of that figure, $4.5 billion are new credits agreed during the last two weeks. LB

RUSSIA SEEKS TO ISSUE EUROBONDS INSTEAD OF TREASURY BILLS...

In an effort to reduce short-term borrowing costs, Russia will offer holders of government treasury bills (GKOs) maturing before 1 July 1999 a chance to exchange those securities for seven-year or 20-year Eurobonds denominated in dollars, Russian news agencies reported on 14 July. According to Interfax, the value of GKOs in circulation totals some $30 billion. John Odling- Smee, head of the IMF's second European department, predicted on 13 July that the planned voluntary swap will reduce Russia's debt servicing costs and relieve the pressure on the GKO market. Widespread fears of a ruble devaluation have sparked a massive sell-off of GKOs and other ruble-denominated securities during the last two months. But the Russian stock market increased by more than 9 percent on 13 July, while in early trading the next day, the stock and bond markets posted gains of more than 13 percent and 10 percent, respectively. LB

...AND EXTEND COOPERATION WITH IMF INTO NEXT CENTURY

The Russian government has informed the IMF that it will seek another Extended Fund Facility for the period 1999-2001, ITAR-TASS reported on 13 July. Before the Russian stock and bond markets began showing steep declines in fall 1997, President Boris Yeltsin and other Russian officials repeatedly said Russia will not seek any new loans from the IMF after the current four-year, $10 billion Extended Fund Facility expires in 2000 (see "RFE/RL Newsline," 18 September 1997). LB

CHUBAIS DISMISSES FURTHER THREAT OF DEVALUATION

Unified Energy System head Anatolii Chubais, Russia's top negotiator with international financial institutions, announced during a 13 July press conference that "there is no need for a devaluation" of the ruble, RFE/RL's Moscow bureau reported. He said the new loan agreements "signify a restoration of faith in Russia's ability to overcome its difficulties," Reuters reported. Central Bank Chairman Sergei Dubinin told journalists on 14 July that the first $5.6 billion installment of the new IMF loan will be added to the Central Bank's gold and hard- currency reserves, ITAR-TASS reported. Those reserves dropped from $15.1 billion to $13.5 billion from 3-14 July. LB

NEWSPAPER DOUBTS NEW LOANS WILL PREVENT DEVALUATION

"Nezavisimaya gazeta" on 14 July expressed doubt that the new foreign loans will eliminate the need for a devaluation. A front-page article in that newspaper, which is financed by CIS Executive Secretary Boris Berezovskii, declared that Russia has received merely a "delay of the death penalty," adding that the new loans will significantly increase Russia's debt load and "lead to the dollarization of the economy." LB

YELTSIN PRESSES DUMA TO PASS ANTI-CRISIS PROGRAM...

Yeltsin met with State Duma Speaker Gennadii Seleznev and representatives from all seven Duma factions on 14 July to lobby for the passage of laws contained in the government's anti-crisis program, Russian media reported. He told parliamentary deputies that "we will not be able to implement [the program] if you do not confirm it... I can decide on some matters myself but, on the whole, the destiny of the program depends on you." The program formed the basis for Russia's recent negotiations with international financial institutions. The Duma will consider many of the government's proposals during an extraordinary session on 15-16 July. It has already rejected some key proposals for increasing budget revenues (see "RFE/RL Newsline," 3 and 7 July 1998). LB

...RULES OUT NEW ELECTIONS, COUPS, CONSTITUTIONAL AMENDMENTS

Yeltsin told influential Duma officials on 14 July that "there will be no extraordinary elections, no coups, no dissolution of the Duma and no changes in the constitution," ITAR-TASS reported, quoting presidential spokesman Sergei Yastrzhembskii. During the Kremlin meeting, Yeltsin also argued that the executive and legislature form "one team," adding that "we are one state." The president recently announced that law enforcement agencies are strong enough to reject any coup attempt (see "RFE/RL Newsline," 13 July 1998). Those remarks appear to have been prompted by an article in "Nezavisimaya gazeta" proposing the creation of a Temporary State Council to govern Russia and call early presidential and parliamentary elections. Several proposed constitutional amendments are being drafted in the Duma and are tentatively scheduled for consideration this fall, "Nezavisimaya gazeta" reported on 11 July. LB

SARATOV GOVERNOR SUGGESTS YELTSIN MAY BE FORCED OUT

Dmitrii Ayatskov has predicted that "surges of discontent" from throughout Russia may force Yeltsin and the government to resign by September. Speaking to Interfax on 13 July, Ayatskov called on Yeltsin to "admit that he made a mistake" with Prime Minister Sergei Kirienko's cabinet. The Saratov governor criticized the government's economic and regional policies, adding that it would be "naive" to expect the government to solve the problem of wage and pension arrears. Ayatskov also said early parliamentary and presidential elections would not be a "tragedy," and he argued in favor of having "more people in government with social democratic tendencies, such as [Moscow Mayor Yurii] Luzhkov and Ayatskov." The Saratov governor was a Yeltsin appointee in 1996 and won an election that year to retain the post. Since then, relations between the two men have been good (see "RFE/RL Newsline," 27 August 1997 and 18 May 1998). LB

NOVGOROD GOVERNOR URGES YELTSIN TO BACK CONSTITUTIONAL CHANGES

Mikhail Prusak has called on Yeltsin to support amending Russia's constitution, "Nezavisimaya gazeta" reported on 11 July. Prusak made the appeal during the Federation Council's session on 9 July. The same day, he met with Yeltsin and suggested "taking economic functions away from the president" and giving them to the government, Interfax reported. Prusak also called for reinstating the post of vice president. The Novgorod governor has repeatedly spoken out in favor of amending the constitution and changing Russia's electoral system (see "RFE/RL Newsline," 26 May 1998). Like Ayatskov, he initially became governor as a presidential appointee and has been a loyal supporter of Yeltsin. But Prusak recently blasted the Kirienko government, which, he claimed, is inexperienced and lacks the trust of the regions, according to the 2 July edition of the "IEWS Russian Regional Report." LB

MINERS REJECT TULEEV'S APPEAL

The blockade of the Trans-Siberian Railroad in Kemerovo Oblast continues, despite Governor Aman Tuleev's appeal to protesting miners on 13 July to allow the transport of materials needed by regional industries, news agencies reported. Tuleev told a meeting of the Kemerovo administration that a government commission will fly to Kemerovo "an hour after the blockade has been lifted," referring to Deputy Prime Minister Oleg Sysuev's offer to negotiate with the protesters if the railroad is opened and miners' political demands are not discussed. Tuleev said a train that is loaded with enriched uranium and bound for a nuclear power plant in Seversk Oblast has for several days remained close to where miners are blocking the railroad. He added that the train poses a major environmental threat. The blockade of the Novokuznetsk-Tashtagol railroad, one of three such blockades in Kemerovo Oblast, was lifted on 13 July, after the mayor of Osinniki told the pickets that Tashtagol was on the verge of rationing food, Interfax reported. BT

KIRIENKO WRAPS UP JAPANESE VISIT

Before departing for China on 14 July, Russian Prime Minister Sergei Kirienko met with Japanese businessmen in Tokyo, ITAR-TASS reported. Kirienko offered the businessmen the opportunity to participate in several projects in Russia, in particular the Kovyktinskii gas-condensate field in Irkutsk. Kirienko also said his government is ready to establish "special regimes for economic activities in Russia's Far East," including projects on the Kuril Islands. Kirienko said the introduction of such "regimes" could facilitate an understanding on "as yet unresolved issues." With regard to the $400 million credit Japan's Eximbank is expected to extend to Russia by 16 July under an agreement reached earlier this year, Kirienko said the money will be used to "settle the problems of the Russian coal mining industry." The previous day, after meeting with Foreign Minister Keidzo Obuchi, Kirienko met briefly with outgoing Prime Minister Ryutaro Hashimoto and was received by Emperor Akihito. BP

CYPRIOT PRESIDENT IN MOSCOW

Glafcos Clerides, who is visiting Moscow at the invitation of Mayor Yurii Luzhkov to attend the World Youth Games, held "friendly" talks on 13 July with President Yeltsin and Foreign Minister Yevgenii Primakov, Russian agencies reported. The talks focused on bilateral relations, in particular boosting economic cooperation. The two presidents confirmed that the controversial sale of Russian S-300 air defense missiles to Cyprus will go ahead, but they did not discuss the anticipated postponement of the delivery of those weapons, Yeltsin's aide Sergei Prikhodko told journalists later. Yeltsin and Clerides also expressed satisfaction that their views on the outlook for and possible ways of resolving the Cyprus issues coincide completely. Clerides told journalists on 14 July, however, that Nicosia would consider canceling the deployment of the S-300s if peace talks with the Turkish Cypriot community begin immediately and the island is demilitarized, dpa reported. LF

DOG FOOD DISCOVERED AT MILITARY FOOD DEPOT

Military prosecutors have discovered more than1,000 tons of dog food and large amounts of products purchased after their expiration date at a military food depot near Moscow, "Kommersant-Daily" reported on 10 July. Criminal charges have been filed against two officials at the depot, and the head of the Defense Ministry's food service has resigned. The Military Prosecutor's Office said it will inspect all major military food depots by the end of the year. Meanwhile, businessman Yurii Lysenko has been charged with taking bribes worth $3.05 million in 1996, ITAR-TASS reported on 13 July. At the time, he was deputy director- general of the Federal Food Corporation, an Agriculture Ministry agency that buys food for a state reserve supplying the armed forces. BT

TWO OIL COMPANIES FACE REDUCTIONS IN EXPORT QUOTAS

The government has trimmed the number of oil companies that will be allowed to export less oil because of persistent tax arrears, Deputy Prime Minister Viktor Khristenko told journalists on 10 July. The measure will now affect only Onako and Vareganneft (a subsidiary of Oneksimbank-controlled Sidanko), Russian news agencies reported. The government initially planned to reduce the oil export quotas of five companies (see "RFE/RL Newsline," 25 June and1 July 1998). The Tyumen Oil Company was the first to be dropped from the list. According to the "Moscow Times" on 27 June, that company has used oil exports to secure foreign loans, and such firms are exempt from the government directive on export reductions. The government reduced the export quotas for Tatneft and Bashneft but restored them after the companies agreed on a payment schedule with the tax authorities. LB

ONLY ONE-FIFTH OF SOLDIERS LIVE ON THEIR PAY

In a survey of 1,500 officers in western Russia published in "Izvestiya" on 14 July, more than half said their families rely either wholly or party on secondary activities, such as construction and pawning, to survive. Some 15 percent said they rely on the earnings of family members and relatives, while only 18.5 percent said they live on their pay alone. However, 55.1 percent said they plan to continue serving in the military. BT

CHECHEN PRESIDENT ASSESSES ANTI-CRIME CAMPAIGN RESULTS

Aslan Maskhadov told journalists in Grozny on13 July that anti-crime measures implemented three weeks earlier have resulted in the closing down of hundreds of small-scale illegal oil refineries, the release of 18 hostages, as well the arrest of 112 people for serious crimes and 64 for drug-related offenses, ITAR-TASS reported. As a result, Maskhadov said he will not prolong the state of emergency imposed on 23 June after its expires on 15 July. Maskhadov has nonetheless decided to restructure and streamline Chechnya's numerous law enforcement and security bodies, his press spokesman Mairbek Vachagaev told Interfax. The anti-terrorism center is to be abolished and the National Security Service reorganized, according to RFE/RL's correspondent in the Chechen capital. That service has been in crisis since its commander, Lecha Khultygov, was shot dead last month. LF

POLICE DETAIN ANOTHER KURSK OFFICIAL

The Kursk Oblast branch of the Interior Ministry has arrested Aleksandr Lukyanchikov, the deputy chairman of the oblast administration's Agriculture Committee, ITAR-TASS reported on 13 July. He is suspected of embezzling goods worth more than 50,000 rubles ($8,000). Last month, Kursk Oblast Prosecutor Nikolai Tkachev filed criminal charges against two deputies of Governor Aleksandr Rutskoi. They are accused of involvement in schemes to embezzle some 11 million rubles (see "RFE/RL Newsline," 17 June 1998). Tkachev has also filed corruption charges against the governor's brother, Mikhail Rutskoi, who was recently sacked as head of the oblast branch of the Interior Ministry. Governor Rutskoi has tried several avenues to secure Tkachev's removal, so far without success. LB




UN, ABKHAZIA CONDEMN ATTACK ON RUSSIAN PEACEKEEPERS...

The UN Security Council issued a statement on 13 July condemning the deaths the previous day of five members of the Russian peacekeeping force deployed under CIS auspices on the border between Abkhazia and the rest of Georgia, ITAR-TASS reported. The five peacekeepers died when their vehicle ran over a land mine in Abkhazia's Gali Raion. Abkhaz Foreign Minister Sergei Shamba told Interfax that he is convinced the attack was carried out by Georgian guerrillas with the aim of destabilizing the situation. Shamba claimed that "certain forces" within the Georgian leadership are intent on preventing the planned meeting between the Georgian and Abkhaz presidents. Documents on the repatriation of Georgian fugitives to Abkhazia's Gali Raion are to be signed at that meeting. LF

...WHILE GEORGIA DENIES RESPONSIBILITY

Georgian Intelligence chief Avtandil Ioseliani told Caucasus Press on 13 July that there is no evidence that Georgian guerrillas laid the mine. The Georgian Foreign Ministry has issued a statement expressing condolences and concern lest the incident lead to a new deadlock in the peace process. LF

AZERBAIJANI OPPOSITION LAYS DOWN CONDITIONS FOR PRESIDENTIAL POLL

Former President Abulfaz Elchibey told Turan on 13 July that opposition candidates will contend the 11 October presidential elections only if certain conditions are met. Those conditions include parity in the composition of the Central Electoral Commission, "the democratization of the pre-election situation," the release of all political prisoners, the abolition of censorship, and the suspension of criminal proceedings against former parliamentary speaker Rasul Guliev and Musavat Party chairman Isa Gambar. Two days earlier, the United Communist Party of Azerbaijan voted to propose its secretary-general, Sayad Sayadov, as a candidate for the presidential poll, Turan reported. LF

AZERBAIJANI OPPOSITIONIST CALLS FOR CRIMINAL PROCEEDINGS AGAINST ALIEV

Rasul Guliev has addressed a 20-page statement to the Azerbaijani Prosecutor-General calling for President Heidar Aliyev to be charged with crimes against the Azerbaijani nation and state, Turan reported. Guliev claimed that Aliyev inflicted irretrievable damage on the country's armed forces, which, he said, led to the occupation of six Azerbaijani raions by Karabakh Armenian forces. Guliev also repeated the claim he made in a recent interview with "Moskovskie novosti" that Aliyev and his family have misappropriated hundreds of millions of dollars. LF

FIGHTING STOPS EAST OF TAJIK CAPITAL

Fighting between two armed groups from the United Tajik Opposition has ceased in the Kofarnikhon region, 30 kilometers east of Dushanbe, following the death of more than 20 people, ITAR-TASS and Interfax reported. The clash began on 12 July between followers of field commanders Nozim Yunusov and Mullo Kasym Ismati, who are reported to have been at odds for some time. Yunusov and 12 of his followers were killed in the battle, but casualty figures for Ismati's followers and for civilians vary, with some reports saying that neither group suffered any casualties. The fighting ceased after mediation by Tajik Deputy Prime Minister Khoja Akbar Turajonzoda. BP

TALIBAN WARN TAJIKISTAN, UZBEKISTAN

The leader of Afghanistan's Taliban Movement, Mulla Mohammad Omar, has warned both Tajikistan and Uzbekistan not to allow anti-Taliban coalition forces to use bases in their countries, ITAR-TASS reported on 14 July. The Taliban have reportedly captured most of Afghanistan's northern Faryab Province during the past week. As a result, Taliban troops are moving closer to the borders of Turkmenistan and Uzbekistan. BP

AUSTERITY MEASURES TO BE INTRODUCED IN KAZAKHSTAN

The Kazakh government is preparing to introduce austerity measures to stabilize the economic situation, Interfax and Reuters reported on 13 July. A memorandum adopted the previous day cites the economic crisis in Asia and the decrease in the prices of oil and metals, Kazakhstan's two major exports, as the reasons for the move. The measures will include cuts in personnel working for state organizations, which are expected to affect 10,000 people. Use of electricity, heating, and communications equipment at those organizations will be regulated, while regional governors and heads of state organizations will be held personally responsible for debts to the budget. Contracts with foreign companies are to be revised, and those that have been breached will be annulled. BP

PRODUCTION-SHARING AGREEMENT SIGNED IN TURKMENISTAN

Representatives of the Turkmen government and a Western consortium composed of the U.S. company Mobil and British company Monument signed an agreement on 10 July to develop the Garashsyzlyk oil field in western Turkmenistan, Interfax and ITAR-TASS reported. The field has estimated oil reserves of 100-300 million metric tons but has been subject to only limited exploration, prompting speculation that those reserves may be larger. Mobil has a 52.4 percent stake, Monument 27.6 percent, and the state-owned company Turkmenneft 20 percent. BP




TEN COUNTRIES JOIN EU OVER TRAVEL RESTRICTIONS ON BELARUS...

Ten non-EU countries--Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Iceland, Norway, Romania, Slovakia, and Slovenia--have joined the EU in imposing travel restrictions on Belarusian state officials because of a dispute over diplomatic residences at Drazdy, near Minsk (see "RFE/RL Newsline," 13 July 1998). Those countries say they "will ensure that their national policies conform to that common position," AP reported on 13 July. The U.S. State Department is also preparing punitive measures against Belarus similar to the EU ban. U.S. State Department spokesman James Rubin said on 13 July that the EU and the U.S. are "reading from the same script" in their dispute with Belarus and that an analogous action by the U.S. can be expected shortly, Reuters reported. JM

...WHILE POLAND, LITHUANIA REFRAIN FROM VISA BAN

In a statement issued on 13 July, the Polish Foreign Ministry "expressed solidarity with the EU's position" but declined to introduce visa restrictions on Belarusian officials, PAP reported. The statement says Poland feels responsibility for maintaining a dialogue with Belarus and for ensuring that the OSCE mission in Minsk continues to function. Foreign Minister Bronislaw Geremek, who is also OSCE chairman, said Poland has not been consulted by the EU on a common stance over Belarus. He added that his decision was taken following consultations with top government officials and the president. Lithuania also has decided not to join the EU visa restrictions against Belarus. Lithuania's decision was made "to soften the impact of [Belarus's] isolation on Lithuanian-Belarusian relations," Belapan quoted a Lithuanian diplomat as saying. JM

EU SENDS GERMAN ENVOY TO REOPEN TALKS WITH BELARUS

Despite imposing visa sanctions against Belarusian officials on 13 July, the EU has sent German Charge d'Affaires to Belarus Hans Gnotke to negotiate the return of Western ambassadors to Minsk. According to dpa, the EU may adopt further sanctions if Belarus does not offer concrete action to normalize the situation over diplomatic residences. ITAR-TASS reported on 13 July that the EU's move to reopen talks with Minsk followed a letter from Belarusian Foreign Minister Ivan Antanovich to EU Council Chairman Wolfgang Schuessel containing "concrete proposals" to end the diplomatic crisis. According to the Russian agency, Anatanovich pledged to respect the Vienna Convention on Diplomatic Relations, guarantee the inviolability of diplomatic residences at Drazdy, and not to issue ultimatums to the EU. JM

KUCHMA, TKACHENKO WANT 'CONSTRUCTIVE COOPERATION'

President Leonid Kuchma and Supreme Council speaker Oleksandr Tkachenko held a "constructive and open" meeting on 13 July to discuss urgent tasks facing the executive and the legislature, Ukrainian Television reported. Both officials stressed that the two branches need to demonstrate "constructive cooperation and concerted action" in legislative work. Tkachenko expressed his support for Kuchma's recent economic decrees and his appeal to the parliament to adopt a 1998 revised budget (see "RFE/RL Newsline," 13 July 1998). The Supreme Council is planning to extend its current session until the end of July in order to pass an amended budget. JM

RUKH TO STAY IN OPPOSITION

Vyacheslav Chornovil, leader of the Popular Rukh, has said the Supreme Council is controlled by a "nomenklatura-leftist majority," Ukrainian Television reported on 13 July. In his opinion, Peasant Party representative Oleksandr Tkachenko became speaker owing to "betrayal" among right-centrist deputies. "Thus, hopes for a coalition government have been buried," Ukrainian Television quoted him as saying. Chornovil announced that Rukh will remain "in opposition to all power branches." A Communist deputy told Ukrainian Television that Rukh "is trying to play [being in] opposition" because it has been "excluded...by those whom it brought to power." JM

MOSCOW TO ISSUE STATEMENT ON VETERANS' MEETING IN TALLINN

Russian Foreign Ministry spokesman Valerii Nesterushkin told BNS on 13 July that his ministry is drafting a statement on what he termed last weekend's rally of veterans who fought on the German side during World War II (see "RFE/RL Newsline," 13 July 1998). Nesterushkin stressed that Moscow is still not ready to comment on the event. The same day, Russian State Duma Foreign Affairs Committee adviser Vasilii Pospelov told the Baltic news agency that the Duma regards the veterans' meeting as a "gesture meant to irritate Moscow" and an attempt to "present fascist troops in the liberators' role." Pospelov added that the committee's political assessment of the Tallinn meeting is "condemnatory." On 11 July, a Church service for all those who died fighting for Estonian independence had taken place in the Estonian capital. It was followed by a closed meeting of the Estonian Freedom Fighters' Union, the Estonian Finland Volunteers, and the Estonian Disabled Soldiers' Association. JC

POLISH FARMERS TO RECEIVE TAX BREAKS IN 1999

Deputy Prime Minister and Finance Minister Leszek Balcerowicz on 13 July announced that value-added tax on farm products and a tax on farmers' incomes will not be imposed next year, PAP reported. Balcerowicz added that the Finance Ministry is currently working on taxes that "meet EU policies." Commenting on the 10 July demonstration by farmers (see "RFE/RL Newsline," 13 July 1998), he stressed that "accepting most of the farmers' demands translates into higher taxes." JM

ZEMAN SAYS VETO OF CABINET APPOINTMENTS WOULD BE UNCONSTITUTIONAL

Milos Zeman, the chairman of the Social Democrats (CSSD), said on 13 July that it would be unconstitutional for President Vaclav Havel to try to veto certain ministerial appointments in a proposed Zeman cabinet. Havel reportedly objects to Jan Kavan being named foreign minister and Vaclav Grulich as interior minister in such a government. Grulich, however, has said he will continue to be a candidate for the interior portfolio. PB

RUSSIAN INSPECTORS TO CHECK PRAGUE'S CFE COMPLIANCE

A team of Russian military inspectors arrived in Prague on 13 July to monitor the country's compliance with the Conventional Forces in Europe treaty, ITAR-TASS reported. Nine Russian officers are to inspect several military bases over the next week. The CFE treaty allows the Czech Republic to have 957 tanks and 1,367 armored personnel carriers. Meanwhile, the Czech Foreign and Defense Ministries have said the country would be prepared to enter NATO in January 1999, three months earlier than originally planned. The earlier date is being considered so that Russian President Boris Yeltsin will attend NATO's 50th anniversary celebrations in April (see "RFE/RL Newsline," 2 July 1998). PB

SLOVAK ENVIRONMENT MINISTER AT DISPUTED NUCLEAR PLANT

Jozef Zlocha visited the controversial Mochovce nuclear power plant on 13 July, an RFE/RL correspondent in Bratislava reported. Zlocha met with the plant's director, Jozef Valach, who said the plant is operating at 35 percent capacity. The plant went into operation on 8 June, despite a storm of protests from the Austrian government that it is unsafe. Several Western companies involved in the design and construction of the plant have said it fulfills all safety standards. Meanwhile in Bratislava, four political parties decided at a roundtable meeting that they will send a joint letter to Austrian Chancellor Viktor Klima expressing their determination to secure the necessary political, economic, and legislative criteria needed to join the EU. Austria currently holds the post of the EU presidency. The groups at the meeting were the Slovak Democratic Coalition, the Hungarian Coalition Party, the Party of the Democratic Left, and the Party of Civic Understanding. PB

POLICE CHIEFS DISMISSED IN HUNGARY

Interior Minister Sandor Pinter on 13 July dismissed national police chief Laszlo Forgacs, Criminal Investigations Director Istvan Ignacz, and Public Safety Director Ferenc Banfi, Hungarian media reported. Prime Minister Viktor Orban said the dismissals are part of an agreement between him and Pinter and are in line with the government's intention to strengthen the police forces. Pinter said he intends to appoint the deputy director of public safety, General Peter Orban, as the new national police commander. Former Interior Minister Gabor Kuncze said he suspects political motives behind the changes, adding that the integrity and expertise of the dismissed officials were unquestionable. MSZ




RUGOVA SEEKS TO REIN IN UCK

Kosovar shadow-state President Ibrahim Rugova said in Prishtina on 13 July that within a week he will call a session of the parliament that was elected in March. Rugova and his Democratic League of Kosova (LDK) will use the session to review political options open to the Kosovars and to try to bring the Kosova Liberation Army (UCK) under the control of the political establishment, RFE/RL's South Slavic Service reported. The Serbian authorities declared the March vote illegal, and parties more radical than the LDK boycotted it. UCK spokesmen have said that the guerrillas do not accept the political leadership of any of the established parties and have called Rugova a "defeatist" (see "RFE/RL Newsline," 13 July 1998). Meanwhile in Peja, some 14 buses filled with Serbian police arrived on 13 July, an RFE/RL correspondent reported. PM

EU FOREIGN MINISTERS ADOPT RESOLUTION ON KOSOVA

Foreign ministers meeting in Brussels on 13 July agreed to call for a cease-fire in Kosova and urge both sides to seek a political settlement. The ministers said that should this call fail, they are urging the UN Security Council to take "further action...to bring about compliance by those who block the process." British Foreign Secretary Robin Cook told Reuters that the resolution is "a very clear, very blunt statement to [Yugoslav President Slobodan] Milosevic...to comply fully with international community demands. We also recognize that there are two sides to the conflict...so we have called on the armed Kosovar Albanian groups to cease the violence." The "Frankfurter Allgemeine Zeitung" reported, however, that the ministers were hard-pressed for ideas as to how to bring about a settlement. German Foreign Minister Klaus Kinkel said the UCK is rapidly gaining in popularity in Kosova. PM

U.S. SAYS NO INDEPENDENCE FOR KOSOVA

State Department spokesman James Rubin said in Washington on 13 July that the Kosovars "need to realize that their independence goals are not going to be achieved. The international community is not going to support independence" for Kosova or a greater Albanian state. "We have said for some time that the primary responsibility for this conflict and for the fighting and for the repression and for the dying [lies with] Slobodan Milosevic. That doesn't mean that extremist elements on the Kosovar Albanian side are free of responsibility.... If they think they are going to...achieve independence, they are fundamentally mistaken." PM

UN RECOMMENDS ALBANIAN ARMS COLLECTION PROGRAM

A UN panel of experts recommends setting up a pilot project in the central Albanian district of Gramsh to retrieve some of the estimated 650,000 weapons looted from barracks and police stations throughout the country during last year's civil unrest. The panel published a report in New York on 13 July warning that cash incentives or buy- back schemes would have an "inflationary impact" and would send out "the wrong message to those who may consider unauthorized weapon possession as a lucrative activity." Instead, the study recommends linking a voluntary weapons return program with "poverty- alleviating and job-creating development projects." Gramsh, which has a population of about 50,000 and an unemployment rate of more than 30 percent, is one of the most heavily armed regions in the country. The report said that the Kosova conflict provides "an additional reason to retrieve weapons from the civilian population." FS

ALBANIAN PROSECUTOR ASKS PARLIAMENT TO LIFT BERISHA'S IMMUNITY...

Prosecutor-General Arben Rakipi on 13 July formally requested legislators to lift the immunity of former President Sali Berisha, former State Secretary for Defense Leonard Demi, and the head of the Tirana branch of the Democratic Party, Shaban Memia. Such a move would make possible an investigation into Berisha's role during last year's unrest. Rakipi told "Koha Jone" that the three might be charged with terrorism, committing crimes against humanity, and ordering the use of chemical weapons against the civilian population. Rakipi said that he has documents signed by the three that substantiate those charges. He added that he will soon bring charges against other former officials who do not enjoy parliamentary immunity. FS

...WHILE OSCE CALLS FOR 'CLIMATE OF RECONCILIATION'

OSCE Ambassador to Albania Daan Everts told "Gazeta Shqiptare" on 13 July that Albania needs "a climate of reconciliation [and that Albanians should] not look backward but forward." He also warned against polarization between the opposition and the governing coalition as well as against tendencies toward political vindictiveness. Everts added that "the law must be applied.... If there was a violation of the law, then the due process must be carried out, but we have to be aware that all this takes place in a highly tense [political] climate.... Legal moves against Berisha will not help in easing the climate. A further heightening of political tensions is not good for Albania," he argued. FS

HERZEGOVINIAN PARTY DEMANDS OFFICIALS RESIGN

The presidency of the Croatian Democratic Community (HDZ), which is dominated by ultra-nationalists from Herzegovina, issued a statement in Mostar on 13 July calling for the resignation of Bosnian officials who were elected on the HDZ slate but have since left the party. The call affects primarily Kresimir Zubak, who is the Croatian member of the Bosnian joint presidency, as well as others who have joined his New Croatian Initiative. That newly founded party represents the interests of more moderate Croats from central Bosnia. Meanwhile in Ljubljana, spokesmen for the Slovenian government announced that it will provide $2.6 million in Bosnian redevelopment aid. The money will help fund projects in which Slovenian firms are involved and provide scholarships to Bosnians studying at Slovenian universities. PM

ROMANIAN FINANCE MINISTER DEFIES PREMIER OVER HELICOPTER LOAN

Daniel Daianu said on 13 July that he will not approve a state loan needed for a major purchase of U.S. helicopters, AP reported. Daianu said that as head of the Finance Ministry, he will not "validate [the loan] with my signature." Prime Minister Radu Vasile's spokesman said that the decision to provide the loan has been made and that "all members of the cabinet support the project." Vasile gave final approval to the $1.45 billion loan for the purchase of 96 helicopters two weeks ago. After the purchase, the U.S. manufacturer Bell Helicopters Textron are to buy 70 percent of the IAR Brasov SA aircraft plant for $50 million. The dispute over the deal comes one day before President Emil Constantinescu arrives in the U.S. for an official state visit. Daianu said he opposes the deal because the military budget will have to be increased by 20 percent over the next nine years in order to cover the loan. PB

GAZPROM THREATENS MOLDOVA AGAIN

Aleksandr Pushkin, a deputy chairman of the Russian gas giant Gazprom, said on 13 July that Moldova must begin to repay its $215 million debt or the company will cut off gas supplies, Infotag reported. Gazprom has reduced the flow of gas to Moldova twice since June. Pushkin said Chisinau has not begun to issue $100 million worth of state securities to Gazprom, as was earlier agreed, and that if no action is taken by 1 August, Gazprom will shut off the gas flow. Pushkin suggested that Chisinau repay $7 million a month after issuing the state securities. PB

BULGARIAN CABINET APPROVES DRUG CONTROL PROGRAM

The Bulgarian government has approved a joint program with the EU and the UN that will step up the fight against drug trafficking in southeastern Europe, BTA reported on 13 July. Romania and Macedonia are also participating in the two-year, $7.5 million project, which will upgrade border checkpoints and custom offices as well as establish and train inspection teams. PB




THE CORRUPTION OF POWER


by Paul Goble

Corruption now threatens the authority and even power of many governments in the post-Soviet states. But the way some of those governments seek to combat it could undermine chances for a transition to democracy.

At least a few leaders in the region appear to be using anti-corruption campaigns in the way their Soviet predecessors did: to punish opponents, to strengthen the security forces, and to consolidate their personal power rather than to root out corruption.

That may now be happening in Kazakhstan.

On 10 July, Kazakh President Nursultan Nazarbayev told an extraordinary meeting of his Security Council in Astana that "the most important thing" is to seek to fight corruption in order to "show our people we can improve our image and change their view of us."

Nazarbayev warned that he and his security agencies would hold everyone accountable, including cabinet ministers. And he promised to make a nationwide address in which he would tell "all my friends and people with whom I once worked that there will be no exceptions for anyone."

But despite what appears to be Nazarbayev's plan to give sweeping new powers to his security agencies, the Kazakhstan leader added somewhat defensively that "I am talking not about repression but about regaining trust in the state power structures."

While corruption has long been a problem in Kazakhstan, Nazarbayev may have been prompted to make this announcement because of an increasingly well- organized protest movement against himself and his government.

In recent weeks, some 21,000 Kazakhs in five cities throughout the country have signed a petition demanding that Nazarbayev take action not only to improve economic conditions in the republic but to force the law enforcement agencies to do their jobs. If he fails to do so, the petition says, those who have signed it will force Nazarbayev "to leave the post of the head of the Kazakh state."

The signatories almost certainly lack the ability to carry out that threat. Not only do polls suggest that Nazarbayev retains support from most people in Kazakhstan, but the president's power base in the country's security agencies seems unquestioned.

Nonetheless, the Kazakh leader is sufficiently concerned about popular unhappiness with his regime and himself as well as about the image of his country abroad that he has decided to launch an anti-corruption campaign.

While many in Kazakhstan and elsewhere are likely to welcome efforts to crack down on corruption, there are three reasons to be concerned about Nazarbayev's plans.

First, whatever the Kazakh president says, his campaign almost certainly will be highly selective. Not only are many of his most senior officials widely thought to be involved in corruption, but each has built up his power base by protecting more junior officials.

At the 10 July meeting, Nazarbayev's security chief Alnur Musayev complained openly that senior officials had blocked prosecutions against their subordinates and that many judges had refused to open criminal probes against their colleagues, regardless of the evidence his agency had collected against them. Thus, a sweeping attack against corruption could have the effect of undermining the political structures of the state itself.

That scenario is made even more likely by the second reason for concern. Precisely because the law enforcement agencies and the courts are so thoroughly corrupt, Nazarbayev clearly plans to use the what he calls "the state power structures" to combat corruption.

In addition to the National Security Committee, the successor to the Soviet-era KGB in Kazakhstan, Nazarbayev indicated that he would use a special presidential Supreme Disciplinary Committee to examine cases of corruption. While those measures may appear justified by the extent of the problem, the strengthening of such extra-judicial agencies may give Nazarbayev even more unregulated personal power over the state and society. That, in itself, could constitute yet another obstacle on Kazakhstan's path to democracy.

Finally, the third reason to be concerned is that Nazarbayev's announcement suggests his efforts at fighting corruption will be a campaign like any other rather than a turning point in the way Kazakhstan deals with a problem that can threaten any country. In such a case, the campaign will be announced with much fanfare and will gradually be forgotten as the country moves on to other issues. And that pattern will both increase public cynicism and allow those dealing in corruption to continue to do so after only a short interval of "good government."

Kazakhstan is far from the only country where this problem exists and this logic applies. The 9 July "Nezavisimaya gazeta," for example, commented that corruption in Georgia has reached such a level that the World Bank commissioned a special study on how it might be overcome. That move comes, despite Georgian President Eduard Shevardnadze's earlier declaration that his government will make a breakthrough against corruption this year.

If Kazakhstan and the other countries in this region genuinely want to overcome corruption, they will need to change public and official attitudes toward it. And they will have to create institutions to ensure that all who violate the rules are punished. However well-publicized, a single campaign against corruption won't do that. In fact such a campaign may become a substitute for the kind of changes that are really needed.


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