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Newsline - September 3, 1998




GOVERNORS BACK CHERNOMYRDIN

The leaders of 20 regions and republics on 2 September met with acting Prime Minister Viktor Chernomyrdin. According to Interfax, Murtaza Rakhimov, president of Bashkortostan, said that only one or two regional leaders still oppose Chernomyrdin. Among those declaring their support for his candidacy were Aman Tuleev, governor of Kemerovo; Ruslan Aushev, president of Ingushetia, and Boris Govorin, Irkutsk governor. "Kommersant-Daily" concludes that the "economic and financial situation in the regions is close to collapse and the governors need someone who would be able to assume total responsibility." The Federation Council will meet on 4 September to consider Chernomyrdin's candidacy. In an abrupt reversal of his earlier sharp criticism, Vladimir Zhirinovsky, leader of the Liberal Democratic Party, also declared his support, saying "Russia is in need of a government chairman with a sound knowledge of the current situation." Zhirinovsky said his 50-member faction abstained in the vote on Chernomyrdin earlier this week. JAC

DUMA PREPARED FOR DISSOLUTION

"Segodnya" on 2 September reported that Vladimir Ryzhkov, State Duma deputy speaker, said the lower house will be dissolved no later than 14 September if Chernomyrdin is not confirmed. He added that the Communist Party is already preparing an appeal to the people in such an event. The newspaper writes that a new parliamentary election could be put off indefinitely, in part because the Federation Council and "other authorities are perfectly prepared to do without the Duma. And by some legal--or illegal--act they will certainly find an original solution to carry this out." Communist Party chief Gennadii Zyuganov remained defiant, telling reporters that "it is not a matter of the dissolution of the Duma but of the Russian Federation itself and the destruction of our statehood." JAC

NO DUMA ELECTIONS BEFORE MAY 1999?

The Justice Ministry on 2 September announced that no political party has the right to participate in parliamentary elections before May 1999, Interfax reported. The ministry explained that a September 1997 law requires that organizations planning to run in elections must first amend their charters and register them with the Justice Ministry and then wait a year to participate in elections. The Federation Council voted down an amendment passed by the Duma to reduce the waiting period to six months. JAC

CLINTON MET GOVERNORS, OPPOSITION

U.S. President Bill Clinton met at the US embassy in Moscow on 2 September with regional leaders such as Samara governor Konstantin Titov, Arkhangelsk governor Anatolii Yefremov, Novgorod governor Mikhail Prusak, Saratov governor Dmitrii Ayatskov, and Tatarstan President Mintimer Shaimeyev. He also met with leading Moscow-based political figures, including Communist Party leader Gennadii Zyuganov and Yabloko leader Grigorii Yavlinskii. Zyuganov told reporters afterward that Clinton "seemed to be very surprised when I told him that Mr. Yeltsin did not work with parliament at all." Yavlinskii praised Clinton's timing, saying that "Clinton's visit here in the context of the very fierce economic and political crisis in Russia is a good sign, suggesting that maintaining friendly relations between our countries does not depend on temporary variations." JAC

U.S., RUSSIA SIGN AGREEMENTS

Presidents Clinton and Yeltsin concluded several agreements and joint communiques at the close of the summit on 2 September. Two security agreements were signed, one pledging to exchange information on ballistic missile launches and the other reducing stocks of plutonium (see "RFE/RL Newsline," 2 September 1998). The two countries also agreed to form working groups to tighten export controls on dual-use technology, combat terrorism, and persuade India and Pakistan to abandon their arms race. The joint communiques addressed the need for a cease-fire in Kosova, the banning of biological weapons, and cooperation in trade, investment, and technology. With regard to NATO, the two presidents agreed to disagree. Yeltsin told a press conference that "we have not deviated from our previous position-- we are against NATO expansion to the East." Russian presidential spokesman Sergei Yastrzhembskii declared that with President Clinton's visit, U.S.-Russian relations had "overcome an apparent recent slump." JAC

CHINA TO THE RESCUE?

While President Clinton linked additional economic assistance to concrete reform measures, China is willing to provide $540 million in aid to Russia, according to Britain's "The Guardian." On 3 September, the newspaper quoted Chinese Foreign Minister Tang Jiaxuan as saying China will provide aid through the IMF. According to the Dutch newspaper "Groot- Bijgaarden De Standaard," the EU will take up the issue of the Russian economic crisis on 3 September. The possibility of adjusting credits that Russia receives under TACIS will be discussed, but a EU spokesman said that the crisis in Moscow cannot be resolved by increasing credits. JAC

CHERNOMYRDIN FORMS CABINET...

Russian President Boris Yeltsin on 2 September signed a decree reinstating the following ministers from Sergei Kirienko's government: acting Justice Minister Pavel Krasheninnikov, acting Foreign Minister Yevgenii Primakov, acting Defense Minister Igor Sergeev, acting Interior Minister Sergei Stepashin, acting Deputy Prime Minister Boris Fedorov, and acting Minister for Emergencies Sergei Shoigu. Acting Deputy Prime Minister Oleg Sysuev, acting Deputy Prime Minister Viktor Khristenko, and acting Minister of the Economy Yakov Urinson were not named in the decree and are widely expected to leave the government. Most newspapers expect acting Finance Minister Mikhail Zadornov to retain his position. Acting Minister of Industry and Trade Yurii Maslyukov, the only member of the Communist Party in the former government, said on 3 September that he is resigning because he opposes Chernomyrdin. JAC

...TAPS REGIONAL LEADERS

"Nezavisimaya Gazeta" reported on 1 September that the Chernomyrdin might tap Vladimir Torlopov, chairman of the Federation Council Committee for Social Policy, for the post of deputy prime minister with responsibility for social questions. According to "Rossiiskaya gazeta" on 2 September, Torlopov, a former trade union leader in Komi Republic, was instrumental in forging a compromise during miners' strikes in Vorkuta in the late 1980s and 1990s. The government has also been wooing Samara governor Titov, according to "Noviye izvestiya" on 2 September. Titov told reporters that he will meet for a second round of talks on joining the government on 3 September. Titov believes that printing money would provide at least a partial solution to the current economic crisis. He said that "it is necessary to print not simply a mass of money but specific sums for specific tasks. For example, in order to pay the army and provide officers with housing." JAC

DUMA CENSURES DUBININ

The Duma on 2 September passed a resolution by 267 votes with one abstention calling on President Yeltsin to remove Central Bank Chairman Sergei Dubinin, characterizing his actions during the latest financial crisis as unsatisfactory and belated. According to Interfax, the Duma wants the Central Bank to tighten control over lending institutions' activities, protect savings, restore commercial banks' liquidity, and ensure that the banking system runs properly. Dubinin told the Duma's Budget Committee that he will not resign. JAC

RUBLE, STOCKS SLUMP

On the morning of 3 September, the ruble quickly fell 4.8 percent to 13.5 rubles per $1 on the electronic exchange. The Moscow Interbank Currency Exchange resumed trading after a four-day hiatus. Stocks also declined, dipping 2.6 percent below the previous day's level, according to Bloomberg. Trading volume continues to be quite low, analysts suggest, in part because foreign- investor interest in Russian equities is almost non- existent. JAC

TAX REVENUES SHORT OF TARGET

ITAR-TASS reported on 2 September that tax revenues in August reached 11.2 billion rubles ($83 million)--2 billion rubles less than was planned and almost 1 billion less than in July. According to Interfax, acting head of the State Tax Service Boris Fedorov said Gazprom paid 500 million rubles less in taxes in August than it should have. He attributed the rest of the shortfall to banks delaying transfers of tax payments owed by companies and to taxpayers using the financial crisis to postpone payments. JAC

NEW CHECHEN DEPUTY PREMIER

Chechen President Aslan Maskhadov on 2 September appointed Yusup Soslambekov as deputy prime minister and presidential representative for foreign policy issues, "Nezavisimaya gazeta" reported. Soslambekov was chairman of the Chechen parliament that was dissolved by President Djokhar Dudaev in 1993. Replacing Musa Shanibov as president of the Confederation of Peoples of the Caucasus, Soslambekov pursued a far more conciliatory policy toward Moscow than did Shanibov. In March 1998, Soslambekov proposed that Moscow recognize the independence of both Chechnya and Abkhazia, after which they could sign a new Union Treaty with Russia and Belarus (see "RFE/RL Caucasus Report," Vol. 1, No. 5, 31 March 1998). Also on 2 September, Deputy Premiers Musa Shakhbazov and Shirvani Basaev and Construction Minister Aslanbek Ismailov resigned from the Chechen government, Interfax reported. LF

DAGESTANI AUTHORITIES, ISLAMISTS REACH COMPROMISE

Talks took place on 2 September between members of the Dagestani government and inhabitants of two of the three Dagestani villages that last month declared an independent Islamic territory, RFE/RL's North Caucasus correspondent reported. The villagers, who are systematically denounced in the Russian press as Wahhabis, agreed to withdraw their declaration of independence in exchange for immunity from prosecution. The authorities rejected the villagers' offer to surrender their arms on condition that all other informal armed groups in Dagestan do likewise. Acting Russian Interior Minister Sergei Stepashin is scheduled to meet with the Islamists on 3 September. LF




KYRGYZ PRESIDENT CALLS FOR CHANGES TO CONSTITUTION...

Askar Akayev appeared on national television on 1 September to announce a referendum on changes to the constitution, Interfax and "Nezavisimaya gazeta" reported. The text of that decree was published in the 2 September "Slovo Kyrgyzstana." Under those amendments, the number of deputies in the Legislative Assembly would be increased from 35 to 67 and the number of representatives in the People's Assembly reduced from 70 to 38. Fifteen of the seats in the legislature would be given to representatives of parties that receive more than 5 percent of the vote in elections. Private land ownership would be introduced, as would the requirements that parliamentary candidates be resident both in the country and their constituency, immunity for deputies limited, and greater freedom for the media guaranteed. BP

...DRAWS CRITICISM FROM DEPUTIES

Akayev's call for a referendum on amending the constitution took deputies by surprise, RFE/RL correspondents in Bishkek reported. On 1 September, at the Legislative Assembly's first session following summer vacation, there was no mention of amending the constitution. Many members of the assembly comnsplained the next day that they had not been consulted and were unaware of Akayev's intentions. Deputy Abyt Ibraimov called Akayev's move "a slap in the face" to the parliament. Deputy Daniyar Usenov noted that Akayev himself had said there would be no more referenda until the year 2000. This will be the third time in four years that a referendum has been held to change the constitution. BP

JOINT MILITARY EXERCISE IN TAJIKISTAN

A Russian- Tajik military exercise began in southern Tajikistan on 3 September, ITAR-TASS reported. The exercise, described as "large-scale," involves troops of the Tajik Defense Ministry and Russia's 201st Motorized Rifle Division, which is stationed in Tajikistan. The stated purpose of the maneuvers is to practice "rebuffing enemy attacks." There is no information on the exact site of the exercises or its distance from the Tajik-Afghan border. BP

ARMENIAN CENTRAL BANK UNFAZED AS DRAM LOSES VALUE

Armenian Central Bank Board member Nerses Yeritsian told journalists on 2 September that the bank does not plan any intervention to prop up the dram, which lost 4 percent of its value against the U.S. dollar the same day, RFE/RL's Yerevan bureau reported. Yeritsian attributed the drop from 502 to 520 drams to $1 to small- scale speculation, adding that Armenia has sufficient foreign-currency reserves to protect attacks on the dram. But he admitted that the national currency has been weakened by sales of short-term Armenian government bonds by Russian investors who are short of foreign exchange. Until recently, Russian investors were estimated to account for up to 60 percent of government bond sales in Armenia. LF

OBSTACLES TO ARMENIAN-IRANIAN TRADE

In an interview with National Television, Armenian Foreign Minister Vartan Oskanian called for the liberalization of trade with Iran, Noyan Tapan reported on 2 September. Oskanian said that Tehran has imposed heavy import duties on imported goods in order to protect local producers. Armenia's trade turnover with Iran, which is its most important trading partner, fell by 9.6 percent in 1997 to $131.3 million, according to "Nezavisimaya gazeta" of 3 September. Oskanian also admitted that the financing of the planned gas pipeline from Iran to Armenia has not yet been resolved. In June, Greece indicated that it might contribute to the costs of that project. The foreign ministers of Iran, Armenia, and Greece are scheduled to meet in Tehran next week. LF

KARABAKH CELEBRATES ANNIVERSARY OF INDEPENDENCE DECLARATION

Armenian President Robert Kocharian, Prime Minister Armen Darpinian, and other government ministers attended celebrations in Stepanakert on 2 September to mark the seventh anniversary of the declaration of the Nagorno-Karabakh Republic, RFE/RL's Stepanakert correspondent reported. Addressing a joint session of the Karabakh government and parliament, the president of the unrecognized republic, Arkadii Ghukasian, said Karabakh's existence has been a success, and he vowed to prevent its return to Azerbaijani rule in the future. Ghukasian called for direct talks between Karabakh and Azerbaijan, which he said is the "shortest way" to settle the decade-long dispute. The ceremonies included the formal opening of a further section of the reconstructed road linking Karabakh to Armenia via the strategic Lachin corridor across Azerbaijani territory. Reconstruction of the entire highway is being financed by the All-Armenian Hayastan Fund. LF

ANOTHER AZERBAIJANI JOURNALIST BEATEN BY POLICE

Baku police on 1 September halted the car of Tali Hamid, editor of the independent newspaper "Mustagil," to prevent him entering a stretch of highway along which President Heidar Aliyev was to drive 90 minutes later, Turan reported. The police verbally insulted Hamid and then dragged him from the car and beat him. Hamid subsequently lodged a complaint with the Prosecutor-General's Office, which has opened an investigation into the incident. LF

COORDINATING COUNCIL DISCUSSES ABKHAZIA

The Coordinating Council for the Abkhaz conflict convened on 2 September for the first time since the fighting in Abkhazia's Gali Raion in May. Georgian and Abkhaz government delegations headed by Minister of State Vazha Lortkipanidze and Prime Minister Sergei Bagapsh attended together with the UN Secretary-General's special representative, Liviu Bota, and the U.S., British, French and German ambassadors to Tbilisi. Bagapsh told Caucasus Press that no concrete decisions were adopted at the meeting. Russian envoy for Abkhazia Lev Mironov said at the meeting that the continuing low level terrorism in Gali and the construction of fortifications on either side of the River Inguri (which forms the internal border between Abkhazia and the rest of Georgia) show that both sides are preparing for a new war. He said the UN and Russia should set a deadline for Tbilisi and Sukhumi to reach a mutually acceptable political settlement of the conflict. LF




CHIRAC OFFERS SUPPORT TO UKRAINIAN REFORMS

French President Jacques Chirac arrived in Kyiv on 2 September to offer support to Ukraine's efforts to reform its economy and boost ties with the EU, Reuters reported. "We understand and support with all our force your desire to tie yourself to Europe, which is your family," Chirac said at a dinner given by Ukrainian President Leonid Kuchma. Several agreements on the use of nuclear energy and bilateral cooperation are to be signed during the two-day visit. French business leaders accompanying Chirac are expected to encourage Ukraine to expand trade with France. French investments account for only $50 million of the $2 billion foreign investment in Ukraine since its independence in 1991. JM

UKRAINIAN CENTRAL BANK TO RESUME SELLING DOLLARS

Ukrainian National Bank Chairman Viktor Yushchenko on 2 September said that the bank will soon resume selling dollars on Ukraine's Interbank Currency Exchange to meet demand on the street, Reuters reported. "The central bank declares that it will not limit exchange operations," he said. The National Bank exchange rate of the hryvnya was 2.25 to $1 on 2 September, while in interbank trade it was quoted at 3.1 to $1. The unofficial exchange rate is even higher, at 3.7 hryvni to $1. Yushchenko's pledge is seen as a move to avoid a hryvnya plunge as Ukraine waits for the IMF to decide on granting the country a $2.2 billion loan. Meanwhile, an IMF mission is in Kyiv to assess the financial situation there before making its final decision on 4 September. JM

LUKASHENKA SAYS BELARUS'S ECONOMIC DEVELOPMENT 'OPTIMAL'...

Belarusian President Alyaksandr Lukashenka has approved a report on the country's economic performance this year drawn up by Economy Minister Uladzimir Shymau, Belarusian Television reported on 1 September. Lukashenka said current economic development can be considered "optimal" for Belarus. At the same time, he instructed Shymau to take measures to avoid price hikes and the smuggling of food out of the country. According to official data, Belarus's GDP grew by 12 percent from January to July, industrial output by 12.5 percent, consumer goods output by 21 percent, and foreign trade by 13.9 percent, compared with the same period last year. JM

...SETS PRIORITIES FOR HOUSING CONSTRUCTION

Lukashenka has set priorities for housing construction in Belarus, Interfax reported on 2 September. He said the state should build more houses in villages and towns in which the housing problem is particularly acute. He also demanded that an average of five apartments be built on every collective farm each year. "Housing is the locomotive which is getting the whole economy of the country going," he stressed. Lukashenka blasted the construction industry for poor performance and warned that the government will "deliberately produce unemployment" in the industry to force competition unless the Construction Ministry takes steps to improve the situation in the sector. JM

BELARUS JOINS NON-ALIGNED MOVEMENT

A conference of the Movement of Non-Aligned Countries in Durban, South Africa, on 2 September accepted Belarus as its 114th member, ITAR-TASS reported. Until now, Belarus had observer status in the organization. JM

ESTONIAN LEFTIST PARTY FACES BANKRUPTCY

The Estonian Social Democratic Labor Party (ESDTP) may be declared bankrupt unless it pays the state some 8 million kroons ($533,000), ETA reported. That debt was accumulated as a result of a dispute between the ESDTP and the government over a building occupied by the party that was declared state property, along with all other assets of the former Communist Party. The ESDTP continued to occupy the building and to pocket the income from leased office space. At a preliminary court session on 2 September, it was recommended that the party be declared insolvent. Tiit Toomsalu, the chairman of the ESDTP, says the case is politically motivated and aimed at the liquidation of the country's only left-wing party. JC

ESTONIAN DAIRY EXPORTERS HIT BY RUSSIAN CRISIS

Estonia's largest dairy concern, United Dairies, is to lay off 300 workers for at least two months and to reduce the price of milk beginning this month, ETA reported on 2 September. That move comes in the wake of the financial crisis in Russia, to which United Dairies exports some 80 percent of its products. Meanwhile, the Parnu dairy plant, a subsidiary of United Dairies, is to be temporarily closed. Some 90 percent of its output is exported to Russia. JC

LITHUANIAN GOVERNMENT TO AID EXPORTERS IN FACE OF RUSSIAN CRISIS

Meeting with Prime Minister Gediminas Vagnorius to discuss the impact of the Russian financial crisis on Lithuania's commercial sector, Finance Minister Algirdas Semeta said the government has sufficient financial and monetary reserves to offer assistance to Lithuanian exporters, BNS reported on 2 September, citing the government press service. He added that the government foresees increasing state budgetary and Privatization Fund reserves in the country's banks to allow those institutions to grant loans to exporters affected by the ongoing crisis. In addition, the Agriculture Loan Guarantee Fund and the Food Product Market Regulatory Agency will extend additional credits to dairies and meat processors, both of which are particularly badly hit by the crisis (see "RFE/RL Newsline," 2 September 1998). JC

SOLIDARITY LEADER CRITICIZES PROPOSED TAX REFORM

Solidarity Electoral Action (AWS) leader Marian Krzaklewski told Polish Radio on 2 September that the AWS will not accept Finance Minister Leszek Balcerowicz's plan to introduce new taxes in 1999 (see "RFE/RL Newsline," 1 September 1998). Balcerowicz is a member of the Freedom Union (UW), the AWS's partner in the ruling coalition. Krzaklewski said that the coalition agreement between the AWS and the UW envisages "family-friendly" changes in the tax system and that Balcerowicz's proposals do not provide for such changes. The AWS leader added that any changes must not only make the poor pay less but also increase concessions to families with a large number of children. PAP reported on 2 September that Poland's major trade unions, Solidarity and the leftist National Trade Union Alliance, have both spoken out against Balcerowicz's plan. JM

POLISH NATIONALISTS PROTEST GERMAN TROOPS PRESENCE

Some 50 people picketed the Defense Ministry in Warsaw on 1 September to protest the stationing of German troops in Szczecin, PAP reported. A Polish-Danish- German unit is to be created in that town once Poland joins NATO. The agency reports that the picket was organized by members of the nationalist organization All-Poland Youth and listeners of the Roman Catholic Radio Maryja station. "We once invited Germans to Poland, but only got rid of them in 1945," PAP quoted one organizer as saying, in what seemed to be an allusion to the invitation for Teutonic Knights to settle in Poland in the 13th century. JM

FORMER CZECHOSLOVAK PREMIER TO BE CHARGED OVER CHORNOBYL?

Lubomir Strougal may face charges over having withheld information on the danger posed by the Chornobyl nuclear catastrophe in 1986, AP reported. Strougal, now 74, is suspected of having intentionally provided false or incomplete information on radiation levels measured on former Czechoslovak territory shortly after the explosion in Chornobyl. The Office for Investigation and Documentation of Communist Crimes, which has the power to prosecute, is investigating the case. A spokesman for the office said investigators hope to decide within a month whether to press charges. Strougal has denied the accusations. MS

ZEMAN 'CONCERNED' ABOUT RUSSIAN CRISIS

Prime Minister Milos Zeman on 2 September said the Czech Republic is "following with concern" the situation in Russia, CTK reported. He said the crisis has caused foreign investors to leave Russia and triggered mistrust in many other emerging CENTRAL AND EASTERN EUROPEan markets. Zeman said some of these investors could switch to the Czech Republic but that in order for this to happen, "it is necessary to create the appropriate atmosphere of economic security and certainty." Zeman also said the Czech Republic insists on the repayment of Russia's outstanding $ 3 billion debt and that this could be achieved through the purchase of stakes in Russian companies. "The prices of shares are now dropping and this is the right moment to buy them," he concluded. MS

SLOVAKIA TURNS TO THE HAGUE AGAIN IN DAM DISPUTE WITH HUNGARY

Slovakia is again appealing to the International Court of Justice in The Hague to rule on the ongoing dispute with Hungary over the Danube hydroelectric power plant. Slovak Foreign Minister Zdenka Kramplova notified her Hungarian counterpart, Janos Martonyi, of this decision in a 2 September letter. Hungarian Foreign Ministry spokesman Gabor Horvath told journalists that his country is "ready to accept the involvement of an impartial third party." Gyorgy Szenasi, Hungary's representative at the trial, said it is "surprising" that Bratislava's move comes shortly before the Slovak general elections. Since no agreement was reached on implementing the court's earlier ruling, both parties are entitled to appeal to the court again, he concluded. MSZ




KOSOVA AGREEMENT IN THE OFFING?

U.S. Ambassador to Macedonia Christopher Hill, who is also Washington's chief envoy regarding the Kosova question, said in Prishtina on 2 September that "the two sides in general agreed what we can reach." He said that Yugoslav President Slobodan Milosevic, with whom he met the previous day in Belgrade, and Kosovar shadow-state President Ibrahim Rugova, with whom he met in Prishtina on 2 September, agreed in principle that Kosova should receive "a certain degree of self-administration" for a provisional period of between three and five years. After that period, the parties concerned would "review" the political status of Kosova. PM

SOME NEGATIVE REACTIONS TO AUTONOMY PROPOSAL...

Numerous commentaries in regional and international media on 2 September pointed out that Hill has yet to get the two sides to agree on details and that the "devil has been in the details" in previous attempts to negotiate an end to the conflicts in the former Yugoslavia since 1991. Some commentaries noted that Hill gave no indication as to when his proposal might take effect, or whether the Kosova Liberation Army (UCK) will agree to it. The UCK's long-standing position is that independence is the only possible solution. German Foreign Minister Klaus Kinkel said that he is skeptical about whether the proposal can lead to concrete results. PM

...AND SOME POSITIVE ONES

Spokesmen for Rugova said the accord could lead to "stabilizing the overall situation in Kosova and assure the functioning of all [state] institutions." U.S. diplomats in Prishtina also stressed that the main goal of the agreement would be to "create a framework for democratic institutions and the functioning of the rule of law," AFP reported. Albanian Foreign Minister Pascal Milo said that Hill's project "promises the start of a dialogue which might lead to further positive developments.... [The agreement] might not be the best Albanians are asking for, but it is a basis to start negotiations and they can reach promising results." PM

FIGHTING CONTINUES ACROSS WESTERN KOSOVA

Serbian and Kosovar sources reported clashes on 3 September in the Prizren area and near the Prishtina-Peja highway and the Gjakova-Klina road. The Kosova Information Center, which is close to Rugova, noted heavy Serbian attacks in the vicinity of Malisheva, Klina, Gjakova and Rahovec. No independent confirmation of either side's accounts of casualties or kidnapping victims is available. In other news, the Austrian Interior Ministry said in a statement the previous day that some 2,800 Kosovars have asked for political asylum in Austria since the beginning of August. The report added that only about 10 percent of the applicants have been able to prove they were victims of repression by the Serbian authorities. Those applicants are thus the only ones to receive asylum. PM

RUEHE WARNS MOSCOW ON KOSOVA

German Defense Minister Volker Ruehe on 2 September said that Russia must play what he called a more constructive role in resolving the Kosova problem. Ruehe suggested that Moscow is not applying sufficient pressure on Belgrade to seek a negotiated solution and that Russia is preventing the UN Security Council from taking effective action to end the crisis in Kosova, RFE/RL's South Slavic Service reported. Ruehe and Kinkel both told the Bundestag that Milosevic must understand that NATO is ready and able to take military action in Kosova if the Atlantic alliance decides to do so, the "Sueddeutsche Zeitung" added. In Brussels, NATO ambassadors agreed to offer transportation and communications assistance to international relief organizations to provide aid to Kosovar refugees. In Bonn, the German government announced that it has made $4.5 million available for refugee relief work, primarily in Montenegro. PM

GARROD APPEALS TO CROATS

Sir Martin Garrod, who is the international community's chief representative in Mostar, appealed on 2 September to the Croatian Democratic Community (HDZ) to support the return of Croats to nearby areas under Muslim control. He called on HDZ leaders to distance themselves from recent remarks by Ivan Prskalo, who is the Croatian co-mayor of Mostar. Prskalo said that Croats should not return to their former homes in Grabovica and Dreznica until Muslim troops leave those areas. Meanwhile in Zagreb, a spokesman for the OSCE said that the Croatian government's commission for refugee return has not done enough to expedite the return of Serbs, especially in the Knin, Obrovac, and Vukovar regions. PM

ALBANIAN GUNMEN FORCE POLICE TO WITHDRAW...

Police on 2 September withdrew from the southern village of Lazarat after eight officers were injured while trying to recapture the village from armed gunmen (see "RFE/RL Newsline" 2 September 1998). Hundreds of special police had made two attempts to capture a group of armed villagers who halted traffic along a main north-south road the previous day, but they gave up those attempts after coming under heavy gunfire. Gjirokastra's police chief Edmond Stepa said all units have withdrawn to Gjirokastra, adding that "police forces will stay here until the situation calms down." He gave no further explanation for the withdrawal. In Tirana, Interior Minister Perikli Teta blamed the disturbances on "elements of anarchy and terror, who will be punished by all means," Reuters reported. He called on "the people of Lazarat to distance themselves from the bandits.... The Albanian police [will] not back down in face of crime," Teta said. FS

...WHILE GUNMEN'S MOTIVE REMAINS UNCLEAR

Observers noted that it is not clear whether the main motive for the gang's actions is political or criminal. OSCE representative Tim Isles said in Tirana that he has "no indication that it was political," adding that "I believe it was a gang doing hold-ups on the road, something which has happened before, and then things escalated." "Rilindja Demokratike," however, published a Democratic Party statement on 2 September accusing the Socialist-led government of conducting "communist persecution" against "the marvelous [sic] inhabitants of Lazarat." It added that "the clique of [Prime Minister Fatos] Nano with its anti-Lazarat behavior shows its true face of crime, political hatred, and unscrupulous hostility toward its political opponents." FS

BOMB DAMAGES SOCIALIST PARTY OFFICES

An explosion during the night of 2 to 3 September badly damaged the headquarters of the Socialist Party in the northern town of Lezha, dpa reported. Four days earlier, a bomb went off near Socialist offices in Shkodra (see "RFE/RL Newsline," 1 September 1998). Meanwhile in Tirana, Pandeli Majko, who heads the Socialist faction in parliament, said that "the developments in Kosova make it necessary [for all parties] in Albania to cooperate and [conduct a] dialogue." He accused Democratic Party leader Sali Berisha of trying deliberately to "increase tensions" between the governing coalition and the opposition. He charged that some of Berisha's recent statements calling for a confrontation with the government have "nothing to do with [the normal conduct of] a democratic opposition and are in contradiction to our national interests," ATSH reported (see "RFE/RL Newsline," 1 September 1998). FS

IMF CALLS FOR 'TOUGH MEASURES' IN ROMANIA

The IMF chief negotiator for Romania, Poul Thompsen, met with Finance Minister Daniel Daianu on 2 September to discuss envisaged cuts in the budget, RFE/RL's Bucharest bureau reported. Thompsen said after the meeting that "very tough measures" are necessary in order to halt the "unprecedented" budget deficit and that Romania must also raise taxes. Daianu said that under current circumstances, a deficit totaling 3.6 percent of GDP cannot be achieved. Unless very strict additional measures are immediately introduced, Romania risks jeopardizing even its "small achievements" to date, such as low inflation, he commented. MS

ROMANIAN PARLIAMENTARY COMMISSION REJECTS ETHNIC HUNGARIAN DEMANDS...

The Chamber of Deputies' Education Commission on 2 September rejected the amendment to the education law, proposed by Victor Ciorbea's cabinet, that would have set up a Hungarian- language state university. Last December, the Senate's Education Commission rejected that amendment but endorsed setting up separate departments that would provide instruction in Romanian and Hungarian. The chamber's commission decided to allow only "sections and groups within multicultural universities," where teaching in ethnic minority languages is permitted. It also decided that instruction in just one of those languages can be offered only by private universities. Deputy Aureliu Emil Sandulescu of the ruling coalition's National Peasant Party Christian Democratic (PNTCD), who proposed the resolution, said the move comes to "emphasize that Romania is a unitary state, not a federal one." He added that a Hungarian-language state university would signify "a first step toward federalism." MS

...WHILE ETHNIC HUNGARIAN PARTY WARNS OF CONSEQUENCES

Csaba Takacs, executive chairman of the Hungarian Democratic Federation of Romania (UDMR), responded by saying that the UDMR will now have to "reconsider its participation in the ruling coalition" at the 5 September meeting of its Council of Representatives. The UDMR's coalition partners had promised that the Senate's decision would be amended by the Chamber of Deputies in accordance with the coalition agreement. Also on 2 September, George Pruteanu, who led the opposition to the amendment in the Senate and who has since been expelled from the PNTCD, was replaced as chairman of the Senate's Education Commission by PNTCD Senator Florin Bogdan. Meanwhile, the government commission set up to discuss ways of establishing a Hungarian state university convened for the first time on 2 September. MS

BULGARIAN PRESIDENT WARNS PARLIAMENT AGAINST COMPLACENCY

Petar Stoyanov on 2 September urged the parliament to press ahead with reforms and warned against complacency because of the financial stability achieved over the past 18 months, Reuters reported. In a speech to the legislature at the opening of its fall session, Stoyanov said he is "concerned" and does not want to "see our accomplishments wasted. They were achieved with a lot of suffering by the Bulgarian society." Stoyanov added that the state administration is still "full of bureaucrats who have a strong interest in slowing privatization and impeding the liberalization of the economy, since they had managed to turn their positions into a source of personal wealth." In his address to the legislature, Prime Minister Ivan Kostov pledged that the "toughest part" of the structural reform will be completed by mid-1999. MS




THE SORCERER'S APPRENTICE'S APPRENTICE


by Liz Fuller

In mid-August, the majority Union of Citizens of Georgia (SMK) parliamentary faction elected 28-year-old lawyer Mikhail Saakashvili as its chairman. That move is not simply the latest in Saakashvili's meteoric career; it could also prove crucial in determining the role of the SMK in Georgian politics over the next decade.

Saakashvili, who spent several years studying in the U.S. after graduating from Kyiv State University in 1992, returned to Georgia in 1995 at the invitation of parliamentary speaker Zurab Zhvania. Since then, he has played a leading role in reforming Georgia's legal system and relentlessly criticized corruption within the upper echelons of power. (He is simultaneously chairman of the parliamentary anti-corruption committee and recently proposed the lustration of government ministers.)

Saakashvili is one of very few leading Georgian politicians who embarked on their political careers only after the collapse of the Soviet system. As "Kavkasioni" correspondent Ia Antadze points out, this puts him at a certain disadvantage vis-a-vis older politicians who are skilled in the art of behind-the-scenes intrigue. In addition, Antadze argues, Saakashvili is a "revolutionary" to whom compromise does not come naturally. At present, however, both those relative "weaknesses" are compensated for by Saakashvili's widespread popularity (he was named Georgia's "Man of the Year" in 1997) and the fact that he has the unqualified support of both Zhvania and Georgian President Eduard Shevardnadze.

Zhvania and Saakashvili are the most prominent representatives of the progressive wing of the SMK, which Shevardnadze created in late1993 as a personal power base. The SMK is a marriage of convenience between disparate elements--the Greens, whom Zhvania originally headed; former Communist Party regional apparatchiks and bureaucrats-turned-businessmen, and youthful and ambitious scions of the former Communist intelligentsia-- all of whom chose to hitch their wagons to Shevardnadze's. Not surprisingly, this heterogeneity spawned major policy differences within the SMK's ranks following its victory in the November 1995 parliamentary elections. Those disagreements were exacerbated by personal animosities, for example between Zhvania and Minister of State Niko Lekishvili.

It is, however, the young, reformist wing of the SMK that has dominated and directed parliamentary debate. In the process, it has frequently demonstrated its independence, for example by rejecting presidential nominees for various official posts. Its members have also criticized Shevardnadze's failure to act more decisively in replacing representatives of the corrupt "old guard" who still occupy senior posts. Moreover, Zhvania has consistently been more outspokenly critical of Moscow than has Shevardnadze. (Whether his role is that of stalking-horse for the president or sorcerer's apprentice is unclear. Alternatively, Zhvania could simply be capitalizing on most opposition parties' shared antipathy and profound mistrust of Russia in order to secure a power base extending beyond his own party.)

Speaking on behalf of his fellow reformers within the SMK in July, Zhvania warned that failure to reform the local administrative system and the concomitant erosion of the leadership's authority had brought Georgia to the brink of catastrophe. He threatened to resign and assume the role of "constructive opposition" within the parliament unless radical measures were adopted to kickstart the stalled reform process. That warning effectively precipitated the resignation three weeks of both Lekishvili and the government. But some observers argued that Zhvania's statements were hypocritical and that neither he personally nor the SMK as a whole could disclaim a share of responsibility for the situation in the country.

Assuming that the new cabinet succeeds in implementing measures to cure the present malaise, Zhvania and Saakashvili will be vindicated and their positions strengthened. But their respective futures will hinge on two factors: first, whether the SMK retains its majority in the November1999 parliamentary elections and second, how the political situation evolves in the post- Shevardnadze era. Under the Georgian Constitution, the parliamentary speaker assumes the presidency in the event of the president's sudden death. But a pre-term presidential poll would inevitably be a hard-fought and ugly battle, and its outcome at this juncture is impossible to predict.

By the same token, there is no guarantee that the SMK would survive the departure of its founder from the political scene. On the contrary, it might split into rival factions--especially if Zhvania failed in his bid for the presidency. In such a case, Saakashvili would be better placed than Zhvania to head the reformist wing of the SMK in its next incarnation. Finally, Zhvania and Saakashvili may at some point cease to be allies. Saakashvili could conceivably regard Zhvania's less than spotless business reputation as reflecting badly on the SMK as a whole. Zhvania, for his part, may consider that Saakashvili's uncompromising approach makes him ill-suited to the political horse-trading that will be necessary if the SMK fails to secure a clear majority in the next parliament.


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