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Newsline - February 1, 1999




NO IMF CASH UNTIL SPRING

First Deputy Prime Minister Yurii Maslyukov told reporters on 29 January that the IMF will offer Russia no money until the budget has been approved and implemented for a period of three months. After meeting with IMF First Deputy Managing Director Stanley Fischer at Davos, Switzerland, on 31 January, Prime Minister Yevgenii Primakov said he will sign a memorandum on 1 February answering all the fund's questions regarding the government's economic program. According to AFP, Primakov said he is "apprehensive" about the fund's likely response to the memorandum. Deputy Prime Minister Valentina Matvienko told reporters on 28 January that Russia "is fed up with these [IMF] loans," because "they have no impact on Russia's economic situation." JAC

PRIMAKOV PROMOTES ECONOMIC PROGRAM AT DAVOS

Speaking at the World Economic Forum in Davos on 30 January, Prime Minister Primakov said his government will make "considerable corrections in the economic reform policy" of its predecessors. He added that in order to rid itself of "the economy of mistrust" created by the 17 August crisis, Russia will strengthen the regulatory functions of the state, create transparent "rules of the game" for its economic system, and continue to seek an agreement with foreign creditors. "Kommersant-Daily" argued that the real audience for Primakov's speech was U.S. Vice President Al Gore, whom Primakov must convince to pressure the IMF to release money soon than this spring. After meeting with Gore on 29 January, Primakov told reporters that the two leaders focused on the "budget and the government's economic policy." They also discussed Russian export control policy on dual technology. JAC

DUMA TO CONSIDER BUDGET FINAL TIME THIS WEEK

As expected, the State Duma on 29 January passed the 1999 budget in its third reading. The vote was 298 to 48 with five abstentions. The Duma rejected an amendment proposed by the presidential administration to cut funding for each branch of power by 11.6 percent. The current version of the budget stipulates a 40 percent cut for the presidential administration, 30 percent for the cabinet, and only 3.7 percent for the Duma. President Yeltsin had threatened to veto the budget if the Duma did not adopt that amendment. Before the budget is sent to the Federation Council, the Duma will consider the budget once more, most likely on 4 February, according to ITAR-TASS. JAC

YELTSIN CUTS STAFF...

Following much speculation, President Boris Yeltsin on 30 January signed a decree trimming the presidential administration staff by roughly 20-25 percent (see "RFE/RL Newsline," 22 December 1998). The decree also eliminated the post of one deputy head of the administration and four presidential advisers, but it did not specify who will lose their jobs. A later decree will provide names, according to presidential spokesman Dmitrii Yakushkin. JAC

...LEAVES HOSPITAL

Yeltsin left the hospital on 30 January to spend two weeks recuperating at the Barvikha sanitarium near Moscow, Yakushkin told Ekho Moskvy. Yeltsin will celebrate his 68th birthday on 1 February, possibly at home, Interfax reported. JAC

BREAD SHORTAGES LOOM

Bread shortages and/or sharp increases in the price of bread will soon occur throughout Russia, "Izvestiya" predicted on 30 January. According to the newspaper, almost all regions have a deficit of grain, while U.S. and EU food aid will not arrive quickly enough to alleviate the situation. In Nizhnii Novgorod, where local officials have removed price restrictions, the cost of bread has already risen by 30 to 40 kopeks (1-2 cents). Meanwhile, Stavropol Krai has imposed a ceiling on grain shipments outside its borders of no more than 6 percent of its total crop. Earlier, Agriculture Minister Viktor Semenov called for replenishing the country's strategic grain reserve, which totaled 20-25 million tons last year but has been "eaten up" (see "RFE/RL Newsline," 25 January 1999). JAC

RUSSIA CALLS FOR KOSOVA PEACE CONFERENCE

In an interview with Russian Public Television (ORT), Foreign Minister Igor Ivanov repeated Russia's opposition to the use of force in Kosova on 31 January, noting that air strikes "could detonate a more serious destabilization in the Balkans." After a meeting with UN Secretary-General Kofi Annan in Davos the previous day, Prime Minister Primakov said that "the only possible way to settle the [Kosova] situation would be to require both sides--the Albanians and [Yugoslav President Slobodan] Milosevic--to sit down at the negotiating table." However, there "has never been a peace conference involving terrorists," military newspaper "Krasnaya zvezda" commented. According to the daily, "Serbian leaders say that there can only be a question of dialogue between Albanian political parties and the Serbian government." JAC

PRIMAKOV MAINTAINS HIGH PUBLIC APPROVAL RATINGS

For the past three months, Prime Minister Primakov continues to top public opinion polls, "Nezavisimaya gazeta" reported on 30 January. According to the newspaper, Primakov enjoys "a more than two-fold advantage over [Moscow Mayor Yurii] Luzhkov," who finished second in a ranking of Russia's most influential politicians. Yeltsin scored third, and his daughter Tatyana Dyachenko came in 13th. The next day, Primakov again dismissed speculation that his proposal for a political pact with the Duma was evidence that he wants to run for president, telling NTV that "it's laughable to think that I want to strengthen my position to participate in the presidential race." He added that it was "very nice" that he has high approval ratings. JAC

ORT HEAD BLASTS COURT, TOP OFFICIALS FOR POLITICAL INTERERENCE

A Moscow arbitration court has named an outside manager to oversee ORT until a final decision on its fate is made in April, the "Moscow Times" reported on 30 January. ORT Director-General Igor Shabdurasulov, appearing on an ORT program, accused the court, Primakov, Moscow Mayor Luzhkov, and the Communists in the Duma of playing "political games" with the channel and trying to limit President Yeltsin's influence. Yeltsin issued a decree in late December authorizing a $100 million loan to ORT using its shares as collateral. JAC

CHURCH'S ROLE IN DISTRIBUTING AID ASSAILED

Human rights activist Gleb Yakunin, a former Orthodox priest, and other religious activists are protesting an agreement allowing the Russian Orthodox Church to distribute $650 million of U.S. food aid, AP reported on 29 January. Yakunin said that Church leaders might embezzle the aid, adding that "letting the Moscow Patriarchate distribute humanitarian aid is like assigning the cow to mind the corn." According to the agency, Yakunin and other activists also expressed the fear that the non-Orthodox poor will not receive the assistance. The same day, Patriarch of Moscow and All-Russia Aleksii II told ITAR-TASS that the Church will allocate U.S. assistance to orphanages and homes for the elderly. JAC

KEMEROVO GOVERNOR DIVERGING FROM LEFT PATH

The local election commission in Kemerovo Oblast registered a number of candidates from the Aman Tuleev Bloc for local elections on 18 April, "Kommersant-Daily" reported on 30 January. According to "Vremya MN" the previous day, Kemerovo Governor Aman Tuleev is attempting to fill municipal and oblast "organs of power" with his own people. The newspaper concluded that Tuleev has decided to pursue his own political path separate from that of local communists and other leftist parties. JAC

NATIONALITIES MINISTER ADVOCATES MEDIA CENSORSHIP

Ramazan Abdulatipov has called for the introduction of strict press censorship to counter what he termed superficial and opinionated coverage that exacerbates tensions in the North Caucasus, "Kommersant-Daily" reported on 30 January. Abdulatipov was addressing a conference the previous day devoted to Russia's draft North Caucasus policy. LF

CHECHEN WARLORD VOWS TO APPREHEND OCALAN

Maverick field commander Salman Raduev has issued a statement warning all CIS states that he is prepared to encroach on their territory if necessary to apprehend fugitive Kurdistan Workers' Party (PKK) leader Abdullah Ocalan, Russian agencies reported. Raduev said that he has been asked for assistance in apprehending Ocalan by the far right-wing Turkish "Grey Wolves" (the National Movement Party, founded by the late Alparslan Turkes). Raduev denied that the PKK is a national liberation party and claimed that it is funded by Russian intelligence. Whether Raduev personally could participate in any operation to capture Ocalan is unclear. ITAR- TASS reported on 29 January that he has suffered a serious relapse and hemorrhaging following cranial surgery two weeks ago. LF

MASS AMNESTY IN WORKS

The cabinet on 28 January approved draft legislation calling for an amnesty of some 94,000 convicts, criminal suspects, and persons on trial, ITAR-TASS reported. According to Justice Minister Pavel Krasheninnikov, the measure would help alleviate prison overcrowding and will cover former soldiers, pregnant women, children, men over 60, women over 55, and tuberculosis patients provided prisoners belonging to those categories have not committed grave crimes. Human rights groups have condemned overcrowding in Russian jails and meager daily food allotments of 70 kopeks (3 cents) per prisoner, Reuters reported. "Vremya MN" reported the next day that during the nation's last amnesty in December 1997 only 15,000 prisoners were released. JAC

LEAKY ICON COULD MEAN SAINTHOOD FOR NIKOLAS II

Metropolitan Kirill of Smolensk and Kaliningrad told reporters on 30 January that myrrh reportedly oozing from an icon of Tsar Nikolas II at the Ascension Church in Moscow will be "reviewed by the synodal commission on canonization of saints and the Pomestnii Sobor will finalize the issue in 2000." Ascension Church priest Vasilii Golovanov earlier said that the icon started exuding myrrh, a yellowish to reddish brown aromatic resin, on 7 November 1998, the anniversary of the Bolshevik Revolution (see "RFE/RL Newsline," 18 January 1999). According to Kirill, the Church's criteria for thaumaturgy are very rigorous and preclude the acceptance of a miracle on what could be the figment of imagination of a mentally ill person. Kirill also noted that no miraculous activity has been observed at the Peter and Paul Cathedral in St. Petersburg, where the imperial family is buried in a side chapel. JAC




ARMENIAN EX-MINISTER FLEES COUNTRY TO AVOID INDICTMENT

Vano Siradeghian on 29 January left Yerevan on a plane bound for the United Arab Emirates, reportedly to seek medical treatment, RFE/RL's Yerevan bureau reported the following day. Earlier on 29 January, Prosecutor-General Aghvan Hovsepian told journalists that he will again ask the parliament to lift Siradeghian's immunity and sanction his arrest on charges of incitement to murder. Parliamentary deputies rejected Hovsepian's first such request last week (see "RFE/RL "Newsline," 26 January 1999). Hovsepian rejected allegations that the attempt to indict Siradeghian, a key supporter of former President Levon Ter- Petrossian, was politically motivated. On 28 January, presidential adviser and Union for Self-Determination chairman Paruyr Hairikian had told journalists that he was prepared to act as Siradeghian's defense lawyer in the interests of ensuring a fair trial, according to Noyan Tapan. LF

ARMENIAN DEFENSE MINISTER ADDRESSES REPUBLICANS' FOUNDING CONGRESS...

The Republican Party of Armenia, held its inaugural congress in Yerevan on 29-30 January, RFE/RL's Yerevan bureau reported. The new group was formed when the original party of that name merged with the Yerkrapah union of veterans of the Karabakh war and the affiliated Yerkrapah group of parliamentary deputies. Yerkrapah leader and deputy parliament speaker Albert Bazeyan called for "resolute steps to ensure law and order and combat corruption." He also stressed the Republicans' commitment to "free economic competition" and the creation of a middle class. Noting the party's role in "maintaining stability in the country," its leading members tried to allay widespread fears that its primary objective is to ensure its own victory in the parliamentary elections in May. Addressing the congress on 30 January, Defense Minister Vazgen Sargsian, Yerkapah's unofficial leader, said there is "no reason to mistrust us." He advocated a debate on how to ensure that the poll is free and fair. LF

...DENIES PRESIDENTAL AMBITIONS

Sargsian also denied persistent rumors of tensions between himself and President Robert Kocharian, saying the latter is "a good friend" whom he will never turn against. Sargsian added that he does not aspire to the post of either president or prime minister, adding that he wants to remain defense minister as "there is a lot of work to be done." He defined his role in recent years as "standing between the army and society" in order to prevent the former's involvement in politics "on the Turkish variant." Sargsian further denied having played the key role in forcing Ter- Petrossian's resignation in February, 1998. LF

AZERBAIJANI PRESIDENT RETURNS FROM TURKEY

Heidar Aliyev was discharged from hospital in Ankara on 29 January and flew back to Baku the following day. Aliyev told the several thousand people, including government ministers and school children, who greeted him on his arrival that his health is fine. He rejected persistent media speculation that he had been treated for cardiac problems, in addition to influenza. More than 50 sheep were sacrificed in honor of the president's return. LF

DEBATE OVER NATO BASES IN AZERBAIJAN CONTINUES

The Azerbaijani Foreign Ministry issued a six-page statement on 29 January warning that Azerbaijan will be "compelled" to take unspecified "adequate measures to ensure the security of the country and the defense of its independence" if Russia continues its policy of military cooperation with Armenia, Turan reported. The same day, members of the parties aligned in the pro-government Democratic Alliance picketed the Russian embassy in Baku to protest Russian arms supplies to Armenia and Armenia's alleged support for the PKK. Ikhtiyar Shirinov, chairman of the pro-government National Congress, told Turan on 29 January that Baku should ask either Turkey or NATO to station in Azerbaijan weapons capable of destroying the fighter aircraft and S-300 air defense missiles that Russia is supplying to Armenia. But the Unified Communist Party of Azerbaijan protested that deploying NATO troops in Azerbaijan would violate the country's constitution. LF

AZERBAIJAN DEMANDS EXTRADITION OF ALLEGED COUP PARTICIPANT

Foreign Minister Tofik Zulfugarov and Prosecutor-General Eldar Hasanov have presented Iran's ambassador in Azerbaijan, Alirza Bikdeli, with a written demand for the extradition of Mahir Javadov, Turan reported on 29 January. Javadov participated in an armed standoff in March 1995 between members of the OPON special police, led by his brother Rovshan, and the Azerbaijani authorities. Mahir Javadov then fled to Austria, where he was granted political asylum. In December 1998, he traveled to Iran, where the Azerbaijani officials claim he is currently "engaging in subversive political activity" with the aim of overthrowing the present Azerbaijani leadership. An Iranian embassy official told Turan on 27 January that Javadov is engaged in business activities in Tehran. But the same day, the independent newspaper "Yeni Musavat" quoted Javadov as appealing to Azerbaijanis to send their sons to help him launch a military campaign to "liberate" Nagorno-Karabakh. LF

UTO MEMBERS USE FORCE TO FREE COMRADES

The Tajik Interior Ministry has demanded that United Tajik Opposition (UTO) leader Said Abdullo Nuri punish UTO members who used force to free eight of their friends from a police station in Faizabad on 31 January, ITAR-TASS reported the next day. Some 200 UTO fighters surrounded the police station demanding the release of the eight men inside. When police refused, the UTO fighters forcibly disarmed police officers, took several of them hostage, and freed the eight men. Local authorities persuaded the UTO fighters to free the policemen and return their weapons, but an unnamed spokesman for the Interior Ministry later said this was not an isolated incident. Tajikistan's National Reconciliation Commission is expected to discuss the incident on 1 February. BP

RUSSIAN BORDER GUARDS TO STAY IN TAJIKISTAN

The director of Russia's Federal Border Service, Colonel-General Konstantin Totskii, says his service does not envisage the "possibility of handing over control of the state border with Afghanistan to Tajikistan," Russia's "Segodnya" reported on 30 January. Totskii, who was speaking in Moscow, said that relinquishing control over the Tajik-Afghan border "would not meet the interests of Russia or of other CIS countries." Totskii cited fighting between Afghan government forces and the Taliban movement near the border with Tajikistan, saying that "if the Taliban approaches the border with the CIS, a serious threat will arise for the entire region," Interfax reported on 29 January. Totskii acknowledged that border guards will leave Kyrgyzstan beginning in May but that 130 officers and officials will stay on as advisers. BP

TAJIK PROSECUTOR WINDS UP CASES AGAINST MUTINEERS

The Prosecutor-General's Office in the northern Tajik region of Leninabad says that 197 people have been prosecuted for their role in last November's mutiny there , Interfax reported on 29 January. Of the 197 prosecuted, 162 remain in custody, of whom some 70 are local residents suspected of aiding renegade former Tajik Army Colonel Mahmud Khudaberdiyev, who led the failed mutiny. Another 70 of Khudaberdiyev's fighters are scheduled to appear in court soon. BP

KYRGYZ PRIME MINISTER FAVORS AMNESTY FOR MONEY SMUGGLERS

At an expanded cabinet session on 29 January, Jumabek Ibraimov recommended an amnesty, given to those who have taken money out of the country provided they voluntarily return the funds, Interfax reported. Ibraimov estimated such funds amount to tens of millions of dollars and said that the passage of legislation granting amnesty could stimulate investment in Kyrgyzstan if the program were successful. The government also approved increasing the output of hydro-electricity and agricultural products, RFE/RL correspondents reported. And, as expected, it announced stricter controls over the use of government-guaranteed foreign loans and recommended full state control over the alcohol industry. BP




UKRAINIAN PRESIDENT BELIEVES RUSSIA WILL APPROVE BILATERAL TREATY...

Leonid Kuchma, speaking in Kyiv on 30 January, said that people should not "overdramatize" Moscow's delay in ratifying the comprehensive Ukrainian-Russian treaty, ITAR-TASS reported. Kuchma, speaking upon his return from the World Economic Forum in Switzerland, said he shares Russian Premier Yevgenii Primakov's view that in time "Russian parliamentary deputies will gain a greater understanding of the need to ratify the treaty." Primakov said in Moscow the following day that "we need very close relations with Ukraine" but such ties are impossible "if we lay any territorial claims on Ukraine." Kuchma said talks on a customs union between Belarus, Russia, and Ukraine is premature. PB

...WARNS RUSSIAN CRISIS POSES DANGERS FOR KYIV

Kuchma on 29 January said that the Russian financial crisis creates political dangers and economic problems for Ukraine, an RFE/RL correspondent reported from Davos, Switzerland. Kuchma, speaking at the World Economic Forum, said turmoil in Russia has encouraged elements in Ukraine that are not committed to reforms. Kuchma said Ukraine's reform model must be improved and market mechanisms, competitiveness, private ownership, and investment opportunities addressed. He added that low currency reserves are a pressing problem and that agreements with the IMF will have to be renegotiated because of a worsening economic climate. PB

UKRAINIAN DEFENSE MINISTER DECRIES MILITARY'S LACK OF MONEY

Oleksandr Kuzmuk said on 29 January that the Ukrainian army will stagnate in 1999 because of a lack of funds, AP reported. Kuzmuk said the 1.7 billion hryvni ($496 million) pledged for defense in the budget is "nothing for a country like Ukraine." He said insufficient funding in previous years has resulted in wage arrears of six months for many officers and soldiers. The military has no money for "modernizing, training, or buying weapons," he added. The Ukraine military has some 320,000 personnel, about one-third of its strength when the Soviet Union collapsed. PB

BELARUSIAN OPPOSITION RALLIES IN MINSK

Some 3,000 people demonstrated in Minsk on 30 January to show support for a new grouping of opposition forces and to press for presidential elections this year, AP reported. The rally followed a two-day congress outside Minsk of some 700 representatives from trade unions, cultural organizations, opposition parties, and human rights groups. Delegates to the congress pledged to join their efforts against the rule of President Alyaksandr Lukashenka. Lyavon Borshcheusky, the acting head of the main opposition group, the Belarusian Popular Front, said "we are in the process of transforming from an opposition to a national liberation movement, because in a country where there is no law, there cannot be any opposition." PB

BELARUSIAN PARLIAMENT PROTESTS POLISH INTERFERENCE

The lower house of the Belarusian parliament, the Council of Representatives, has issued a statement protesting the Polish Sejm's "interference" in Belarusian internal affairs, Belapan reported on 29 January. The council was protesting a "Message to the Belarusian People," adopted by the Sejm on 22 January (see "RFE/RL Newsline," 25 January 1999). The statement said the Sejm document "invokes a feeling of misunderstanding and concern" and "is unfriendly and cannot but alarm us." It added that the parliament is willing to "improve relations and collaboration with the Sejm." PB

TALLINN PROTESTS TO VILNIUS OVER CEILING PRICES

Estonia on 29 January delivered a diplomatic note to Vilnius protesting the imposition of ceiling prices on Estonian imports, ETA reported. Tallinn argues that such a move violates the Baltic free trade agreement and the principles of the World Trade Organization. Latvia delivered a similar note to Vilnius last week. In early January, Riga was the target of such protests from Estonia and Lithuania when it considered imposing quotas on imports of pork and live pigs from those countries (see "RFE/RL Newsline," 8 January 1999). JC

VILNIUS SUGGESTS RUSSIAN COMPANY HINDERING SUPPLIES OF CRUDE

The Lithuanian government issued a statement on 29 January saying that disrupted supplies of Russian crude to the Mazeikiai Nafta refinery may negatively impact on Lithuanian-Russian relations. Earlier the same day, the refinery was reported preparing to shut down after crude supplies from Russia appeared to be running dry. The government statement said that its Economy Ministry and Mazeikiai Nafta believe that Russia's LUKoil, which coordinates supplies of crude to Lithuania, and "some official Russian institutions" may have hindered supplies. If confirmed, the statement continues, this would "lead to distrust in Russian policy andinevitably would reflect on [bilateral] relations." LUKoil has expressed an interest in buying a 33 percent stake in the Mazeikiai Nafta refinery. The Lithuanian government, however, has said that LUKoil will be eligible to participate in an open tender for the refinery but will not be given preferential treatment.

MEDICAL PANEL SAYS LILEIKIS UNFIT TO STAND TRIAL

A team of eight doctors has concluded that Aleksandras Lileikis, who is charged with having committed crimes against humanity during the Nazi occupation of Lithuania, is too weak to appear in court. One week earlier, the panel drew a similar conclusion regarding the health of Kazys Gimzauskas, who faces similar charges, ELTA reported. The trials of both men were halted last month after they failed to show up for court hearings. The court is not obliged to accept the panel's conclusions, but observers say it is unlikely to proceed against the recommendations of the panel, which it appointed. JC

SOLANA INVITES THREE COUNTRIES TO NATO MEMBERSHIP

NATO Secretary-General Javier Solana on 29 January sent letters to the foreign ministers of Hungary, Poland, and the Czech Republic inviting their respective countries to join NATO. In Warsaw, Polish Prime Minister Jerzy Buzek said it is "a great day for Poles," adding that Polish membership in the Atlantic alliance "threatens no one." The three countries are slated to be officially welcomed into NATO at the alliance's 50th anniversary summit in Washington in April. PM

POLISH AGRARIAN LEADER MAKES THREATS, AS ROAD BLOCKADES DWINDLE

Andrzej Lepper, the leader of the farmers' Self-Defense group, called on farmers to continue their blockade of dozens of roads to protest low prices, AP reported on 31 January. Lepper made his call as farmers began withdrawing heavy machinery, after the government agreed to subsidize pork purchases to help out ailing farmers. Lepper said the government price for pigs is still too low. There were only eight blockades reported on 31 January, down from 130 a few days earlier. Premier Jerzy Buzek had said the blockades were a threat that hindered dialogue. PB

KWASNIEWSKI CRITICIZES PACE OF PRIVATIZATION

Polish President Aleksander Kwasniewski, speaking in Davos on 29 January, said that privatization must be accelerated to guarantee early entry into the EU, Reuters reported. Kwasniewski said he thinks privatization will pick up and that Poland will "have all the conditions to be in the EU at the end of 2002." Kwasniewski vetoed a bill last week that would have set up a privatization watchdog, which some argued would have hindered the privatization process. In other news, a medical team has concluded that former President Wojciech Jaruzelski is too ill to stand trial for his role in the deaths of 44 protesters killed by security forces in Gdansk in 1970. PB

RUML SAYS FREEDOM UNION NOT ABOUT TO JOIN GOVERNMENT

Jan Ruml, who is chairman of the small conservative Freedom Union, said in Prague on 31 January that his party has no plans to join the Social Democratic (CSSD) government. Ruml noted that there is a current in his party that "feels that we should be more flexible in talks" on changing the balance of political forces, but he stressed that "we are not in a hurry to get into government." Ruml argued that the party's main task is to present a clear alternative to the Social Democrats, CTK reported. He nonetheless added that his party is willing to talk to the CSSD and to Vaclav Klaus's Civic Democratic Party (ODS) about establishing "a certain majority political environment." Prime Minister Milos Zeman has recently sought to attract the support of several smaller parties for his minority government, which has an "opposition agreement" with the ODS. PM

MECIAR RETURNS TO POLITICS?

Former Slovak Prime Minister Vladimir Meciar told the National Board of his Movement for a Democratic Slovakia (HZDS) in Stara Tura on 31 January that the current government is responsible for Slovakia's poor economic performance. It was his first public speech since he retired from politics last fall, TASR reported. The board voted to set up a shadow cabinet, which the party's national convention will choose in April. The board also issued an appeal to the government against what it charged are wholesale sackings of HZDS supporters from jobs in the public sector and in the media,"Sme" reported. PM

NEW CHAIR FOR HUNGARIAN DEMOCRATIC FORUM

The Hungarian Democratic Forum, which is the junior partner in the governing coalition, elected Justice Minister Ibolya David as its new chair on 30 January. David defeated controversial outgoing chair Sandor Lezsak, who commented that the forum has shown it wants to improve its electoral chances by selecting as its leader a person who does very well in public opinion polls. David stressed that the party's problem is not its ideology but the way that it presents its views to the public. David added that the party must welcome back the many former members who left the party in recent years. She noted that the forum will retain its own identity and not merge with any other parties. The forum won the first post- communist elections in 1990 but has steadily lost members and votes in subsequent elections. PM




UN, NATO BACK CONTACT GROUP ON KOSOVA

Meeting in London on 29 January, the foreign ministers of the international Contact Group approved an ultimatum to the Belgrade authorities and the Kosovar leadership to agree to attend talks in Rambouillet, France, by 6 February. The two sides would then have up to two weeks to reach a political agreement on the province's future. The Contact Group threatened military action against those who reject the ultimatum (see "RFE/RL Newsline," 29 January 1999). On 30 January in Brussels, the NATO Council authorized Secretary-General Javier Solana to issue orders for air strikes should either side not comply. In New York, the UN Security Council endorsed the Contact Group's statement. PM

WESTERN LEADERS ISSUE WARNINGS

In Washington on 29 January, U.S. President Bill Clinton urged the Serbs and Kosovars to accept the Contact Group's terms, which, he said, are the best alternative to a war that neither side can win. Two days later, Secretary of State Madeleine Albright added that "our strategy of diplomacy backed by the threat of force is the only way to ensure that both sides halt the violence and come immediately to the negotiating table." In London, Vice President Al Gore noted that Washington has not yet made a decision on whether to commit ground troops to help enforce an eventual settlement. He nonetheless added that "the central pointis that NATO will back up its demand with force if [Yugoslav President Slobodan] Milosevic does not keep the agreement." British Prime Minister Tony Blair said that the Contact Group's statement reflects "a new momentum in [the] process" of reaching a settlement. PM

MILOSEVIC NON-COMMITTAL ON ULTIMATUM

Milosevic told Cook in Belgrade on 30 January that he needs "several days" to consider his reply to the Contact Group. The state-run Tanjug news agency quoted Milosevic as saying that the problem "must be solved peacefully, within Serbia and with the participation of representatives of all ethnic groups" in the province. Belgrade has long insisted that any conference on Kosova must take place in Serbia because Kosova "is an internal part of Serbia." The Serbian authorities have also insisted that any talks include representatives of often tiny ethnic minorities, which, observers suggest, is aimed at diluting the political power of the 90 percent ethnic Albanian majority. On 31 January, the pro- Milosevic daily "Politika" published the Contact Group's statement, which some observers argued was a sign that Milosevic intends to agree to the Rambouillet talks. PM

MIXED SIGNALS FROM KOSOVARS

Shadow-state President Ibrahim Rugova and leading journalist Veton Surroi told Cook in Skopje on 30 January that they will attend the talks. Adem Demaci, who is the political spokesman for the Kosova Liberation Army, and Rexhep Qosja, who is a prominent nationalist leader, said that they need more time to study the proposal. Demaci and other UCK representatives stressed that talks "organized in a rush" could lead nowhere. Meanwhile in Prishtina, spokesmen for students on a hunger strike appealed on 31 January to all Kosovar political leaders to sink their differences and adopt a united stand. PM

WHAT HAPPENED AT ROGOVA?

British General John Drewienkiewicz, who is deputy head of the OSCE monitoring mission in Kosova, said in Prishtina on 30 January that at least five of the 24 Kosovars killed at Rogova between Prizren and Gjakova the previous day were elderly peasants in civilian clothes. OSCE monitors noted that only three of the victims wore UCK uniforms. The monitors called on Finnish pathologists already in Prishtina to examine bodies from the Recak massacre to investigate the deaths in Rogova. Serbian spokesmen charged that the 24 Kosovars were "terrorists" killed in battle. PM

MACEDONIA MAY HOST ADDITIONAL NATO TROOPS

Foreign Minister Aleksandar Dimitrov told Cook in Skopje on 30 January that his country is ready to provide support not only for the NATO force already stationed in that country but also "for the possible second arrival of forces," AP reported. Dimitrov noted that additional troops could not only assist in any evacuation of OSCE civilian monitors from Kosova but also "serve some other possible solutions if there's no peaceful solution and the Contact Group plan fails." Serbia has repeatedly threatened Macedonia with unspecified consequences for hosting the NATO troops, even though Milosevic approved their presence near Serbia's borders in his agreement with U.S. special envoy Richard Holbrooke in October. Macedonia sees close cooperation with NATO as a means to anchor itself in Euro-Atlantic structures. PM

ALBANIAN PREMIER CALLS ON ARMY TO DEFEND SOVEREIGNTY...

Pandeli Majko told troops near Kukes on 29 January that they should be prepared to defend Albania's sovereignty, Reuters reported. Majko, who was accompanied by Defense Minister Luan Hajdaraga and U.S. Ambassador Marisa Lino, stressed that "we must be prepared to defend what is most sacred to us, our sovereignty." FS

...WANTS NATO TO USE FORCE

The Albanian government issued a statement on 30 January saying that "no one must nurse illusions [that] the Yugoslav authorities will respect the decisions of the international community unless force is used." The statement stressed that without force Milosevic will ignore the Contact Group's initiative. Meanwhile, in an interview with "Zeri i Popullit," Foreign Minister Paskal Milo welcomed the Contact Group's call for negotiations. Milo called it "necessary" that Kosovar leaders join the talks, dpa reported. FS

NO EARLY ELECTIONS IN CROATIA

Nikica Valentic, who is an aide to President Franjo Tudjman, said in Zagreb on 30 January that parliamentary elections will take place at some point during the last three months of 1999. Elections are due in January 2000. There has been much speculation that the governing Croatian Democratic Community (HDZ) would call an early vote, even though it is not doing well in public opinion polls. "Jutarnji list" wrote on 1 February that the HDZ hopes to deepen rifts within the six-party opposition coalition by prolonging the pre-election campaign throughout much of 1999. Several opposition leaders said their parties "will not allow" the HDZ to use its dominant role in the government and the media to set down rules for the elections that are detrimental to the opposition. PM

CROATIAN INTELLIGENCE OFFICIALS REPLACED

Tudjman on 29 January sacked General Markica Rebic as deputy defense minister with responsibility for intelligence work. The opposition has charged HDZ hard-liner Rebic with abusing his position to spy on opposition politicians and independent journalists. Tudjman accepted the resignation of Miroslav Separovic as head of one of the country's several intelligence bodies and from all his posts in the HDZ. Separovic charged that he has never received enough authority to combat the misuse of intelligence agencies for political purposes. Also on 29 January, Interior Minister Ivan Penic charged that public discussion of the role of the intelligence services is part of an unspecified "campaign to destabilize the state," RFE/RL's South Slavic Service reported. PM

ROMANIAN PREMIER, PRESIDENT BACK FROM GERMANY

Prime Minister Radu Vasile on 30 January concluded a four-day working visit to Germany, Romanian Radio reported. Vasile headed a delegation that included Foreign Minister Andrei Plesu, Industry and Trade Minister Radu Berceanu, and Labor and Social Protection Minister Alexandru Athanasiu. Vasile held talks with German Chancellor Gerhard Schroeder and Foreign Minister Joschka Fischer. Topping the agenda were reforms in Romania and the country's efforts to join European and Euro-Atlantic structures. The Romanian side expressed particular interest in boosting economic cooperation and attracting more German investments. On 31 January, Romanian President Emil Constantinescu met with Hungarian President Arpad Goncz in Germany to discuss bilateral relations. DI

MOLDOVAN CABINET STEPS DOWN

Premier Ion Ciubuc on 1 February submitted his resignation to President Petru Lucinschi, dpa reported. His center-right government was sworn in last May but proved unable to cope with the economic difficulties provoked by the impact of the Russian crisis. On 29 January, Ciubuc denied persistent rumors that he is contemplating handing in his resignation. "There will be no resignation even though the press is looking forward to it," the Flux agency quoted him as saying. DI

BULGARIA 'WILL SUPPORT NATO STRIKES' IN KOSOVA

In an interview published in the "Berliner Morgenpost" on 1 February, President Petar Stoyanov said his country "would pursue a policy of Euro- Atlantic solidarity" in the event of NATO strikes to end the fighting in Kosova, dpa reported. But Stoyanov added that he is sure that "the international community will use every means to find a peaceful solution to the conflict." He said he hopes that Bulgaria will be admitted to NATO as soon as it meets the criteria for membership, arguing that admitting Romania, Macedonia, and Bulgaria to NATO would contribute to "stabilizing" the situation in the former Yugoslavia. LF




SLOVENIA'S ECONOMY PERFORMS SOLIDLY, DESPITE EU CRITICISM


by Michael Wyzan

Last year, Slovenia saw some improvement over its respectable, if unspectacular economic performance in previous years. With its minimal trade dependence on the former Soviet Union (which accounted for only 3.9 percent of exports in January-October 1998), and low level of capital inflows, Slovenia is arguably the least vulnerable of all Central European countries to the shocks emanating from the Russian financial crisis.

Slovenia's GDP grew by 4.8 percent in January-June 1998 and is estimated to have risen by 4 percent for the whole year, up from 3.8 percent in 1997. The acceleration in industrial production was more dramatic: having grown by only 1.0 percent in 1996 and 1997, it was up by 3.8 percent in January-October 1998 over the same period in 1997.

Especially encouraging is the fact that output growth has been driven by exports, which in dollar terms rose by 6.8 percent during January-August, compared with 0.7 percent for all of 1997. Last year's export growth was largely due to faster economic growth in the country's main EU trading partners (the EU bought 65 percent of Slovenia's exports in January-October), especially early in the year.

Another boost to exports came from improved efforts at keeping labor costs under control, following the passage of legislation in July 1997 that replaced full indexation of wages to prices on a quarterly basis with partial indexation on an annual one. During January-September 1998, real gross wages rose by only 1.3 percent compared with the same period in 1997, whereas they rose by 3.4 percent last year in comparison with 1996.

Monthly gross dollar wages ($704 in July 1998) remain the highest among transition countries, although they are down from their peak of $755 in November 1996. Despite slower wage growth and faster production rises, the official unemployment rate remains virtually unchanged (14.5 percent in October 1997 and 14.6 percent a year later).

There was concern early in 1998 about higher inflation, given the government's commitment to liberalizing prices in preparation for acceding to the EU. In 1997, 28 percent of the goods in the retail price index had administered prices. Indeed, the 12-month rate of consumer price inflation rose to 9.4 percent in March 1998. Inflation sank to 6.4 percent from November 1997 to November 1998, the lowest rate since independence.

Slow inflation is partly due to tight fiscal policy, with the general government budget deficit in 1998 expected to have been about 1 percent of GDP for the second year running. This is another result of the stable exchange rate. The tolar, after weakening from 169 to the dollar at the end of 1997 to 173 on 31 March 1998, strengthened to under 163 on 21 January.

The foreign trade deficit during January-October 1998 was $601 million, down from $692 million during the same period in 1997. All other current account balances are positive, with the total such balance at $39 million during the first 10 months, nearly identical to the whole-year figures for 1996 and 1997.

The Bank of Slovenia's foreign reserves reached $3.7 billion in November 1998, up from $3.3 billion a year earlier. In contrast to these favorable indicators, foreign direct investment fell to $130 million during January-October 1998 from $248 million in the first 10 months of 1997.

The hallmark of Slovenia's macroeconomic policy has been caution. There has been a hesitancy toward foreign investment, approaches toward fiscal imbalances and foreign and public debt have been conservative, and the pace of enterprise restructuring and pension and tax reform leisurely.

For example, a value-added tax is not scheduled for introduction until July 1999, long after all nine other EU candidate countries and Croatia have taken this step. The trade unions succeeded in blocking a pension reform whereby workers would have had to make mandatory contributions to pension funds. Those funds would have invested the money on financial markets.

Slovenia's cautious approach to reform has not found favor with the European Commission, whose November 1998 report on Slovenia's progress toward accession was critical in several respects. The commission pointed to a poorly supervised, cartel- like banking sector unprepared for international competition, slow liberalization of the capital account, incomplete tax reform; inefficient bankruptcy procedures; and slow structural reforms at state enterprises and utilities.

These criticisms may be merited, but one should not lose sight of the fact that Slovenia is better prepared to bear the costs of accession than other candidate countries. It has a high GDP per capita (just below $10,000 last year), low foreign debt (less than $5 billion, most of which is long-term, compared with a $20 billion GDP), and the region's best international credit ratings. It would have no trouble borrowing money to cover, for example, the costs of meeting the EU's environmental standards. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria.


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