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Newsline - September 23, 1998

RFE/RL NewsLine - Russia



In his 22 September decree, President Boris Yeltsin abolished three ministries, three state committees, and two federal services and created five new ministries, five new state committees, and two federal services. That results in a net gain of two new ministries and two new state committees. The new ministry for Anti- Trust Policies and Support of Entrepreneurship will handle the work of several old committees and federal services, including the now defunct State Anti-Monopoly Committee. Yeltsin divided the old Ministry for Regional and Ethnic Policy into two separate ministries: the Ministry for Regional Affairs and Ministry for Ethnic Policy. He also restored the Ministry for CIS Affairs (abolished at the last CIS summit, in April) and created a Ministry of Trade, eliminating the old Ministry of Industry and Trade. The new state committees will deal with land, youth affairs, fishing, construction, and standardization and metrology. And in a move likely to undermine the independence of the Central Bank and Academy of Sciences, Yeltsin made their chairmen cabinet-level officials. JAC


"Kommersant-Daily" on 22 September reported that representatives of Russia's military-industrial complex have gained influence in the Kremlin at the expense of the "oil and gas lobby" and the "oligarchs." The newspaper cited Primakov's recent appearance at a meeting of the Russian Union of Industrialists and Entrepreneurs, where Primakov was presented with a proposal for the government to provide "targeted loans for high-tech exports." It concluded that the interests of the agriculture sector will also be well represented by Deputy Prime Minister Gennadii Kulik. A member of the Agrarian faction, Kulik "intends to lobby for maintaining agricultural output prices at the same level as manufacturing." JAC


"Kommersant-Daily" on 22 September pointed out the sudden show of public warmth between Communist Party leader Gennadii Zyuganov and Moscow Mayor Yurii Luzhkov and concluded that the pair have formed an alliance of convenience to promote their mutual interests in the State Duma. However, the partnership may last only until presidential elections in 2000, when both men are likely to run for president. Zyuganov told reporters on 19 September that Luzhkov had "adopted a stance in favor of strengthening order in the country" during the crisis. According to the newspaper, Luzhkov on 21 September "stated unambiguously that he really is headed in the same direction as the Communists: 'It is not a question of a chance situation occurring but of a consolidation for the sake of implementing the important principles that we serve.'" JAC


Despite one of the worst harvests in the last three decades, acting Minister of Food and Agriculture Viktor Semenov told Interfax on 22 September that Russia will not import large quantities of grain. He said grain imports will not exceed 3 million tons. Semenov, however, does not rule out barter. The same day, Interfax reported that Russia has offered Hungary between five and eight MiG-29s in exchange for wheat. JAC


Audit Chamber Deputy Chairman Yurii Boldyrev told Ekho Moskvy on 22 September that his agency has discovered that the Central Bank violated regulations governing the financial institution, such as not financing its expenses out of its profits. In addition, Boldyrev claims that the bank spent large sums of money intended for public purposes on "various centers and funds," which, in turn, paid their employees wages of $3000 to $15,000 a month and negotiated "preposterous contracts" for consulting services. Meanwhile, according to "Trud," Veniamin Sokolov, chief auditor of the Audit Chamber, said his recent interview with BBC was mistranslated and that he did not in fact claim that the Central Bank had made inappropriate use of the IMF credit (see "RFE/RL Newsline," 22 September 1998). JAC


The Audit Chamber released its report on the Russian government's use of World Bank loans on 22 September. The chamber claimed, according to Interfax, that the Russian government used $1.4 billion extended to the government by the World Bank for economic restructuring projects to finance federal spending and servicing the foreign debt. The report concluded that "as a result, the target economic indices were not reached--the budget deficit has not decreased and GDP has not increased--which were the main goals of the loans." However, the "Moscow Times" of 23 September cited an economist familiar with the bank's work as saying that the Audit Chamber misunderstood the conditions of the bank's structural loans. The Finance Ministry had discretion to use the Bank monies as it wished and the so-called "target economic indices" are conditions of IMF credits not World Bank loans, according to the economist. JAC


On 23 September, "Kommersant-Daily" reported that Central Bank chairman Viktor Gerashchenko has appointed Oleg Mozhaiskov, an associate from his first tenure at the Central Bank during the Soviet era, as deputy chairman. Mozhaiskov was deputy board chairman of the International Moscow Bank, which Gerashchenko previously headed. JAC


Contradicting an earlier statement by his spokesman, First Deputy Prime Minister Yurii Maslyukov said that a state monopoly on tobacco and alcohol will be introduced and the money used for pensioners and low-income families, ITAR-TASS reported on 22 September (see "RFE/RL Newsline," 21 September 1998). Tax inspectors in St. Petersburg told ITAR-TASS that tougher control over alcohol production and trade added 82 million rubles ($5 million) to excise duties in the first half of 1998. Russian Television reported that Prime Minister Primakov signed a resolution for the formation of a working commission for the implementation of a state monopoly on alcohol as well as tobacco. In his book "A History of Vodka" (London: Verso, 1992), Rus RFE/RL NewsLine - TRANSCAUCASIA AND CENTRAL ASIA



Gunmen opened fire on a minibus carrying members of the UN observer force in the Abkhaz capital, Sukhumi, late on 21 September. Four UN servicemen were injured, three of whom were evacuated to Turkey for hospital treatment. Abkhaz President Vladislav Ardzinba condemned the shooting, which he blamed on Georgia, as intended to destabilize the region. He also imposed a night-time curfew throughout Abkhazia, according to ITAR-TASS. The Russian Foreign Ministry issued a statement condemning the attack, which it said "once again proves the need for resolute action on the part of the Georgian and Abkhaz authorities to normalize the situation." While both UN personnel and Russian peacekeepers have been attacked in the vicinity of the border between Abkhazia and the rest of Georgia, this is the first attack on UN personnel in Sukhumi, which, located some 50 km from the border, is outside the normal sphere of operation of Georgian guerrilla organizations. LF


Sergei Bagapsh was in Tbilisi on 22 September to attend a session of the Coordinating Commission created last November under UN auspices to deal with Abkhaz economic issues, Caucasus Press reported. Bagapsh told journalists before leaving Sukhumi that the talks will focus on resuming rail transport between Georgia and Abkhazia, natural gas supplies, and repairs to the Inguri hydroelectric power station, according to ITAR-TASS. Bagapsh also held separate talks with Minister of State Vazha Lortkipanidze and with Georgian President Eduard Shevardnadze, who expressed his willingness to travel to Sukhumi for direct talks with Ardzinba. Ardzinba had proposed such a meeting in a letter to Shevardnadze. In the same letter, he also expressed concern about reports that Tbilisi is preparing new terrorist acts in Abkhazia's Gali Raion on 30 September. LF


Speaking on Adjar Television, Supreme Council chairman Aslan Abashidze said he has held talks with representatives of Djavakhk, the organization that is lobbying for autonomy for several predominantly Armenian-populated districts in southwestern Georgia, "Nezavisimaya gazeta" reported on 23 September. Abashidze said the Armenians have proposed that the districts be subsumed into neighboring Adjaria, which has autonomous status within Georgia. Abashidze said that he does not consider that proposal "separatist." Caucasus Press on 7 September had quoted Abashidze as denying having invited Djavakhk's leaders to Adjaria or being aligned with them. LF


Following a meeting on 22 September between Azerbaijani Prosecutor-General Eldar Huseinov and members of the opposition Movement for Democratic Elections and Electoral Reform, the Azerbaijani authorities released 28 of the 63 people detained during the 12 September clashes between police and demonstrators in Baku. The criminal charges against those released remain in place, however. Former Premier Panah Huseinov, one of those released, confirmed opposition claims that some of the detainees had been tortured, but he denied that he personally had been beaten, according to Turan. LF


Akezhan Kazhegeldin's aide, Mikhail Vasilienko, who was detained in Astana by Kazakh security officials on 18 September, has been released after being tried and sentenced on charges of hooliganism (see "RFE/RL Newsline," 21 September 1998), RFE/RL's Almaty bureau reported on 23 September. Vasilienko had planned to submit to the Kazakh leadership four volumes of proposals drafted by the Businessmen's Association on amending the country's electoral legislation and constitution. LF


Parliamentary speaker Abdygany Erkebayev told journalists in Bishkek on 22 September that lawmakers plan to debate the proposed referendum on changes in the parliament's structure and powers at the fall session, which begins on 29 September, RFE/RL's Bishkek bureau reported. Erkebayev said he learned of the planned referendum from the media and that neither President Askar Akayev, who announced the referendum on 1 September, nor any member of the presidential staff has discussed with him the implications of the proposed changes. Those changes would increase the number of deputies in the Legislative Assembly from 35 to 67, of whom 15 are to be elected on party lists. The number of seats in the People's Assembly would be cut from 70 to 38. In addition, the conditions under which deputies can be granted immunity from prosecution will be limited. LF


The UN mission in Tajikistan on 22 September issued a statement deploring the murder earlier that day of prominent oppositionist Otakhon Latifi and calling upon both the Tajik government and the opposition to abide by their commitment to the peace process, Interfax reported. Both the government and opposition have condemned the killing as "a stab in the back" to the peace process and as intended to create the impression of instability in the country. The Aga Khan, who is currently visiting Dushanbe, expressed his condolences to United Tajik Opposition leader Said Abdullo Nuri. The two men discussed programs aimed at improving the economic situation in the country and the ongoing repatriation of Tajik refugees from Afghanistan, according to ITAR-TASS. LF


The repatriation from Afghanistan to Tajikistan of the last contingent of Tajik opposition fighters, which began on 21 September, was suspended almost immediately, Russian agencies reported. Some 150-200 men, together with 50 or so refugees, are believed to comprise that contingent. Interfax reported that a 20 kg bomb was found on the barge that was to transport the returnees across the Pyandj River, which marks the border between the two countries. LF


Echoing alarmist statements by President Islam Karimov, Khikmatulla Tursunov on 22 September characterized Afghanistan as a center o RFE/RL NewsLine - CENTRAL AND EASTERN EUROPE



Valeriy Pustovoytenko on 22 September began a new crackdown on debtor companies by locking up executives from more than 50 firms in a government building and demanding that they sign obligations to pay their debts, Ukrainian Television reported. Pustovoytenko applied a similar measure to some 2,000 tax debtors in early August (see "RFE/RL Newsline," 6 August 1998). This time, the target of his campaign are managers who have been slow in returning foreign debts guaranteed by the government. Pustovoytenko said the government needs the $734 million it paid to foreign creditors on behalf of debtor companies. Both Prosecutor-General Mykhaylo Potebenko and Pustovoytenko have threatened to take executives of debtor companies to court and initiate bankruptcy proceedings. JM


Ukrainian National Bank Chairman Viktor Yushchenko on 22 September said that most foreign investors have agreed to swap their Ukrainian domestic treasury bills for longer-term bonds under a government debt restructuring plan, AP reported. The plan is intended to postpone some of the government's debt payments in view of insufficient budget revenues. Details of the plans were not made public, but Ukrainian bankers assert that foreign investors were offered the chance to redeem 20 percent of the bonds immediately and to change the rest into Eurobonds with a 20 percent annual interest rate. The new bonds are redeemable in September and December 2000. It is estimated that foreign investors hold 1.8 billion hryvni ($580 million) in Ukrainian bonds that are due to mature in 1999. JM


Some 12,000 schoolchildren in Kyiv, Chernihiv, Kirovohrad, and Zakarpatska Oblasts have not been to school since the beginning of the school year on 1 September owing to a teachers' strike over unpaid wages, AP reported on 22 September. Ukrainian teachers are owed some 410 million hryvni ($132 million) in back wages. Ukrainian Television reported that teachers are paid full and regular wages only in the city of Kyiv. JM


At a cabinet meeting on 22 September, Belarusian President Alyaksandr Lukashenka harshly criticized the government for not efficiently dealing with "visible economic tensions in the republic," Interfax reported. In particular, he criticized Foreign Affairs Minister Ivan Antanovich and Foreign Trade Minister Mikhail Marynich for a lack of coordination between their ministries. Lukashenka said Belarus is now experiencing its second crisis this year. The first crisis, he said, was in March, after a fall in the value of the Belarusian ruble was "initiated in Moscow." From January-August, prices in Belarus rose by 30 percent, instead of the planned 17 percent, while the Belarusian ruble fell by 60 percent, he noted. He called upon his ministers to end the "endless and empty discussions and procrastination. Those who do not want to work should resign without waiting for the president's moves," he added. JM


Several non-governmental organizations have urged Latvians to vote against amendments to the citizenship law passed earlier this summer by the parliament, BNS reported on 22 September. At a news conference in Riga the previous day, representatives of the Baltic Unity Association, the Latvian Education Association, the Artists' Union, the Theater Association, and several Latvian organizations abroad voiced concern that the ruling parties showed a "lack of interest" in Latvia's fate by approving the amendments "in a hurry" and yielding to pressure from Russia and European organizations. They argued that the amendments should be adopted by the new parliament and should be adapted to reflect Latvian interests rather than European requirements. The amendments will be put to a popular vote at the beginning of next month, at the same time as the parliamentary elections. JC


The government on 22 September adopted 39 measures aimed at shielding domestic industry from the impact of the ongoing financial crisis in Russia, dpa reported. Those measures include restrictions on imports, subsidies for exports, increased patrols along Lithuanian borders to combat smuggling, and low-interest loans to firms in a bid to boost short-term turnover. The German news agency reports that Lithuanian exports to Russia and the CIS, which accounted for 46.4 percent of total exports last year, have virtually ceased since the ruble's devaluation in August. JC


The Sejm has voted by 237 to 157 with two abstentions to pass a law allowing individuals to look at their communist-era secret service files, PAP reported on 22 September. The bill, which still requires the upper house's and president's approval, is seen as a means of screening secret service collaborators in order to bar them from top state posts. It provides for setting up an Institute of National Remembrance in January 1999 to maintain secret service files from 1944-1989. The institute will make those files available by the end of 1999 to victims of the totalitarian regime and reveal the names of communist agents and informers. According to Janusz Palubicki, minister in charge of Poland's secret service, as many as 4 million people in Poland may be interested in checking their files. JM


By a vote of 222 to 76 with 106 abstentions, the lower house also approved a law on reforming the social security system, PAP reported. Under the law the Social Security Agency (ZUS) is to keep account of contributions by all insured persons. Contributions may be divided between the so-called first and second insurance pillar. People over 50 will not be covered by the new system. Those over 31 and under 50 will be free to choose whether to send their contributions to the ZUS or a pension fund of their choice. Those u


German Foreign Minister Klaus Kinkel told the UN General Assembly on 22 September that the international community is ready to use force in an effort to end Serbian military offensives in Kosova, an RFE/RL correspondent reported. Kinkel ascribed most of the blame for the crisis on Yugoslav President Slobodan Milosevic. Austrian Foreign Minister Wolfgang Schuessel, also speaking for the EU, said the violence in Kosova has created "consequences for the civilian population that are out of any justifiable proportion." Russian designate-Foreign Minister Igor Ivanov appealed for peace in Kosova but warned that Western military intervention would cause a "big war" with "unforeseen consequences." But the Russian ambassador to the UN, Sergei Lavrov, said Moscow will accept a UN resolution that does not authorize an immediate use of force. UN Security Council President Hans Dahlgren said a resolution demanding a cease-fire could be voted on any day. PB


Serbian forces launched new attacks against ethnic Albanian villages in various parts of the province on 22 September, AFP and Reuters reported. Serbian offensives were reported in central and northwestern parts of Kosova. Serbian police reported "strong resistance" northwest of Prishtina in small villages near Cicevica. There are no reliable reports of casualties, though thousands of more people are said to have left their villages amid the fighting. Large quantities of weapons were reportedly seized, and several buildings were on fire. PB


The presidency of the unofficial Kosova parliament made an appeal for the Kosova Liberation Army (UCK) to release a group of ethnic Albanian politicians it has detained, dpa reported on 22 September. The deputy speaker of the parliament, Gjergj Dedaj, is among those being held in the village of Skenderaj since 20 September. In a statement, the presidency said such an act hurts the "concerted action of all the political and state institutions in their struggle for the freedom and independence of Kosova." The UCK, which has few official political allies, has criticized efforts by ethnic Albanian political parties to negotiate with Belgrade on the province's status. PB


Gramoz Pashko, a leader of the Democratic Alliance Party, pledged his continued support for the embattled government of Prime Minister Fatos Nano, ATA reported on 21 September. Pashko, whose party is a member of the ruling government, said a resolute investigation of the murder of Democratic Party deputy Azem Hajdari would return stability to the country. Pashko denounced the violent acts committed in the past week and said Democratic Party leader Sali Berisha bears responsibility for them. Berisha, meanwhile, called on his countrymen to continue their anti- government protests. A rally on 21 September was called off because of poor attendance. PB


Robert Gelbard, the U.S. special envoy to the Balkans, noted in Sarajevo on 22 September that the West will be closely watching ultranationalist Nikola Poplasen, the expected winner in the election for the Bosnian Serb presidency, Reuters reported. Although Poplasen, an ally of indicted war criminal Radovan Karadzic, has not yet been officially declared the winner, incumbent President Biljana Plavsic has conceded that she lost the election (see "RFE/RL Newsline," 22 September 1998). Despite assurances from Poplasen that he will adhere to the Dayton agreement, Gelbard said "concrete results, not words" are important. Carlos Westendorp, the international community's high representative in Bosnia-Herzegovina, said Bosnian Serb entities that do not follow Dayton will be cut off from Western financial help. Official election results are expected later this week. PB


Representatives of a working group on the return of refugees have agreed with officials from the Vitez and Travnik municipalities on the return of Bosnian Croats to three villages in the area, Bosnian Television reported on 22 September. Jason Taylor, the head of the working group, said the agreement will allow refugees to return to Velika Bukovica, Grahovcic, and Brajkovic. He said that the people of Gacice have not agreed on the return and that they continue to block access to the village. PB


Vlado Popovski, the Macedonian intelligence chief, said on 22 September that members of the UCK are in Macedonia, AFP reported. Popovski said the UCK has an "infrastructure in Macedonia" but that he does not think it will be active because "the situation in this country is much better than in Kosova or Albania." He added that ethnic Albanian parties take part in the civic and political institutions. Popovski said the greatest threat to Macedonia would be posed by the smuggling of weapons into the country from Albania or a large influx of ethnic Albanian refugees from Kosova. PB


President Emil Constantinescu on 22 September met separately with leaders of the Democratic Party and the Hungarian Democratic Federation of Romania (UDMR). Mediafax reported that Constantinescu said the present ruling coalition must reach agreements facilitating its continued existence till 2004. Alexandru Sassu, who led the Democrats' team, said that his party cannot give a "blank check" to the coalition and that its support depends on whether a solution can be found to such urgent problems as privatization and restructuring "within six months." Constantinescu told the UDMR that he supports finding a compromise on the Hungarian-language state university that would be backed by a large majority in the parliament. But the same day, the Chamber of Deputies' Education Commission voted against resuming the discussion of the article in the amended education law that forbids state universities in national minority languages. MS


The Democratic Party's Commission on Ethics on 22 September rejected what it called an appeal by former Deputy Chairman Adrian Severin against the party's National Coordination Council 19 September decision to strip him of his post. Severin responded that he never appealed to the commission, noting that it had merely discussed a letter he sent party chairman Petre Roman after the vote in the National Coordination Council. He also pointed out that the commission did not invite him to the debate, Mediafax reported. MS


Adrian Paunescu, the executive deputy chairman of the Socialist Labor Party (PSM), told journalists in Bucharest on 21 September that he is resigning from the PSM. The former Ceausescu court poet said he opposes a compromise reached by the PSM and Socialist Party leaderships according to which the two formations are to have equal representation at the congress that will approve their merger. The compromise also stipulates that at county and national leadership level, the PSM and the Socialist Party will be represented proportionally in line with their respective present strength. The Socialist Party split from the PSM in 1994, largely owing to its opposition to Paunescu's growing prominence within the formation. The PSM is headed by former Communist Premier Ilie Verdet. MS


Ion Ciubuc and the deputy head of the Transdniester separatist government, Viktor Sinev, met in Chisinau on 22 September to discuss a number of accords that will be signed by President Petru Lucinschi and separatist leader Igor Smirnov at their next summit, which is to take place either on 30 September or 1 October, RFE/RL's Chisinau bureau reported. The two leaders agreed that Chisinau will take over the $15 million debt owed by Tiraspol to the Russian Gazprom conglomerate in partial settlement of the debt owed to the separatist region by the Moldovan authorities for energy deliveries. According to Tiraspol, that debt totals $22 million. Ciubuc said later that by the end of this year, Chisinau will pay $10 million in cash to Tiraspol toward paying off its 1998 debt in full. MS


by Jan Maksymiuk

On 31 July, in a televised conference with oblast and raion administration leaders at regional television centers throughout the country, Belarusian President Alyaksandr Lukashenka called upon the nation to launch a "battle for the harvest." He described "grain and agriculture" as the foundations of Belarusian statehood and independence and announced that Belarus would switch to an "emergency operation mode" during this year's harvest. "This means in plain folks' idiom that all living creatures, everything that moves or is able to move, should be sent to gather crops," he explained.

Lukashenka compared today's situation in Belarus to that of the Brest fortress on the German-Soviet front line in 1941, when "the [German-Soviet] front moved further east, while the fortress was still resisting and not surrendering." He elaborated this military imagery by saying that "the front of economic cataclysm is now sweeping over former USSR countries. Belarus has so far stood firm, and it should continue to stand firm. We have nobody to rely on but ourselves."

Military vocabulary applied to harvesting rye or barley is not unusual in Belarus. Decades of Soviet indoctrination have left deep marks on the national psyche, including people's ability to use and understand language. The memory of the Soviet military effort in World War II (called the Great Patriotic War in the former USSR) was kept alive by the communist authorities throughout the entire post-war period. In particular, the Belorussian SSR, which was made a Soviet guerrilla stronghold during the war, cherished Soviet military traditions and vocabulary. Thus, Lukashenka's appeal to mobilize the nation for a heroic battle doubtless had an effect on both the conscious and the subliminal levels, regardless of whether the battle involved tanks and aircraft or tractors and harvest combines.

In keeping with the traditions of the command economy, Lukashenka appointed top government officials to oversee the harvest campaign in the Belarusian regions. National Bank Chairman Pyotr Prakapovich was given the responsibility of securing a victory in his native Brest Oblast. While Prakapovich was carrying out his harvest mission, the Belarusian ruble exchange rate plummeted from 70,000 to 120,000 to $1 by the end of August and then to 200,000 to $1 in mid-September. Not only Russia's financial turmoil should be blamed for the Belarusian ruble's plunge.

The "emergency operation mode" required emergency measures to prop up the Belarusian agricultural sector. According to independent analysts, more than 50 percent of the collective farms are de facto bankrupt. Even the Ministry of Agriculture has officially admitted that only 62 out of Belarus's nearly 3,000 collective farms are in a "satisfactory" financial situation. Reports in the Belarusian independent press suggest that the National Bank printed some 14 trillion Belarusian rubles ($280 million, according to the official exchange rate) to provide financial support to the shaky sector. Belarus's financial market reacted with galloping inflation.

The harvest campaign provides a graphic illustration of how Lukashenka's government is running the agricultural sector. Whenever the need arises--and it routinely does twice a year, first in the sowing and then in the harvesting season--the National Bank switches on its printing presses and grants collective farms both credits and advances. Those monies are seldom paid back, but the state compensates their loss by purchasing grain, meat, and milk well below the production cost. Both the inflation rate and prices are rising as real incomes fall. Nonetheless, state statisticians are happy to report production growth.

Such tactics have somehow worked and, if one believes official data, are still working in Belarus's industrial sector. But they are no longer working in agriculture. Despite the nationwide mobilization for the harvest, the kolkhozes failed to reach their targets. The total grain output this year was 5 million tons, down from 6 million tons last year. The average grain yield was 2.34 tons per hectare, compared with 2.70 tons per hectare in 1997. Deputy Agricultural Minister Ivan Shakola has said Belarus will double feed grain imports this year to compensate for the loss of crops owing to the heat waves and storms that severely hit the countryside this year. This was an implicit admission that Belarus lost its "battle for the harvest."

Lukashenka put on a brave face at the official celebration of the harvest's end in the town of Nyasvizh on 19 September. "You saved the country," he told the best-performing tractor and harvest combine operators, awarding new Lada cars to 12 of them. And he pledged food aid to crisis-stricken Russia.

He did not, however, breathe a word about what is an open secret in Belarus: a majority of Belarusians place their hope to stay alive not on a state-sponsored "battle for the harvest" but on tiny plots of land near their country homes and dachas. There, they grow their meager crop of vegetables and potatoes to sustain themselves through the winter. As for the Belarusian government, even half a century after the war it still wants people to believe that food provision is a heroic exploit, not a routine economic task.