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Newsline - March 10, 1999




SKURATOV, PRIMAKOV CUT SHORT VACATIONS

Prime Minister Yevgenii Primakov returned to Moscow from his vacation in Sochi on the evening of 9 March, five days earlier than scheduled (see "RFE/RL Newsline," 26 February 1999). Prosecutor-General Yurii Skuratov also reported for work on 9 March, chairing a meeting with his deputies, Interfax reported. President Boris Yeltsin had accepted Skuratov's resignation in early February, but the Federation Council postponed consideration of the issue until 17 March, requesting that Skuratov himself appear to explain his decision. According to the agency, Skuratov was on leave from 22 February following his release from the hospital, where he had been registered on 2 February. Skuratov has fully recovered, according to one of his closest deputies, "Kommersant-Daily" reported on 10 March. The Yeltsin administration apparently remains concerned: administration head Nikolai Bordyuzha told "Argumenty i Fakty" that Skuratov is "a decent person who has truly become very tired." JAC

BORDYUZHA OUT, CHUBAIS IN?

Citing "high-ranking" sources, "Moskovskii komsomolets" reported on 10 March that President Yeltsin is considering replacing presidential administration head and Security Council Secretary Bordyuzha, whose recent hospitalization for heart pain, the newspaper added, was not coincidental (see "RFE/RL Newsline," 9 March 1999). According to these sources, "Kremlin strategists" believe the presidential administration needs someone "strong and tough enough" to shield a sick Yeltsin and become an effective counterweight to the growing influence of Prime Minister Primakov. On the other hand, this official must possess very limited levers of influence so that he or she would still be dependent on the president. According to the newspaper, former First Deputy Prime Minister Anatolii Chubais fits the bill and Yeltsin will make a decision "within several days" on whether to invite him to rejoin the government. JAC

IMF MISSION TO RETURN TO MOSCOW...

The IMF will send a staff mission to Moscow this week, RFE/RL's Washington bureau reported on 9 March. According to a fund spokeswoman, there are no deadlines for reaching an agreement, but the IMF hopes that the team can make rapid progress. Citing its own sources, the "Times" of London reported on 9 March that the fund and the Russian government are likely to reach an agreement in time for Prime Minister Primakov's visit to Washington, D.C. later in March for the Gore-Primakov Commission. The next day, First Deputy Prime Minister Yurii Maslyukov told reporters that "there is no need for additional meetings in Moscow" with the IMF mission, because Primakov will discuss "all unsettled issues" in Washington. Ahead of the commission meetings, former Prime Minister Viktor Chernomyrdin will meet with Vice President Al Gore as well as the heads of the IMF and World Bank. He told reporters, however, that he has "no authority" at all to conduct official talks with international financial institutions. JAC

...AS CONTROVERSY CONTINUES TO SHROUD CENTRAL BANK

According to RFE/RL's Washington bureau, Fund officials continue to have questions about the Russian Central Bank's use of the tiny offshore firm FIMACO to manage its hard currency reserves. IMF sources told RFE/RL that the fund sent a mission to the Central Bank to conduct technical training in reserves management, and fund officials recommended that all reserves should be "invested by and in the name of the Central Bank." JAC

NEW CALL FOR WRITING OFF SOVIET DEBT

First Deputy Finance Minister Mikhail Kasyanov is holding consultations with Paris Club "experts" on the possibility of restructuring Russia's external debt, Interfax reported on 9 March. In an open letter to President Yeltsin published by "Kommersant- Daily" on 9 March, Duma deputy Aleksandr Shokhin recommended that the Russian government immediately open negotiations with Paris Club creditors on writing off the country's debts inherited from the Soviet Union by exchanging the debts for those developing countries still owe to the Soviet Union. According to Shokhin, the "nominal amounts of [both sets of] debts and financial assets coincide almost precisely." Deputy Foreign Minister Oleg Vyugin told Interfax on 10 March that the Central Bank used nearly $1 billion of its gold and foreign currency reserves in January to make foreign debt payments. In an earlier interview with the "Financial Times," Finance Minister Mikhail Zadornov warned that if the Russian government does not reach an agreement with the IMF soon, its hard currency reserves used for repaying foreign debts will be exhausted. JAC

ST. PETERSBURG POLICE INCREASING PRESSURE ON RELIGIOUS GROUP

Officials from St. Petersburg's Interior Department have initiated criminal proceedings against Open Christianity, a Dutch religious group, some of whose members have been fighting an attempt by local police to remove them from a building where they have been operating a school for several years, ITAR-TASS reported on 9 March (see "RFE/RL Newsline," 1 March 1999). Interior Department head Lieutenant-General Viktor Vlasov told ITAR-TASS that the group has been operating the school's building for commercial purposes for the past four years, charging other groups rent and not paying taxes. According to the agency, an eviction notice will become effective on 12 March. School and human rights group officials argue that the real conflict with city officials is over the right of religious groups to teach their faith. JAC

DUMA DEPUTY APPEALS TO RUSSIAN LEADER TO USE DOMESTIC BANKS

State Duma Security Committee Chairman and member of the Communist Party faction Viktor Ilyukhin publicly appealed to President Yeltsin on 9 March to move his personal savings from foreign bank accounts to Russian commercial banks. According to Ilyukhin, Yeltsin should set an example that "business tycoons and 'new Russians'" might follow. He added that the amount of money that would be returned this way would be greater than the sums currently under negotiation with the IMF. Ilyukhin has been outspoken in his demands that Yeltsin resign and is a member of the Duma's impeachment commission. According to "Trud" the next day, Ilyukhin plans to introduce an amendment to the Criminal Code that would make the non-return of assets removed from Russia a criminal offense. JAC

REFINED PRODUCT EARNINGS CONTINUE TO SLUMP

Russia's revenues from the export of petroleum products were down by 34.5 percent--$222 million--in January, compared with the same period last year, according the State Statistics Committee, Interfax reported on 10 March. JAC

COSMONAUTS BECOME SPACE FARMERS

Crew of the space station "Mir" planted several dozen seeds of varying kinds of wheat in their "hothouse" on 9 March, ITAR-TASS reported. Scientists hope that the wheat can be harvested within 70 to 90 days, proving that space is suitable for agricultural production. Commercial applications of the experiment are likely only in the distant future, since spokesman for the Institute for Medical and Biological Problems Vladimir Sychev told the agency that 20 square meters of grain must be sown to provide enough bread for one person. The same day, cosmonauts marked the 65th anniversary of the birth of Yurii Gagarin, the first man to fly into space. JAC

SHAIMIEV CALLS ON REGIONAL BLOCS TO UNITE

Interfax on 9 March quoted Tatarstan's President Mintimer Shaimiev as predicting that if all Russia's regional blocs and movements united, they would form a majority in the next State Duma. Shaimiev expressed his support for Samara Governor Konstantin Titov's proposal to create a Golos Rossii [Voice of Russia] movement, adding that Communist Party leader Gennadii Zyuganov's opposition to that proposal derives from his awareness that such a regional movement is the only force in Russia strong enough to counterbalance the Communists. LF

CHECHEN PRESIDENT WANTS TO MEET WITH YELTSIN...

Speaking on Chechen Television on 9 March, Aslan Maskhadov said a meeting between himself and Russian President Yeltsin is urgently needed to defuse escalating tensions between Moscow and Grozny, Russian media reported. Affirming that "I am doing my best to prevent war," Maskhadov condemned the use of threats and ultimatums as counter-productive. He said more than 20 separate groups are investigating the circumstances of the 5 March abduction from Grozny airport of senior Russian Interior Ministry official Major-General Gennadii Shpigun. Maskhadov has offered a $200,000 reward for information on Shpigun's whereabouts. Also on 9 March, Chechen Deputy Prosecutor-General Magomed Magomadov deplored the lack of cooperation between Moscow and Grozny in investigating Shpigun's abduction. LF

...CAN COUNT ON MOSCOW'S SUPPORT

Russian Nationalities Minister Ramazan Abdulatipov told Interfax on 9 March that he sees no need for a meeting between Yeltsin and Maskhadov but that it is imperative for either Prime Minister Primakov or a lower-level Russian leader meet immediately with both Maskhadov and Chechen opposition politicians, including adherents of radical Islam, Interfax reported. Primakov is to chair a high-level meeting on policy toward the North Caucasus on 10 March. Interior Minister Sergei Stepashin, who on 7 March issued the "threats and ultimatums" to which Maskhadov had referred, said Russia "has been supporting and will support the legitimate Chechen president." Both Yeltsin's special envoy to Chechnya, Valentin Vlasov, who was abducted and held captive for six months last year, and Oleg Sysuev, first deputy chief of the presidential administration, ruled out Moscow's use of force in Chechnya. LF




SPLITS IN FORMER ARMENIAN RULING PARTY?

Two members announced their resignation from the board of the Armenian Pan-National Movement on 9 March to protest the re-election of fugitive former Interior Minister Vano Siradeghian as board chairman, RFE/RL's Yerevan bureau reported. Former deputy parliamentary speaker Karapet Rubinian said that he opposes Siradeghian's ideology, describing him as neither a liberal nor a democrat. Samvel Gevorgian said that the defeated candidate for the post, former parliamentary speaker Babken Ararktsian, would have been "more useful to the party," which a third HHSh member predicted may now spilt. Siradeghian was re-elected in absentia as board chairman on 8 March (see "RFE/RL Newsline," 9 March 1999). LF

ARMENIAN JOURNALIST KILLED IN HIT-AND-RUN ACCIDENT

Tigran Hayrapetian, editor of "Nor Ughi," which is published by the eponymous opposition party, died in hospital in Yerevan early on 9 March after being run over by a car in the capital, Noyan Tapan and ITAR-TASS reported. Hayrapetian, who was 35, managed Nor Ughi chairman Ashot Bleyan's unsuccessful presidential election campaign in 1998. He contributed to several opposition publications. LF

ARMENIAN FOREIGN MINISTER IN CYPRUS

Visiting Cyprus on 8-10 March, Vartan Oskanian held talks with his Cypriot counterpart, Ioannis Cassoulides, Nicosia Mayor Lellos Demetriades, and Cypriot parliamentary deputy president Nicos Anastasiades on expanding bilateral relations and cooperation, dpa and Noyan Tapan reported. Discussing with Cassoulides the situation in the Caucasus and the Middle East, Oskanian expressed the hope that Turkey's relations with its neighbors will improve following the parliamentary elections next month. Oskanian also met with President Glafcos Clerides on 9 March. LF

ARMENIAN DEFENSE MINISTER VISITS TBILISI

Vazgen Sargsian met with his Georgian counterpart, David Tevzadze, and parliamentary chairman Zurab Zhvania in Tbilisi on 8 March to discuss defense cooperation between Armenia and Georgia and creating a legal framework for such cooperation, ITAR-TASS and Caucasus Press reported. The next day, Sargsian met with Georgian Minister of State Vazha Lortkipanidze. Sargsian assured the Georgian officials of Armenia's unswerving support for Georgia's territorial integrity. LF

KARABAKH SPOKESMAN DENIES PRESIDENT MET WITH AZERBAIJANI OPPOSITIONISTS

A spokesman for Arkadii Ghukasian, president of the unrecognized Nagorno-Karabakh Republic, told RFE/RL's Armenian Service on 9 March that an Azerbaijani press report claiming Ghukasian met with two prominent Azerbaijani opposition figures in the U.S. on 5 March is untrue. "Yeni Azerbaijan," the official Azerbaijani government daily, reported on 6 March that Ghukasian met with Musavat Party chairman Isa Gambar and former Azerbaijani parliamentary speaker Rasul Guliev to discuss proposing to Western oil companies that the planned Baku-Ceyhan pipeline for Azerbaijan's Caspian oil be routed not via Georgia but via Stepanakert and Armenia. Gambar similarly denied the meeting with Ghukasian but admitted he had met with Guliev to discuss the political situation in Azerbaijan, Turan's Washington correspondent reported on 9 March. Ghukasian met in Washington on 8 March with Donald Kaiser, the U.S. co- chairman of the OSCE Minsk Group, according to Noyan Tapan. LF

CHAIRMAN OF COMMITTEE ON DEFENDING AZERBAIJAN'S EX-PARLIAMENT SPEAKER DETAINED

Natik Jabiev, who heads the youth committee to defend Rasul Guliev's rights, was sentenced by a Baku district court on 9 March to 12 days in prison "for resisting the police," Turan reported. Jabiev was detained on 5 March. On 20 February, two other members of the committee were sentenced to 15 days in prison. LF

GEORGIA, ABKHAZIA TRADE ACCUSATIONS OVER REPATRIATION

Georgian Minister of State Vazha Lortkipanidze, meeting with Russian and UN special envoys for Abkhazia Lev Mironov and Liviu Bota in Tbilisi on 9 March, accused the Abkhaz leadership of backtracking on an earlier offer to recruit into the police force of the region's southernmost Gali raion Georgian displaced persons who return to their homes in Abkhazia. Lortkipanidze said the move was aimed at limiting Georgian representation in the force, Caucasus Press reported. In Sukhumi, Abkhaz Prime Minister Sergei Bagapsh told journalists on 9 March that unspecified Georgian leaders are trying to prevent displaced persons from returning, according to Interfax. He said 350 have managed to do so since 1 March, adding that of an estimated 30,000 who returned spontaneously earlier, 22,000 have already registered with the Abkhaz authorities. LF

GEORGIAN, UZBEK PRESIDENTS MEET...

Georgian President Eduard Shevardnadze met with his Uzbek counterpart, Islam Karimov, in Tashkent, on 9 March, Russian and western press reported. Karimov called their discussions "rich in content and constructive." Shevardnadze said they focused on problems on of regional and international security as well as bilateral economic cooperation. Uzbek Prime Minister Utkir Sultanov met with Georgian Foreign Minister Irakli Menagharishvili the same day to discuss shipping more Uzbek cargo via the "Trans- Caucasus transportation corridor," according to Interfax. Sultanov said his country could supply aircraft, cars, trucks, buses, and agricultural equipment to Georgia. Trade between the two countries has jumped from $600,000 in 1994 to $15.2 million in 1998, according to news agencies. BP

...COMMENT ON BEREZOVSKII'S DISMISSAL

At a press conference following their meeting, both presidents criticized the decision to replace Boris Berezovskii from the post of executive secretary of the CIS. Shevardnadze said it was "inappropriate" for the Russian State Duma to issue an appeal for Berezovskii's dismissal, saying it was "not within [its] authority" to do so. He added that "the decision on Berezovskii's appointment was made jointly (among CIS countries) but that the decision on his dismissal" was made unilaterally. Both presidents agreed that it would have been better if President Yeltsin had requested that Berezovskii step down. BP

UZBEK PRESIDENT SAYS INVESTIGATION INTO BOMBINGS SOON COMPLETED...

At the same press conference, Karimov said the investigation into the terrorist bombings in Tashkent last month will soon be completed. Karimov repeated claims that Islamic groups were responsible, but he contradicted earlier remarks by saying "we do not assume that Chechens have something to do with the criminals who committed that act of vandalism" (see "RFE/RL Newsline, " 26 February and 5 March 1999). Karimov noted that unlike Chechnya, "we will never embark on creating an Islamic, Sharia State [since such a state] is opposed by all Uzbekistan's 24 million people." BP

...CONNECTS POLITICAL OPPOSITION TO BOMBINGS

Karimov linked opposition political groups to the bombings, particularly leaders of the Erk Democratic Party, whom Karimov called "beggars living outside the country." "Realizing they have no other way and relying on money provided by extremist Islamic centers," these forces would rather see "an Islamic state than a civilized democracy," Karimov said. He vowed that those responsible for the bombings will receive "an open and just trial, in line with the letter and spirit of the law, without forgiveness or pity." BP

KYRGYZSTAN, UZBEKISTAN REACH NEW AGREEMENT ON GAS SUPPLIES

The Kyrgyz government's press service announced on 9 March that a new plan to pay for gas supplies from Uzbekistan has been worked out by the two countries (see "RFE/RL Newsline," 9 March 1999), RFE/RL correspondents in Bishkek reported. Kyrgyzstan will supply 22,000 tons of wheat to pay off the $3.3 million it owes Uzbekistan for gas supplies. BP




BELARUSIAN OPPOSITION ACCUSES OSCE MINSK MISSION OF 'INACTIVITY'...

Members of the opposition Central Electoral Commission have sent a letter to OSCE Chairman in Office Knut Vollebaek accusing the OSCE Minsk mission and its head, Hans Georg Wieck, of "inactivity," RFE/RL's Belarusian Service reported on 9 March. The oppositionists said Wieck "expresses opinions that contradict the OSCE official position on Belarus." In particular, they said that Wieck expresses "the need" to recognize the constitution adopted in the 1996 controversial referendum. "We have already ceased to count on Mr. Wieck's help and are forced to [directly] address the OSCE leadership," the oppositionists said. JM

...WARNS AGAINST MOSCOW 'POLITICAL PROJECT' IN BELARUS

Zyanon Paznyak, exiled leader of the Belarusian Popular Front (BNF), has issued a statement saying that the participation of former Prime Minister Mikhail Chyhir in the opposition election campaign this year is a "political project" stage- managed by Russia's special services. According to Paznyak, the project aims at creating a pro-Moscow opposition to President Alyaksandr Lukashenka in Belarus and at moving the BNF and the "Belarusian national liberation movement" to the "sidelines of politics." Paznyak and Chyhir are two candidates who have announced their intent to run in the 16 May presidential elections scheduled by the opposition Supreme Soviet in accordance with the 1994 constitution. Mikhail Chyhir resigned from the post of prime minister before the 1996 referendum, which abolished the 1994 constitution and considerably expanded Lukashenka's powers. JM

BELARUSIAN COMMUNISTS URGE RESTORATION OF 'PEOPLE'S DEMOCRACY'

At its 6-8 March congress, the Belarusian Party of Communists criticized policies pursued by the president and the government as "oriented toward pauperizing the working people," Belapan reported on 9 March. The party's main goal, as stated in an appeal to the Belarusian people, is to restore a "people's democracy in the form of soviets of deputies of the working people." The party sees Belarus's future in a voluntary union state of "brotherly nations" based on "equality, people's democracy, and socialism." JM

UKRAINIAN COURT LIFTS BAN ON PRICE HIKES FOR UTILITIES, TRANSPORTATION

The Constitutional Court on 9 March overturned a law that temporarily banned increases in the price of utilities and public transportation. The Supreme Council passed the law in July 1998, stating that it would remain in effect until the government has repaid all wage and pension arrears. The court ruling said the law is unconstitutional and allowed the government to raise utilities and transportation rates. So far, Ukrainians have paid only 80 percent of the cost of water, heating, and electricity supplies. The abolition of utilities subsidies was an IMF requirement to resume releasing tranches of a $2.2 billion loan, which was frozen last fall. JM

UKRAINE DISMISSES EU DEMAND TO CLOSE CHORNOBYL

Deputy Energy Minister Hennadiy Yaroslavtsev has shrugged off a demand by the European Commission to close the Chornobyl nuclear power plant as soon as possible, Reuters reported on 9 March. Energy Commissioner Christos Papoutsis urged Ukraine to reconsider last week's decision to restart the only operational reactor at Chornobyl and to expedite the plant's closure, pointing to safety considerations. Yaroslavtsev said the commission's demand is "an attempt to exert political pressure on Ukraine." The Chornobyl plant "is the safest of all similar nuclear power plants in the former Soviet Union," he argued. Ukraine has pledged to shut down Chornobyl by 2000 in exchange for Western assistance to complete the construction of another two nuclear reactors. JM

ESTONIAN INSPECTORATE SAYS NO LEAK IN TELEKOM TENDER

The Securities Inspectorate has announced it will not launch an investigation into an alleged leak about the distribution terms of Eesti Telekom shares during last month's tender, ETA reported on 9 March 1999. Uhispank was accused by "several sources" of having leaked information among its clients about the distribution terms of Eesti Telekom shares. The inspectorate said it has investigated all bids ranging from 300,000 kroons to 1 million kroons and found them to have been divided equally. There is no evidence that Uhispank clients were given preferential treatment, it concluded. JC

RIGA WANTS RUSSIAN-LATVIAN COMMITTEE TO RESUME FULL DIALOGUE

Latvian President Guntis Ulmanis told journalists in Riga on 9 March that Russia continues to pursue "incorrect diplomacy practices" toward Latvia by proposing to resume a dialogue with that country only on socio-humanitarian issues, "Diena" reported on 9 February. The previous day, Riga rejected a proposal to hold a meeting of experts of the Latvian-Russian intergovernmental committee's working group on socio- humanitarian issues in Moscow next week. Instead, it is proposing that the committee resume all its activities, not just those focusing on certain issues. Also on 9 March, Latvian Foreign Minister Valdas Adamkus commented on national radio that the proposal to discuss only socio-humanitarian issues casts doubt on Russia's declared wish to resume a dialogue with Latvia. JC

LITHUANIAN PRESIDENT SAYS 'NOTHING CLARIFIED' WITH PREMIER

Valdas Adamkus told journalists on 9 March that Prime Minister Gediminas Vagnorius failed to provide answers to questions that "cause concern" at an unofficial meeting between the two leaders the previous day, according to BNS and ELTA. "Almost nothing was clarified" at that meeting, the president commented, adding that he quizzed Vagnorius about transparency in the privatization process, problems in the energy sector, failure to meet budget revenue targets, and growing unemployment. Vagnorius responded that Adamkus's interpretation of the meeting was not only strange and incomprehensible, but also misleading." JC

POWER BRIDGE GROUP INTRODUCES STRATEGIC INVESTOR AT ELEVENTH HOUR

Representatives of the U.S. Power Bridge Group have officially informed Lithuanian Economy Minister Vincas Babilius that the U.K. company National Power will be a strategic investor in the project to link Lithuania's power grid to that of Poland, ELTA reported on 9 March. The Power Bridge Group won a tender for that project last year but owing to "financial difficulties" had failed to launch the project. It was required to find a strategic investor and to set up an energy company to carry out the project by 10 March. A government commission recently asked the Finance Ministry to determine whether the U.S. consortium is financially capable of realising the project. JC

POLAND WORRIED ABOUT SITUATION IN BELARUS

Polish Defense Minister Janusz Onyszkiewicz said on 9 March that the situation in Belarus raises "serious concerns," Reuters reported. He stressed the need to restore "democratic values" in Belarus, adding that the Belarusian leadership's policies "do not lead to conditions which benefit its neighbors." Onyszkiewicz also accused Belarus of trying to renegotiate the Conventional Forces in Europe Treaty in order to increase by 20 percent the deployment ceiling of Belarusian troops. Marek Siwiec, head of the presidential National Security Bureau, told Polish Radio the same day that one of the conditions for limiting conventional arms in Poland is that Russia and Belarus do the same. In Siwiec's opinion, Belarus has to make arms cuts because owing to its relations with Russia, "transferring a sizable number of troops from one country to another [takes] a matter of hours." JM

CZECH SENATOR TO LOSE PARLIAMENTARY IMMUNITY?

The Prosecutor- General's Office has asked the Senate to lift the parliamentary immunity of Vaclav Benda, who represents the opposition Civic Democratic Party, CTK reported on 10 March, citing the daily "Pravo." The office wants to launch legal proceedings against Benda, the former director of the Office for the Documentation and Investigation of Communist Crimes, for "unauthorized handling of personal data" in connection with Benda's claim that former Vienna Mayor Helmut Zilk had been a communist-era secret police informer. According to the daily, he could face a two-year prison sentence. Benda told "Pravo" that he is convinced he will not lose his immunity and that he is "not obliged to reveal the sources of information I received as a Senator." MS

SLOVAK GOVERNMENT REACHES DECISION ON RUSSIAN ANTI-MISSILE SYSTEM

The government on 9 March reached a decision on whether to proceed with the agreement, signed by its predecessor, on receiving a Russian S-300 anti-missile system. However, it will not release details on that decision before informing the Russian government, government spokesman Ladislav Lengyel told CTK. Under the agreement, the system was intended as part payment for Russia's debt to Slovakia. Sources close to governmental circles earlier said the transaction might harm Slovakia's efforts to join NATO. MS

SLOVAK NATIONALIST LEADER FACES INVESTIGATION

The Prosecutor-General's office has opened an investigation into the statements recently made by Slovak National Party leader Jan Slota on Hungarians and Roma (see "RFE/RL Newsline," 9 March 1999), CTK reported. If the parliament agrees to lifting his immunity, he could be charged with instigating racial and national hatred and with promoting the suppression of individual rights and freedoms. In the case of a guilty verdict, he could face up to eight years in prison. Slota, who is also chairman of the legislature's committee that monitors the secret services, told Radio Twist on 9 March that he refuses to apologize for his statements and is not afraid of losing his immunity. MS

FORMER HUNGARIAN DEFENSE MINISTER ACCUSED OVER MISSING FILES

A group of veterans of the 1956 Hungarian uprising suspects Gyorgy Keleti, former defense minister in Gyula Horn's cabinet, of involvement in the disappearance of the files of the former premier, Hungarian media reported on 9 March. The group claims that Horn was involved in the shooting of civilians following the crushing of the Budapest uprising. They have informed the Military Prosecutor's Office that they suspect Keleti of having ordered Jozsef Csaradi, head of the Defense Ministry Archives, to hide Horn's file. The veterans say Keleti later promoted Csaradi to the rank of colonel. Keleti dismissed the accusations, saying a court has already concluded that those files were removed from the archives before 1994, under a Democratic Forum government. MSZ




BEFORE TALKS WITH MILOSEVIC, HOLBROOKE WARNS OF TRAGEDY

U.S. diplomat Richard Holbrooke, speaking before his meeting with Yugoslav President Slobodan Milosevic on 10 March, said that Belgrade is on a "collision course" with the West if it does not agree to the Kosova autonomy deal, AFP reported. Holbrooke, who was accompanied to the meeting by U.S. envoy Chris Hill, said "we are only a few days away from a tragedy of even greater dimensions," referring to NATO threats to bomb Yugoslavia if the latter fails to agree to the Kosova peace plan, which was forged at Rambouillet, France. Talks are due to resume there on 15 March. Holbrooke added that the "threat of greater war is ever present." Holbrooke met with other Western envoys and ambassadors of the six-country Contact Group before leaving for Milosevic's presidential palace. PB

WEST STILL BETTING ON KOSOVAR ALBANIAN ACCEPTANCE...

EU envoy Wolfgang Petritsch reassured Holbrooke on 10 March that Kosova's ethnic Albanians will soon agree to the peace accord, AP reported. Petritsch said they are "very, very close to signing..., up to 95 percent is a done deal and they want to make sure that their last commander is on board." Albanian Foreign Minister Paskal Milo said the previous day in Tirana that it is "very important that the leaders of the Kosova Liberation Army (UCK) sign the agreement as soon as possible...today or tomorrow." Milo was speaking after meeting with his German counterpart, Joschka Fischer, and EU Human Rights Commissioner Hans van den Broek. Fischer said the ethnic Albanians committed a "big" mistake by not signing the accord at Rambouillet. Fischer said it will be "impossible to put pressure" on Belgrade if the Kosovar Albanians do not sign the agreement. PB

...ALTHOUGH UCK STILL LEAVES ROOM FOR DOUBT

Jakup Krasniqi, the UCK spokesman, told the Albanian-language newspaper "Kosova Sot" that the chances of the UCK leadership signing the peace agreement are "50-50," AP reported. He said the details of the agreement are still being discussed. Krasniqi also said that only the head of the ethnic Albanian delegation at the Rambouillet talks, Hashim Thaqi, can sign the accord. Thaqi was last seen in Albania (see "RFE/RL Newsline," 8 March 1999), and his current whereabouts are unknown. Serbian officials have issued an arrest warrant for him. Thaqi is also the prime minister-designate of the Kosova interim government. PB

SERBIAN OFFICIALS ISSUE MORE ARREST WARRANTS...

Serbian police have issued arrest warrants for eight UCK members, including three who are on the Kosovar Albanian peace negotiating team, AFP reported on 9 March. The three--Thaqi, Krasniqi, and Ram Buja--are described as "terrorists" and are said to be "armed and inclined to use arms," the Serbian Interior Ministry said in a statement. Six of the eight have already been sentenced to prison terms of up to 20 years after being tried in absentia. In other news, the Serbian Prosecutor-General's Office said on 10 March that no charges will be filed against police officers involved in an alleged massacre of 45 Kosovar Albanians at Recak. The office said the Albanians were killed in combat. PB

...STEP UP FIGHTING ALONG BORDER

Tank-backed Yugoslav forces continued to battle UCK fighters in both the north and south of the province on 9 March, according to AP. Reporters said the village of Ivaja, near the Macedonian border, was in ruins after sustaining artillery attacks. Dead animals littered the streets, houses had been torched, and a mosque destroyed. The 400 or so citizens of the town were rounded up and the men separated from the women and children. On the morning of 10 March, aid workers said about 35 men are still being held. Fighting is also reported in Trpeza and near Vucitrn, north of Prishtina, as well as in several other villages nearby. Hundreds of people have fled the fighting. PB

REPUBLIKA SRPSKA PRESIDENT REMAINS DEFIANT

Nikola Poplasen said on 9 March in Banja Luka that the decision to sack him was a "senseless and unfounded" move and that he will remain in office, Reuters reported. Poplasen said that "not only do I feel like the president, I act like one." Poplasen was dismissed from his post last week by Carlos Westendorp, the international community's high representative (see "RFE/RL Newsline," 8 March 1999). Westendorp's spokesman said Poplasen "is finished" and that the "international community does not recognize him [as president]." Westendorp has said that Poplasen will be removed from office by force if necessary. Poplasen also lashed out at Milorad Dodik, the Bosnian Serb premier, saying he is working for "the destruction of the Serb Republic." PB

TUDJMAN, ACCUSED WAR CRIMES SUSPECT REPORTED ON THE MEND

The weekly "Nacional" reported on 9 March that President Franjo Tudjman was recovering well following the removal of a cancerous brain tumor, AP reported. "Nacional" has close ties to the government and said sources within the ruling party disclosed the information. Tudjman and his doctors have denied that he has ever had cancer. Meanwhile, the prison doctor of Dinko Sakic, who has been accused of war crimes, reported on 10 March that Sakic is feeling better and may be able to attend his trial, which was postponed last week (see "RFE/RL Newsline," 4 March 1999) and rescheduled for 15 March. PB

SLOVENE FOREIGN MINISTER DENIES STALEMATE IN TALKS WITH CROATIA

Boris Frlec denied on 9 March that talks with Croatian officials on border issues have broken down, Slovene radio reported. Frlec said the talks have been ongoing for more than two years and that great progress has been made. He said the sides are working on four "difficult" issues, the most difficult one being the status of Piran Bay. PB

ROMANIAN INTERIOR MINISTER SAYS JANUARY CLASHES CONSITUTE FAILED COUP D'ETAT

Constantin Dudu Ionescu on 9 March said he can "more or less" confirm that the clashes between the police and striking miners in January constituted part of a failed coup d'tat. Ionescu said the conclusion was reached by an investigation carried out by the ministry and was based on "informative briefs" of the Romanian Intelligence Service (SRI), RFE/RL's Bucharest bureau reported. The daily "Evenimentul zilei," citing those "briefs," reported on 9 March that the miners aimed at overthrowing both the government and President Emil Constantinescu and at replacing them with administration led by the Greater Romania Party, which was promised the support of the Chinese Communist Party if the attempt succeeded. The Chinese Embassy in Bucharest denied the allegation. The SRI said that the "briefs" were cited "out of context" and that the daily's report is "exaggerated in places." MS

VATICAN DENIES PAPAL ITINERARY ESTABLISHED

A spokesman for the Vatican said the itinerary of Pope John Paul II's visit to Romania has not been finalized and that a special papal envoy will travel to Bucharest for this purpose next week, AFP reported on 9 March. The same day, the Romanian Catholic Bishops' Conference called on the Orthodox Church to enable "Catholic clergy and believers" to "rejoice in seeing the pope all over the country," Mediafax reported. MS

LUCINSCHI RE-NAMES STURDZA AS PREMIER

President Petru Lucinschi on 9 March re-named Ion Sturdza as premier- designate, RFE/RL's Chisinau bureau reported. Sturdza has 15 days in which to form a government. Lucinschi urged the parliament to approve the new government by the end of the week, warning that if the legislature again fails to vote confidence in the cabinet, he will have to dissolve the parliament. Lucinschi also noted that early elections would plunge Moldova into a situation where it will have "neither a parliament nor a government" for three months. MS

BULGARIA TO SEEK REVISION OF KOZLODUY AGREEMENT

Deputy Premier Evgeni Bakardzhiev told journalists on 9 March that Bulgaria will seek to have its 1993 agreement with the EU revised. Under that agreement, Sofia was to close down by 1998 four old reactors at the Kozloduy nuclear plant. Bulgaria wants the reactors to continue operating until the end of their operational life: 2005-2006 for two reactors and 2010 for the other two. Bakardzhiev said the negotiations must aim at meeting "both the European requirements and standards, as well as Bulgaria's national interest," Reuters reported. MS




BOSNIA'S TWO-ENTITY ECONOMY GROWING BUT STILL WEAK


by Michael Wyzan

The economy of Bosnia-Herzegovina is a unique case among transition countries, its most striking feature being its division into the economy of the Croatian and Muslim- dominated Federation of Bosnia-Herzegovina and that of the Republika Srpska.

There has been slow progress on trying to integrate the economies of the two entities. The Central Bank of Bosnia- Herzegovina, which functions as a currency board and is headed by IMF-appointed Peter Nicholl, put the convertible mark (KM) into circulation on 22 June 1998, supposedly for use in both entities.

However, in mid-January, Nicholl observed that "four currencies [the KM, the Deutsche mark, the Yugoslav dinar, and the Croatian kuna] are still in use here. The KM is developing well and is used all over all the country, but its use is still uneven and we have a long way to go in Herzegovina and the Republika Srpska before the KM can be described as the dominant currency of the whole country."

The economies of the two entities display different trends, with the Republika Srpska generally performing worse. However, the two entities share the feature that economic growth has slowed from the rapid rates displayed beginning in 1995, as the immediate reconstruction tasks have been completed. Industrial production in the federation rose by 25.6 percent during January-September 1998, compared with the same period in 1997.

This figure is less impressive when one takes into consideration the extent of the country's economic collapse in the early 1990s and the fact that such production grew by 341 percent in 1995 and 30 percent in 1997. Industrial production in the Republika Srpska grew by 26.3 percent during January-September compared with the same period in 1997, down from 34 percent in all 1997. However, Republika Srpska has not experienced as rapid an industrial recovery as the federation.

In 1994, the monetary authorities in both entities agreed to avoid using central bank credit to finance budget imbalances. This policy, along with the successful pegging of the federation's former currency, the Bosnia-Herzegovina dinar (since replaced by the KM), to the Deutsche mark and increased imports of consumer goods financed by foreign credits, have brought inflation down, especially in the Federation.

Inflation is running faster in the Republika Srpska than in the Federation. Retail prices in January-September 1998 were 5.9 percent higher in the Federation than on average in 1997, compared with 13.4 percent in 1997 (December-to- December). The equivalent figures for the Republika Srpska were 26.1 percent for January-September 1998 and 12.8 for 1997, so inflation is accelerating there, in keeping with developments in the Federal Yugoslavia, whose currency is still used heavily in the Republika Srpska.

The labor market is more depressed in the Republika Srpska than in the Federation, where employment has risen from 244,488 in December 1996 to 289,922 in September 1998. The numbers "waiting," that is, workers who are not working but for whom social contributions are made, have fallen over this period from 94,168 to 71,598. Fully 246,341 individuals were seeking work in September, although the IMF estimates that the unemployment rate has fallen from 70-80 percent to 30-40 percent since the end of hostilities. The unemployment rate is higher in Republika Srpska.

Net monthly wages are larger in the Federation, although they are rising faster in the Republika Srpska. Those wages came to DM 339 ($200) in the Federation in September 1998, compared with DM 206 a year earlier and DM 14 in November 1994. The equivalent figures for the Republika Srpska are DM 180 in September 1998, DM 64 in September 1997 and DM 49 in November 1994.

Foreign trade has been highly unbalanced, with trade and current account deficits financed by multilateral and bilateral inflows. Inflows have been large enough that the Central Bank's foreign reserves have been growing, reaching DM 280 million on 15 January, up from DM 144 million at the end of 1997.

During January-September 1998, the Federation exported goods worth just $73 million (up from $63 million in the same period of 1997), while its imports came to $674 million (down from $1.1 billion). Thus, the trade deficit last year was likely far smaller than the $1.2 billion racked up in both 1996 and 1997, but this is hardly good news, since it results almost entirely from an import collapse.

Imports and exports were down by about the same amount in the Republika Srpska during January-September 1998 compared with a year earlier, yielding deficits of about $280 million during each period. This suggests that the entity's international borrowing ability is constrained to a relatively small fixed amount each year.

While economic growth rates may remain impressive by the usual standards in both entities, genuine recovery must await economic reintegration between the two entities and with at least some other parts of the former Yugoslavia as well. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria.


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