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Newsline - November 25, 1998


First Deputy Prime Minister Yurii Maslyukov told reporters on 24 November that the 1999 budget will not be submitted to the State Duma by 1 December and is more likely to be submitted on 7 December. On 16 November, Duma Budget Committee Chairman Aleksandr Zhukov said his committee must have the 1999 budget by 1 December, ITAR-TASS reported. Until recently, the government had appeared willing to meet that deadline. The Duma will not debate the budget before 20 December, Duma Deputy Aleksandr Shokhin told Interfax. Meanwhile, Finance Minister Zadornov told journalists that the government is still leaning toward a budget based on the Ministry of Economy's optimistic scenario of a 2 percent decline in GDP and a 2 percent surplus of the primary budget (which does not include debt payments). He also noted that a Central Bank credit will be necessary to finance the expected budget deficit of 2.2 percent of GDP. JAC


The IMF mission completed its most recent work in Moscow on 24 November by sending Prime Minister Yevgenii Primakov a memorandum on the government's draft budget for 1999 and tax collection proposals, Interfax reported. Maslyukov told a news conference that the IMF mission "is not happy with the way we plan to change our tax system." He admitted that prospects for "future talks are not very promising." Deputy Finance Minister Oleg Vyugin revealed that the IMF is demanding a primary budget surplus of 4 percent rather than the 2 percent surplus planned in the version of the 1999 budget that is considered most likely to be adopted by the cabinet (see "RFE/RL Newsline," 24 November 1998). JAC


Two of Russia's energy giants, LUKoil and Gazprom, have signed a strategic partnership agreement enabling each company to tap resources in the other's area of specialization. LUKoil has gas production for which it needs access to a pipeline, while Gazprom has significant oil reserves. The agreement calls for integrating the two companies' activities in oil and gas exploration, production, and refining as well as in the marketing of oil, gas, and petrochemical products. JAC


In Belarus, opposition politicians, such as Lyavon Barshchevski, deputy chairman of the Belarusian Popular Front, said the murder of State Duma deputy Galina Starovoitova marked the end of a romantic period of hopes for Russian democracy. Anatol Lyabedzka, a member of Belarus's 13th Supreme Soviet, suggested that "Russia is seriously ill, "much more seriously than we have been thinking," adding that Belarus should keep away from "the sick." Ukrainian Foreign Minister Borys Tarasyuk expressed shock "at the irreparable loss," while Lithuania's parliament adopted a statement characterizing the death as a "blow to Russia's democracy and a sign showing that violent and terrorist forces are becoming active" in Russia. Estonian Parliament member Igor Grazin said the bullet aimed at Starovoitova also hit Estonia, since she was a friend of all small nations. And the Armenian parliament observed a one-minute silence on 23 November in memory of Starovoitova, who had supported the 1988 movement for Karabakh's unification with Armenia. JAC


The U.S., Germany, and former British Prime Minister Margaret Thatcher all expressed their outrage at Starovoitova's killing. Amnesty International said that it believed her killing was "politically motivated," while UN Human Rights Commissioner Mary Robinson described the killing as an act of "despicable cowardice." On 24 November, residents in 1.8 million apartments in the European part of Russia turned off their electricity for two minutes to honor the slain deputy, according to United Energy Systems of Russia, Interfax reported. JAC


The slaying of Starovoitova has increased scrutiny of St. Petersburg and its political process. Starovoitova's assassination is "first of all a St. Petersburg murder, connected with events in the city, which has become a testing ground for criminal groupings and a center for corruption," Duma deputy and Yabloko party member Yurii Shchekochikin told "Segodnya on 24 November. The newspaper claimed that the 6 December election to the local legislative assembly is "perhaps the first one in the city in which the criminal world has at least one representative in each constituency." According to the newspaper, the acting deputy speaker of the city's legislative assembly, Viktor Novoselov, is a close friend of "Kostya the Grave," who "controls" practically all trade in the Moscow district of St. Petersburg. "Kommersant-Daily" the same day referred to the "not too ethical and even manifestly criminal methods being used in the pre-election campaign," noting that Starovoitova herself predicted that someone would be shot during the elections. JAC


One legacy of Starovoitova's death may be the creation of a coalition of "democratic" forces. On 24 November, former First Deputy Prime Minister Anatolii Chubais told an audience in St. Petersburg that the "creation of a powerful rightist center has been stepped up and intensive consultations are now under way," Interfax and Ekho Moskvy reported. According to Chubais, an announcement about the new alliance will be made next week. Democratic groups in St. Petersburg have agreed to refrain from verbal attacks against one other before the 6 December local elections, he said, adding that Yabloko, Democratic Russia, and the Accord bloc have agreed to field joint candidates. JAC


Politicians from various parties have begun fighting for the favors of the members of the new Congress of Municipal Formations, "Izvestiya" reported on 25 November. The congress held its first meeting 19 November and was registered by the Ministry of Justice on 30 October. The daily noted that Moscow Mayor Yurii Luzhkov has already invited a delegation from the Congress of Municipal Formations to attend a meeting of his new movement, Otechestvo [Fatherland]. Former First Deputy Prime Minister and Mayor of Nizhnii Novgorod Boris Nemtsov attended the congress's first meeting, where he said the organization's first task must be the promotion of its deputies to legislative assemblies at all levels. JAC


Speaking in Ashgabat on 24 November, Russian State Duma speaker Gennadii Seleznev categorically rejected CIS Executive Secretary Boris Berezovskii's proposal for streamlining the CIS's executive structure, Interfax reported. Berezovskii advocates reversing the 1994 decision to split the CIS's Coordinating-Consultative Committee into the Executive Secretariat and the Inter- State Economic Commission rather than creating yet another body, the Committee of Permanent Representatives. The resurrected committee would be a supra-national coordinating body. Seleznev termed Berezovskii's proposal an attempt to transform his staff into a Soviet Union cabinet and claimed that Turkmen President Saparmurat Niyazov also rejects it. Berezovskii retaliated by accusing Seleznev of advocating the destruction of the CIS, according to Interfax. He said the proposed reform of CIS governing bodies provides for abolishing inefficient structures and consolidating control of economic and political issues within a single body. LF


The Moscow Helsinki Group, together with two other human rights groups, released a report on 19 November asserting that numerous violations of freedom of conscience have occurred since the enactment of the controversial 1997 law regulating religious organizations, the "Moscow Times" reported on 25 November. According to the report, religious groups experience the most interference at the local level, "where legislatures have adopted restrictive measures that go even further than the federal law," the newspaper reported. For example, in the town of Volgodonsk in Rostov Oblast, no non-Orthodox churches can be built, while in the Republic of Khakassia, a Lutheran mission has been banned. The report concluded that the "legislative and administrative conditions" for "large-scale persecution of religious dissidents or of forced conversion of the population into Orthodoxy" have been created. JAC


Some 52,000 teachers in 32 regions in Russia are continuing to strike, according to Galina Merkulova, deputy chair of an education and science trade union, "Izvestiya" reported on 25 September. In Archangelsk Oblast, 767 schools and other educational establishments have shut their doors since 23 November, when teachers went on strike to demand payment of back wages. Other regions affected by the protest action, according to the daily, are Primorskii Krai and Ulyanovsk and Chita Oblasts. JAC


The U.S. consulate in Vladivostok denied earlier press reports that U.S. Consul General Douglas Kent has been charged in a traffic case, AP reported on 24 November. Consulate spokeswoman Susan Krause said no pedestrians were involved and the traffic police are still investigating the incident. The consulate told the "Moscow Times" on 25 November that Kent was sober at the time of the crash and that the accident occurred when Kent's sports utility vehicle hit a speeding Toyota Camry, in which Aleksandr Kashin was riding. Kashin, 23, is now paralyzed from the armpits down, the "Moscow Times" reported. JAC


At the close of his visit to Iran, Russian Atomic Energy Minister Yevgenii Adamov said on 23 November that he has reached agreement with Iranian officials on speeding up construction of the Bushehr nuclear power plant, which he inspected. He added that Russian may cooperate with Iran in building more such plants, Interfax reported. On 24 November, Sverdlovsk Governor Eduard Rossel arrived in Tehran to discuss trade and economic contacts, including supplies of machinery and fuel for nuclear power plants, according to ITAR-TASS. LF


Jiang Zemin on 25 November departed left Novosibirsk for Japan, Russian news agencies and Xinhua reported. Jiang spoke to the "scientific and technological community" in the Far Eastern city, lauding the achievements of a "city of 1.7 million people [that] boasts as many as 100 research institutes." In a joint communiqu released on 24 November, Russian President Boris Yeltsin and Jiang said Russian-Chinese relations are "enjoying a stable development along the track of equality." They agreed it is necessary to coordinate efforts and improve "monetary and legal conditions" to strengthen bilateral trade. Russia supported China's position on Taiwan, promising no Russian weapons will be sold to the island and no political recognition given to it. China, for its part, said it would not object to Russia establishing commercial and cultural ties with Taiwan. BP


In a an article published in "Nezavisimaya gazeta" on 25 November, Kurdistan Workers' Party leader Abdullah Ocalan accused Turkey of trying to dismember the CIS by infiltrating Azerbaijan, Georgia, and the Central Asian states. He also claimed Turkey supported the group of Russian politicians who instigated the 1994 invasion of Chechnya, with the aim of undermining the Russian Federation. In an interview published in "Kommersant- Daily" on 24 November, Ocalan confirmed that after leaving Syria on 9 October he flew to Moscow, after which he moved to different locations within Russia and unspecified other CIS states. But he denied Turkish media allegations that he traveled to Armenia. Ocalan told the newspaper that the decision to reject his request for political asylum in Russia was taken "at the very highest level, probably by Prime Minister Primakov, given President Yeltsin's illness." LF


The press service of former Kazakh Prime Minister Akezhan Kazhegeldin issued a statement on 25 November commenting on the Supreme Court decision the previous day that bars Kazhegeldin from running in the 10 January presidential elections (see "RFE/RL Newsline," 24 November) , RFE/RL correspondents in Almaty reported. The statement said the Supreme Court's decision proves there is no political mechanism that might influence the current government and its "pocket parliament." Kazhegeldin's press secretary, Amirzhan Kosanov, said the decision represents a "black day for Kazakh democracy." He added that that Kazhegeldin will hold the first session of his newly created political movement next week. Earlier this month, Kazhegeldin had twice announced that he would convene the founding congress of that movement within the next few days but failed to do so on both occasions. LF/BP


Karishal Assanov, who has registered to run in the January presidential elections as an independent, said incumbent President Nursultan Nazarbayev has greater access to the media than his opponents, RFE/RL correspondents reported. Assanov made the comments at a press conference in Almaty on 24 November, adding that some candidates have been deprived of any access to the country's media. BP


President Nazarbayev's campaign manager, former Prime Minister Sergei Tereshchenko, told journalists he expects there will be three candidates running against Nazarbayev in the January presidential elections, RFE/RL correspondents in Astana reported on 24 November. Tereshchenko listed parliamentary deputy Engels Gabbasov, Customs Committee chief Gani Kasymov, and Communist Party leader Serikbolsyn Abdildin as the likely rivals. Tereshchenko noted, however, that with less than one week before the deadline to register expires, only Nazarbayev has collected the required 170,000 signatures and paid the necessary fee to the Central Election Commission. Meanwhile, Nazarbayev visited the northern city of Pavlodar on 24 November, where he told journalists that his country will be a major oil and gas exporter in the next century, Interfax reported. BP


Lawmakers on 24 November voted to double excise tax on alcohol and oil products, RFE/RL correspondents in Bishkek reported. Finance Minister Taalaibek Koichumanov told the parliament that the state budget is likely to be short by 100 million som ($3.4 million) at the end of this year. Meanwhile, there was better news at exchange offices in the Kyrgyz capital, where the som was trading at 29 to $1. Deputy Prime Minister Boris Silayev blamed the fall of the som, which last week plummeted to 35 to $1, on exchange offices. He added that he favors closing all such offices and transferring their tasks to commercial banks. BP


In another move aimed at further restricting the activities of opposition parties, the Azerbaijani parliament on 24 November voted by 80 to seven to impose prison sentences of up to three years for organizing or participating in an unsanctioned demonstration, Reuters reported. On 13 November, lawmakers had passed legislation limiting the right to hold public demonstrations. Last week, the opposition Movement for Electoral Reform and Democratic Elections postponed for one week a rally planned for 22 November after the Baku authorities refused permission for such a meeting. LF


President Heidar Aliyev has authorized the sale of all but 5 percent of the state's 51 percent stake in the International Bank of Azerbaijan, AFP and Interfax reported on 24 November. The bank is the country's largest and is involved in more than 90 percent of the country's import- export deals. It is anticipated that either the European Bank for Reconstruction and Development or a similar international financial institution will acquire 20 percent of the shares. LF


Polish Foreign Minister and OSCE Chairman-in- Office Bronislaw Geremek met in Yerevan on 24 November with Armenian President Robert Kocharian and Foreign Minister Vartan Oskanian and also held separate talks with the president of the unrecognized Nagorno-Karabakh Republic, Arkadii Ghukasian, RFE/RL's Yerevan bureau reported. Geremek told reporters later that he is "very happy" that the Karabakh authorities are displaying "goodwill" over the most recent OSCE draft Karabakh peace plan. He said he hopes to get a "good answer" in Baku, where he will discuss Azerbaijan's reported objections to that plan on 25 November. Both Kocharian and Ghukasian have undertaken to give an official response to the new peace proposals within the next few days. LF


In a statement to the parliament on 24 November, the center-right National Democratic Union (AZhM) said it may boycott next year's parliamentary elections unless the election law passed last week is amended to preclude falsification of the vote, RFE/RL's Yerevan bureau reported. The previous day, former Armenian Communist Party First Secretary Karen Demirchian called for the new law's architect, the majority Yerkrapah parliamentary group, and eleven opposition parties, including the AZhM and Demirchian's recently founded center-left People's Party of Armenia, to reach a "consensus" to ensure that the parliamentary elections are free and fair. Demirchian urged Yerkrapah to agree to unspecified concessions in order to avoid precipitating "splits in society." LF


Georgian presidential adviser for international affairs Levan Aleksidze has denied that Georgia is to blame for obstacles to the planned signing of two land-mark agreements by President Eduard Shevardnadze and Abkhaz leader Vladislav Ardzinba, Interfax reported on 24 November. Ardzinba had said on 23 November that Georgia is insisting on revising the previously agreed text of a protocol on the repatriation of ethnic Georgian displaced persons to Abkhazia's Gali Raion. Aleksidze denied this but in turn accused Abkhazia of trying to insert into the agreements a clause whereby Georgia would recognize Abkhazia's independence. LF


Czech Deputy Defense Minister Jaromir Novotny has completed a three-day visit to Georgia during which he discussed the possible repair and purchase of spare parts for SU-25 fighter aircraft, Caucasus Press reported. The deal would be worth some $10 million. Novotny also told journalists in Tbilisi on 24 November that a bilateral cooperation agreement whereby the Czech Republic will train Georgian army officers will be signed next year. LF


Some 2,000 opposition demonstrators rallied in Minsk on 24 November to protest the November 1996 referendum that granted Belarusian President Alyaksandr Lukashenka nearly unlimited powers, AP and RFE/RL's Belarusian service reported. The results of the 24 November 1996 referendum, which are believed by the opposition and international human rights groups to have been falsified, allowed Lukashenka to disband the legitimate parliament and replace it with a loyal legislature. The demonstrators demanded that the authorities reduce police forces and bureaucracy, increase pensions and wages, return to the 1994 constitution, hold presidential elections next year, and improve relations with the West. "Today the results of [Lukashenka's] policy can be observed on the empty store shelves. What is going on in the country proves that Lukashenka can't rule the country," Mikalay Statkevich, leader of the opposition Hramada Social Democratic Party, told the rally. JM


Lukashenka told workers at a Minsk plant on 24 November that the recent price hikes in Belarus were forced by the "terrible pressure" from producers who insisted on increasing sale prices in order to cover production costs, Belarusian Television reported. Lukashenka warned trade union leaders against inciting people to take part in street protests and destabilize the situation in the country. He threatened to disclose financial abuses by "trade union functionaries," who, he claimed, "feed on trade union membership fees." JM


Belarusian Television on 24 November reported that someone has surreptitiously placed "provocative" leaflets into the mailboxes of "many of us." The leaflets appeal to Belarusians to help crisis-stricken Russia, which "lacks even bread and milk." They also "appeal to all pensioners to contribute a half or one-third of their pensions to Russia's budget and to all workers to give up a part of their wages. Students, too, could decline to take their stipends for the time being." A television commentator said the leaflets were prepared by a "Jesuit brain, morbid enough to trade such foulness with regard to the holy cause of fraternity and friendship." JM


The Belarusian government has denied an entry visa to Elisabeth Schroeder, a deputy of the European Parliament, RFE/RL's Belarusian Service reported on 25 November. Schroeder, a member of Germany's Green Party, intended to visit Minsk from the 25-27 November to participate in a conference. She also reportedly planned to meet with members of the opposition Charter '97 and visit the offices of several independent publications. A spokesman for Schroeder said she requested the visa on 13 November but received no response from the Belarusian Foreign Ministry. JM


Communists, Socialists, and other leftists held rallies across Ukraine on 24 November to protest President Leonid Kuchma's policies and demand his resignation, AP reported. Some 700 people turned out in Kyiv and some 2,700 in Kharkiv. "Ukraine is prepared for a peaceful revolution and is ready to oust this anti-people president through elections," the agency quoted a Socialist leader as saying. JM


Lawmakers on 23 November rejected an amendment to the law on parliamentary elections that would have required members of parliament and local government representatives to speak Estonian sufficiently well to take part in the work of those bodies, ETA and BNS reported. The vote was 48 to six, with members of the United Russian faction casting a "no" vote and many Center Party and Coalition Party members abstaining. At the end of 1997, the parliament had included language requirements for deputies in the language law, which provided for delegating authority to the government to establish such requirements That law was vetoed, however, and the Constitutional Court later ruled that such requirements can be stipulated only in a constitutional law, such as the election law (see also "RFE/RL Newsline," 24 November 1998). JC


The Fatherland and Freedom party, one of the three coalition parties currently involved in forming a minority government, has said it is opposed to the Social Democrats' involvement in the new cabinet. Fatherland spokesman Janis Kuzulis told Reuters on 24 November that "our board has basically decided that the Social Democrats should not participate either within or outside of the coalition." Prime Minister-designate Vilis Kristopans of Latvia's Way had said earlier he would offer cabinet posts to parties outside the coalition, and the Social Democrats were considered the most likely candidates. Under the coalition agreement, however, Kristopans is bound to respect the Fatherland and Freedom party's decision. The three-party coalition has 46 seats in the 100-strong parliament. JC


Also on 24 November, both the People's Party, which won last month's parliamentary elections but has not been invited to join the coalition, and the Social Democrats announced they will not support Kristopans's cabinet. Kristopans told BNS the same day that he will ask both parties for their support, and he pledged he would make every effort to ensure that the vote in the parliament on his cabinet takes place on 26 November. Kristopans is to submit an incomplete list of his government lineup to the parliament on 25 November. A candidate still has to be nominated for the agricultural portfolio. JC


Algis Zvaliauskas resigned on 24 November over a business trip to Sweden during which he was found to have mixed public and private interests, BNS reported. The Ethics Commission concluded that during his 23-25 October visit to the Scandinavian country, Zvaliauskas had no official meetings scheduled for the second day of his visit and went hunting. The commission ruled that this day cannot be considered part of an official business trip. Zvaliauskas reportedly paid for the trip after the scandal broke in the local press. The Conservative-dominated government is now faced with the threat of having to resign since more than half of its members have been replaced, according to BNS. JC


Deputy Prime Minister Leszek Balcerowicz on 24 November warned that the trade unions' influence on the cabinet is too large and could harm reforms, Reuters reported. His comment followed the resignation of Transport Minister Eugeniusz Morawski over the reform of the Polish State Railroad (PKP) (see "RFE/RL Newsline," 24 November 1998). Morawski is a member of the Freedom Union, which is chaired by Balcerowicz. "The resignation signals weakness of Poland's political system- -the excessively great role of trade unions, which may be dangerous for the country's development," the agency quoted Balcerowicz as saying. Under pressure from the Solidarity trade union, the cabinet recently rejected a plan to restructure the PKP and allow for competition within the railroad transportation sector. JM


The Polish cabinet has approved a secret data protection bill adjusting the country's system of protecting state and official secrets to NATO standards, PAP and Reuters reported on 24 November. The bill, which now goes to the parliament, creates a Secret Information Protection Committee to decide what information is classified and to oversee its protection. It divides secret data into four categories: top secret, secret, confidential, and for official use and obliges state institutions to create zones, ranging from rooms to boxes, in which classified information should be stored. The president, the premier, parliamentary speakers, cabinet ministers, the central bank head, and the ombudsman would have unlimited access to such information. JM


Vaclav Havel and his Kyrgyz counterpart, Askar Akayev, signed a cooperation agreement in Prague on 24 November, an RFE/RL correspondent reported. The accord pledges cooperation in trade, fighting organized crime, and in protecting the environment. Havel said after the signing that Kyrgyzstan deserves respect for its tolerance, democratic leadership, and the openness in its political and economic affairs. Akayev said Prague's joining NATO will strengthen security in the region. Akayev also met with Czech Prime Minister Milos Zeman, who praised the Central Asian country as an "island of stability." PB


Former Slovak President Michal Kovac on 24 November said he will run for the presidency in direct elections to be held next year, the daily "Pravda" reported. Kovac, who has no party affiliations, said that the president "should be independent from partisan structures." Kovac was president from 1993 until 2 March 1998. The sharply divided parliament has failed to elect his successor in numerous votes since then. The coalition government of Mikulas Dzurinda has agreed to alter the constitution to allow popular presidential elections. Kosice Mayor Rudolf Schuster is considered the favorite for the presidency. PB


An opinion poll in Slovakia shows that support for the government of Mikulas Dzurinda is growing, Reuters reported. The survey revealed that support for the combined coalition is 65 percent, compared with the 58 percent of the vote it won in the September elections. Former Premier Vladimir Meciar's Movement for a Democratic Slovakia registered the largest drop in support, down from 27 percent in the election to 16.6 percent now. In other news, Dzurinda told students at Bratislava's School of Economics that they do not have to fear the introduction of university tuition fees. Dzurinda said the government will gradually raise the higher education budget in order to bring it closer to EU levels. PB


The Constitutional Court on 24 November elected Janos Nemeth as its chairman and Andras Hollo as deputy chairman, Hungarian media reported. Nemeth replaces Laszlo Solyom, whose term expired. Between February 1990 and July 1997 he was chairman of the National Election Committee. MSZ


Yugoslav President Slobodan Milosevic on 24 November replaced General Momcilo Perisic with General Dragoljub Ojdanic as army chief of staff, Tanjug reported. Perisic has repeatedly refused to take sides in the dispute between Milosevic and the Montenegrin leadership and has stressed that the army must stay out of politics. He recently said in a newspaper interview that senior politicians, whom he did not name, are responsible for the conflict in Kosova because they failed over many years to find a political solution to the problem (see "RFE/RL Newsline," 20 October 1998). Perisic and other army officers have long been resentful of what they regard as Milosevic's favoring the paramilitary police over the army. In October, Milosevic sacked Jovica Stanisic, his intelligence chief. Observers in Belgrade told "RFE/RL Newsline" that Milosevic may feel he has already lost control of Kosova and is now preparing for a showdown with the Montenegrin leadership. PM


Adem Demaci, who is the political spokesman for the Kosova Liberation Army (UCK), said in Prishtina on 24 November that U.S. envoy Chris Hill's plan for an interim political settlement "is far from what we really want, but we are not rejecting it." Demaci added that "the UCK has no illusions...and it is preparing, if need be, to rise again in defense of the Albanian people. I am not an optimist. I'm afraid that the Serb regime will once more force us into spilling blood," AP quoted him as saying. PM


The Democratic League of Kosova, which is the leading ethnic Albanian political party in the province, said in a statement in Prishtina on 24 November that Serbian paramilitary police have recently returned to several localities that witnessed extensive fighting earlier this year. The statement added that the police have resumed shelling and looting in some places. Elsewhere, the Kosovar news agency KIC reported that harsh winter weather has led to "difficult humanitarian conditions" in the Skenderaj, Malisheva, and Klina regions. Among the problems identified by KIC are shortages of power, water, medicines, food, clothing, and fuel. Some 15,000 people remain "without a roof over their heads" in the Malisheva area, which is the poorest in Kosova, and another 30,000 are homeless in the central Klina region. PM


Veran Matic, who heads independent Belgrade Radio B-92 and the Independent Association of Serbian Journalists, wrote in "Danas" on 25 November that the month-old draconian press law aims at meeting the "immediate political goals of the governing fascist-Stalinist coalition" headed by Milosevic. Matic charged that the law seeks to foment a sense of insecurity among journalists, so that they are never quite sure of what is permitted and what is not. Matic likened this to "psychological torture in concentration camps" and charged that the authorities' goal is to force journalists into silence. PM


Filip Vujanovic told a news conference in Podgorica on 24 November that the Serbian authorities' policies toward the media only serve to promote a lack of democracy in that country, RFE/RL's South Slavic Service reported. He added that Montenegrin courts will not carry out or be affected by rulings of Serbian courts. Vujanovic stressed that he does not feel that Yugoslavia is heading for dissolution. He added that Montenegro opposes giving Kosova republican status equal to that of Serbia and Montenegro. PM


Several prominent Bosnian Muslim political leaders, including Alija Izetbegovic, Haris Silajdzic, and Edhem Bicakcic, signed a letter saying that U.S. envoy Richard Sklar's alleged accusation that "all Bosnian politicians are corrupt" is a "lie." They added that Sklar should "finally publicly name those he accuses of corruption or get off our backs." The leaders stressed that "we are not thieves." Ejup Ganic, who is president of the mainly Muslim and Croatian federation, wrote a similar letter to Sklar, AP reported. PM


Interior Minister Ivan Penic said in Zagreb on 24 November that "there is no systematic tapping of journalists' phones or the creation of files" on them. He added, however, that the security services conduct "random" phone taps on people they believe to be part of the "security problem." Membership in any particular profession, he stressed, does "not clear someone," and "the intelligence service has a data base of persons who in any way were a part of the security problem." He did not elaborate. The weekly "Globus" recently charged that the intelligence services keep extensive files on journalists, including information about their private lives. The opposition and moderates within the governing Croatian Democratic Community (HDZ) have frequently said that the HDZ's hard-liners use the intelligence services for political purposes. PM


Results from the 22 November local elections show that Prime Minister Janez Drnovsek's Liberal Democrats are the most popular party, with 25 percent of the total votes, up from 17 percent in the 1994 local elections. But the share of the votes for Drnovsek's main coalition partner, the Slovenian People's Party (SLS), fell from nearly 13 percent to just over 10 percent. Observers in Ljubljana said that the future of the coalition is now in doubt, the "Frankfurter Allgemeine Zeitung" reported on 25 November. Janez Jansa's rightist Social Democrats won the second largest number of votes, with just over 17 percent of the total, a gain of more than 3 percent over 1994. The big losers were Lojze Peterle's Christian Democrats, whose share of the total fell from 18 percent to 10 percent. PM


A spokesman for the Central Election Commission said in Tirana on 24 November that in the 22 November referendum on the constitution, results from 14 out of 37 regions "show a turnout of 56 percent and more than 90 percent voted for the constitution" (see "RFE/RL Newsline," 24 November 1998). Results from the far south are due in Tirana on 25 November, and tallies from the snow-bound north will be delivered by helicopter. Elsewhere in Tirana, Ridvan Bode, the secretary-general of the opposition Democratic Party, told 2,000 protesters that "the constitution is dead but [the authorities] are trying to exhume it by manipulating" the electoral results, Reuters reported. PM


Emil Constantinescu has accused opposition parties of ruining Romania's image in the eyes of Western Europe, Reuters reported on 24 November. The president, speaking on the eve of a visit by NATO Secretary-General Javier Solana, said that the boycotting of the parliament by leftist and nationalist parties (see "RFE/RL Newsline," 23 November 1998) and their rejection of his offer to discuss problems are imperiling Romania's attempts to integrate into Euro- Atlantic structures. Former President Ion Iliescu, the head of the Party of Social Democracy in Romania, refused a meeting with Constantinescu on 24 November, as did other nationalist parties. The lack of a quorum in the parliament has stalled the passage of reform legislation. PB


Hungarian National Cultural Heritage Minister Jozsef Hamori and his Romanian counterpart, Ion Caramitru, signed two framework agreements in Bucharest on 24 November, Hungarian media reported. One accord promotes bilateral cultural cooperation, the other concerns the joint protection of monuments. The two ministers agreed to develop concrete proposals on expanding cooperation between their ministries until 2001. Hamori also met with several representatives of the coalition Hungarian Democratic Federation of Romania. MSZ


Sixty people have died in Romania over the past few days owing to sub-zero temperatures, AFP reported. Police reported that 24 people were found frozen to death on 23 November alone. PB


Romanian Prime Minister Radu Vasile said his country is supplying Moldova with 15 percent of its energy needs, AP reported on 24 November. Vasile, who recently met with Moldovan Deputy Premier Valeriu Dolganiuc to discuss Chisinau's electricity needs (see "RFE/RL Newsline," 23 November 1998), said Romania can supply up to 60 percent of those needs. Moldovan authorities said Bucharest will decide if it wants to be paid in cash or receive instead a stake in MoldTelecom, the national telecommunications company. The Moldovan state electricity company is owed some 1.8 billion lei ($300 million) by industrial and domestic consumers unable to pay their bills. PB


Military officials from Bulgaria, Romania, Greece, and Turkey agreed on 24 November in Istanbul that the headquarters of a multinational Balkan military force will be in the southern Bulgarian city of Plovdiv, an RFE/RL correspondent in Sofia reported. The officials said the headquarters will rotate to a different country every four years. In other news, Bulgarian Premier Ivan Kostov appointed parliament deputies Zdravko Zafirov and Plamen Radonov as deputy defense ministers. Both are members of Kostov's party, the Union of Democratic Forces. They replace Simeon Petkovsky and Rumen Kanchev, who were sacked 10 days ago. PB


Michael Wyzan

Alone among the transition economies in Central and Eastern Europe, Romania's economy has by most measures performed worse since a reformist government was elected to replace the former Communists (in Romania's case, in November 1996). Although inflation is down and the exchange rate has been relatively stable this year, gross domestic product (GDP) will decline substantially for the second consecutive year and privatization efforts have largely stalled.

Finance Minister Daniel Daianu, who is credited with having kept the budget deficit and foreign debt from getting out of control, was dismissed on 23 September. Even before his departure, rating agencies, concerned about the coalition government's bickering and policy paralysis as well as about possible contagion from the Russian financial crisis, had begun to lower Romania's credit rating.

The time pattern of the changes in Romania's GDP is unique among transition countries. After experiencing positive growth from 1993 to 1996, this output measure fell by 6.6 percent in 1997, similar to the 6.9 percent GDP decline suffered that year by Bulgaria, which was in the throes of a severe economic crisis. GDP declined by a further 5.2 percent in the first half of 1998, compared with the same period in 1997, and industrial production was down by 19.1 percent over the same period. Forecasts of the GDP decline for 1998 as a whole range from 3 percent to 6 percent and higher. Such a steep decline would generally be expected to increase the budget deficit (because of a decline in revenues from various taxes) but to reduce the trade deficit (because of weakening imports).

It became clear during this summer that the fiscal imbalance of 3.6 percent of GDP, approved by the parliament in May, was no longer realistic. However, in early September, the parliament (on Daianu's recommendation) approved a temporary 6 percent surcharge on most imports, excise hikes on tobacco and alcohol, and a state sector wage freeze in the fourth quarter. These measures are expected to hold the deficit to 4 percent of GDP this year, although promises by new Finance Minister Traian Remes to cut taxes in 1999 call into question the sustainability of this fiscal strengthening.

More surprising, external sector indicators have not improved as the economy has declined, with the slower growth of imports more than offset by a fall in exports. The latter during the first six months were $4.1 billion, down by 1.3 percent from January-June 1997, while imports were $5.4 billion, up by 4.0 percent.

The current account deficit has increased in tack with the trade imbalance, the former reaching $1.1 billion in January-June 1998, compared with $864 million in the first half of 1997. These imbalances are not unusually large for the region, and observers expect the current account deficit to be an unremarkable 4-5 percent of GDP this year. Moreover, the foreign reserves rose from $2 billion in July 1997 to $2.6 billion in July 1998, mostly owing to an increase in foreign direct investment late in 1997.

Nonetheless, Romania remains relatively unattractive to foreign investors, especially under the conditions on world financial markets after the Russian crisis, which has raising concern over how Bucharest will finance its external imbalances. This unease is heightened by the bunching of foreign debt service this year ($1.7 billion) and next ($2.2 billion).

The leu, which finished 1997 at 8,023 to the dollar, has weakened relatively little this year (by about 11 percent through September). But following an recent increase in its rate of depreciation, it is now at almost 10,000 to the dollar. Nonetheless, this year's more stable currency reflects the fall in retail price inflation to 52 percent in the 12 months to August 1998, compared with 152 percent in 1997.

Although inflation has slowed and the decline of the leu has abated, wages have continued to grow. Both the monthly wage expressed in dollars and the real wage (measured in leu) have risen considerably. The gross dollar wage was $154 in June, up from $108 in June 1997.

Trends in Romanian unemployment are difficult to relate to movements in wages. The jobless rate peaked in early 1994 at 11.3 percent and then declined to 6.1 in November 1996, before rising to reach 9.6 percent in February of this year. It then declined over the course of 1998, the most recent figure being 8.8 percent in June.

Romania's economy apparently has more in common with Russia's (and those of other CIS states) than with those elsewhere in CENTRAL AND EASTERN EUROPE. The failure to implement structural reform has made it difficult to turn reduced inflation and a more stable exchange rate into sustainable economic growth. Both Romania and Russia have learned that under such conditions, these improvements in macroeconomic stability cannot be sustained either. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria.