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Newsline - October 7, 1998


RFE/RL NewsLine - Russia




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THOUSANDS TURN OUT FOR NATIONWIDE PROTEST

According to Interfax, initial reports from the Interior Ministry suggest that more than 60,000 people turned out for public protests in the Far East on 7 October--a much smaller turnout than organizers had expected. In Vladivostok only 3,000, rather than the expected 5,000 citizens, participated, AP reported. ITAR-TASS estimated that turnout in Novosibirsk was some 35,000 people. Nakhodka witnessed one of its largest protest meetings the previous day when about 3,000 gathered in the city's main square. An RFE/RL correspondent in Novosibirsk noted that the centerpiece of protesters demands was the payment of back wages but that they also called for the resignation of President Boris Yeltsin. An RFE/RL correspondent in Irkutsk reported that cold weather thinned the ranks of protesters in that Siberian city, with mostly pensioners and Communist Party activists showing up. JAC

FINAL PROTEST COUNT TO BE DELAYED

A final count on the number of participants in the Russia's day of national protest may not be available for sometime. In some cities, union leaders' estimates of the number people taking part in ongoing protests were twice the amount estimated by local police. The pre-event estimates of the "sponsors" of the protest action also varied widely. Mikhail Shmakov, head of the Russian Federation of Independent Trade Unions, predicted that 25 million would participate in marches, and Communist Party leader Gennadii Zyuganov said he was counting on 40 million. "Nezavisimaya gazeta" forecast a modest turnout based on what many considered the event's "dress rehearsal," the fifth anniversary of storming of the parliament on 3-4 October. Both "Nezavisimaya gazeta" and "Kommersant-Daily" reported that the early October event attracted no more than 5,000 participants. However, "Kommersant-Daily" suggested that organizers usually underestimate the number of participants. "Nezavisimaya gazeta" receives financial backing from Boris Berezovskii's LogoVAZ group, while the sources of financing for "Kommersant-Daily" are unknown. JAC

RUSSIA THREATENS TO USE UN SECURITY COUNCIL VETO

After NATO postponed a decision on Kosova until 8 October, NTV on 6 October suggested that Russia's tough stance against bombings may have been the cause. Foreign Minister Igor Ivanov announced that Russia will veto any effort proposed in the UN Security Council to authorize NATO air strikes against Yugoslavia. Both Foreign Ministry spokesman Vladimir Rakhmanin and Armed Forces Colonel General Vladislav Putilin held news conferences in which they stressed that peaceful ways of settling the Kosova conflict have not been exhausted--especially since President Yeltsin's telephone conversation with Yugoslav President Slobodan. After their discussion, Milosevic agreed to allow an OSCE delegation into Kosova (see "RFE/RL Newsline," 6 October 1998). JAC

KOSOVA OUTCOME TO DETERMINE RUSSIA'S STATUS?

Russian policymakers, analysts, and the press are linking the outcome of Russia's campaign against NATO air strikes in Yugoslavia with both Russia's status as a world power and its talks with the IMF. Our Home is Russia faction leader Aleksandr Shokhin declared that if Russia's tough statements on NATO air strikes against Yugoslavia are ignored, then it will be obvious that Russia is losing its status as a great power. He told reporters on 6 October that he believes Kosova constitutes a "dramatic turning point in defining Russia's role in the world." Georgii Arbatov, honorary director of the Institute for U.S. and Canada Studies, told Interfax that Russia should pressure Milosevic rather than the West. He said "It is difficult to act as a great power when you constantly beg for aid." Meanwhile, "Izvestiya" the same day reported that after "having lost its last hope of obtaining IMF monies", the Russian government issued uncharacteristically bold statements against a possible NATO action. JAC

PRIMAKOV APPEALS TO POCKETBOOK, CUPBOARD

In his televised address to the nation on 6 October, Prime Minister Yevgenii Primakov promised Russian citizens not only that back wages and pensions but fruits, vegetables, and potatoes during the cold winter. He noted that his government has slashed tariffs on transportation of fruits and vegetables and removed other restrictions against movement of food on Russian territory. With regard to remedying the nation's economy, he emphasized restructuring the banking system, creating an effective tax system, and breaking "the vicious circle of nonpayments" between businesses and the budget as well as among businesses themselves. Primakov also promised to continue with privatization but "not so some individuals and groups can get rich." Primakov explained his government's delay in presenting a finished economic program by citing the program's dependence on negotiations currently being conducted at home and abroad. JAC

TAX REFORM IN THE WORKS

In the same address, Primakov promised that the government will submit proposals to improve the tax system in the "nearest future." In the meantime, he reported giving instructions to the state tax service to release equipment from storage worth more than $1 billion that had been seized from enterprises that did not pay their taxes. He justified the action, saying the enterprises employ "human beings" and are "about to yield solid profits to the state soon" once the equipment has been reinstalled. JAC

RUSSIA PREPARED FOR FAILURE WITH IMF?

The Russian press is characterizing Russian government talks with the IMF as "circular" and likely to end in failure. "Vremya MN" on 6 October reported that the IMF is demanding that the government complete its economic program. However, "Russia claims it cannot complete its program until it knows whether or not the West will give it money." "Izvestiya" the same day said that although Zadornov has threatened the West with the possibility of domestic unrest and Russian default on loans owed to Western banks if money is not forthcoming, "Russia's position remains bad." The newspaper explained that "the fund has no money, since the US Congress has not agreed to grant it an extra

KAZAKH PARLIAMENT APPROVES AMENDMENTS

A joint session of the Kazakh parliament on 7 October passed amendments to the country's constitution, RFE/RL correspondents in Astana reported. Under those amendments, the term of deputies in the lower house would be extended from four to five years and in the upper house from five to six years. The president's term in office would be increased from five to seven years, and parliamentary and presidential elections would be held in January 1999, one year ahead of schedule. BP

UN RESUMES FOOD PROGRAM IN TAJIKISTAN

Despite the fact that most of the personnel of the UN mission to Tajikistan remain outside that country's borders, the program to supply food to fighters of the United Tajik Opposition resumed on 6 October, ITAR-TASS reported. The UN mission is providing food and blankets to 10 UTO centers in eastern Tajikistan at the request of the Tajik government. The bulk of the UN mission will not return until an investigation into the murders of four UN employees in late July has been completed and the findings made public. BP

ARCHITECT FOR NEW KAZAKH CAPITAL CHOSEN

Kazakh President Nursultan Nazarbayev on 6 October announced the winner of a competition to design the new Kazakh capital, Astana, Interfax reported. Japanese architect Kise Kurokawa was selected from the 27 competitors. Nazarbayev said the winning design reflects a symbiosis of European and Asian cultures and of nature and man. BP

KYRGYZ GOVERNMENT RELEASES INITIAL ESTIMATE OF ISSYK KUL DAMAGE

Deputy Prime Minister Boris Silayev has said that according to a preliminary estimate, the damage caused by the sodium cyanide spill earlier this year in the southern area of Issyk Kul totals 91 million som (about $4 million), Interfax reported on 7 October. In May, a truck belonging to the Kumtor gold mine overturned into the Barskoon River, which flows into Issyk Kul, spilling 1.7 tons of sodium cyanide into the water. Silayev, who heads the government commission investigating the damage to the area, said the estimate does not include agricultural losses. An RFE/RL journalist who visited the village most affected by the spill, Barskoon, found that while a medical center has been set up there, residents have not received compensation for their losses and humanitarian aid to the village amounted to one notebook, one pen, and five pieces of candy per inhabitant. BP

ARMENIAN PARLIAMENT CONTINUES ATTACK ON GOVERNMENT

Opposition deputies stepped up their attacks on the government's privatization program during a special meeting of the parliament on 6 October, RFE/RL's Armenian Service reported. Vano Siradeghian, chairman of the former ruling Armenian Pan-National Movement, said that President Robert Kocharian is intent on replacing the current parliament with a rubber-stamp legislature. He said that Kocharian may seek to dissolve the assembly before the end of this year and call elections that are likely to be manipulated by "people with money and levers." PG

ARMENIAN PRESIDENT WANTS ENHANCED RUSSIAN ROLE IN CAUCASUS

Kocharian said on 6 October that Yerevan will seek to expand Moscow's role in the Caucasus, including in the transport of oil and gas, ITAR-TASS reported. Kocharian also said that his government highly values Russia's role in resolving conflicts across the region. PG

ARMENIAN COMMUNISTS PLEDGE SOLIDARITY WITH RUSSIAN PROTEST

The Armenian Communist Party issued an appeal on 6 October calling for its supporters to take to the streets to express "solidarity" with the mass protest action scheduled to take place in Russia the next day, RFE/RL's Armenian Service reported. Sergey Badalian, the party's leader, said that he expects "tens of thousands" of supporters to march in central Yerevan, adding that "there is a revolution going on in Russia." Badalian also said that he and his supporters will demand the ouster of the "anti- popular" Yerevan government and Armenia's inclusion in a "new union" of former Soviet republics. PG

SHEVARDNADZE PRAISES OSCE ROLE IN CAUCASUS

Speaking to the OSCE Parliamentary Assembly in Tbilisi on 6 October, President Eduard Shevardnadze praised the role of the OSCE in seeking to settle conflicts in the Caucasus region, Interfax reported. Shevardnadze said that he is particularly pleased that the OSCE has become the first international organization to "bravely and openly" declare that Georgians were subject to ethnic cleansing in Abkhazia. And he said that his government is prepared to help the OSCE find a settlement to the Karabakh dispute between Armenia and Azerbaijan. PG

GUAM GROUP TO COOPERATE TO OVERCOME WORLD CRISIS

Representatives of the four GUAM countries--Ukrainian Premier Valery Pustovoitenko, Moldovan Premier Ion Ciubuk, Georgian state minister Bazha Lordkipanidze, and Azerbaijan presidential economic adviser Vakhid Akhundov--issued a declaration in Washington on 6 October that their governments will work together to overcome the world economic crisis, Interfax reported. They said that they will both coordinate their policies and seek to promote transit across their region. PG




UKRAINE TO 'UNCONDITIONALLY SUPPORT' UN DECISION ON KOSOVA

Andriy Veselovskyy, an official in the Ukrainian Foreign Ministry, told journalists on 6 October that Ukraine "will unconditionally support" a possible decision of the UN Security Council on the use of force against Yugoslavia, Ukrainian Television reported. But he stressed that Ukraine is interested in a peaceful solution of the Kosova crisis. The same day, the Ukrainian Supreme Council adopted a resolution calling for the issue of Kosova autonomy to be settled "in a peaceful, civilized way, while maintaining the territorial integrity of the [Yugoslav] state." ITAR-TASS reported that Rukh deputies did not participate in the vote on the resolution, nor did part of the Popular Democratic Party and the Greens parliamentary caucuses. JM

KUCHMA WANTS TO BOOST ALCOHOL, TOBACCO INCOME

Ukrainian President Leonid Kuchma ordered government officials on 6 October to raise more money from the country's alcohol and tobacco industries by cutting taxes and reducing smuggling, AP reported. Kuchma criticized the government's increase in the excise tax on alcohol, which had to be revoked last week because prices increased so much that distilleries were unable to sell their products. Kuchma also said the heavy taxes on tobacco and alcohol have resulted in a huge black market for those goods, adding that 75 percent of cigarettes and 25 percent of alcoholic beverages sold in Ukraine are either smuggled into the country or illegally produced. JM

LUKASHENKA PLEDGES HELP TO YUGOSLAVIA IN KOSOVA CONFLICT...

Belarusian President said on 6 October that Belarus is even more resolute than Russia in supporting Yugoslavia over its stance on Kosova, Belarusian Television reported. "We will unconditionally offer Yugoslavia any support and help our Slavic [brothers] might need," he said. He also said his offer includes "military help, except sending our boys outside Belarus's borders, because the [Belarusian] Constitution forbids that. The Yugoslavs can count on us, we will meet our obligations under our treaty on friendship and mutual assistance." JM

...SAYS HIS LIFE 'HAS HUNG BY A THREAD'

One year after the assassination of Yauhen Mikalutski, chairman of the State Control Committee in Mahilyou and Lukashenka's friend, the Belarusian president announced that the crime has been solved and the perpetrators arrested. He commented to Belarusian Television on 6 October that the Mikalutski case had also involved him personally: "It is probably too early to speak about it, but the president's life, too, has hung by a thread." He noted that the assassination "was prepared just several meters from here" and pointed to the Drazdy compound, where the residences of evicted Western ambassadors are located. And he added that during the investigation. "several tons of weapons ranging from a Kalashnikov rifle to hundreds of kilograms of TNT" were found. Lukashenka pledged that details of the investigation will soon be revealed to the public. JM

ANOTHER ESTONIAN BANK IN TROUBLE

The Central Bank on 6 October announced that it has granted a request by the small ERA Bank to suspend its license until 15 October, ETA reported. In that appeal, the bank's management said that "considering the current situation, where the confidence in Estonian financial institutions is at a low, we may face temporary liquidity problems in the near future." It also noted that while ERA Bank is actively seeking a way out of its current difficulties, it will be necessary for the Central Bank to intervene. ETA noted that doubts about the solvency of ERA Bank emerged earlier this week when it was reported that the bank had transferred its 36 percent ownership of the now defunct EVEA Bank (see "RFE/RL Newsline," 5 October 1998) to four "shelf companies" registered in Estonia in order to conceal losses totaling some 50 million kroons (some $3.8 million).

RUSSIA QUALIFIES STAND ON LATVIAN REFERENDUM

One day after hailing the results of the referendum in Latvia on amendments to the country's citizenship laws (see "RFE/RL Newsline," the Russian Foreign Ministry has qualified its response to that vote. Ministry spokesman Vladimir Rakhmanin said on 6 October that while Moscow "positively appraises" the referendum on the citizenship law, it believes it is "too early to speak of radical changes in the humanitarian situation" in Latvia, BNS reported, citing Interfax. He added that "radical nationalists" in Latvia continue to seek to tighten the citizenship and education laws contrary to the opinion of the Council of Europe and the OSCE." The Latvian Foreign Ministry responded by saying this latest comment displays a "lack of understanding of the situation in Latvia" and is "clearly inconsistent" with the evaluations of other countries and international organizations. JC

LITHUANIAN PARLIAMENT NOT TO IMPEACH IMPRISONED DEPUTY

The Conservative parliamentary group on 6 October voted by 58 with four abstentions to reject the impeachment of lawmaker Audrius Butkevicius, who is jail awaiting trial on charges of attempted large-scale fraud, BNS reported. Deputies from the Center Union and leftist opposition parties, which had proposed launching impeachment proceedings, were absent during the vote. The Conservatives suggested that Butkevicius should give up his parliamentary mandate, adding that the parliament expressed its will one year ago when it gave permission to prosecute the lawmaker (see "RFE/RL Newsline," 30 September and 2 October 1998). JC

LUSTRATION LAW APPEALED IN CONSTITUTIONAL COURT

The Center, Social Democratic, and Democratic Labor parliamentary groups have appealed to the Constitutional Court over a law that would prohibit former KGB staff from working as civil servants in government and administration structures for 10 years, BNS reported on 6 October. Earlier this year, President Valdas Adamkus, refusing to sign the bill into law, returned the legislation to the parliament for further debate and proposed that it not go into effect until 1 January 1999-- a proposal that the parliament approved. A presidential commission ruled last week that the issue of restricting the employment of former KGB staff must be decided by the courts. JC

POLISH PARTIES DISPLEASED WITH LOCAL ELECTION CAMPAIGN BROADCASTS

The ruling Solidarity Electoral Action (AWS) on 5 October protested President Aleksander Kwasniewski's "covert attempt" to win support for the opposition Democratic Left Alliance (SLD) during his 4 October interview with Polish Television, PAP reported. The AWS demands that Polish Television grant Prime Minister Jerzy Buzek the same amount of prime air time as Kwasniewski received. The next day, Poland's smaller parties--the Polish Peasant Party, the Labor Union, and the National Pensioners' Party--protested public radio's favoritism toward the AWS and the SLD. Labor Union leader Marek Pol commented that radio broadcasts are clearly aimed at confirming the public view that "Poland is like a boxing ring in which only two opponents, the AWS and the SLD, appear." JM

POLAND TO OBTAIN $4.6 MILLION FROM U.S. FOR PENSION REFORM

Poland will receive $4.6 million from the U.S. for a pension reform that would make retirement payments dependent on employee contributions to state or private funds, AP reported on 6 October. The money, supplied by the U.S. Agency for International Development, will be spent on an information campaign, training, and supervision of funds. U.S. Ambassador to Poland Daniel Fried said Poland's pension reform is vital for completing the country's transformation from communism to democracy and a market economy. The new social security system in Poland will be launched on 1 January 1999 (see "RFE/RL Newsline," 23 September 1998). JM

ASYLUM SEEKERS VIEW CZECH REPUBLIC AS TRANSIT TO WEST

Jiri Kolar, the chief of the Czech police, said on 6 October that 95 percent of the refugees caught at the border with Slovakia are heading for the West, CTK reported. Kolar said the refugees request asylum in the Czech Republic but never go to refugee camps. He said that all refugees will now be bused to camps and that if they refuse to stay they will be taken back to Slovakia. Police have captured some 26,000 illegal aliens this year, most of them from Yugoslavia. PB

OPPOSITION CRITICIZES CZECH MINISTER'S HEALTH REFORM PLAN

Opposition politicians are criticizing the health reform plan of Health Minister Ivan David as being too socialist, CTK reported on 7 October. Miroslav Macek, deputy chairman of the Civic Democratic Party, said David's plan was a "return to the Communist system of the 1950s. It considers peoples' health to be public property." The plan, called "Consolidation and Development of Health Care in 1998-2005," would create a system of heavily subsidized state-run facilities, whereas private health care centers would be excluded from the health insurance system, the daily "Lidove noviny" reported. Vaclav Krasa, deputy chairman of the Freedom Union, said the plan would lead to a lack of foreign medicine and long lines at doctor's offices as well as deprive the patient of a choice of physicians. PB

SLOVAKIA'S SDL NO LONGER OPPOSES COALITION WITH ETHNIC HUNGARIANS

Jozef Migas, chairman of the Party of the Democratic Left (SDL), said on 6 October that he no longer opposes forming a coalition that includes the Hungarian Coalition Party (SMK), AP reported. Migas said "we want to form a government for four years, and as soon as we can." Migas had voiced his disapproval of including the SMK in the proposed four-party coalition (see "RFE/RL Newsline," 5 October 1998). Observers say the SDL was reluctant to add the SMK because of fears it would push for regional autonomy or seek to have the Benes decrees invalidated. Under those decrees, some 60,000 ethnic Hungarians were deported from Czechoslovakia after 1945. Bela Bugar, the chairman of the SMK, said his party did not want to bring up the Benes decrees during coalition negotiations. PB

MECIAR NAMES DUBCEK, KRAMPLOVA TO FOREIGN POSTS

Slovak Prime Minister Vladimir Meciar, using some of the rights accorded to him in the absence of a president, has appointed Milan Dubcek and former Foreign Minister Zdenka Kramplova as ambassadors. Dubcek, the youngest son of former Czechoslovak Communist Party leader Alexander Dubcek, was named ambassador to Greece. Kramplova was named ambassador to Canada, a post that has been open for more than a year. Kramplova said she would ignore a request from the Slovak Democratic Coalition not to depart for Canada until a new government is formed in Bratislava. "I was approved for this post by a legitimate cabinet," she said. Meciar announced the same day that the new parliament will convene on 29 October--the latest possible date allowed under the constitution. PB

HUNGARIAN PRIME MINISTER IN WASHINGTON

On the second day of his official visit to the U.S., Viktor Orban met with Attorney General Janet Reno and FBI Director Louis Freeh, Hungarian media reported on 6 October. Orban and Freeh signed an agreement on joint action against organized crime. In other news, Klaus Naumann, chairman of NATO's military committee, told journalists in Budapest that the alliance is counting on the participation only of present member states in the event of a military operation against Yugoslavia. In meeting with Defense Minister Janos Szabo, Naumann expressed his satisfaction with Hungary's preparation for accession but said further development is needed in the areas of English-language training and air defense cooperation. MSZ

HUNGARY'S AGRICULTURE MINISTER REACHES COMPROMISE WITH FARMERS

Jozsef Torgyan and farmers' representatives announced on 6 October that an agreement has been reached in solving the ongoing grain crisis, ending weeks of mutual accusations. The ministry has promised farmers that it will extend deadlines for repaying loans. In return, farmers have called off their planned demonstrations, Hungarian media reported. MSZ




'GRIMMEST SITUATION' REGARDING KOSOVA

An unnamed senior U.S. diplomat told Reuters in Belgrade on 7 October that U.S. envoy Richard Holbrooke and other negotiators now face "the grimmest situation we've faced in this region." The previous day, Holbrooke discussed Kosova with ethnic Albanian leaders in Prishtina and then met for the second time within 24 hours with Yugoslav President Slobodan Milosevic (see "RFE/RL Newsline," 6 October 1998). In Washington, President Bill Clinton warned that "the stakes [in Kosova] are high...[and] the time to end the violence is now." He referred to the province as a "powder keg" and added that the crisis there threatens to destabilize other countries in the Balkans. PM

SECURITY COUNCIL TAKES NO ACTION ON KOSOVA

The UN Security Council issued a non-binding statement on 6 October demanding from Belgrade a "full and sustained compliance" with the council's recent call for a complete withdrawal of Serbian forces from the province. The highest UN body condemned the "tactics of indiscriminate and disproportionate use of force against civilians, as well as terrorist activities." It also called on both sides to comply but did not specify what the UN would do if they did not. The council urged the international community to "intensify efforts to prevent a humanitarian disaster." PM

ARKAN PREPARES TO RESIST NATO

Zeljko "Arkan" Raznatovic said in Jagodina on 6 October that he will reactivate his paramilitary forces in the event of NATO attacks on Serbia, "Nasa Borba" reported. "It is not important whom we have to face but the sanctity of that which we are defending--and we are defending sacred Serbian land.... We shall not kneel before NATO missiles.... We shall not allow ourselves to become the slaves of NATO or any other foreign power." In Prishtina, the Kosova Liberation Army (UCK) issued a statement reaffirming its claim as the sole representative of the Kosovars. The UCK stressed that armed struggle is the only sure way to end the Serbian crackdown. PM

ALBANIAN FOREIGN MINISTER URGES GROUND TROOPS FOR KOSOVA

Paskal Milo told a press conference in Tirana on 6 October that NATO should consider sending ground troops into Kosova if air strikes fail to produce results. He added that "Albania supports air strikes by NATO forces against Serbian military installations as an effort to send a strong message to Milosevic to sit down at the negotiating table." Milo stressed that "if we have a continuing humanitarian problem, we would need [ground troops]. If we have an escalation of the conflict, then there should be a military presence." Milo also said that Albania hopes for improved cooperation with Kosovar leader Ibrahim Rugova. He added that Rugova has repeatedly turned down invitations to visit Tirana and discuss a coordinated foreign policy. FS

MONTENEGRO ASKS NATO TO RECONSIDER

The Montenegrin parliament passed a resolution on 6 October calling upon NATO to rethink plans for air strikes against Serbia, an RFE/RL correspondent reported from Podgorica. The legislators said that such attacks would only kill innocent victims and play into Milosevic's hands by giving him an excuse to crack down upon his domestic enemies (see "RFE/RL Newsline," 6 October 1998). PM

SESELJ THREATENS REBROADCASTERS

Serbian Deputy Prime Minister Vojislav Seselj told independent Radio B-92 on 6 October that the government may soon take tough measures against Serbian radio and television stations rebroadcasting the programs of Western stations "that carry out hostile espionage propaganda against our country." He suggested that the authorities could close, seize the equipment of, or start legal proceedings against the offending Serbian stations. Seselj added: "I guarantee you personally that you will not [re]broadcast [the programs of] Radio Free Europe," the Belgrade independent daily "Danas" reported. Seselj and Serbian Information Minister Aleksandar Vucic have recently threatened legal measures against those who rebroadcast the programs of RFE/RL, VOA, the BBC, Deutsche Welle, or Radio France International (see "RFE/RL Newsline," 30 September and 6 October 1998). PM

MONTENEGRO SAYS LAW BACKS JOURNALISTS

The Republican Secretariat for Information issued a statement in Podgorica on 6 October that took issue with the "extremely crude" charges made by Vucic against the media. It stressed that Serbian officials have no right to criticize the media in Montenegro. The secretariat said that it has no evidence of any wrongdoing by domestic or foreign journalists or media working on Montenegrin territory. It stressed that the law guarantees the domestic and foreign media's right to conduct their professional activities peacefully and unhindered. The secretariat added that it is "extremely concerned about the...brutal attacks...against those stations that rebroadcast foreign news programs" or exercise their right to present their own point of view. PM

WESTENDORP SAYS SESELJ 'NOT ACCEPTABLE'

The international community's Carlos Westendorp wrote Milosevic on 5 October that he expects the Yugoslav leader to "keep Seselj out of Bosnian politics." Westendorp described as "unwelcome" Seselj's recent calls on Bosnian Serb leaders to form an "all-Serb government" without Muslim or Croatian participation as well as his implicit threats to take SFOR peacekeepers hostage in the event of NATO air strikes against Serbia. Westendorp added that Seselj's "presence in the Republika Srpska would be interpreted as an unfriendly act aimed at disrupting the peace process...[and] I would have to consider taking direct action" against the Bosnian Serb branch of Seselj's Serbian Radical Party in reply. Also in Sarajevo, a spokesman for SFOR said that the peacekeepers "will not tolerate" any interference with their work in response to international military intervention in Kosova, RFE/RL's South Slavic Service reported. PM

MILITARY EQUIPMENT FOR MACEDONIA

Representatives of the 10,000- strong Macedonian army on 6 October formally took possession of 60 armored personnel carriers supplied by Germany. The vehicles are BTR-70s that belonged to the former East German army and are accompanied by 35 tons of spare parts. The army will distribute the APCs to barracks in major towns throughout the country, AP reported. PM

FRIENDS OF ALBANIA SET PRIORITIES

The Friends of Albania, a new OSCE-sponsored group made up of representatives from international organizations and embassies, held their first meeting in Tirana on 6 October (see "RFE/RL Newsline," 1 October 1998). The group seeks to increase coordination between international organizations and help the Albanian government in its efforts to stabilize the political and economic situation. The group agreed that its main goals are: improving the country's security situation, fighting corruption, drafting a new constitution, assisting refugees from Kosova, promoting economic development, and encouraging professionalism in the media. Elsewhere, Prime Minister Pandeli Majko discussed measures aimed at fighting corruption at a meeting with the prosecutor-general, the secret service chief, the head of the anti-corruption agency, the justice minister, and the head of the parliament's legal commission. FS

ROMANIAN PRIME MINISTER URGES REFORMS

Radu Vasile said on 6 October that the Romanian government must swiftly carry out long- delayed reforms or face the danger of becoming a "bad debtor," Reuters reported. Vasile, commenting in Bucharest upon arriving from the IMF-World Bank meeting in Washington, said Romania is entering "the 11th hour." In a report released by the executive directors of the IMF the same day, the fund warned Romania that its current fiscal and monetary policies are "unsustainable." It said Bucharest must bring the state budget under control and that the pace of privatization and collection of taxes needs to be increased. The report praised Romania's liberalization of the foreign exchange market and the government's focus on controlling inflation. Vasile added that the proposed deal with Bell Helicopters is "not feasible" in the near future. PB

RADIOACTIVE MUSHROOMS FOUND IN ROMANIA, BULGARIA

Bulgarian officials said on 6 October that they have discovered mushrooms tainted with radioactive cesium 137 in the southern part of the country, AFP reported. An official said the radioactive levels recorded are the highest since the Chornobyl nuclear accident in 1986 and twice as high as generally accepted levels. Romanian officials said last week that they exported contaminated mushrooms to several EU countries but that the levels were not high enough to threaten public health. PB

BULGARIA LOOKS AT COSTS OF CLOSING DOWN NUCLEAR REACTORS

Ivan Shilyashki, the chairman of Bulgaria's Power Generation Commission, said on 5 October that it will cost some $100 million to decommission the two largest reactors at the Kozloduy nuclear power plant, BTA reported. Shilyashki's committee is charged with formulating the country's national strategy on nuclear power for the next 30-50 years. The European Union has made repeated calls for Bulgaria to close down Kozloduy, which the EU deems unsafe. Shilyashki said Bulgaria will continue to transport spent nuclear fuel rods to Russia. He added that it is 25-30 percent cheaper to send the rods there than to Western Europe. PB




RUSSIAN CRISIS HITS UKRAINIAN FIRMS


by Stefan Korshak

Ukraine's Motor-Sych appeared to have it all: direct government support, an expanding Russian customer base, cheap labor and materials, as well as a weak national currency to exploit those advantages even further.

Then the Russian financial crisis set in, sending the ruble into freefall. Motor Sych's customer base of large Russian aerospace companies dried up almost immediately. The few customers that remained operational could pay only in rubles. Moreover, a number of Russian suppliers of key components shut down their production lines.

Motor Sych, Ukraine's largest engine maker, is among a host of companies paying for Ukraine's inability--or unwillingness--to loosen the economic bond with Russia.

The recent price of maintaining such close ties has been steep. Falling exports to Russia have crippled key industries such as metallurgy and machine building. And it has forced the government to devalue the hryvna.

Through August, Russia had accounted for almost half (44.3 percent) of Ukraine's general trade turnover in 1998. Most exports (55 percent) to Russia were products of the former Soviet military-industrial complex: for example, metallurgical products (15 percent), heavy machinery (14 percent), and chemicals (10 percent).

In July, Russia slapped a 3 percent import duty on Ukrainian industrial and agricultural commodities. Then the crisis hit.

The hryvna's downslide, rooted in Ukraine's long-standing foreign currency crunch, might also have been prompted by a calculated effort by the government to make exports competitive.

Paul Gregory, head of the research section at Alfa Capital Kyiv, told RFE/RL that "one way for the Ukrainian government to increase income is to increase the volume of its exports." He said "one means of doing that is worsening the hryvna's exchange rate against other currencies, so Ukrainian products become cheaper."

But Gregory also said that even if the Ukrainian exchange rate winds up lower relative to the ruble than it was before the crisis, it will not affect trade statistics until some time next year.

The Donetsk Iron and Steel Works (DISW), one of Ukraine's metal exporters, was another company hit first by the Russian excise duty and then by the fall of the ruble.

Olexsander Pilipenko, DISW's vice president, told RFE/RL that his company is not currently receiving many new orders from Russia. He said the main reason is that Russian companies are short of funds.

A partly privatized mill and a leader in the Ukrainian steel industry, DISW was in the process of expanding and modernizing its product line when the Russian crisis hit. The crisis put a damper on that process.

Pilipenko said that as of the beginning of September, many Russian firms stopped sending payments to his company. He said Russian companies buy only 10 percent of his firm's products, adding that "non-payment by any customer is by no means good news."

With some 80 percent of its products traditionally labeled for Russia, Motor Sych is worse off. Vladislav Matvienko of Motor Sych's import-export division said its "Russian customers are experiencing certain problems in settling contracts agreed with earlier." He said Russian firms "are still paying, but sometimes with a delay." And when they pay, he added, they do it often in rubles, which only adds to Motor-Sych's problems.

Matvienko added that "like many other companies," his is having trouble exchanging rubles paid by Russian firms. He noted that his company sometimes has to exchange into a third currency- -a so-called multi-stage currency exchange --in order to get the currency it needs to make its own payments.

The Ukrainian government has curtailed sales of dollars and the conversion of rubles on Ukrainian exchanges, making the Russian currency essentially worthless. There are no clear prospects of a change in that situation any time soon. The author is a Kyiv-based RFE/RL correspondent.


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