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Newsline - August 6, 1999




STEPASHIN TO STEER CLEAR OF ELECTIONS, CAMPAIGNS

In an interview with "Izvestiya" on 6 August, Prime Minister Sergei Stepashin said he will avoid making public his political likes and dislikes because the cabinet needs to stay above the political fray in an election year. He noted that while some of his predecessors "declared their membership in certain political parties or even financial and industrial groups," Russian citizens gradually began to link the government's activities to the interests of certain behind- the-scenes groups." This, he concluded, "was extremely harmful for the development of Russian society." He added that it is too early to speak about his possible participation in presidential elections in 2000: "A statesman these days should think about how to strengthen the Russian state rather than dream about higher posts." "Kommersant- Daily" reported on 4 August that the presidential administration unsuccessfully tried to get members of the governor's bloc, All Russia, to accept Stepashin as the leader of a centrist electoral bloc. JAC

PURGE PREDICTED AT BEREZOVSKII'S MOST RECENT MEDIA ACQUISITION...

Leonid Miloslavskii has been appointed director-general of the Kommersant Publishing House, Interfax reported on 5 August. Miloslavskii, who is one of the co- founders of "Kommersant-Daily," reportedly sold his 15 percent stake in the company to financier Boris Berezovskii. "Moskovskii komsomolets" predicted on 6 August that mass purges at "Kommersant-Daily" should be expected soon, since "there will be few journalists who resign themselves to following Berezovskii's line." According to "Moskovskii komsomolets," Raf Shakirov, ousted editor-in-chief of "Kommersant-Daily," has already received offers to head a newspaper to be started by Right Cause, the movement led by Unified Energy Systems Chairman Anatolii Chubais. Shakirov's job is likely to be offered to Andrei Vasiliev, a former executive at Russian Public Television, which is reportedly controlled by Berezovskii, Interfax reported on 5 August. "Moskovskii komsomlets" is considered close to Moscow Mayor Yurii Luzhkov, a rival of Berezovskii. JAC

...AS PRESSURE EASING ON ANOTHER MEDIA BARON?

"Kommersant- Daily" reported on 5 August, without reference to any source, that the Federal Tax Police Service has decided not to institute criminal proceedings against Media-Most head Vladimir Gusinskii for tax evasion (see "RFE/RL Newsline," 26 July 1999). Gusinskii reportedly paid the entire amount owed, along with fines. In addition, an unidentified person from the presidential administration allegedly called the tax service on Gusinskii's behalf. JAC

IMF POSTS AUDITOR'S REPORT ON CENTRAL BANK

The IMF has posted on its website the report based on the audit of Russia's Central Bank performed by the international accounting firm PriceWaterhouseCoopers. Media previously reported that the Central Bank Chairman Viktor Gerashchenko did not want the report made public, while fund officials and U.S. Congressmen did (see "RFE/RL Newsline," 1 July 1999). The document is accessible at http://www.imf.org/external/country/rus/fimaco/russia.pdf. Contents of the report had been leaked to "The Moscow Times," which concluded on 31 July that the report confirmed the worst allegations made by the bank's critics, since it shows that the Central Bank kept separate books to hide controversial transactions. JAC

FEDERATION COUNCIL WARNS GOVERNMENT OVER BUDGET

Federation Council Chairman Yegor Stroev told reporters on 4 August that the Russian government may run into problems passing its budget for 2000 if it does not first consult with legislators in the upper chamber, according to ITAR-TASS. "Vremya MN" reported the next day that the council wants it own representatives to participate in the drafting of the budget. It noted that regional leaders do not care for the government's economic plans, particularly the joint statement by the Central Bank and government prepared for the IMF, because those plans do not sufficiently take into consideration the interests of regions and industry. Federation Council Budget Chairman Konstantin Titov, who is also the informal head of the Voice of Russia election bloc, told Ekho Moskvy on 5 August that senators not only want to participate in setting the budget's macroeconomic parameters but also want input into the system of monetary transfers to the regions. JAC

GOVERNMENT TO HIT UP EES, GAZPROM FOR LARGER CONTRIBUTIONS

Tax Minister Aleksandr Pochinok is reportedly planning to review this month all tax agreements that the government has concluded with the country's largest taxpayers, such as Gazprom, Unified Energy Systems (EES), and the Roads and Transportation Ministry, "Kommersant-Daily" reported on 5 August. According to the daily, these entities provide at least one quarter of all revenues to the federal budget, and the Tax Ministry wants to increase their tax payments in keeping with increasing inflation and their growing level of production. In addition, agreements on restructuring old tax debts of the coal and banking sectors will reportedly be finalized soon. JAC

FINANCES GETTING TIGHTER AT FATHERLAND?

"Izvestiya" reported on 6 August that former Tax Minister Georgii Boos has been selected to head the election headquarters of the new alliance between Moscow Mayor Yurii Luzhkov's Fatherland and the governors' grouping All Russia. The daily also reported that Fatherland has been experiencing problems with financing. According to the newspaper, the majority of Fatherland's financing comes from the city- controlled holding company Sistema, headed by Vladimir Yevtushenkov, but the recent removal of one of Yevtushenkov's close associates from the position of financial director has not "induced Yevtushenkov to become more generous." The daily reported that a number of departments within Fatherland have been eliminated to tighten central control over financing, and every large expenditure must be first approved in Moscow headquarters. In an interview with "Kommersant-Daily" on 27 July, Yevtushenkov denied allegations that his company was formed using money from the Moscow city government. "Izvestiya" is controlled by Vladimir Potanin's Interros and LUKoil. JAC

RUSSIA REWARDS TROOPS WHO ENTERED KOSOVA BEFORE NATO

President Boris Yeltsin on 5 August signed a decree awarding the medal "For Services to the Fatherland" to Major-General Anatolii Rybkin, who commanded a unit that entered Kosova from Bosnia on 10 June ahead of NATO troops. Less prestigious awards went to the 205 troops who took part in the mission, "Krasnaya zvezda" reported. Meanwhile, Defense Minister Igor Sergeev has canceled a visit to Bosnia that was scheduled for 7 August, Reuters reported. A government spokesman gave no reason for the cancellation. Sergeev had been expected to personally hand over the awards to the soldiers (see "RFE/RL Newsline," 29 July 1999). FS

IVANOV, ALBRIGHT REITERATE COMMITMENT TO KOSOVA PEACE

Russian Foreign Minister Igor Ivanov and U.S. Secretary of State Madeleine Albright, in a telephone conversation on 5 August, stressed their commitment to the current peace plan for Kosova, Foreign Ministry spokesman Vladimir Rakhmanin told Interfax. He added that Ivanov called for the faster disarming of the Kosova Liberation Army (UCK). Albright and Ivanov also discussed possible cooperation "to give a new impetus to the Middle East settlement, taking into account the position of the present Israeli leadership." Furthermore, the two agreed that U.S. and Russian experts will meet in Moscow on 17 August to discuss the future START III arms reduction agreement along with possible modifications of the 1972 Anti-Ballistic Missile treaty. FS

RUSSIAN OFFICIAL SETS CONDITIONS FOR RESUMING FULL CONTACTS TO NATO

Rakhmanin told Interfax on 5 August that Russia will resume full relations with NATO "under certain conditions." He added that above all the Russian government hopes that "the Yugoslav tragedy connected with [NATO's] military operation...in the Balkans will never be repeated, that new dividing lines will not be drawn in Europe as a result of the implementation of NATO enlargement plans, [and] that [NATO] will fully take into account our lawful interests and concerns and strictly follow the provisions of the Russia- NATO founding act." Russia suspended its relations with NATO in March to protest the bombing of targets in Yugoslavia. Rakhmanin added that "at the moment Russian-NATO cooperation is limited to international peacekeeping operations in [Kosova] and Bosnia, while all other spheres of cooperation remain frozen." FS

FORMER FOREIGN MINISTRY OFFICIAL TO BE TRIED AS SOUTH KOREAN SPY

The Main Military Prosecutor's Office has sent the case of Valentin Moiseev, the former deputy director of the Foreign Ministry's Second Asian Department, for trial, "Vremya MN" reported on 4 August. Moiseev is accused of passing classified documents to an adviser at Moscow's South Korean Embassy, who was expelled from Russia shortly after Moiseev's arrest last summer (see "RFE/RL Newsline," 8 July 1998). According to an unidentified Russian counterintelligence officers, Moiseev is thought to have been recruited by the secret services of South Korea while serving in that country. He returned to Russia in 1996. JC

AKSENENKO URGES MEASURES TO MAINTAIN NORTHERN SHIPPING ROUTE

Speaking at a Moscow conference on 5 August, First Deputy Prime Minister Nikolai Aksenenko warned that unless the government takes "well-calculated" measures now, Russia might "lose" the Northern Shipping Route in the next five to 10 years, Interfax reported. In particular, Aksenenko pointed to the poor condition of ice-breakers and the northern ports. Only 1.48 million tons of cargo was transported along the route last year, compared with 6.58 million in 1987, according to data cited at the conference. Interfax also reported that plans to increase the number of cargo vessels are not expected to be realized because of the absence of budget funds. JC

STAVROPOL SPIFFING UP LENIN MONUMENT FOR HOLIDAY

The Stavropol Krai government is reassuring local Communists that the bronze status of former Soviet leader Vladimir Lenin in Stavropol's central square will be renovated in time for the 7 November anniversary of the Bolshevik revolution, "Izvestiya" reported on 5 August. The newspaper notes that krai budget does not have enough money for the 3 million ruble ($123,000) renovation but that local power suppliers have promised to chip in the necessary cash for work to begin. However, the daily notes that like the region, they, too, are on the "edge of bankruptcy." Stavropol Krai Governor Aleksandr Chernogorov, who ordered the fix-up, recently declared his intention to the join the For Victory election bloc, recently founded by Communist Party leader Gennadii Zyuganov (see "RFE/RL Russian Federation Report," 4 August 1999). JAC

RUSSIAN INTERIOR MINISTRY TROOPS DEPLOYED ON DAGESTAN- CHECHNYA BORDER

Responding to a request for assistance from the leadership of Dagestan, Moscow sent Interior Ministry forces to the republic's Tsumadin and Botlikh Raions on 4 August. Interfax the next day quoted unidentified "well- informed" Russian intelligence sources as claiming that Chechen field commanders and Dagestani extremists are planning to seize the capital, Makhachkala, in late August or September and overthrow the present Dagestani leadership. "Nezavisimaya gazeta" commentator Ilya Maksakov, however, argued on 6 August that the Dagestani leadership is in full control of the situation. He noted that predictions of an imminent coup underestimate popular support for State Council chairman Magomedali Magomedov and Makhachkala Mayor Said Amirov and exaggerate the strength of Nadir Khachilaev and radical Islamist Bagautdin Magomedov. The last two have been identified as responsible for the 2 August cross-border incursion from Chechnya into Tsumadin Raion. LF

CHECHNYA INTENSIFIES BORDER CONTROLS WITH DAGESTAN

President Aslan Maskhadov, for his part, has ordered that border controls with Dagestan be tightened to preclude the infiltration of armed groups into Chechnya, Deputy Prime Minister Kazbek Makhashev told Interfax on 5 August. Makhashev denied that any Chechen forces were involved in the fighting in Dagestan earlier this week. He said Chechnya respects the right of the population of Dagestan to self- determination and has no intention of interfering in the republic's internal affairs. He added that events in Dagestan should not negatively impact on negotiations between Chechnya and the federal center. LF

INGUSH PRESIDENT SAYS ABDUCTED RUSSIAN OFFICIAL HELD IN CHECHNYA

Ruslan Aushev said in Moscow on 5 August that Interior Ministry Major-General Gennadii Shpigun, who was abducted in Grozny in early March, is alive and being held captive in Chechnya, Interfax reported (see "RFE/RL Newsline," 8 March 1999). According to Aushev, Shpigun's captors have demanded a $7 million ransom. LF




AZERBAIJANI PRESIDENT NOT TO ATTEND SIGNING OF TURKMEN PIPELINE AGREEMENT

Interfax on 5 August quoted an unnamed Turkmen government source as stating that Heidar Aliyev will not attend the 6 August signing in Ashgabat of an agreement between the Turkmen government and the PSG company giving the latter the rights to extract Turkmen gas and export it via the projected Trans-Caspian pipeline. According to ITAR-TASS, Niyazov and Aliyev agreed during a telephone conversation on 5 August to meet in the near future to discuss both the gas pipeline project and the "equitable division" of the central sector of the Caspian. The recent announcement of huge reserves of gas in the Azerbaijani sector of the Caspian has called into question the viability of the costly and technically problematic Trans-Caspian pipeline project (see "RFE/RL Newsline," 13 July 1999). LF

AZERBAIJANI OFFICIAL DENIES DISAGREEMENTS WITH TURKEY OVER BAKU-CEYHAN

Deputy Prime Minister Abid Sharifov told journalists on 5 August that Azerbaijan and Turkey could sign within one month the four main framework agreements on construction of the Baku-Ceyhan export pipeline for Caspian oil, Turan reported. He denied persistent rumors that there are serious disagreements between Baku and Ankara over the terms of the project (see "RFE/RL Newsline," 29 July 1999). Also on 5 August, Interfax quoted Armenian First Deputy Energy Minister Kalust Galustian as saying that routing the Baku-Ceyhan pipeline via northern Armenia, rather than Georgia as planned, would reduce the estimated $2.4 -$3 billion cost by $500 million. LF

STALIN'S GRANDSON ELECTED HEAD OF GEORGIAN LEFT-WING ALLIANCE

Yevgenii Dzhughashvili has been elected leader of the People's Patriotic Union of Georgia, Russian agencies reported on 5 August. That alignment unites a number of left- wing parties and organizations. Former Georgian parliamentary speaker Vakhtang Goguadze told Interfax that the choice of Dzhughashvili, who is 63 and a former Soviet army colonel, could serve to consolidate left-wing forces in the run-up to the 31 October parliamentary elections. But the United Communist Party of Georgia objected to the choice of Dzhughashvili over their leader, retired General Panteleimon Giorgadze. LF

KAZAKH OPPOSITION BLOC THREATENS ELECTION BOYCOTT

Representatives of six opposition parties aligned in the "Respublika" bloc convened a press conference in Almaty on 5 August to demand unspecified amendments that would make the present election law more democratic, RFE/RL's bureau in the former capital reported. They said that if those change are not made, they will consider boycotting the parliamentary elections in September-October. The opposition leaders also demanded representation on the national and local electoral commissions. They said they have addressed an open letter to President Nursultan Nazarbaev requesting that the elections to the upper chamber of parliament be postponed from September to December. LF

KAZAKH WOMEN END HUNGER STRIKE

Seven women members of the Zher-Ana (Motherland) Party have ended the hunger strike they began in Almaty three weeks ago to protest the planned privatization of agricultural land, RFE/RL correspondents in the former capital reported on 6 August (see "RFE/RL Newsline," 27 July 1999). But their leader said they will resume the protest if the parliament returns to discussing the draft bill on land ownership, which passed in the first reading last month. Discussion of that bill has been shelved indefinitely, and Prime Minister Nurlan Balghymbaev said last week that conditions are not yet ripe for the sale of agricultural land (see "RFE/RL Newsline," 28 July 1999). LF

KYRGYZ DETAINED IN KAZAKHSTAN TO BE EXTRADITED

Kyrgyz National Security Ministry official Talant Razzakov confirmed on 5 August that 17 Kyrgyz citizens detained by Kazakh police three weeks ago in Jambyl Oblast will shortly be sent back to Kyrgyzstan, RFE/RL's Bishkek bureau reported. The Kyrgyz were among 78 Sunni Muslims, including women and children, detained for allegedly illegal religious activities at a camp near the Kazakh town of Taraz (see "RFE/RL Newsline," 20 and 22 July 1999). The Kyrgyz Muftiyat has written to Kazakhstan's Interior Ministry protesting the detentions, which a Kazakh prosecutor said were carried out in response to a request from Uzbekistan. The Uzbek Interior Ministry had claimed that radical Islamists suspected of involvement in the February bombings in Tashkent had gathered near Taraz. Also on 5 August, RFE/RL's Almaty bureau reported that the Uzbek embassy held a press conference on the ongoing investigation into those bombings. Embassy officials said the perpetrators wanted to kill President Islam Karimov and establish an Islamic state in Uzbekistan. LF

AFGHAN FIGHTING 'NOT A THREAT' TO TAJIKISTAN

General Aleksandr Markin, who commands the Russian border guard detachment deployed on the frontier between Tajikistan and Afghanistan, told Interfax on 5 August that the resurgence of heavy fighting in Afghanistan between the Taliban and Northern Alliance forces does not threaten Tajikistan's security. Markin said his troops have adequate resources to maintain the security of the border "under any circumstances." LF

TURKMENISTAN TO CREATE NATIONAL BUREAU FOR REFUGEES

Mustafa Djamil, who heads the UNHCR's regional office, said after talks in Ashgabat that Turkmenistan will set up a national bureau for refugees by the end of this year, "Nezavisimaya gazeta" reported on 5 August. Djamil's discussions in the Turkmen capital also focused on the need to expedite the return to Tajikistan of refugees who fled during the 1992- 1997 civil war. LF




BELARUSIAN OFFICIAL CRITICIZES CIS EXECUTIVE SECRETARY

Syarhey Posakhau, Belarus's permanent representative to the CIS, told journalists in Minsk on 5 August that CIS Executive Secretary Yurii Yarov is unwilling to tackle urgent problems facing his secretariat, including the energy crisis and falling trade turnover between CIS countries. According to Posakhau, Yarov's current duties are "issuing, filing, and storing pieces of paper," Interfax reported. JM

LUKASHENKA CALLS BELARUSIAN POPULAR FRONT 'DESTROYERS'

Belarusian President Alyaksandr Lukashenka said on 5 August that the recent congress of the opposition Belarusian Popular Front (see "RFE/RL Newsline," 2 and 3 August 1999) gathered "destroyers" who "are ready to turn [Belarus] upside down," Belarusian Television reported. He added that he will "most likely" have the records of the congress published ad verbatim. If people could listen to the congress, their "ears would close up [out of fear]," Lukashenka noted. JM

UKRAINE STRUGGLES TO AVOID DEFAULT ON LOANS

The Finance Ministry on 5 August said some 50 percent of its Eurobonds sold through the U.S. Merrill Lynch bank have been converted into new Eurobonds maturing in February 2001. Ukraine sold some $400 million in T-bills through Merrill Lynch in 1997 and was to have redeemed them last September. It needs around $3.5 million to service debts by the end of 2000, but the National Bank has only $1.3 million and is dependent on the IMF's $2.6 billion loan program. A government delegation will visit MF headquarters in Washington next week to seek new loans. "We have agreed on some questions but others demand an elaboration of positions and wordings," AP quoted Deputy Premier Serhiy Tyhypko as saying. Ukraine is counting on receiving some $180 million in IMF credit this month. JM

UKRAINIAN NUCLEAR POWER WORKERS WARN OF SECTOR'S 'BANKRUPTCY'

The union representing workers employed by the state-run Enerhoatom nuclear power company issued a statement on 5 August warning that the atomic energy industry is in a critical state. "An unbalanced tax policy has brought highly profitable nuclear power plants to the verge of bankruptcy," AP quoted the statement as saying. The document also noted that the industry lacks money to pay on time for nuclear fuel supplies from Russia, thus casting doubt on the "readiness of some reactors to be operational during the fall-winter season." JM

ESTONIA HAS HIGHEST AVERAGE WAGE, PENSION IN BALTICS

LETA reported on 5 August that in the first quarter of 1999, the average monthly wage in Estonia was $290.90, while it was $257.98 in Lithuania and $229.43 in Latvia. Compared with the first quarter of 1998, Lithuanian wages increased by 13.6 percent, while Estonian and Latvian wages were up 11.5 percent and 7.8 percent, respectively. Estonia recorded the average monthly pension at $110.20, followed by Latvia at $94.39 and Lithuania at $77.07. Compared with pensions in the first quarter of 1998, Estonia registered an increase of 29.5 percent, followed by Latvia (21 percent) and Lithuania (12.9 percent). MH

ESTONIAN INTERIOR MINISTER SAYS CORRUPTION 'BIGGEST PROBLEM'

In an interview published in the 6 August "Eesti Paevaleht," Juri Mois said corruption is the "most dangerous" problem in the fight against crime. At the same time, he noted that that the fight against organized crime and violent crimes has been more successful, adding that street crime is "not a big problem," Mois said "we need to give the police greater operational freedom" and close loopholes in criminal legislation. MH

LATVIAN PARLIAMENT ADOPTS AMENDMENTS TO PENSIONS LAW...

Lawmakers on 5 August approved the controversial amendments to the law on pensions by a vote of 51 to 36. The amendments stirred controversy among trade unions and pensioners as they gradually raise the retirement age from 57.5 years old for women and 60 for men to 62 for both by 2006. The amendments also stipulate that working pensioners will lose benefits starting the year 2000 if their wages exceed twice the pension level. Several hundred people have staged demonstrations in Riga recently to protest the amendments, LETA reported. Also on 5 August, the opposition collected signatures from more than one-third of the 100 deputies in order to postpone the promulgation of the amendments by two months. A referendum on the amendments will be held if 10 percent of the population supports such a vote. MH

...APPROVES BUDGET AMENDMENTS

The same day, lawmakers also approved amendments to the 1999 budget cutting spending by 64.4 million lats ($109 million) to take into account a shortfall in expected revenues of 93.1 million lats. The total spending for 1999 is now 1.4 billion lats. The parliament also approved state involvement in the revitalization of the failed Rigas Komercbanka, proposing that 1 million lats be earmarked for that purpose. And deputies voted in favor of increasing the excises on fuel oil, tobacco, and alcohol as well as raising the gambling tax. MH

POLAND TO HAVE LARGER BUDGET DEFICIT THAN EXPECTED?

By the end of July, the budget deficit had reached some 96 percent of the government target for 1999, PAP reported. However, Finance Minister Leszek Balcerowicz told Polish Radio on 5 August that this year's budget targets will be met if the cabinet observes "appropriate budget discipline." Meanwhile, Wieslawa Ziolkowska, a member of the Monetary Policy Council, said the risk of a deficit in the entire public sector is more dangerous than a state budget deficit slightly larger than planned. The state budget accounts for only 52 percent of all public funds, the remainder being accounted for by local government and health and other funds. According to Ziolkowska, the public sector deficit is a time bomb planted by the government when it introduced several systemic reforms at the same time. JM

CZECH SENATORS SUBMIT BILL ON MEMORIAL TO OPPRESSED

Twelve Senators on 5 August submitted a bill on the construction in Prague of a Memorial to the Times of Oppression. The center would apply to the period 1939-1989 and would gather documentation, to be made available via the Internet, on the periods of fascist occupation and communist rule. It would be located on the site of a former monument to Stalin. MS

SLOVAK POLITICIAN CALLS FOR COALITION SOLIDARITY

Justice Minister Jan Carnogursky on 5 August told CTK that Slovakia's national interests must come before party interests and that the time "is not ripe" for changing the premier. Carnogursky, who heads the Christian Democratic Party (KDH), is considered a rival of Prime Minister Mikulas Dzurinda for the leadership of the Slovak Democratic Coalition (SDK). The coalition was set up last year by five parties, including the KDH. Carnogursky said Slovakia must "present itself as a stable, democratic, and pro-European country" to succeed in its EU accession bid. He added the KDH will take a "neutral stand" on the demand of the Hungarian Democratic Coalition to reshuffle the cabinet because "changing a few ministers would be seen abroad as a normal step" and would not damage the country's image. MS

SLOVAK PARLIAMENTARY CHAIRMAN ON RELATIONS WITH RUSSIA

Jozef Migas, in an interview with ITAR-TASS on 4 August, said that he is opposed to the "ideologization" of relations with Russia, which "are now stable and not burdened by any problems." Migas, who is expected to visit Russia in the early fall, said the "intensification of relations with Russia, above all in the economic field, is one of the most important priorities for us." Migas also said Russia "was, is, and will remain a great power that exerts great influence on international developments," adding that he is "certain" its present economic difficulties will be surmounted. MS

HUNGARY'S SMALLHOLDERS REJECT FIDESZ CANDIDATE FOR PRESIDENCY

During unofficial talks with the junior coalition Independent Smallholders' Party, the major coalition party, FIDESZ, has proposed Ferenc Madl, former minister of culture in Jozsef Antall's government, as the parties' joint candidate for president. "Nepszava" reported on 6 August that the Smallholders rejected the proposal and said they continue to consider party chairman Jozsef Torgyan as their candidate. Under a coalition agreement, the Smallholders are to nominate a joint candidate for president. In other news, FIDESZ has offered one seat on its National Board and another on its Steering Board to the Christian Democratic Federation, which was formed by former members of the so-called "moderate wing" of the Christian Democratic Party. MSZ




MONTENEGRO UNVEILS PLAN FOR FUTURE TIES WITH SERBIA

The Montenegrin government approved a detailed plan on 5 August that would abolish the Yugoslav federation and recast Podgorica-Belgrade relations as a loose association of two sovereign states. The Montenegrin parliament is slated to approve the measure "soon," RFE/RL's South Slavic Service reported. It is unclear if the government intends the proposal as a basis for negotiations with Belgrade or as a "take-it-or-leave-it" proposition. Top Montenegrin officials said recently that they will hold a referendum on independence if the Serbian authorities do not respond to the proposal by late September. PM

MONTENEGRIN PROPOSAL PUTS POWER IN REPUBLICS

The plan calls for establishing a "Union of Montenegro and Serbia" with a unicameral legislature in which Montenegro and Serbia would have equal representation, BETA reported on 5 August. The cabinet would have a maximum of six ministries with small staffs, while each republic would, in effect, have its own foreign policy and army, which would be loosely coordinated with those of the other. Both sides would have to agree to broad joint foreign- and economic-policy goals, which would center on integration with Euro-Atlantic structures. Each republic would have economic independence and the right to introduce its own currency. Any joint currency would have to be freely convertible. And each republic would have a veto on joint decisions, including the election of the union's president and any declaration of war. PM

U.S. GIVES MONTENGRIN PROPOSAL CAUTIOUS BACKING

State Department spokesman James P. Rubin said in Washington on 5 August that the Montenegrin proposal is a "measured and rational approach to political and economic reform." He added that "we think that they should continue to work within Yugoslavia to ensure their rights are protected." PM

LESKOVAC TELEVISION EDITOR FREED

Ivan Novkovic left the Leskovac jail on 5 August after completing a 30-day sentence for broadcasting a call for an anti-Milosevic demonstration (see "RFE/RL Newsline," 8 July 1999). He told a rally of some 4,000 people after his release from prison that he does not regret broadcasting the appeal, which led to a series of large demonstrations. Novkovic added that he hopes similar anti-Milosevic protests will take place in all Serbian towns. PM

RESERVISTS TO TAKE HUNGER STRIKE TO BELGRADE

A spokesman for 10 army reservists staging a hunger strike in Nis said on 5 August that they will continue their 10-day-old protest in Belgrade "next week." The spokesman added that the only response they have had from the authorities was a police threat to remove them from the city center. The reservists demand back pay for their recent service in Kosova. PM

SERBIAN INTERIOR MINISTER WARNS OPPOSITION

Vlajko Stojiljkovic said in Kraljevo on 5 August that KFOR troops have failed to protect Serbian civilians in Kosova. He charged that this failure constitutes a violation of their mandate, the Belgrade daily "Politika" reported. Stojiljkovic accused unnamed "outside factors" of using domestic "traitors and hooligan elements, in other words, allies of NATO" to undermine Serbia's economy, security, and political life. He warned that the security forces will not allow efforts to "destabilize" Serbia to continue. The minister did not elaborate. PM

YUGOSLAV AUTHORITIES MOVE AGAINST PRIVATE RADIO

Federal Telecommunications Ministry officials on 5 August informed the management of opposition leader Vuk Draskovic's Belgrade- based Studio B Television that Studio B faces legal action if it continues to allow the private radio station B2-92 to use one of its frequencies (see "RFE/RL Newsline," 4 August 1999). The ministry officials stressed that only Studio B has the legal right to broadcast on that frequency. A spokesman for Studio B said that B2-92 will continue to use the frequency under a new name that will include the term "Studio B," VOA's Croatian Service reported. PM

YUGOSLAV ARMY DROPS CHARGES AGAINST DJINDJIC

On 5 August, the Yugoslav army prosecutor's office dropped charges of draft-dodging against Democratic Party leader Zoran Djindjic (see "RFE/RL. Newsline," 29 July 1999). The opposition politician said that the decision shows that the army is not willing to let the Milosevic regime use it for political purposes. PM

AHTISAARI CALLS FOR KFOR TO TAKE CHARGE OF SECURITY

Finnish President Martti Ahtisaari, who helped broker the Kosova peace settlement, said in Helsinki on 6 August that KFOR and not civilian police should assume responsibility for security in the province. He added: "I fear the role of the international police has not been fully thought out. They are perhaps needed when [local] police are retrained...and in monitoring the [local] police," Reuters reported. The president concluded: "That 3,000 or 3,100 police should keep order in the country is not of this world. [Keeping order] requires close cooperation between KFOR and the international police." Foreign governments have contributed fewer police than expected to the international police force. PM

SERBIAN HUMAN RIGHTS ACTIVIST SAYS PARAMILITARIES WERE ATTACHED TO REGULAR UNITS...

Natasa Kandic of the Humanitarian Law Fund (FHP) told Reuters in Belgrade on 5 August that most of the killings in Kosova were carried out by paramilitary units "established by orders from a very high level" and attached to regular forces. "Their task was to expel people from villages, and to kill," she said, adding that they included Bulgarian and Russian mercenaries. Kandic called on Serbs to "start talking about responsibility, to support the UN war crimes tribunal, and the investigation and punishment not just of perpetrators, but also those responsible at a high level, starting with Milosevic." The FHP was the only Serbian NGO to investigate Serbian war crimes during the conflict, RFE/RL's South Slavic Service noted. FS

...WARNS OF ALBANIAN 'CULTURE OF BLOOD FEUDS'

Kandic on 5 August also urged the Kosovar Albanians to "face up" to the wave of revenge killings of Serbs since June. She added that the revenge attacks are rooted in the Albanian "culture of blood feuds" and warned that if left unchecked they could "spiral out of control." Kandic stressed that "this is not revenge in the usual sense--'you robbed me, I'll rob you.' Nothing like this happened in the wars in Croatia and Bosnia. It is part of the Albanian mentality." She urged "new discussion" of the problems, adding that "otherwise it will go on till the last minority [in Kosova] is eliminated." FS

RUGOVA, THACI MEET WITH KOUCHNER

Ibrahim Rugova, the leader of the moderate Democratic League of Kosova (LDK), met on 4 August with the Kosova Liberation Army's (UCK) Hashim Thaci in the residence of UN Special Representative Bernard Kouchner in Prishtina, an RFE/RL South Slavic Service correspondent reported. The three discussed the situation in Kosova and forms of possible cooperation between the rival Kosovar political groups and the UN civilian administration. Bilal Sherifi, who is the head of Thaci's UCK-backed provisional government, told RFE/RL on 5 August that "the two sides discussed the agreement signed [by the Kosovar Albanian delegates] in Rambouillet about the creation of the provisional government.... Both sides agreed to create a joint commission to administer financial resources that have been collected by the fund administered by [the LDK's shadow-state Prime Minister Bujar] Bukoshi." FS

LDK JOINS TRANSITIONAL COUNCIL

LDK officials told an RFE/RL correspondent in Prishtina on 5 August that they have appointed their representatives to the UN's transitional council, following their meeting with Kouchner. Kosovar Albanians, Serbs, and small ethnic minorities are represented on the council, along with representatives of the international community. Rugova and LDK senior leader Fatmir Sejdiu will represent the LDK. Mark Krasniqi of the Christian Democratic Party of Kosova will also participate in the council. On 16 July, the first meeting of the transitional council took place, but Rugova refused to attend it, arguing that smaller shadow-state political parties must also be represented. FS

TAIWAN FREEZES KOSOVA AID AFTER CANCELING PREMIER'S VISIT

A spokesman for Taiwanese Prime Minister Vincent Siew said in Taipei on 5 August that Taiwan will "re-evaluate" a planned $300 million donation to Kosova. The announcement came after NATO notified Siew the previous day that it "cannot guarantee his security" in the region during a planned visit, dpa reported. The spokesman stressed that the donation can be made only "after we have made contacts with and gained understanding of the region." Siew had planned to visit Kosova on 5 August after his visit to Macedonia, together with a 160-strong business delegation (see "RFE/RL Newsline," 5 August 1999). FS

MACEDONIA LIFTS FEE FOR RELIEF TRUCKS

A UNHCR spokesman said in Geneva on 6 August that the Macedonian authorities have agreed to lift a $348 per-truck inspection fee for UNHCR relief vehicles bound for Kosova (see "RFE/RL Newsline," 4 August 1999). The spokesman added that "aid trucks will start rolling this morning." At least 90 aid trucks are waiting in Skopje alone. PM

ALBANIAN SPECIAL POLICE TAKE CONTROL OF DURRES PORT

Prime Minister Pandeli Majko on 5 August ordered special police troops to take control of the main port of Durres to stem corruption and smuggling, RFE/RL's South Slavic Service reported. Majko stressed that local police have proven unable to deal with highly organized and well-armed criminals. FS

IMF APPROVES ROMANIAN STAND-BY LOAN

The IMF executive board on 5 August approved the $547 million stand-by loan on which the Romanian government and the IMF had agreed in April. The loan will be disbursed over eight months and the first $73 million tranche released immediately, Reuters reported. IMF First Deputy Managing Director Stanley Fischer said that Romania must continue efforts to obtain credits from international private lenders. Fischer added that the full implementation of the government's program would "mark a major step forward in Romania's quest for financial stability and establish the basis for sustainable growth." Under the approved loan, Romania is aiming at an inflation rate of some 40 percent, a decline in output of no more than 3.5 percent, and a consolidated deficit not exceeding 3.7 percent of GDP in 1999. MS

HUNGARIAN LEADER IN ROMANIA URGES CHURCH PROPERTY RESTITUTION

Bela Marko, chairman of the Hungarian Democratic Federation of Romania (UDMR), sent a letter to President Emil Constantinescu, Prime Minister Radu Vasile, and Justice Minister Valeriu Stoica on 5 August urging the restitution of Church property confiscated by the Communists. Marko says the UDMR cannot comprehend why the restitution of such property is not included in a bill on the restitution of real estate currently being debated by the parliament, Mediafax reported. MS

MOLDOVAN PRESIDENT'S CONSTITUTIONAL INITIATIVE MEETS MORE CRITICISM

Party of Democratic Forces leader Valeriu Matei told journalists in Chisinau on 5 August that the presidential drive to change the constitutional system is aimed at "setting up a dictatorship." He warned that if the drive is successful, President Petru Lucinschi will extend his mandate, following the examples of Belarus and Kazakhstan. Parliamentary chairman Dumitru Diacov said that the presidential commission draft on changing the constitution was "a surprise for the deputies," RFE/RL's Chisinau bureau reported. He argued that the draft is an "anti-democratic document" that violates the principle of the separation of powers. Meanwhile, 38 deputies on 5 August asked the Constitutional Court to rule on the constitutionality of a draft law initiated by them. The draft envisages curtailing presidential powers and introducing a full-fledged parliamentary system in Moldova. MS

TRANSDNIESTRIAN LEADER WARNS AGAINST ATTEMPT TO EVACUATE RUSSIAN ARSENAL

"The Russian arsenal in Transdniester belongs to the Transdniestrians and only to them. We have just temporarily lent it to Russian troops," Transdniester Supreme Soviet Deputy Chairman Vladimir Atamanyuk said in an interview with Infotag on 4 August. Atamanyuk added that "if Russia attempts to withdraw the military equipment by force, the Transdniestrians will foil the attempt by lying on the rail tracks." MS

BULGARIAN GOVERNMENT APPROVES DEFENSE INDUSTRY BUY-OUT

The government on 5 August approved the sale of the Arsenal military industrial enterprise to an employee-management company. The company, called Arsenal 2000, will acquire a 51 percent stake in the enterprise for $2.1 million. Under existing legislation, the company's debts to the state budget will be written off, Privatization Agency chief Zachary Zhelyazkov told journalists in Sofia. The cabinet also approved the sale of the Elatsite-Med copper-producing enterprise to another employee-management company. The latter is to pay 10 million leva (some $5.5 million) for a 79 percent stake in the enterprise, BTA reported. MS




DEMOGRAPHY AND DEVELOPMENT


by Paul Goble

The demographic crisis in the Russian Federation and several other post-Soviet states not only serves as a brake on economic development but also appears to be so deeply rooted in the social fabric of these countries that economic growth alone is unlikely to overcome it anytime soon.

That pattern--one very different from countries in Western Europe--almost certainly will limit the ability of these societies to develop politically as well, thus further restricting their chance to escape from their communist pasts and to create the foundations for self-sustaining democratic development.

That disturbing conclusion is suggested in a new study prepared for the U.S. Defense Department by a group of scholars that includes Murray Feshbach, Nicholas Eberstadt and Vladimir Kontorovich. Those scholars focused on the Russian Federation, but their conclusion that the demographic crisis there "is unique from other historical precedents" clearly applies to other parts of the post-Soviet region as well.

Falling birth rates and rising death rates, the authors note, mean that the Russian population will almost certainly be smaller in the future than it is today. Indeed, last week, the Russian statistics agency appeared to confirm that viewpoint when it released figures showing that the population of the Russian Federation fell by 346,700 in the first five months of 1999 alone, an acceleration of a trend that began earlier this decade.

Because the number of deaths in the Russian Federation exceeded the number of births there during that period by 396,000, the agency said, the decline would have been even greater had it not been for the migration of some 47,000 ethnic Russians from former Soviet republics back to the Russian heartland.

Many analysts have blamed this situation on the economic difficulties that the Russian Federation and other post- Soviet states now face. But the authors of the Defense Department study suggest that the demographic problems are much deeper, appear to be getting worse, and are likely to last even after these countries begin to recover economically.

Some of the problems, the authors suggest, are rooted in ecological and epidemiological situations that the authorities do not appear to have either the resources or even the will to reverse. And these health problems, reflected in both falling life expectancies and declining populations, will in turn make it difficult for the Russian Federation and other countries to bounce back economically as quickly as many seem to expect.

In many respects, the authors of this study suggest, the health profile of Russia today currently resembles one of a Third World country that is doing poorly rather than the kind found in more developed states, even those that have experienced an acute economic crisis or even depression.

But perhaps the most important finding of this new study, the one with the broadest application, is that economic development by itself will not provide a sure cure for the demographic difficulties found in the post-Soviet states. Instead, these problems are likely in themselves to create political challenges in each of the three very different demographic regions of the former Soviet space.

In the Slavic countries, where the demographic crisis is the most severe, the aging and increasingly ill population is likely to demand expanded health care at a time when the authorities are trying to reduce government expenditures in order to allow for economic growth. Such demands could provide a base for political leaders interested in expanding the size of the state at the expense of the economy.

In the Baltic countries, where the populations are among the oldest in Europe, pensioners are in many instances turning away from the parties that led the drive to the recovery of independence toward political groups promising to take care of them and their pension and health concerns in the future, a shift that may change the politics of all three Baltic States over the next decade.

And in the historically Islamic countries of Central Asia, still high birth rates are not only putting more pressure on existing facilities but are creating conditions for future political instability by reducing the average age of the population to levels more common in the poorest Third World countries than in Europe.

Demographic developments like these seldom attract much attention as they are taking place, but their consequences appear likely to prove far more important than many of the events that now garner headlines.


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