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Newsline - August 17, 1998




MOSCOW ALLOWS RUBLE TO FALL

Russian Prime Minister Sergei Kirienko has announced that the ruble will be allowed to fluctuate between 6 and 9.5 rubles to the dollar until the end of the year, Interfax reported on 17 August. While Kirienko said this step "does not mean a devaluation," the ruble fell by 0.12 rubles to the dollar following the announcement. Kirienko also announced a 90- day moratorium on servicing the foreign debt and a restructuring of government bonds due before the end of 1999. And he said that the government will be backing the 12 largest banks in order to ensure that they continue to operate normally. The prime minister did not rule out changes in the government after he meets with President Boris Yeltsin, who has returned to Moscow from his vacation. Kirienko also said he will discuss the changes with IMF officials. Meanwhile, the Central Bank introduced limits for non-residents on currency exchange operations "of a capital nature" to protect the Russian market against speculation (see "End Note" for joint statement issued by the Russian government and the Central Bank). PG

CENTRAL BANK'S DUBININ SAYS END TO SPECULATION IN SIGHT

Russian Central Bank Governor Sergei Dubinin said that the government and the bank have taken these steps to protect Russian citizens and domestic manufacturers instead of "players on the foreign exchange market and the market of short-term government securities," ITAR-TASS reported on 17 August. He said that he believes that these measures will "put an end" to speculation on the market and allow resources to go to the "real sector" of the economy. Anatolii Chubais, Yeltsin's special representative to international financial institutions, was equally upbeat. In a statement distributed by ITAR-TASS on 17 August, Chubais said that "in response to the threat of financial panic, the government was forced to take extraordinary measures. These measures in no way are a retreat from the earlier announced course." Also on 17 August, the IMF issued a statement expressing support for, and urging investors "to understand," the Russian government's measures, ITAR-TASS reported. PG

DUMA TO HOLD SPECIAL SESSION ON 21 AUGUST

Duma chairman Gennadii Seleznev told ITAR-TASS on 17 August that the State Duma has decided to invite President Yeltsin to participate in a special session of the parliament on 21 August. Seleznev said that the Duma will hold another special meeting on 25 August. PG

RUSSIA MEDIA FOCUSES ON FOREIGN COVERAGE OF FINANCIAL CRISIS

Russian news agencies and other media outlets gave prominent coverage over the weekend to Western commentary on the Russian crisis. All focused on the 14 August telephone conversation between Russian President Boris Yeltsin and U.S. President Bill Clinton and ongoing consultations by the IMF and the G-7 countries about a possible new aid package to Moscow. A proposal by financier George Soros that Russia establish a currency board was sharply criticized both because of the assumption that Soros was betting on a ruble devaluation, something he denied, and because of the power such a board would have over the Russian economy. Standard & Poor's on 14 August lowered the country's short-term rating for foreign-exchange commitments from B to C. Another international rating company, Moody's, had downgraded Russian issues the previous day. PG

YELTSIN SAYS RUSSIAN REGIONS MUST PAY ON AGROBONDS

Aleksandr Livshits, the deputy head of the presidential administration, said on 14 August that Yeltsin has ordered the government to find ways "within a month" to force Russian regions to make payments on their agrobond obligations, Interfax-FIA reported. Some 45 Russian regions were to have paid investors some 2 billion rubles (some $330 million) by now, but less than a third of that amount has been paid on time. Some regions-- including Kalmykia and Lipetsk--have not paid at all, Livshits said. Such a situation, he added, "has had a negative impact on investor confidence in the Russian financial market as a whole." PG

KRASNOYARSK, PETERSBURG ADOPT ANTI-CRISIS MEASURES

Krasnoyarsk Governor Aleksandr Lebed has created a special anti-crisis group on his territory, ITAR- TASS reported on 14 August. Lebed said the new labor- management-administration group will be in a position to "react promptly to problems and prevent explosions of social discontent in the region." In making this announcement to local unions, he said he hopes they will be responsible in any protests they undertake and that he is refusing to accept his wages until "we get out of the mess" the country is now in. Meanwhile, St. Petersburg Governor Vladimir Yakovlev said his region will also attempt to stabilize the situation. But he added that the role of any one region is minimal and that "the country will be in a fever for long if the government starts to patch the holes." PG

FINANCE MINISTRY FAILS TO FULFILL PROMISES TO SAKHALIN MINERS

Sakhalin Governor Igor Farkhutdinov told ITAR-TASS on 15 August that the federal Finance Ministry has sent 95 million rubles (some $15 million) instead of the 121 million it had promised to deal with wage arrears. His comments came as the deadline for paying back wages to the region's miners expired. In a related development, Russian Deputy Minister for Fuel and Energy Igor Kozhukhovskii told the news agency on 14 August that the Russian cabinet on 20 August will discuss how to cope with problems in the country's troubled mining industry and particularly in hard-hit Kemerovo Oblast. He suggested that despite the overall crisis, there are some reasons for optimism: the size of wage arrears has fallen while production and funds budgeted for retraining have increased. PG

YELTSIN SAYS CIS STATES MUST BLOCK TALIBAN

After conversations with the presidents of Tajikistan and Uzbekistan, Russian President Boris Yeltsin said in Novgorod on 14 August that "the three countries must unite their efforts and raise a barrier to the Taliban," Interfax reported. Federal Border Service chief Colonel- General Nikolai Bordyuzha said in Beijing that his men are ready to prevent any incursions. But Russian Defense Minister Igor Sergeev downplayed the situation, saying that "for now" there is no danger of Taliban groups crossing into CIS territory. Despite a recent lull in the fighting in northern Afghanistan, ever more Russian leaders--from Patriarch Aleksii II of Moscow and All-Russia to Duma speaker Seleznev--have expressed concern about developments there. PG

YELTSIN VETOES PROPOSED REFERENDUM CHANGES

Yeltsin on 14 August rejected a Duma-passed constitutional law that would have allowed referendums to be held to recall the president or to change his term, ITAR- TASS reported. Yeltsin said that the draft is unconstitutional and thus not subject to future discussion. PG

NEW DUTIES FORCE IMPORTERS TO PAY HIGHER INDIRECT TAXES

The imposition of a new 3 percent import duty on 15 August means that importers will have to pay higher VAT and excise taxes as well, an official of the State Customs Committee told Interfax the previous day. In addition, the imposition of this new duty may complicate relations with Belarus. According to Russian customs officials, Belarus does not plan to levy an equivalent duty or pay the amount due to Moscow, as required by its trade agreement. As a result, Russia will be forced to resume the practice of identifying the country of origin for all goods imported to Russia via Belarus. PG

JOURNALIST ATTACKED IN BASHKORTOSTAN

Sergei Fufayev, a reporter long critical of the Ufa authorities, was beaten up by three young men early on 14 August, ITAR- TASS reported. Noting that his attackers told him "to get away from Bashkortostan," Fufayev said he considered the incident an act of "political terrorism" and that he will appeal to the Federal Security Service for protection. PG

TATARSTAN ALLOWS FOREIGNERS TO BUY SOME LAND

As of 15 August, foreigners can buy and sell land from Tatarstan's state land reserve, ITAR-TASS reported. It thus becomes the second Russian Federation subject to permit such transactions: Saratov passed a similar law at the end of 1997. PG

KHABAROVSK: PAY TAXES, AVOID AUDITS

The Khabarovsk regional authorities have distributed their first "obedient taxpayer" certificates to two companies, ITAR-TASS reported on 16 August. The certificates, established by the Khabarovsk governor, are given to any legal entity that pays its taxes on time. They allow the bearer to avoid an audit by the tax police for the following two years. PG

NORTH CAUCASUS REJECTS GOVERNMENT'S REGIONAL DEVELOPMENT PROGRAM

Meeting in Pyatigorsk on 14-15 August, representatives of Russia's North Caucasus republics, Ukraine's Luhansk Oblast and of Abkhazia and South Ossetia unanimously rejected a program drafted by the federal government to promote social and economic stabilization in the region, Caucasus Press reported. The participants said the program does not include urgent measures needed to ensure economic stabilization and fails to take into consideration the financial potential of either Russia in general or the individual North Caucasian federation subjects. They appealed to President Yeltsin to upgrade the program to the status of a presidential one and to include in it only measures that would contribute to a rapid improvement in the economic situation in the region. LF




ARRESTS AT BAKU OPPOSITION RALLY

Azerbaijani police arrested 106 of the 5,000 or so people who attended the opposition rally in a Baku suburb on 15 August to protest the authorities' failure to provide democratic conditions for the 11 October presidential elections Interfax reported quoting Interior Minister Ramil Usubov. Almost all those detained were subsequently released. Opposition representatives estimated the number of demonstrators in Baku at closer to 20,000, saying 300 were detained. They added that a total of 50,000 people took part in protest demonstrations across the country. Earlier on 15 August, Baku police had detained 15 opposition activists and temporarily surrounded the home of Azerbaijan Popular Front party chairman Abulfaz Elchibey. Police also detained an RFE/RL correspondent in Gyandja and prevented opposition activists from picketing the Supreme Court, the Presidential Chancellery, and the Baku Mayor's Office, Turan reported. LF

STANDOFF DEFUSED ON GEORGIAN-ARMENIAN BORDER

Georgian army detachments were prevented from conducting joint maneuvers with Russian forces on 13 August in Akhalkalaki Raion, which borders on Armenia, according to an RFE/RL correspondent in the Georgian capital. According to the Georgian governor of the region, Gigla Baramidze, the Georgian units were halted by 25 Armenians armed with mortars and other artillery, who Baramidze said were members of the Djavakhk organization. That group was formed to protect the interests of the district's predominantly Armenian population. But a local Armenian official told Caucasus Press that the Armenians had merely intended to warn the Georgian troops of possible hostile reactions by local Armenian residents unaware of the real reason for the Georgian troops' presence in the region. Although Georgian Television had announced the maneuvers in advance, some Armenians in Akhalkalaki feared that the Georgian troops were planning to deport them. The Georgian units subsequently withdrew. LF

GEORGIA, ABKHAZIA MARK SIXTH ANNIVERSARY OF OUTBREAK OF WAR

Speaking in Sukhumi on 14 August, the anniversary of the Georgian incursion that precipitated the 1992-1993 war, Abkhaz President Vladislav Ardzinba assessed the prospects for a settlement as remote, Reuters reported. Ardzinba warned that he will refuse to participate in future peace talks if attacks by Georgian guerrillas on Abkhaz police continue, adding that such attacks "will not go unanswered by our side." Georgian presidential adviser Levan Aleksidze told Interfax that "sooner or later" Abkhazia will again become part of a united Georgia and that the unresolved conflict should be settled by peaceful means. But Tamaz Nadareishvili, chairman of the ethnic Georgian Abkhaz parliament in exile, told Interfax that military force is the only way to ensure the return to Abkhazia of the ethnic Georgian population forced to flee during the fighting. LF

UZBEK PRESIDENT VISITS AFGHAN BORDER

Islam Karimov visited the city of Termez, located on the border with Afghanistan on 15 August, ITAR-TASS and Reuters reported. Karimov met with senior military officials in the city and said he is confident in the ability of the country's armed forces to protect the border. Of the civilian population, Karimov said they "are confident in their own strength. Such a nation is invincible." In a related story, the Uzbek Defense Ministry released a statement on 14 August denying a "Kommersant-Daily" report the same day alleging Uzbek military units had crossed the Amu-Darya and were taking up positions in the Panjshir Gorge in Afghanistan. BP

TAJIK OPPOSITION CALLS FOR REFERENDUM AGAIN

The United Tajik Opposition on 14 August renewed its call to hold a nationwide referendum on rewording part of the constitution, Interfax reported. The UTO objects to the term "secular state," which, it says, prevents some groups from participating in the country's political life. UTO deputy leader, now first deputy Prime Minister Khoja Akbar Turajonzoda, had called for such a referendum before returning to Tajikistan from self-imposed exile in Tehran in February. The government's response is the same now as then: "Those articles shall not be changed even in a referendum." BP

REGIONAL HEAD MURDERED IN TAJIKISTAN

The head of the Shahrinaw Region, Kalandar Khaydarov, was killed by unknown assailants on 16 August, ITAR-TASS reported. Men in military clothing broke into his home in Shahrinaw, 40 kilometers west of Dushanbe, and took Khaydarov away. His body was found later with multiple bullet wounds. Police are attributing the crime to a mafia dispute. BP

IRANIAN FOREIGN MINISTER IN KAZAKHSTAN

Kamal Kharrazi met with Kazakh President Nursultan Nazarbayev in Astana on 14 August to discuss the Caspian Sea, Interfax and IRNA reported. Nazarbayev said the Russian-Kazakh agreements on the division of the sea could serve as a model for resolving the Caspian's status. Kharrazi said the sea should be de-militarized to "become a sea of friendship and peace." The two also discussed resuming shipments of Kazakh crude oil to Iran via the Caspian. Kharrazi noted that the planned Neka-Persian Gulf pipeline will be completed in two years and that shipments of crude oil will then resume. BP

CONSTRUCTION OF TURKMEN-PAKISTANI PIPELINE TO BEGIN THIS YEAR

A Turkmen government official said construction of the 1,271 kilometer Turkmen-Pakistani pipeline will start before the end of this year, Interfax reported on 14 August. Gochmurad Nazdzhanov said recent events in Afghanistan, where the Taliban movement have captured most of that country, will not affect the pipeline schedule. "It is a purely economic project," Nazdzhanov said, "we cannot see any reason for postponing the work." After Pakistan, the Turkmen government has the best relations with the Taliban, who for the past two years have occupied territory adjacent to Turkmenistan. BP




UKRAINIAN NATIONAL BANK'S RESERVES FALL SHARPLY

Ukrainian National Bank Chairman Viktor Yushchenko says the bank's reserves dropped to $1.15 billion from $1.49 billion in August, following the repayment of a loan to Nomura International (see "RFE/RL Newsline," 13 August 1998). The government initially planned to repay the loan with foreign aid but was unable to secure such assistance because of the lack of confidence in Ukraine among foreign investors. Yushchenko remains optimistic about the country's financial prospects. "The largest payments in 1998 have been made, and now everything should be done to win the confidence of both market operators and Ukraine's creditors in the Ukrainian market," Interfax quoted him as saying 15 August. JM

METHANE BLAST KILLS 20 UKRAINIAN MINERS

A methane explosion at a coal mine in Luhansk, eastern Ukraine, killed 20 miners and injured four others on 16 August, ITAR-TASS reported. The blast occurred 600 meters underground. In April, 63 miners died in Donetsk Oblast in Ukraine's worst-ever coal mine accident. The death toll at Ukrainian coal mines this year exceeds 200. Some 270 miners died in accidents at coal mines last year. JM

PRISONERS OF LUKASHENKA REGIME DENIED REGISTRATION

The Belarusian Supreme Court has upheld the Justice Ministry's decision to refuse registration to the Belarusian Association of Prisoners of the Lukashenka Regime, Belapan reported on 14 August. According to the Justice Ministry, the organization's name does not conform with its charter, since there are no political prisoners under Lukashenka. The ministry pointed to official court records for 1994-1997, in which, it said, no trial for "particularly dangerous crimes against the state" is recorded. The Supreme Court argued the association is using President Alyaksandr Lukashenka's name without his consent. It also ruled that the association broke the law by including Vadzim Labkovich, a minor, among its founders. Labkovich has been given an 18 month prison sentence for spraying anti-Lukashenka graffiti in the city of Stoubtsy. JM

BELARUS REPORTS HIGHER BUDGET REVENUES THAN EXPECTED

Belarusian Tax Committee Chairman Mikalay Dzyamchuk says budget revenues this year will exceed forecasts by 15-18 percent, ITAR-TASS reported on 14 August. According to Dzyamchuk, the increase is due to a "high level of tax collection." During the first seven months of this year, state budget revenues totaled 108.5 percent of the expected sum and local budget revenues 117.2 percent. JM

KALLAS SAYS ESTONIA'S RURAL PARTIES GROWING STRONGER

Siim Kallas, leader of the opposition Reform Party, wrote in the 14 August daily "Postimees" that the Coalition Party is losing ground to its rural partners in the ruling coalition and that the latter will likely have the upper hand if the alliance is renewed for the March 1999 elections, BNS reported. "One can already say that the Estonian Country People's Party has taken the lead in the minority coalition," he argued. He added that the diminishing influence of former Prime Minister Tiit Vahi within the Coalition Party makes the rural bloc's position in the alliance stronger. Kallas went on to accuse the government of seeking to buy votes in the run-up to the elections. He commented that if, as is currently rumored, subsidies to farmers are to be increased by 26 percent, "one can ask whether the government coalition really thinks Estonia doesn't have any bigger worries." JC

KRASTS SIGNS PETITION FOR CITIZENSHIP LAW REFERENDUM

Latvian Prime Minister Guntars Krasts on 14 August signed a petition in support of holding a referendum on amendments to the citizenship law, BNS and Reuters reported. Krasts had said earlier that the amendments were passed without a broad public debate and that the best way to judge public opinion would be through a referendum. The driving force behind the initiative is Krasts's Father and Freedom party, which is opposed to the amendment whereby all children born after August 1991 will be granted citizenship without having to demonstrate proficiency in the Latvian language. The campaign to collect signatures closes on 18 August. Local media say that the initiative is still far short of the 133,000 signatures needed to force a vote. JC

INTERIOR MINISTER JOINS FATHERLAND AND FREEDOM PARTY

Latvian Interior Minister Andrejs Krastins has joined the Fatherland and Freedom party, BNS reported on 14 August. Krastins quit the National Reform party last month and, as a cabinet minister, required the support of a political party. According to BNS, Fatherland and Freedom was the only party he found acceptable to join. Krastins is a former member of the Latvian National Independence Movement, which he left in protest when it merged with the Fatherland and Freedom party. He will not run for a seat in the October parliamentary elections. JC

POLISH FARMERS THREATEN NATIONWIDE PROTEST OVER GRAIN IMPORTS...

The national protest committee of the Solidarity trade union of private farmers, the largest trade union of its kind in Poland, has sent a letter to Prime Minister Jerzy Buzek demanding that the government immediately halt all grain imports. If their demand is not met by 20 August, farmers threaten "to resume protest actions on rail, road, and sea border crossings and on internal roads," PAP reported on 16 August. Marian Zagorny, head of the protest committee, said that the aim of the protest action is to destroy all imported grain by dumping it on railroad tracks. Following earlier protests by farmers, the government imposed duties on grain imports and agreed to purchase domestic grain. But farmers now complain that they have to wait for several days outside grain-purchasing stations, which are limited in number, to sell their grain at unsatisfactory prices. JM

...PROMPTING MIXED REACTION

Cardinal Jozef Glemp, head of the Polish Catholic Church, has criticized farmers who are threatening to destroy grain, Television Polonia reported on 15 August. Glemp delivered a sermon to 200,000 pilgrims at the national shrine of Jasna Gora on 15 August. "This is the start of a terror [action], not democracy," he commented. Jaroslaw Kalinowski, leader of the opposition Polish Peasant Party, said the farmers "do not want anything for free. We only desire to receive equitable payment for what we have produced with our own hands," Polish Television reported. Minister of Agriculture Jacek Janiszewski pledged that the government will increase purchases of Polish grain this week. He also confirmed that grain imports to Poland have ceased since the government increased tariffs on such imports at the beginning of this month. JM

CONTROVERSY OVER HAVEL'S CONTINUING IN OFFICE

Former Chamber of Deputies chairman Jaroslav Zverina on 15 August said that the doctors treating ailing President Vaclav Havel believe another operation would endanger his life and do not recommend that he remain in office, "Lidove noviny" reported on 15 August. At the same time, Zverina said he is "not challenging" Havel to resign. Last April, Zverina caused a controversy when he called on Havel to quit his post. Miroslav Cerbak, a member of the medical team treating Havel, said the team has "never issued a report saying Havel is fully able to perform his presidential duties," but he stressed that neither has it "recommended that Havel resign," CTK reported. Another member of the team told the news agency on 16 August that Havel's condition is "satisfactory" but that it is not yet possible to say when the tracheotomy performed on him will be removed. MS

SLOVAK SUPREME COURT RULES AGAINST MECIAR'S PARTY

The Supreme Court on 14 August rejected the appeal by Vladimir Meciar's ruling Movement for a Democratic Slovakia (HZDS) against the registration of the opposition Slovak Democratic Coalition (SDK) and its right to participate in the September parliamentary elections, Reuters reported. The HZDS claimed that the SDK is a coalition of parties and that, in line with the new electoral law, each of its components must win at least 5 percent of the vote on 25-26 September to gain parliamentary representation. SDK leader Mikulas Dzurinda commented that the court has "prevented the destruction of the democratic system in Slovakia" and that its ruling means "victory of justice over the HZDS's ill-will." MS

SUSPECTED KILLER OF HUNGARIAN MEDIA TYCOON GIVES HIMSELF UP

Njazi Aqifi, an Albanian from Kosova suspected of having shot media tycoon Janos Fenyo in February, gave himself up on 14 August at Roeszke, a Yugoslav-Hungarian crossing point, MTI reported. While still on the Yugoslav side of the border he told journalists that he is innocent and hopes to be able to prove his innocence in Hungary. A lawyer representing Aqifi said the authorities have agreed to release him if investigators fail to prove his guilt within 30 days. MS

HUNGARIAN OPPOSITION CRITICIZES TAX CHAIRMAN APPOINTMENT

Socialist Party parliamentary group leader Laszlo Kovacs and the leader of the Alliance of Free Democrats parliamentary group, Balint Magyar, have criticized the recent appointment of Lajos Simicska as president of the Tax and Finance Office, Hungarian media reported on 14 August. Simicska is the former treasurer of the ruling Federation of Young Democrats-Hungarian Civic Party. Kovacs said the appointment of a party official "to head an organization demanding impartiality violates the unwritten rules of politics and good taste." Magyar called the step "political cynicism" and said it is aimed at "covering up shady deals" and at using the tax office for "political intimidation." Bela Horvath, leader of the parliamentary group of the Independent Smallholders' Party, a member of the ruling coalition, called the accusations a "political hoax" and expressed support for the appointment. MS




SERBIAN FORCES CAPTURE JUNIK

A spokesman for Serbian paramilitary police forces said in Prishtina on 16 August that those forces took control of Junik, which is located near the Albanian frontier and which was the last key town under the control of the Kosova Liberation Army (UCK). The spokesman added that Serbian forces are now able to move unhindered throughout the province. Foreign journalists reported from Junik that it is deserted except for some 15 people too old to flee. The correspondents also noted widespread material damage, including to the main mosque, the minaret of which is reported missing. Kosovar sources said that Serbian forces used tanks and aircraft to launch an assault on villages near the Albanian border on 15 August. PM

EXODUS OF REFUGEES CONTINUES

Spokesmen for the United Nations High Commissioner for Refugees said that some 600 refugees from Junik reached Tropoja in northern Albania on 14 August alone, the "Frankfurter Allgemeine Zeitung" reported on 17 August. Two days earlier, the newspaper had quoted a UNHCR spokesman as saying in Geneva that "thousands" of Kosovars are waiting in the mountains near the border to cross into Albania. The spokesman added that refugees had previously avoided the minefields that Serbian forces laid along the Albanian frontier but that more recently they have begun trying to cross through the mined areas. PM

DEMACI ACCEPTS UCK POST

Veteran Kosovar politician Adem Demaci told RFE/RL's South Slavic Service on 14 August that he is pleased to accept the UCK's recent offer to head its negotiating team and will relinquish all other political duties, as requested by the guerrillas (see "RFE/RL Newsline," 14 August 1998). Demaci added that he remains committed to independence for Kosova. The next day, he said that no negotiations on Kosova's future can be successful without the participation of the UCK and the political opposition. Shadow-state President Ibrahim Rugova's negotiating team includes only parties that participate in the shadow-state government. PM

MOSCOW PRAISES KOSOVAR AGREEMENT TO TALK

The Russian Foreign Ministry on 14 August praised the decision of the shadow-state leadership to appoint a special delegation to talk with the central government in Belgrade, Interfax reported. The Ministry press release called on all sides to "start negotiations immediately and without any preliminary conditions." In a related release, the Foreign Ministry said that Russian participation in NATO's Partnership for Peace maneuvers in the Balkans reflect "Russia's role in strengthening stability and security" there. PG

NATO STARTS MILITARY EXERCISES IN ALBANIA...

Military personnel from 14 NATO and Partnership for Peace member states began a five-day exercise in Albania on 17 August. The 1,700-member force will take part in various drills in the mountains. ITAR-TASS noted that "no exercises imitating air raids have been planned.... NATO promised to do everything possible so that the exercises seem 'politically sterile,' as Russia... insisted." The U.S. Defense Department on 14 August withdrew two of its planned three warships from the exercises, reducing the number of its participating marines from 1,000 to 275. A Pentagon spokesman said the same day in Washington that the troops are needed to help evacuate U.S. citizens from the Democratic Republic of Congo. He stressed that the reduction is not related to the situation on the ground in Albania. The exercises are partly designed to show Belgrade that NATO is able to respond, if necessary, in the Kosova crisis. FS

...WHILE U.S. EMBASSY EVACUATES PERSONNEL

The U.S. government began evacuating all but essential staff from Albania on 16 August after the State Department temporarily suspended normal embassy operations in the wake of the embassy bombings in Tanzania and Kenya (see "RFE/RL Newsline," 14 August 1998). An unnamed embassy source told Reuters that Ambassador Marisa Lino will stay on. State Department officials said the previous day in Washington that the decision to suspend activities does not reflect any change in the "good" U.S.-Albanian relations. The officials declined to comment on whether they fear any specific terrorist threat in Albania. The evacuation follows earlier media reports that the African bombings may have been in revenge for the arrest of four Islamic fundamentalists in Albania earlier this year. Meanwhile, an unidentified Albanian police official told AP in Tirana on 16 August that the authorities recently arrested a fifth suspected Egyptian Islamist. FS

ALBANIA QUITS ISLAMIC CONFERENCE

Prime Minister Fatos Nano told "Zeri i Popullit" of 16 August that Albania is no longer a member of the Organization of the Islamic Conference (OIC). Albania, which has a large Muslim population, became a member of the OIC in 1993 under former President Sali Berisha. Nano, however, claims that Albania never really belonged to the OIC because Berisha did not follow Albanian legal procedure when applying to join that body. He added that "Albania has no other future but to be integrated in Europe." And he stressed that Albania will continue to cooperate with the "Arab countries" on a bilateral or multilateral level. Meanwhile, "Koha Jone" reported on 16 August that it has received unspecified threats because of its recent articles against Islamic fundamentalism. FS

HERZEGOVINIAN SERBS GO HOME

Some 100 Serbs from Bacevici near Mostar returned home on 15 August for the first time since 1992 and immediately began rebuilding the devastated village. The UNHCR will provide the returnees with drinking water and other basic necessities until Bacevici's basic infrastructure is functioning again. To date, only 15,045 Bosnian refugees have returned to homes in regions where they constitute an ethnic minority, the "Frankfurter Allgemeine Zeitung" reported on 15 August, citing UNHCR figures. The newspaper added that some 376,146 Muslims and Croats have gone back to homes on the territory of the mainly Muslim and Croatian federation since the Dayton agreement was signed at the end of 1995. PM

SREBRENICA INVESTIGATION WIDENS

Dutch military justice authorities in Arnhem and Defense Minister Frank de Grave in The Hague have launched investigations into charges that Dutch peacekeepers in July 1995 ran over with armored vehicles and killed up to 30 Muslim soldiers who were blocking the Dutch path of retreat from Srebrenica, the "Frankfurter Allgemeine Zeitung" reported on 15 August. The military justice authorities also plan to issue an open invitation to all 460 former peacekeepers to file a disposition about their recollections of the fall of Srebrenica. Several Dutch government bodies are investigating a variety of charges that the Dutch troops did not carry out their duties to protect the Muslims and that they may actually have helped the Serbs round up Muslim civilians (see "RFE/RL Newsline," 13 August 1998). PM

ROMANIA'S LIBERALS WANT ALLIANCE RESTRUCTURED

Valeriu Stoica, first deputy chairman of the National Liberal Party (PNL), said on 16 August that his party wants to continue its membership in the Democratic Convention of Romania but that the convention must be "restructured". He said restructuring is necessary to "make more specific the role each member plays in the alliance." He added that the PNL may want to run its own candidates in the next local elections. Stoica also warned against the "obsessive ongoing discussions" about a government reshuffle that Prime Minister Radu Vasile has announced for next month. He said the such discussions are reminiscent of the "reshuffling psychosis" that preceded the events leading to the resignation of Victor Ciorbea's cabinet. MS

ETHNIC HUNGARIAN LEADER ON UNIVERSITY IN ROMANIA

Attila Verestoy, leader of the Senate parliamentary group of the Hungarian Democratic Federation of Romania, said on 14 August that he wished to "remind" President Emil Constantinescu of his 10 December 1997 declaration. Constantinescu had said he supports the setting up of a Hungarian-language state university in Romania. Verestoy was responding to Constantinescu's recent statement in Cluj in support of a "multi-cultural" university in the town, Mediafax reported. Verestoy also said he does not rule out the possibility of setting up a separate university for national minorities scattered throughout several Transylvanian towns and whose center would be in "Cluj or Targu Mures." He also said teaching at such university could take place "in Hungarian and German." MS

BULGARIAN OFFICIALS CLAMP DOWN ON CORRUPTION, CRIME

Three customs officials and two police officers in the Black Sea port of Burgas have been dismissed and 13 other customs officials are being investigated for involvement in smuggling into the country millions of tons of sugar without paying custom duties, AP reported on 14 August. The sugar was processed at a nearby plant owned by a subsidiary of Multigroup, which is run by members of the former communist nomenklatura and security services. The same day, customs officials at the Black Sea port of Varna seized 670 kilograms of cocaine, while police near Sofia arrested a Bulgarian who tried to sell a Turkish bus driver 3,200 compact discs suspected to be pirate copies. MS




STATEMENT OF THE GOVERNMENT OF THE RUSSIAN FEDERATION AND THE CENTRAL BANK OF RUSSIA


A crisis broke out on world financial markets when the

Russian economy was at the start of a recovery. From October 1997 the Government and the Bank of Russia have been protecting the main achievements of the economic policy of the recent years--stable prices and a fixed ruble and, hence, the living standards of the people. The problem of servicing the national debt aggravated sharply [sic] with the worsening of the foreign economic situation and because of the unsatisfactory state of affairs with revenues of the budget. Expenditures for the redemption of the earlier issued state securities and the payment of interest on them have become a heavy burden on the state budget with tax collection being low. The Russian Government has to reduce the domestic state debt, cutting expenditures under the federal budget and making external borrowings. The Government's economic programme was backed in July by international financial organisations and leading countries of the world. However, the crisis aggravating in Asia and a new fall of world prices of oil have not permitted the restoration of the confidence in Russian securities and, hence, the improvement of the situation with the budget. The country's foreign currency reserves continue shrinking and the banking system experiences certain difficulties. In this situation the Government and the Bank of Russia deem it necessary to take a set of measures aimed at the normalisation of the financial and budget policy.

1. As of August 17, 1998, the Bank of Russia floats the ruble within new limits of the "currency corridor" fixed at the level of from 6 to 9.5 rubles to the US dollar. Interventions by the Bank of Russia will be made to lessen sharp fluctuations in the ruble rate. The Bank of Russia will be using the interest policy for the same purpose.

2. State securities (treasury bills and federal loans bonds) that are to be canceled up to December 31, 1999, inclusively, will be exchanged for new securities. The technical parameters of the exchange will be announced on Wednesday, August 19, 1998. Biddings in the market of treasury bills -- federal loan bonds are suspended till the securities' exchange is completed.

3. Under the provisions of the regulations of the International Monetary Fund, the Government and the Bank of Russia introduce temporary restrictions for Russian residents on large-scale foreign currency operations. A 90-day moratorium is imposed as of August 17, 1998 on the repayment of credits received from non-residents in the Russian Federation, on the payment of insurance on credits insured by the mortgage of securities, on the payments under fixed-term contracts in foreign currency. Non-residents in the Russian Federation are prohibited to invest funds into ruble assets with the time for repayment of up to one year.

4. The Government and the Bank of Russia regard a stable functioning of the banking system and the system of settlements and payments in the Russian Federation as one of [its] important priorities. In this connection, the Government and the Bank of Russia favour the setting up of a payments' pool by the biggest Russian banks to maintain stability of interbank settlements. At the same time the Bank of Russia is going to exert efforts to consolidate the Russian banking system, drawing into this stable [sic] Russian Banks and leading foreign banks. 5. To restore the financial market, the Russian Government will shortly begin placing short-term treasury bills (for a term of one or two weeks). A broader range of securities will be issued for the population.

6. The Government and the Bank of Russia address to the Federal Assembly a legislative initiative to tighten control over the flow of currency abroad. At the same time the Government and the Bank of Russia are going to take urgent actions in the area within the bounds of their powers. 7. The Russian Government repeatedly suggests to the State Duma to hold an extraordinary session before the end of August to pass key draft laws helping to ensure the timely payment of pensions and wages to workers in the state sector, to create legislative procedures for banks' stabilisation and to strengthen the system of currency regulation and currency control. Prime Minister, President, Russian Federation Bank of Russia S.V. Kiriyenko S.K. Dubinin Source: ITAR-TASS, 17 August 1998.


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