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Newsline - December 29, 1998




MOSCOW WARNS U.S. ON IRAQ

The Russian Foreign Ministry issued a statement on 28 December warning against "actions that would not contribute to the creation of a favorable atmosphere for resuming the search for a political solution to the Iraq problem," Russian agencies reported. Ministry officials told Interfax that the statement was a response to the exchange of fire between U.S. aircraft and Iraqi air defense units. Earlier on 28 December, Foreign Minister Igor Ivanov repeated Moscow's opposition to any use of force in Iraq or in Kosova, and called for a rapid review by the UN of Iraqi weapons programs. Ivanov also blamed the Kosovar Albanians for the problems in Kosova and said that any use of force against Serbia "would only exacerbate" the situation. PG

YELTSIN PLEDGES TO PRESS AHEAD WITH DEMOCRATIC REFORMS

In a letter to Moscow's "Kommersant-Daily" on 29 December, the Russian President acknowledged that 1998 had not been "easy for any of us," but said that "there is no path for Russia except the one towards democracy, towards a state based on the rule of law." He suggested that "many people, especially 'Kommersant' readers, may have thought that the country was moving backwards. It is not so!" "As president, I affirm -- there is no way back," Yeltsin said. PG

DUMA DEPUTY DENIES PROBLEMS IN RUSSIA'S NUCLEAR PROGRAM

"Despite recent statements by US Energy Secretary Bill Richardson, we are able to provide for absolute safety in power engineering in Russia as well as in other countries where we construct nuclear power plants," Vladimir Gusev told ITAR-TASS on 28 December. Gusev, who is chairman of the Duma committee with oversight in this area, said that the situation in Russia's nuclear power engineering was "normal but not disastrous." PG

FYODOROV CALLS 1999 BUDGET UNREALISTIC...

Boris Fyodorov, the former finance minister and deputy premier, told a Moscow news conference on 28 December that the state budget given preliminary approval by the Duma on 25 December was based on "phoney" assumptions, Interfax reported. He suggested that inflation would be at least double what the budget assumed, that the ruble-dollar exchange rate would fall much further than projected, and that there is no reason to expect any economic growth in 1999. And Fyodorov said that the recent printing of "at least" 10,000 million rubles meant that the situation could "get out of hand within the next few months." The leader of the Forward Russia political party said his group will issue a detailed forecast in January 1999. PG

...AND SAYS TAX RECEIPTS MAY FALL BY HALF

Fyodorov, who also served as head of the State Tax Service, added at his 28 December news conference that he fears the actual collection of taxes may fall 30 to 50 percent, Interfax reported. Such declines, Fyodorov said, would make it impossible for Moscow to fulfill its promises to the international financial community and could lead to Russia's economic and political "isolation." PG

YELTSIN CALLS FOR TIGHTER CIS

Pronouncing himself satisfied with the performance of the country's foreign ministry, President Yeltsin told Foreign Minister Ivanov on 28 December that his priorities for the year ahead include closer integration within the Commonwealth of Independent States, the promotion of nuclear non-proliferation, and solving the Iraq and Kosova problems, ITAR-TASS reported. Yeltsin also said that he hopes to expand Moscow's ties with Europe. To this end, Ivanov said, Yeltsin plans to visit Paris in late January 1999. PG

RUSSIA-BELARUS UNION PROPOSAL SPARKS DEBATE

Vladimir Pokrovskii, the Russian official who has been responsible for expanding ties between Moscow and Minsk under the earlier union accords, told Reuters on 28 December that "nothing will happen or suddenly flower" as a result of the documents signed on 25 December by Presidents Yeltsin and Lukashenka. Pokrovskii said that the process of bringing the two countries closer together will be long and complex, with more than 2,000 issues still to be decided. But officials in Karelia, Murmansk, and Belgorod all greeted the proposed union, arguing that it reflects the combined will of the Russian and Belarusian peoples. PG

RUSSIAN COMMUNISTS URGE CLOSER TIES WITH UKRAINE

In a statement released following the ratification of the Russia-Ukraine friendship treaty on 25 December, the Communist faction in the Duma released a statement calling for expanded ties between the Russian and Ukrainian people, ITAR-TASS reported on 28 December. The statement called on Kyiv to help ensure that Russia's Black Sea fleet can operate on Ukrainian territory and not to do anything that could "destroy the spiritual and historic unity of both peoples." PG

IVANOV DENIES RUSSIA BEHIND CONFLICTS ON CIS TERRITORY

Following a 28 December meeting with visiting Armenian Foreign Minister Vartan Oskanian, Russian Foreign Minister Ivanov said that "speculations about Russia's alleged interest in the maintenance of tension in various regions for the sake of preserving its presence or its influence there are absolutely groundless," ITAR- TASS reported. Instead, Ivanov continued, Moscow is "interested in the full and final settlement" of all such conflicts "because this is in line with our national, strategic, long-term interests." PG

YELTSIN SAYS MILITARY REFORM GOING "SLOWLY"

During a meeting with Defense Minister Igor Sergeev on 28 December, the Russian president said that military reform is taking place "but still slowly," ITAR-Tass reported. He welcomed the reduction in the number of troops to 1.2 million, congratulated Sergeev on the introduction of the Topol-M missiles, and praised the government for increasing its financial support for the military. PG

RYZHKOV SAYS RUSSIANS HAVE NEVER BEEN NATIONALISTIC

Speaking in Barnaul on 28 December, Vladimir Ryzhkov, the first deputy speaker of the Duma, denounced recent nationalistic statements by his colleagues. He called on Siberians to voice their opposition to such statements. And he argued that "nationalism has never been characteristic of Russian people and never will be, as this contradicts our entire history." PG

KARAGANOV PRAISES RUSSIA-INDIA-CHINA AXIS

Sergei Karaganov, the head of the Foreign and Defense Policy Council, told Interfax on 27 December that he welcomes Prime Minister Primakov's plans for a Russia-India-China axis. Not only would "we like to use our cooperation to counterbalance the excessive power of the United States," Karaganov said, the creation of such a structure, along with a Russia-European Union accord will promote stability at a time when the international relations system "is very rapidly falling apart." PG

LUZHKOV SAYS HIS FATHERLAND MOVEMENT IS "FOREVER"

Moscow Mayor Yurii Luzhkov told Interfax-Moscow on 28 December that his new Fatherland Movement was not simply a means for competing in the upcoming parliamentary and presidential elections but rather had been created to last "forever." He said that the movement is preparing a program for discussion at its second congress in April 1999. And Luzhkov added that he has no interest in forming "any alliances or unions" with former prime minister and current Our Home is Russia leader Viktor Chernomyrdin. (See also "End Note") PG

LEBED CALLS FOR REINSTATEMENT OF DEATH PENALTY

In order to put the country in order, Krasnoyarsk Governor Aleksandr Lebed said on 28 December that the country should impose harsher penalties on criminals, including the reinstatement of the death penalty, ITAR-TASS reported. He said that the West would "greet" such a step if it were effective, even though it would put Moscow at odds with the requirements of the Council of Europe. In other remarks, Lebed called for lifting parliamentary immunity so that the courts could prosecute legislators, and for giving the police expanded freedom to shoot to kill. PG

SKURATOV URGES TOUGHER SENTENCES FOR CORRUPTION

Russian Prosecutor General Yurii Skuratov on 28 December called for tougher sentences to be handed out in corruption and bribery cases, ITAR-TASS reported. He said that he is surprised by the number of those convicted who are sentenced to probation rather than prison. And he said he is disappointed that the Swiss authorities have not used evidence provided by Moscow to convict Sergei Mikhailov, who is widely thought to be a Russian mafia chieftain. PG

PUBLIC TV CHIEF SAYS YELTSIN LOAN WON'T AFFECT PROGRAMS

ORT General Director Igor Shabdurasulov said on Ekho Moskvy on 28 December that President Yeltsin's decision to open a credit line for the hard-pressed network will not affect its programming decisions, ITAR-TASS reported. Shabdurasulov said that Yeltsin had made the loan rather than the government because ORT had been created by presidential decree, and he said that the government is fully protected from any losses by ORT assets. PG

MOSCOW TO RESTRICT MILITARY COOPERATION TO STATE-OWNED FIRMS

Trade Minister Georgii Gabunia told Prime-Tass on 28 December that the Russian government planned to prohibit any firm that is less than 50 percent owned by the state from carrying out military-technical cooperation with foreign countries. Such an arrangement will allow the authorities to control the situation more effectively as they seek to generate increased revenues from such programs. PG

CUSTOMS TO CREATE "GREEN CORRIDOR" FOR LAW-ABIDING...

State Customs Committee chairman Valerii Draganov told ITAR-TASS on 28 December that he plans to crack down on smuggling but will create special and easier border -- something he called the "green corridor" -- clearing procedures for those businesses which have demonstrated they obey the law. Draganov said that his committee is compiling a list of approximately 100 to 150 such companies. PG

...BUT TIGHTEN CONTROLS TO RAISE REVENUES

Draganov added that the Russian Federation should increase customs duties 2.5 times in 1999 in order to raise revenue. He noted that the Customs Committee accounted for 30 percent of budget revenues in 1998, a figure he said would rise to 45 percent in 1999. And he added that his committee is preparing a plan for self-financing of its own activities. PG

FOUR OUT OF FIVE RUSSIANS SAY LIFE BECOMING HARDER

A December poll of 1600 Russians found that 82 percent believe that their lives have become more difficult over the past year, Interfax reported on 28 December. Asked by the Public Opinion Fund to name the three most important events of 1998, 43 percent said the August financial crisis, 32 percent volunteered the murder of Duma Deputy Galina Starovoitova, and 30 percent indicated the growing inflation. PG

HUMANITARIAN AID MATCHES FALL IN IMPORTS

Trade Minister Gabunia told Prime-Tass on 28 December that humanitarian assistance from abroad would not have any dramatic effect on domestic producers because "the volume of humanitarian deliveries is the same size as the reduction of imports" following the August 1998 financial crisis. PG

BODIES OF SLAIN ENGINEERS FLOWN TO U.K.

The remains of one New Zealand and three British telephone enginers executed in Chechnya three weeks ago were transported from Chechnya via Dagestan to Baku on 28 December and flown from there to London the following day. The Chechen leadership had vetoed transporting the bodies to Moscow. Chechen Deputy Prime Minister Kazbek Makhashev told Interfax on 28 December that the investigation into the murders "has advanced considerably." He said the suspected murderers will be tried in a Shariah court and executed if found guilty. LF




ARMENIAN FOREIGN MINISTER IN MOSCOW

Vartan Oskanian held talks in Moscow on 28 December with his Russian counterpart Igor Ivanov, Russian First Deputy Prime Minister Vadim Gustov, and the Russian co-chairman of the OSCE Minsk Group, Yurii Yukalov, ITAR- TASS reported. Speaking at a joint news conference, Oskanian and Ivanov positively assessed cooperation and bilateral relations in 1998. Ivanov said that he and Oskanian had discussed the possibility of "direct talks" on resolving the Karabakh conflict "with the assistance of the OSCE and with Russia's participation." (Such talks would presumably involve Armenia, Azerbaijan and the unrecognized Nagorno-Karabakh Republic, although Ivanov did not say so explicitly.) Ivanov said there are no "ready formulae" for resolving the conflict, and the "political will" to do so is essential. Both ministers denied that Russian-Armenian military cooperation is directed against any third country. Oskanian said that cooperation is "absolutely transparent" and implemented within the framework of the CFE treaty. LF

TOP ARMENIAN OFFICIALS RECEIVE SALARY INCREASE

The Armenian parliament passed legislation on 28 December quadrupling the salaries of leading government, parliament and judiciary officials, RFE/RL's Yerevan bureau reported. The president, prime minister, ministers and their deputies, heads of government departments and parliament leadership will in future receive an average monthly salary of 187,500 drams ($370). Parliament also passed legislation requiring top officials to complete an annual declaration of their income and property, ITAR-TASS reported. LF

AZERBAIJANI PRESIDENTIAL ADVISOR CONDEMNS RUSSIAN 'NEO- IMPERIALISM'

Vafa Gulu-zade told Turan on 28 December that a statement by Duma deputy speaker Sergei Baburin during last week's debate on ratification of the Russian-Ukrainian Treaty is "a manifestation of the imperial ambitions of Russia's political elite." Baburin had recalled that Russia "ceded Kars and other Armenian territories" to Turkey in the 1920s. Gulu-zade also condemned deliveries to Armenia of Russian weaponry, which he said included S-300 missiles. He equated the Armenian-Azerbaijani conflict with "the long-drawn-out Russian-Turkish conflict, in which Armenia implements its master's will," and said that "the Azerbaijani people have fallen victim to the Russian national idea of world domination," according to Interfax. LF

AZERBAIJANI PARLIAMENT DELEGATION VISITS IRAN

An Azerbaijani parliament delegation headed by chairman Murtuz Alesqerov held talks in Tehran on 22-23 December with Iranian parliament chairman Ali Akper Nateq Nouri and former president Ali Akbar Hashemi Rafsanjani, Turan reported. The talks focussed on improving bilateral relations, regional conflicts and the status of the Caspian Sea. The Azerbaijani delegation then travelled to Meshed, where the possibility of beginning regular flights between that city and Baku was discussed. On 25 December the delegation visited Tabriz, the second largest city in Iran and the cultural center of that country's large Azerbaijani minority. It was the first visit to Tabriz by a delegation from the Azerbaijan Republic. LF

AZERBAIJAN ANNOUNCES SELECTIVE AMNESTY

President Heidar Aliyev has submitted to the Azerbaijani parliament a bill that would amnesty up to 12,000 prisoners, Turan reported on 25 December. Those eligible include World War II veterans, persons unjustly repressed in the Stalinist period, refugees and internally displaced persons, and persons over 60. But as Azerbaijan Popular Front Party member Alimamed Nuriev pointed out to Turan, persons convicted for slander, violating public order, insulting the president and giving false evidence are not eligible for amnesty. LF

CHEVRON REAFFIRS COMMITMENT TO KAZAKH DEVELOPMENT

Senior Chevron Corporation official Kenneth Derr told Kazakhstan's President Nursultan Nazarbayev at a 28 December meeting in Astana that his company will increase production at the Tengiz field despite the fall in world oil prices, Interfax and RFE/RL's Astana bureau reported. Derr said the Tengizchevroil joint venture plans to raise annual output from 8.6 million metric tons in 1998 to 12 million tons by mid-2000. Derr told journalists after the meeting that measures to scale down production costs at Tengiz, including cutting transportation costs, were also discussed. LF

KYRGYZ PREMIER'S POWERS TO BE BROADENED

Presidential press secretary Kanybek ImanAliyev said in Bishkek on 28 December that President Askar Akayev will shortly issue a decree giving newly- appointed Prime Minister Jumabek Ibraimov greater authority in appointing government officials and regional leaders, RFE/RL's Bishkek bureau reported. Hitherto all ministerial appointments have been the exclusive prerogative of the president, according to Interfax. But ImanAliyev added that the delegation of additional powers from the president to prime minister will only be temporary, without specifying for how long a time period. LF

TURKMENISTAN SHELVES TRANS-IRANIAN GAS PIPELINE

The President of BP-Dutch Shell, Hank Dajkgraaf, told journalists in Ashgabat on 24 December after meeting with President Saparmurat Niyazov that plans to proceed with construction of a gas export pipeline from Turkmenistan to Turkey via Iran have been postponed indefinitely, Interfax and Turan reported. Dijkgraaf said that the Turkmen leadership prefers the alternative Trans-Caspian route, and that "it is impossible to implement simultaneously two large-scale gas pipeline projects oriented towards the Turkish market." BP-Dutch Shell holds the exclusive rights to create a consortium to construct a gas export pipeline from Turkmenistan to Turkey. LF

NEW POLITICAL PARTY FOUNDED IN UZBEKISTAN

The founding congress of the Fidokorlar national democratic party was held in Tashkent on 28 December, RFE/RL's bureau in the Uzbek capital reported. Participants at the congress elected the former deputy director of the Uzbekistan Strategic Research Institute, Erkin Norbotaev, as party general secretary, and approved the party program and statutes and the founding of a party newspaper. Meeting earlier this month with Uzbek President Islam Karimov, the party's founders assured him of their "progressive views" and ability "to assume responsibility for democracy, justice and the happiness of the people," according to Interfax. LF




KUCHMA ASSESSES OUTGOING YEAR AS 'COMPLEX, CONTRADICTORY'

Ukrainian President Leonid Kuchma said at a ceremony of bestowing state awards in Kyiv on 28 December that the year 1998 was "complex and contradictory," but "the situation is neither hopeless nor tragic," Ukrainian Television reported. According to Kuchma, Ukrainians need to "halt complaining about unfavorable conditions, roll up their sleeves, and get down to work." Kuchma criticized those politicians who made "populist proposals and promises" during the debate of Ukraine's 1999 draft budget. "Unfortunately, I have no grounds to say that the upcoming year 1999 will be much easier [than 1998]. It is obviously impossible to resolve sore problems quickly and painlessly," he added. JM

CRIMEAN DEPUTY ARRESTED FOR PLOTTING CONTRACT MURDER

Crimean police have arrested Mykola Kotlyarevskyy, a deputy of the Crimean parliament, Ukrainian Television reported on 28 December. Kotlyarevskyy is charged with plotting a contract murder and a long string of assaults, extortion, and engaging in swindling cases with the assistance of a gang in 1994-97. Hennadiy Moskal, head of the Ukrainian Interior Ministry's Crimean Directorate, said the Crimean parliament "has at least three [other] deputies with a criminal record," but did not disclose their names. JM

BELARUSIAN FOREIGN MINISTER BRIEFS ON MERGER WITH RUSSIA

Belarusian Foreign Minister Ural Latypau on 28 December held a briefing for foreign diplomats in Minsk on the Russian-Belarusian merger accords signed on 25 December in Moscow (see "RFE/RL Newsline, 28 December 1999), Belarusian Television reported. According to Latypau, both Russia and Belarus will remain sovereign countries "at all stages of unification." He said the discussion of the unification process will be conducted "by a method of public opinion polls." He did not rule out amendments to the constitutions of Russia and Belarus if the future merger treaty "exceeds the constitutional framework." JM

DEMONSTRATORS AGAINST BELARUS-RUSSIA MERGER PUNISHED

Minsk courts have disciplined nine people arrested for participating in the 25 December demonstration (see "RFE/RL Newsline," 28 December 1998) against the merger accords signed by Presidents Alyaksandr Lukashenka and Boris Yeltsin, RFE/RL's Belarusian Service reported on 28 December. Four people were punished with a 5-day detention, three with fines, and one with a court warning. Meanwhile, activists of the opposition Belarusian Popular Front staged a picket on 28 December in Pinsk, southern Belarus, to protest Lukashenka's integration accords with Russia. JM

LENINGRAD MILITARY DISTRICT SETS UP BALTIC UNIT

Citing NATO's decision to expand and the possibility that the three Baltic countries will be included into the Western alliance, the Leningrad MD has established a "Russian army group in the Baltic direction," ITAR-Tass reported on 29 December. Given that the LMD conducted a training exercise last summer in the regions adjoining Estonia and Latvia under the rubric "Operation Return," this latest decision appears likely to exacerbate tensions in this region. PG

ESTONIAN PREMIER FAVORS BALTIC FREE TRADE AREA

A spokesman for Prime Minister Mart Siiman said on 28 December that Tallinn continues to support the Baltic free trade treaty and that the Estonian government will not try to modify it, BNS reported. Siiman's Latvian and Lithuanian counterparts will meet with him in Tallinn on 7 January to discuss trade problems, including Latvia's efforts to restrict the importation of pork from Estonia. PG

ESTONIA'S EUROINTEGRATION EFFORT SLOWS

Hendrik Hololei, the chief of Estonia's Eurointegration Bureau, told BNS on 28 December that Tallinn's efforts to integrate Estonia into Europe re "stalled" as a result of poor planning and administrative shortcomings within the government. Hololei added that the draft bills on this subject that had been scheduled to reach the Estonian parliament in 1998 will be several months late as a result. PG

NATURALIZATION UP IN ESTONIA, LATVIA

Estonia naturalized 9196 people in the first 11 months of 1998, up from 6720 in the same period during 1997, BNS reported on 28 December. Of the new citizens, 5904 were children. As a result, some 105,032 people have been naturalized since 1992. Meanwhile in Latvia, 4439 people were naturalized in 1998, up from 2993 in 1997. That brings the total of those naturalized since the recovery of Latvian independence to 11,432. Most of those naturalized in both countries were ethnic Russians. Latvian officials told BNS that they expect the number to grow rapidly in 1999 because of changes in Latvia's citizenship legislation. PG

LATVIA UNABLE TO SPEND ONE PERCENT OF GDP FOR DEFENSE

Prime Minister Vilis Kristopans told Latvian Radio on 29 December that his government cannot afford to devote one percent of the country's GDP for defense spending, BNS reported. But he added that it is possible that Riga may be able to do so within a year. At present, Latvia spends a significantly lower percent of its GDP on defense than either of its Baltic neighbors. PG

EUROPEAN UNION FUNDS LITHUANIAN PROJECTS

Under the terms of a memorandum signed on 28 December by EU representatives and Lithuanian Foreign Minister Algirdas Saudargas, the European Commission will fund several projects in Lithuania during the next year. These are part of the special "catch-up" fund established by the EU to aid those countries not included in the first round of candidacy for accession talks. PG

LANDSBERGIS SAYS BRU DIRECTED AGAINST LITHUANIA

Lithuanian Parliament Speaker Vytautas Landsbergis told ITAR-Tass on 28 December that the proposed Russian-Belarusian Union was part of Moscow's effort to block Lithuania and her neighbors from joining NATO. He suggested that the timetable adopted by the Russian and Belarusian presidents on 25 December for what he called "Russia's westward expansion" was set to coincide with the Western alliance's Washington summit. PG

VISITORS TO POLAND MUST SHOW FINANCIAL SUPPORT

A new customs regulation taking effect on 1 January 1999 obliges foreigners entering Poland to show on request that they have enough money for their stay, AP reported on 29 December. According to the regulation, foreign tourists older than 16 years must have at least 500 zlotys ($143), or at least 100 zlotys for each day they intend to stay. Those under 16 must have 300 zlotys, or 50 zlotys for each day of their stay. Foreigners using Poland as a transit route must also have financial support: 200 zlotys for those over 16 and 100 zlotys for others. Polish officials have said the new regulation is intended to tighten border controls without having to reintroduce visas for citizens of post-Soviet states in the east. JM

CZECH FOREIGN MINISTER WARNS AGAINST HASTE IN JOINING EU

The government does not regard 1 January 2003, which has been set as the target date for joining the European Union, "as dogma," Czech Foreign Minister Jan Kavan said in an interview with "Lidove noviny" on 28 December. Kavan said postponing the date for joining the EU "for the benefit of better preparation could be an advantage," CTK reported. He said one might remember as "an analogy" Greece, "whose industry has been destroyed by joining the EU." Kavan said that joining the union was "nonetheless necessary" because non-member states were exposed to "unfavorable conditions raising from West European protectionism." MS

CZECH SKINHEADS CHARGED FOR ATTACK ON ROMA

Six skinheads were charged on 28 December for a racially-motivated attack on an invalid Roma at the Havlickuv Brod railway station on 14 November, CTK reported. The six, three of whom are minors, attacked the deaf and dumb man as he was leaving a restaurant in the station. The case will come before a court of justice in late January, and if found guilty, the skinheads could face up to three years in prison. Also on 28 December, Human Rights Commissioner Petr Uhl said he decided not to announce a tender for a memorial that is to be set up at the site of a former Romany concentration camp in Lety, southern Bohemia. The camp functioned between 1939 and 1943 and is now occupied by a pig farm. Uhl said he first plans to raise money for the transfer of the farm to another site. MS

OPPOSITION WALKS OUT OF HUNGARIAN PARLIAMENT IN PROTEST

Deputies representing the opposition Socialist Party and the Free Democrats walked out of the parliament on 28 December in protest against a government proposal to change the proportion of representation on the supervisionary bodies of the state radio, state television, Duna television and the MTI news agency, Reuters and MTI reported. The government proposed to add six members to these bodies and the oposition says this would leave it in the minority. A law passed under the former Socialist-Free Democrats coalition gave equal representation to government and opposition on the bodies controlling public media. Also on 28 December, president Arpad Goencz appointed Tamas Deutsch as Minister of Youth and Sports as of 1 January 1999. Deutsch became known after his arrest in Prague in August 1989, at an opposition protest marking the 1968 Soviet invasion. MS

HUNGARIAN PARLIAMENT APPROVES AMENDED 1999 BUDGET

The parliament on 28 December approved an amended version of the 1999 budget with a vote of 205-145. The total budget is 3.5 trillion forints ($ 16 billion) and the projected deficit is 374.17 billion forints ($ 1.7 billion), representing some 4 percent of the Gross Domestic Product, AP and MTI reported. The legislature also approved the setting up of a controversial tax police, to be called the Criminal Directorate. It granted the directorate large investigative powers, including that of covert surveillance. The new body is designed to combat tax evasion. An estimated 30 percent of Hungary's GDP is generated by the black economy. MS




RUGOVA WANTS NATO ROLE IN KOSOVA...

Shadow-state President Ibrahim Rugova said in Prishtina on 28 December that the "civilian Albanian population is threatened" by the Serbian military and police presence and operations in the Llap region near Podujeva, KIC news agency reported. A stepped-up international, including NATO, engagement is needed to force Belgrade to end its aggressive policy of ethnic cleansing, Rugova added. Meanwhile in the Podujeva area, the latest cease-fire held on 28 and 29 December against a background of fog and freezing temperatures (see "RFE/RL Newsline," 28 December 1998). The fighting over the long weekend led to a total of 14 killed and four wounded, RFE/RL's South Slavic Service reported. PM

...AS DOES ALBANIAN PARLIAMENT

The Albanian legislature in a special session on 28 December passed a resolution charging Belgrade with "openly [committing] ethnic cleansing [and violating] Security Council Resolutions" in Kosova. The resolution says that NATO intervention is needed to prevent a "humanitarian catastrophe" and to speed up a political solution. The declaration also urged the international community to organize an international conference at which the future status of Kosova will be negotiated. Parliament asked the government to give "strong support" to the Kosovars and called on all political forces in Albania and Kosova to find a common platform on the issue, "Zeri i Popullit" reported. The opposition Democratic Party did not participate in the session. Legislator Vili Minarolli from the Democrats told the Enter news agency that his party prefers to discuss the resolution at a multi-party round table. FS

UCK SAYS SERBIAN FORCES THREATEN KOSOVARS, FOREIGNERS

The Kosova Liberation Army (UCK) said in a statement in Prishtina on 28 December that Kosovars and international employees alike face increasing danger from Serbian security forces in the Llap region. KIC quoted the UCK as stating: "having been defeated by the UCK forces on 24 December, the Serbian occupation forces took revenge against the [ethnic] Albanian civilian population and threatened OSCE observers and international media representatives." The guerrillas pledged that "international institutions, governmental and non-governmental, as well as media representatives, will in no way face obstructions by the Albanian people and the UCK. They will in no way be harmed by us, but rather welcomed." The UCK urged foreign representatives not to assign equal blame to the "criminal and the victim We are confident you have not sent your representatives to approve the Belgrade regime's crimes," the text concluded. PM

UNHCR LOOKS FOR DISPLACED PERSONS

A spokesman for the United Nations High Commissioner for Refugees said in Geneva on 28 December that efforts are under way to locate the up to 5,000 persons who fled their homes in sub-zero temperatures during the past week's fighting (see "RFE/RL Newsline," 28 December 1998). The spokesman added that most displaced people have probably fled to the homes of friends and relatives nearby, but also that some are living rough in the nearby hills. Some Serbs and Montenegrins as well as ethnic Albanians have fled their homes in recent days. PM

BOSNIAN SOCIAL DEMOCRATS UNITE

Representatives of the two strongest non-nationalist opposition parties agreed in Tuzla on 28 December to merge the Social Democratic Party and the Social Democrats of Bosnia-Herzegovina as of 27 February. The new party will be called the Social Democratic Party of Bosnia-Herzegovina. The two parties are the direct descendants of the former League of Communists and have their strongest bases of support in Sarajevo and Tuzla. The two parties together have 25 seats out of 140 in the federation's lower house. Representatives of the international community and West European Social Democrats have been working for over one year to bring about the merger in an effort to counterbalance the strength of the nationalists. PM

BOSNIAN PRESIDENCY NOMINATES NEW GOVERNMENT LEADERS

The three- member joint presidency agreed in Sarajevo on 28 December to keep Muslim politician Haris Silajdzic as one of the two co-prime ministers and to replace hard-line Serb Boro Bosic with moderate Svetozar Mihajlovic for the other position. The Croatian Democratic Community's Neven Tomic will keep his deputy premiership. The joint parliament must now vote on the nominations, as well as on a proposal to increase the number of ministries. PM

POPLASEN TO PUSH INTEGRATION WITH BELGRADE

Hard-line Republika Srpska President Nikola Poplasen told the Belgrade daily "Vecernje novosti" of 28 December that the Bosnian Serbs will seek closer integration with federal Yugoslavia "in the near future." He stressed that the Bosnian Serbs are entitled to better ties with Belgrade as a quid-pro-quo for their having accepted the Dayton agreement. Critics of the peace treaty have said that one of its basic flaws is that it recognizes a single Bosnian state, but gives broad powers to each of the two entities. The Republika Srpska maintains its own relations with Belgrade, while the federation has special ties to Zagreb. PM

TUDJMAN TAKES STOCK OF 1998

Croatian President Franjo Tudjman said in Zagreb on 28 December that the high points of this past year for his country were the reintegration of eastern Slavonia, the papal visit, and the signing of an agreement on special relations between Croatia and the Bosnian federation. Tudjman spoke at a reception for 2,000 people at his official residence. PM

CROATIA TO REVIEW COOPERATION WITH HAGUE?

Ivic Pasalic, who is Tudjman's top aide and regarded by many as the second most important man in Croatia, told "Jutarnji list" of 28 December that Zagreb may reconsider or even stop its cooperation with the Hague-based war crimes tribunal if the court indicts persons who are currently top commanders of the Croatian army. The unnamed generals may be sought for atrocities they allegedly committed during the successful Croatian offensives of 1995, Pasalic suggested. Pasalic, who comes from Herzegovina, argued that no Serb or Muslim has been charged with crimes against Croats in conjunction with the war in Bosnia-Herzegovina, and that some Serbs indicted for atrocities in Croatia are living openly in Serbia. Tudjman recently suggested in a speech that the court has secretly indicted up to six Croatian generals. PM

ALBANIAN POLICE TEAR DOWN KIOSKS

Police began tearing down over 37 unlicensed kiosks on central Tirana's Skanderbeg Square on 26 December. City officials said that they want to erect a monument for Mother Teresa on the site, where a statue of dictator Enver Hoxha stood until 1991. Some owners of the kiosks threatened to start a hunger strike, saying they have lost their only source of income and that the police action also made them homeless. Meanwhile, Croatian-Albanian businessman Vebi Velija, who owns the property, demanded that he be allowed to build a high-rise building there. He told the "Albanian Daily News" of 29 December that the government has for years denied him a building permit and warned that the authorities are sending a wrong signal to foreign investors. FS

ITALIAN BANK WINS ALBANIAN PRIVATIZATION TENDER

Privatization Ministry official Vasil Pano told "Albanian Daily News" of 29 December that Milan's Banca Intermediazione Mobiliare has won a World Bank tender to consult Albania's government on the privatization of five key industries, including oil, mining and telecommunications. The privatization process is scheduled to begin in January 1999. Meanwhile, in separate incidents between 26 and 28 December near the southern Italian coast, the Italian Coast Guard intercepted four speed boats carrying a total of over 100 illegal immigrants, most of whom are Kosovars and Kurds. FS

LIQUIDATION OF LOSS MAKING STATE COMPANIES INITIATED IN ROMANIA

The State Property Fund on 28 December started legal procedures for the liquidation of 30 loss making state companies, RFE/RL's Bucharest bureau reported. Radu Sarbu, chairman of the fund, said some 12-15 of these companies may be able to restart operating next spring as private companies because investors have expressed an interest in taking over their debts and investing in technological restructuring. The closure of the companies will affect some 70,000 persons, who will receive the compensation stipulated under the law as soon as the affected companies' administrative boards approve the closures. Sarbu said a total of 49 loss making state companies will be liquidated in the near future. MS

ROMANIAN MINERS BRACE FOR STRIKE

The two main unions representing Romanian miners set up a joint committee on 28 December to prepare the strike planned for 4 January in protest against the government's plans to close pits, Mediafax reported. The committee is demanding a meeting with premier Radu Vasile and said the planned strike might be postponed until 11 January, depending on the outcome of the meeting. The committee was empowered to prepare the unification of all unions representing miners. Miron Cozma, the leader of the Jiu Valley miners, said he is prepared to step down in order to facilitate the unification. Cozma and the leader of the Cartel Alfa miners, Marin Condeescu, have long been opponents. MS

MOLDOVAN HARD CURRENCY RESERVES HALVED IN 1998

National Bank chairman Leonid Talmaci on 28 December told Infotag that Moldova's hard currency reserves were halved in 1998-- from $ 300 million before the August Russian financial crisis to about $ 150 million at present. Talmaci also said he expects the 1998 inflation rate to be about 10 percent and forecast that in 1999 the rate will be 15 percent. MS

BULGARIAN FOREIGN MINISTER DEFINES 1999 TASKS

Nadezhda Mihailova told BTA on 27 December that Bulgaria's "chief challenge" in the forthcoming year is to prove to its partners in the international community that its 1997-98 progress was part of "a persistent successful policy." She said the reforms that had been carried out are "irreversible" and prove that Bulgaria "can be a worthy member of the European and the Euro-Atlantic community." Priorities in 1999 will concentrate on initiatives connected with the region, regional stability and efforts to find a solution to the Kosova crisis, Mihailova said, adding that Sofia's involvement in finding solutions to Kosova can have "a positive effect on the country's image." She said the crisis has no direct impact on Bulgaria and does not pose an immediate threat to its national security, but has an influence on the region's image that impacts every country and makes foreign investors cautious. MS

BULGARIAN PREMIER MEETS FORMER MONARCH

Ivan Kostov met on 28 December with former King Simeon II, who is spending his Christmas holiday in Bulgaria, AP reported. The government press office said the premier informed Simeon about the costs of maintenance of two palaces, three hunting lodges and two country houses that the monarch is to be restored ownership of in line with a June decision of the Constitutional Court. MS




LUZHKOV'S "OTECHESTVO" HOLDS FOUNDING CONGRESS


by Floriana Fossato

The registration deadline for political movements wishing to contest Russia's next parliamentary elections, scheduled for 19 December 1999, expired at midnight on 19 December 1998. The last movement able to meet that deadline was the newly formed "Otechestvo" [Fatherland], which on the same day held its founding congress and elected Moscow Mayor Yurii Luzhkov as its leader.

Russian media called the achievement "impressive." Under Russian law, a political organization must submit to the Justice Ministry both its charter and documentation on its funding in order to obtain formal registration. The ministry then has one month to examine those documents and decide whether to register the movement.

In the case of "Otechestvo," just a few hours after the necessary documents had been brought to the ministry, Justice Minister Pavel Kresheninnikov told Luzhkov that registration had been granted.

Luzhkov, in turn, thanked Kresheninnikov for his ministry's "business-like approach" and explained that registration had been possible because 59 regional branches of the movement, set up after Luzhkov launched "Otechestvo" in November, had duly provided the requested documentation. The protocol of the 19 December founding congress was the only document still needed.

At "Otechestovo"s founding congress, which took place in the prestigious Column Hall in downtown Moscow, Luzhkov received support from more than 1,100 delegates, when he detailed his vision for Russia's future. Observers present at the meeting were struck by the organizational efforts, the wide range of the delegates' backgrounds and the security measures. In all of those respects, many thought the gathering reminiscent of Communist Party congresses.

Calling for a revival of the defense industry and the country's nuclear forces, Luzhkov told delegates that Russia needs "a modern army and a reliable nuclear deterrence system" in order to restore its role as a leading world power. This need, he said, was illustrated by the U.S.-led attacks against Iraq, which Russia strongly opposed but was unable to stop or influence. Luzhkov also said that he wants to create a state system "based on social democracy, strong state power, and a combination of market-economy methods and social policies." And he commented that to achieve these goals, he wants to draw support from both the right and left of the political spectrum.

According to the daily "Vremya-MN," Luzhkov's "declared centrist line" prompted him to use phrases that "should appeal to many...and will probably become a slogan textbook for his supporters."

However, another daily,"Segodnya," said that Luzhkov's words illustrate that the movement's election campaigns "will be based on strong criticism of radical-liberal reform and of the results of the activities of governments led first by [Viktor] Chernomyrdin and then by [Sergei] Kirienko."

Without naming any names, Luzhkov lambasted reforms carried out in Russia during the last seven years. He commented that "for the second time in this century," Russia has been overtaken by doctrines that are "alien to its culture." "If the situation in the country remains as it was," Luzhkov added, "we will all be up against some serious difficulties."

According to Luzhkov, the implementation of reform, which has enriched just a few and left the majority of Russians struggling to make ends meet, has proved a dangerous "experiment." He said that "vulgar monetarism can be implemented, but for this one should choose a country and a people one does not feel sorry for." He concluded by telling delegates that "Now, dear sirs, the experiment is over." Those words were greeted with warm applause from the audience, composed of many industrialists of the early perestroika period as well as by regional bosses and politicians who had earlier suppported President Boris Yeltsin.

Luzkhov, who is seen as one of the leading contenders to replace Yeltsin in an election set for the year 2000, also called for "experienced managers" of the Soviet-era to be reinstated in leading positions and for property that had been privatized illegally to be returned to the state.

Luzhkov's message is one of patriotism and national unity, both of which have been wounded by the many political and economic crises of the last few years and, in particular, by the fallout of the August financial collapse. Luzhkov's critics, however, argue that it was the very reforms that he now condemns that helped Moscow's growth. Taxes on emerging businesses were largely collected in Moscow to the benefit of the local budget.

Luzhkov is popular in the capital and enjoys consistently strong ratings in opinion polls. But many observers question whether there is support for the Moscow mayor in Russia's regions. Over the past 12 months, Luzhkov has been cultivating a network of supporters among regional leaders.

The founding congress of "Otechestvo" was crowded with regional bosses. Some, including Nizhnii Novgorod Governor Ivan Sklyarov and his Novosibirsk colleague, Vitalii Mukha, were sitting among presidium members. Others said that Luzhkov has an "excellent chance" to become Russia's next president, adding that they would support "Otechestvo" back home.

Still others were more cautious. "Vremya MN" quoted an unnamed regional governor as saying he is waiting to see how developments unfold and to find out whether Prime Minister Yevgenii Primakov supports "Otechestvo"

Primakov has so far made no public statement on Luzhkov's movement. For his part, President Yeltsin did not send any message to the congress. Kremlin aide Oleg Sysuev, a member of Kirienko's former government, wished the new movement well but distanced himself from Luzhkov's criticism of reforms.

Luzhkov responded by saying that Sysuev's comments only show that the presidential administration does not understand the real situation in the country. The author is an RFE/RL correspondent based in Moscow.


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