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Newsline - September 4, 1998




CHERNOMYRDIN RECOMMENDS TOUGH MEASURES...

In an uncharacteristically bold statement, acting Prime Minister Viktor Chernomyrdin called for the Russian state to "switch over to economic dictatorship" starting in January under which enterprises would no longer be able to avoid or delay paying taxes. Among the measures he suggested was the payment of pension arrears totaling 20 billion rubles ($1.2 billion), back wages to public sector employees totaling 7.5 billion rubles, 1.5 billion rubles worth of defense industry wages, and 2 billion rubles for science, health, and education spending through a "controlled" monetary emission. And he included 1 billion rubles the government still owes to the victims of Chornobyl. JAC

...AND FLOATING RUBLE

Chernomyrdin also insisted that the ruble must be allowed to float freely against the dollar. He suggested that once the ruble is stabilized, the nation's money supply could be linked to the Central Bank's gold and hard currency reserves, in what some analysts are calling a de facto currency-board system. JAC

PRESIDENT TO MAKE ANOTHER OFFER TO DUMA

Aleksandr Kotenkov, presidential representative to the Duma, told reporters on 4 September that President Boris Yeltsin will present the Duma with draft legislation allowing the lower house a greater say in the formation of the cabinet. However, according to Reuters, Duma speaker Seleznev dismissed the effort, saying that the proposal differs little from previous ones. He added that the Duma is still likely to reject Chernomyrdin. JAC

PRESS PREDICTS DUMA REVERSAL OVER CHERNOMYRDIN

While State Duma speaker Gennadii Seleznev predicted on 3 September that no more than 150 deputies will vote for Chernomyrdin, some newspapers were considering the possibility of a Chernomyrdin victory. "If the Duma is ready to back down, it must have reasons for doing so. And the Federation Council and Chernomyrdin himself must give it the reasons," "Kommersant-Daily" said on 3 September. "Segodnya" on 3 September reported that "many deputies are unable to rid themselves of the feeling that they overstepped the mark in opposing Chernomyrdin's appointment and could risk losing everything. [Liberal Democratic Party leader Vladimir] Zhirinovsky who is always sensitive to the way the wind is blowing ...was the first to sense that it was time to recover lost ground." The Russian Regions faction has showed signs that it wants a quick resolution to the impasse. According to ITAR-TASS, faction members asked the Federation Council to mediate a compromise between the president and the Duma. JAC

LEBED EXPRESSES QUALIFIED SUPPORT FOR CHERNOMYRDIN...

Interviewed on 3 September by Russian Public Television, Krasnoyarsk Krai governor Aleksandr Lebed predicted that the Federation Council--whose members he characterized as pragmatic and less politicized than Duma deputies--will vote to confirm Chernomyrdin as premier on 4 September but that the Duma will reject his candidacy a second time. Lebed hinted that he might accept the premiership but only if it were offered him "from below, from the people," a comment he repeated in an interview the same day with NTV. Asked if he thinks Federation Council chairman Yegor Stroev is a possible alternative candidate for premier, Lebed said that Stroev is "a wise and sober- minded person" and for that reason would be unlikely to accept the post if offered. LF

...OUTLINES PREFERRED FINANCIAL POLICY

Lebed said that the leadership's top priority should be paying internal debts by means of monetary emission. He added that Russia's foreign creditors understand that "first we restore order inside the country, and then we pay off our foreign debts some time in the future--or we never pay them." Then, Lebed advocated, the ruble should be allowed to find its own level against the dollar, after which the exchange rate should be brought in line with the Central Bank's gold and foreign-currency reserves. LF

RUBLE'S DECLINE PICKS UP SPEED

On the morning of 4 September, the ruble fell 26 percent to 16.99 rubles per $1 from the previous day's level of 13.48 rubles. In his speech to the Federation Council, Chernomyrdin described the ruble as "becoming wooden." He said "people are buying matches, buckwheat, and sugar," implying that these commodities are a more reliable storehouse of value. JAC

NO FOOD SHORTAGE IN MOSCOW YET

According to Moscow customs office head Sergei Soldatov, a food crisis is not imminent in Moscow, RFE/RL reported on 4 September. The Moscow region customs office has more than 50,000 tons of foodstuff in storage, which is thought to be sufficient to keep market shelves stocked for two to three months. Deliveries of imported goods dropped 15 percent in August, compared with July. Former Minister of Agriculture Viktor Khlystun told Interfax on 4 September that no one in Russia is likely to starve, but shortages of certain food items, such as vegetable oil and meat products, may occur. Meanwhile, the "Moscow Times" reported on 3 September that the dry spring and early summer followed by heavy August rains may result in a poor harvest of potatoes this year. According to that newspaper, potatoes account for 10 percent of the nation's total calorific intake. JAC

BANK CUSTOMERS SAY NO THANKS

On 2 September, the Central Bank ordered six leading commercial banks-- Inkombank, Menatep, Most Bank, Mosbiznesbank, Promstroibank and SBS-Agro--to stop servicing the accounts of individual depositors. Their customers had to decide by 26 September whether to leave their money in the private banks or transfer their funds to Sberbank, the country's largest bank, where their money would be guaranteed by the government. But in either case, the customer cannot withdraw any money until 15 November. The decision was not popular. One customer commented to NTV on 3 September: "How can you trust a state bank if you don't trust the state?" According to ITAR-TASS the next day, the Central Bank lifted its restriction for customers who sign a statement giving up their right to transfer their accounts to Sberbank. JAC

REGIONS CONSIDER ECONOMIC SEPARATISM...

"Kommersant-Daily" on 3 September suggests that the ongoing political and economic crisis in Russia may prompt the handful of federation subjects (including Moscow, Tatarstan, and Krasnoyarsk Krai) that are not dependent on subsidies from the federal budget to embark on the path of economic separatism. The newspaper notes that the governors of Sakha and Kemerovo, Mikhail Nikolaev and Aman Tuleev, have already begun forming their own gold and hard-currency reserves in violation of federal law. At the same time, those regions dependent on subsidies from Moscow are experiencing budget deficits, which in some cases are equal to the entire annual budget. The newspaper also notes that such policies risk increasing the rift not only between the regions and the federal center but also between the individual regions. Saratov governor Dmitrii Ayatskov has warned that the present economic crisis could result in the disintegration of Russia as a federation and its rebirth as a confederation. LF

...OR REDEFINING BORDERS

Meanwhile the acting mayor of Kyzyl, the capital of the Republic of Tyva, explained to "Noviye izvestiya" on 3 September that the city has asked to secede from Tyva and join neighboring Krasnoyarsk Krai as the only way to coerce the republic's government into paying the 19 million rubles it owed the city as of 1 August. The Republic of Khakasiya, which also borders on Krasnoyarsk, is similarly debating rejoining that krai, from which it separated in 1992. LF

DEFENSE MINISTER WARNS AGAINST DELAY IN FORMING NEW GOVERNMENT

Speaking in Astrakhan on 3 September, acting Russian Defense Minister Igor Sergeev warned of a possible replay of the violence that followed President Yeltsin's decree on dissolving the Duma in fall 1993 unless a new Russian government is named soon, ITAR-TASS reported. Sergeev was observing joint air defense exercises by Russian, Belarusian, Kazakh, and Kyrgyz forces. Armenian Defense Minister Vazgen Sargsian, who also attended, said that Armenia will participate in similar exercises next year. Sergeev's press secretary, General Anatolii Shatalov, told Interfax on 4 September that rumors of army units being concentrated near Moscow are "untrue" and "a provocation." LF

RUSSIA TO RAISE OIL EXCISE TAX?

In a blow to oil exporters, ITAR-TASS reported on 4 September that the Ministry of Fuel and Energy is drafting proposals for changing the oil excise tax. The agency speculated that the tax will be increased because a press release said the government is seeking to revise the tax in order to increase income to the state budget. Earlier, Russian oil producers asked the government to reduce the oil excise tax because of the sharp fall in world oil prices. The Duma passed a law in July calling for a small decrease, which President Yeltsin later vetoed (see "RFE/RL Newsline," 17 July 1998). JAC

RUSSIA'S MOST DANGEROUS PROFESSION?

In the second attack on a mayor in the oil producing region of Western Siberia in less than four months, Nizhnevartovsk Mayor Yurii Timoshkov was seriously injured when a bomb exploded in his car. Yurii Shirmankin, deputy head of the Nizhnevartovsk-based Tyumen Oil Company, told Reuters that Timoshkov was targeted by "a certain group" that wants to gain influence over the local budget and oil companies in the region. Timoskhov survived a previous assasination attempt in April. In June, Vladimir Petukhom, mayor of Nefteyugansk, also in the Tyumen Oblast, was shot dead while walking to work. Russian newspapers speculated that the killing might have been connected with Petukhov's long history of clashes with the management of YUKOS, whose subsidiary Yuganskneftegaz, is the major employer in Nefteyugansk (see "RFE/RL Newsline," 29 June 1998). JAC

RUSSIAN VISA PROCESS SIMPLIFIED

In October, foreign visitors to Russia will no longer have to list the cities they intend to visit when they apply for a visa. President Yeltsin signed a decree last year allowing foreigners to move freely around the country, but some local officials remained unaware of the change. JAC

RUSSIAN-CHINESE BORDER FULLY DEMARCATED

Russian Foreign Ministry spokesman Vladimir Rakhmanin announced on 3 September that the entire Russian-Chinese border has now been demarcated, ITAR-TASS and Interfax reported. Most of the border demarcation was completed by last November, leaving only stretches in the west unmarked. Rakhmanin said the final demarcation of the 4,200-kilometer border is a "new significant step" in Russo-Chinese relations. Rakhmanin did not mention three islands in the Amur River, which by mutual consent have been left out of the demarcation process. BP

CHECHEN PRESIDENT WILL NOT CEDE PREMIERSHIP

Aslan Maskhadov has said that in accordance with the constitution of the Chechen Republic Ichkeria, he will continue to occupy the position of prime minister, RFE/RL's Grozny correspondent reported on 4 September. Maskhadov was responding to a report to the parliament by former acting Premier Shamil Basaev on the performance of his cabinet during the first half of 1998. Maskhadov also denied that he has appointed former Chechen parliamentary speaker Yusup Soslambekov as deputy prime minister (see "RFE/RL Newsline," 3 September 1998). Maskhadov said that Soslambekov will liaise between the Chechen and Russian leaderships. Maskhadov also categorically rejected rumors that former Russian parliamentary speaker Ruslan Khasbulatov will be offered a post in the next Chechen government. On 3 September, Khasbulatov testified to the Russian State Duma commission for the impeachment of the president on the events that preceded the attack on the Russian parliament in October, 1993. LF

RUSSIA SOFT-PEDALS IN DAGESTAN

Meeting on 3 September with residents of two Dagestani villages that last month declared an independent Islamic territory, acting Russian Interior Minister Sergei Stepashin pledged that the Russian authorities will not resort to violence against the villagers or other followers of traditional Islam in Dagestan, Caucasus Press reported. The previous day, the Russian State Duma unanimously passed a resolution assessing the situation in Dagestan as highly tense and calling on the Russian government to establish a special commission, on which representatives of both chambers of the parliament would be represented, to draft a new policy on the North Caucasus. The most recent draft policy document for the region was rejected as too general by most regional leaders. Interviewed by "Kommersant-Daily" on 3 September, former Dagestan Security Council secretary Magomed Tolboev warned of a popular uprising in Dagestan unless State Council chairman Magomedali Magomedov voluntarily steps down. LF




AKAYEV SETS DATE FOR KYRGYZ REFERENDUM...

Kyrgyz President Askar Akayev on 3 September announced that a referendum on amendments to the country's constitution will be held in mid-October, RFE/RL correspondents in Bishkek reported. Akayev said the amendments will be put to a public debate until 5 October. That statement has annoyed parliamentary deputies, who were not offered the opportunity to review the proposed amendments before the announcement of the referendum. BP

...EXPLAINS REASON FOR VOTE

Also on 3 September, Akayev held a press conference to explain his motives for holding the referendum, RFE/RL correspondents reported. The president said the parliament is not fulfilling its duties and is dragging its feet on passing several essential laws. He mentioned private land ownership as one area where the parliament has failed to make progress. Turning to the subject of the CIS, Akayev said member countries need to support President Boris Yeltsin and Russia and noted that undermining the legitimacy of the Russian president could precipitate the collapse of the CIS and ruin its members' economies. BP

HAS KAZAKH PRESIDENTIAL CAMPAIGN BEGUN?

There is growing speculation in Kazakhstan that President Nursultan Nazarbayev has already begun his presidential campaign, RFE/RL correspondents reported on 3 September. Nazarbayev has made several tours of the country's regions recently, sparking rumors in the local press that he is seeking to get a head start and will bring forward the presidential election, currently scheduled to take place in 2000. Kazakh economists are forecasting that an economic crisis in Kazakhstan will peak toward the end of next year. In order to avoid holding elections when his popularity could be diminishing, Nazarbayev may opt to hold early elections. Opposition parties are reportedly now gravitating to former Prime Minister Akezhan Kazhegeldin as an alternative presidential candidate to Nazarbayev. BP

TURKEY OFFER SUPPORT TO CIS CENTRAL ASIAN STATES

The Turkish Deputy Undersecretary of the Foreign Ministry, Mehmet Ali Irtemcelik, said in Bishkek on 3 September that Ankara will support the CIS Central Asian states against the threat of Afghanistan's Taliban movement, the Anatolia news agency reported. According to ITAR-TASS the same day, Irtemcelik, who is on a tour of the CIS Central Asian states, will convey an offer by Turkish President Suleyman Demirel to hold a presidential summit on Afghanistan. Demirel's letter to the CIS Central Asian presidents notes that Ankara shares their concern and can no longer sit on the sidelines as an observer. Offers to hold a conference on the Afghan situation have been made many times by Kyrgyzstan, Iran, and Japan, but without success. BP

ARMENIAN DRAM BOUNCES BACK

The national currency regained ground on Armenian financial markets on 3 September after losing some 4 percent of its value against the U.S. dollar the previous day, RFE/RL's Yerevan bureau reported. But in an interview with "Yerkir" on 3 September, Tigran Jrbashian of the Sed Marsed consulting company downplayed Armenia's improved macroeconomic performance in 1998. Arguing that the present exchange rate of the dram is "artificial," he predicted that it will fall in value in the coming months and that "signs of a serious crisis" will emerge in October or November. LF

PRESIDENTIAL ELECTION CAMPAIGN KICKS OFF IN AZERBAIJAN

In his initial campaign TV broadcast, Independent Azerbaijan Party chairman Nizami Suleimanov called upon incumbent President Heidar Aliyev to retire from politics, ITAR-TASS and Turan reported on 3 September. Suleimanov said that if he wins the 11 October presidential poll, he will form a coalition government that includes the opposition Musavat, Azerbaijan Democratic, and Azerbaijan Popular Front parties and will raise the salaries of state sector employees up to tenfold. Communist Party candidate Firuddin Gasanov offered a program of "progressive socialism" similar to the programs of the Chinese, French, Italian, and Russian Communist Parties. Gasanov promised quick solutions to social problems, including a return to free education and health care, and a strong army. Six candidates, including Aliev, will contend the poll. LF

AZERBAIJAN, IRAN DISCUSS COOPERATION IN OIL SECTOR

President Aliyev on 2 September met with Ali Akbar Hashimi, director-general of Iran's Oil Industries Engineering and Construction Company, Turan reported the following day. That company has 10 percent stakes in the consortia formed to exploit the Shah-Deniz and the Lenkoran-Deniz off-shore Caspian oil fields. Hashimi indicated that his company is keen to expand its activities in Azerbaijan and enter the petrochemical and gas sectors. Natik Aliev, president of the Azerbaijan state oil company SOCAR, whose dismissal on corruption charges was rumored last week to be imminent, also attended the talks. LF

ABKHAZIA SIGNALS INTEREST IN OIL PIPELINE

The Abkhaz government delegation to the Coordinating Council, meeting in Sukhumi on 2 September, indicated that the breakaway republic's leadership is interested in the proposed construction of an oil export pipeline linking Russia's Black Sea terminal of Novorossiisk with the Georgian port of Supsa (see "RFE/RL Caucasus Report," Vol. 1, No. 1, 3 March 1998), "Nezavisimaya gazeta" reported on 4 September. The Abkhaz say that construction of the pipeline would contribute substantially to restoring the region's economy and reducing unemployment. But Georgian presidential adviser Levan Aleksidze told Interfax on 3 September that talks on economic reconstruction in Abkhazia should be shelved until the ethnic Georgians forced to flee fighting in Abkhazia in 1992-1993 and/or in May 1998 have been allowed to return to their homes. LF




CHIRAC SUPPORTS IMF LOAN TO UKRAINE

French President Jacques Chirac said on 3 September that France fully supports extending a much-awaited IMF loan to Ukraine. On the second day of his official visit to Kyiv Chirac spoke with IMF Managing-Director Michel Camdessus by telephone and said that the IMF's decision on its credit program to Ukraine is a "question of days." Chirac also promised French investments in Ukraine if Kyiv continues to implement reforms. The two sides signed four agreements on the peaceful use of nuclear energy, nuclear safety, energy cooperation, and cooperation between Ukrainian and French law enforcement bodies. JM

CURRENCY DEALERS SAY STABILIZATION OF HRYVNYA PROBLEMATIC

The Ukrainian National Bank will find it difficult to stabilize the national currency, Ukrainian News reported on 3 September. According to Ukrainian currency dealers, the depletion of the bank's hard-currency reserves may force it to cease supporting the hryvnya. "The National Bank currently sells $20-40 million per day. At this rate, its reserves will dry up within one month," Oleksandr Prokopenko from Privatbank said. Dmytro Fedotov from Ukrsibbank said that even the $200-250 million that is expected in the first tranche of the IMF's $2.2 billion loan to Ukraine may not be sufficient to stabilize the hryvnya. In his opinion, only the approval of a $400 million loan by the World Bank this year could help stabilize the country's currency. JM

BELARUSIAN LAWMAKERS WANT DIRECT ELECTIONS TO RUSSIAN-BELARUSIAN PARLIAMENT

Deputies of the Belarusian Chamber of Representatives have appealed to Russian and Belarusian citizens to unite efforts in order to overcome the current crisis, Belapan reported on 3 September. The Belarusian lawmakers propose that both countries' parliaments urgently consider bills on introducing a single Belarusian-Russian citizenship and on direct elections to a joint parliament. The appeal states that the "economic, political, and moral model of building the current Russian society [according to the dictates of] international and regional financial-oligarchic groups...has totally collapsed. At the same time, the independent and patriotic policy conducted in Belarus under the leadership of President Alyaksandr Lukashenka convincingly proves [that policy's] viability and efficiency." JM

LUKASHENKA CALLS RUSSIAN CRISIS 'POLITICAL HYSTERIA'

Belarusian President Lukashenka has described the current crisis in Russia as "nothing more than political hysteria," Interfax reported on 3 September. "The situation in Russia is worrying me a great deal. I'm afraid this crash will affect Belarus," the agency quoted him as saying on a tour of collective farms in Mahilyou Oblast. Lukashenka added that he sees no desire in Russia to deal with the crisis. In his opinion, the current developments in Russia show that "election campaigns for the parliament and in effect for the president have started." JM

BELARUS HIT BY 'CREDIT BLOCKADE'

Belarusian Economy Minister Uladzimir Shymau has admitted that Belarus needs considerable foreign investments to integrate its economy into the world economy, Belapan reported on 3 September. Shymau praised the European Bank for Reconstruction and Development for its "quite pragmatic policy" of continuing financial projects in Belarus. He added that Belarus hopes to "prolong a dialog" with the IMF and the World Bank, which have recalled their permanent representatives from Minsk (see "RFE/RL Newsline," 15 April and 28 August 1998). Deputy Economy Minister Valeryy Drozd said Belarus received $60.8 million in foreign credits in 1998, which is "only 18 percent of the sum planned for this year. We are under a credit blockade by international financial organizations," he commented. JM

ESTONIA, NOT LATVIA, ORIGINAL TARGET OF RUSSIAN ECONOMIC MEASURES?

Anatolii Chekhoev, chairman of the Russian State Duma's CIS affairs committee, has said that the parliament originally intended to introduce economic measures against Estonia, rather than Latvia, BNS reported on 3 September. Chekhoev explained that a project to that effect was drawn up last year. After "an anti-Baltic campaign" was launched in Russia in February and March, the project was "slightly modified" and directed against Latvia, he added. Chekhoev said that a bill providing for sanctions against Latvia has been revised by the government since April and is due to undergo its first reading later this month The aim of the sanctions, he stressed, is to force Latvia to halt alleged discrimination against its Russian-speaking population. JC

ESTONIAN PRESS SPECULATES ON ILVES'S POSSIBLE RESIGNATION

"Postimees" says that Foreign Minister Toomas Hendrik Ilves is likely to resign next week and start preparing for the March 1999 parliamentary elections as leader of the People's Party, ETA reported on 3 September. The daily argues that the party is forcing its chairman to resign from the foreign affairs portfolio so that it can distance itself from Mart Siimann's cabinet. "Sonumileht," on the other hand, says that Ilves's resignation is not so imminent. Maris Lillak, counselor to the foreign minister, said Ilves "may leave the cabinet before the elections and it may happen as early as September." JC

POLISH FARMERS CONCERNED ABOUT INCREASED PORK IMPORTS

Polish farmers are concerned about recent increases in imports of pork from the EU, "Zycie" reported on 4 September. According to official data, Poland imported 7,254 tons of pork from the EU in July, approximately the same amount as in the first six months of 1998. EU-produced pork is some 20 percent cheaper that its Polish counterpart. Most meat processing plants in Poland have stopped buying pigs from Polish farmers and have lowered prices for raw domestic meat. The situation on the Polish meat market is aggravated by Russia's financial collapse, which has put a brake on most exports from Poland to that country. Roman Wierzbicki, leader of the Farmers' Solidarity Trade Union, said his organization will demand that the government introduce higher prices for domestic producers and import quotas on EU meat. JM

CZECH EXTREMIST PARTY OWES BACK TAXES

The Republican Party owes 23.8 million crowns ($767,740) in back taxes, "Mlada Fronta Dnes" reported on 3 September. The daily said tax authorities have opened an investigation into the party's finances. As a result the extremist formation, which has accused the previous government of fraud and embezzlement, will no longer be eligible to receive 21 million crowns ($677,400) in state subsidies, which are allocated to political parties that gain more than 3 percent of the vote. The daily also said that Republican Party leader Miroslav Sladek is suspected of having used most of his party's 1996 state subsidy for personal purposes, AP reported. MS

FORMER CZECH TENNIS STAR ACCUSED OF FINANCIAL FRAUD

Milan Srejber is suspected of abusing inside information and illegally transferring 14 million crowns ($ 450,000) to one of his companies from a privatization fund that he administered in 1995- 1996, AP reported on 3 September. Srejber denies the accusation. If charged and convicted, Srejber could face up to 12 years in jail. In November 1997, Srejber triggered the collapse of former Premier Vaclav Klaus's cabinet when he admitted to having secretly donated 7.5 million crowns to Klaus's ruling Civic Democratic Party after acquiring a large stake in a privatized steel concern. MS

'ACTING' CHIEF OF STAFF APPOINTED IN SLOVAKIA...

Defense Ministry spokesman Frantisek Kasicky, in a 2 September interview with RFE/RL, announced the appointment of Major-General Julius Humaj as acting chief of staff. Kasicky said Marian Miklus, who was appointed chief of staff by parliamentary chairman Ivan Gasparovic against the recommendation of the Defense Ministry, will be permitted to take over from the former chief of staff, General Josef Tuchyna, only after the parliamentary elections scheduled for 25-26 September. Tuchyna, who resigned to run for the parliament on the list of the opposition Party of the Democratic Left, later withdrew his resignation, saying the appointment of Miklus was a breach of the law. MS

...AS ALLEGATIONS EMERGE OF CORRUPTION IN MILITARY

The head of the Association of Slovak Soldiers, Colonel Peter Svec, said Miklus and Defense Ministry secretary Jozef Gajdos (a member of Vladimir Meciar's Movement for a Democratic Slovakia), are guilty of corruption in a deal involving the repayment of Russian debts to Slovakia with the delivery of military equipment. In response to the accusations, Kasicky said that reporters should speak to Gajdos, whom the government has put in charge of deblocking the debt by importing from Russia MiG-29 fighter planes and the S-300 anti-aircraft defense system. On 3 September, government spokesman Marian Kardos confirmed that at a meeting of the cabinet one day earlier, Defense Minister Jan Sitek of the junior coalition partner Slovak National Party demanded Gajdos's resignation. Kardos said the demand was rejected on the grounds that Gajdos's appointment was a political one by Meciar's party. MS




SERBS POUND VILLAGES NEAR PRIZREN

Serbian forces continued to shell ethnic Albanian villages near Prizren, in southwest Kosova, on 3 September (see "RFE/RL Newsline," 1 September 1998), Reuters reported. The firing could be heard in Prizren, and several of the villages were "totally destroyed," Kosovar sources added. Serbian sources said that 20 members of the paramilitary police died in the fighting, while Kosovar sources put the total at seven. The Serbian sources added that the police found a "modern battlefield clinic" for treating wounded guerrillas in one village. Police barred journalists from leaving Prizren for the surrounding countryside to investigate conflicting reports on the fighting. A policeman at a checkpoint told the journalists: "We have some business there and it is not safe to go." An RFE/RL correspondent reported from Prishtina that there was also fighting along the Gjakova- Klina road in an area crowded with refugees. PM

ALBRIGHT, SCHUESSEL GUARDEDLY OPTIMISTIC ON AUTONOMY DEAL

U.S. Secretary of State Madeleine Albright said in Vienna on 3 September that the recent tentative agreement between Yugoslav President Slobodan Milosevic and Kosovar shadow-state President Ibrahim Rugova is a "good procedural step forward" (see "RFE/RL Newsline," 3 September 1998). She added that "obviously there is a long way to go" until the two sides reach a settlement, and "we have also said that if force is necessary, the nations that agree [to that step] must be ready to act." Austrian Foreign Minister Wolfgang Schuessel, who is the current EU chair, spoke cautiously about the tentative agreement: "I don't think that the solution is there.... It is a small hope but it is part of a diplomatic process." PM

NATO TO WORK WITH SERBIAN SECURITY FORCES?

"The Guardian" reports from Brussels on 4 September that NATO has agreed to offer logistical support for international relief efforts in Kosova that will depend on cooperation with Serbian forces (see "RFE/RL Newsline," 3 September 1998). The London-based daily added: "In effect, the proposal makes NATO a partner in the Serbian scheme for four humanitarian aid centers...to be run by non- governmental organizations and the [UN] and to be provided with 'security' by Serb troops." Former U.S. Assistant Secretary of State Morton Abramowitz, who is a spokesman for the non-governmental International Crisis Group, said that "it's crazy to think that Kosovar women and children will put themselves under the protection of Serbian forces who have been shooting their husbands and fathers." The daily added that some "NATO planners...are privately frustrated at the refusal of NATO governments to take a decision to stop Serb aggression." PM

ALBANIA REPORTS 41 INCIDENTS AT KOSOVA BORDER WITHIN SIX MONTHS

Interior Ministry spokesman Artan Bizhga told Reuters in Tirana on 3 September that federal Yugoslav forces have committed 41 border violations from the Kosova side of the border since March. The incidents include the firing of shells into Albania, sniping by soldiers and civilians, violations of Albanian airspace by helicopters, and the entering of Albania by ground forces. Bizhga stressed that Albanian officials have repeatedly called meetings of the joint border commission but that the Yugoslav representatives often failed to attend. The previous day, NATO Secretary-General Javier Solana reassured Prime Minister Fatos Nano by telephone from Brussels that "NATO continues to be politically committed to helping Albania develop normally as a factor of stability in the region." FS

SESELJ AGAINST INTERNATIONAL ROLE IN INVESTIGATING WAR CRIMES

Serbian Deputy Prime Minister Vojislav Seselj said in Belgrade on 3 September that the question of investigating atrocities is not the business of international organizations. He added that "only state organs" have the right to carry out such missions, RFE/RL's South Slavic Service reported. Meanwhile in Washington, a State Department spokesman said in a statement that Assistant Secretary of State John Shattuck, who is Washington's top human rights envoy, and former Senator Bob Dole, who chairs the International Commission on Missing Persons, will arrive in Kosova on 4 September to investigate "credible reports of serious violations of human rights and humanitarian law." PM

NO ELECTION DEBATE FOR IZETBEGOVIC

A spokesman for the Party of Democratic Action (SDA) said in Sarajevo on 3 September that Alija Izetbegovic, who is the Muslim member of the Bosnian joint presidency, will not take part in any debates in the run-up to the 12-13 September general elections. The spokesman added that Izetbegovic will give interviews in the course of the next week to RFE/RL's South Slavic Service and to one other station. The president feels that his views are well enough known that he does not need to engage in additional public discussions, the spokesman concluded. "Oslobodjenje" reported that plans for a televised debate of Muslim candidates on 3 September collapsed because Izetbegovic and a minor candidate refused to take part and because Fikret Abdic, the king-pin of the Bihac pocket region, did not confirm on time that he would participate. Muhamed Filipovic of the Liberal Bosnjak Organization said that Izetbegovic's refusal is an admission of weakness. PM

ZUBAK URGES TOUGHNESS WITH NATIONALISTS

Kresimir Zubak, who is the Croatian member of the joint presidency and who has broken with his nationalist former allies, said in Sarajevo on 3 September that the international community has not done enough to "help create a level playing field" for the non-nationalist candidates, Reuters reported. He charged that his Croatian nationalist opponents tear up his posters, try to beat up or intimidate his supporters, and attempt to break up his rallies. He also blasted Croatian Television for its "quite unbelievable coverage" of his New Croatian Initiative. PM

AGREEMENT ON PLOCE, NEUM IN THE OFFING?

Jacques Klein, who is a deputy of the international community's Carlos Westendorp, said in Dubrovnik on 3 September that Bosnian and Croatian delegations agreed on a framework in which to solve a key problem that has bedeviled their relations since the breakup of the former Yugoslavia. He said that talks aimed at working out the details will take place in Sarajevo the following day. At issue are how to give Bosnia access to the Adriatic through Croatia's port at Ploce and how to provide Croatia with transit rights through Neum, which is a tiny Bosnian fishing village on the Adriatic. Meanwhile in Zagreb, a county court indicted Neven Barac, the former head of the Dubrovacka Banka, in conjunction with his role in Croatia's biggest-ever banking scandal. PM

SOUTHERN ALBANIAN GUNMEN 'DISAPPEAR'

Gunmen who injured eight policemen in the southern village of Lazarat on 2 September had "disappeared" by the following day, police spokesmen said (see "RFE/RL Newsline," 3 September 1998). Local residents told Reuters that the gunmen had withdrawn into the mountains. Police declined to say if they plan a search operation. The village itself appears to be "back to normal," and traffic on Albania's main north-south road has resumed. Edmond Stepa, who is nearby Gjirokastra's police chief, said that police have made no arrests. Elsewhere, police in Lezha arrested two Democratic Party members on 3 September on suspicion of having planted a bomb at the local Socialist Party headquarters the previous night. FS

ETHNIC HUNGARIAN PARTY TO LEAVE ROMANIAN COALITION?

Hungarian Democratic Federation of Romania (UDMR) chairman Bela Marko told journalists on 3 September that the UDMR demands from its ruling coalition partners "a clear-cut answer" on their commitment to cooperation with the UDMR and to minority rights. Responding to the vote by the Chamber of Deputies' Education Commission the previous day, Marko said that not only opposition members but also members of the ruling coalition, including Education Minister Andrei Marga, are responsible for "anti-minority instigations." He said that "from now on," the UDMR will act "in conformity with our own program and the interests of our electors." UDMR deputies boycotted debates in the Chamber of Deputies on 3 September, and Marko said the party's ministers will vote against envisaged budget cuts, RFE/RL's Bucharest bureau reported. MS

MODERATE UDMR LEADER PLEDGES TO RESIGN

Gyorgy Tokay, who as head of the Department for National Minorities has ministerial rank, said on 3 September that he will resign from the cabinet if a Hungarian-language state university is not set up. Tokay is considered to be the most prominent leader of the UDMR's "moderate faction." But the chairman of the Chamber of Deputies' Education Commission, Anghel Stanciu, said in a letter to Tokay the same day that the government commission studying ways to set up such a university must be disbanded in the wake of the vote by the Education Commission. The ruling coalition party leaders are meeting with President Emil Constantinescu on 4 September, and the UDMR's complaints are on the meeting's agenda. MS

MOLDOVAN GOVERNMENT APPROVES DRAFT LAWS ON LOCAL ADMINISTRATION

The cabinet on 2 September approved two draft laws providing for a reform of the country's local administration. The laws stipulate that the number of districts will be reduced to 9 from the present 36 and that local administration staff will be cut by some 20-30 percent, saving some 12 million lei ($2.5 million), Infotag reported on 2 September. The drafts make no reference to the Transdniester, but the agency says it is assumed that if the separatist region has an autonomous status, Tiraspol and Bendery-Tighina will have the status of a municipality. Last year, the parliament refused to approve earlier versions of the drafts and returned them to the government for "improvement." MS




ALBANIAN OPPOSITION ON COLLISION COURSE WITH GOVERNMENT


By Fabian Schmidt

Just one year or so after taking office, Albania's Socialist-dominated government is facing a strong challenge from the opposition Democratic Party. Former President and opposition leader Sali Berisha has made it clear recently that he wants to bring down the government, calling it "communist" and accusing Prime Minister Fatos Nano of politically persecuting the Democrats. This development follows on the heels of the arrest last month of six former high-ranking officials, including three members of Berisha's government.

Prosecutor-General Arben Rakipi has charged those six officials with crimes against humanity during last year's widespread unrest, which began in southern Albania and led to the fall of Berisha's government. He says he has documents signed by the defendants that prove they ordered the use of chemical weapons and air attacks against rebellious civilians in the south. Berisha, however, accused Nano of having fabricated the charges and of being behind the arrests. Nano, for his part, claims he learned about the arrests only after they had taken place.

This latest conflict sheds light on the most problematic aspect of Albania's transformation into a state based on the rule of law, namely the politicization of state institutions, particularly the judiciary. Few Albanians trust the country's justice system, which is considered corrupt and politically biased. A recent survey conducted by the World Bank indicates that many judges, prosecutors, and lawyers are more than willing to accept bribes.

The Socialists and its coalition allies have repeatedly accused Berisha of not having respected the independence of the judiciary when he was in office. Therefore, they made reform of the judiciary one of their priorities after winning the elections in July 1997. That reform also meant the sacking of several appointees of Berisha's administration, including those whose professional credentials were questionable, having completed only crash courses organized by Berisha's government with the aim of quickly training post-communist judges and lawyers. Nonetheless, many employees of the current judiciary are former communist-era officials, and the Democrats accuse the Socialists of returning former communists to key positions.

At the same time, the current government will most likely allow the trial against the six former officials to proceed. Any government attempt to have the charges thrown out would doubtless be interpreted as a sign of weakness by the opposition. And such an attempt would also undermine the independence of the judiciary, which the government has pledged to respect, and provide proof that the cabinet is indeed willing and able to interfere with the work of the courts.

The conflict also shows that the Democrats have not yet fully accepted the role of an opposition party respecting a democratic parliamentary system. Since losing power, they have repeatedly boycotted the legislature, as did the Socialists under the previous, Democratic-led government. Even though the Council of Europe and the OSCE have urged the Democrats to take their parliamentary duties seriously, they have not halted their boycotts. Instead, they have tried in vain to blackmail the government into accepting political compromises over various issues, using their presence at, or absence from, the legislature as a political lever.

In a bid to get the Democrats back to the parliament, OSCE representatives in Tirana have offered to mediate between the government and the opposition and have begun regularly observing parliamentary proceedings. Now the OSCE has also pledged to monitor the trial of the six former officials in order to convince the Democrats that the proceeding will be fair and free from political interference.

But the Democrats are unlikely to accept that offer and return to the parliament once and for all. Rather, their strategy seems to be one of confrontation. Berisha called on his supporters last month "to use all means" to overthrow the government. Since then, he has organized two demonstrations, despite a police ban, and intends to continue to hold demonstrations until the government steps down.

Berisha's strategy of destabilization seems calculated to make the conflict in neighboring Kosova work in his favor. He has repeatedly accused the government of high treason, pointing to its moderate Kosova policy, which does not openly advocate independence for the region. And he is fully aware that because of that policy, most Kosovars and many northern Albanians do not trust Nano's government.

Moreover, Berisha is trying to profit politically from still widespread lawlessness. Earlier this week, his party issued a statement claiming that a police operation against armed robbers from the Democrats' southern stronghold of Lazarat constituted "communist-style persecution" of the villagers. The robbers, for their part, had stopped and looted 18 trucks on the country's main north-south road.


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