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Newsline - September 7, 1998




CENTRAL BANK CHAIRMAN OFFERS TO RESIGN

Sergei Dubinin on 7 September tendered his resignation, citing as one reason for his decision the State Duma's delay in passing a number of "vitally important" draft laws on banking, ITAR-TASS reported. Two days earlier, Central Bank Deputy Chairman Andrei Kozlov resigned. Kozlov was responsible the Central Bank's relations with other banks, as well as for the controversial scheme in which six top banks were forced to transfer all private individuals' bank deposits to Sberbank (see "RFE/RL Newsline," 4 September 1998). "Russkii telegraf" reported on 4 September that acting Prime Minister Viktor Chernomyrdin overruled the objections of Central Bank officials when he agreed to the basic principles for introducing a currency board. Under a currency board system, the role of the Central Bank would be diminished. JAC

YELTSIN, DUMA CONVENE ROUNDTABLE

President Yeltsin met with Russia's legislative and executive branches on the morning of 7 September to seek to convince them to confirm acting Prime Minister Chernomyrdin. On 4 September, Yeltsin had submitted draft amendments to Russia's Law on Government expanding the Duma's power to select the cabinet. NDR leader Aleksandr Shokhin told Russian Television on 6 September that Chernomyrdin still had not marshaled enough votes for a victory, having won the support only of the Our Home is Russia (NDR), the Liberal Democratic Party of Russia, and most of the Russian Regions factions. Shokhin added that Chernomyrdin had at most 125-130 votes, assuming that the "Communists and their allies, the Yabloko group, fail to change their position." The same day, Yabloko leader Grigorii Yavlinskii declared his faction's continued strong opposition to Chernomyrdin. If rejected by the Duma and renamed by Yeltsin, Chernomyrdin will be considered for a third and final time. JAC

GOVERNORS TO SWITCH TO LUZHKOV?

Interfax reports that a group of regional governors will suggest to President Yeltsin that he nominate Moscow Mayor Yurii Luzhkov for prime minister when the roundtable between the executive and legislative branches reconvenes on the afternoon of 7 September. In an interview published in "Kommersant-Daily" on 4 September, Samara Governor Konstantin Titov said that he will back either Luzhkov or Federation Council speaker Yegor Stroev, but not Chernomyrdin. The next day, Luzhkov told reporters that Chernomyrdin did not present the country with an economic program during his speech to the Federation Council. He said that Yabloko head Yavlinskii, on the other hand, had proposals on economic stabilization that merited discussion. JAC

RUSSIA TO SEEK MORE FOREIGN AID...

Acting Prime Minister Chernomyrdin said in a 6 September national television address that Russia needs to double its gold and hard-currency reserves "hopefully through the assistance of the global financial system." Acting Minister of the Economy Yakov Urinson told "Vremya MN" in an interview published the next day that Russia might have to borrow up to $20 billion, kept on deposit in the central bank of another country, in order to carry out the idea of establishing a currency board for Russia. Under a currency board system, new units of money cannot be issued unless they are backed 100 percent by reserves of another, more stable currency. In his speech to the Federation Council on 4 September, Chernomyrdin implied that his government will adopt a currency board system, although he never actually used the words "currency board" (see "RFE/RL Newsline," 4 September 1998). JAC

...BUT PRESS, IMF SKEPTICAL

"Russkii telegraf" reported on 4 September that an exchange rate of 30 rubles to the dollar would require a currency board with $12 billion in reserves and a money supply of 370 billion rubles. But according to "Izvestiya" the next day, the nation's reserves are "currently negligible," and the newspaper called a possible agreement with the West "on urgent currency assistance too good to be true." IMF Managing-Director Michel Camdessus said on 4 September that a currency board for Russia, though a good idea, is not appropriate under current conditions. JAC

RUSSIA TO OPT FOR ARGENTINA'S QUICK FIX?

The Russian press has concluded that Chernomyrdin's government has opted to follow the example of Argentina's 1991 currency reform, based on the advice of its architect, Argentine former Minister of Economy Domingo Cavallo. Cavallo arrived in Moscow last week at the invitation of acting Premier Chernomyrdin and acting Deputy Prime Minister Boris Federov. Cavallo told reporters on 4 September that Argentina's economic experience may prove useful for Russia but that Russia may still opt for a different program. When asked how much time the Russian government would require to implement "its unpopular measures" to fix the economy, Federov told Russian Public Television that "the Argentineans who advised us were saying unequivocally that while President [Carlos] Menem's popularity at the time of the reform was 10 percent, six months later he was able to win the presidential election. So the results can be very rapid." JAC

LOCAL LEADERS SET UP FOOD BANKS....

Stepping into the vacuum left by continued political uncertainty in Moscow, political and business leaders around Russia have devised a variety of measures to ease the economic crisis, according to ITAR-TASS on 6 September. In Saratov, Governor Dmitrii Ayatskov issued an instruction that fruit and vegetable merchants operating at fairs in the city of Saratov and throughout the region be exempt from fees for trading at the fair in the hope that traders do not increase their prices. In St. Petersburg, Deputy Governor Ilya Klebanov said on 5 September that the city will use some of its budget monies to create a reserve of food products that it will buy only from local enterprises. JAC

...AND PRICE CONTROLS

Smolensk Governor Alexander Prokhorov on 6 September ordered the establishment of an ad hoc commission on control over pricing. The city of Novgorod has established a special working group to strictly monitor supplies to kindergartens, schools, and hospitals to ensure they do not pay exorbitant prices. In Kursk, the city administration also created an interdepartmental commission for the control of prices on goods and services. Vendors wishing to raise prices on goods such as bread, sugar, eggs, and milk will first have to seek the agreement of the local department of trade. JAC

REGIONS ENGAGE IN PANIC-BUYING

ITAR-TASS reported on 7 September that regions are experiencing shortages of key goods, as citizens have begun hoarding non-perishable items. For example, in Nakhodka and Ufa, consumers are purchasing sugar, flour, and other foods in large quantities. In Vologda, a local gasoline station claimed that it has only enough gasoline to last two days. Grocery stores in Murmansk have run out of salt, cereals, cooking oil, and other staples. JAC

KREMLIN FEARS CRIME WAVE

Both acting Interior Minister Sergei Stepashin and acting Director of the Federal Security Service Vladimir Putin told the Federation Council on 4 September that they fear Russia will experience a new wave of crime because of the current financial crisis. Putin told the Council that already a large layer of Russian society--which controls up to 40 percent of gross domestic product--is involved "in criminal and pre-criminal economic conduct." According to ITAR-TASS, Stepashin reported his ministry is ill-prepared for the new threat because the money planned for it will hardly be enough to pay salaries, which have been frozen since 1995. He also noted that local governments owe more than 1.3 billion rubles ($63 million) for the maintenance of municipal police forces. JAC

BOMB KILLS 17 IN DAGESTAN

Seventeen persons were killed and up to 70 injured when a car bomb exploded in a residential district of Makhachkala on 4 September, Russian agencies reported. Both Dagestani Interior Minister Adilgirei Magomedtagirov and his Russian counterpart, Sergei Stepashin, attributed the explosion to local criminal groups intent on overthrowing the Dagestani government. Former Russian Deputy Prime Minister Ramazan Abdulatipov has written to Russian President Yeltsin and acting Prime Minister Chernomyrdin proposing that they impose direct presidential rule in Dagestan, Interfax reported on 5 September. Meanwhile, a warrant has been issued for the arrest of former Makhachkala municipal council chairman Kurban Makhmudgadzhiev on suspicion of having masterminded both the 4 September bombing and the assassination attempt last month on Makhachkala Mayor Said Amirov, RFE/RL's North Caucasus correspondent reported on 7 September. LF




GEORGIAN, AZERBAIJANI CURRENCIES LOSE VALUE

The Georgian lari on 6 September fell from 1.38 to 1.70 to $1 in street trading, AP reported the following day. In his weekly radio address on 7 September, Georgian President Eduard Shevardnadze warned against panic, affirming that the lari is stable and there are no objective reasons for it to fall in value. Meanwhile in Baku, officials from the National Bank of Azerbaijan began touring currency exchange stalls on 4 September in the hope of preventing panic buying of dollars, according to ANS-Press. As of 5 September, the manat was trading at between 3,940 and 3,950 to $1, an increase of 100 manats over the previous week, Turan reported. ANS-Press quoted unconfirmed reports that customs officials have imposed restrictions on the import and export of foreign currencies. LF

BAKU DEMONSTRATION POSTPONED

Meeting on 3 September, the opposition Movement for Democratic Elections and Electoral Reform decided to postpone the protest demonstration scheduled for 5 September, RFE/RL's Baku bureau reported. Baku Mayor Rafael Allakhverdiev had rejected the opposition's demand to be allowed to hold the demonstration on the city's main Freedom Square, proposing instead that it take place at a motor-racing stadium in the suburbs. LF

CIVILIAN KILLED IN COMBAT MANEUVERS IN GEORGIA

A man was killed and his wife and mother injured on 5 September when Russian peacekeeping forces inadvertently fired an anti-tank missile at their home near Tskhinvali, ITAR-TASS reported. The Russian troops, who are part of a peacekeeping contingent deployed in the self-proclaimed Republic of South Ossetia, were engaged in routine combat training. LF

GEORGIAN BORDER GUARDS PRESSURE RUSSIAN COUNTERPARTS TO LEAVE

Georgian border guards on 6 September entered the Russian border guard post in the Georgian Black Sea port of Poti and demanded that the Russians vacate the premises, Caucasus Press reported the following day. Under an agreement signed by Georgia and Russia earlier this year, Georgian border guards were to assume full responsibility for patrolling Georgia's sea borders on 1 September. The Russian contingent will be transferred from Poti to the Adjar capital, Batumi. LF

KYRGYZ PREMIER ADDRESSES PARLIAMENT

Addressing the upper house of the parliament on 4 September, Kubanychbek JumAliyev said the country's economic situation is stable. He noted that GDP growth during the first eight months of 1998 was 4.5 percent, and he predicted an annual inflation rate of 12 percent this year. JumAliyev admitted, however, that the Asian and Russian financial crises have adversely affected the som. He proposed banning any financial transactions in U.S. dollars and conducting all such transactions only in the national currency. JumAliyev also informed lawmakers that the government will not implement the law, enacted earlier this year, that reduces land tax by 50 percent. He asked the parliament to amend that legislation. LF

TAJIK PRESIDENT ASSESSES MILITARY

In an interview with ITAR-TASS on 5 September, Imomali Rakhmonov said that despite the 1992-1997 civil war, Tajikistan has succeeded in building armed forces adequate to ensure the country's security. He added that joint maneuvers in recent months involving Russian forces and Tajik Interior Ministry troops, presidential guards, and army units have demonstrated that Tajikistan's armed forces "are capable of assuming control of the situation in conditions where either an external threat or local conflicts [arise]." In other news, the body of Mukhiddin Zamonov, a bodyguard for one of the opposition members of the National Reconciliation Committee, was found in a reservoir near Dushanbe on 4 September, one week after he was abducted by unidentified gunmen, AP reported. An Interior Ministry official has been arrested and has confessed to the killing, which is believed not to have been politically motivated. LF




IMF APPROVES $2.2 BILLION LOAN TO UKRAINE

The IMF Board of Directors on 4 September approved a three- year $2.2 billion loan to Ukraine. The first tranche of the loan, worth some $260 million, will be released "within days," Ukrainian News reported on 5 September. The disbursement of the other tranches will depend on Ukraine's compliance with the reform program for 1998- 2001 agreed by the IMF and the Ukrainian government. That program aims at increasing state finances and continuing structural reforms as well as tightening fiscal policies to control government spending. The program foresees GDP growth at 4 percent by 2001, compared with -0.3 percent in 1997. Inflation is expected to drop from 10 percent to 7 percent, and hard currency reserves are slated to increase to the equivalent of seven weeks' imports, compared with 6.3 weeks in 1997. JM

UKRAINE INTRODUCES NEW HRYVNYA EXCHANGE CORRIDOR

Following its announcement last week (see "RFE/RL Newsline," 2 September 1998), the Ukrainian government has de facto devalued its currency by introducing a new hryvnya exchange rate corridor. On 5 September, the new exchange rate corridor of 2.5-3.5 hryvni to $1 dollar replaced the previous band of 1.8-2.25 hryvni to $1. A joint statement by the cabinet and the Ukrainian National Bank said the move is aimed at maintaining export-import operations, ensuring the competitiveness of exports on foreign markets, averting capital outflow from Ukraine, and reducing the number of barter operations. The value of the Ukrainian hryvnya has declined almost 30 percent since January 1998, when the currency band was established. The central bank's reserves have dwindled to some $800 million following the bank's unsuccessful attempts to maintain the hryvnya within the previous exchange range. JM

LUKASHENKA OFFERS TO ADVISE MOSCOW ON FINANCIAL CRISIS...

Belarusian President Alyaksandr Lukashenka on 4 September offered to advise Moscow how to deal with the current economic crisis in Russia, Interfax and Reuters reported. Addressing a rally in Rechytsa, Lukashenka argued that the Russian crisis has political rather than economic roots. He told journalists after the rally that he is ready to discuss the crisis with Russian President Boris Yeltsin "to the extent that Boris Nikolayevich himself needs it. I think that consultations with Belarus wouldn't hurt him." Lukashenka suggest that Russia opt for "all the best things which have been tested in Belarus and already shown to work," Interfax quoted him as saying. JM

...SAYS HE WILL NOT ATTEND CIS CUSTOMS SUMMIT

Speaking in Mahilyou the previous day, the Belarusian president said he will not attend the CIS customs summit scheduled for 10 September in Astana, Kazakhstan, Belapan reported. Lukashenka said he consider it inappropriate to schedule at the same time Russian President Yeltsin's visit to Kazakhstan and the summit of the CIS Customs Union heads of state. "Who needs this mess?" he commented. Lukashenka added that the second reason for his refusal to visit Astana is the lack of support among the CIS Customs Union member states for the agreement on a CIS single economic area and for Kazakhstan President Nursultan Nazarbayev's program entitled "On Ten Simple Steps To Meet Ordinary People." The 4 September "Russkii telegraf" suggests that the true motive behind Lukashenka's decision is his unwillingness to support Yeltsin at the summit. JM

BELARUSIAN RUBLE PLUMMETS ON INTERBANK CURRENCY EXCHANGE

The Belarusian ruble decreased significantly on 4 September in response to Russia's crisis, Belapan and AP reported. The exchange rate for non-cash operations on the Interbank Currency Exchange plunged to some 300,000 Belarusian rubles to $1, down from 80,000 Belarusian rubles to $1 in mid-August. According to commercial bank experts quoted by Belapan, the ruble plunge shows that "Belarus has begun to reap the harvest of its integration with Russia." Among the domestic reasons for the ruble collapse, they cited numerous administrative restrictions on financial operations in Belarus and a recent large credit emission reportedly undertaken by the National Bank. The unofficial exchange rate on 4 September was some 100,000 Belarusian rubles to $1, while the official exchange rate stood at 50,400 Belarusian rubles to $1. JM

IMF SAYS ECONOMIC OUTLOOK FOR ESTONIA REMAINS POSITIVE

In a press release on 4 September, the IMF argued that the outlook for Estonia's economy remains positive, despite the financial crisis in Russia, ETA reported. The fund noted that in the medium term, there may be some adverse impact on GDP growth and balance of payments. But "given Estonia's commitment to market- oriented reforms, its stable macroeconomic environment, and the discipline instilled by the currency board arrangement and strict bank supervision," the impact could remain limited. In a program drawn up last year with the IMF, Estonia is seeking to reduce inflation to below 9 percent and achieve GDP growth of 8 percent this year. According to the IMF, the program's targets for the end of 1997 and the first half of this year have been largely met. JC

CLINTON URGES LATVIA TO SUPPORT CITIZENSHIP AMENDMENTS

In a letter to his Latvian counterpart, Guntis Ulmanis, U.S. President Bill Clinton stressed that granting citizenship to Latvia's Russian-speaking minority is essential for the country's integration into Euro-Atlantic institutions. According to Ulmanis' office on 4 September, Clinton pointed out that Latvia's handling of the issue will be watched closely in the West and will affect its efforts to join such institutions as the EU and NATO. He added that the U.S will not support further attempts by the international community to suggest new recommendations on amending the citizenship law, nor will it support any amendments that are not in compliance with OSCE recommendations. Ulmanis backs the amendments to the citizenship law, but the nationalist-inclined Fatherland and Freedom Party successfully pushed for a referendum on the issue. That vote is scheduled for 3 October. JC

OSCE CONFIRMS CLOSURE OF SKRUNDA

OSCE inspectors have confirmed that the early-warning anti-missile radar station at Skrunda ceased operations on 31 August, in accordance with a 1994 Latvian-Russian agreement, BNS reported on 4 September. The dismantling of the Soviet- era station was begun on 1 September and is scheduled to be completed by 29 February 2000. During the period in which the station is dismantled, Russia will continue to pay Latvia rent for the site. JC

POLAND REJECTS COMPENSATION CLAIMS BY GERMAN EXPELLEES

Polish Foreign Minister Bronislaw Geremek told Polish Radio on 6 September that Poland rejects compensation claims by ethnic Germans who resettled to Germany after World War II. Geremek added that such payments should be made by the German government. Noting that Poland paid compensation to Poles expelled from areas annexed during the war by the Soviet Union, Geremek said "let the German government do likewise." Geremek's statement was in response to a renewed claims by Erika Steinbach, leader of Germany's Alliance of Expellees, at a rally in Berlin earlier the same day. "One would be satisfied with symbolic compensation," Reuters quoted Steinbach as saying. It is estimated that German expellees from Eastern Europe and their descendants make up some 20 percent of the German population. JM

POLAND, GERMANY, DENMARK SET UP JOINT MILITARY CORPS

Janusz Onyszkiewicz, Volker Ruehe, and Hans Haekkerup, defense ministers of Poland, Germany, and Denmark, met in Szczecin on 5 September to sign an agreement on the creation of a joint NATO military corps, PAP and dpa reported. The 60,000-strong corps will consist of three mechanized divisions, one in each country, which will train soldiers for peacekeeping missions and rescue operations during natural disasters. The corps staff will be located in Szczecin. "The corps here in Szczecin does not mean a German or Danish expansion into the East, but a reunification of Europe," dpa quoted Ruehe as saying. JM

CZECH REPUBLIC ALLOWED ILLEGAL ARMS EXPORTS TO NORTH KOREA

The Czech Republic continued to allow exports of arms to North Korea and other communist countries between 1992 and 1997, although such exports were illegal, "Lidove Noviny" reported on 5 September. The newspaper said a Czech company run by a Russian businessman, identified as "A.K.," exported a total of 365 military vehicles and other weapon systems to North Korea, China, and Slovakia. In October 1997, the businessman was accused of illegal export activity and taken into custody. Chief of Staff General Jiri Sedivy told "Lidove Noviny" that the exports may turn out to be " a big problem" for the Czech Republic. The Defense Ministry refused to comment, saying it will issue a statement "within a few days," AP reported. MS

POLL SHOWS STRONG SUPPORT FOR NEW OPPOSITION COALITION

An opinion poll conducted on behalf of Czech state television indicates that the new opposition coalition will receive almost a quarter of the vote in the elections to the Senate scheduled for 13-14 November, CTK reported on 6 September. The new coalition--composed of the Freedom Union, the Christian Democratic Party, the Democratic Union, and the Civic Democratic Alliance-- received 24 percent backing. The poll also indicates that the governing Social Democrats (CSSD) will receive 35 percent support and the main opposition Civic Democratic Party (ODS) 26 percent. The CSSD and the ODS are partners in the so-called "opposition agreement," which allows the CSSD to rule as a minority government. MS

EXODUS OF SLOVAK ROMA TO BRITAIN INCREASES

The exodus of Slovak Roma from eastern Slovakia who apply for asylum in Great Britain is increasing, AP reported on 4 September, citing Slovak newspapers. The agency said 1,256 members of the Roma minority in Slovakia have applied for asylum, most of them from the Michalovce area. MS

HUNGARIAN SOCIALISTS ELECT NEW LEADER

At its congress on 5 September, the opposition Hungarian Socialist Party (MSZP) elected former Foreign Minister Laszlo Kovacs as party chairman, Hungarian media reported. Kovacs, who is also the party's parliamentary group leader, won by a vote of 384 to 144 over former trade union leader Sandor Nagy. Kovacs replaces ex- Premier Gyula Horn, who after the party's defeat in the May general elections announced that he will step down. "The MSZP can succeed only if it becomes a modern social democratic party," Kovacs said. The congress also elected Peter Kiss as executive deputy chairman and Gyorgy Foldes as chairman of the party's National Board. MSZ




U.S. OFFICIALS REPORT 'HORRENDOUS' CONDITIONS IN KOSOVA...

U.S. Assistant Secretary of State John Shattuck said on 6 September that he and former U.S. Senator Bob Dole have seen evidence of "horrendous" rights violations after a tour of central Kosova, Reuters reported. Shattuck said he and Dole--the chairman of the International Commission on Missing Persons--saw "violations of humanitarian law and acts of punitive destruction." Dole is investigating reports that missing Serbs and ethnic Albanians are being held prisoner by either side. Shattuck said reports of Serbian security forces separating men and boys at gunpoint from groups of refugees will be a topic of discussion when he and Dole meet with Yugoslav President Slobodan Milosevic in Belgrade on 7 September. Shattuck also warned that many ethnic Albanians were in danger of dying of starvation and exposure if the wholesale destruction of villages by Serbian forces continues. PB

...DEMAND THAT BELGRADE INCREASE ACCESS TO KOSOVA

Shattuck said that the U.S. wants forensic experts allowed into the Serbian province to investigate alleged atrocities by both Serbs and ethnic Albanians, AP reported. Dole said they have heard "chilling" accounts of atrocities and that despite Western promises not to allow crimes against humanity to occur in Kosova, like those that took place in Bosnia, "such crimes are already happening." Shattuck said Serbian claims of crimes against humanity will be in doubt if experts are not allowed to verify the claims. That Yugoslav officials continue to deny visas to such experts is "absurd," Shattuck said. PB

KINKEL REJECTS U.S. ENVOY'S CRITICISM

German Foreign Minister Klaus Kinkel on 6 September strongly refuted allegations by U.S. Ambassador to Macedonia Christopher Hill that Europe is indifferent to solving the Kosova crisis, Reuters reported. Kinkel, speaking on the sidelines of an EU foreign ministers' meeting in Salzburg, called Hill's comments "cynical and condescending" and said that the EU is "not the world's policeman." At the same time, Kinkel said the EU should appoint its own special envoy to Kosova, such as the U.S. has done with Hill. Hill said in a speech in the U.S. on 4 September that the EU is content on forging a united Europe that conveniently does not include the Balkans. PB

EU BANS YUGOSLAV FLIGHTS

The EU on 6 September announced it will prohibit Yugoslav national airline (JAT) flights to the EU, AP reported. The move was announced at the EU foreign ministers' meeting in Salzburg after Athens dropped its reservations against the ban. The sanction on JAT will be in force until Belgrade halts its crackdown on ethnic Albanians in Kosova, officials said. PB

SERBS SAID TO HAVE CAPTURED 450 SUSPECTED REBELS

Serbian police reportedly detained some 450 suspected members of the Kosova Liberation Army (UCK), dpa reported on 6 September. The Serbian Media Center said some 250 men were captured near Klina and another 200 in the central Kosova region of Orahovac, both areas the scene of heavy fighting between Serbian and UCK forces recently. Kosovar Albanian sources claim many of the men are civilians and are not members of the UCK. PB

UCK SPOKESMAN WARNS ABOUT DEALING WITH MILOSEVIC

Adem Demaci, the political representative of the UCK, said on 5 September that he has no faith in an interim peace accord between Yugoslav President Milosevic and Kosova "shadow state" President Ibrahim Rugova, AP reported. Demaci told the Albanian-language daily "Bujku" that he does not believe Milosevic, who, he added, is "constantly lying." Demaci said although the accord is at a preliminary stage, he fears Rugova "will make a mistake." He said Serbia uses one hand to "simulate dialogue" and the other "to exert force against our population." Milosevic and Rugova have agreed in principle to a U.S. formula granting Kosova some degree of autonomy (see "RFE/RL Newsline," 3 September 1998.). PB

CROATIAN CANDIDATES BANNED FROM BOSNIAN ELECTIONS

The OSCE's Electoral Appeals Commission has disqualified 15 candidates of a Croatian nationalist party from taking part in the 12-13 September Bosnian elections, AP reported on 5 September. The members of the Croatian Democratic Union of Bosnia-Herzegovina (HDZ BiH) were banned because they allegedly received unfair and blatant support from Croatian television, which is controlled by Croatia's ruling HDZ party. The HDZ BiH has protested the action and said in a statement that the OSCE is trying to rig the election. It said it will consider boycotting the election if the OSCE's decision is not reversed. Croatian President Franjo Tudjman said the next day that the ban of ethnic Croats from the Bosnian elections is detrimental to the democratic process and the peace process in Bosnia-Herzegovina, AP reported. PB

CROATIAN ELECTRIC COMPANY DEMANDS COMPENSATION FROM SLOVENIA

The Croatian Electric Power Company has formally asked the Krsko nuclear power plant in Slovenia to reimburse it for losses incurred when the plant cut off power to Croatia, HINA reported on 5 September. The company is asking for $8.6 million for outages that occurred between 30 July and 1 September. The director of the Slovenian utility company, Ivo Banic, said the request has no legal basis. Slovenia has sporadically turned off power to Croatia from the plant-- which Zagreb says is jointly owned by both countries-- because it has failed to pay its bills. PB

ROMANIAN GOVERNMENT APPROVES REVISED BUDGET...

The cabinet headed by Radu Vasile on 5 September approved Finance Minister Daniel Daianu's proposal to cut this year's budget by 8 trillion lei ($890 million) and to increase budget revenues by raising duties on imports and taxes on tobacco and alcohol. The cabinet also decided to impose a wage freeze and to apply an 11 percent value-added tax on newsprint, and it approved a decree whereby debts of loss-making state companies will be covered by selling shares in those companies on the bourse or through direct negotiations between prospective buyers taking over the debt and the companies' management. On 4 September, at a meeting called by President Emil Constantinescu, the leaders of the ruling coalition parties agreed to put aside differences in order to expedite reform. MS

...BUT WILL CABINET SURVIVE?

The chairman of the Hungarian Democratic Federation of Romania (UDMR), Bela Marko, said after the meeting with President Constantinescu that he failed to extract from the coalition partners a promise to pass through the parliament the amendment to the education law allowing the setting up of a Hungarian-language state university. Marko added that the UDMR will support in the parliament only those economic reform measures with which it agrees. At a meeting of the UDMR's Council of Representatives on 5 September, the UDMR decided that agreement on the proposed amendment must be reached by 30 September or it will leave the ruling coalition. Such a scenario could mean the cabinet will not longer have sufficient votes to pass laws that require a special majority. MS

CHIRAC PROMISES HELP AMID MOLDOVAN ECONOMIC CRISIS

French President Jacques Chirac, on a one-day visit to Moldova on 4 September, said France will help Moldova overcome the difficulties arising from the financial crisis in Russia, ITAR-TASS reported. President Petru Lucinschi said he had appealed to Chirac to intervene in order to secure assistance from the IMF and the World Bank. Lucinschi said that as a result of the Russian financial crisis, Moldova's monthly losses amount to 5 percent of GDP. The Moldovan leu has dropped by more than 25 percent against the U.S. dollar, and the National Bank has intervened to stop it falling further. National Bank governor Leonid Talmaci told AP on 4 September that the bank will not allow the devaluation to exceed 5 lei to the dollar. The parliament will convene in an emergency session on 11 September to discuss the crisis. MS

BULGARIA ALLOWS CIRCUMCISION OF MUSLIM BOYS

For the first time in 50 years, the Bulgarian authorities have allowed circumcision ceremonies for Muslim boys, dpa reported on 4 September, citing BTA. More than 30 Muslim boys were circumcised on 6 September in the Teke mosque in Dobrich, northeastern Bulgaria. The circumcisions were carried out by Fawzy Ibraiamov, who was jailed under the former communist regime for illegally carrying out circumcisions. MS




RUSSIA FROM A DIFFERENT ANGLE


by Julie Corwin

While Moscow--or the press, at least-- is riveted by the Kremlin's current political gyrations, one suspects after reading Fen Montaigne's "Reeling in Russia" (St. Martin's Press; New York, 1998) that the Russian countryside is paying only scant attention. Montaigne, a former Moscow-based correspondent for the "Philadelphia Inquirer," journeyed over 6,000 miles from Murmansk to Kamchatka with fly-fishing rod in one hand and notepad in the other. The book that results is part travelogue, part reflection on Russia--a kind of Marquis de Custine goes fishing minus the uppity French attitude. By skipping Moscow altogether, Montaigne provides a useful antidote to most Western media coverage of Russia, which rarely ventures out of one time zone, let alone covers all 11.

The portrait of the people that emerges is one of a populace anaethesized by alcohol, deeply mistrustful of political institutions, and reduced by economic upheavals to eking out little more than a subsistence-level income. The few individuals with energy and initiative face constant setbacks. For example, Victor Chumak, one of Russia's first private farmers living in Rtysheva, in Saratov Oblast watched the foundation of his small agricultural empire erode overnight. Interest rates on bank loans hit 200 percent, and the bank repossessed his 12 tractors, two harvesters, and three trucks. In the village of Umba on the Kola Peninsula, Victor Shmelyov, a former highly paid truck driver now unable to find work, has been reduced to taking whatever odd jobs he can find, such as ushering foreigners around in his broken-down van.

And then there are the individuals who don't participate in the economy any differently than their forebears might have 100 years ago: Vasily Volkov and his daughter Yelena pick berries on Kola Peninsula during the high season and spend the rest of their time fishing on the lakes and rivers in the forests of Karelia. The berries they sell for $14 a bucket; the fish they trade for bread and cured pork. Their only source of steady income is Volkov's monthly pension, worth about $60 a month.

The Volkov's relationship is similar to that of most of people Montaigne encounters. They don't just live on the land, they live off it. They see the forests, rivers, lakes as vast basins of inexhaustible resources that exist to be exploited. Poaching is the rule, enforcement of fishing regulations the exception. On the Kola River, biologists estimate that poachers kill up to 50 percent of the salmon run. Some poachers catch enough fish merely to feed their families, while others string large nets across the mouths of rivers and make hundreds of thousands of dollars a season. Inspectors are routinely bribed to look the other way; those who won't are transferred. At one point, an American naturalist tries to persuade his listeners in Kamchatka that efforts must be made to preserve Russia's unique steelhead trout before it disappears from the local Utkholok, Tigil, Kvachina, and Snatolveyem Rivers, as it did in the American Pacific Northwest.

Against the background of these individual struggles and on almost every page of the book is vodka. Consumed in vast quantities late into the evening as well as early in the morning, it appears to function as the social/political/economic lubricant, numbing the population to unnecessary indignities while at the same time making everything run less efficiently. At Kem on the Karelian coast, Montaigne encounters Yevgeny Nikonov, the owner of a small lumber mill, who argues that he must keep a cap on wages in order to preserve a minimum level of sobriety at his business. Nikonov says, "'The average worker wants to earn only enough for a bottle of vodka a day, two packs of cigarettes, and a little food. If you pay him more, he'll drink a second bottle and not come to work the next day." Nikonov claims that the workers he fired for drunkenness on the job have vandalized his house and boat and robbed the store run by his sister several times.

When reporting his experiences directly, Montaigne is an engaging writer. He can make a character and a place come to life quickly. His zest for adventure, quiet sense of humor, and a profound love for Russia make him an entertaining guide. His attempts, however, to wrap up the Russian national character every five pages or so become tiresome, and at times the long fishing interludes distributed over longer intervals feel like a device--or, even perhaps, a ploy by a publishing company eager to find a way to market a book about rural Russia to group of consumers who routinely pay $60 to $100 for new graphite rods. Perhaps for his next book, Montaigne should leave the rods at home and stay in one place--possibly a struggling former collective farm. He writes with feeling and obvious enthusiasm about agriculture, and a longer stay with the people he writes about might enable him to make them seem less stereotypical: less Vasily the Peasant and Andrei the New Russian and more like vivid, unique individuals.


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