Accessibility links

Newsline - January 4, 1999




YELTSIN, CLINTON PLEDGE TO MAINTAIN U.S.-RUSSIAN TIES

Russian President Boris Yeltsin spoke by telephone with his U.S. counterpart, Bill Clinton, on 30 December and repeated his opposition to U.S. and British attacks on Iraq. According to Interfax citing the Russian presidential press service, Yeltsin and Clinton agreed on the need to preserve and extend the "positive potential of U.S.-Russian relationships developed over the past few years." The two leaders also discussed preparations for the next session of the commission headed by Russian Prime Minister Yevgenii Primakov and U.S. Vice President Al Gore as well as U.S. Secretary of State Madeleine Albright's upcoming visit to Moscow scheduled for the end of January. JAC

RUSSIA CONDEMNS SHOOTINGS IN ANGOLA...

The Russian Foreign Ministry condemned UNITA for shooting down a second UN plane over Angola on 3 January. A ministry statement called for the UN Security Council to take "the most decisive and tough measures, envisaged by the UN Charter, against [UNITA]." According to the statement, six civilian airplanes had already been shot down in Angola over territory controlled by UNITA. JAC

...CALLS FOR UPDATE OF CFE TREATY...

The Foreign Ministry has again called for a revision of the Conventional Forces in Europe (CFE) treaty before NATO is expanded in the spring. According to a ministry statement on 2 January, the OSCE Foreign Ministers' Council agreed in Oslo to settle in the first months of 1999 the key problems of adapting the CFE treaty to reflect the new reality. The Russian Foreign Ministry contends that the admission of new members to NATO will undermine the "validity of the CFE treaty" and "threaten Russia's security." Moscow's hopes of strengthening the role of the OSCE as a pan-European security organization and as a counterweight to an expanded NATO are viewed as unrealistic by many OSCE member states. JAC/LF

...ASSESSES S-300 REDEPLOYMENT DECISION

Russian Foreign Ministry spokesman Vladimir Rakhmanin told Interfax on 30 December that any amendments to the agreement to sell Russian S-300 air defense missiles to Cyprus must be negotiated by the Greek Cypriot government and the Russian arms exporter Rosvooruzhenie. Rakhmanin said that Russia will abide by the terms of the January 1997 deal to supply the missiles and expects Cyprus to do the same. On 30 December, Cypriot President Glafcos Clerides announced that the missiles, which should have been delivered to Cyprus in November, would be temporarily deployed on Crete instead. Duma Defense Committee Chairman Viktor Ilyukhin told ITAR-TASS that the stationing of the S-300s on Greek territory does not pose a threat to Russia, given the cordial relations between the two countries. LF

CREDIT RATING OF SEVEN RUSSIAN REGIONS LOWERED

Fitch ICBA lowered the credit rating of seven Russian regions, ITAR-TASS reported on 30 December. Belgorod, Leningrad, Kaliningrad, and Moscow Oblasts, the Republics of Komi and Sakha (Yakutia), and Krasnoyarsk Krai all received a new lower credit rating of CCC. Krasnoyarsk, whose governor is General Aleksandr Lebed, a possible presidential contender in 2000, fared the worst, earning a place on the agency's "red list," according to ITAR-TASS. JAC

RYAZAN ABOLISHES TRIALS BY JURY

Ryazan Oblast Governor Vyacheslav Lyubimov and Ryazan Oblast Duma Chairman Vladimir Fedotkin have informed the Supreme Court, the Yeltsin administration, and the Justice Ministry that they have abolished trials by jury, "Vremya MN" reported on 30 December. The daily quoted an anonymous administration source as saying that the "experiment" with such trials "has been discontinued" because it was a "failure" and, at 50,000-80,000 rubles ($2,400-$3,900) a year, cost the regional budget "too much." A council of local judges appealed to the Prosecutor-General's Office and the Federation Council in late December to revoke the local authorities' decision, but they have so far received no reply. The newspaper concluded that if the "illegal action" of the Ryazan authorities goes unpunished, then other regions are likely to follow suit. JAC

INFLATION SURGED IN 1998

Russia's inflation rate in 1998 soared to 84.4 percent from 11 percent in 1997, according to the State Statistics Committee. GDP dipped 5 percent, compared with a 0.8 percent gain the previous year, Interfax reported on 31 December. Industrial output slipped 5.5 percent. Meanwhile, Russia's stock market performed worse than any of the 32 exchanges in transitional economies monitored by the International Finance Corporation. JAC

TOKOBANK DECLARED BANKRUPT

A Moscow court on 29 December declared Tokobank bankrupt, ITAR-TASS reported. The bank, which was once one of Russia's largest, ran into problems even before the devaluation of the ruble on 17 August, and the Central Bank had taken over its management in May. According to an audit, the bank owes 7.8 billion rubles ($378 million), while its assets amount to only 3.4 billion rubles. JAC

'MIR' TO SPEND ANOTHER NEW YEAR IN SPACE?

Russian space officials continue to scramble for some way to extend the operational life of "Mir," as Russian cosmonaut Sergei Avdeev celebrated his birthday and 500th day in space on 1 January. An international firm is prepared to finance the space station's operation for the next three years, according to Yurii Semenov, construction designer at the Energiya space rocket corporation, Interfax reported the previous day. Semenov reported that to keep the station operating for one year costs $250 million. The Russian Space Agency will need about $300 million to fund its share of the International Space Station. Avdeev and fellow cosmonaut Grigorii Grechko celebrated the New Year with 100 grams of cognac--not champagne, which turns "into light foam and disperses into the air in zero gravity," the "Moscow Times" reported. JAC

KOKH DENIED ENTRY TO U.S.

Former Chairman of the State Property Committee Alfred Kokh was denied entry into the U.S. on 23 December for undisclosed reasons, Reuters reported. In May, the Moscow Prosecutor-General's Office opened a criminal case against Kokh alleging that he and other former officials embezzled property when they acquired apartments in the capital. JAC

NEW AMBASSADOR TO ARRIVE MID-JANUARY

Russia's newly appointed ambassador to the U.S., Yurii Ushakov, will arrive in Washington to assume his new duties on 19 January, RIA Novosti reported on 31 December. His predecessor, Yulii Vorontsov, is to retire. JAC

CHECHEN PARLIAMENT, SHARIAH COURT SEEK COMPROMISE...

Meeting on 30 December with parliamentary deputies, members of Chechnya's Supreme Shariah Court agreed to review their 24 December ruling calling for the dismissal of parliamentary speaker Ruslan Alikhadjiev and the suspension of the parliament's powers, ITAR- TASS reported (see "RFE/RL Newsline," 30 December, 1998). The previous day, the parliament had annulled the court ruling but agreed to a request by President Aslan Maskhadov to suspend that annulment until 5 January. In the future, representatives of the Muslim clergy will work with legislators to ensure that legislation conforms with shariah norms. LF

...AS PRESIDENT BOWS TO COURT'S DECISIONS

Speaking on Chechen Television on 30 December, Maskhadov said that he enjoys the support of the Chechen people and that the ongoing attempt by three rival field commanders to persuade the Supreme Shariah Court to impeach him will not succeed. On 3 January, Maskhadov issued a decree abolishing the Marsho charitable foundation formerly headed by his wife. The Supreme Shariah Court had dismissed her from that post on 24 December, arguing that women should not occupy positions of influence. Maskhadov has also indicated his readiness to comply with the court's demand that he dismiss several leading officials, his spokesman Mairbek Vachagaev told Interfax on 3 January. LF




UTO FIELD COMMANDERS SACKED AFTER SHOOT-OUT

The leader of the United Tajik Opposition (UTO), Said Abdullo Nuri, has dismissed Rahmon Sanginov and Khojali Pirmuhammadov as field commanders, ITAR-TASS reported on 31 December. The previous day, an argument between the two field commanders erupted into a gun battle outside the building where the Tajik National Reconciliation Commission meets, leaving several people dead and injured (see "RFE/RL Newsline," 30 December 1998). Nuri also ordered the field commanders' units to surrender their arms. The UTO leadership released a statement on 31 December warning that those who oppose the peace process in Tajikistan will be severely punished, regardless of services previously rendered. BP

FORMER DEPUTY PROSECUTOR-GENERAL MURDERED IN TAJIKSTAN

Tolib Boboyev, the former prosecutor-general of Leninabad Oblast, was killed by masked gunmen while visiting the home of his son on 2 January, ITAR-TASS reported. Boboyev was the only person killed in the attack. Police are investigating the incident. According to the news agency, Boboyev was a former member of the National Unity Party, which was earlier headed by former Prime Minister Abdumalik Abdullojonov. Abdullojonov was implicated in the violence in northern Tajikistan in early November and is currently wanted by Tajik law enforcement agencies. BP

ELECTIONS, REFERENDUM PLANNED IN TAJIKISTAN IN 1999

President Imomali Rakhmonov told journalists on 31 December that his country faces "a serious examination" in 1999, when, he said, parliamentary and presidential elections as well as a referendum on amendments to the constitution will take place, ITAR-TASS reported. Rakhmonov added that the social, political and, moral maturity of the country depends on the people's participation in these events and on efforts at strengthening the peace process. BP

SIX KILLED ALONG UZBEK-TURKMEN BORDER

Three men shot and killed three Uzbek policemen near the border with Turkmenistan on 29 December, ITAR-TASS and Interfax reported. The three then attempted to cross over into Turkmenistan but were stopped at a border crossing. In the shoot-out that followed, two Turkmen policemen and a Turkmen customs official were killed. One of the attackers was eventually apprehended, but the other two remain unaccounted for. The identity of the two fugitives is reportedly known, but there are no details on the reason for the attack. BP

GEORGIAN PRESIDENT SEES NO SWIFT SOLUTION TO ABKHAZ CONFLICT

Eduard Shevardnadze told journalists in Tbilisi on 30 December that he thinks a settlement of the Abkhaz conflict in 1999 is highly improbable, ITAR-TASS reported. Shevardnadze said that resolving the conflict will depend largely on whom is elected president of Georgia in the 2000 elections, adding that he will seek re-election. Georgian Foreign Minister Irakli Menagharishvili told Interfax on 30 December that he too does not believe that a solution to the conflict will be reached this year. Predicting a "long and difficult" period of negotiations, he added that Georgian displaced persons who fled Abkhazia should participate in the decision on Abkhazia's future. LF

GEORGIA HOPES TO JOIN COUNCIL OF EUROPE, WTO IN 1999

Menagharishvili also said the process of Georgia's accession to full membership in the Council of Europe will begin late this month, according to ITAR-TASS. He added that a decision about Georgian membership in the World Trade Organization is expected in the second half of the year. LF

ARMENIAN FOREIGN MINISTER REVIEWS 1998

In an interview with RFE/RL's Yerevan bureau, Vartan Oskanian characterized 1999 as "quite a positive year" for Armenian foreign policy, singling out the OSCE Minsk Group's new draft proposals for resolving the Karabakh conflict and improved relations with all neighboring states, including Turkey. Oskanian also said there was a greater emphasis in 1998 on relations with Europe. He predicted that 1999 will mark the beginning of "a political dialogue" with the EU and that Armenia will "probably" be accepted as a full member of the Council of Europe in the course of the year. But that latter decision, he added, may be contingent on how the 1999 parliamentary elections are conducted. LF




UKRAINIAN PARLIAMENT APPROVES 1999 BUDGET

The 450-strong Supreme Council voted by 226 to two to approve the 1999 budget, AP reported on 31 December. The remaining deputies refused to cast their votes. The budget provides for revenues totaling 23.98 billion hryvni ($6.8 billion). The 1.24 billion hryvni deficit will be covered by foreign loans (630 million hryvni) and government domestic bonds (610 million hryvni). Communist lawmakers had repeatedly refused to approve the budget, demanding that the government allocate more funds to repay overdue wages and pensions. Some, however, relented after the cabinet agreed to allocate some funds earmarked to pay this year's debt obligations to finance education and health care. JM

KUCHMA, BLAIR URGE FINANCIAL ASSISTANCE FOR CHORNOBYL

Ukrainian President Leonid Kuchma and British Prime Minister Tony Blair have appealed to the leaders of 10 countries to help renovate the sarcophagus covering a ruined reactor at the Chornobyl nuclear power plant, AP reported on 30 December. Ukraine has appealed on previous occasions to the international community to help make the sarcophagus environmentally safe. Since 1997, some 20 donor countries have pledged $390 million toward the estimated $758 million in repair costs. JM

LUKASHENKA SAYS 1998 ECONOMIC PERFORMANCE 'NOT BAD'...

In his New Year address, Belarusian President Alyaksandr Lukashenka said 1998 was "the most difficult year of all the preceding ones" but that "events of the last six months have convincingly testified to the correctness of our strategy." He admitted that a "considerable" number of Belarusians are poor but added that the year 1998 "as a whole" finished with "not bad economic results." According to Lukashenka, both GDP and the production of consumer products increased. JM

...WHILE POLL SUGGESTS HALF OF BELARUSIANS 'BARELY MAKE BOTH ENDS MEET'

In a poll conducted by the Belarusian Economics Ministry in November and December 1998, 51 percent of the 1,200 respondents said they "barely make both ends meet," Belapan reported on 1 January. Of those polled, 79 percent said the economic situation in Belarus in 1998 worsened, while 43 percent said it will get even worse in 1999. JM

BELARUSIAN OPPOSITION APPEALS FOR HELP IN DEFENDING INDEPENDENCE

The leadership of the Belarusian Popular Front (BNF) on 31 December adopted an appeal to parliaments and governments of Europe as well as those of the U.S. to give practical support to the "Belarusian opposition in its struggle for the freedom and independence of Belarus," Belapan reported on 1 January. The appeal said that documents on a Russian-Belarusian merger signed by Belarusian and Russian Presidents Lukashenka and Boris Yeltsin in Moscow on 25 December are "yet another attempt at annexing Belarus." The BNF called upon democratically elected parliaments and governments to release political assessments of the Lukashenka-Yeltsin deal and to render financial assistance to Russia only on condition that it renounces its efforts "to destroy Belarusian sovereignty." JM

MERI SIGNS LEGISLATION ON LANGUAGE REQUIREMENTS FOR DEPUTIES

Estonian President Lennart Meri on 31 December signed legislation that imposes language requirements on members of the parliament and local governments, ETA reported. Russia has criticized that legislation, as has OSCE High Commissioner on National Minorities Max van der Stoel in a recent letter addressed to Meri (see "RFE/RL Newsline," 30 December 1998). JC

ESTONIAN OPPOSITION LEADERS SIGN STATEMENT ON POST-ELECTION COOPERATION

The leaders of the Reform Party, the People's Party, the Fatherland Union, and the Moderates have signed a joint statement announcing their readiness to form a coalition government after the March elections, ETA reported on 31 December. The four leaders also stressed their aims of creating new jobs, increasing wages, maintaining a reliable taxation system, and improving the situation of large families. Currently, the four parties have a combined total of 36 seats in the 101- strong parliament. JC

NARVA AGAIN CUTS WATER SUPPLIES TO IVANGOROD

Narva Vesi, the municipal water company of the border town of Narva, has cut off water supplies to the Russian town of Ivangorod and halted sewage treatment, ETA and Russian agencies reported. Ivangorod owes Narva more than 18 million kroons (some $1.4 million) for such services, and last year, Narva Vesi cut water supplies to Ivangorod in a bid to force the city to pay its debts. Interfax reports that Anatolii Potapov, the mayor of Ivangorod, has threatened to start dumping untreated sewage into the Narva River if the firm continues to refuse to treat sewage. That river flows into the Gulf of Finland. JC

ESTONIA PROTESTS LATVIAN PROPOSAL FOR MEAT QUOTAS

The Estonian Foreign Ministry has sent a diplomatic note to Riga protesting the Latvian government's proposal to impose quotas on imports of Estonian pork and live pigs, ETA reported on 31 December. Estonian Agriculture Minister Andres Vari said that as yet Latvia has provided no figures on how imports of Estonian pork are influencing its domestic market. Under the free trade agreement between the Baltic States, restrictive measures are permitted only in cases where there is a negative effect on the domestic market of one of those countries. JC

LITHUANIAN LUSTRATION LAW GOES INTO EFFECT

A law banning former KGB agents from holding government office and a wide variety of private-sector jobs went into effect on 1 January, ITAR-TASS reported. The ban is to apply for 10 years. The parliament passed the legislation last summer but agreed to postpone its enactment after President Valdas Adamkus vetoed the legislation, questioning its constitutionality. The Constitutional Court, however, has not yet ruled on the issue. JC

LITHUANIA URGES RUSSIA TO RESOLVE MILITARY TRANSIT 'DIFFICULTIES'

The Lithuanian Defense Ministry has called on its Russian counterpart to resolve "organizational difficulties" in transporting Russian servicemen via Lithuania to and from Russia's Kaliningrad Oblast, BNS reported on 31 December. The ministry said that on 22 and 27 December its border guards ordered 80 Russian soldiers off scheduled passenger trains traveling from Moscow to Kaliningrad because those soldiers lacked travel authorization from the Lithuanian Defense Ministry. It added that such incidents occur frequently before and during holidays. JC

POLISH PREMIER NOMINATES NEW PROVINCIAL GOVERNORS

Jerzy Buzek on 31 December appointed governors to 14 of Poland's 16 new provinces, Polish media reported. Who will occupy the remaining two posts is still being debated. The new governors are to take office on 4 January under the administration law adopted last July. Buzek told the governors that Poland's new territorial system means the successful rejection of "one more relic of communism." Following an agreement reached by the coalition Solidarity Electoral Action (AWS) and the Freedom Union (UW) the previous day, the AWS nominates all 16 new governors, while the UW has named candidates for all first deputy governor posts. JM

SOLIDARITY SUSPENDS SIT-IN STRIKE OVER MINERS' PENSION BENEFITS

Miners belonging to the Solidarity trade union have suspended their underground strike until the end of March in order to allow the government to draw up a bill guaranteeing them early retirement benefits (see "RFE/RL Newsline," 28 December 1998), Polish media reported on 31 December. Union leaders said that the protest will be continued in the form of meetings and rallies, adding that the sit-in strike can be resumed if the government tries "to go back on its promises." JM

HAVEL WARNS AGAINST 'NEW WALLS' IN CZECH SOCIETY

In his New Year's address, President Vaclav Havel said that in post- communist Czech Republic, "new walls" are emerging in place of those that have been demolished. Havel said these "walls" are threatening democracy and take the form of prejudice against the Romani population, anti-German, anti-Russian, and anti-American "moods," as well as occasional "anti-African, anti-Arab, and even anti-European" attitudes. He added that "even the wall that we thought could never again be erected," namely anti-Semitism, is reappearing. Havel went on to warn against the "seduction" of "populist collectivism" and stressed that attacking "the freedom of one individual" is "threatening the freedom of all." And he also denounced the "strange walls" that are invading political life in the form of terminology such as "barricades, mobilization, closed ranks, disciplined movement, and traitors." MS

ROMA APPOINTED TO GOVERNMENT COMMISSION

Twelve members of the Romani minority in the Czech Republic have been appointed to the government commission set up to examine how to promote coexistence between that minority and the Czech majority, a government spokesman told CTK on 31 December. The same day, Deputy Labor Minister Bela Hejna told CTK that his ministry has prepared a document on promoting coexistence between the two communities by means of "macrosocial measures" and social policies aimed at integrating Roma. MS

SLOVAK PREMIER PREDICTS DIFFICULT ECONOMIC SITUATION IN 1999

Mikulas Dzurinda on 1 January said the year 1999 is likely to be one in which the country will have to face its "most difficult economic situation" until now. He called on Slovaks to help rebuild the "devastated" economy by buying Slovak products and by showing "unity, responsibility, and solidarity." He also said Bratislava must "do everything" to ensure it "gets on the train" of European integration in 1999. The same day, the government announced hikes in the prices of electricity, water, and mail services, with other increases planned for later this year, AP reported. Dzurinda was delivering the traditional presidential New Year's message, because Slovakia has been without a head of state since March 1998. He promised that "in 1999, citizens will elect the president in direct elections, which are the fairest way to do so. " MS

HUNGARIAN RAILWAY WORKERS GO ON STRIKE

The 15,000-strong Free Union of Railway Workers went on strike on 4 January after rejecting the 16 percent wage hike proposed on 31 December by Hungarian State Railways. Only 468 of the 2,760 scheduled trains will run, along with 22 trains carrying staples, medicine, blood donations, and perishable goods. International trains will also be affected. The other two railway workers' unions have accepted the wage hike and therefore are not taking part in the strike. The two sides are to resume talks on 4 January. MSZ




UCK TO LAUNCH RADIO STATION

The Kosova Liberation Army (UCK) announced in a statement on 3 January that the guerrillas will begin broadcasts the following day aimed at promoting their views. The statement added that the station will be called "Free Kosova," but it did not indicate from where or on which frequencies it will broadcast. The statement noted that the UCK will also launch its own news agency on 4 January under the name of Kosova Press. Kosovars currently receive Albanian-language radio and television broadcasts from a small number of public or private stations located in Albania. VOA's Albanian-language Service also has a wide listenership. The Prishtina-based Kosova Information Center news agency reflects the views of the moderate shadow-state leadership. Several Albanian-language dailies and weeklies based inside or outside Kosova provide news services on their web sites. PM

CALM HOLIDAY PERIOD IN KOSOVA...

A spokesman for OSCE monitors said in Prishtina on 3 January that the fragile cease-fire held throughout the long New Year's holiday weekend. He added that monitors will soon begin investigating reports supplied by the UCK that a grave near Ferizaj contains the bodies of 11 ethnic Albanian women and children. In other news, Serbian and Kosovar sources reported the deaths of three persons in two separate incidents, but the circumstances of their deaths are unclear, according to Reuters. PM

...BUT NOT ON ALBANIAN FRONTIER

Federal Yugoslav forces fired 13 mortar rounds 200 meters into Albanian territory, near Qafe e Morines, during the evening of 31 December and the early morning of 1 January, ATSH reported. A spokesman for the Albanian Interior Ministry said that there were no injuries or damage. FS

RUGOVA CALLS FOR NATO 'ATTENTION'

Shadow-state President Ibrahim Rugova said in a New Year's statement issued in Prishtina on 1 January that "we are convinced that [only] the [monitoring] mission and permanent NATO attention can calm down tensions in Kosova. Only the deployment of NATO troops in Kosova can bring about greater security for all the people, which is a precondition for a political settlement of the Kosova problem." PM

UCK VOWS TO CONTINUE FIGHT

The UCK said in a statement issued in Prishtina on 3 January that "our people are awaiting a difficult and bloody fight with the barbaric enemy. But [the new radio station, which is the] voice of freedom and independence, the voice of truth and justice, and the voice of the guns of freedom, will give us the force and courage to be even better mobilized, more organized, and more determined to carry out our duties for the cause of honor and sacrifice for freedom and fatherland." FS

SERBIAN LEADER SAYS MILOSEVIC RESPONISBLE

Momcilo Trajkovic, who leads the Prishtina-based Resistance Movement of Serbs in Kosova, told the Podgorica-based independent daily "Danas" of 4 January that Yugoslav President Slobodan Milosevic, his Serbian counterpart, Milan Milutinovic, and their respective aides bear full responsibility for the fate of Kosova's Serbian minority. Trajkovic stressed that the Serbs have found it necessary to take their defense into their own hands because the "Albanian terrorists have occupied most of the territory [of the province] and mercilessly and treacherously kill and drive out the Serbs." He added that the Belgrade authorities have ignored their duty to defend the Serbs of Kosova. Milosevic, for his part, said in his New Year's message that 1999 will bring a "political solution" for the province. He added that the year will require "courage, optimism, great patience, trust, positive energy, good will, hope, and decisiveness." PM

FRANCE ASSUMES CHAIR OF CONTACT GROUP

Representing Foreign Minister Hubert Vedrine, Ambassador to Macedonia Jacques Huntzinger said in Prishtina on 2 January that the first weeks of January will be important in preventing a resumption of the fighting in Kosova. He told Rugova and several other ethnic Albanian leaders that the Kosovars should adopt a common platform on a political settlement. Fehmi Agani, who heads Rugova's negotiating team, told the French diplomat that the Kosovars will have a new proposal by mid-January, but he did not elaborate. France assumed the chair of the international Contact Group at the end of 1998. Paris has long resented what it regards as a preponderance of U.S. influence in the Balkans and has sought to assert a stronger role for itself. PM

FRENCH MINISTER BLAMES UCK

Defense Minister Alain Richard said in Prishtina on 1 January that "the main destabilizing factor [in Kosova] today] is the UCK and not the Serbs. If the clashes continue to increase [the pact between Milosevic and U.S. special envoy Richard Holbrooke] will no longer be valid and we will have to go back to threats of military pressure." Richard called for the UCK's financing from abroad to be cut off. PM

MONTENEGRO TO KEEP CONTROL OVER OWN BORDERS

Interior Minister Vukasin Maras said in Podgorica that the Montenegrin--but not the federal Yugoslav--police will continue to control the republic's frontiers, RFE/RL's South Slavic Service reported on 30 December. He added that the Montenegrin police will "carry out every assignment," which observers said was a warning to former Montenegrin President Momir Bulatovic not to provoke street violence (see "RFE/RL Newsline," 30 December 1998). The Montenegrin authorities opened the border crossing with Croatia at Debeli Brijeg for the Christmas and New Year's holidays, despite the opposition of the Belgrade authorities, RFE/RL's South Slavic Service reported on 3 January. PM

POPLASEN FAILS IN BID TO OUST DODIK?

Hard-line Republika Srpska President Nikola Poplasen on 31 December named Social Democrat Brane Miljus to form a government to replace that of moderate Prime Minister Milorad Dodik. Poplasen-backer Dragan Kalinic had earlier failed to gain a majority in the parliament to oust the incumbent. Miljus accepted the mandate and said he is confident that he can carry it out. Social Democratic spokesmen said that Miljus had not consulted his party, which responded by expelling him on 3 January. Former President Biljana Plavsic said she was "shocked" by the nomination of Miljus, "Danas" reported on 4 January. Other moderates said that Serbian Radical Party leader Vojislav Seselj orchestrated the nomination from Belgrade. Muslim leader Safet Bico noted that deputies representing his Coalition for a United and Democratic Bosnia will not support Miljus's candidacy, RFE/RL's South Slavic Service reported on 3 January. PM

ALBANIAN SOCIALIST PROPOSES AMNESTY FOR BERISHA

Spartak Braho, who is the deputy chairman of the parliament's Judiciary Committee, proposed on 30 December that lawmakers pass an amnesty for Democratic Party leader Sali Berisha. The move would halt investigations into Berisha's alleged involvement in a September coup attempt, "Albanian Daily News" reported. Braho told "Gazeta Shqiptare" that pardoning Berisha would reduce political tensions and open the way for the Democrats to end their parliamentary boycott. FS

VIOLENT CRIMES STILL RAMPANT IN ALBANIA

An Interior Ministry spokesman on 30 December said that 548 people, including 19 policemen, were killed in violent crimes during 1998, dpa reported. He also reported 62 cases of kidnappings, 24 "terrorist acts," and the blowing up of more than 10 high-voltage power lines (see "RFE/RL Newsline," 9 December 1998). A total of 5,562 acts of violent crimes were reported. Observers suggested that the real figures are higher because official statistics are neither complete nor reliable. FS

ROMANIAN MINERS GO ON STRIKE

Miners in the Jiu valley went on strike on 4 January and said they will travel to Bucharest, in defiance of an order issued by the Mayor of Bucharest's office, unless Premier Radu Vasile or Industry and Trade Minister Radu Berceanu travels to Petrosani to talk to them there, Romanian Radio reported. The miners are protesting plans to close unprofitable pits and are demanding wage increases, compensation for being laid off worth $10,000, and two hectares of land for each miner who loses his job. They also want the state to reschedule their company's debt. MS

MOLDOVAN PREMIER REFUSES TO DISCUSS STATUS OF BESSARABIAN CHURCH

Premier Ion Ciubuc on 30 December rejected a proposal by his deputy, Valentin Dolganiuc, that the cabinet debate the status of the Bessarabian Church. Ciubuc said he hopes Dolganiuc will prove "just as able to solve the country's agricultural problems and the problems of the industry as he is [proving in] solving religious problems," Flux reported. The Bessarabian Church, which is subordinate to the Bucharest Patriarchate, has appealed to President Petru Lucinschi over the government's refusal to discuss its status. In 1997, a court ruled that the government's refusal to register the church was unlawful. The ruling was later overturned on procedural grounds. MS

BULGARIAN CURRENCY PEGGED TO EURO

The lev has been pegged to the euro at the permanent exchange rate of 1,955.83, AP and BTA reported on 31 December and 1 January. Under the currency board system established in July 1997, the lev was pegged to the German mark. The pegging to the euro reflects the permanent conversion rate of the mark to the euro, announced on 31 December. In other news, as of 1 January 1999, customs were reduced on 80 percent of goods imported from Central European Free Trade Agreement (CEFTA) countries, of which Bulgaria became a full member in July 1998. Duties on CEFTA imports are to be eliminated on 1 January 2002, BTA reported. MS




OIL AND GAS NO PANACEA FOR CASPIAN COUNTRIES' ECONOMIC WOES


by Michael Wyzan

Azerbaijan, Kazakhstan, and Turkmenistan have large deposits of crude oil and natural gas, the exploitation of which plays a major role in their economies. Despite the fact that Azerbaijan and Turkmenistan have been slow economic reformers, they, like Kazakhstan, have succeeded in attracting large volumes of foreign direct investment (FDI) into the fossil fuel sector.

Kazakhstan received $3.2 billion in oil and gas-related FDI from 1993 through June 1998, while Azerbaijan's oil sector attracted $1.8 billion in FDI from 1994 through June 1998. This investment helped to make these countries the main recipients of such investment per capita in the CIS.

Oil currently represents about 65 percent of Azerbaijani exports and more than 80 percent of the FDI that it has received, while in Kazakhstan the oil and gas sector accounts for about a quarter of exports and two-thirds of FDI (although the latter figure varies widely from year to year).

Nonetheless, the production of oil and gas has not increased rapidly in any of the three countries; none is currently a major producer of these commodities on the world market. Pipeline routings remain a contentious issue, with economic and geopolitical considerations (especially the U.S.'s desire to minimize Russian and Iranian involvement) often conflicting. Accordingly, it is unlikely that fossil fuels will contribute substantially to economic growth in these countries over the next few years.

International oil and gas companies are currently sending mixed signals about the prospects for oil and gas development in the Caspian region. A number of such companies have closed down their operations recently. For example, Unocal announced on 8 December that it was withdrawing from all Caspian projects except those based in Azerbaijan. The next day, Shell, Chevron, and Mobil signed a new agreement with Kazakhstan on oil exploration in the Caspian.

Production data reveal largely declining trends, at least through the end of 1997. Azerbaijan produced 9 million tons of crude oil in 1997, down from 12.5 million in 1990, while Kazakhstan's oil production in 1997 was virtually unchanged from the 1990 level.

The most striking case is Turkmen gas extraction, which plummeted from 88 billion cubic meters in 1990 to 17 billion in 1997. Since gas represents two-thirds of both GDP and exports in a "normal year" (for example, in 1994), this collapse in gas production has had dire consequences for the economy, with GDP declining by 25.9 percent in 1997.

The decline in Turkmen gas production, which is all the more striking in a country with a good sectoral infrastructure and the world's fourth-largest gas reserves, occurred in two stages. At the beginning of 1994, a dispute with Gazprom resulted in the Russian gas giant's refusal to allow into its pipeline Turkmen gas bound for Europe. A visit to Ashgabat in late November 1998 by Russian State Duma speaker Gennadii Seleznev failed to resolve the dispute. Earlier, in March 1997, the government halted gas exports to its CIS partners namely, Armenia, Georgia, and Ukraine because those countries had built up large arrears to it for earlier deliveries. However, at the end of 1998, Turkmenistan and Ukraine signed an agreement that will allow the flow of Turkmen gas to resume to Ukraine.

Although there are grounds for optimism that in the long run, fossil fuels will play a major role in the three countries' economic development, a lot of problems must be resolved between now and then. World economic conditions are unfavorable at present. Not only are prices low, but investors are leery of putting money into CIS countries after the collapse of the Russian economy. And a number of large oil and gas projects are coming on stream outside the region.

Moreover, developing countries have rarely genuinely benefited from oil and gas booms. In what economists call the "Dutch disease," large inflows occurring in the sector contribute to strong exchange rates, which make it difficult to export other goods. In countries without transparent and efficient government sectors and with considerable regional or social inequality, revenues flowing into state coffers often benefit only tiny elites. Governments frequently spend oil money before it is earned and make commitments on which they cannot renege when oil prices fall.

Azerbaijan, Kazakhstan, and Turkmenistan seem likely to suffer from these problems. Only Kazakhstan has a diversified economy, although even in that country, there is concern that the government is counting excessively on oil and gas. One encouraging sign is Turkmenistan's attempt to diversify its economy by building 50 joint-venture textile plants. Another is Kazakhstan's pension reform, under which pensions are based on the retiree's contributions during his working life rather than paid out of a large state fund (a tempting target for government misuse) fueled by the contributions of current workers. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria.


XS
SM
MD
LG