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Newsline - November 16, 1999




CHECHEN LEADERS APPEAL FOR HELP

Chechen President Aslan Maskhadov has appealed to Muslim states to "take an appropriate position" in response to the Russian devastation of Chechnya, Reuters reported on 16 November, quoting the secretary-general of the Organization of the Islamic Conference, Azzedine Laraki. Speaking in Jeddah, Laraki called on Russia to seek a peaceful solution to the conflict. He added that because of that conflict, he has rejected an invitation to visit Russia. In Prague, Chechen Foreign Minister Ilyas Akhmadov told journalists at RFE/RL's headquarters on 15 November that Moscow systematically rejects Chechen proposals for talks on resolving the conflict and that an outside mediator is needed. He said the UN could assume that role, as it did in Kosova (see also Part II). LF

RUSSIAN REPRESENTATIVE ADVISES CIVILIANS TO LEAVE GROZNY

Russian presidential representative to Chechnya Nikolai Koshman on 15 November advised the remaining civilian population of Grozny to leave the city "for their own safety," noting that a corridor leading north from Grozny has been opened for this purpose, Interfax reported. Koshman was speaking at a press conference in Moscow on 15 November after he and Foreign Minister Igor Ivanov had tried to justify Moscow's Chechnya policy to G-7 ambassadors. On 12 November, Koshman had said he considers it inappropriate to rebuild Grozny a second time and proposed designating Gudermes the capital. Koshman also said that by 25 December, Russia aims to create eight tent camps in the "liberated" areas of northern Chechnya to which displaced persons will be encouraged to return. He predicted that over the next month, local Chechen communities would elect representatives to a new parliament, which, he said, would then name a new government by February 2000. LF

BASAEV PESSIMISTIC OVER INTERNATIONAL COMMUNITY'S ABILITY TO PRESSURE MOSCOW

Field commander Shamil Basaev said in Grozny on 15 November he does not believe the West will succeed at the upcoming OSCE summit in Istanbul in persuading Russia to stop the war in Chechnya, Interfax reported. Basaev denied rumors of disagreements within the Chechen leadership or between individual field commanders. But he admitted that some residents of Gudermes had colluded with Russian troops and helped the latter take the town under their control (see "RFE/RL Newsline," 12 November 1999). OSCE Chairman-in-Office Knut Vollebaek said on 15 November that Russia must set a deadline for withdrawing its troops from Chechnya, according to AP. LF

RUSSIAN MILITARY DENIES BATTLE FOR ACHKHOI-MARTAN

Chechen chief of staff Mumadi Saidaev said on 15 November that Russian armored columns were advancing from two directions on the town of Achkhoi Martan, southwest of Grozny. He noted, however, that those troops encountered serious resistance from the town's Chechen defenders, Interfax reported. But a Russian military spokesman denied that either direct clashes had taken place or that federal forces had incurred heavy losses. Meanwhile, systematic air strikes continued against Bamut and the towns of Sernovodsk and Urus Martan, while Grozny suffered fewer air raids than in recent days. LF

SHOIGU SUBJECTED TO NEW SCRUTINY...

Emergencies Minister and leader of the interregional movement Unity (Edinstvo) Sergei Shoigu announced on 15 November that he will go on vacation from 25-30 November in order to prepare for the upcoming State Duma elections, ITAR-TASS reported. Shoigu's announcement follows criticism from media and public figures that his recent tours to cities in Siberia, the Far East, and the North Caucasus were in effect campaign trips (see "RFE/RL Russian Federation Report," 3 November 1999.) Under Russian election law, officials are allowed to campaign only in their free time. In its latest issue (no. 45), "Literaturnaya gazeta" profiles Shoigu and the work of his ministry. According to the journal, Shoigu recently said that he takes a poor view of citizens who do not participate in elections and proposed "to deprive Russian citizenship to anyone who fails to vote three times in a row." JAC

...AS NEW INFORMATION COMES TO LIGHT ABOUT HIS MINISTRY

The journal also reported that Shoigu, who has been unusually successful in marshalling budget funds for his agency, managed to establish a special force within the ministry armed with light infantry weapons and staffed by former agents of elite forces such as Alpha. Among its missions is counter-terrorism and "providing security for the constitutional system." The journal argues that the existence of the group has been kept a secret with the complicity of the Kremlin, which "possibly saw" in the "enhanced Emergency Ministry a kind of gun under the pillow." However, this violates the constitution "since the ministry is not among the bodies specified for 'providing security.'" The office of Moscow Mayor Yurii Luzhkov reportedly owns 25 percent of the stock of "Literaturnaya gazeta" Publishers. JAC

YELTSIN APPOINTS PUTIN'S CHOICE FOR SECURITY COUNCIL CHIEF

President Boris Yeltsin on 15 November named Sergei Ivanov, the deputy director of the Federal Security Service (FSB), as the secretary of the Security Council. The 46-year-old Ivanov takes over that post from Prime Minister Vladimir Putin, who proposed Ivanov as his successor at the council, Interfax reported, quoting presidential spokesman Dmitrii Yakushkin. Like Putin, Ivanov is a native of St. Petersburg and made a career in intelligence, first in the KGB and then in the FSB, both at home and abroad. Also on 15 November, Yeltsin signed a decree appointing FSB Director Nikolai Patrushev (another St. Petersburg native) a permanent member of the council to replace former Prime Minister Sergei Stepashin. JC

DUMA TO BOOST MILITARY SPENDING

The State Duma's Budget Committee on 15 November recommended that the Duma adopt amendments to the 1999 budget that will increase military spending by 8.695 billion rubles ($330 million), Interfax reported. Last week, Finance Minister Mikhail Kasyanov explained that at least some of the unexpected additional tax revenues collected would be directed toward the army (see "RFE/RL Newsline," 15 November 1999). "Vremya MN" on 16 November reported that although all factions and political parties have already declared they will support the activities of the government in Chechnya, deputies would like more specific information from the government on how the money will be spent. The daily added that with elections looming, deputies would also like to earmark additional funds for assistance to children. The Duma is scheduled to hold the third reading of the 2000 budget on 29 November and the fourth reading on 3 December--16 days before the Duma elections. JAC

INDUSTRIAL PRODUCTION CONTINUES TO EDGE UP

Russian industrial production grew 7.5 percent during the first 10 months of 1999, compared with the same period last year, according to the Russian Statistics Agency on 15 November. During the first three quarters, production jumped 7 percent (see "RFE/RL Newsline," 20 October 1999). Output in October alone leaped 10.3 percent, compared with the same month last year. The Organization for Economic Cooperation and Development forecast in its latest economic outlook that Russian GDP growth will slip to 1 percent in 2000 from 2 percent in 1999, Reuters reported on 16 November. The OECD concluded that "while there are signs of recovery, the macroeconomic situation remains potentially rather fragile." The organization also noted that while inflation would decline from 40 percent this year to 30 percent in 2000, upward pressure on energy and transportation prices would eventually hurt the manufacturing sector. JAC

RUSSIA TO CONTINUE TO PUSH FOR DEBT WRITE-OFF

One day before the next round of negotiations with London Club creditors was scheduled to begin, Finance Minister Kasyanov told reporters on 15 November that the Russian government will ask the London Club creditors to write off 40 percent of its debt, Interfax reported. In September, Western sources told Interfax that Russia was hoping to have 30 percent of its debt to the club written off (see "RFE/RL Newsline," 16 September 1999). London Club members are reportedly prepared to consider partial debt forgiveness if the government is prepared to convert all debts from Vneshekonombank securities into Eurobonds. JAC

YELTSIN AFFIRMS PRESIDENTIAL ELECTION DATE

After meeting with Central Elections Commission Chairman Aleksandr Veshnyakov on 15 November, President Yeltsin told reporters that Russia's next presidential elections will be held on 4 June 2000. That date was established in accordance with the bill on presidential elections, which was passed by the Duma in its first reading in late October. A second reading has not yet been scheduled, but Veshnyakov said earlier that he hopes the draft law will be approved no later than early December. JAC

KVASHNIN WARNS OF 'RETALIATORY MEASURES' OVER POSSIBLE ABM CHANGES...

Chief of the General Staff of the Russian Armed Forces General Anatolii Kvashnin said on 15 November that if the U.S. sets up a national defense system, Russia will have to take "retaliatory steps and raise the effectiveness of [its] strategic nuclear forces." Arguing that the U.S. process of deploying such a system has become "irrevocable," Kvashnin commented that the "selection of the deployment areas makes the objective of the national system clear. It is to intercept ballistic missiles launched from Russia and China." The U.S. is proposing a limited national defense system based in Alaska. JC

...SAYS NATO MIGHT USE FORCE ON TERRITORY OF FORMER USSR

Also on 15 November, Kvashnin said that Moscow has not ruled out the possibility that NATO will use force on the territory of the former Soviet Union, among other places. "Not only the growing military-political activity in the former Soviet Union but [also] the evident attempts to declare these regions a sphere of NATO security interests are alarming," he commented. Arguing that "Kosovo and Iraq" were the first examples of NATO's "growing readiness" to use armed force, Kvashnin went on to say that "one may expect that other territories, including former Soviet territories, will be no exception." At the same time, Kvashnin noted that Moscow still believes that there is "no alternative to cooperation with NATO" and hopes to renew "equal and constructive relations" with the alliance. JC

U.S. CARRIER NOT TO RETURN TO RUSSIAN FAR EAST IN SHORT TERM

Charles Cooper, director for international operations at Alaska Airlines, told Interfax-Eurasia on 15 November that his company will resume flights to Russia's Far East no sooner than the middle of the next decade of the next century. The company began serving Khabarovsk in 1991. Last November, following the August 1998 financial crisis, the company closed its operations in Russia. Far Eastern cities have recently witnessed increased air fares owing to the rising cost of jet fuel (see "RFE/RL Russian Federation Report," 10 November 1999). For example, Domodedovo increased fares for flights between Magadan and Moscow by more than one-third. JAC

MOSCOW CONTINUES TO PRESSURE LONDON

An official at the Russian Embassy to the U.K. told journalists in London on 15 November that Moscow has requested that the British authorities carry out a thorough investigation to establish whether "Muslim centers" for training fighters in Chechnya "can function" in the U.K., ITAR-TASS reported. He added that if it becomes clear to Russia that the British authorities have "a soft approach to the issue to the detriment of Russia's national interests," Russian-British relations will be "affected." That statement follows an incident in which Russian journalists were allegedly beaten by people attending a meeting to raise funds for Chechen forces fighting against Russian troops (see "RFE/RL Newsline," 15 November 1999). JC




LOW-GRADE EXPLOSIVES FOUND IN ARMENIAN PARLIAMENT

Police on 15 November evacuated the Armenian parliament building following an anonymous telephone warning to speaker Armen Khachatrian, RFE/RL's Yerevan bureau reported. They subsequently found under the presidium table a package containing low-level explosives. That package was rendered harmless, and Deputy Interior Minister Oganes Varyan denied it was life-threatening. Presenting newly appointed National Security Minister Karlos Petrosian to ministry personnel on 15 November, President Robert Kocharian said it is still premature to give a final evaluation of the 27 October parliament shootings, in which eight people, including Prime Minister Vazgen Sargsian, died. LF

ARMENIA SENDS RESCUE TEAM TO TURKEY

An Armenian government spokesman said on 15 November that Yerevan is ready to send relief supplies, including blankets, generators, and medicines, to those made homeless by the 12 November earthquake in northwestern Turkey, RFE/RL's Yerevan bureau reported. A 24-strong Armenian rescue squad flew to the region on 13 November. LF

AZERBAIJAN ASKED TO RESPOND TO TORTURE ALLEGATIONS

The UN Committee Against Torture in Geneva on 15 November asked Azerbaijan's Deputy Prosecutor-General Fikret Mamedov to respond to claims by human rights watchdogs that Azerbaijani prisoners are subjected to ill-treatment and torture, an RFE/RL correspondent in Geneva reported. Mamedov conceded that isolated cases of ill-treatment occur. He outlined new legislation intended to improve the rights of detainees and preclude police brutality. LF

GEORGIA REJECTS RUSSIAN CRITICIM OVER CFE

In his weekly radio broadcast, Georgian President Eduard Shevardnadze said on 15 November that Russian Foreign Minister Igor Ivanov's claim that Georgia and Moldova are creating obstacles to the signing at the OSCE Istanbul summit of the revised CFE treaty is "unfair," ITAR-TASS reported. Shevardnadze told journalists later that day that Georgia will not give up the quota of armaments to which it is entitled under the CFE treaty. It currently shares that quota with Russia on a 50:50 basis. He said Georgia is ready to make unspecified compromises, but not to the detriment of the country's interests. LF

OSCE REGISTERS VIOLATIONS IN GEORGIAN RUNOFF POLL

In a statement issued in Tbilisi on 15 November, the OSCE/ODIHR Election Observation Mission registered "serious violations" during the runoff poll the previous day in 24 constituencies where no candidate had won a majority in the 31 October vote, Caucasus Press reported. Those irregularities included intimidation of members of local election commissions and ballot-stuffing in Tbilisi, Abasha, and Chkhorotsku. The statement also noted deficiencies in tabulating the first round returns. And it said that only 13 out of 19 members of the Central Electoral Commission signed the final protocol listing the first round results. LF

GEORGIA'S FUEL AND ENERGY MINISTER RESIGNS

Temur Giorgadze announced at a Tbilisi press conference on 15 November that he has submitted his resignation following a public disagreement with Mikhail Saakashvili, who heads the majority Union of Citizens of Georgia faction in the Georgian parliament, Caucasus Press reported. President Shevardnadze said that Giorgadze's decision to step down was "in principle correct." Georgia has long suffered from intermittent and inadequate electricity supplies. A foreign study earlier this year calculated that $1.5 billion in foreign investment is needed in order to rehabilitate the entire power generating network. LF

KAZAKHSTAN CALCULATES DAMAGE FROM RUSSIAN ROCKET EXPLOSION

The director of Kazakhstan's Space Research Agency, Meirbek Moldabekov, told journalists on 15 November that Russian and Kazakh experts have estimated that Kazakhstan should receive 19 million tenges (approximately $36,000) in compensation for the damage caused when a Russian proton rocket exploded on 27 October shortly after blastoff from the Baikonor cosmodrome, RFE/RL's Kazakh Service reported. Kazakhstan's Deputy Premier Aleksandr Pavlov and his Russian counterpart, Ilya Klebanov, will sign an agreement on 17 November on the payment of compensation for the damage. Pavlov told both chambers of Kazakhstan's parliament on 12 November that when he meets with Klebanov he will insist that Russia pays promptly and in full the $115 million annual rent for the use of Baikonur, according to Interfax. LF

KAZAKHSTAN ABOLISHES RESTRICTIONS ON FOREIGN-CURRENCY EARNINGS

National Bank of Kazakhstan Chairman Grigorii Marchenko told a congress of financiers in Almay on 15 November that the bank has revoked its April requirement that exporters sell 50 percent of their foreign-currency earnings, Interfax-Kazakhstan reported. Marchenko said the financial system has now stabilized following the de facto devaluation of the tenge in April. LF

KYRGYZ PARLIAMENT REJECTS BUDGET DRAFT IN FIRST READING

Parliamentary deputies on 15 November rejected the draft budget for 2000 after the government refused to increase the minimum wage for teachers and doctors, RFE/RL's Bishkek bureau reported (see "RFE/RL Newsline," 15 November 1999). Meanwhile the Kyrgyz government has failed to reach agreement with the IMF on the terms of a second Economic Structural Adjustment Facility loan. Talks on that loan will resume in February. LF

KYRGYZSTAN ESTABLISHES DIPLOMATIC RELATIONS WITH AFGHANISTAN

Meeting in Moscow on 15 November, the Kyrgyz and Afghan ambassadors to Russia, Akmatbek Nanaev and Abdul Wahif Assifi, signed a protocol establishing diplomatic relations, RFE/RL's Bishkek bureau reported. LF

TAJIK PRESIDENT SWORN IN

Imomali Rakhmonov was sworn in for a second term as president on 16 November, Asia Plus-Blitz reported. Russian Prime Minister Vladimir Putin, the foreign ministers of Iran, Afghanistan, and Ukraine, and senior officials from China, India, and Uzbekistan attended the ceremony in Dushanbe. Rakhmonov said the most important objectives of his second term in office are creating conditions for political pluralism and media freedom, cracking down on crime, terrorism, and drug-smuggling, and making Tajik products more competitive on world markets. With regard to foreign policy, Tajikistan will continue strengthening ties with Russia, other Central Asia states, and the world community, he said. LF




BELARUSIAN PRESIDENT REJECTS ACCORD ON OPPOSITION ACCESS TO MEDIA

Alyaksandr Lukashenka on 15 November rejected a protocol granting the opposition limited access to the state- controlled media. That document was signed earlier this month by the president's representatives and oppositionists (see "RFE/RL Newsline," 4 November 1999), Belarusian Television reported. Under the protocol, the opposition would have been allowed to show pre-recorded videos on state television. According to Lukashenka, the protocol contravenes "all civilized and democratic norms" because it allows the opposition "to introduce its censorship in the state media," while depriving journalists of their "authorship right." Belapan reported the same day that opposition and government experts agreed to resume consultations on access to the media after the 18-19 November OSCE summit in Istanbul. JM

BELARUS-RUSSIA UNION TREATY TO BE SIGNED ON 26 NOVEMBER?

Mikhail Myasnikovich, head of the Belarusian presidential staff, told Interfax on 15 November that the signing of a treaty establishing the union state of Belarus and Russia will take place in the Kremlin at noon on 26 November. According to Myasnikovich, the signing ceremony will be preceded by a "face-to-face meeting" between Lukashenka and Russian President Boris Yeltsin and will be followed by a session of the Higher Council of the Belarusian-Russian Union. JM

INTERNATIONAL OBSERVERS SAY UKRAINIAN ELECTIONS FLAWED

Observers from the OSCE and the Parliamentary Assembly of the Council of Europe (PACE) have criticized the Ukrainian authorities for voting irregularities and unfair campaigning in the 14 November presidential runoff in Ukraine. "The second round was worse than the first.... The elections were far from fair and democratic," Reuters quoted a PACE observer as saying. Simon Osborn, an OSCE observer, said his organization had seen voters being given more than one ballot and individuals voting for their families. The OSCE also expressed concern over pressure exerted on voters in prisons, hospitals, and educational institutions. Osborn added, however, that it was difficult to assess to what extent the irregularities affected the outcome. International observers also noted that the state media failed to provide balanced and fair coverage for both candidates in the runoff. JM

KUCHMA SAYS UKRAINE NEEDS DEBT PAYMENT RESCHEDULING

President Leonid Kuchma said on 15 November that Ukraine needs to reschedule foreign debt payments. Kyiv will soon begin negotiations on this issue, he added. As of 1 October, Ukraine's foreign debt stood at $12.9 billion, and the country is due to pay some $3 billion each in 2000 and 2001. Kuchma also told journalists that he does not see any barriers to cooperation with the IMF, including the resumption of the IMF's $2.6 billion loan program for Ukraine. He pledged to accelerate market reforms in the country, saying that by re-electing him, Ukrainians have chosen "a democratic way to build their country based on a market economy," according to Interfax." JM

UKRAINE'S SYMONENKO WARNS OF IMMINENT ECONOMIC WOES

Petro Symonenko, leader of the Communist Party and Kuchma's rival in the runoff, said on 15 November that the government will soon stop paying wages and pensions, prices will increase, and the hryvnya exchange rate will decline still further. "This will be one of the results of Kuchma's victory in the presidential polls," Symonenko said. He added that Ukraine "will [begin to] catastrophically lose its economic independence," and he blamed the centrist forces that "unambiguously" supported Kuchma in the runoff for that possible outcome. Symonenko noted that official reports on industrial growth in Ukraine this year are a "myth," noting that the World Bank forecast a 4 percent slump in Ukraine's 1999 industrial production. JM

HRYVNYA STRENGTHENS AFTER KUCHMA'S VICTORY

The Ukrainian currency rose against the U.S. dollar on 15 November, following Kuchma's triumph in the runoff. Kyiv street traders offered to buy $1 for 4.9 hryvni, down from 5.05 last week. On the interbank currency exchange, $1 was selling at 4.83- 4.86 hryvni on 15 November, and traders expect the hryvnya to stabilize at 4.7 to $1 "in two to three days," according to Interfax. "Many so-called presidential candidates have forecast that the national currency will fall after the elections. They should not rejoice. The hryvnya will be stable," Kuchma said the same day. National Bank Chairman Viktor Yushchenko also affirmed that the hryvnya will stabilize since "the political factor in pressure on the hryvnya exchange [rate] exhausted itself" on the day of the presidential runoff. JM

ESTONIA'S BUDGET COLLECTION IN TROUBLE

The Finance Ministry on 15 November announced that 85.94 percent of funds for this year's budget were collected in the first 10 months (or 87.5 percent) of this year, ETA reported. That figure includes funds from privatization deals, including the initial public offering of Eesti Telekom shares early this year (see "RFE/RL Newsline," 11 February 1999). Tax collection remains slow, with the collection of corporate income tax highest at 87.1 percent. Personal income tax collection stood at 77 percent and value-added tax at 71.75 percent. Excise collection remains low at 61.01 percent, while motor vehicle excise collection is lowest at 35.13 percent. MH

ESTONIAN PRESIDENT TO BOYCOTT OSCE SUMMIT

Lennart Meri has announced he will boycott the OSCE summit scheduled to begin in Istanbul on 18 November, ETA reported on 15 November. Meri commented that "the OSCE will be celebrating when it should be acting." Meri stressed that the OSCE should be focused on the crises in the Caucasus as well as xenophobia and anti- Semitism. "Staying away from the forum is a way to draw attention to this and at the same time underscore faith in the ideals espoused by the OSCE and hope for a cooperation that would allow ideals to be translated into reality." "Postimees" noted that Prime Minister Mart Laar and Foreign Minister Toomas Hendrik Ilves will lead the Estonian delegation. Latvian President Vaire Vike-Freiberga will also not attend the ceremony, as 18 November is Latvia's Independence Day. Prime Minister Andris Skele will lead the Latvian delegation. MH

POLISH COALITION USES RUSE IN BID TO PUSH TAX BILL AHEAD

The parliamentary Commission for Public Finances, a majority of whose members belong to the coalition Solidarity Electoral Action (AWS) and Freedom Union (UW), voted on 15 November to reject the AWS-UW tax reform bill (see "RFE/RL Newsline," 15 November 1999). That move is seen as a ruse to end the bill's obstruction by opposition members of the commission. The opposition Democratic Left Alliance (SLD) pledged to block the bill and began submitting numerous amendments to the parliamentary commission. Today, coalition deputies are expected to submit the same bill for a second reading as a so-called minority motion. At the same time, the SLD promised to continue obstructing the bill by flooding the parliament with amendments. JM

CZECH POLICE DROP SUDETEN INVESTIGATION

Czech police on 15 November halted an investigation into the alleged mass execution of 21 Sudeten Germans in the village of Tocov in 1945, CTK reported. Police were unable to find anyone who could confirm testimony of about 30 German witnesses or remember the names of the Czechs who allegedly carried out the massacre. Also, the police noted that the 1946 criminal code did not consider acts carried out as "fair revenge" to be illegal. The German state attorney launched the case in the border town of Hof earlier this year. VG

HAVEL INVITES SERBIAN OPPOSITION LEADERS TO OSCE MEETING

Czech President Vaclav Havel has invited Serbian opposition leaders Vuk Draskovic and Zoran Djindjic as well as Montenegrin President Milo Djukanovic to attend the 18-19 November OSCE meeting in Istanbul under the auspices of the Czech delegation, Czech media reported. VG

CZECH SENATOR CRITICIZES TREATMENT OF CHECHEN OFFICIAL

Czech Senate Foreign Relations Committee Chairman Michael Zantovsky on 15 November criticized the lukewarm reception that the government accorded visiting Chechen Foreign Minister Ilyas Akhmadov, CTK reported. The agency noted that the Foreign Ministry appeared to distance itself from Akhmadov, who met only with the head of the ministry's Russian department. Zantovsky, who met with Akhmadov, said the Czech government should behave like "a normal European country" and put more pressure on Russia to find a peaceful solution to the Chechen conflict. Foreign Ministry spokesman Ales Pospisil described Akhmadov as a "legitimate representative of the Chechen administration," adding that the ministry respects the territorial integrity of Russia, of which "Chechnya is a part." VG

RATING AGENCY PRAISES SLOVAK GOVERNMENT

The international rating agency Standard & Poor's has improved its rating for Slovakia from negative to stable, TASR reported on 15 November. However, the agency has not changed the ratings of Slovakia's long-term obligations in domestic or foreign currency, which remain at BBB+ and BB+, respectively. Standard & Poor's praised the government's fiscal measures and structural reforms, noting that the overall environment for investors has improved. Last month, Moody's also improved its rating for Slovakia. VG

AUSTRIA SAYS IT WILL NOT BLOCK SLOVAK-EU TALKS

Austrian Foreign Minister Wolfgang Schuessel on 15 November said his country will not try to block the start of EU accession talks with Slovakia, TASR reported. Schuessel was speaking at a meeting of EU foreign ministers in Brussels. An EU official said that earlier in the meeting Schuessel asked his EU counterparts to support Austria's call for two reactors at Slovakia's Jaslovske Bohunice nuclear power plant to be shut down before the planned closure dates of 2006 and 2008. EU Enlargement Commissioner Guenter Verheugen said later that the EU will not re-open the talks on the plant until after the Helsinki summit next month. VG

HUNGARIAN JEWS ASK FOR ACTION AGAINST ANTI-SEMITISM

The Federation of Jewish Religious Communities in Hungary (MAZSIHISZ) has asked the cabinet to take action against "fascist, racist, and anti-Semitic" outbreaks that are causing concern among the public, Hungarian media reported on 16 November. The statement objects to the planned rehabilitation of Hungary's World War II Prime Minister Laszlo Bardossy, the desecration of Jewish cemeteries, and the publication of ant-Semitic books. Maria Schmidt, an adviser to Prime Minister Viktor Orban, recently described the Holocaust as a marginal issue of the war. MAZSIHISZ expressed the hope that such comments would be rendered illegal in the criminal code. MSZ




THOUSANDS PROTEST MACEDONIAN ELECTION RESULT...

An estimated 30,000 people gathered in central Skopje on 15 November charging that the 14 November election of Boris Trajkovski as president was fraudulent, AP reported. The state election commission said Trajkovski received some 77,000 more votes than did rival candidate Tito Petkovski. Turnout was reported to be about 70 percent. Petkovski supporters chanted "thieves, thieves" and waved Macedonian flags. Petkovski's Social Democrats--the former Communists--issued a declaration demanding that the election be annulled. Petkovski charged that vote counting at some 200 polling stations in western Macedonia--which is heavily populated by ethnic Albanians-- was "completely falsified." The election commission said cast ballots outnumbered listed voters in five electoral precincts. PB

...WHILE OSCE GIVES ELECTION LUKEWARM APPROVAL

Election observers from the OSCE said on 15 November that the election was "generally carried out satisfactorily" but that officials should investigate a number of irregularities, particularly in the western part of the country and near the capital, Reuters reported. The OSCE noted that "large-scale proxy voting and instances of multiple voting" took place and that election officials should "carefully scrutinize" complaints of fraud. Mark Stevens, the OSCE's mission head, said there was an "extreme turnout of up to 97 percent" in some regions dominated by ethnic Albanians. He said if all those people did vote it was "a wonderful display of democratic practice." PB

NATO SECRETARY-GENERAL CALLS KOSOVA CONFLICT 'WAKE-UP CALL'

George Robertson said on 15 November in Amsterdam that the alliance's air campaign in Yugoslavia was a "wake-up call" to NATO that it must strengthen its military, AFP reported. Robertson, speaking to the NATO Parliamentary Assembly, said the alliance's military capabilities are insufficient to meet future security needs. Robertson also complained of European members' poor contribution to the air campaign compared to the U.S. He said European countries contributed less than 5 percent to the NATO operation. In other news, Bernard Kouchner, the UN mission head in Kosova, said in Paris on 16 November that he has received only 1,700 of the some 6,000 international police he has requested for duty in Kosova. Kouchner added that he supports the idea of elections in Kosova before the summer of 2000. PB

MONTENEGRIN PRESIDENT MEETS WITH UN BALKAN ENVOY

Milo Djukanovic met with special UN envoy to the Balkans Carl Bildt in Podgorica on 15 November, AP reported. Djukanovic and Bildt urged the international community to step up its efforts in protecting the Serbian minority in Kosova. The two also discussed Montenegro's monetary reform and the republic's relations with Belgrade. Bildt said the West "will have to find effective mechanisms to help democratic Montenegro." He also met with Montenegrin Premier Filip Vujanovic. In other news, Ljubisa Krgovic, a member of Montenegro's Monetary Council, said the republic will ignore a ruling by the Yugoslav Constitutional Court that the decision by Montenegro to introduce the German mark as a dual currency is unconstitutional. PB

RADIO FREE MONTENEGRO BACK ON AIR

The independent radio station Free Montenegro was allowed back on the air on 15 November, the Belgrade-based independent agency Beta reported. The radio was banned by the Montenegrin government for not having proper "technical documentation." The radio's editorial board challenged that ruling as politically motivated. The station is broadcasting on FM frequency 103. PB

BOSNIAN PRESIDENCY VOWS GREATER COOPERATION

The three members of the Bosnian presidency agreed in a declaration at the UN in New York on 15 November to increase cooperation in an effort to fulfill the Dayton accords and create a multiethnic, democratic country, an RFE/RL correspondent reported. The declaration, proposed by U.S. Ambassador to the UN Richard Holbrooke, Croat Ante Jelavic, Muslim Alija Izetbegovic, and Serb Zivko Radisic pledged to strengthen Bosnia-Herzegovina's central government and condemned "forces advocating ethnic hatred and division." They agreed to establish 400-strong multiethnic border patrol, support one national passport, and create a permanent executive staff for the joint presidency. Bosnia's high commissioner, Wolfgang Petritsch, said he welcomes the statement but added "it is now time that actions supported words." In other news, Bosnian Serb customs officials said they have seized $1.4 million worth of goods since beginning a "Stop Smuggling" campaign two months ago. PB

REPORT ON SREBRENICA BLAMES UN AND SERBS

A report on the 1995 fall of the UN safe haven of Srebrenica released on 15 November sharply criticizes the UN for not using force against Bosnian Serb forces, Reuters reported. The document concludes that a fighting force and air strikes should have been used in Bosnia much sooner. It states that "a deliberate and systematic attempt to terrorize, expel, or murder an entire people must be met decisively with all necessary means." It adds that the UN "failed to do [its] part to help save the people of Srebrenica from the Serbian campaign of mass murder." The report is also critical of the Dutch peacekeepers that were supposed to protect the town. The report covers events before and after the fall of the mainly Muslim town, from which the Red Cross says some 7,300 men and boys are still missing. PB

DOCTORS CLAIM TUDJMAN RECOVERING

Doctors attending Croatian President Franjo Tudjman said on 16 November that his condition continues to stabilize and that he is recovering from surgery performed two days earlier, Reuters reported, citing Hina. The independent weekly "Nacional" said the president no longer needs a respirator to breath but that his overall condition is critical. Officials from his ruling Croatian Democratic Community said they are not considering asking the Constitutional Court to declare Tudjman incapacitated. Tudjman must formerly declare a date for new parliamentary elections one month in advance. With the vote scheduled for 22 December, he thus has until 22 November in which to do this. If he or someone in his place does not do so, then the elections will be postponed. PB

SERBIAN OPPOSITION SAYS PARALLEL GOVERNMENT TO BE SET UP

Vladan Batic, the coordinator of the opposition movement Alliance for Change (SZP), said on 15 November that a parallel government will soon be established, Beta reported. Batic said he hopes the government will receive international recognition. He said the government will be led by Dragoslav Avramovic. Batic also said that the representatives from 11 parties and associations have agreed to join the SZP electoral coalition, which is now composed of 19 parties, associations, and trade unions. PB

SERBIA RELEASES SOME ETHNIC ALBANIAN PRISONERS

A group of 47 ethnic Albanians was released by the Serbian Justice Ministry on 15 November and taken to Kosova, Beta reported. That group had been imprisoned in Leskovac and Zajecar. The ministry claims to have released 267 of the estimated 2,000 or so prisoners whom Serbian forces took with them to Serbia when they left Kosova ahead of NATO forces. In other news, a Serbian prosecutor in the central town of Pozarevac charged a Kosova Serb with murdering three ethnic Albanians during NATO's air campaign in the province. No trial date has yet been set. PB

ROMANIA TO RESUME ENERGY SUPPLIES TO MOLDOVA

Romania announced on 15 November that it will resume energy supplies to Moldova at midnight the same day, Rompres reported. Romania cut off its energy supplies to Moldova on 11 November, after the Moldovan government fell in a no- confidence vote (see "RFE/RL Newsline," 12 November 1999). Chisinau experienced power outages after Romania's decision. Romania supplies about 15 percent of Moldova's energy needs. Romanian Prime Minister Radu Vasile said on 15 November that a new contract for energy supplies to Moldova will be signed soon. Moldova owes Romania about $16 million. VG

ROMANIAN UNION THREATENS TO START STREET PROTESTS

The National Trade Union Bloc on 15 November announced that it will launch street protests on 24 November if the government does not meet its demands to improve living standards, according to a 15 November Mediafax report cited by the BBC. The bloc is demanding that the government index wages to inflation, freeze prices for six months, and allow the bloc to take part in negotiations on next year's state budget. Union members warned that the street demonstrations could result in early elections. VG

VERHEUGEN REASSURES ROMANIA, BULGARIA

EU Enlargement Commissioner Guenter Verheugen said on 15 November that he expects "positive results" for Romania and Bulgaria at the December EU summit in Helsinki, an RFE/RL correspondent reported. He added that he expects both countries to meet the conditions that the EU has set for starting accession negotiations with them. Verheugen was responding to French European Affairs Minister Pierre Moscovici, who expressed concerns that the EU was marginalizing Romania and Bulgaria by imposing extra membership conditions on them. The EU recently asked Romania to reform its orphanage system and Bulgaria to work out a plan for the closure of the Kozloduy nuclear plant before accession negotiations can begin. VG

MOLDOVAN CURRENCY LOSING VALUE

The leu fell to a record low of less than 12 leu to $1 over the weekend, Infotag reported on 15 November. On the black market, it was trading at about 13 leu to $1. Meanwhile, the associate director of the bread producer Franzeluta, Spiridon Danilescu, said bread prices will go up by 10 percent in Chisinau on 16 November. He noted that the wheat and flour market has "practically disappeared" in Moldova as suppliers are refusing to sell to Franzeluta owing to the devaluation of the leu. He said the company is also hampered in making purchases of supplies abroad because of a shortage of dollars in the country's commercial banks. VG




OVERCOMING CORRUPTION


by Paul Goble

Macroeconomic reforms--such as privatization, price liberalization and making national currencies convertible-- are not in themselves sufficient to overcome the corruption now holding back many post-communist countries, according to the European Bank for Reconstruction and Development.

In its annual report on transition economies released last week, the EBRD argues that such reforms have not had the effects on either relations between the state and the economy or hence on the level of corruption that both that bank and most other advocates of reform had expected.

And it concludes that post-communist governments must do more to promote fair and transparent laws, strong regulatory agencies, and efficient and effective court systems if they are to bring corruption under control, something the bank said few of these countries have been able to do so far.

In short, the solutions to the multifaceted problems of corruption are more often to be found in politics rather than economics.

In the past, the EBRD, like other international lenders, has tended to shy away from discussing corruption in these countries, typically treating it as a transitional problem certain to be cured by the kind of free market reforms it and other Western institutions have advocated.

But as the bank's report acknowledges, the high levels of corruption in these countries and, more important, the real sources of that corruption have prompted the EBRD to change its approach.

The level of corruption in many of these countries is staggering. According to the report, officials in Georgia extract in the form of bribes some 8.1 percent of the annual revenues of companies operating there. In Ukraine, that figure is 6.5 percent, and in the Commonwealth of Independent States as a whole 5.7 percent.

By adding to the costs of doing business, bribery keeps many firms from making a profit and thus dooms them to an early end. At the same time, demands for bribes discourage new investors from both within the countries involved and abroad.

Indeed, the EBRD found that newly formed companies in these countries had to pay almost twice as much of their revenues in bribes as did more established concerns--5.4 percent, compared with 2.8 percent. And thus bribes serve as yet another barrier to the establishment of new businesses.

Perhaps the most striking aspect of this year's EBRD report on transition economies, however, is its focus on what macroeconomic reforms cannot achieve by themselves. The bank noted that most post-communist countries have privatized many firms and reduced direct state intervention in the economy.

But those macroeconomic steps have not necessarily reduced "the overall level of intervention or the informal tax imposed on firms in the form of bribes and time spent dealing with government officials."

Indeed, the EBRD found that state-owned firms and privatized ones of the same size were forced to pay approximately the same percentage in bribes, an indication that privatization has not had the impact on corruption that many had expected.

Sometimes this appears to be because the new owners are the former communist-era managers, who have a special relationship with government officials. Sometimes it is because the firms or the government agencies with which they must deal have one or another kind of monopoly power, something privatization has done little to change.

Because economic changes alone have failed to overcome corruption, the EBRD argued that these countries must turn to political means instead. Indeed, in releasing the report, the bank's president, Horst Koehler, said: "I underline this twice. Weak institutions are the main obstacle to economic growth in a number of transition countries."

But in contrast to some analysts who have written off any chance for improvement in these societies, the EBRD notes that the fight against corruption can be won by leaders and governments willing to take the political risks involved in breaking with the past and building institutions capable of managing a modern, free market economy.


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