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Newsline - July 24, 1998




TRADE ISSUES HIGH ON AGENDA FOR GORE-KIRIENKO TALKS

Before talks with US Vice President Albert Gore on 24 July, Prime Minister Sergei Kirienko called for the U.S. to grant Russia most-favored-nation trade status, Russian news agencies reported. "The classification of Russia as a country with a non-market economy does not meet current realities and leads to the imposition of unjustifiably high anti-dumping duties on a number of key export items," Kirienko said. ITAR-TASS quoted an unidentified source in the Russian-U.S. Commission on Economic and Technological Cooperation as saying that Gore has agreed to support Russia's demand for permanent MFN status. Meanwhile, Gore told the Russian delegation that he and President Bill Clinton are "absolutely committed to deepening [U.S.-Russian] relationships." Gore arrived in Moscow on 23 July and will leave late on 24 July. Instead of flying to Karelia to meet with vacationing President Boris Yeltsin, as some Russian media speculated, he is to speak to Yeltsin by telephone on 24 July. BT

PRIMAKOV IN BEIJING

Russian Foreign Minister Yevgenii Primakov gave a press conference in Beijing on 23 July, ITAR-TASS and China's Xinhua news service reported. Primakov said after talks with his Chinese counterpart, Tang Jiaxuan, that neither country would impose sanctions on India or Pakistan for conducting nuclear weapons tests. But he added that Moscow and Beijing want all countries possessing or close to possessing nuclear weapons to sign the Nuclear Non-Proliferation Treaty. Primakov also said independence for Kosova "cannot even be discussed," adding that "the Contact Group's integrity should guarantee success in settling the Kosova problem." Primakov noted that China shares his country's view on this point. The Russian official also met briefly with Chinese President Jiang Zemin. ITAR-TASS reported only that Primakov expressed his country's condolences over the loss of life in recent flooding in China. BP

RUSSIAN MILITARY DELEGATION ARRIVES IN CHINA

A Russian military delegation led by first deputy chief of the general staff, General Valerii Manilov, arrived in China on 23 July, ITAR-TASS and Xinhua reported. Manilov held talks with Lieutenant-General Xiong Guangkai, the deputy chief of staff of the Chinese People's Liberation Army. The two sides discussed the regional and international situations and, according to Xinhua, "reached extensive consensus." They also discussed military cooperation, confidence- building measures, and the current reform of both armies. Manilov and the delegation are on a six-day visit. BP

CHECHEN PRESIDENT SAYS FOREIGN SPECIAL SERVICES BEHIND ATTACK

Chechen President Aslan Maskhadov said on 23 July that the attack against him may have been the "joint work of several special services" who were able to enlist local allies "craving for power and money," Interfax reported. (The Russian Federal Security Service said it has no information about the possible involvement of any security service.) Acknowledging that he was slightly injured in the attack, which killed one of his bodyguard, Maskhadov said that he had expected even worse things when he became president. "Explosions and incidents are inevitable in a country that has gone through such a grave war." But he suggested that those counting on playing one resistance leader against another or using Islam to topple his government "will not succeed." PG

FIVE SCENARIOS BEHIND ATTACK ON MASKHADOV

Chechen Deputy Prosecutor-General Magomed Magomadov told Interfax on 23 July that he had identified five scenarios for the assassination attack: foreign special services, local opposition politicians, officials who lost their positions as a result of the Gudermes controversy, religious extremists, and a fifth column of Chechens supported by Moscow. One possible suspect has already been cleared. On 24 July, the Supreme Shariat Court concluded that former Chechen President Zelimkhan Yandarbiev had no involvement in the attack. But despite the attack, Chechen officials have played down the security problems in Grozny. On 23 July, Chechen military commander Aslambek Ismailov said he sees no need to increase security measures there, ITAR-TASS reported. PG

YELTSIN, OTHERS DECRY ATTACK ON MASKHADOV

Russian President Yeltsin sent Maskhadov a telegram to express his "profound concern and indignation" over the assassination attempt. He also ordered Russia's security services to investigate the crime, Interfax reported on 23 July. Among other Russian officials who denounced the attack on the Chechen president were Yeltsin's personal envoy for Chechnya, Ivan Rybkin, Krasnoyarsk Krai Governor Aleksandr Lebed, CIS Executive Secretary Boris Berezovskii, and National and Regional Policy Minister Yevgenii Sapiro, Russian news agencies reported. Other leaders who have condemned the attack include Dagestani leader Magomedali Magomedov and Georgian President Eduard Shevardnadze. PG

COMMUNIST JOINS GOVERNMENT AFTER ALL...

State Duma Economic Policy Committee Chairman Yurii Maslyukov, a member of the Communist Party's Central Committee, defied party discipline on 23 July to accept the post of industry and trade minister. The ministry was created during the April cabinet reshuffle, when the Foreign Trade Ministry was abolished. Until now, Georgii Gabuniya has served as acting minister. Although the Central Committee's Presidium spoke out against Maslyukov joining the government (see "RFE/RL Newsline," 23 July 1998) Maslyukov told journalists that half the members of the Communist faction in the State Duma supported his decision, RFE/RL's Moscow bureau reported. Maslyukov held various positions in the Soviet defense industry and the economic planning agency Gosplan, which he headed during the late Gorbachev period. LB

...SEEKS OVERSIGHT OF DEFENSE INDUSTRY AND SCIENCE POLICY

Maslyukov told journalists on 23 July that Prime Minister Kirienko supports his vision for the Industry and Trade Ministry, which includes giving that ministry oversight of the defense industry and the arms trade, Russian news agencies reported. The Economics Ministry, headed by Yakov Urinson, currently supervises those matters. "Kommersant-Daily" claimed on 24 July that "influential forces" in the presidential administration support keeping defense industry-related matters under the purview of the Economics Ministry, and that Kirienko will let Urinson and Maslyukov do battle in the coming months before making a final decision. Urinson worked under Maslyukov in Gosplan, the newspaper said. Maslyukov also wants science policy to fall under the control of the Industry and Trade Ministry, which would be a blow to Science and Technology Minister Vladimir Bulgak. LB

PRIMORE GOVERNOR TO STAY OUT OF CABINET

Primorskii Krai Governor Yevgenii Nazdratenko told Interfax on 23 July that it would not be "desirable" for him to join the federal government now (see "RFE/RL Newsline," 23 July 1998). He praised Kirienko as "an intelligent man of integrity" but said future socioeconomic developments will demonstrate whether the government should include new members from among regional leaders. In an interview published in "Vremya-MN" on 20 July, Nazdratenko argued that "social tension is inevitable," adding that "the government simply has no mechanism to stop people" if they march on Moscow. Relations between Nazdratenko and previous federal governments have been strained, in part because of the long-standing enmity between the governor and former First Deputy Prime Minister Anatolii Chubais. In recent weeks, Samara Oblast Governor Konstantin Titov and Novgorod Oblast Governor Mikhail Prusak have also reportedly turned down invitations to join the cabinet. LB

DUMA SPEAKER SAYS SPECIAL SESSION NO SURE THING...

Gennadii Seleznev told journalists on 23 July that the Duma may not convene a special session in August to consider laws in the government's anti-crisis program, Russian news agencies reported. Seleznev argued that such a session would be "a very expensive treat." He noted that some of the draft laws have not yet been submitted to the Duma, and also argued that consideration of some laws can wait until the Duma is scheduled to reconvene in September. However, Seleznev said a special session between 17 and 22 August is still possible. He repeated his belief that a new IMF stabilization loan will provide only short-term help for Russia. He also charged that the government's move to triple individual contributions to the Pension Fund is unconstitutional (see "RFE/RL Newsline," 22 and 23 July 1998). LB

...AGREES WITH OIL COMPANIES' WARNING

Speaking to journalists on 23 July, Seleznev also agreed with a recent statement by oil companies warning that the government's policies are influenced by international financial organizations and could lead to social unrest (see "RFE/RL Newsline," 22 and 23 July 1998). He said leading oil industry executives "understand perfectly" that loans from the IMF will not solve Russia's long-term problems, Interfax reported. He also argued that heads of oil companies know better than the president, prime minister, or "anyone else what state the Russian economy is in." However, Seleznev added that Russian policy should be shaped by the legislative and executive branches, not by oligarchs, Interfax reported. LB

'NEZAVISIMAYA' AGAIN ADVOCATES TEMPORARY STATE COUNCIL

Vitalii Tretyakov, the editor-in-chief of "Nezavisimaya gazeta," on 24 July repeated his call for the formation of a Temporary State Council to preside over early presidential and parliamentary elections (see "RFE/RL Newsline," 13 July 1998). He blasted Yeltsin's governing style and characterized the president as Russia's main "oligarch." Tretyakov concluded that only two possible scenarios, if accompanied by the creation of a Temporary State Council, would stave off both social unrest and dictatorship: the return of Viktor Chernomyrdin to the post of prime minister or the appointment of a "new government." The leading candidate to head a new government would be Yabloko leader Grigorii Yavlinskii, Tretyakov argued, although he listed other possibilities as well, including Alfa Bank head Petr Aven or "someone else among the oligarchs" who has already held a state post. "Nezavisimaya gazeta" is financed by CIS Executive Secretary Boris Berezovskii's LogoVAZ group. LB

CENTRAL BANK LOWERS REFINANCING RATE

The Central Bank on 24 July reduced its annual refinancing rate from 80 percent to 60 percent. ITAR-TASS noted that it is the ninth change in the benchmark rate since the beginning of the year. In an effort to protect the ruble, the Central Bank raised the refinancing rate from 28 percent to 42 percent in February, then lowered it three times before recurring instability on financial markets prompted two rate hikes in May, bringing the refinancing rate to 150 percent. The bank lowered the rate to 60 percent in early June but raised it to 80 percent three weeks later as the sell-off of Russian securities continued. The first $4.8 billion tranche of an $11.2 billion IMF loan will be used to bolster the Central Bank's hard-currency reserves, which stood at $13.6 billion as of 17 July. LB

GOVERNMENT SLASHES LIST OF 'STRATEGICALLY IMPORTANT' COMPANIES

The government has cut the list of state-owned companies that may not be privatized in the near future from some 3,000 to 697, ITAR-TASS reported on 23 July. The 2,300 companies removed from the list of firms that produce goods of "strategic importance" are to be sold, but no time frame for their sale has been announced. The 697 enterprises that remain on the list span a wide variety of industries and sectors, such as nuclear facilities, weapons producers, health and medical facilities, metallurgy, oil and chemical companies, communications enterprises, airports, shipping lines and seaports, and Russian Public Television, the Channel 1 broadcaster that is only 51 percent state-owned. Opposition deputies in the Duma have denounced plans to shorten the list of strategically important companies. LB

PRIVATIZATION REVENUES BELOW TARGET IN FIRST HALF OF 1998

The State Property Ministry announced on 22 July that federal budget revenues from the sale or management of state-owned property totaled some 1.6 billion rubles ($257 million) during the first half of 1998, "Kommersant-Daily" and "Nezavisimaya gazeta" reported on 23 July. That figure is less than 20 percent of 1998 budget targets for such revenues. The two biggest privatization auctions planned for later this year involve 75 percent plus one share in the oil company Rosneft and 25 percent minus two shares in the telecommunications giant Svyazinvest. An attempt to sell the Rosneft sale failed in May, and in early July the government extended by another three months the deadline for submitting bids for the oil company (see "RFE/RL Newsline," 10 July 1998). LB

RUSSIA, EU FORMALIZE TEXTILE AGREEMENT

Officials from Russia and the EU on 23 July signed an agreement reached in March on textile trade, Reuters reported. Russia agreed to lift import quotas on carpets from the EU (see "RFE/RL Newsline," 1 April 1998). The European Commission says the value of annual EU carpet sales to Russia exceeds 200 million Ecu ($220 million). In exchange, the EU agreed not to renew its quotas on more than 30 types of Russian textiles after 1 May. In April, the EU stopped considering Russia a "non-market economy," allowing Russian industries to be considered on a case-by-case basis in disputes over anti-dumping duties. LB

NUCLEAR WEAPONS WORKERS STAGE WARNING STRIKE IN NIZHNII NOVGOROD

Some 3,500 workers at the Federal Nuclear Center in Sarov (former Arzamas-16), Nizhnii Novgorod Oblast, stopped work for three hours on 23 July to protest non-payment of wages, media reported. The workers threaten an indefinite strike if their demands for the payment of wages totaling 90 million rubles ($14.5 million) from 1997-1998 and for wage hikes are not met, RFE/RL's correspondent in Nizhnii Novgorod reported. The strike committee kept workers in radiation-sensitive areas on the job, but a representative of the complex's management warned "there are elements of danger in any case." In May, Prime Minister Kirienko visited the nuclear- weapons research center and promised that "money will always be found" for its operations. The Atomic Energy Ministry has so far received 30 percent of what it is due from the 1998 budget, "Nezavisimaya gazeta" reported on 24 July. BT

TWO REGIONS AIM TO INTRODUCE ALTERNATIVE SERVICE

St. Petersburg and the Republic of Tatarstan are aiming to introduce alternative service, "Kommersant- Daily" reported on 23 July. Article 59 of the Russian Constitution provides for forms of service other than military in cases where personal convictions or religious beliefs prevent military activity. However, a federal law on alternative service has been held up in the Duma since 1994 owing to on-going opposition from the Duma Defense Committee (see "RFE/RL Newsline," 8 January and 5 May 1998). The daily reported that "the silence of the Duma and the many appeals of conscripts' parents forced" the Tatarstan legislature to introduce its own law, which has passed in the first reading. Instead of introducing a regional law, St. Petersburg Governor Vladimir Yakovlev has proposed that Yeltsin issue a presidential decree allowing alternative service in St. Petersburg. BT




TENSION REMAINS HIGH OVER ABKHAZIA

Liviu Bota, the UN secretary-general's special representative for Georgia, told a meeting of Georgian, Abkhaz, and Russian officials in Geneva on 23 July that "the potential for a new outbreak of hostilities is real," AP reported. Meanwhile, the Georgian Foreign Ministry condemned Abkhazia for the hostage-taking of five people in the Zugdidi region, an action that the Abkhaz officials have denied being involved in, ITAR-TASS reported. And in the wake of the 22 July mine explosion in which nine Russian soldiers were wounded, the Russian Defense Ministry warned Georgia against supporting anyone who attacks Russian peacekeepers in Abkhazia, the Russian agency said. The local commander of CIS peacekeeping forces, General Sergei Korobko, said that unless conditions improved, he will seek additional forces from other CIS countries to control the situation. PG

TALBOTT PLEDGES U.S. SUPPORT FOR GEORGIA

Deputy Secretary of State Strobe Talbott told Georgian President Eduard Shevardnadze and other senior officials in Tbilisi on 23 July that Washington seeks to support the development of a democratic, prosperous, and independent Georgia, ITAR-TASS reported. According to Georgian parliamentary speaker Zurab Zhvania, Talbott also said the U.S. will provide special assistance to help Georgia protect its borders and support refugees from Abkhazia. PG

Aliyev SIGNS NEW OIL AGREEMENTS IN LONDON

Azerbaijani President Heidar Aliyev completed his five-day visit to London on 23 July by signing three new agreements on the exploitation of Caspian basin oil, Interfax reported. PG

UN MOURNS EMPLOYEES KILLED IN TAJIKISTAN

A ceremony was held at the UN compound in Dushanbe on 24 July in honor of the three UN employees who, along with their driver, were killed by unknown assailants on 20 July, ITAR-TASS reported. The bodies of military observers Richard Shevchek (Poland) and Adolfo Sherpegi (Uruguay) as well as civilian affairs observer Yukata Akino lay in state outside the compound's main building. Their Tajik driver/translator Jurajon Mahramov was buried in accordance with Islamic tradition on 22 July. Meanwhile, field commanders from the United Tajik Opposition based in the Pripamirye area, where the UN workers were killed, have joined efforts to locate the perpetrators of the crime. BP

EBRD EXTENDS LOAN TO KAZAKHSTAN

The European Bank for Reconstruction and Development on 23 July announced it will grant Kazakhstan a $40 million loan, Interfax reported. The loan will be released in two tranches of $20 million and used to finance medium- and long-term transportation, construction, industrial, and public sector projects. The EBRD has the option of using funds from the first tranche to buy shares in the Kazakh bank to which it releases the money. BP

LOOMING CRISIS IN KAZAKH OIL SECTOR?

Kazakh Prime Minister Nurlan Balgimbayev told a meeting of senior officials of the country's oil industry on 22 July that the situation in the oil sector is "very serious," Interfax reported. Balgimbayev said that "production is not competitive" and that refineries in Pavlodar and Chimkent are "on the verge of grinding to a halt." A government commission, headed by First Deputy Prime Minister Uraz Jandosov, has been charged with helping the country out of "its pre-crisis situation." BP




GORE IN CHORNOBYL, URGES ECONOMIC REFORM IN UKRAINE

U.S. Vice President Al Gore on 23 July visited Chornobyl and the town of Prypyat, whose 55,000 inhabitants were evacuated after the 1986 nuclear accident. The site is a "menacing monument to mistakes of the century now slipping away from us," AP quoted Gore as saying. Ukrainian President Leonid Kuchma announced the same day that he and Gore will convene a conference of private donors to raise funds to strengthen the concrete sarcophagus covering the reactor that collapsed in the 1986 nuclear accident. Winding up his visit, Gore repeated his call to Ukraine to carry out economic reform in order to attract foreign loans. "I am confident that if Ukraine carries out a truly bold program of economic reforms, the international community is prepared to respond with new financial support," Reuters quoted him as saying (see also "End Note" below). JM

IMF MISSION IN KYIV TO DECIDE ON $2 BILLION LOAN

An IMF mission arrived in Kyiv on 23 July to make a final decision on a $2 billion loan to Ukraine. If the IMF decision is positive, the World Bank will release credits to Ukraine totaling $800 million, Ukrainian Television reported. The Ukrainian government sees a possible IMF loan as crucial to stave off Ukraine's financial collapse and to continue economic reforms. The IMF, for its part, is afraid that Ukraine's leftist-dominated parliament may frustrate the government's reformist efforts. "Finally, Ukraine has agreed a very sensible program with us, but they're having great troubles getting it through the parliament," Reuters quoted IMF First Deputy Managing Director Stanley Fischer as saying on 23 July. JM

LUKASHENKA SAYS DIPLOMATIC CONFLICT DUE TO 'MORE COMPLEX' REASONS...

Belarusian President Alyaksandr Lukashenka says the conflict over the eviction of Western ambassadors from the Drazdy compound was caused by issues other than repairs to the compound utility systems, ITAR-TASS reported on 23 July. "This was not only the sewage system. There were issues both more interesting and more complex," he said. He promised to reveal what he alluded to the reasons of the conflict "in due time." And he added that U.S. has threatened to break diplomatic relations with Belarus unless marines are allowed to be stationed at the U.S. ambassador's residence at Drazdy. "I am not receiving ultimatums," AP quoted him as saying. JM

...WHILE U.S. EMBASSY DENIES THREATENING TO BREAK TIES WITH MINSK

A spokesman of the U.S. embassy in Minsk said on 23 July that the U.S. State Department has never demanded that marines be stationed at the U.S. ambassador's residence, as claimed by Lukashenka. The spokesman explained that the U.S. has demanded that the Belarusian government allow the ambassador's bodyguards--Belarusian citizens--to enter the compound in order to restore "the situation that existed before the withdrawal of the ambassador," ITAR-TASS reported. The embassy also confirmed that the U.S. wishes to maintain diplomatic relations with Belarus, dpa reported. JM

ANTANOVICH SUGGESTS SOME DIPLOMATS MAY RETURN TO DRAZDY

Belarusian Foreign Minister Ivan Antanovich suggested on 23 July that some diplomats may return to their residences at Drazdy after the completion of repairs, Belapan and ITAR-TASS reported. Antanovich said the Drazdy compound has been declared the presidential residence and authorities are now determining its boundaries. "[But] some part of the Drazdy territory will remain free, including for settlement purposes," ITAR- TASS quoted him as saying. Referring to the residence of the U.S. ambassador, which is next to Lukashenka's, Antanovich said that "in no country in the world, even a friendly one, is an ambassador allowed to share a fence with the president." JM

FEW LATVIANS ABROAD SIGN REFERENDUM PETITION SO FAR

BNS reported on 23 July that only a small number of Latvians living abroad have so far signed the petition in favor of holding a referendum on recent amendments to the citizenship law. Signatures are being collected at embassies in 20 embassies worldwide, as well as consulates in major cities. According to the news agency, fewer than 10 citizens living abroad have signed the proposal since the collection of signatures began on 20 July. The last day for collecting signatures is 18 August. JC

LITHUANIAN PRESIDENT, PREMIER DISCUSS CONTROVERSIAL BILLS

At talks during the evening of 22 July, Lithuanian Prime Minister Gediminas Vagnorius said he supports President Valdas Adamkus's opinion that the recently passed lustration law is "dubious from the point of view of the constitution and international law," BNS reported, citing the press service of the President's Office. Adamkus and Vagnorius also discussed amendments to the tax law adopted earlier this summer. Those changes, which would impose new taxes on capital gains and dividends, prompted strong protests by stock brokers. The president must decide by 24 July whether to sign the amendments into law. JC

PARLIAMENTARY DEPUTIES QUIT COALITION OVER GDANSK SHIPYARD SALE

Several deputies from the Polish Family, a Roman Catholic group within the ruling Solidarity Electoral Action (AWS), have quit the AWS parliamentary caucus, Polish Radio reported on 23 July. The reason for the separation was the consent given by the District Court in Gdansk for the purchase of the Gdansk Shipyard by the Gdynia Shipyard in association with the Warsaw-based Evip Progress company. The Gdansk Shipyard, which is the cradle of Poland's Solidarity movement, was declared bankrupt two years ago. JM

FIFA THREATENS TO SUSPEND POLAND FROM INTERNATIONAL SOCCER

The International Federation of Football Associations (FIFA) threatened on 23 July to exclude Poland's national team and clubs from international soccer events unless the government reinstates sacked officials of the Polish Soccer Associations (PZPN). In May, Poland's Physical Culture and Tourism Office head Jacek Debski suspended the entire PZPN leadership, accusing them of incompetence. FIFA rules say that national soccer associations must be independent of governments, while the FIFA ultimatum says Debski must reinstate PZPN officials by 7 August. According to Reuters, Debski remains adamant and threatens to sue FIFA in an international court if the latter imposes its ban on Poland. The current crisis underlines the poor state of soccer in Poland, whose national team failed to qualify for the last three World Cups. JM

FLOODING SPREADS TO CZECH REPUBLIC, POLAND

Flooding from torrential rain on 22-23 July has resulted in the death of four people in Poland and three in the Czech Republic . Hardest hit were two villages some 120 kilometers east of Prague and Polish villages in the Klodzko and Walbrzych provinces, which suffered severe flood damage one year ago. Six Polish villages and five Czech villages have had to be evacuated. Meanwhile in Slovakia, the death toll has risen to 36. Some 50 people still missing, and officials said water in local streams has reached its highest level in 500 years, Reuters reported. MS

CZECH FINANCE MINISTER AIMS AT 'BALANCED' 1999 BUDGET.

Ivo Svoboda told journalists in Prague on 23 July that his "personal aim is to create a balanced budget" for 1999, but he added that he is uncertain this will be possible "in the present [economic] environment." Svoboda said the stabilization of the economy, which began in 1997 with austerity measures launched by the government and the Central Bank, is expected to end in 1999, paving the way for economic growth, Reuters reported. He also said the new cabinet will continue the process of privatizing banks and deregulating rents and energy prices. MS

EIGHTEEN PARTIES TO COMPETE IN SLOVAK ELECTIONS

Interior Ministry official Jan Liska told Reuters on 23 July that 18 parties have registered to run in the 25-26 September general elections and that the ministry is now checking whether all parties and candidates fulfill the legal provisions to run. The election campaign starts officially on 26 August. Polls give only six parties a realistic chance of crossing the 5 percent threshold necessary for parliamentary representation. Those parties include are Vladimir Meciar's Movement for a Democratic Slovakia and its coalition party, the Slovak National Party. Four opposition parties--the Slovak Democratic Coalition, the Party of Civic Understanding, the Democratic Left, and the Hungarian Coalition Party--are also likely to gain representation. MS

HUNGARY ANNULS SOCIALIST GOVERNMENT'S DECISION ON DAM

The cabinet headed by Viktor Orban on 23 July annulled a decision by Gyula Horn's government to go ahead with the construction of the controversial Gabcikovo-Nagymaros dam, Reuters reported. It said the decision of the former cabinet, taken in the wake of the ruling of the International Court of Justice in The Hague in September 1997, forced the country into an uneconomical "prestige project" that was also a "huge environmental risk." The statement said the new government wants to "do everything" to reach an agreement with Slovakia and to "uphold Hungary's legal obligations" in line with the decision of the court. But it stressed that Hungary will do so only after carrying out studies on environmental effects. MS




KOSOVAR PARLIAMENT SAYS PEACE STILL POSSIBLE

Representatives of the underground Kosovar legislature issued a declaration in Prishtina on 22 July saying that "the possibilities for dialogue and a peaceful solution, although greatly reduced, have not been exhausted. Therefore, while not giving up vigilance and self-defense, let us try to use them. Let us cooperate more and coordinate our efforts with all those who can help us, with the Republic of Albania, with [other Albanians in the Balkans], and with the diaspora." The statement did not include any concrete suggestions regarding a solution. The legislature also recognized the Kosova Liberation Army (UCK) as a legitimate Kosovar organization. Shadow-state President Ibrahim Rugova added that "we should have done this long ago." Until earlier this year, Rugova and most civilian leaders referred to the UCK fighters as "frustrated individuals" or denied that the UCK was anything more than a creation of Serbian propaganda. PM

RUGOVA'S PARTY APPEALS TO HAGUE COURT

The Democratic League of Kosova (LDK) said in a statement in Prishtina on 23 July that Serbian forces are carrying out a policy of "genocide against the ethnic Albanians" in the province. The LDK called on the Hague-based war crimes tribunal to prosecute those who ordered as well as those who carried out "these war crimes." Meanwhile in Paris, the Assembly of the Western European Union adopted a resolution stating that chances for a peaceful resolution of the Kosovar crisis are "minimal" because the international community did not "intervene" at the beginning of the conflict, RFE/RL's South Slavic Service reported. The text also noted that Serbian forces are carrying out a strategic "cleansing" of the border area with Albania (see "RFE/RL Newsline," 23 July 1998). PM

UCK CONTROLS SERBIAN MONASTERY

Father Sava, who is the spokesman for Serbian Orthodox Bishop Artemije, said in Decan on 23 July that UCK forces have taken control of a monastery near Zociste south of Rahovec. Sava noted that the monastery does not have police protection, the Belgrade daily "Danas" reported. The monk added that the guerrillas did not allow the clergy to take either their personal belongings or Church artifacts with them when they left. "The Independent" reported that Sava and his fellow monks at Decan are active both on the ground and on the Internet to promote reconciliation between Serbs and ethnic Albanians. PM

LARGE UCK PRESENCE REPORTED IN TROPOJA

A Reuters correspondent visiting Tropoja in northeastern Albania on 23 July reported that UCK fighters have transformed the town into "a virtual military base." He reported that UCK soldiers openly train without interference from the Albanian police and that there is an open-air weapons market in the town center. OSCE Field Officer Christopher Dwan said, however, that the presence of Serbian troops along the border "makes it difficult for UCK fighters to cross into Kosova." Tropoja and other northeastern towns have traditionally been lawless and difficult for the Tirana authorities to control. FS

U.S. ENVOY CALLS FOR MILITARY AID TO ALBANIA

Christopher Hill, who is U.S. ambassador to Macedonia, told NATO officials in Ohrid on 23 July that Albania needs urgent help to strengthen its army and its political and economic institutions, unidentified diplomatic sources told Reuters. Hill stressed that the Albanian government is unable to assert itself in the "wild" northern borderlands and that if nothing is done quickly, Albanian territory may become firmly established as a support base for the UCK. Such a development could provoke a military response from Serbia and lead to an expansion of the conflict, they added. NATO Secretary-General Javier Solana said the alliance has no plans to use Macedonian territory for any military intervention in Kosova. NATO will hold exercises involving 25 countries in Macedonia in September as part of the Partnership for Peace program. FS

TURKISH LEGISLATORS APPROVE ALBANIAN DEPLOYMENT

The Turkish parliament on 23 July authorized the stationing of soldiers in Albania. The decision is designed to show support for Albania in the Kosova crisis. It also gives the government the right to decide about the size, place, and time of any deployment. Turkey currently has only a small contingent of soldiers in Albania, who train troops and help reconstruct the naval base at Pasha Liman, near Vlora. FS

ALBANIAN GOVERNMENT CRACKS DOWN ON DRAFT DODGERS

Minister for Local Government Bashkim Fino on 23 July ordered all prefects to increase their efforts to recruit young men for the army because of the increase of tensions along the Kosovar border. Fino said that his aim is to double the number of soldiers by the end of September. To help achieve that goal, he told the prefects to take "harsh measures" against draft evaders. He added that the local government and the army must work together to update draft lists and apprehend draft dodgers. FS

ALBANIAN RADIO, TELEVISION GETS NEW HEAD

The Council of Directors of Albanian Radio and Television (RTSH) has appointed Ardian Klosi as director-general. A professor of philosophy at Munich University in recent years, Klosi replaces film director Albert Minga. Journalists in Tirana told an RFE/RL correspondent that they expect Klosi to speed up the transformation of RTSH into a public broadcasting institution along West European lines. They added that Klosi is likely to be more determined than Minga in introducing reforms and in resisting attempts by politicians to interfere with broadcasters' autonomy. FS

NATO TROOPS ARREST WRONG SERBIAN TWINS

A spokeswoman for the Hague-based war crimes tribunal said at the court on 23 July that two Bosnian Serb brothers seized by British SAS forces in Prijedor earlier that day and taken to the Netherlands are not the indicted Banovic twins Nenad and Predrag (see "RFE/RL Situation Report," 23 July 1998). "These two persons are not the Banovic brothers. They are people who have nothing to do with this," she added. The spokeswoman did not reveal the identity of the two men, except to note that they have the same birthday as the Banovices, the London daily "Guardian" wrote. Meanwhile in Banja Luka, Serbian authorities refused to allow the funeral of Imam Ibrahim Halilovic to take place at the site of the destroyed 16th century Ferhadija mosque, where he had worked for years. Halilovic will be buried in Sarajevo instead, RFE/RL's South Slavic Service reported. PM

TUDJMAN BACKING DOWN ON PAY HIKES?

Croatian President Franjo Tudjman told Prime Minister Zlatko Matesa and cabinet members on Brijuni on 23 July that they should "take another look" at their recent decision to raise their pay and that of other government officials (see "RFE/RL Newsline," 13 July 1998). The decision put Tudjman's own salary at more than $8,000 per month in a country where the average monthly wages are $400 and where many pensioners have to make do with much less than even that. The pay hikes have proven a political bonanza for opposition parties. PM

ROMANIAN PREMIER CRITICIZES FINANCE, PRIVATIZATION MINISTRIES

At a cabinet meeting on 23 July, Radu Vasile criticized the performance of the Finance and Privatization Ministries and asked their heads to take immediate steps to collect anticipated budget revenues. Vasile said the Privatization Ministry has failed to meet the planned pace of privatization and that this negatively affects the country's image among foreign investors. He also said the State Property Fund, which is subordinated to the ministry, is "a bureaucratic, oversized, and slow- moving" body. He accused the Finance Ministry of being responsible for "inefficient tax collection" and "heavy bureaucracy." The government the same day announced stakes will be sold in the Romanian Bank for Development and Postbank. Meanwhile a spokesman for the ruling Democratic Party said a government reshuffle may take place in fall, RFE/RL's Bucharest bureau reported. MS

FUNAR TO JOIN GREATER ROMANIA PARTY

A Bucharest court on 23 July rejected Cluj Mayor Gheorghe Funar's appeal against the refusal of the Bucharest Municipal Tribunal to register his Party of Romanian Unity Alliance. That party was formed after Funar's exclusion from the Party of Romanian National Unity. Funar said he and his supporters will now join the extremist Greater Romania Party, which has offered him the post of executive chairman. Also on 23 July, a court in Bucharest has issued a ruling on the Romanian National Party's appeal against the refusal of the tribunal to register it under that name. The court returned the dossier to the court, asking it to re- examine the case. MS

MOLDOVAN DEPUTIES OPPOSE TRANSIT OF NUCLEAR WASTE

Alecu Renita, chairman of the parliament's Ecological Sub-Committee, is demanding that Prime Minister Ion Ciubuc explain to the house why Minister of State Nicolae Cernomaz approved a license for the transportation of nuclear waste from Bulgaria's Kozloduy nuclear plant to Russia, RFE/RL's Chisinau bureau reported on 23 July. Moldovan legislation prohibits the transit of nuclear waste. Cernomaz, for his part, claims that the license permits only the transportation of nuclear fuel from Russia to Bulgaria under "perfectly safe conditions" and that such transports have been carried out for the "last decades." Renita says the Bulgarian ambassador to Chisinau has asked the sub-committee to amend the law so as to allow for the transportation of nuclear waste to Russia. MS

BULGARIA ANNOUNCES ANTI-CRIME STRATEGY

The government publicized a package of measures to fight conventional, organized, and cross-border crime, Reuters reported. The document was approved last week. Details released on 23 July say the struggle against organized crime "is a key element in the government's plan to secure normal conditions for economic reforms." MS




U.S.-UKRAINIAN RELATIONS AFTER GORE'S TRIP TO KYIV


by Sherman W. Garnett

U.S. Vice President Al Gore's trip to Kyiv this week ended with his resisting Ukrainian President Leonid Kuchma's calls for public U.S endorsement of an IMF bail- out package. Kuchma sought such an endorsement to strengthen both his bargaining position with an IMF delegation arriving this weekend and his political standing as he seeks re-election next year. He had counted on US help on both accounts.

Yet, there are good reasons why Gore hesitated. First, although no one doubts the seriousness of Ukraine's economic crisis, as early as next month the government may not be able to meet its debt service obligations. There are widespread doubts about the Ukrainian government's commitment to reforms as well as its ability to implement them if adopted.

Second, bad economic policy is not the only source of this crisis. Bad politics are at work as well. The Ukrainian political establishment does not see political and economic reforms as an urgent matter. The most intense struggles in Ukrainian politics take place, not between parties, ideologies, or branches of government but among the political and economic leadership, in both Kyiv and the regions. Various coalitions of leading politicians, bankers, new- and old-style business leaders and government bureaucrats struggle for control over the state's wealth and especially for the positions of state power that control it (and that make the rules for its privatization). As long as Ukrainian politics is dominated by this still unfinished competition for power and property, there will be little energy left for sound economic policy. Third, the US is right to be wary of appearing to back a candidate in the Ukrainian presidential race given the absence of real progress toward ending the country's political and economic stagnation. For Kuchma, the bail-out is a crucial element in his re-election campaign. The presidential contest has influenced most of the decisions taken in Kyiv during the last six months and will likely influence all decisions in the next 15. Yet the U.S. wants an independent and stable Ukraine. Kuchma has real accomplishments to his credit, especially in foreign policy and in launching the first set of economic reforms in 1994. But he is presiding over a country heading backward. In such circumstances, the U.S. must be pro-reform, not pro- Kuchma.

Vice President Gore heard from Kuchma and his senior advisers another impassioned argument for U.S. and Western assistance to Ukraine and to Kuchma personally: the fiscal crisis and the resulting economic and political damage that will come in its wake, threatening the "survival of the state itself."

Yet it is precisely Ukraine's survival that is not an issue. Even the staunchest left-wing politicians in eastern Ukraine dismiss the collapse of the Ukrainian state and its re-integration with Russia as an impossible scenario.

Rather, the question is now what kind of state Ukraine will become. The broad alternatives can be stated starkly as a choice between gradually becoming a part of Europe or remaining relegated to Europe's periphery. A European Ukraine requires bold choices and actions that have so far been beyond the ability of this or any other Ukrainian government. A peripheral Ukraine comes by default: the leadership need only follow the political rules of the game already deeply ingrained in the country.

If this is the state of Ukrainian politics, why should the West care? If Ukraine has successfully muddled through so far., why not let it continue down this road? Perhaps the West should simply let the Ukrainian leadership steer the country toward stagnation and obscurity on Europe's periphery. As tempting as such a conclusion is, Ukraine's choice between Europe and Europe's periphery matters to the continent as a whole.

A choice in favor of the status quo does not merely perpetuate today's Ukraine. It undermines the foundations that have made the current situation bearable inside the country and less dangerous for Ukraine's neighbors. It would certainly put in danger the policies that have dramatically lowered inflation and brought Ukraine a stable currency. It would exacerbate economic deprivation in the country as a whole, particularly along crucial ethnic and regional fault lines. A peripheral Ukraine would increase the danger that enlarging European institutions like NATO and the EU would find themselves on a much more unpredictable and unstable frontier.

These strategic realities give visits like Gore's additional importance. Senior U.S. and Western officials cannot force the Ukrainian leadership to act against its immediate political interests. They cannot impose economic reforms on an unwilling country. Yet they must be a strong stimulus for these reforms by reminding Ukraine of the choice it faces and the consequences of failing to act. They must also sketch out--as they did so successfully to a Ukraine unsure of whether it should proceed with nuclear disarmament--the support Kyiv can count on if it recognizes the seriousness of the situation and makes the hard reform decisions needed for the country to move forward. The author is a senior associate with the Carnegie Endowment Russian-Eurasian Program.


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