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Newsline - January 7, 1999




RUBLE'S FALL RENEWS DOUBTS ABOUT BUDGET

The ruble on 6 January fell 2 percent below the exchange rate on which the 1999 budget is based. The ruble lost almost 6 percent of its value at close of trading, ending at 21.9 rubles per dollar, AFP reported. The budget was calculated on the basis of an exchange rate of 21.5 rubles per dollar. Central Bank Deputy Chairman Tatyana Paramanova told the State Duma the same day that the ruble's future exchange rate will depend on whether Russia can persuade its creditors to accept a debt restructuring plan and on how effective currency controls are. Traders told the agency that they expect the ruble's value to keep slipping in part because of low world prices for oil and other key commodities that Russia exports. JAC

RUSSIA CELEBRATES ORTHODOX CHRISTMAS

Millions of Russian residents celebrated Russian Orthodox Christmas on 7 January. In a Christmas message sent to Patriarch of Moscow and All Russia Alexii II, President Boris Yeltsin said that Russia is "unthinkable without the Orthodox Church, which is one of the roots of the Russian state and has strengthened the nation spiritually and morally at complex turning points in its history," Interfax reported. Prime Minister Yevgenii Primakov attended a midnight Mass officiated by Alexii II the previous day at Moscow's Epiphany Cathedral. Meanwhile, some of the nation's wealthier residents celebrated the holiday by buying cars and apartments before the introduction of a new law requiring them to declare purchases exceeding $4,000, AFP reported. Moscow salesmen of foreign cars said that sales have recently risen dramatically. JAC

EURO INTRODUCTION SPAWNS CONFUSION

The Russian Foreign Ministry hailed the introduction of the euro as "an event of enormous political and economic importance," Interfax reported on 6 January. However, officials from the Finance Ministry, Customs Committee, and Fuel and Energy Ministry have failed to come up with a coordinated approach to it, the "Journal of Commerce" reported the same day. In particular, they have different views on how to collect export duties, which had previously been calculated in ecus. In addition, the Fuel and Energy Ministry recently approved a decree imposing export duties on fuel oil that is calculated in ecu and took effect on 1 January (see "RFE/RL Newsline," 6 January 1999). Meanwhile, Russian journalists are confused about the appropriate gender of the word in Russian and have been referring to it both as a feminine and a masculine noun, according to Reuters. JAC

FOREIGN CREDITORS CONTINUE TO SHUN BOND SWAP PLAN

Russian holders of the government's defaulted short-term treasury bonds have expressed interest in swapping their old bonds for new ones, a Finance Ministry official told Bloomberg on 6 January. The official added, however, that foreign investors remain reluctant to make such a swap. According to the agency, government will resume talks with foreign bondholders on 18 January to discuss their concerns. A member of a committee of representatives of foreign bondholders said that they may boycott the government's proposed swap. JAC

LEBED URGED TO ACCEPT WASTE

Minister for Nuclear Energy Yevgenii Adamov met with Krasnoyarsk Governor Aleksandr Lebed on 5 January and urged him to accept nuclear waste from Ukraine or risk losing the business to other countries, such as Britain and France. The next day, Ukrainian Prime Minister Valeriy Pustovoytenko called on the Russian government to work out a compromise with Lebed. Lebed has refused to accept the waste because he said the rate that the Ukrainians are paying is a fraction of the world market price. In addition, he charged that goods and services that make up part of Ukraine's payment never arrive in time or in full, according to "Segodnya." JAC

RUSSIA CRITICIZES NO-FLY ZONE POLICY IN IRAQ...

Responding to reports that U.S. airplanes fired on Iraqi combat aircraft in southern Iraq, Russia on 6 January called for a review of the international community's no-fly zone policy in Iraq. Foreign Ministry spokesman Vladimir Rakhmanin said that "no fly-zones in southern and northern Iraq were imposed outside of the framework of UN Security Council resolutions," ITAR-TASS reported. Rakhmanin added that Russia is "seriously concerned about the new incident" and that "sooner or later this issue must be thoroughly examined." JAC

...SLAMS POLAND FOR GRANTING STANKEVICH ASYLUM

In a statement issued on 6 January, the Russian Foreign Ministry criticized the Polish authorities for granting refugee status to former aide to President Yeltsin Sergei Stankevich. It argued that there is no legal justification for granting Stankevich asylum. According to the statement, Stankevich's case raises "serious doubts about [the Polish government's] readiness for honest cooperation between law enforcement agencies of the two countries." Stankevich is charged with accepting a large bribe. JAC

OFFICIALS DENY CLAIM THAT RUSSIA WILL SOON GIVE TWO ISLANDS TO JAPAN

Government officials in Russia and Japan have denied a claim by the Japanese newspaper "Yomiuri" on 6 January that the two southernmost Kuril Islands will soon be handed over to Japan, Russian and Japanese media reported. The newspaper had claimed that the islands of Shitokan and Habomai would be handed over in an "interim pact" and that discussion would continue on the return of Kunashir and Itirup. Russian Foreign Ministry spokesman Rakhmanin said the report was "pure sensationalism," and Japan's chief cabinet secretary, Hiromu Nonaka said it is "entirely without basis." However, Japanese officials are making clear that the issue of ownership of the four islands cannot be put off until after a peace treaty officially ending World War II is signed by the two countries. Both countries want to sign that treaty by the end of 2000. BP

YELTSIN ELEVATES FSB INSPECTORATE'S STATUS

President Yeltsin has signed a decree designed to improve the structure of the Federal Security Service (FSB), ITAR-TASS reported on 6 January. The decree separates the Inspectorate of the Department for Organizational Work and Personnel from that department, raising its status to an independent subdivision of the FSB. It also streamlines the inspectorate's internal structure. JAC

LOCAL OFFICIALS ASSERT VLADIVOSTOK ELECTIONS ON TRACK

Mayoral elections in Vladivostok scheduled for 17 January will take place as planned, according to local officials. Chairman of Primorskii Krai's Duma, Sergei Dudnik, denied an earlier Interfax report that Russia's Supreme Court had cancelled the upcoming elections, NTV reported. Ilya Grinchenko, chairman of Vladivostok's electoral commission, told ITAR-TASS that elections will be held on schedule and that his commission has circulated a statement to the local population not to be deceived by disinformation aimed at disrupting the elections. Interfax had reported on 6 January that voters would be electing only local Duma representatives at the 17 January elections. JAC

SIERRA LEONE EMBASSY SIEGE ENDED

A group of university students from Sierra Leone ended a siege of their country's embassy in Moscow on 6 January. The students complained that they are stranded in Russia and do not have enough money to go home, noting that the embassy is doing nothing to help them, Ekho Moskvy reported. The students were calling for their government to close the embassy and replace it with a consulate, directing the savings to them. The students receive about $100 a year from their government to live on. JAC

NEW DEPUTY FOREIGN MINISTER NAMED

President Yeltsin has signed a decree appointing Yevgenii Gusarov, head of the Foreign Ministry's Department for Pan-European Cooperation, as deputy foreign minister. Gusarov replaces Nikolai Afanasievskii, who has been appointed Russian ambassador to France. JAC

CHECHEN MILITARY COMMANDER WOUNDED IN BOMB ATTACK

General Sulim Yamadaev, deputy commander of the Chechen National Guard, was seriously wounded on 6 January when a remote-controlled bomb destroyed the jeep in which he was driving, Russian agencies reported. The explosion took place in the town of Gudermes, east of Grozny. Yamadaev commanded the National Guard unit that engaged in serious fighting with units from the Islamic regiment headed by Arbi Baraev in Gudermes last July (see "RFE/RL Newsline," 16-17 July 1998). LF

BASAEV REJECTS COURT RULING AGAINST CHECHEN PRESIDENT

Speaking at a press conference in Grozny on 6 January, former acting Premier Shamil Basaev condemned as "illegitimate" a ruling handed down on 24 December by the Shariah Supreme Court, Russian agencies reported. That ruling rejected the demand by Basaev and two fellow field commanders that President Aslan Maskhadov be impeached on charges of violating the constitution. It also temporarily suspended the powers of the Chechen parliament. Basaev accused Maskhadov of altering the text of the court ruling before it was published. He also claimed that the Supreme Shariah Court was illegally set up as its members were appointed by Maskhadov, who is not constitutionally empowered to make such appointments. Basaev said that field commanders will demand that a new court be elected and that Maskhadov again be brought to trial. LF




NAZARBAYEV REVEALS MORE 'KEYS TO PROSPERITY'

Kazakhstan's President Nursultan Nazarbayev, speaking at a meeting of his supporters in Astana on 6 January, revealed more of his goals should he be re-elected on 10 January, ITAR-TASS reported. Nazarbayev had earlier said he holds the keys to prosperity and that one of them is taking measures to avoid a financial crisis (see "RFE/RL Newsline," 5 January 1999). He went on to explain on 6 January that the second "key" is preserving social stability by achieving inter-ethnic harmony. The third is the democratization of society in stages and the fight against crime and corruption, while the fourth is an "effective and reasonable" social policy that includes paying wages and pensions on time, providing employment opportunities, regular heating and electricity supplies, and universal access to health care and education. The fifth key, he said, is further integration with other CIS states. "Only together will the Commonwealth [of Independent States] be able to overcome crisis misfortunes," he commented. BP

STROEV SAYS KAZAKHSTAN NEXT TO JOIN RUSSIA-BELARUS UNION

Speaker of the Russian Federation Council Yegor Stroev said he is sure Kazakhstan will be the next country to join the Russia-Belarus union, Interfax reported on 5 January. Stroev said "necessity will push Kazakhstan into our union,' adding that Ukraine will "follow in Kazakhstan's footsteps." Kazakhstan's President Nazarbayev is a staunch advocate of further integration within the CIS and one of the driving forces behind the establishment of the CIS Customs Union, which comprises Kazakhstan, Russia, Belarus, and Kyrgyzstan. Tajikistan is expected to become a full member of that union in the near future. BP

NEW PARTY HOLDS FOUNDING CONGRESS IN KAZAKHSTAN

The Agrarian Party of Kazakhstan held its founding congress in Astana on 6 January, ITAR-TASS and Interfax reported. The meeting was attended by 131 people representing 12 regions. The goal of the party is to support farmers and push for the introduction of private land ownership. BP

TURKMEN PRESIDENT TO HEAD NEW HUMAN RIGHTS COMMISSION

Saparmurat Niyazov signed a decree on 6 January establishing a human rights commission that he will head, ITAR-TASS and Interfax reported. The commission, which is to be subordinated to the Supreme Court and the Institute for Democracy and Human Rights, will oversee the work of law enforcement agencies, the military, and the judiciary. Its members will include representatives of the National Security Committee, the Interior Ministry, and the Prosecutor-General's Office as well as the heads of local and regional administrations. The same day, Niyazov announced that a moratorium on the death penalty has gone into effect (see "RFE/RL Newsline,"4 December 1998). According to Interfax, Turkmen courts passed 700 death sentences last year, most of which were for drug-related offenses. It is unknown how many of those sentences were carried out. BP

TAJIK PRESIDENT WANTS IMPROVED EFFORTS AT COMBATTING DRUG- TRAFFICKING

Imomali Rakhmonov called a special cabinet meeting on 6 January to demand improved efforts in combating drug- trafficking, ITAR-TASS reported. The meeting followed the arrest at Moscow's Domodedyevo airport of a Tajik citizen seeking to smuggle 6 kilograms of heroin into the country. Rakhmonov said the incident did "great moral damage to the republic's authority in the international arena." He ordered tighter controls at the country's airports, on its railway network, and at roadside checkpoints. According to an ITAR-TASS report on 5 January, the Tajik State Commission for Drug Control reported that Tajik law enforcement representatives seized more than 2 tons of narcotics, a large part of which was heroin, last year. Russian border guards along the Tajik-Afghan border seized more than 1 ton of narcotics in 1998. BP

GAS RATIONED IN TAJIKISTAN

Gas in Tajikistan is being rationed owing to insufficient funds to pay neighboring Uzbekistan for supplies, ITAR-TASS reported on 6 January. The agency responsible for providing the country with gas, Tajikcomservice, said the population has paid only 5-10 percent of their bills and that their debt to the country exceeds 10 billion Tajik rubles (some $10 million). BP

CHASE IN TASHKENT ENDS IN EXPLOSION

Police in Tashkent on 5 January were pursuing a man in the capital's Chilonzar District when a hand grenade the man was carrying blew up, RFE/RL correspondents reported. The man is believed to be one of three who recently attacked police and border guards along the Turkmen- Uzbek border (see "RFE/RL Newsline," 4 January 1999). Six people died in that incident. After negotiating with the police, the man was attempting to flee in a car when the hand grenade accidentally went off. BP

AZERBAIJAN OPPOSITION PARTY PROTESTS OFFICIAL CAMPAIGN AGAINST IT

The Azerbaijan Democratic Party issued a statement on 6 January condemning rallies convened by the leadership of Azerbaijan's Nakhichevan Autonomous Republic, Turan reported. Participants at those rallies called for the arrest of the party's secretary-general, Sardar Djalaloglu, for having allegedly made insulting comments about the exclave's population. They also demanded the closure of the party's newspaper and of the independent newspaper "Yeni Musavat." LF

GAMSAKHURDIA SUPPORTERS PREVENTED FROM MARKING ANNIVERSARY OF HIS OUSTER

Police in Tbilisi used force to prevent supporters of deceased President Zviad Gamsakhurdia from staging a demonstration in central Tbilisi on 6 January, the seventh anniversary of Gamskahurdia's ouster by warlords Tengiz Kitovani and Djaba Ioseliani, Caucasus Press reported. Tbilisi police chief Soso Alavidze said that the would-be demonstrators were guilty of disturbing public order. LF

GEORGIAN CURRENCY LOSES VALUE AGAIN

Having recovered slightly from its early December fall against the dollar (see "RFE/RL Newsline," 7 December 1998), the lari lost 20 percent of its value against the U.S. currency on 5-6 January, falling to 2.18 to the dollar, Caucasus Press reported. On 5 January, the Central Bank had set an exchange rate of 2.3246 lari to the euro, according to Reuters. LF




KUCHMA PRAISES ORTHODOX CHURCH IN CHRISTMAS MESSAGE

In a Christmas message on 6 January, Ukrainian President Leonid Kuchma praised the Orthodox Church for its role in society and said Christian ideals should guide the Ukrainian people, AP reported. "On the eve of a great date, 2000 years since the birth of Christ, the Church's activities become even more important," Kuchma said. In his last year's Christmas address, Kuchma had called for unity among Ukraine's feuding Orthodox Churches: the Ukrainian Orthodox Church (subordinated to the Moscow Patriarchate), the Ukrainian Orthodox Church--Kyiv Patriarchate, and the Ukrainian Autocephalous Orthodox Church. JM

BELARUSIAN OPPOSITION WARNED NOT TO SEIZE POWER BY UNCONSTITUTIONAL MEANS

The Belarusian Prosecutor-General's Office has warned the opposition against any attempt to "unconstitutionally seize state power" or any intention to destabilize the situation in the country and "provoke mass riots," Belarusian Television reported on 6 January. The warning comes after the opposition newspapers "Narodnaya volya" and "Naviny" reported on preparations for a session of the Supreme Soviet and a Congress of Democratic Forces in Belarus. The Supreme Soviet, which was disbanded by President Alyaksandr Lukashenka in 1996, is recognized as Belarus's legitimate legislature by all European nations except Russia. Supreme Soviet Chairman Syamyon Sharetski recently announced the intention to convene that body and set a date for presidential elections in 1999, as stipulated by the 1994 Constitution. Its successor, the 1996 constitution, prolonged Lukashenka's presidency until 2001. JM

EXILED OPPOSITION LEADER URGES BELARUSIANS TO OUST LUKASHENKA

Zyanon Paznyak, exiled leader of the opposition Belarusian Popular Front, has called upon Belarusian citizens "to actively demand President Lukashenka's dismissal, participate in all opposition actions, and get ready for a general strike," Belapan reported on 6 January. Paznyak said that the 25 December Belarusian-Russian declaration on further integration is Lukashenka's "betrayal of state interests and the people." He argued that Lukashenka is offering Belarus "for sale" to avoid responsibility for the "collapse of [his] economic policy." And he urged the opposition not to participate in local elections scheduled for 4 April, adding that "under a dictatorship, only the dictator can win elections and referendums." In his opinion, former Prime Minister Mikhail Chyhir's presidential bid is "inspired by pro-Moscow forces" (see "RFE/RL Newsline," 7 December 1998). JM

BELARUSIAN SOCIAL DEMOCRATS NOT TO PARTICIPATE IN LOCAL ELECTIONS

The Belarusian Social Democratic Party, led by former parliamentary speaker Stanislau Shushkevich, will not participate in the 4 April local elections, Belapan reported on 6 January. Shushkevich cited the anti-democratic law on local elections adopted last month (see "RFE/RL Newsline," 16 December 1998). The law in effect bars many opposition activists from running in such elections by excluding those candidates who have been fined or detained for participating in protest actions. JM

LATVIAN PARLIAMENT COMMITTEE SUPPORTS ABOLITION OF DEATH PENALTY

The parliamentary Committee for Human Rights and Public Affairs on 6 January voted to recommend ratification of the sixth protocol to the European Convention on Human Rights and Basic Freedoms, which calls for the abolition of the death penalty, BNS and Reuters reported. Committee chairman Antons Seiksts told reporters that the committee voted by six to two with one abstention in favor of a parliamentary vote on the issue. The bill will have to undergo three readings in the legislature. President Guntis Ulmanis imposed a moratorium on capital punishment in 1996, but the parliament included a provision in the new criminal code, due to go into effect in April, for such a penalty. JC

LITHUANIAN PRESIDENT APPOINTS NEW TRANSPORT MINISTER

Valdas Adamkus has appointed Rimantas Didziokas, a parliamentary deputy from the ruling Conservative Party, as minister of transport and railways, BNS reported on 6 January. Didziokas replaces Algis Zvaliauskas, who was sacked for abuse of office in mid-November. JC

GIMZAUSKAS'S TRIAL HALTED PENDING MEDICAL CHECKUP

The trial of alleged World War II criminal Kazys Gimzauskas has been indefinitely postponed pending a medical examination of the 90- year-old defendant to determine whether he is fit to appear in court. Gimzauskas, who is accused of handing over Jews to Nazi death squads, did not show up for the opening of his trial on 5 January because, his lawyer said, he is too ill to leave home (see "RFE/RL Newsline," 6 January 1999). The trial of Aleksandras Lileikis, who was Gimzauskas's superior during the Nazi occupation and is charged with the same crime, is due to resume on 7 January. Last November, Lileikis's only appearance in court to date was cut short when he complained of heart pains and was rushed to the hospital in an ambulance. JC

POLISH CABINET ACCUSES TELEVISION OF BREACHING 'IMPARTIALITY'...

Government spokesman Jaroslaw Sellin has accused Polish Television management of violating the "impartiality of public television" in a panel discussion program on 5 January, PAP reported the next day. The discussion was to have been conducted by Leszek Miller, leader of the opposition Democratic Left Alliance, and Deputy Premier and Interior Minister Jan Tomaszewski. Tomaszewski sent his deputy Jerzy Stepien in his place, but Miller opposed that replacement and the program editor asked Stepien to leave the studio, turning the anticipated discussion into an interview with Miller. This is the latest incident in a prolonged tussle between the ruling coalition and the opposition over the management of Poland's public television. The two sides are accusing each other of attempts to take political control over state-owned media. JM

...DRAFTS BILL ON SUPPORT TO FAMILIES WITH MANY CHILDREN

The cabinet on 6 January adopted a draft law providing for one-off payments of 165 zlotys ($48.4) to large families, PAP reported. The payments will be made for each child from the third-oldest downward. Kazimerz Kapera, the government's plenipotentiary for family issues, said the allowances will be paid to children and young people who were under 20 in September to offset spending connected with the start of the new school year. They will not be subject to tax and will cost the budget 260 million zlotys ($76.2 million). Some 1.5 million families are expected to receive such benefits. Kapera added that the payment of allowances is a "one- off project" and should be seen as a sign that a "pro-family tax system" will be introduced in 2000. JM

FISCHER SAYS NO DELAY TO POLAND'S EU ENTRY...

German Foreign Minister Joschka Fischer has said there will be no unjustified postponement of Poland's admission to the EU, dpa reported. Fischer and his French counterpart, Hubert Vedrine, said after a 6 January meeting with Polish Foreign Minister Bronislaw Geremek in Paris that they both advocate Poland's swift EU entry under "the best possible conditions," but they gave no specific date. Referring to Geremek's remark that Poland will be ready for EU membership by the end of 2002 (see "RFE/RL Newsline," 6 January 1999), Fischer said "he would be delighted to see Poland admitted [to the EU] at that time," the "Frankfurter Allgemeine Zeitung" reported on 7 January. JM

...AND GERMANY TO PUSH FOR RAPID EU EXPANSION

The next day, Fischer said Bonn will push for the rapid expansion of the EU, dpa reported. Speaking after a meeting with Czech Premier Milos Zeman and Foreign Minister Jan Kavan in Prague, Fischer said Europe could fall into a "deep political crisis" if enlargement of the union is delayed. He gave no timetable for adding new EU members. Fischer and Kavan said relations between the two countries have been "more open and intensive" since Germany's leftist government came to power in October. PB

CARNOGURSKY'S PARTY RELUCTANTLY ACCEPTS SCHUSTER AS PRESIDENTIAL CANDIDATE

Jan Carnogursky, justice minister and chairman of the Christian Democratic Movement (KDH), said on 6 January that his party will not challenge Kosice Mayor Rudolf Schuster for the post of president, TASR reported. Carnogursky, speaking on Radio Twist, said that although he does not think Schuster is the optimal candidate, the KDH will honor promises made during coalition talks. The KDH is a member of the ruling Slovak Democratic Coalition. Carnogursky said that he respects former President Michal Kovac but does not think the KDH will support Kovac's candidacy for president. PB

SLOVAK NATIONALIST PARTY OPPOSES BILINGUAL SCHOOL REPORTS

Anna Malikova, first deputy chairwoman of the opposition Slovak National Party, told Slovak Radio on 5 January that the coalition's intention to have parliament urgently debate an amendment to the education law making it possible for school reports to be issued in both Slovak and Hungarian is illegal. Malikova said that according to house regulations, such urgent proceedings are warranted only if "basic human rights" are at issue. "I fail to see what is the link between those rights and bilingual school reports," she commented. Malikova also criticized Slovak politicians of Hungarian ethnic origin who, she said, "claim they are loyal to Slovakia" but "do not want to respect its state language." MS

RAIL STRIKE TAKES TRAGIC TURN IN HUNGARY

Istvan Sipos, executive director of the Hungarian State Railways (MAV), died of a heart attack in his office on 6 January, Hungarian media reported. Sipos, 48, was the railway company's chief negotiator in talks with the Free Union of Rail Workers, which organized the ongoing strike (see "RFE/RL Newsline," 4 January 1999). Despite Sipos's death, strike representatives announced that the protest will continue. Kalman Katona, the minister of transport, telecommunications, and water management, said he was shocked to hear that the strike will not be called off in the wake of Sipos's death. He added that the union represents a radical minority of railway employees. The strike has so far caused MAV losses of some 120 million forints ($600,000). MSZ




NATO READIES 'THREE-TIER' EVACUATION FORCE FOR KOSOVA

An unnamed NATO spokesman told Reuters in Brussels on 6 January that the Atlantic alliance's rapid reaction force to evacuate endangered OSCE civilian monitors from Kosova is expected to become "fully operational" on 8 January. The "first tier" of the force is a 1,900-strong French-led contingent based in Macedonia. It includes troops from the U.K., Germany, The Netherlands, Italy, and Canada as well as from France. A second tier consists of British-led special forces to deal with emergency situations, such as the taking of monitors as hostages. The commandos will be based in their home countries, but it is unclear which countries are supplying troops for the second or third tiers. The third tier is 3,000-strong and will also be based outside Macedonia. Its mission will be to provide support in case the entire monitoring mission has to be evacuated at once. PM

DISCORD BETWEEN WASHINGTON AND PARIS?

Also in Brussels on 6 January, the NATO Council agreed that both the Serbian forces and the Kosova Liberation Army (UCK) are to blame for current tensions in the province, independent BETA news agency reported. In an interview with Reuters, an unnamed NATO spokesman played down reports of differences between the U.S. and France over Kosova (see "RFE/RL Newsline," 6 January 1999). The spokesman stressed that the two allies are making "convergent political efforts" to help end the crisis in Serbia's southern province. In his memoirs of the Dayton peace talks, U.S. special envoy Richard Holbrooke wrote that Paris was highly suspicious and resentful of Washington's role in the Balkans. PM

SHORTAGE OF OSCE MONITORS FOR KOSOVA

Norwegian Foreign Minister Knut Vollebaek, whose country holds the OSCE rotating chair for 1999, said in Oslo on 6 January that only 600 instead of the planned 2,000 civilian monitors will be in place in Kosova by mid-January. Vollebaek added that 1,200 will be on the ground by the middle of the month, and that the final total probably will not exceed 1,500. He said that the shortfall is due to the fact that there are not enough "qualified people" willing to take on such a risky assignment, RFE/RL's South Slavic Service reported. PM

TIGHT SECURITY IN PRISHTINA FOR ORTHODOX CHRISTMAS

Police maintained tight security near Prishtina's St. Nicholas Serbian Orthodox Church on 6 January. The strong police presence was aimed at preventing an incident similar to the recent grenade attack on a Serbian caf in central Prishtina, independent Belgrade Radio B-92 reported (see "RFE/RL Newsline," 6 January 1999). One local Serb told B-92 that after the incident, "every normal person [in Prishtina] is afraid for his life. [If I am attacked] I will fire back without warning." The broadcast added that a recent poll showed that 66 percent of Serbs describe themselves as "religious" and that 10 percent go to church regularly. PM

U.S. BLOCKS $20 MILLION FOR SERBIAN BANKS

President Bill Clinton said in Washington on 6 January that the U.S. authorities have prevented some $20 million worth of transactions involving Serbian banks since mid-1998 (see "RFE/RL Newsline," 27 May 1998), RFE/RL's South Slavic Service reported. Washington and its major Western allies agreed to freeze Serbian assets abroad in response to Belgrade's crackdown in Kosova. Clinton added that Washington will keep in place the so-called "outer wall" of sanctions against Serbia, which bar it from membership in international financial institutions. Meanwhile in Belgrade, a recent survey shows that 65 percent of the Yugoslav population "lives in poverty," Radio B-92 reported. Living conditions are somewhat better in Montenegro than in Serbia. PM

INDEPENDENT SERBIAN MEDIA OPPOSE 'EXTREMISTS'

ANEM, which is the organization of independent electronic media in Serbia, said in a statement in Belgrade on 6 January that the "existence and work of any media that promote ethnic conflicts and hatred are not desirable." The statement added that Yugoslavia needs more multiethnic broadcasting institutions and periodicals because only such media can help "create basic conditions for talks, understanding, and reconciliation of all ethnic groups and bring about the defeat of extremists of all kinds." The statement comes in response to a decision by the UCK to set up its own radio station and news agency in the province (see "RFE/RL Newsline," 4 January 1999). Meanwhile in Nis, Mayor Zoran Zivkovic of the Democratic Party blamed Milosevic's policies for the groundswell of support among Kosovars for the UCK. PM

MILOSEVIC FAILS TO BLOCK INTERNET

Drazen Pantic, who founded Serbia's first Internet service provider, told a symposium sponsored by the United States Institute of Peace on 6 January that Milosevic has not been able to prevent the free flow of news and information through the Internet, an RFE/RL correspondent reported from Washington. Pantic noted that the independent media have made use of the Internet since the winter of 1996-1997, when Radio B-92 set up its own web site following Milosevic's shutdown of the station's transmitter. Pantic added that attempts by the government to control Internet access by imposing taxes on users or by placing filters on anti-Milosevic web sites have failed. He also noted that some 30,000 subscribers receive B-92's daily newscasts via e-mail. PM

WASHINGTON PROTESTS ATTACK ON SERBIAN STUDENT

State Department spokesman James Rubin said on 6 January that Washington condemns the recent beating up of Belgrade student leader Boris Karajcic shortly after his return to Serbia. Rubin did not specify who attacked Karajcic. The student leader had been on a lecture tour in the U.S., where he discussed the Belgrade government's attempts to exercise tight control over institutions of higher learning, RFE/RL's South Slavic Service reported. PM

ARBOUR BLASTS ZAGREB

Louise Arbour, who is the chief prosecutor for the Hague-based war crimes tribunal, criticized Croatia's state-run media for their "very aggressive rhetoric" and "pathetic inaccuracies" in writing about the court. She added that the government's record on cooperation with The Hague is limited chiefly to "gestures" and leaves much to be desired. Arbour noted that Croatia does not allow the court's prosecutors to collect evidence in that country. Her remarks came in the wake of statements critical of the court by President Franjo Tudjman and his chief aide, Ivic Pasalic (see "RFE/RL Newsline," 29 December 1998). Her comments were the strongest she has ever made in public regarding Croatia, AP noted. PM

UNAUTHORIZED SENATE DELEGATION MEETS WITH STRIKING MINERS

A delegation of Romanian senators, led by Senate Economic Commission chairman Viorel Catarama, traveled to the Jiu Valley on 6 January to meet with striking miners, Romanian Radio reported. A government spokesman said Catarama is not authorized to negotiate with the miners. Petre Roman, the president of the Senate, said the delegation can only obtain information on the situation, and he added that he hopes Catarama will not overstep his authority. Many of the miners reacted angrily when they learned that Catarama will not negotiate for the government. The government has rejected miners' demands that ministers travel to the mining region in southern Romania to hold talks (see "RFE/RL Newsline," 5 January 1999). PB

DEFENSE MINISTER SAYS LOW SPENDING ON MILITARY HINDERS NATO CHANCES

Victor Babiuc said in Bucharest on 6 January that a further decrease in this year's defense budget is imperiling any chance the country has of joining NATO in the near future, Rompres reported. Babiuc said the Defense Ministry budget of just 1.98 percent of estimated GDP for 1999 is the lowest over the last four years. He said such a small budget will paralyze army training, prevent reform, and threaten operational capabilities. Babiuc added that reduced spending on defense will be cited by NATO leaders as a reason for not inviting Bucharest to join the alliance. PB

EX-BULGARIAN KING VISITS COAL MINE

Former King Simeon II, visiting a mine in Pernik, some 30 kilometers southwest of Sofia, told miners that Bulgaria can revive itself economically only if a consensus is achieved among its social classes and ethnic groups. "One of the reasons for our lack of unity," Simeon said, "is a typical Bulgarian feature that makes everyone want to be the [only] leader," AP reported. Last month, the government asked the Constitutional Court to invalidate a 1946 referendum--widely thought to have been rigged--that abolished the monarchy. Simeon ruled Bulgaria under regencies for three years starting in 1943, when he was 6 years old. MS/PB




WHERE REFORMS TRUMP RESOURCES


by Paul Goble

In the post-Soviet states, political and economic reforms are proving to be more important than location and natural resources in creating favorable conditions for both local businessmen and outside investors.

Those countries and regions that have carried out such reforms have outperformed those that have not--even when the latter have the edge in resources and other traditional foundations for economic growth. And this gap between the reformers and the non-reformers seems likely to grow in the years ahead.

This conclusion, reflected in a series of reports released at the turn of the year, is likely to encourage those both inside and outside the region who have been pressing for reform and who believe that political reform is just as important as economic change for business to grow.

But it is also likely to raise new questions about outside investment in countries and regions blessed with extensive natural resource holdings or favorable geographic location but so far lacking the commitment to complete the transition from the communist past to democracy and the free market.

The most dramatic example of the impact of reform on economic performance is provided by an Economist Intelligence Unit survey of business conditions in Russian cities outside Moscow that was published in December.

The EIU survey concludes that the six best cities for business in Russia -- Nizhnii Novgorod, Samara, Saratov, Yekaterinburg, Perm, and Velikii Novgorod -- have two things in common: one, their leaders are committed to economic and political reform, and two, they lack the natural resources that many, both inside and outside the region, had expected would be "Russia's saving grace."

But as the survey notes, Russian regions that enjoy such resources and have far better geographic locations often allow the "easy money" they have received in the short term to become an excuse for not making the kind of changes that will allow them to earn their way in the future.

In short, the EIU says, "politics, not petroleum" appear likely to determine where Russian businesses will thrive and where they will not.

The link between politics and petroleum also informs some recent studies of the economic prospects of Azerbaijan, Kazakhstan, and Turkmenistan, three oil- and gas-rich countries that had expected to outperform other post-Soviet states lacking such resources. To date, that has not happened, and recent assessments by Western scholars and journalists recently summarized in "The New York Times" suggest that these optimistic expectations may not be realized anytime soon.

As most of the studies acknowledge, a major reason for the lack of progress in these three states is geography. None is in a position to ensure that its enormous petroleum reserves can ever reach world markets. And it is thus not surprising that most of the discussion in the West about these countries until now has focused on pipeline routes rather than on the internal political and economic situations of these states.

But that is beginning to change, with ever more analysts focusing on the countries' economic and political situations. This attention has highlighted three sets of problems that may make it more difficult for these countries to create the climate they need for future business development.

First, Azerbaijan, Kazakhstan, and Turkmenistan still face the problems inherent in a transition from surviving Soviet-era leaders, who many argue have run roughshod over democratic principles to remain in power and who by their own design appear to lack a class of obvious political successors.

Second, all three are confronted with large and, in some cases, growing problems of corruption and overinvolvement of government officials in economic activities. While this is a legacy of the Soviet past, it is one that all three regimes have done little to fight.

And third, all three paradoxically face the problems of an embarrassment of riches: precisely because of the natural wealth they control, these leaders have attracted the kinds of preliminary investment that has encouraged them not to take the steps toward reform that they otherwise might have made.

For all these reasons, these three have performed much less well than several other post-Soviet countries, such as the Baltic States, that appeared to have fewer prospects but have in fact done better.

In the past, many analysts suggested that things would get better in Azerbaijan, Kazakhstan, and Turkmenistan once the petroleum began to flow to Western markets. But now, ever more people, both inside these countries and beyond, are beginning to question their earlier optimism.

And they are beginning to focus on the need today for the kind of reforms that until now they had been willing to put off. That sets the stage for additional political and economic turmoil. But it may also help to create the kind of business climate that will allow these countries to enjoy the benefits reformist states already have.


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