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Newsline - December 8, 1998




FORMER KGB OFFICIALS RISE TO TOP OF KREMLIN...

The new head of the presidential administration, Nikolai Bordyuzha, will continue as head of the Security Council as well as personally investigate Yabloko's charges of government corruption, presidential spokesman Dmitrii Yakushkin told NTV. Bordyuzha had already met with the heads of law enforcement bodies on 7 December. When Bordyuzha, 49, was tapped to head the Security Council in September, press reports characterized him as "Primakov's man" and as someone known for his loyalty and lack of political ambition (see "RFE/RL Newsline," 16 September 1998). Bordyuzha is also a colonel-general who started his military career in 1972, after graduating from a military academy in Perm. He has occupied several important positions in the KGB. On 7 December, President Boris Yeltsin appointed another former KGB official, Vladimir Makarov, as deputy chief of staff of the presidential administration. JAC

...WHILE YELTSIN'S MOVE EXPLAINED AS JUST CLEANING HOUSE

The presidential administration had been coordinating its work poorly, presidential spokesman Yakushkin explained as background to President Yeltsin's decision to replace Valentin Yumashev with Bordyuzha as head of the presidential administration. However, Yakushkin added, the reshuffle does not alter the president's positive appraisal of Prime Minister Primakov's performance. Meanwhile, the Russian press offered its own interpretation of the staff upheaval. A popular theory was that Yeltsin sacrificed Yumashev to make himself look more rigorous and firmly in charge. The press also speculated that Yeltsin wanted to distance himself from financial magnate Boris Berezovskii, who was close to Yumashev. "Segodnya" noted on 8 December that State Duma deputy and Our Home is Russia faction leader Aleksandr Shokhin had said Yumashev was unwise to state publicly that he would support former Prime Minister Viktor Chernomyrdin in the next presidential election. JAC

DUMA, POLITICAL ELITE PRAISE KREMLIN RESHUFFLE

A wide variety of politicians applauded Yeltsin's decision to dismiss Yumashev. Moscow Mayor Yurii Luzhkov said he thought the president made the right decision, because "the administration had been working more and more ineffectively." Duma Chairman Gennadii Seleznev and Liberal Democratic Party leader Vladimir Zhirinovsky both praised the staff reshuffle. Yabloko leader Grigorii Yavlinskii called the decision "one of the most important steps taken by the president to date." He said it was aimed at "intensifying the campaign against corruption in the upper echelons of power." Agrarian faction leader Nikolai Kharitonov was more skeptical, saying Yeltsin should concentrate on the problems that "make people wake up in their cold apartments in Kamchatka and Sakhalin and shudder." JAC

VLADIVOSTOK DECLARES STATE OF EMERGENCY

City officials in Vladivostok have declared a state of emergency because half the buildings in the city are without heat, Interfax reported on 8 December. Lack of heat and electricity has been a chronic problem this winter as well as last, but the situation worsened on 7 December when a major storm dumped a thick layer of snow over the city. Schools and day-care centers have been closed and hospitals will soon be evacuated if conditions do not improve soon. Some residents have already lost patience. Earlier, violence broke out when hundreds of residents who were protesting the lack of heat by blocking a bridge into a local suburb attacked a television crew that was trying to drive past them, the "Moscow Times" reported on 4 December. JAC

START-II DEBATE DELAYED AGAIN

The Duma has postponed discussion of the START-II treaty until 15 December, ITAR-TASS reported on 8 December. Duma Deputy Speaker and member of the Yabloko faction Vladimir Ryzhkov told reporters that the Duma is set to ratify the treaty on that date or send the draft law to President Yeltsin with an explanation of its stance. Duma Foreign Affairs Committee Chairman Vladimir Lukin (Yabloko) told reporters that the debate was delayed because no faction beside Yabloko had submitted its proposals on the bill and that leftist parties are deliberately delaying discussion. Duma Security Committee Chairman Viktor Ilyukhin (Communist Party) said the treaty cannot be discussed until the government submits a budget for decommissioning part of its nuclear arsenal. Earlier, Liberal Democratic Party leader Zhirinovsky declared that he is "even more convinced [than ever] that the Duma should not ratify START- II." JAC

IRAQI DEPUTY PREMIER IN MOSCOW

Tariq Aziz held talks in Moscow on 7 December with Prime Minister Yevgenii Primakov and Foreign Minister Igor Ivanov, both of whom commended Baghdad's decision to resume cooperation with UN weapons inspectors. Ivanov later told journalists that a review of Iraq's compliance with UN resolutions calling for the elimination of weapons of mass destruction should begin immediately in order to expedite the lifting of international sanctions. Aziz also discussed with Russian officials Moscow's participation in the UN "Oil for food" program, and assured them that Iraq will meet its outstanding financial obligations to Russia, according to "Izvestiya" on 8 December. Ivanov met in Moscow on 4 December with UNSCOM head Richard Butler. LF

ARMED FORCES CHIEF VISITS U.S.

Russian Armed Forces Chief of Staff General Anatolii Kvashnin began the first leg of a four-day trip to the U.S. by visiting the U.S. Naval Base in Pearl Harbor, Hawaii, on 7 December. Two days earlier, "Nezavisimaya gazeta" called Kvashnin "the second most important man in the Russian military's hierarchy," who "enjoys the support of President Yeltsin's family." The newspaper also picked up on earlier speculation by "Moskovskii komsomolets" that Kvashnin is orchestrating a "secret campaign against [Defense Minister] Igor Sergeev" and Sergeev's plans to form a joint command for strategic nuclear forces. According to the newspaper, Kvashnin opposes the plan because it would place Russia's Strategic Rocket Forces Commander Colonel-General Vladimir Yakovlev in a prime position to succeed Sergeev as head of the Defense Ministry. "Nezavisimaya gazeta" receives financing from Boris Berezovskii's LogoVAZ group. JAC

DZERZHINSKII OPPOSED, WHILE LENINS, STALINS POP UP

Moscow Mayor Yurii Luzhkov said in Germany that he will fight efforts to resurrect a monument to Felix Dzerzhinskii, the founder of the Cheka, or secret police, ITAR-TASS reported on 8 December. Luzhkov called the monument "a symbol of a return to the past." Earlier, the Duma passed a draft resolution calling for the monument to be restored to its former home in Lubyanka Square in Moscow (see "RFE/RL Newsline," 3 December 1998). Three days earlier, hundreds of protesters gathered in front of the building of the former KGB to protest the plan to reinstall the monument. In other parts of the country, monuments to other Soviet leaders are being unveiled. On 5 December, a bust of Vladimir Lenin was dedicated in Murmansk Oblast, and on 21 December a bust of Josef Stalin will be installed at a school in Chelyabinsk, ITAR-TASS reported on 23 November. JAC

RUSSIA EXTENDS INVESTIGATION OF BLISS

The Russian government has decided to continue its investigation of the espionage case against U.S. citizen Richard Bliss, who was charged with spying in Russia while installing a cellular telephone system in Rostov na Donu for the San Diego-based Qualcomm, AP reported on 8 December. According to a State Department spokesman, the investigation will last for another four months. Bliss has quit Qualcomm and is suing it on the grounds that it knowingly sent him to Russia with illegal equipment. JAC

MOSCOW ELECTIONS ANNULLED

The Moscow Election Commission declared the 6 December election in the Lyublino district invalid because only 24.2 percent of voters participated, while the law requires 25 percent, Interfax reported. The elections were held to fill a State Duma deputy seat vacated by Boris Fedorov, former head of the Federal Tax Service. Of the 15 candidates who ran, former presidential press secretary Pavel Voshchanov, a member of Yabloko, won the most votes. The seat will now remain vacant until regular Duma elections in December 1999. JAC

NEW TEACHERS' STRIKE LAUNCHED IN FAR EAST

Teachers in Nekrasovka, outside Khabarovsk, went on strike on 7 December to protest unpaid wages, ITAR-TASS reported. According to union officials, Nekrasovka area teachers are owed 8.8 million rubles ($450,000), while the total debt to teachers in Khabarovsk Krai is 160 million rubles. Also in the krai, teachers in the Verkhne- Bureinskii Raion and Sovetskaya Gavan have stopped work to protest wage arrears. JAC

LARGER BURYATIA PONDERED

Ust-Orda Buryatian Autonomous Okrug is debating joining a future incarnation of the Buryatian-Mongolian Republic, which existed in 1937, "Delovoi vtornik" reported on 1 December. Duma deputy Iosif Kobzon floated the proposal in September, (see "RFE/RL Newsline," 8 September 1998). According to the newspaper, humanitarian and Buddhist organizations favor the idea in order to preserve the Buryatian language, but economists are less excited because the economy of the okrug is too intertwined with that of Irkutsk Oblast, to which it now belongs. JAC

LET THEM EAT DOG?

Russian meat production is likely to plummet 57 percent this year, compared with 1990 levels, Interfax on 6 December quoted Viktor Kabanov, a member of the Russian Academy of Agricultural Sciences, as saying. Kabanov added that "current reductions in meat production exceed the declines suffered during the two World Wars taken together." Meat consumption dropped 25 percent between 1990 and 1995, according to the Institute of Nutrition at the Russian Academy of Medical Sciences, "The New York Times" reported. Meanwhile, Boris Misnik, chairman of the Duma's Committee for the North, told Reuters on 4 December that media reports about people in the northern regions being forced to eat dogs are true. He said "there are places in Yakutia where dogs would normally be running about, but you do not see them." JAC




DECISION ON AZERBAIJAN OIL EXPORT PIPELINE AGAIN POSTPONED...

Representatives of the oil companies represented in the Azerbaijan International Operating Company engaged in exploiting three offshore Caspian oil fields have again postponed a decision on the optimum route for the Main Export Pipeline for that oil, the Dow Jones Newswire reported on 7 December. The U.S., Turkey, Azerbaijan, Georgia, Kazakhstan, and Uzbekistan have all pledged their commitment to routing that pipeline from Baku via Georgia to the Turkish Mediterranean terminal at Ceyhan, but the AIOC is reluctant to make a firm commitment to that option, which is considerably more costly than the alternative route to Supsa, on Georgia's Black Sea coast. Interviewed by Reuters on 3 December, Azerbaijani Foreign Minister Tofik Zulfugarov expressed confidence that the Baku-Ceyhan route will ultimately be selected. Zulfugarov downplayed fears that rock-bottom oil prices might render Caspian oil unviable. LF

...AS IRANIAN ALTERNATIVE LOOKS INCREASINGLY ATTRACTIVE

Speaking at a conference in London on 5 December, a senior Iranian analyst argued that routing the pipeline southward from Baku to the Persian Gulf is the most cost-effective and secure route, IRNA reported. Two days later, a representative of the French oil company Total told journalists in Baku that Total is considering forming a consortium to build an export pipeline from Baku to Iran, Reuters reported. U.S. oil companies are banned from engaging in operations in Iran, but European oil firms may do so. Moreover, some European governments have reportedly endorsed that variant. LF

ARMENIA MARKS 10TH ANNIVERSARY OF SPITAK EARTHQUAKE

Armenia observed a day of mourning on 7 December to mark the 10th anniversary of the Spitak earthquake, which destroyed one-third of the country's industrial capacity and killed an estimated 25,000 people. President Robert Kocharian and senior government officials toured the region most severely affected, promising that reconstruction will be completed within three years. But regional governor Ararat Gomtsian said that the government program for reconstruction of the earthquake zone cannot be implemented within that period. He added that of the $150 million needed, only $3 million was allocated in the 1998 budget, according to "Nezavisimaya gazeta" on 8 December. On 6 December, Kocharian presented awards to 40 people who played a prominent role in alleviating the consequences of the earthquake, including former Soviet Premier Nikolai Ryzhkov, who helped coordinate relief efforts. LF

TWO MORE ABKHAZ POLICEMEN SHOT DEAD BY GUERRILLAS

Two Abkhaz policemen died on 7 December when unidentified assailants ambushed and opened fire on their car in Gali Raion, Caucasus Press reported. Abkhaz Security Minister Astamur Tarba laid the blame for the killings on the Georgian White Legion and Forest Brothers guerrilla formations, adding that captured Georgian paramilitaries have confessed to having undergone training at Georgian military bases. The Georgian leadership has consistently denied any connection with or control over those guerrilla formations. LF

UNOCAL PULLS OUT OF TURKMEN PROJECTS

The U.S. company Unocal has announced it will cease participating in pipeline projects originating in Turkmenistan, ITAR-TASS reported on 8 December. Unocal suspended its participation in the pipeline project from Turkmenistan to Pakistan via Afghanistan in August, when fighting broke out in northern Afghanistan and the U.S. launched rocket attacks there on camps under the direction of suspected terrorist Osama Bin Laden. On 7 December, the official representative of Unocal, Barry Lain, said his company is pulling out of projects in Central Asia owing to "the lack of good possibilities for capital investment, which have been accented by the low prices for fuel." Unocal has pulled out of all projects around the Caspian Sea excluding those in Azerbaijan. The Anatolia news agency reported on 7 December that Turkish officials are not concerned about Unocal's withdrawal from the proposed Transcaspian pipeline. BP

NAZARBAYEV TOURS NORTHERN KAZAKHSTAN

Kazakh President Nursultan Nazarbayev met with workers in northern city of Karaganda on 7 December, telling them he expects "total privatization" to take place next year, Interfax reported. Nazarbayev said industrial facilities and banks "must be private" but added that railways, power transmission lines, and oil and gas pipelines "must remain in the hands of the government." He noted that a bill on private land ownership will be passed in 1999 and is expected to give "impetus to the advancement of farming." With regard to the January elections, Nazarbayev said he is sure international monitors will be present during the ballot. BP

KAZAKH FOREIGN MINISTER IN WASHINGTON

Kasymjomart Tokayev, visiting Washington on 7 December, differed with Nazarbayev over what will be up for sale in Kazakhstan next year, Reuters reported. At a dinner in the Kazakh Embassy, Tokayev told reporters that "if the price of oil drops, the government in Kazakhstan is going to sell its shares in various enterprises," singling out, among others, oil and gas, railroad, and telecommunications companies. He did not name any of those firms, however, nor did he say how low the price of oil would have to drop before sales began. Tokayev is visiting Washington to explain the decision to hold early presidential elections, which the U.S. government has criticized. BP

COMMUNIST CANDIDATE IN KAZAKH ELECTIONS MEETS WITH PRESS

Serikbolsyn Abdildin, the Communist Party candidate for the January presidential ballot, told journalists in Almaty on 8 December that the Russian Communist Party will send observers to the election,. RFE/RL correspondents reported. Abdildin blamed incumbent President Nursultan Nazarbayev and the Kazakh government for the "terrible economic situation in the country" and accused them of involvement in corruption. Abdildin said he will not heed a call from former Prime Minister Akezhan Kazhegeldin to withdraw from the race, Interfax reported on 8 December. According to Reuters the previous day, Kazhegeldin's press office had released a statement calling on Abdildin, as the only candidate outside Nazarbayev's sphere of influence, to withdraw his candidacy so that "Nazarbayev cannot create the impression of honest elections." BP

AKAYEV SPEAKS OUT ON DOMESTIC PROBLEMS

Kyrgyz President Askar Akayev said at a 7 December meeting marking the 50th anniversary of UN Declaration on Human Rights that "bureaucratic officials" sometimes do not pay attention to the constitutional rights of Kyrgyz citizens, Interfax reported. He noted that Kyrgyzstan still does not have sufficiently stable democratic institutions, legal standards are too low, and legislation is imperfect. He added that the parliament will introduce legislation on new criminal and civil procedural codes as well as on the Supreme Court and local judiciaries. And he warned that organized crime is putting additional pressure on the economy and also involves senior officials. BP

UZBEK PRESIDENT RECEIVES EMIR TIMUR AWARD

Islam Karimov on 7 December was awarded the Emir Timur Order to mark his achievements in creating a sovereign state, increasing respect for Uzbekistan worldwide, strengthening civil peace and national accord, and preserving and boosting cultural values, Interfax reported. BP




SWISS JUDGE IN KYIV TO CONTINUE INVESTIGATION OF LAZARENKO

Swiss law officials flew to Kyiv on 7 December to continue the criminal investigation of former Ukrainian Premier Pavlo Lazarenko, AFP reported. Judge Laurent Kasper-Ansermet will meet with the Ukrainian Prosecutor-General's Office to look for evidence that Lazarenko illegally deposited state money into Swiss bank accounts (see "RFE/RL Newsline," 7 December 1998). Lazarenko, a parliamentary deputy and head of the Hromada movement, is seen as a potential candidate in next year's presidential election. Dozens of Hromada deputies and party supporters protested outside the Swiss embassy in Kyiv on 7 December. They later met with the ambassador and called Lazarenko's arrest a "planned action of reprisal against a politician whose party is in the opposition." PB

KUCHMA BLASTS ENERGY MINISTRY AFTER NUCLEAR REACTOR GOES DOWN

Ukrainian President Leonid Kuchma criticized Energy Minister Oleksiy Shebertsov and his ministry on 7 December after a nuclear reactor was shut down for safety reasons, AP reported. Kuchma said he will hold energy sector leaders personally responsible for continued problems. Reactor No. 2 at the Pivdeno-Ukrainskaya nuclear power station was automatically shut down by its safety system, said Nadezhda Shumak, a spokeswoman for the state-run nuclear energy company Energoatom. She said no radiation was released. The station, which is located about 300 kilometers south of Kyiv, had been running only for two days after undergoing nearly five months of repairs. Shumak said its shutdown is likely to cause brownouts. Meanwhile in Sevastopol, the Ukrainian telephone company Ukrtelecom shut off telephone lines to Russia's Black Sea fleet because of unpaid bills of some 500,000 hryvna ($146,000). PB

KUCHMA VETOES BILL RAISING MINIMUM WAGE

President Kuchma vetoed a bill on 8 December that would have raised the country's minimum wage, AP reported. Kuchma said the hike would force the government to lay off workers and either print more money or raise taxes. The legislature voted last month to nearly triple the minimum monthly wage from 55 hryvna ($16) to 148 hryvna. PB

LUKASHENKA WANTS NEW FOREIGN MINISTER TO SEEK EXPORT MARKETS

Belarusian President Alyaksandr Lukashenka said on 7 December that exports are one of the country's top priorities, Belapan reported. After introducing his new foreign minister, Ural Latypov, (see "RFE/RL Newsline," 7 December 1998) to the staff of the Ministry of Foreign Affairs, Lukashenka said "we should ensure an aggressiveeconomic policy to champion our economic interests and to sell our products [abroad]." Lukashenka also praised Latypov as highly educated, honest, and industrious. PB

IMF CONTINUES TALKS WITH BELARUSIAN OFFICIALS

Representatives of the IMF and government officials met in Minsk on 7 December to resume talks on a $100 million emergency compensation loan, AP reported. Yulia Lyskova, an IMF aide in Minsk, said the loan is contingent upon Minsk's fulfilling IMF recommendations on economic liberalization. She said the talks, which are expected to last all week, will determine what Belarus is doing to implement those plans. PB

ESTONIAN PEOPLE'S PARTY APPROVES JOINT LIST WITH MODERATES

The People's Party has approved running on a joint list with another opposition party, the Moderates, in the March 1999 elections, ETA reported on 7 December. No decision has yet been taken on a possible merger of the two parties. Toomas Hendrik Ilves, People's Party chairman and former foreign minister, said the party will have to wait for the Moderates' congress on 13 December before taking such a decision. Also on 7 December, ETA reported that three Russian parties--the Social-Democratic Labor Party, the United Popular Party, and the Russian Unity Party-- intend to merge to form a new left-wing organization. Last month, the parliament voted to ban electoral alliances (see "RFE/RL Newsline," 18 November 1998). JC

ESTONIAN LAWMAKERS AGAIN SUSPEND DEBATE ON ANTI-CORRUPTION BILL

For the sixth time, the parliament has suspended the debate on a new anti-corruption bill, ETA reported on 7 December. Daimar Liiv, chairman of the parliamentary Legal Commission, and Justice Minister Paul Varul both denied that discussion of the draft law, which was submitted to the parliament in March 1996, has been postponed owing to the efforts of corrupt officials. The bill does not fit into the Estonian legal system, Varul argued, adding that a 1995 anti-corruption law remains in place. On 8 December, the parliament is expected to approve amendments to the citizenship law in the third and final reading. Parliamentary group chairmen say they have the necessary 51 votes for the passage of the amendments, which provide for virtually automatic citizenship for stateless children under 15 who were born after 26 February 1992. JC

LATVIAN PREMIER DECIDES ON SOCIAL DEMOCRAT FOR AGRICULTURAL MINISTRY

Vilis Kristopans told journalists on 7 December that he has chosen among the six candidates proposed by the Social Democrats for the post of agricultural minister, BNS reported. Kristopans pointed out that under the coalition agreement, he cannot make that decision unilaterally and will therefore send letters to the coalition partners--Fatherland and Freedom party and the New Party--to approve his choice. He added that inviting a Social Democrat candidate to take over the Agricultural Ministry does not mean expanding the coalition. The Social Democrats have said that receiving the agricultural portfolio is a condition for supporting Kristopans's minority government. Maris Grinblats, the leader of the Fatherland and Freedom Party, which has opposed including the Social Democrats in the ruling coalition, said a decision on the matter will be taken by both the party's leadership and parliamentary group, RFE/RL's Latvian service reported. JC

LITHUANIAN SOCIAL DEMOCRATS WANT ECONOMY MINISTER REMOVED

Vytenis Andriukatis, a member of the Social Democratic parliamentary group, told journalists on 7 December that the party's presidium will seek to initiate a motion of no confidence in Economy Minister Vincas Babilius, BNS reported. Andriukatis said that information collected over the past 18 months provides "many sufficiently serious arguments" to remove Babilius from his post. According to Andriukatis, that information testifies to Babilius's incompetence in heading the ministry and in dealing with the energy sector and privatization. The minister's previous economic activities are also questionable, Andriukatis said. The Social Democrats are to seek support among other parliamentary groups to launch a motion of no confidence in Babilius. JC

POLISH PREMIER SAYS EU PLEASED WITH PREPARATIONS

Jerzy Buzek said on 7 December that the European Commission favorably received Warsaw's report on its preparations for EU membership, PAP reported. Buzek made his comments after Jan Kulakowski, the head of Poland's EU negotiating team, met with the EU's European Integration Committee. Among the main topics discussed were corporate law, consumer protection, health, and customs duties. Buzek said the commission is still concerned about the effect EU legal norms would have on the Polish legal system. In other news, a Polish court sentenced four skinheads to prison terms ranging from two to 25 years for attacks that led to the deaths of three people in Legionowo, just north of Warsaw. PB

ISRAEL WON'T ALLOW WAR CRIMES SUSPECT TO POLAND

Israel refused a Polish extradition request for a Jewish man accused of atrocities against German prisoners during World War II, AP reported on 7 December. Solomon Morel, who commanded a camp for German prisoners in Swietochlowice, southern Poland, is alleged to have tortured inmates there and to have been responsible for more than 1,500 deaths. Orit Shemesh, an Israeli Justice Ministry spokeswoman, said the statute of limitations in the case has run out. Morel, whose parents and two brothers died during the war, moved to Israel in 1994. PB

HAVEL, ZEMAN WARN AGAINST RACISM

President Vaclav Havel, meeting on 7 December with Premier Milos Zeman and other members of the cabinet to discuss racism and xenophobia, warned that the situation in the Czech Republic is "serious" owing to "growing apathy toward racist violence here," AP reported. Zeman said that while in opposition he had demanded the outlawing of the skinhead movement, adding that he has not changed his views since then. He said the movement is "a continuation of fascism in this country." Zeman also said the Czech secret service will monitor the movement and a special police unit will be formed to prevent racist attacks. Some 30 racist-motivated murders have been registered in the Czech Republic since 1989. MS

SLOVAK GOVERNMENT WANTS 'POSITIVE SIGNAL' FROM EU SUMMIT

Prime Minister Mikulas Dzurinda told journalists in Bratislava on 7 December that his government expects the EU to signal its willingness to bring Slovakia back among the front runners for EU membership at the EU Vienna summit on 11 December. Dzurinda said his cabinet has already taken steps to overcome several of the stumbling blocks identified by the EU in Slovakia's membership bid. In this connection, he mentioned improving the situation of national minorities, including the opposition in the work of parliamentary committees, and ending political control over state television and radio, Reuters reported. Dzurinda said, "We need a positive signal, such as the one we received from the European Parliament". MS

WASHINGTON PRAISES HUNGARIAN PROGRESS

Hungarian Foreign Ministry State Secretary Zsolt Nemeth on 7 December said his recent talks with U.S. Undersecretary of State Stuart Eisenstat and former Undersecretary of State Richard Holbrooke confirmed that Washington sees Hungary as "a bridgehead of democracy and market economics." Nemeth told reporters at the end of his U.S. visit that Hungary will most probably be admitted to NATO in the second half of February or early March. One day earlier, the Hungarian news agency quoted Defense Minister Janos Szabo as saying that according to the latest reports, Hungary will be a full member of NATO in March. MSZ




SERBIAN MINISTER WARNS MONITORS...

Serbian Deputy Prime Minister Tomislav Nikolic said in Belgrade on December 7 that "if the peace process [in Kosova] is established no one will be jeopardized, including the verifiers. But if Albanian terrorists are allowed to strut around, murder, kidnap we shall have to conduct the same action again as this summer but this time we shall go to the end regardless of what others think.... If the West, the Americans, Germans, French, British think there should be peace in [Kosova], then they should not send their troops to Macedonia." PM

...RECEIVES REBUKE FROM SOLANA

When asked about Nikolic's remarks, NATO Secretary-General Javier Solana said in Brussels on 7 December that a decision by the alliance that authorized air strikes against Serbia remains in effect. He added, "We are not going to tolerate statements like the ones...that have been made today." Solana discussed the deployment of NATO troops to Macedonia with Prime Minister Ljubco Georgievski (see "RFE/RL Newsline," 7 December 1998). The Macedonian leader said that "the mandate of these forces is quite clear: they are peace forces and they are to react only if the life of verifiers is in danger. And we do not treat [the deployment] at all as a hostile act towards a neighbor." The following day, NATO foreign ministers in a statement called on both the Serbs and the Kosovars not to exacerbate tensions in Kosova. PM

FRENCH SEND MILITARY EQUIPMENT TO MACEDONIA

The transport ship "Ouragan" left Toulon for Thessaloniki on 6 December, Reuters reported the next day. On board the ship are 128 vehicles, including "many" armored personnel carriers, and 160 ground troops, who will travel to Macedonia by land. An advance party for the French-led NATO rapid reaction force arrived in Macedonia by air on 6 December (see "RFE/RL Newsline," 7 December 1998). PM

KOSOVARS CALL NEW HILL PLAN 'UNACCEPTABLE'

Fehmi Agani, who heads the negotiating team appointed by shadow-state President Ibrahim Rugova, told a press conference in Prishtina on 7 December that U.S. envoy Chris Hill's latest plan for a settlement in Kosova is "almost identical to the Serbian proposal for Kosova...[and] cannot be considered a basis for...future negotiations." Agani stressed that Hill's plan is unacceptable because it anchors Kosova in the Serbian legal system rather than offering broad autonomy (see "RFE/RL Newsline," 7 December 1998). He added that Adem Demaci, who is the political spokesman for the Kosova Liberation Army (UCK), also rejects Hill's proposal, an RFE/RL correspondent reported from the Kosovar capital. PM

ALBANIAN MINISTRY REJECTS SERBIAN CHARGES

The Foreign Ministry issued a statement in Tirana on 8 December denying repeated claims by Serbian officials that Albania is providing training facilities for the UCK and is seeking to establish a "greater Albania." The statement added that "behind these unfounded accusations...is hidden the well-known aim of Belgrade to hamper and turn back the process of finding a real political solution to the Kosova problem." FS

SERBIAN MEDIA SITUATION CALLED 'WORST IN EUROPE'

Robert Menard, who heads Reporters without Borders, said in Belgrade on 7 December that Serbia is the worst country "in all of Europe" with regard to freedom of the media, an RFE/RL correspondent reported from the Serbian capital. He called on the Serbian authorities to repeal the recent press law, under which several periodicals have been shut down and radio stations forbidden to rebroadcast programs in Serbo-Croatian from abroad. PM

GELBARD SAYS POPLASEN BLOCKING DAYTON

Robert Gelbard, who is President Bill Clinton's special envoy for the former Yugoslavia, said in Banja Luka on 7 December that Republika Srpska President Nikola Poplasen's "actions and his words have shown us that he is against the Dayton agreement," which ended the Bosnian war in 1995. Gelbard added that Poplasen "appears to be using democratic mechanisms for anti-democratic purposes." Poplasen, for his part, said in a statement that he is "ready to accept any argument about the violation of the Dayton agreement and, if it happens, do everything to put a stop to it." Poplasen, who belongs to Vojislav Seselj's Serbian Radical Party, defeated moderate former President Biljana Plavsic in elections in September. PM

BOSNIAN SERB GENERAL PLEADS INNOCENT

General Radislav Krstic told the Hague-based war crimes tribunal on 7 December that he is innocent of charges of genocide in connection with the massacre of some 7,000 Muslim men and boys following the fall of Srebrenica in the summer of 1995 (see "RFE/RL Newsline," 3 December 1998). The VOA quoted international forensics experts as saying that they have examined mass graves in the Srebrenica area and that the evidence suggests the victims were executed. Many persons were mutilated and some had their hands bound with wire. Krstic commanded the Drina Corps in the area at the time. PM

BOSNIA TO LAUNCH PRIVATIZATION

The mainly Croatian and Muslim federation will start privatization within the next two months, Privatization Agency director Adnan Mujagic said in Sarajevo on 7 December. He added that before the process can begin, the international community's Carlos Westendorp must confirm that Bosnia's privatization laws are in order and a privatization agency for Mostar Canton must be set up. Tensions between Muslims and Croats are at their highest in the Mostar area. PM

CROATIA, BOSNIA BEGIN WORK ON BORDER ISSUES

Members of the border commissions from the two neighboring republics agreed in Banja Luka on 7 December on the order in which they will seek to resolve questions regarding their common frontier. First on the agenda for the next session is the region around Martin Brod, in western Bosnia. It is unclear when or where that meeting will take place. PM

TUDJMAN BLASTS 'DARK FORCES'

Croatian President Franjo Tudjman told the opening session of the Central Committee of the governing Croatian Democratic Community (HDZ) in Zagreb on 7 December that he firmly rejects what he called unwarranted demands by unnamed "centers" abroad on "the sovereign Croatian state." Tudjman stressed that he will "not allow" anyone to establish a "different Croatia" that will "serve outside interests" and regard itself as part of the Balkans, rather than a Central European country. The president added that the media in Croatia are much freer than their counterparts in many of the countries that criticize Croatia. Tudjman said that Croatia will not follow anyone's orders and urged other countries to mind their own business, RFE/RL's South Slavic Service reported. He did not specify which countries he meant. PM

GANG ROBS TIRANA-ATHENS BUS, KILLS POLICEMAN

A group of armed men robbed the Tirana-Athens bus at Kthesat e Greshices, near Tepelena, on 6 December and killed a policeman riding on the bus, ATSH news agency reported. Four of the robbers reportedly trapped the policeman by surrounding him inside the bus while other robbers ambushed the vehicle. Police have recently begun to travel in passenger buses to protect them against robberies. The Tirana-Athens line is particularly important because it takes migrant workers to jobs in Greece and brings them back. Buses are the mainstay of public transportation in Albania. FS

ROMANIAN OPPOSITION ENDS PARLIAMENTARY BOYCOTT

The leaders of the Party of Social Democracy in Romania, the Party of Romanian National Unity, and the Greater Romania Party--Ion Iliescu, Valeriu Tabara, and Corneliu Vadim Tudor--have agreed with Senate Chairman Petre Roman to set up three committees to discuss a parliamentary relations code and legislative priorities and to re-examine the opposition's move to debate a law-based state, Romanian media reported on 7 December. Representatives of both the ruling coalition and the opposition would belong to those committees. The coalition's rejection of such a move led to the parliamentary boycott that began in mid-November. Iliescu, Tabara, and Tudor said they might renew the boycott if the committees' decisions or the implementation of those decisions are unsatisfactory. MS

RENAULT TO HAVE MAJORITY STAKE IN ROMANIAN CAR FACTORY

The State Property Fund on 7 December received a bid from the French Renault firm for a 51 percent stake in the Dacia car producer of Pitesti, RFE/RL's Bucharest bureau reported. The French firm was the only bidder to make the deadline set by the fund, although other foreign automakers had earlier expressed an interest. Dacia produced Renault vehicles under license from 1968-1979. A spokesman for the fund said Renault plans to make large investments in the Romanian automaker and that the talks are expected to last no longer than several weeks. MS

FORMER BULGARIAN PREMIER SUED FOR LIBEL, INSULT

Zhan Videnov, who was Bulgarian premier from 1994-1996, on 7 December appeared in a Sofia court to face charges of libel and insult, AP reported. Atanas Tilev, a Bulgarian-born German businessman, sued Videnov for 15 million leva (some $9,000), after Videnov accused him of shady dealings in Bulgaria. If found guilty, Videnov could be sentenced to up to three years in prison. A bank owned by Tilev went bankrupt at the end of Videnov's tenure as premier, and Tilev has since accused a group of people close to Videnov of illegally siphoning money out of his bank. Two of the group's members were charged with embezzlement after fleeing abroad in 1997. MS




NEW SLOVAK GOVERNMENT INHERITS DIFFICULT ECONOMIC SITUATION


by Michael Wyzan

The government of Slovak Prime Minister Mikulas Dzurinda, which took office on 30 October, has found the country's economy beset by serious problems.

On 1 October, five days after the elections, the National Bank of Slovakia abandoned the first exchange rate for the Slovak crown, which had been introduced in 1993, in the face of a rapidly rising current account deficit. On 12 November, the cabinet doubled the projected 1998 budget deficit to 19.2 billion crowns ($549 million), 2.7 percent of GDP (compared with a projected 0.7 percent). The higher deficit figure is not alarming, but the true budget picture is far worse when losses at state-owned enterprises are taken into account.

Like its Romanian counterpart after November 1996, the new Slovak coalition government, committed to political and economic reform as well as rapprochement with Western institution, will likely find that economic performance deteriorates at the beginning of its term in office. And as in Romania and the Czech Republic, the question arises as to what extent and for how long the economy (and perhaps the new government's popularity) will pay the price for its predecessor's transgressions.

Slovakia's economic performance has always been puzzling. In terms of economic growth, Slovakia is one of the stars of the post-communist world, with GDP increasing by 6.5-7 percent annually from 1995-1997. Rapid growth continued in the first half of 1998, with GDP up by 6.1 percent.

For years, observers queried whether such GDP growth figures could be sustained in a country where little economic restructuring seemed to be taking place and which had received relatively little foreign direct investment (a cumulative $1.3 billion from 1993 through June 1998, based on balance-of-payments data). Both of these problems result largely from a non- transparent method of privatization that favored elements politically allied to the former government.

It would be expected that fast economic growth in a small open economy would be driven by rapid growth of exports. However, exports of goods and services grew at average annual rate of 2.8 percent (in constant crowns) from 1995-1997, less than half the GDP growth rate.

It is now clear that economic growth has been driven by a boom in state-sector infrastructure investment in projects like the Mochovce nuclear power station and the Gabcikovo hydroelectric power plant. Such investments contributed to an overheated economy and did little to reduce unemployment, which reached 13.8 percent in August (compared with 12.8 percent a year earlier), by far the highest figure among the four original Visegrad countries.

The investment boom contributed to the fact that imports in constant crowns grew over the last four years almost twice as fast as GDP. The result has been sizable trade and current account deficits, which after falling somewhat in 1997--owing to special measures to restrain imports taken by the authorities, which refused to devalue the crown--are up again substantially this year. The current-account imbalance for the first three quarters was about $1.6 billion, compared with $1.1 billion during the period January-September 1997. This means that the deficit will be around 10 percent of GDP for 1998.

It is clear that the economy will have to be slowed down to ensure that external imbalances are under control. Slovakia has relied heavily on short-term borrowing (more than 40 percent of the growing foreign debt is short term) and interest rates on such loans are high--especially since several rating agencies have lowered Slovakia's credit ratings during 1998 and international lenders have re-evaluated their relations with transition countries after the Russian debt default. Letting the National Bank's foreign reserves decline, from $3.7 billion in July to $3.0 billion in October, is hardly a sustainable substitute for foreign borrowing.

What is less certain is how steep a decline the Slovak economy will undergo. Given the rapid growth in the first half of the year, GDP will probably grow by 4-5 percent this year. Growth projections for next year run as low as 0 percent, although most forecasts are closer to 2.5-3 percent.

There are two key issues that will determine the Slovak economy's medium-term growth prospects. The first is how depressed the economy must become in order to have the current account deficit within acceptable limits. Although the government can do little about conditions on international capital markets, it could reduce the severity of the necessary contraction by a wave of cash privatizations of public utilities, which remain in state hands.

The second issue is whether the coalition government will prove sufficiently cohesive to make tough economic decisions on such questions as wage policy and privatization. The paralysis that has saddled Romania with a collapsing economy two years after electing a reformist coalition government must be avoided at all costs. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria.


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