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Newsline - August 17, 1999




POWER MINISTERS RETAIN THEIR JOBS...

Russian President Boris Yeltsin signed a decree on 17 August reappointing Defense Minister Igor Sergeev, Foreign Minister Igor Ivanov, Interior Minister Vladimir Rushailo, Emergencies Minister Sergei Shoigu, and Federal Security Service director Nikolai Patrushev. Prime Minister Vladimir Putin pledged that the cabinet's composition will be finalized and submitted to Yeltsin this week, Interfax reported. JAC

...AS FORMER PROSECUTOR LANDS AT JUSTICE MINISTRY

Yeltsin also appointed former acting Prosecutor-General Yurii Chaika as justice minister, replacing Pavel Krasheninnikov. Krasheninnikov was widely tipped to lose his job for his failure to find a legal pretext to ban or otherwise punish the Communist Party. Chaika, 48, recently retired from the Prosecutor-General's Office in order to avoid waiting until October for the Federation Council to consider his request to resign from that post (see "RFE/RL Newsline," 10 August 1999). Russian media speculated earlier that Chaika, like his predecessor Yurii Skuratov, faced pressure from the Kremlin to suspend his office's investigations into alleged corruption involving two members of Yeltsin's inner circle, media tycoon Boris Berezovskii and Pavel Borodin, head of the Kremlin's facilities directorate. JAC

DUMA CONFIRMS PUTIN

State Duma deputies on 16 August voted by 233 in favor of Putin's candidacy for prime minister, only seven more than necessary. Eighty-four voted against him, while 17 abstained. Most members of the Liberal Democratic Party, Our Home Is Russia, and Russian Regions voted to support Putin, while voting among other factions was more uneven. Among the Communists, who form the largest faction, 32 members voted for Putin, 52 against, four abstained, and 41 did not vote at all, according to Interfax. Before the vote took place, Communist Party leader Gennadii Zyuganov told members that they could vote as they wish on Putin's candidacy. The Duma will convene its regular fall session on 14 September, according to ITAR-TASS, and the Duma Council will hold its first meeting after the summer recess on 13 September. JAC

CHECHEN RADICAL WARNS OF NEW MILITARY OPERATION IN DAGHESTAN...

Chechen field commander Shamil Basaev told Interfax and ORT on 16 August that within the next few days the Islamist militants will enlarge the zone of combat operations in Daghestan and establish control over more territory. Such an operation could mean pushing eastward through the Andi River canyon to seize the Tsuntin, Khunzakh, and Gumbet Raions and the main highway to Buynaksk and Makhachkala, according to "Nezavisimaya gazeta" of 17 August. The Russian federal command in Daghestan dismissed Basaev's warning as a "bluff." LF

...WHILE RUSSIANS CLAIM 'BREAKTHROUGH' IN BOTLIKH

Meanwhile, the commander of the North Caucasus Military District, Colonel-General Viktor Kazantsev, told journalists in Makhachkala on 16 August that federal forces have achieved a "breakthrough" in Botlikh Raion and taken all the strategically important heights there, Caucasus Press reported. Russian military spokesmen claimed last week to have established control over Tsumadin Raion. According to "Nezavisimaya gazeta," the militants occupied several villages in Botlikh along a crescent-shaped ridge, including the crucial village of Tando, which was being subjected to constant high-altitude bombing. The brunt of the fighting is being borne by Daghestani volunteer brigades. The Russian army forces are reportedly undisciplined, badly trained, and underfed. Russian Interior Ministry sources in Makhachkala estimated the Islamists' casualties since 7 August at 400. LF

POLISH RESEARCHERS MISSING IN DAGHESTAN

The Polish Embassy in Moscow has contacted the Russian Foreign and Interior Ministries and the Federal Security Service to ask for help in locating two women researchers from the Polish Academy of Sciences Center for Environmental Protection who disappeared while travelling in Daghestan last week, Interfax reported. Their car has been found abandoned in Gunib Raion, and they are believed to have been abducted. LF

CHECHEN PRESIDENT AGAIN DENIES INVOLVEMENT IN DAGHESTAN FIGHTING

In a televised address to the population of Daghestan on 15 August, Aslan Maskhadov accused Russian security services of precipitating the crisis in Daghestan through their support for extremist Islamist missionaries from Daghestan who settled in Chechnya, Interfax reported. Addressing some 5,000 people who participated in a rally in Grozny the following day to protest the hostilities in Daghestan, Maskhadov similarly accused Moscow of trying to trigger a civil war in Chechnya and of trying to compromise his leadership by depicting the fighting in Daghestan as a conflict that Chechnya instigated against Daghestan. Also on 16 August, the Chechen authorities began mobilizing reservists and veterans of the 1994-1996 war. LF

COMMUNISTS PURGE RANKS

Spiritual Heritage leader Aleksei Podberezkin was expelled from the Duma Communist faction on 16 August. Communist Party leader Zyuganov said Podberezkin had "effectively left" the faction when he announced his group's intention to run in parliamentary elections separate from the Communist Party. Podberezkin told NTV that day that at its congress in early October, his movement will discuss whether to join the Fatherland-All Russia alliance (see "RFE/RL Newsline," 30 July 1999). According to NTV, Duma Security Committee Chairman Viktor Ilyukhin, another member of the Communist faction and leader of the Movement to Support the Army, said he does not rule out that he, too, will be expelled soon. Ilyukhin has said that his group is opposed to joining the For Victory alliance, currently being organized by Communist Partly leader Zyuganov. JAC

YELTSIN ASKS THAT CRIMINALS BE KEPT OUT OF DUMA...

Russian President Yeltsin on 16 August urged the head of the Federal Tax Police, Vyacheslav Soltaganov, to increase his force's efforts to prevent persons with a criminal record from becoming members of the lower legislative chamber, ITAR-TASS reported. Interior Minister Rushailo said earlier that Russian law enforcement agencies are expecting to encounter "new, financially and administratively better-organized attempts by criminal structures to drag their candidates into the Duma." "Slovo" reported in its 15 August issue that known criminals seek not only the office of Duma deputy but also Duma staff positions. According to the publication, the certificate of a deputy's assistant grants the certificate- holder free rides on public transportation, free telephone calls and access to any organization in order to obtain information. It reported that deputies have on average 120 assistants, although only five of those assistants are entitled to salaries. JAC

...AS ELECTION COMMISSION THREATENS CRACK DOWN ON CAMPAIGN ADVERTISING

Central Election Commission Chairman Aleksandr Veshnyakov warned the Liberal Democratic Party of Russia, led by Vladimir Zhirinovskii, that it must stop its pre-election television and radio advertising if it wants to run in the 19 December Duma elections, ITAR-TASS reported on 13 August. Campaigning, according to Veshnyakov, can start only on the day of registration of candidates or party lists, which is not expected until early October. Documents for registration must be submitted by 25 October but no earlier than 25 September, according to "Kommersant-Daily" on 11 August. "The Moscow Times" concluded on 17 August that Veshnyakov "appears more willing than his predecessors to enforce a narrow, literal interpretation of Russia's election law and perhaps use it to block a party from participating in elections." JAC

ONE YEAR AFTER CRISIS, DOMESTIC INDUSTRY HAS REVIVED...

One year after the 17 August 1998 financial crisis, the Russian population's standard of living has fallen 25-30 percent, former Economics Minister Yevgenii Yasin told RFE/RL's Moscow bureau. However, according to Yasin, positive trends have emerged, such as the "increase in exports, the domestic production growth to replace imports, [and] the improved budget situation" (see also "End Note" below). Andrei Ilarionov, head of the Institute for Economic Analysis, told reporters on 16 August that the ruble's devaluation reduced the tax burden on industry by 7 percent, while the Russian Statistics Agency reported the same day that industrial production grew 4.5 percent during the first seven months of 1999, compared with the same period last year. Twelve of the 15 basic industries the agency tracks showed positive growth. JAC

...SOME BANKS HAVE BEEN WEEDED OUT...

As of 1 July, seven of Russia's top 25 banks had lost their licenses, while another five had managed to hold onto their licenses but could not meet their obligations to clients, according to Interfax on 16 August. One of the latter, SBS Agro, was granted yet another breather when on 16 August the Central Bank declared a 30-day moratorium on the payment of claims to creditors of the bank. According to a Central Bank press release, the moratorium is being imposed to preserve SBS-Agro's assets and "prevent instances where the claims of some creditors of the lending institution are met at the expense of others." On 17 August, Soyuz Banking Group President Aleksandr Smolenskii said that SBS-Agro bank could decide unilaterally to close unless the government makes viable proposals by 1 September to restructure the Soyuz banking group, which includes the bank. JAC

...BUT ECONOMIC RECOVERY WILL LIKELY WITHER

Credit agency Fitch ICBA concluded on 16 August that despite the recent rebound in industrial production, there is little evidence that once the scope for import substitution has been exhausted, investment and expanded exports will emerge to sustain the current economic recovery, according to Reuters. The agency also predicted that the Russian government will not implement major economic reforms before the looming presidential elections. And, without a radical restructuring of the enterprise sector and the attraction of substantial investment, including foreign direct investment, the economy is likely to reach the limit of its productive capacity soon, according to the agency. JAC

RUSSIAN, JAPANESE DEFENSE CHIEFS DISCUSS SECURITY

Meeting in Moscow on 16 August, Igor Sergeev and Hosei Norota signed a memorandum on boosting ties between the two countries' defense agencies. Sergeev told Norota that Russia regards Japan as "an influential and responsible neighbor." Norota, for his part, sought to appease Russian concerns about Japan's decision to carry out research with the U.S. on setting up an "umbrella" to protect U.S. troops and allies in Asia against missile attacks, Reuters reported. Russia is concerned that such a system would force a revision of the 1972 ABM Treaty. "It cannot be said that the Russian side was satisfied with today's explanations," a Russian Defense Ministry official said. Meanwhile, talks are scheduled to begin in Moscow on 17 August between Russian and U.S. experts on the Start-3 treaty and on possible changes to the ABM Treaty in view of U.S. plans to develop its own national ABM system. JC

MALAYSIAN PREMIER IN FAR EAST

Mahathir Mohamad is currently on a visit to Khabarovsk Krai aimed at boosting economic ties, AP and Russian agencies reported. On 16 August, he told Governor Viktor Ishaev that Malaysia is interested in Khabarovsk's timber and machine-building sectors. He toured the Komsomolsk-na-Amure aircraft company, which produces Sukhoi fighter jets and bombers and, according to Interfax, accounts for one-third of the region's industrial potential. And on 17 August, he is expected to visit a shipyard before leaving for Beijing the next day. JC

MORE RUSSIAN POLICE ARRIVE IN KOSOVA

Ivan Shushkevich, who is the head of the Russian Interior Ministry's international relations department, told ITAR-TASS on 16 August that so far Russia has sent 69 policemen to Kosova and that another 31 will arrive by 20 August. Russia plans to deploy a total of 210 policemen in the 3,100-strong international police force by mid-September. Twenty of those policemen previously served in the UN Police Task Force in Bosnia-Herzegovina. Several will assume senior positions at the police headquarters in Prishtina. FS




ROW OVER AZERBAIJAN'S MUNICIPAL ELECTION LAW CONTINUES

At a meeting in Baku on 16 August, members of Azerbaijan's Central Electoral Commission said that the amendments to the law on municipal elections proposed by the U.S. National Democratic Institute and the Azerbaijani opposition Movement for Electoral Reform and Democratic Elections (MERDE) constitute "a premeditated insult" and interference into the country's internal affairs, Turan reported. They also condemned accusations that commission chairman Djafar Veliev is ready to falsify the results of the poll. Veliev presided over the parliamentary elections in November 1995 and the October 1998 presidential poll, both of which were described by international observers as undemocratic and marred by widespread fraud. Meanwhile, two opposition representatives of MERDE told Turan on 16 August that they do not regard presidential administration official Ali Hasanov's criticism of the proposed amendments as valid (see "RFE/RL Newsline," 16 August 1999). LF

TYPHOID OUTBREAK IN AZERBAIJANI ARMY

Azerbaijan's Defense Ministry reported on 16 August that two servicemen died of typhoid on 4 August and another 100 are suffering from the disease, Interfax reported. Turan on 16 August cited "Yeni Musavat" as reporting that the victims were serving at the Geranboy and Gilazi military camps and that a quarantine has been imposed. LF

GEORGIAN OFFICIAL SAYS DAGHESTAN FIGHTING COULD DELAY POPE'S VISIT

A spokeswoman for the Georgian Orthodox Church told Reuters in Tbilisi on 16 August that it may be appropriate to delay Pope John Paul II's trip to Georgia until 2001 because of the unstable situation resulting from the fighting in Daghestan. Vatican envoy Giovanni Battista Re announced in Tbilisi on 15 August after talks with Georgian Foreign Minister Irakli Menagharishvili and the head of the Georgian Orthodox church, Catholicos Ilia II, that the pontiff will visit Georgia at an unspecified date this fall (see "RFE/RL Newsline," 16 August 1999). Caucasus Press on 13 August cited "Dilis gazeti" as reporting that members of the Islamic Shura of Daghestan, which last week proclaimed an independent Islamic republic, have sent an e-mail to Georgian President Eduard Shevardnadze assuring him of their desire to establish friendly relations with Georgia once they take power in Daghestan. LF

KAZAKH ELECTION OFFICIAL CASTS DOUBT ON FORMER PREMIER'S ELIGIBILITY...

Zaghipa Balieva told journalists in Almaty on 16 August that former Prime Minister Akezhan Kazhegeldin may not, after all, be eligible to contend the 10 October elections to Kazakhstan's lower chamber of parliament, Interfax reported. Balieva had said at a press conference last week that the administrative offense Kazhegeldin committed in 1998 by participating in an unregistered public movement does not constitute an impediment to him taking part in the October ballot (see "RFE/RL Newsline," 13 August 1999). But on 16 August Balieva said that she was unaware that Kazhegeldin had also been found guilty of contempt of court. LF

...AS DEADLINE PASSES FOR REGISTRATION OF CANDIDATES TO SENATE

Balieva also said on 16 August that a total of 33 candidates have registered to contend the 16 seats in the upper chamber of parliament, RFE/RL's Almaty bureau reported. She said that the OSCE has prepared special television programming to inform the electorate about the ballot. Also on 16 August, Petr Svoik, one of the leaders of the opposition Azamat Party, was refused registration in an Almaty district as a candidate for a lower house seat. The next day, "Nezavisimaya gazeta" reported that for the first time in Kazakhstan, new computer technology will be used to record the identity of every citizen who casts a vote and thus preclude multiple voting during the upcoming parliamentary elections. LF

KAZAKH JOURNALIST FOUND DEAD

Armial Tasymbekov was found dead in his apartment in Almaty last weekend, his relatives told RFE/RL's bureau in the former capital on 17 August. No further details of the circumstances of his death are available. Tasymbekov was briefly incarcerated in a psychiatric hospital earlier this year on suspicion of involvement in daubing slogans on buildings in Astana that denigrated President Nursultan Nazarbaev and extolled former Prime Minister Kazhegeldin (see "RFE/RL Newsline," 3 and 6 May 1999). LF

BP REVERSES DECISION TO QUIT KAZAKH OIL PROJECT

BP Amoco has gone back on its decision to sell its 9.5 percent stake in the Offshore Kazakhstan International Operating Company (OKIOC) for an asking price of $440 million, Interfax reported on 16 August, quoting an unnamed OKIOC official. BP had announced in July that it planned to sell its share in the consortium, regardless of whether the first test well yielded hydrocarbons (see "RFE/RL Newsline," 30 July 1999). On 13 August, ITAR-TASS reported that Kazakhstan's Prime Minister Nurlan Balghymbaev had set in motion the drilling machine to bore OKIOC's first offshore test well. LF

KAZAKHSTAN MAY SOON DECIDE ON SECOND OIL EXPORT PIPELINE

Speaking at a news conference in Atyrau after the OKIOC ceremony, Balghymbaev said the choice of a second Caspian export pipeline (in addition to the one from Tengiz to Novorossiisk, which is scheduled to go into operation in mid- 2001) will be contingent on the results of the test well, which, he said, should be available in three to four months, Interfax reported. Balghymbaev hinted that the route via Turkmenistan to Iran is the most likely option, noting that the feasibility study for the alternative pipeline to China will not be completed for another two months. LF

KYRGYZSTAN ADMITS RANSOMING HOSTAGES

Ministry of National Security spokesman Talant Razzakov told an RFE/RL correspondent in Bishkek on 16 August that the Kyrgyz authorities paid $50,000 in cash to obtain the 13 August release of four local guerrillas from Uzbekistan took hostage one week earlier in the southern district of Batken (see "RFE/RL Newsline," 10 and 16 August 1999). The kidnappers had originally demanded a $1 million payment. Razzakov also said that Defense Ministry forces have begun a military operation with the aim of neutralizing the guerrillas. Razzakov confirmed that Uzbek planes bombed some mountainous areas in Batken on 15 August as well as Tajikistan's neighboring Djirgatal district in an attempt to hit the guerillas. He did not elaborate. According to "Vechernii Bishkek" of 16 August, the Uzbek bombing raid was coordinated with the Kyrgyz leadership. LF

DATE SET FOR KYRGYZSTAN'S LOCAL ELECTIONS

Central Electoral Commission chairman Sulaiman Imanbaev announced in Bishkek on 16 August that President Askar Akayev has signed a decree scheduling local elections for 17 October, RFE/RL's Bishkek bureau reported. LF

UZBEKISTAN DENIES ITS PLANES BOMBED TAJIK TERRITORY

Tajikistan's Foreign Minister Talbak Nazarov on 16 August lodged an official complaint with Uzbekistan's ambassador in Dushanbe, Bakhtiar Urdashev, following an incident the previous day in which four jets approaching from Kyrgyz airspace dropped eight bombs on Tajikistan's Djirgatal district, Russian agencies reported. Buildings were destroyed and some 100 sheep and cattle killed, but there were no human casualties. Djirgatal is close to the border with Kyrgyzstan's Osh Oblast, where guerrillas from Tajikistan, some of them reportedly ethnic Uzbeks, took four Kyrgyz officials hostage last week (see above). The Uzbek Foreign Ministry denied any knowledge of the bombing. LF




OSCE SAYS LUKASHENKA SHOULD NOT PICK OPPOSITION DIALOGUE PARTNERS

Adrian Severin, head of the OSCE Parliamentary Assembly's group for Belarus, told RFE/RL's Belarusian Service on 16 August that neither the OSCE nor Belarusian President Alyaksandr Lukashenka has the right to select which oppositionists participate in the talks that are planned to take place under the aegis of the OSCE on the 2000 parliamentary elections in Belarus. Severin was responding to Lukashenka's statement that the Supreme Soviet--which was chosen by opposition parties as their mouthpiece at the talks--does not represent the country's opposition (see "RFE/RL Newsline," 16 August 1999). "From the point of view of democratic principles, we cannot accept as reasonable to exclude anybody from the dialogue," Severin noted. JM

UKRAINE'S MARCHUK SAYS AUTHORITIES BLOCKING PRESIDENT'S RIVALS

Yevhen Marchuk, former prime minister and a presidential candidate, has accused the government of blocking his and other candidates' presidential campaigns to ensure President Leonid Kuchma's re-election, AP reported on 16 August. "Public servicemen, who are paid by the state...are being used in Kuchma's election campaign," Marchuk noted. He said police disrupted his meeting with voters in Luhansk on 14 August by citing a bomb threat and ordering all those present out of the building. According to Marchuk, the event was a "provocation" staged by the authorities to prevent him from meeting with voters. JM

UKRAINIAN PRESIDENT VETOES BILL GRANTING IMMUNITY TO LOCAL DEPUTIES

Kuchma has refused to sign a bill amending the law on the status of local council deputies. The changes, approved by the parliament on 15 July, stipulated that local deputies cannot be detained or arrested "without approval by corresponding local councils until a verdict of guilty has been declared by court," the "Eastern Economic Daily" reported on 16 August. Kuchma argued that the constitution grants legal immunity only to parliamentary deputies, judges, and the president and does not mention local council deputies. JM

LAST COMPETITOR JOINS UKRAINIAN PRESIDENTIAL RACE

Ukraine's Supreme Court has ordered the Central Electoral Commission to register Yuriy Karmazin, leader of the Party of the Fatherland's Defenders, as a presidential candidate, the "Eastern Economic Daily" reported on 16 August. The commission previously refused registration to Karmazin, recognizing as valid only some 849,000 signatures out of the 1.7 million he had submitted. Karmazin will be the 15th and last presidential hopeful to be registered. JM

BALTIC DEFENSE COLLEGE OPENS

The Baltic Defense College, located in Tartu, Estonia, opened its doors on 16 August. A total of 32 cadets from the three Baltic States, Denmark, Germany, Hungary, Sweden, and the U.S. make up the initial student body. The curriculum meets NATO standards, and most instructors are from NATO member states. The three Baltic States are sharing maintenance costs, while material assistance is supplied by Belgium, Denmark, Finland, France, Germany, Great Britain, the Netherlands, Norway, Poland, Sweden, Switzerland, and the U.S. MH

ESTONIAN MERCENARIES IN RUSSIAN ARMY

The daily "Eesti Paevaleht" reported that there are currently six Estonian mercenaries in the Russian military in Kosova. One of the six told the newspaper that "the unit consists of men hardened by experience in the Afghan and Chechen wars." He said that a one-time payment of $1.5 million would be paid to his children "if something were to happen to me." According to the daily, Russian troops in Kosova receive some $2000 per month. A high-ranking Estonian Foreign Ministry official said he sees no problem, noting that the mercenary who spoke to the newspaper is "a free man from a free country, and he has the right to offer his services." MH

LITHUANIAN POLICE OFFICERS HEAD TO KOSOVA

Ten Lithuanian police officers left for Kosova on 16 August to join the UN sponsored police mission. Of the 10, five are veterans of a similar operation in Bosnia-Herzegovina. In addition, there are 10 Lithuanian medics working in Albania, and Lithuania provided one member of a Kosova verification mission. Lithuania also has seven police officers in Croatia and Bosnia as part of an OSCE mission, as well as 137 troops in Bosnia as part of the peacekeeping mission. MH

PEASANT LEADER URGES POLISH PRESIDENT TO ASSUME 'RESPONSIBILITY'

Andrzej Lepper, leader of the radical Self- Defense farmers' union, has sent an open letter to Aleksander Kwasniewski urging the president to be a "general inspector" and assume "responsibility" for monitoring "harmful phenomena" in the country, PAP reported on 16 August. In Lepper's opinion, the government fails to resort to financial reserves when the country lacks money and continues to exempt foreign firms in Poland from paying taxes. Lepper also asked Kwasniewski to make public what happened to money from the privatization of state-owned companies. According to Lepper, state-owned property was estimated at $400 billion in 1990 and up to 70 percent of it has since been sold. JM

CZECH DAILY SAYS DEPUTY PREMIER HAS ILLEGAL FOREIGN BANK ACCOUNT

"Mlada fronta Dnes" reported on 16 August that Deputy Premier Egon Lansky has a bank account in Austria that was opened without the prior approval of the Czech National Bank, as is required by law. The daily said Lansky could be fined for failing to notify the central bank of that account. MS

CZECH PRESIDENT RETURNS BILL TO PARLIAMENT

Vaclav Havel on 17 August returned to the Chamber of deputies an amendment that would have deleted from the list of lawyers those with less than four years' professional experience, with the exception of government and local government officials, senators, and other civil servants, CTK reported. Havel concluded that the bill gave "unjust advantages to civil servants." MS

CZECH WWII SLAVE LABORERS SUE GERMAN COMPANIES

Lawyers in the U.S. representing Czech citizens employed as slave laborers during World War II are suing the Austrian and German companies Steyr-Daimler-Puch, Daimler-Chrysler, Volkswagen, and Siemens, CTK reported on 13 August. The Czech citizens are demanding $1 billion in compensation. The lawyers said that although negotiations on with the Austrian and German companies on compensation are on-going, they decided to file suit because the compensation offered by the companies is lower than that paid to survivors living in Western Europe. MS

SLOVAK FOREIGN MINISTER WARNS AGAINST SLOVAK ROMA EXODUS TO BELGIUM

Eduard Kukan on 13 August told journalists that the number of asylum requests made by Slovak Roma in Belgium has recently increased and that it is "not out of the question" that Belgium will decide to impose visa requirements on Slovak nationals, SITA and CTK reported. He said that in the last 10 days, the Belgian authorities have received 103 such requests and expect another 300 or so by the end of the month. Kukan said Slovakia will deal with the problem because it recognizes that the "Roma problem must be solved at home, not abroad." MS

SLOVAK POLICE WANT PARLIAMENT TO LIFT IMMUNITY OF MECIAR, KOVAC

Chief investigator Jaroslav Ivor on 16 August told journalists that police will ask the parliament to lift the parliamentary immunity of former Premier Vladimir Meciar and former President Michal Kovac and to relieve them of their oath of secrecy. Ivor said that in his former position Meciar had had access to secret information and his testimony is essential for the investigation into the 1995 abduction of Kovac's son. He noted that Kovac is willing to provide the information he has on his son's kidnapping. Ivor also said that former Slovak Counter- Intelligence (SIS) chief Ivan Lexa is not only a suspect in the abduction case but is also believed to have committed "abuse of office" that resulted in losses to the SIS totaling several million Slovak crowns. Ivor declined, however, to provide any other details, SITA reported. MS

HUNGARY DENIES JAMMING YUGOSLAV BROADCASTS

In a statement to "Magyar Hirlap" published on 17 August, the Foreign Ministry denied the Yugoslav claim that broadcasts on Serbian radio and television are being jammed in Hungary and Croatia. The statement added that the ministry has received no official complaint from Yugoslavia (see "RFE/RL Newsline," 16 August 1999). MS




TWO SERBS KILLED IN MORTAR ATTACK

Unknown persons fired nine mortar shells at the village of Klokot in the U.S. sector of Kosova on 16 August. Two Serbian teenagers were killed and five other Serbs wounded. It was one of the most serious incidents of apparently ethnically motivated violence since the fighting ended in June, AP reported. In a separate incident, unknown persons shot and wounded an ethnic Albanian boy in Petrovce, which is also in the U.S. sector. PM

PLIGHT OF KOSOVAR SERBS WORSENS

UNHCR special envoy Dennis McNamara told BBC Television on 16 August that the UNHCR recently helped an unspecified number of Serbs to leave Kosova. He added that Serbs are increasingly faced with the danger of revenge attacks by ethnic Albanians and that the "pressures [on Serbs] seem to be mounting on a daily basis." His agency may evacuate more Serbs soon, McNamara noted, pointing out that it is not the policy of the UNHCR to encourage people to leave but rather to assist them if they choose to do so. He said that some people who had wanted to be evacuated but whom his agency did not evacuate subsequently lost their lives. On 17 August, Reuters reported that in Prishtina, armed ethnic Albanians locked an elderly Serbian woman in her kitchen and robbed, beat, and attempted to rape her daughter-in-law. The women and their Serbian neighbors later fled for safety. British peacekeepers said it was the third such incident in 24 hours. PM

MILOSEVIC DEMANDS RETURN OF SERBIAN TROOPS TO KOSOVA

Yugoslav President Slobodan Milosevic said in a statement on 16 August that KFOR has "tolerated the rampage of bandit groups" in Kosova. He added that "the gravest crimes against Serbs have been committed [as well as] the ethnic cleansing of non-Albanians" since Serbian forces left under the terms of the June peace agreement. Milosevic demanded that KFOR speed up the disarmament of Kosova Liberation Army (UCK) fighters and expel "hordes of criminals and robbers" who have recently arrived from Albania. He also repeated the recent call by several other top Serbian officials that the UN allow Serbian forces to return to the province (see "RFE/RL Newsline," 16 August 1999). PM

SERBIAN RAILWAY MEN RETURN TO WORK

Some 200 ethnic Serbian railway workers in Fushe Kosova returned to work on 16 August. A UN spokesman told BBC Television that the men's experience will be a big help in arranging for the efficient transportation of supplies for the coming winter. The men will not work with their ethnic Albanian former colleagues. PM

KOUCHNER SUSPENDS 'APARTHEID' LAWS...

UN spokeswoman Nadia Younes told an RFE/RL South Slavic Service correspondent in Prishtina on 16 August that UN Special Representative Bernard Kouchner has suspended "apartheid" legislation discriminating against individuals on ethnic or religious grounds. Kouchner issued the ruling at a 15 August meeting with some 50 judges and prosecutors from throughout Kosova. He also appointed a 19-member working group, co-chaired by the ethnic Albanian Professor of Law Blerim Reka and UN legal experts, to review the existing laws. One of those laws likely to be abolished is that prohibiting Albanians from buying real estate from Serbs. FS

...AFTER CRITICISM FROM KOSOVAR JUDGES

Reka told an RFE/RL South Slavic Service correspondent on 16 August that Kouchner suspended the discriminatory laws after several ethnic Albanian judges had criticized them. The professor noted that "there is confusion about which laws will be applied in Kosova," pointing out that "the first decree that Bernard Kouchner signed says explicitly that those laws will be used in Kosova that were in force until 24 March of this year. These were the laws of the Yugoslav occupiers." Reka added that most ethnic Albanians believe that "one cannot apply the laws of a regime that committed genocide on the territory of and toward the people who were the victims of that genocide." FS

SERBS, ALBANIANS NEGOTIATE COMPROMISE IN MITROVICA...

Bajram Rexhepi, who is the UCK-appointed mayor of Mitrovica, asked a group of ethnic Albanian protesters there on 16 August to disperse peacefully. He told them that Serbian and Albanian representatives found a compromise earlier that day--under UN mediation--to allow the return of ethnic Albanian displaced persons to the northern, Serb-dominated part of town. Rexhepi told an RFE/RL South Slavic Service correspondent that "according to the agreement, 25 families will return to their homes in the north every day. It also provides for free access by students to the metallurgic faculty in the north.... We also agreed on the creation of a joint board of directors for the Trepca mines." FS

...BUT QUESTIONS REMAIN OVER IMPLEMENTATION

Rexhepi added that "we will try to implement that agreement in the coming days. If it brings concrete results it is fine, but if not the population will try to find other ways to end the [partition] of the city." An unidentified Western official, however, told Reuters that neither side has signed any agreement. He suggested that Rexhepi is misrepresenting the state of affairs by presenting his side's bargaining points as a done deal. FS

SHPAK SAYS UCK DEMILITARIZATION BEHIND SCHEDULE

Colonel- General Georgii Shpak, who is commander of the Russian paratrooper units, told Interfax on 16 August that the UCK is behind schedule with its demilitarization plan. He added that unidentified attackers have "often" fired shots near Russian checkpoints, but he added that there have been no direct attacks on the paratroopers. FS

SERBIA'S DINKIC CALLS DEMO 'LAST CHANCE FOR PEACEFUL CHANGE'...

Mladjan Dinkic of the G-17 group of independent economists told Vienna's "Die Presse" of 16 August that the opposition demonstration slated for 19 August in Belgrade will prove decisive for Serbia's political future. He called it "the last chance for a peaceful transition of power and the last chance for the opposition to unite." He stressed that Milosevic must leave office before winter sets in. The alternative could be a violent revolution on the model of Romania in 1989, Dinkic warned. He expressed understanding that Serbian Orthodox Patriarch Pavle will not take part in the demonstration. Dinkic noted that Pavle must represent all Serbs, "including those on the other side." The opposition leader added, however, that many clerics will march in the protest and that the Orthodox Church has called for Milosevic to go. PM

...OUTLINES PROGRAM FOR SERBIA'S FUTURE

Dinkic also told "Die Presse" of 16 August that the G-17's "Stability Pact for Serbia" calls for a one-year transitional government to organize free and fair elections and to draft plans for economic reform (see "RFE/RL Newsline," 28 July 1999). Dinkic stressed that Serbia must quickly reach a "reasonable understanding" with Montenegro over the future of their relationship. He noted that Serbia also must join the international stabilization project for southeastern Europe and make its markets attractive for foreign investors. If Milosevic does not step down or is not overthrown soon, Serbia is likely to "remain a black hole in Europe for the next 10 years," Dinkic warned. PM

CONFUSION PERSISTS OVER BELGRADE RALLY'S LIST OF PARTICIPANTS

Dinkic did not mention that generals-turned- politicians Vuk Obradovic and Momcilo Perisic do not plan to attend the demonstration. Kosovar Serb leader Momcilo Trajkovic, moreover, said that no one from the opposition has invited him or anyone from his Serbian Resistance Movement, "Danas" reported on 16 August. Alliance for Change leader Vladan Batic told Reuters that his group will attend the rally, but "we don't know who else will turn up." The main problem involves the sequence and number of speakers. The clash of egos among opposition leaders has long been the major obstacle to unity within the opposition. PM

LEADING BUSINESSMAN LEAVES MILOSEVIC GOVERNMENT

Bogoljub Karic has resigned his position as minister-without-portfolio in the Serbian government, AP reported on 16 August. Karic said that his "government obligations have inflicted severe damage to my business." He is one of 308 top Yugoslav officials whom Western countries have withheld visas. PM

UP TO $1 BILLION LOST IN BOSNIAN FRAUD

"The New York Times" of 17 August reported that U.S.-led anti-fraud investigators have found that Muslim, Serbian, and Croatian nationalist leaders have stolen up to $1 billion from public funds or international aid projects since the Dayton peace agreement was signed in 1995. The report, which exceeds 400 pages and was compiled for the office of the international community's high representative, details widespread corruption. In one incident, a Bosnian bank "lost" $20 million belonging to 10 foreign embassies or aid agencies. In Tuzla, $200 million "disappeared" from the 1999 budget. Tuzla officials had the local schools painted four times in 1998, at a cost several times the going-rate, even though international aid organizations also had them rebuilt and painted. The schools have no heating. Few corrupt officials have ever been brought to justice, the report added. Observers note that Bosnia requires massive investments and a vigorous expansion of the private sector to combat rampant unemployment and poverty. PM

CROATIAN OPPOSTION COALITION TOTTERS

Officials of the opposition Istrian Democratic League and the Liberal Party said in Rovinj on 16 August that their parties do not approve of the recent "strategic alliance" struck between the Social Democrats and Social Liberals. In Zagreb, an official of the People's Party said that the emergence of the two-member alliance threatens to destroy the six-party electoral coalition that seeks to win a majority in the parliamentary elections due by the end of 1999. The Social Democrats and Social Liberals are the two largest parties within the six- member coalition. Opinion polls suggest that the coalition seems likely to defeat the governing Croatian Democratic Community. PM

ROMANIAN DEMOCRATIC PARTY SENDS 'MESSAGE TO TRANSYLVANIA'

Democratic Party leader Petre Roman revealed in Targu Mures on 16 August his party's "Message to Transylvania," RFE/RL's Bucharest bureau reported. Roman said that his party does not want the Romanian majority to "merely coexist" with the Hungarian minority because "coexistence [means] separate development." The Democrats, Roman said, want the region to build on its historical traditions and spearhead cooperation among all Romanians on the country's progress toward integration into European structures. Addressing the region's Hungarian ethnic minority, Roman said "we respect and back your fidelity toward your national cultural values and we expect to receive from you a political pledge of fidelity toward the Romanian national unitary state." MS

ROMANIAN OPPOSITION LEADER PROTESTS FRENCH-SWISS TV PRODUCTION

Party of Social Democracy in Romania leader Ion Iliescu, in an open letter addressed to Romanian political leaders and journalists, demanded that a protest be launched against the French television channel TV 5's showing of what he called "a profoundly anti-Romanian" movie, Romanian media report. The movie, which was aired on 12-13 August, depicts the ordeals of an ethnic Hungarian who returns to Romania after 1989 and finds out that his brother has been killed by the Ceausescu secret police. Iliescu said that the film is based on "falsehood and myth, ignorance of historical reality [and] fabricated lies." A spokesman for the channel told AFP that the movie was "fiction, which by definition cannot be guided by the same criteria of objectivity as a report." MS

MENINGITIS EPIDEMIC SPREADS TO MOLDOVAN CAPITAL

The meningitis epidemic has spread from Romania--where more than 2,000 cases have been recorded so far--to Chisinau, Infotag reported on 16 August, citing an official from the National Center of Preventive Medicine. The official told the agency that 67 cases were registered in July and another 67 in the first 10 days of this month. He said no information is available on the spread of the disease to other parts of Moldova. MS

BULGARIA TO DEMOLISH DIMITROV MAUSOLEUM

A spokeswoman for the Ministry of Construction said on 16 August that the Georgi Dimitrov mausoleum will be demolished by 8 September because "experts agree that it does not match Sofia's overall architectural image," Reuters reported. Dimitrov's body was removed from the mausoleum and cremated in 1990. The opposition Socialist Party said that the decision is "politically motivated" and linked to the October local elections. It added that it wants the building to be turned into a memorial for Bulgarian soldiers. MS

BULGARIAN EURO-LEFT NOMINATES CANDIDATE IN SOFIA MAYOR ELECTIONS

Nikolai Kamov of the Euro-Left Party will run for the Sofia mayoralty in the fall local elections. Kamov's candidacy has also been endorsed by the Bulgarian Social Democratic Party (BSDP) and the United Labor Bloc, BSDP honorary chairman Petar Dertliev told BTA on 13 August. Kamov was originally expected to be the candidate of the entire leftist opposition, but the Bulgarian Socialist Party has nominated former minister Rumen Ovcharov to run for the post. MS




ONE YEAR AFTER THE MELTDOWN: FEARS WANE, SHADOW LINGERS


By Floriana Fossato

Many analysts assessing the state of the Russian economy one year after the August 1998 financial meltdown note that their worst fears have not come true. Some even feel that it was a healthy development for Russia.

Former Economics Minister Yevgenii Yasin, for example, recently told RFE/RL that last August's meltdown was a "moment of truth" for Russia. "We found out that it is impossible to live on debts and impossible to live with an inflated ruble exchange rate," he said. "The market has brought everything back to normal. Now we stand on a more realistic footing. We can like it or not, but it is better to dance to this music than to live on illusions."

A year ago today, the government of then Prime Minister Sergei Kirienko in effect devalued the ruble and defaulted on some domestic debt. Within three weeks, the ruble plummeted from six to 16 to the dollar, banks refused to return clients their savings, most business activities suffered huge losses, and foreign investment dried up. As a result, many people lost their jobs, and most of those who managed to keep them saw their salaries reduced or delayed.

When the crisis peaked last summer, Russians emptied shop shelves and started stocking up on goods, preparing for the worst. They once again showed their endless capacity for enduring cataclysms. And, significantly, there was no major social unrest.

A new left-leaning government led by Yevgenii Primakov talked much about implementing measures that could have led to hyperinflation. But in the end it avoided a full economic crash by enforcing a policy that some observers called "positive inaction." As a result, the ruble continued its fall, but finally found firmer ground at a rate of about 24 to the dollar.

Following the ruble devaluation, imports fell drastically--by 46 percent in the first half of this year-- helping boost domestic production. Demand has increased for a wide range of domestically produced goods, which now are cheaper owing to the devaluation. Those goods range from food products to construction materials.

Another reason for Russia's improving trade balance is the upward trend of world prices for oil and other raw materials. A barrel of Russian oil was worth only 8.58 dollars in February, but the price had risen to 19.34 dollars by July.

Yasin, however, notes that the current positive trend had a high price and that currently Russians are poorer than a year ago. "The positive trends we notice now in industry and in several other sectors--the increase in exports, the [domestic] production growth to replace imports, the improved budget situation--has been paid for by the people. The population's standard of living has decreased by 25 to 30 percent."

Official figures released in July say that the number of Russians living in poverty increased from 33 million last year to 55 million this year. This means that nearly four out of every 10 people live below the official subsistence level, defined as a monthly income not exceeding 829 rubles (some $34).

The average monthly wage now equals about $50, having fallen from some $200 before last August. The average pension now equals only about $17 a month.

Some economic analysts argue that government policies have contributed little to the current positive trends. Denis Rodionov, an analyst with Brunswick Warburg, told RFE/RL that "deeper reforms--structural and institutional--are still not there." He said that the main policy needs continue to be the reform of monopolies, the introduction of bankruptcy legislation, the reduction of barter practices, the improvement of tax collection, and the restructuring of the banking system.

Others argue that another huge problem is persisting corruption and the inefficiency of both the authorities and state and private businesses.

The government and central bank program outlining economic policy for this year states that the Russian authorities are committed to further structural reform. The program was submitted to the IMF ahead of the fund's long- awaited decision late last month to issue $4.5 billion in new loans over the next 18 months. The money is intended to help refinance previous loans that are coming due.

The IMF decision has been of critical importance for Russia. Not only has it unlocked additional funds from the World Bank and Japan's Eximbank. It has also made possible an agreement with the Paris Club of foreign debtors on postponing payment of some Soviet-era debts.

But the IMF's new loan was accompanied by unusually strong words from fund officials. Citing an audit that found Russia's central bank had falsified the size of its reserves in 1996 by secretly channeling funds through the offshore company FIMACO, the IMF's first deputy managing director, Stanley Fischer, said the fund has "made clear to the highest levels of Russian government" that what happened was "unacceptable".

Peter Westin, an economist at the Moscow-based European Center for Economic Policy, wrote recently in the English- language "Moscow Times" that the IMF decision "was mainly political." He said it "reconfirms the suspicion that creditors view Russia as too big to fail."

One year after the meltdown, most analysts seem to agree that the shadow of August 1998 lingers. The author is an RFE/RL correspondent based in Moscow.


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