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Newsline - January 27, 2000




SWISS POLICE REPORTEDLY ISSUE ARREST WARRANT FOR YELTSIN CRONY

Swiss authorities have issued an international arrest warant for Pavel Borodin, the former chief of the Kremlin's facilities directorate, who was named Secretary of State of the Union of Russia and Belarus on 26 January, Reuters reported on 27 January. According to the agency, the arrest warrant was issued a few days ago in relation to money- laundering charges. An unidentified Swiss magistrate said that more warrants are expected in a few days. The office of Russia's Prosecutor-General reported that it had no information about the warrants, according to Interfax on 27 January. A senior investigator at the office, Ruslan Tamaev, told the agency that "no one in Switzerland has made an official announcement of the launching of criminal proceedings against Pavel Borodin." JAC

MOSCOW BRACES FOR NEW ROUND OF EXPLOSIONS...

From 25 January until 1 February, Moscow police will work 12-hour shifts and street patrols will increased by 25 percent, "Segodnya" reported on 26 January. Federal Security Services (FSB) spokesman Vasilii Stavitskii told Interfax that day that an anti-terrorist command center has been established in Moscow. On 21 January, acting President Vladimir Putin said that "the danger of terrorist attacks in Russia has increased" in light of the latest events in Chechnya (see "RFE/RL Newsline," 21 January 2000). "The Independent" reported from Ryazan on 27 January that some citizens in that city are not excluding the possibility that the "drill" last September under which residents of an apartment building were evacuated resulted from an attempt by the FSB to plant a real bomb rather than stage a "training exercise." JAC

...AS QUESTIONS RAISED ABOUT 'FAKE' BOMB IN RYAZAN

A Ryazan police official told the British daily that their tests showed the presence of explosives in the apartment building. Another Ryazan police officer intercepted a call the day of the drill to the FSB in Moscow in which a caller sought instructions about how to leave the city since the railway stations were being watched. The police officer added that the call might have been part of an exercise to test police alertness. The newspaper reported earlier that it has acquired video footage in which a Russian Military Intelligence (GRU) officer said the GRU, along with the FSB, was responsible for the August bombings of apartment buildings in Moscow and Volgodonsk (see "RFE/RL Newsline," 6 January 2000). JAC

PUTIN AIDE SAYS SANCTIONS AGAINST RUSSIA 'IMPOSSIBLE'

Sergei Yastrzhembskii said on 26 January that "it is impossible, in principle, to introduce sanctions against Russia" because "Russia is a vast country that provides Europe with a huge number of resources," ITAR-TASS reported. Yastrzhembskii then said that "sanctions against Russia is the most counterproductive action that could be made," although he said he did not rule out "some measures to restrict contacts." And he suggested that any sanctions reflected the domestic situation of Western countries rather than a reasoned assessment of Russia's actions in Chechnya. But Foreign Ministry spokesman Aleksandr Yakovenko said that Moscow would retaliate if any sanctions were imposed and would do so to ensure "as great a loss to the European Union as to Russia." Meanwhile, First Deputy Prime Minister and Finance Minister Mikhail Kasyanov said that EU measures against Russia "will not cause the Russian Federation any additional problems," but Russian Power Minister Yevgenii Adamov said that EU threats to impose sanctions could undercut nuclear security, the Russian news agency reported. PG

RUSSIA TO STRICTLY CONTROL FLOW OF INFORMATION ON CHECHNYA

Russian presidential aide Yastrzhembskii told journalists in Moscow on 26 January that beginning on 27 January, daily briefings on the situation in Chechnya will take place at the Russian Information center, Russian agencies reported. There will also be two official press centers in the North Caucasus, in Mozdok and the Grozny suburb of Khankala, Yastrzhembskii added. He said that only he and First Deputy Chief of Army General Staff Colonel General Valerii Manilov will be authorized to issue official reports and comment on the situation in Chechnya. He also said that the present system of providing accreditation for journalists wishing to cover the Chechen conflict will be changed, and life insurance for journalists in Chechnya will become compulsory. LF

PRESIDENTIAL AIDE AGAIN RULES OUT TALKS WITH MASKHADOV

Yastrzhembskii also said that Moscow does not consider Aslan Maskhadov either Chechnya's legitimate president or an appropriate negotiating partner as he does not control the situation in Chechnya, Russian agencies reported. Neither does any other Chechen leader an acceptable negotiating partner for Moscow, Yastrzhembskii added. He further rejected as "cynical and absolutely wrong" conjecture that the Chechen campaign was timed to coincide with the runup to the Russian presidential election. LF

RUSSIAN JOURNALISTS APPEAL FOR HELP TO FIND MISSING COLLEAGUE

The Russian Union of Journalists on 26 January appealed to the country's military and civilian authorities for help in locating RFE/RL correspondent Andrei Babitskii, who has been missing in Chechnya since 15 January (see "RFE/RL Newsline," 26 January 2000). Presidential aide Yastrzhembskii said on 26 January that he is aware that Babitskii disappeared after leaving Grozny on 14 January, but that he cannot confirm reports that Babitskii has been detained by Russian security forces. An RFE/RL staffer in Moscow rejected as unlikely the suggestion that Babitskii may have been kidnapped for ransom by a Chechen group, the "Moscow Times" reported on 27 January. LF

CHECHEN FIELD COMMANDER KILLED

Former Chechen Deputy Premier Isa Astamirov was killed late on 25 January during fighting in Grozny, ITAR-TASS reported. Fierce fighting continued on 26 and 27 January for control of the city's Minutka Square. Federal forces also continued their air and artillery bombardment of Chechen positions in the Argun gorge south of Grozny. Manilov told journalists in Moscow that the Chechen forces in Argun are blocked by Russian troops and cannot either break through Russian lines or retreat to Daghestan. LF

SAIDULLAEV HEADS FOR CHECHNYA

Chechen businessman Malik Saidullaev, who heads the pro-Moscow Chechen State Council, flew to Chechnya on 26 January with the aim of holding talks with Chechen field commanders and President Aslan Maskhadov on a cessation of hostilities, Interfax reported. Saidullaev said that he has been authorized by the Russian Defense Ministry to conduct such talks, and hopes also to meet next week with Maskhadov. He will also discuss with Nikolai Koshman, the Russian government representative in Chechnya, the formation of new Chechen government bodies. Saidullaev expressed doubt that the Russian authorities' current approach to resolving the Chechen conflict , which, he said, excludes "dialogue with the Chechen people," will prove successful. LF

RUSSIA DENIES TARGETING INGUSHETIA

A Rusian military spokesman in the North Caucasus on 26 January denied Ingushetian officials' claims that an Ingush village close to the border with Chechnya was hit the previous day by a missile launched from a Russian military aircraft, Interfax reported. Ingushetia's President Ruslan Aushev had confirmed initial report of the incident, adding that no one was injured and no buildings damaged. LF

DUMA CONFLICT SUBSIDING...

Union of Rightist Forces (SPS) leader Sergei Kirienko said on 26 January that his faction will attend a meeting of the Duma Council the next day. The SPS is one of the three factions, including Fatherland-All Russia (OVR) and Yabloko, that have been boycotting sessions of the new State Duma (see "RFE/RL Newsline," 26 January 2000). After a meeting with acting President Putin on 26 January, OVR leader Yevgenii Primakov said that he has asked that new committees be created so that the Duma's smaller parties would be represented. He added that if there is no progress in finding a way out of the Duma's critical situation "we will not attend the Duma session on 28 January." Yabloko leader Grigorii Yavlinskii said that he expects that all factions will attend Duma sessions on 9 February. Duma Chairman Gennadii Seleznev said on 27 January that factions that do not attend the session on 28 January will lose those committee posts reserved for them. JAC

...AS NEW DUMA GROUP FORMED

State Duma deputy Andrei Isaev (OVR) told journalists on 27 January that a new "interfactional" deputies group called "Solidarity" has been created and will work to strengthen cooperation between the parliament and workers and trade unions, Interfax reported. Isaev, who will be coordinator of that group, said that 12 deputies have signed a declaration of intent to join it. The chairman of the Federation of Independent Trade Unions, Mikhail Shmakov, said that his organization will support the group's activities. JAC

RUSSIAN OFFICIALS HOLD LITTLE HOPE FOR IMF FUNDS BEFORE APRIL

First Deputy Prime Minister Kasyanov told "Nezavisimaya gazeta" on 27 January that the government does not expect to get a new injection of cash from the IMF in the first quarter of this year. Central Bank Chairman Viktor Gerashchenko made a similar pronouncement the same day, according to Prime-TASS. After meeting with U.S. Treasury Secretary Larry Summers the previous day, Tax Minister Aleksandr Pochinok said that Summers had agreed that Russia had met the conditions that the IMF had laid out for the second installment of its $4.5 billion loan. He added that the topic of Russia's military campaign in Chechnya did not come up. First Deputy Finance Ministers Aleksei Kudrin, Sergei Ignatiev, and Sergei Shatalov are scheduled to meet with IMF officials on 27-28 January. JAC

GOVERNMENT NOT TO CUT SOCIAL SPENDING UNTIL AFTER ELECTIONS

State Duma Budget Committee Chairman Aleksandr Zhukov said on 26 January that the question of spending cuts in the budget will likely be included in the Duma's agenda only after the government's implementation of the budget in the first quarter can be evaluated. Zhukov told "Segodnya" on 27 January that one of the most important laws to be considered by the new Duma will be the second section of the Tax Code. Yurii Prikhodko of the Federal Tax Police Service told ITAR- TASS on 26 January that 54 serious crimes, including two murders, were committed against tax policemen in 1999. In addition, he reported that some 94 taxmen were granted state protection. JAC

RUBLE CONTINUES FALLING...

The ruble slipped .2 percent on 26 January from the previous day to 28.55 rubles per dollar. Traders told Reuters that they do not believe that the Central Bank was active in the market to try to prop up the ruble's value. Trading volume was down to $147 million from $238 million on 24 January. Central Bank Chairman Gerashchenko said on 26 January that he expects the ruble to strengthen by the end of the month. JAC

...AS ECONOMISTS QUESTION ROSY STATISTICS

"The Moscow Times" reported on 27 January that some economists are questioning recent estimates by the State Statistics Committee that the gross domestic product surged 3.2 percent last year (see "RFE/RL Newsline," 26 January 2000). Alfa Bank released a report that it believes the real GDP growth using the Producers Price Index "was actually closer to zero." Yevgenii Gavrilenkov of the Bureau for Economic Analysis told the daily that he thinks the committee "will change the basis of their calculations, revising figures for previous years" in order to substantiate their 3.2 percent growth estimate. He added that the committee's figures could be the result of inefficient methods and to a lesser extent political considerations. JAC

PRESIDIUM MEMBERS LISTED

"Novye Izvestiya" published a list on 26 January of the members of both the Russian government's presidium. It includes acting President Putin, First Deputy Prime Minister Kasynaov, Deputy Prime Ministesr Ilya Klebanov, Nikolai Koshman, Valentina Matvienko, Sergei Shoigu and Vladimir Shcherbak, Railroads Minister Nikolai Aksenenko, Foreign Minister Igor Ivanov, Interior Minister Vladimir Rushailo, Defense Minister Igor Sergeev, Justice Minister Yurii Chaika, Economics Minister Andrei Shapovalyants, and chief of the government staff Dmitrii Kozak. "Kommersant- Daily" reported earlier that former First Deputy Prime Minister Aksenenko's name was added to the list at the last minute. Former First Deputy Prime Minister Khristenko, who is now only a deputy prime minister, is not a member of the presidium. JAC

RUSSIA LOOKS TO EXPAND NUCLEAR CONSTRUCTION IN CHINA, IRAN

Russian Atomic Energy Minister Yevgenii Adamov said on 26 January that Moscow hopes to expand its nuclear power construction programs in China and Iran and is conducting discussions with both countries about possible sales to them, ITAR-TASS reported. PG

RUSSIA, ITALY ADOPT MILITARY COOPERATION PROGRAM

In Rome on 27 January, Italian Deputy Defense Minister Gianni Rivera and Russian First Deputy Defense Minister Nikolai Mikhailov signed a military cooperation agreement that will create the framework for Italian purchases of the products of Russia's military industry, ITAR-TASS reported. The joint communique issued after the meeting said that this agreement will provide the basis for broader cooperation in the security field. PG

ELECTION COMMISSION CONSIDERS THE INTERNET

"Vremya MN" reported on 26 January that Central Election Commission Chairman Aleksandr Veshnyakov has said that during the leadup to 19 December State Duma elections, crude violations of Russian election law occurred on news websites in Russia. However, sanctions against sites that violated the law have not been forthcoming because the election law does not adequately address the issue of information disseminated on the Internet. In a meeting with Veshnyakov and online editors, First Deputy Media Minister Mikhail Seslavinskii concluded that the issue is also complicated by the fact that the government would have to learn who is the domain's owner, where the server is located, and other such questions, the website reported on the same day. The chief editors of told "Vremya MN" that "one wants to know how [Veshnyakov] plans to struggle against servers registered in China, America, and Antartica." JAC

RUSSIAN ORTHODOX CHURCH OBJECTS TO HEALTH IN SCHOOLS

Metropolitan Kirill of Smolensk and Kaliningrad announced on 25 January that he opposes the Education Ministry's plans to introduce health studies in Russian schools, "Segodnya" reported on 26 January. The Metropolitan explained that the introduction of health studies suggests that "excessive attention" will be paid "to the needs of a person's body, including sexual needs." Kirill also objects to the prevalence of American textbooks on the subject in Russian schools and proposed instead an optional course in Bible studies instead of health studies. JAC

OLIGARCH WINS TOP POST IN INTERNATIONAL JEWISH ORGANIZATION

Media Most head Vladimir Gusinskii was elected vice president of the World Jewish Congress on 26 January, Interfax reported. Gusinskii is already president of the Russian Jewish Congress. JAC




ARMENIAN, AZERBAIJANI PRESIDENTS TO RESUME KARABAKH TALKS

Armenian President Robert Kocharian told journalists on 26 January upon his return to Yerevan from the CIS summit in Moscow that he and his Azerbaijani counterpart Heidar Aliyev will continue their talks on the Karabakh conflict on the sidelines of the World Economic Forum in Davos, Switzerland, Russian agencies reported. Kocharian added that both he and Aliyev agree on the need to reverse the slowdown in the peace process since the 27 October Armenian parliament shootings. Kocharian refrained from making any prognosis as to the likely outcome of the planned Davos talks. But Armenian Foreign Minister Vartan Oskanian said on 26 January in Strasbourg, where he is attending the Parliamentary Asssembly of the Council of Europe session, that those talks will show in which direction the peace process is heading, according to ITAR-TASS. Also on 26 January, Kocharian briefed Arkadii Ghukasian, president of the unrecognized Nagorno-Karabakh Republic, on his talks with Aliyev in Moscow on 24 January, RFE/RL's Yerevan bureau reported. LF

AZERBAIJANI OPPOSITION REJECTS OFFICIAL RATIONALE FOR ELECTRICITY RATIONING

Azerbaijani opposition experts said on 25 January that the planned introduction of energy rationing testifies to the incompetence of economic planners and the inefficient use of the energy generated, Turan reported (see "RFE/RL Newsline," 26 January 2000). Ali Masimov of the Azerbaijan Popular Front and Musavat's Gubad Ibadogly both said that Azerbaijan generates enough power to meet its domestic needs but that some of that power is illegally exported. LF

GEORGIAN OFFICIALS OFFER CONFLICTING EXPLANATIONS FOR ABKHAZ CLASH

Tamaz Nadareishvili, chairman of the ethnic Georgian Abkhaz parliament-in-exile, told Caucasus Press on 27 January that the the five Abkhaz killed or wounded in western Georgia's Zugdidi Raion late on 25 January had been engaged in reprisals against local Georgians involved in cigarette smuggling (see "RFE/RL Newsline," 26 January 2000). But Temur Khetsuriani, who is Security Minister in the ethnic Georgian Abkhaz government-in-exile, said that the men had abducted a Georgian couple from a village in Zugdidi on 23 January. Interfax on 26 January said that the Abkhaz were attacked while conducting unsanctioned talks with local Georgians on the hostages' release. LF

KAZAKH MIG SALE TRIAL RESUMES

The trial resumed in Almaty of 26 January of Kazakh Army Chief of General Staff Bakhytzhan Ertaev and businessman Aleksandr Petrenko, RFE/RL's bureau in the former capital reported. The two men are accused of arranging the illegal sale to North Korea of 40 obsolete MiG fighters. The proceedings were suspended on 11 January after Ertaev suffered a minor heart attack (see "RFE/RL Newsline," 12 January 2000). Ertaev told journalists on 26 January that the accusations against him are groundless, and that he is confident he will be acquitted, according to Interfax. LF

KAZAKH REGIONAL NEWSPAPER EDITOR CHARGED WITH ABETTING SEPARATISTS

Oleg Ablakaev, editor of the commercial newspaper "HBC-Press" in the town of Oskemen in eastern Kazakhstan, has been formally charged with supporting separatism, RFE/RL correspondents reported on 27 January. Publication of "HBC-Press" was suspended for three months earlier this week because the paper had printed an appeal last November to the region's ethnic Russian population by Viktor Kazimirchuk, the leader of a group of Russians accused of planning to establish an independent Russian republic on the territory of eastern Kazakhstan. One of Kazimirchuk's co- accused, former Oskemen municipal council member Nikolai Ivanov, is now in Russia trying to obtain political asylum. Kazimirchuk has been taken to a psychiatric hospital in Almaty. LF

KAZAKH OPPOSITION PARTY OFFICIAL REFUSED EXIT VISA

Kazakhstan immigration officials this week rejected a request for an exit visa by Republican People's Party of Kazakhstan's Executive Committee Chairman Gaziz Aldamzharov, RFE/RL's Almaty correspondent reported on 27 January. Aldamzharov said he believes that refusal was politically motivated. The Republican Reople's Party of Kazakhstan is headed by former Prime Minister Akezhan Kazhegeldin. LF

KAZAKHSTAN PROTESTS UZBEK BORDER DEMARCATION

Astana has lodged an official protest with the Uzbek government over unilateral moves by Tashkent to demarcate sections of the two countries' 230 km common border without prior consultation with the Kazakh government, ITAR-TASS reported on 26 January citing Kazakhstan State Television. There have been several recent incidents of Uzbek border guards opening fire on Kazakhs in the vicinity of the border (see "RFE/RL Newsline," 14 January 2000). LF

KYRGYZ POLICE DEFUSE CAR BOMB IN CAPITAL

Alerted by a street cleaner, Kyrgyz police defused a primitive explosive device detected under a car in the yard of a house in Bishkek, ITAR- TASS reported on 27 January. The residents of the building in question include two government officials, several Turkish businessmen, relatives of a Kyrgyz parliament deputy, and a priest from a Korean church. LF

TAJIKISTAN UNVEILS 1999 ECONOMIC STATISTICS

Tajikistan's GDP grew by 3.7 percent in 1999 compared with the previous year, Interfax reported on 26 January quoting the State Statistics Commission. Industrial production rose by 5 percent, while agricultural output increased by 3.8 percent despite the loss of half the country's cotton crop due to adverse weather conditions. Annual inflation in 1999 was 24 percent, compared with 20 percent in 1998. The country posted a $24.8 million foreign trade surplus in 1999, compared with a deficit the previous year. Aluminium, average prices for which rose by 10 percent in 1999, accounts for 45 percent of Tajikistan's export production. LF




COUNCIL OF EUROPE SAYS BELARUS STILL NOT MEETING EUROPEAN STANDARDS

The Parliamentary Assembly of the Council of Europe on 26 January "expressed its profound concern that Belarus continues to fall seriously short of Council of Europe standards as regards pluralist democracy, the rule of law and human rights," Belapan reported. After hearing a report on the situation in Belarus by Wolfgang Behrendt, rapporteur of the Political Affairs Committee, the assembly decided not to restore the Belarusian legislature's special guest status, which was suspended after the controversial November 1996 referendum in Belarus. The assembly also noted that the democratic legitimacy of Belarusian power institutions can only be restored "through political dialogue between the authorities and the opposition culminating in democratic elections." JM

UKRAINIAN PRESIDENT VETOES MORATORIUM ON REFERENDUMS

Leonid Kuchma has vetoed the bill that temporarily bans holding nationwide referendums in Ukraine (see "RFE/RL Newsline," 12 January 2000), Interfax reported on 26 January, quoting Kuchma's spokesman Oleksandr Martynenko. Kuchma believes that the ban violates the constitution by denying the right of the people to express their will through a form of direct democracy such as a referendum. JM

UKRAINE'S TKACHENKO CANCELS DOCUMENTS SIGNED BY MEDVEDCHUK

Parliamentary speaker Oleksandr Tkachenko, who was voted out of his post by the parliamentary majority on 21 January, has canceled all parliamentary resolutions signed by deputy speaker Viktor Medvedchuk on 22 January, Interfax reported on 26 January. According to a communist deputy quoted by the agency, Medvedchuk does not have the true parliamentary stamps and seals the resolutions he signs with "falsified stamps." Meanwhile, Medvedchuk has recently fired parliamentary spokesman Vitaliy Lukyanenko. According to deputy Oleksandr Volkov, it is Tkachenko who has duplicated stamps, while Medvedchuk's seals are genuine. JM

LATVIAN PRESIDENT PROMISES TO EXAMINE ALLEGATIONS OF ACQUITTED WAR CRIMINALS

While attending the international conference on the Holocaust in Sweden, Latvian President Vaira Vike-Freiberga said that she will discuss with justice officials allegations of war criminals being exonerated following the restoration of independence. Efraim Zuroff, the head of the Jerusalem office of the Simon Wiesenthal Center, broached the topic with Vike-Freiberga during their meeting on 26 January. Zuroff claims to have evidence against 41 people convicted of war crimes by Soviet courts but subsequently acquitted by Latvian courts, BNS reported. About 13,000 Latvians were convicted during the Soviet-era for war crimes, though most of the cases involved those who fought against Soviet partisans and occupiers. During the meeting, Vike-Freiberga reiterated Latvia's commitment to prosecuting all war criminals, but cautioned against Zuroff's suggestion for the state to pressure witnesses to testify. In a related story from Stockholm, the Lithuanian delegation to the conference, led by Prime Minister Andrius Kubilius, announced the organization of a conference in Vilnius this coming autumn on Jewish property plundered during World War II. MH

POLISH CUSTOMS SIGN ANTI-PIRACY ACCORD WITH WESTERN FIRMS

Main Customs Office (GUC) head Zbigniew Bujak said on 26 January that Polish customs officers will be able to more effectively block imports of cheap copies of name-brand clothing, computer software, and other goods thanks to cooperation with manufacturers of the original brands, PAP reported. Bujak added that the GUC has signed an agreement on cooperation in protecting intellectual, trade, and industrial property rights with such firms as Puma, Levi Strauss, Hasbro, Reebok, Nike, Adidas, Microsoft, and Ford. The firms that signed the agreement will help provide information to customs officers so that they can easily tell bootleg copies from authentic goods. JM

CZECH PARLIAMENT PASSES BUDGET, AGREEMENT WITH SLOVAKIA

The Chamber of Deputies on 26 January passed the first reading of the budget, Czech media reported. The budget passed with the support of deputies from the Czech Social Democratic Party and Civic Democratic Party, as called for in a series of agreements signed by the chairmen of the two parties (see "RFE/RL Newsline," 26 January 2000). The budget anticipates a deficit of 35.2 billion crowns (approximately $1 billion). In other news, police say they are examining the role of the Czech National Bank in a potentially illegal operation to sell off part of Agrobanka, "Mlada fronta Dnes" reported on 27 January. VG

ISRAELI FOREIGN MINISTER PRAISES CZECH REPUBLIC

Israeli Foreign Minister David Levy praised the Czech government's decisions to approve a bill on the restitution of Jewish property confiscated during World War II and its efforts to pass laws against anti-Semitism. Both Levy and Prime Minister Milos Zeman expressed concern at the prospect that the Austrian Freedom Party might form part of a coalition government in Vienna. VG

NEW HEAD OF CZECH TELEVISION SELECTED

The Board of Czech Television on 26 January elected a new general director for the publicly owned broadcaster, Czech media reported. Dusan Chmelicek, who heads Czech Television's legal department, was elected by a vote of five to two. Chmelicek, 32, replaces former General-Director Jakub Puchalsky, who resigned amid a hail of criticism last month (see "RFE/RL Newsline," 16 December 1999). Board chairman Jan Jirak said Chmelicek was elected for several reasons, including, his communications skills, his familiarity with the internal situation at the station, and his independence from the "political sphere." However, the board has come under fire from politicians and professional broadcasting associations for the lack of transparency in the selection process. VG

SLOVAK GOVERNMENT PASSES PRICE HIKES

The Slovak government on 26 January approved a series of price hikes for utilities, telecommunications, transportation, and postal services, TASR reported. As of 1 February, household electricity prices will rise by 40 percent, while the rates for companies will go up 5 percent. Gas prices for households will rise by 30 percent, railway fares by 30 percent, bus fares by 20 percent, postal services by 10 percent, water by 27 percent, and sewage fees by 55 percent. Telecommunications services will increase in cost by 0.5 percent on 1 April and a further 5 percent on 1 July. The ministers from the Party of the Democratic Left refused to support the increases, but they were outvoted by the rest of the coalition government's members. Prime Minister Mikulas Dzurinda said the government does not plan to introduce any more major price increases for the remainder of its term in office, which ends in 2002. VG

SLOVAK PREMIER SAYS MINISTERS RECEIVED ILLEGAL BONUSES

Prime Minister Dzurinda on 26 January said special bonuses of more than 100,000 crowns ($2,439) paid to cabinet ministers at the end of 1999 were illegal, TASR reported. Dzurinda said that in response to the public outcry over the bonuses, he asked five legal experts to examine the bonuses and four of them confirmed that the bonuses violated a 1993 law. The prime minister said the cabinet agreed on 26 January that each minister would return the bonuses. In other news, the Hungarian Coalition Party, which is part of the governing coalition, accused Agriculture Minister Pavol Koncos of refusing to return state land that was confiscated before 1948 according to the Benes decrees. It accused Koncos of "playing the nationalist card." VG

HUNGARIANS CONSIDER KADAR ERA ONE OF BRIGHTEST PERIODS

Respondents to a recent Gallup public opinion poll said Hungarian Socialist Workers' Party leader Janos Kadar was one of the three most outstanding personalities from the brightest eras of Hungarian history, Hungarian media report on 27 January. The other two, according to the poll, are 15th century ruler King Matthias Corvinus, and St. Stephen, the king who introduced Christianity to the area in 1000. Two- thirds of the respondents believe that Hungary will be among the most successful nations in the next 10-20 years. The poll was commissioned by the "image center" at the Prime Minister's Office, which intends to spend 4.3 billion forints ($17 million) on Hungary's image this year. MSZ

BUDA CASTLE CLOSED TO NEO-NAZIS

The Young Left group has reserved six sites in Buda Castle on 12-13 February in order to prevent a planned neo-Nazi demonstration from taking place there, "Nepszabadsag" reported on 27 January. Last week, Hungarian skinheads urged their German colleagues on a German-language website to return for a repeat of a demonstration held last year in Budapest to commemorate the SS troops who died in Buda Castle while fighting the Soviets. The Young Left group plans to honor civilian victims of World War II. MSZ




RACAN ANNOUNCES NEW CROATIAN GOVERNMENT

Prime Minister designate Ivica Racan announced in Zagreb on 27 January that his six-party coalition has reached an agreement on the new 22-member government. He added that he will ask acting president Vlatko Pavletic to appoint the cabinet later in the day. Of the three vice premiers, Social Liberal Goran Granic will be Racan's direct deputy. Slavko Linic, who belongs to Racan's Social Democrats and is mayor of Rijeka, will be in charge of the economy. Social Democrat Zeljka Antunovic will deal with political and social affairs. Social Democrats will head three key ministries: Finance Minister Mato Crkvenac, Foreign Minister Tonino Picula, and Interior Minister Sime Lucin. Defense Minister Jozo Rados is a Social Liberal. PM

DEFEATED CROATIAN PARTY DEADLOCKED

Members of the presidency of the Croatian Democratic Community (HDZ) failed at a three- hour meeting in Zagreb on 26 January to agree on who will head the party's factions in the new parliament, RFE/RL's South Slavic Service reported. The party is on the verge of disintegration following the death of President Franjo Tudjman in December and the subsequent outbreak of factional in-fighting in public. PM

TUDJMAN'S LEGACY CRUMBLING RAPIDLY

Pavletic has reassigned command of the presidential honor guard from the president to the chief of the General Staff, "Jutarnji list" reported on 27 January. A final decision on the unit's fate will lie with the new president, who will be elected on 7 February. Both candidates have indicated that they will eliminate the guard unit as well as other symbols of Tudjman's rule that are widely regarded as pompous. Elsewhere, the same Zagreb daily notes that moves by the HDZ to rename streets and squares after Tudjman have largely come to nothing. Only three towns have passed proposals to name a street or square after the late president. PM

PETRITSCH BLOCKS SAROVIC AS BOSNIAN SERB PRESIDENT

The international community's Wolfgang Petritsch said in Sarajevo on 27 January that Republika Srpska Vice President Mirko Sarovic has no right to move into the vacant president's job. Petritsch called such an attempt "regrettable, unconstitutional, and illegal...with the clear and obvious aim of destabilizing" the Republika Srpska, AP reported. He added that Sarovic "will be held accountable" for his announcement the previous day that he will assume the presidency. Sarovic said that he wanted to end the political stalemate in the Republika Srpska and replace Milorad Dodik, the moderate prime minister. Carlos Westendorp, who was Petritsch's predecessor, offered the presidential post to Sarovic in March 1999 after sacking Nikola Poplasen, the nationalist president. Sarovic at that time declined the offer. Westendorp told him that he should reconsider but that he would need the approval of the international community to assume the presidency. Petritsch has since said that he does not want Sarovic in the post. PM

KLEIN CALLS ON COUNCIL OF EUROPE TO ADMIT BOSNIA

Jacques Klein, who is the UN's chief representative in Bosnia- Herzegovina, appealed to the Council of Europe to admit that country even though it has not yet fulfilled all criteria for membership. In remarks he prepared to deliver in Strasbourg, Klein noted that "it may not be a Bosnia you wish to see sharing your home or even living in your neighborhood...[but] while it is clear that Bosnia still has a distance to go in fully meeting European standards, to deny accession again would only reward those who caused its misfortunes. Wise judgment must be made. Left outside for too long, one of your closest neighbors may become a breeding ground for anti- democratic and foreign tendencies sustained by exploitation and criminality," AP reported from Sarajevo on 26 January. PM

OSCE SEEKS REFORM OF BOSNIAN PRESIDENTIAL VOTE

The OSCE, which supervises elections in Bosnia-Herzegovina, will propose to the joint Bosnian parliament that it adopt a new election law. According to the proposal, voters will be able to cast their ballot for whichever of the three seats in the joint presidency they wish, RFE/RL's South Slavic Service reported on 26 January. Currently, voters in the Republika Srpska vote for the Serbian seat, while voters in the federation elect only the Muslim and Croatian representatives. PM

YUGOSLAV COURT REJECTS MONTENEGRO'S DUAL CURRENCY SYSTEM

Meeting in Belgrade on 26 January, the Constitutional Court called illegal Montenegro's move in November 1999 to introduce the German mark as legal tender alongside the Yugoslav dinar. Montenegro is likely to ignore the ruling--as it has other Belgrade court decisions--because it does not recognize the authority of the Belgrade federal government. Podgorica argues that the introduction of the mark was necessary to shield Montenegro from rising inflation in Serbia. The Montenegrin authorities also note that the move was simply taking recognition of the reality that the mark has been widely used throughout the former Yugoslavia for decades. PM

SERBIAN CROWN PRINCE CALLS FOR OPPOSITION UNITY

On his first visit to the Republika Srpska, Aleksandar Karadjordjevic said in Banja Luka on 26 January that "we must work to remove the regime in Belgrade," Reuters reported. He called Yugoslav President Slobodan Milosevic "the leader of 250,000 thugs who run the country through oppression." Aleksandar appealed to opposition politicians to stop "creating idiotic problems" among themselves and to "shut up, so that we can get on with life and hope." He stressed that he considers as enemies of the Serbian people all those who are anti-democrats, AP reported. PM

ALBRIGHT APPEALS FOR MONEY FOR KOSOVA

Speaking in Washington on 26 January, Secretary of State Madeleine Albright called on "our partners" to "pledge generously" to aid Kosova but also to be prompt with their payments. She argued that a "serious crisis" has emerged in the province for the UN administration because of a lack of money, AP reported. PM

MACEDONIAN POLICE FILE CHARGES AGAINST ALBANIANS

A police spokesman said in Skopje on 26 January that the police have arrested 10 ethnic Albanians in connection with the murder of three policemen in the ethnic Albanian village of Aracinovo recently (see "RFE/RL Newsline," 25 January 2000). An additional suspect remains at large, he added. Aracinovo is believed to be the center of an ethnic Albanian smuggling ring. PM

ROMANIAN PARTIES CONTINUE DEBATE ON TIMING OF ELECTIONS

The chairman of the National Peasants' Party Christian Democratic, Ion Diaconescu, said on 25 January that his party wants local and general elections to be held "according to the usual schedule," Mediafax reported. He rejected rumors in the press that the PNT-CD intends to call for a postponement of the elections. The statement is the latest in ongoing discussions on the timing of the elections (see "RFE/RL Newsline," 21 January 2000). The president of the Hungarian Democratic Union of Romania, Bela Marko, said his party supports the idea of holding the local elections in June 2000 and the parliamentary elections in November, Rompres reported. In other news, Romanian Foreign Ministry spokesman Mihail Dobre on 26 January announced that Romania lost some $900 million in 1999 as a result of last year's conflict in Kosova, Mediafax reported. VG

APPEAL COURT REINSTATES CLUJ MAYOR

An appeals court in Cluj reinstated Gheorghe Funar as the mayor of the city after he was suspended pending an investigation of allegations that he abused his position and damaged private interests (see "RFE/RL Newsline," 26 January 2000). Funar, who heads the chauvinist Greater Romania Party, will now be able to serve as Cluj mayor until a court rules on his indictment. VG

SPECIAL SUMMIT ON TRANSDNIESTER TO BE HELD IN JULY

Moldovan President Petru Lucinschi on 26 January said he and his Russian counterpart, Vladimir Putin, agreed at the CIS summit in Moscow to hold a special meeting on the break-away Transdniester region this July, BASA-Press reported. He said the meeting will be attended by representatives from Moldova, Transdniester, Russia, Ukraine, and the OSCE. Lucinschi described the CIS summit as a "turning point" and said Putin "unequivocally supported Moldova's position on the resolution of the Dniester region problem," ITAR-TASS reported. VG

TRANSDNIESTER WANTS TROOP WITHDRAWAL COORDINATED WITH SETTLEMENT

Representatives of the Transdniester administration said they support the Russian Foreign Ministry's position that a withdrawal of Russian troops can only take place in conjunction with a political settlement, according to ITAR-TASS. The representatives said the Russian troops are fulfilling a "stabilizing and peacekeeping mission" in the region. Meanwhile, Transdniester authorities refused to allow a military inspection team from Spain to enter the region on 26 January, BASA-Press reported. The Spanish team arrived in Moldova the day before with the intention of inspecting Russian army depots in accordance with the Conventional Forces in Europe treaty. The Transdniester authorities said they were denied entry into the region because they failed to inform the Tiraspol government beforehand. VG

UKRAINE THREATENS TO CUT OFF ALL ELECTRICITY TO MOLDOVA

Ukraine on 26 January threatened to cut off all electricity exports to Moldova because of unpaid debts, BASA-Press reported. Moldovan energy officials described the warning as a means of pressuring Chisinau into paying those debts. According to BASA-Press, Moldova owes Ukraine some $60 million in unpaid energy debts. Meanwhile, the Chisinau energy distribution network has been cutting off power to various neighborhoods of the capital 3-4 times a day for 6-10 hours. Temperatures in the capital have been oscillating recently between 15 C and 20 C degrees below zero. In other news, observers from the Helsinki Human Rights Committee on 26 January said they noted "numerous" violations of the electoral rules during the 23 January elections in Taraclia county, BASA-Press reported. VG

BULGARIA WELCOMES EU PROPOSAL ON VISAS

Bulgarian President Petar Stoyanov on 26 January welcomed the European Commission's proposal that visa requirements be dropped for Bulgarians and Romanians, BTA reported. Stoyanov described the proposals as confirmation that the two countries are moving in the right direction. The European Commission's proposal to include the two Balkan countries on a list of 48 countries that have visa-free relations with the EU must now be approved by the 15 EU governments and the European Parliament. An official in the Bulgarian Foreign Ministry said Sofia expects the procedure to be completed this year. Bulgarian and Romanian experts are scheduled to meet on 28 January to discuss measures to tighten border controls, which is one of the EU's key conditions for lifting visa requirements. VG

BULGARIA REJECTS RUSSIAN CRITICISM OF BALKAN SUMMIT

Bulgarian Foreign Ministry spokesman Radko Vlaykov on 26 January rejected Russian criticism of the recent Balkan summit in the Bulgarian town of Hissar, BTA reported. On 25 January, the Russian Foreign Ministry expressed "bewilderment" at the fact that Yugoslavia was not represented at the meeting and described the summit as "isolationist" with relation to Belgrade. Vlajkov said the meeting was not "isolationist" but rather represented "a new form of cooperation" in the region. He added: "At a time when cooperation with Yugoslavia is difficult, its participation in the event would have blocked positive results of the meeting," AP reported. VG




Capital Flight From Russia Continues


By Robert Lyle

The global organization of commercial banks, investment firms and insurance companies--the Institute of International Finance (IIF)--says that capital flight from Russia continues to be substantial and should be around $20 billion again this year.

The IIF says the flight of capital from Russia has been at about that level annually for the past year or two.

Charles Dallara, managing-director of the institute, told reporters in Washington on 24 January that the problem for Moscow continues to be a lack of solid reforms and stable policies.

"Obviously, it will be important for Russia to find some policy framework that will stabilize and turn around that situation at some point, but we don't have a clear sense that that's in the cards," he said

The director of research for the IIF, Kevin Barnes, says there was some reduction in the amount of capital flight from Russia in December. But he says even if that decrease continues it will not have a major impact on the forecast of $20 billion fleeing this year.

Overall, says Barnes, there are a lot of uncertainties ahead for Russia.

"Perhaps the removal of some of the political uncertainty that we fear through a prolonged election period could make the situation even more difficult. That will not happen. We are having to reevaluate a number of developments. Russia has been helped by strong oil prices, (but is) still very uncertain on capital flight and what will happen on the debt picture."

The institute says Russia's capital flight and other problems will turn private capital flows into the country from positive to negative this year--with money more leaving than coming in.

For the rest of what the IIF calls "emerging Europe"-- Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia, and Turkey--the picture is very positive. Private capital flows, which had dropped markedly during the 1998 crisis, are beginning to return and are estimated to have hit nearly $32 billion in 1999. They should climb another $500 million this year.

Barnes says these countries are drawing external financing because of their progress in reforms:

"We've seen some encouraging steps, such as in Bulgaria. But there needs to be continued efforts in that area to work toward the goal of convergence with the European union. In several of those economies, we see encouraging progress, but still more needs to be done."

Capital flows into all of the emerging economies in the world are expected to increase from just below $150 billion in 1999 to nearly $200 billion this year. That all depends, says the IIF, on a continued strong U.S. economy and no major crises anywhere in the world this year. Robert Lyle is a former Washington-based correspondent for RFE/RL.


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