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Newsline - May 26, 2000




GOVERNMENT APPROVES TAX REFORM PLANS...

The government of Prime Minister Mikhail Kasyanov on 25 May approved a package of tax bills intended to reform the Russian tax system, establish a flat 13 percent income tax rate, and eliminate turnover taxes. Minister for Economic Development and Trade German Gref explained that if the bills are adopted, "a six- month moratorium will be provided so that enterprises and citizens can cut their expenses after 1 January 2001." To cover lost budget revenue from the taxes to be cut, the government plans to increase excise duties on gasoline and tobacco and abolish numerous tax exemptions granted to companies. In particular, the excise tax on gasoline will be increased sixfold, according to ITAR-TASS. Gref acknowledged that the higher excise taxes would raise the price of high- octane gas by 25 percent but he insisted that an outbreak of inflation in all spheres would not occur. JAC

...AS INFLATION FEARS ARE RAISED

Other Moscow officials apparently disagree with Gref's prediction. Mikhail Shmakov, chairman of the Federation of Independent Trade Unions, foresees a 40 percent rise in prices across the board, while newly appointed Energy Minister Aleksandr Gavrin anticipates a 50 percent increase, "Kommersant-Daily" reported on 26 May. Gref also noted on 25 May that the wages of servicemen and law enforcement officials will now have to be increased to compensate for their loss of tax privileges under the plan. JAC

PUTIN ASSIGNS ANOTHER TOP ECONOMIC POST...

Russian President Vladimir Putin signed a decree on 26 May dismissing presidential envoy to the Group of Seven Aleksandr Livshits and replacing him with presidential economic advisor Andrei Illarionov. The previous day, "Izvestiya" reported on an economic program for Russia drafted by Illarionov and Boris Lvin that differs considerably from that authored by Minister for Economic Development and Trade Gref and others. According to the daily, Illarionov calls for lifting restrictions on foreign bank operations, abolishing state banking supervision, establishing a currency board, privatizing state property by open auction with foreign participation, and reducing the number of federal ministries. JAC

...AS CAPITAL REPORTEDLY FLOWING BACK TO RUSSIA

Illarionov told reporters on 25 May that some $9 billion flowed into Russia during the first four-and-a-half months of 2000, which was much higher than the rate during the past few years, ITAR-TASS reported. Illarionov did not provide a breakdown of from where the funds were flowing, but he concluded that foreign investment in Russia is "virtually doomed" to grow this year. JAC

MOSCOW BACKS AWAY FROM THREAT TO TALIBAN

"Vek" on 25 May quoted presidential aide Sergei Yastrzhembskii, who earlier this week had suggested Moscow might launch preemptive strikes against Taliban bases in Afghanistan in retaliation for their support for Chechnya, as noting that the Taliban have "dissociated themselves from the Chechen terrorists," Interfax reported. Meanwhile Russian Security Council Secretary Sergei Ivanov told Russian journalists in Moscow on 25 May that while Moscow reserves the right to undertake such attacks, it will do so only "as a last resort," if diplomatic moves and international sanctions against the Taliban prove ineffective. Meanwhile the Taliban have appealed to their adversaries of the Northern Alliance, headed by Ahmed Shah Massoud, to align against the Russians, whom they termed Afghanistan's "long-standing enemy," ITAR-TASS reported. LF

U.S. DAMPENS HOPES FOR BREAKTHROUGH ON ABM...

Speaking in Washington on 25 May, National Security Adviser Sandy Berger sounded a cautious note over President Bill Clinton's first summit meeting with his Russian counterpart, Putin, scheduled for early next month in Moscow. While some reports have suggested the two sides might be able to resolve ongoing differences over nuclear arsenals or U.S. plans to implement a limited national defense system, Berger commented that the summit is not the occasion to clear up those disputes, according to AP. Also on 25 May, Interfax quoted an unidentified senior U.S. official as saying that during U.S. Deputy Secretary of State Strobe Talbott's talks in Moscow earlier this week, the Russian side had "not expressed any desire" to comply with the U.S.'s proposal to change the 1972 Anti-Ballistic Missile treaty so that Washington can deploy its own defense system. JC

...WHILE MOSCOW STILL LOOKS TO START 3 FOR POSSIBLE COMPROMISE

Meanwhile, at a UN Conference on Disarmament in Geneva on 25 May, Vasilii Sidorov, Russia's envoy to that gathering, stressed Moscow's position that deeper cuts in nuclear arsenals under the START 3 treaty could be an part of an alternative to amending the ABM treaty. Rather than "destroying" that treaty to allow a U.S. national defense system, he said, Russia and the U.S. should cooperate to assess threats from so-called "rogue states." Moscow has proposed that under START 3, the two sides could cut the number of nuclear warheads to 1,500. The U.S. wants the two countries' arsenals to be between 2,000 and 2,500 warheads. JC

KREMLIN SAYS REGIONAL REFORM OF LAW ENFORCEMENT AGENCIES IN WORKS

In an interview with "Izvestiya" on 26 May, acting deputy head of the presidential administration Aleksandr Abramov said Russian law enforcement agencies will be restructured along the lines of the newly created seven federal districts. He noted, however, that the Interior Ministry and Tax Police are still discussing their plans in light of the recent announcement by Prosecutor-General Vladimir Ustinov that he will establish prosecutors' offices in each of the new seven districts (see "RFE/RL Newsline," 24 May 2000). Also on 26 May, Justice Minister Yurii Chaika announced that his ministry is creating new structures for the seven districts, and first deputy director of the Federal Tax Police Vladimir Avdiiskii announced that his agency will closely cooperate with the new presidential representatives to the regions, according to Interfax (see "RFE/RL Newsline," 25 May 2000). JAC

PUTIN REPORTEDLY SUPPORTS CREATION OF NEW STATE ORGAN...

After a meeting with various regional leaders and President Putin on 25 May, Yaroslavl Governor Anatolii Lisitsyn told reporters that the president has supported a proposal to continue discussing the principles for forming the Federation Council, Interfax reported. Putin also reportedly agreed that consideration of the bill that he submitted to the State Duma on the upper legislation chamber be postponed from 31 May to a later date. State Duma Chairman Gennadii Seleznev reported the same day that Putin supports the idea of creating a new body, called the State Council, that would advise the president (see "RFE/RL Russian Federation Report," 24 May 2000). According to the head of Lipetsk Oblast's legislature, Anatolii Savenkov, Putin favors life membership in the State Council for governors who have been elected twice (and are therefore ineligible for re-election). JAC

...AS GOVERNORS MAKE CREATIVE SUGGESTIONS

Ivanovo Governor Vladislav Tikhomirov said that Putin also agreed that membership in the State Council should include immunity from criminal prosecution, which Federation Council members currently possess. Tambov Governor Oleg Betin, who also attended the meeting with Putin, said that his fellow regional leaders expressed widely differing views on a variety of subjects. For example, Kursk Governor Aleksandr Rutskoi suggested that governors resign en masse so that Putin could then appoint governors by decree. However, Betin said that Putin rejected that suggestion, noting that polls show that 80 percent of Russians favor selecting their own regional leaders. JAC

KREMLIN OFFICIAL SEES MEDIA SITUATION AS PROBLEMATIC BUT NOT GLOOMY

Addressing the National Association of Television and Radio Broadcasters on 25 May, first deputy head of the presidential staff Igor Shabdurasulov predicted that relations between authorities and mass media "will not be unclouded and problem-free in the foreseeable future." Nevertheless, he insisted that "fears and gloomy anticipations are groundless" and that the situation around TV-Tsentr and Media-Most should not be assessed as a threat to democratic achievements. He did agree, however, that law enforcement agencies' actions against Media-Most were "disproportionate." Earlier this week, an anonymous source in the presidential administration told Interfax that neither President Putin nor his staff were informed in advance about the 11 May raid on the Moscow headquarters of the Media-Most Group. The source also expressed regret that the operation had not been carried out in a "more moderate fashion" (see "RFE/RL Newsline," 23 May 2000). JAC

MOSCOW NAMES SPECIAL ENVOY FOR CASPIAN

Russian Deputy Prime Minister Viktor Khristenko told the staff of the Fuel and Energy Ministry on 25 May that former minister Viktor Kalyuzhnyi has been appointed special envoy to the Caspian Sea region, Interfax reported. Echoing comments made by President Putin at a Security Council meeting last month (see "RFE/RL Newsline," 25 April 2000), Kalyuzhnyi called for a strengthening of Russia's role in that region. Also on 25 May, LUKoil and YUKOS representatives announced that Gazprom will join them as a member of the Caspian Oil Company, created to explore and develop oilfields in Russia's sector of the Caspian, "The Moscow Times" reported on 26 May. LF

ARE RUSSIAN GENERALS WINNING THE WAR FOR ETHIOPIA?

Based on information received from the Eritrean embassy in Moscow, "Izvestiya" on 26 May argued that Ethiopia's successes in the conflict with neighboring Eritrea can be attributed to the expertise being offered by Russian generals. According to the newspaper, Eritrean intelligence has confirmed that Russian generals are present at all meetings of the Ethiopian General Staff. And of the Russian experts currently in Addis Ababa, the newspaper added, those from the air force occupy a "special place." "Izvestiya" noted that both the Defense and Foreign Ministries have refused to comment on the matter. The Defense Ministry, for its part, confirms only that Russian military specialists--namely "instructors, experts, teachers"--are provided for in Russian-Ethiopian "military- technical' cooperation agreements. "Izvestiya" is owned by Vladimir Potanin's Interros Group and LUKoil. JC

KASYANOV FILLS SOME EMPTY SLOTS

Prime Minister Kasyanov on 25 May appointed Vladimir Malin chairman of the Federal Property Fund. Malin replaces Igor Shuvalov, who was recently appointed head of the government staff (see "RFE/RL Newsline," 19 May 2000). Kasyanov also named Yurii Medvedev first deputy property minister, replacing German Gref, who is now minister for economic development and trade. JAC




ARMENIAN NATIONALIST PARTY TURNS AGAINST LEADERSHIP

Addressing a congress of his National Accord party on 25 May, chairman Artashes Geghamian criticized the policies of Andranik Markarian's new government, arguing that far greater state involvement is needed to overcome Armenia's current economic crisis, RFE/RL's Yerevan bureau reported. "We still don't have a concept of national economic security or a foreign policy doctrine," he complained. But the congress did not discuss whether to vote no confidence in the new government next month. Geghamian had supported the previous government of Aram Sargsian, whose policies Markarian has pledged to continue. Geghamian had been considered a possible successor to Sargsian as premier (see "RFE/RL Newsline," 4 May 2000). "Azg" reported on 25 May that National Accord's partner in the Right and Accord parliament bloc, the Union for Constitutional Rights, is increasingly unhappy with Geghamian's attacks on the president and government. Right and Accord has seven parliament deputies. LF

ARMENIAN RIGHT-WING SEEKS SUPPORT IN SOUTH

Members of the recently created Union of Rightist Forces visited the southern region of Meghri on 23-24 May and appear to have tried to garner support from the local population by suggesting that, contrary to official disclaimers, the Armenian leadership is considering ceding that region to Azerbaijan in exchange for Nagorno-Karabakh, Armenpress and Noyan Tapan reported. Some residents, alarmed by that possibility, have reportedly left Meghri. Democratic Motherland chairman Petros Makeyan claimed that Premier Vazgen Sargsian and parliamentary speaker Karen Demirchian were killed in the 27 October parliament shootings because they opposed such a territorial exchange. A spokesman for President Robert Kocharian denied last week that Kocharian and his Azerbaijani counterpart, Heidar Aliev, had agreed to such an exchange of territory (see "RFE/RL Newsline," 19 May 2000). LF

U.S. BANK REJECTS ARMENIAN INVESTMENT PROPOSAL

The U.S. Exim Bank has rejected a request by General Motors for a $50 million loan to help finance the production of trucks and minibuses in Armenia, according to "Respublika Armeniya" of 25 May, as cited by Groong. General Motors had committed itself to that project in January1998. Exim Bank cited "economic instability" in Armenia as the reason for its decision. LF

AZERBAIJANI PRESIDENT VISITS GYANJA

President Aliyev traveled on 23-24 May to Gyanja, Azerbaijan's second-largest city, and to Shamkir, where he attended the opening of a hydro-electric power-station partly funded by the EBRD, Turan reported. In Gyanja, only 5,000 of whose 300,000 residents are employed, Aliyev discussed social and economic problems with city administrators. Aliyev stressed that foreign investment is needed to privatize the city's dormant industrial enterprises, including the aluminum plant, for which he said several foreign bids have been made. LF

GEORGIA AGAIN DENIES TALIBAN PRESENCE

Georgian Border Guard Commander Valerii Chkheizde on 25 May rejected as misinformation Russian media claims that Taliban mercenaries are waiting in Georgia to enter Chechnya, Caucasus Press reported. The Georgian Foreign Ministry had issued a similar denial two days earlier (see "RFE/RL Newsline," 24 May 2000). Speaking in Moscow on 25 May, however, Colonel General Valerii Manilov, who is first deputy chief of the Russian Army General Staff, told journalists that 1,500 men are concentrated in Georgia's largely Chechen-populated Pankisi gorge ready to enter Chechnya, Interfax reported. Manilov added that military defenses are being constructed in the gorge. LF

KAZAKH OPPOSITION, PRESS TARGETED FOR REPRISALS

Igor Poberezhskii, who is former Kazakh Premier Akezhan Kazhegeldin's press secretary, was stabbed and seriously wounded in Moscow on 25 May, RFE/RL's Kazakh Service reported. On 24 May, film-maker Rashid Nugmanov, a member of Kazhegeldin's Republican People's Party of Kazakhstan, was detained at Almaty airport on his arrival from France, where he has lived for the past seven years, and ordered to report to the Almaty tax police the following day. And on 25 May, police confiscated the entire 26 May print-run (53,000 copies) of the independent weekly "Nachnem s ponedelnika," together with documentation found during a search of the newspaper's Almaty editorial office. LF

KYRGYZSTAN DESIGNATES RUSSIAN 'STATE LANGUAGE'

The Legislative Assembly, the lower house of the bicameral parliament, has voted by 43 to two to pass legislation designating Russian an "official language" of the Kyrgyz Republic, RFE/RL's Bishkek bureau reported on 25 May. The law rules that Russian may be used alongside Kyrgyz, which remains the state language, in all spheres of life. Kyrgyz officials say the legislation is intended to stem the increasing emigration of Russians from Kyrgyzstan, where they currently account for approximately 14 percent of the population (see "RFE/RL Newsline," 22 May 2000). LF

DATE SET FOR KYRGYZ ROUNDTABLE

Presidential administration official Arslan Anarbekov told RFE/RL's Bishkek bureau on 25 May that the roundtable discussion between the Kyrgyz leadership and opposition has been scheduled for 3-4 June. He said seven issues are on the agenda, including the results of the February-March parliamentary elections, preparations for the presidential elections to be held later this year, press freedom and human rights, and the role and status of opposition and non-governmental organizations in the political process. LF

KYRGYZSTAN'S GUILD OF PRISONERS OF CONSCIENCE REFUSED REGISTRATION

Guild of Prisoners of Conscience Chairman Topchubek TurgunAliyev told RFE/RL's Bishkek bureau on 25 May that the Ministry of Justice has again refused to register that organization. The ministry claimed that no one is persecuted for political motives in Kyrgyzstan and therefore no one can qualify as a prisoner of conscience. The ministry had refused two weeks earlier to register the guild, which was founded in February and has some 100 members, on the grounds that the documentation it submitted contained errors. LF

TAJIKISTAN DENIES DIPLOMATS INVOLVED IN KAZAKH DRUGS SMUGGLING

Tajik Foreign Ministry official Igor Sattarov told journalists in Dushanbe on 25 May that employees of Tajikistan's Almaty embassy are not involved in drug- smuggling, Reuters reported. He blamed the recent discovery by Kazakh National Security Committee officials of almost 100 kilograms of heroin on the Tajik trade representative in Kazakhstan and a former driver for the Tajik embassy there, neither of whom has diplomatic immunity (see "RFE/RL Newsline," 23 and 24 May 2000) . LF

SECURITY OFFICIAL SAYS TAJIKISTAN COULD REPEL TALIBAN

Tajik Security Council Secretary Amirkul Azimov told ITAR-TASS in an exclusive interview on 25 May that his country's armed forces are "ready and capable to rebuff foreign aggression from any state, including Taliban fighters." A Taliban spokesman had threatened on 24 May that any Russian attack on Taliban bases in Afghanistan would trigger reprisals against Uzbekistan and Tajikistan, whose territory Russia would be constrained to use to launch such strikes (see "RFE/RL Newsline," 25 May 2000). LF

UZBEKISTAN DEFINES LIMITS TO MILITARY COOPERATION WITH RUSSIA

President Islam Karimov told the parliament on 25 May that Uzbekistan's army must be restructured to render it "compact and mobile," Interfax reported. He added that separate battalions will be created for each of the country's five military districts, according to "Nezavisimaya gazeta." Karimov told journalists later that day that Uzbekistan's armed forces are quite capable of defending the country, provided they receive the required military-technical assistance from Russia. He noted that such assistance is needed specifically to rebuild the country's fleet of helicopters. But at the same time Karimov emphasized that no Russian troops will be deployed on Uzbek territory, nor will Uzbek troops participate in hostilities outside Uzbekistan. That latter statement may have been intended to refute recent Russian media speculation that Uzbekistan may again accede to the CIS Collective Security Treaty. Tashkent failed to renew its participation in that treaty when it expired in April 1999. LF

UZBEK PRESIDENT PROPOSES BICAMERAL PARLIAMENT

Karimov on 25 May suggested to parliamentary deputies that the legislature be reformed to create a second, "professional" chamber that would meet more frequently than the existing parliament, which convenes only two-three times per year, Reuters reported. He explained that the new lower chamber would focus on passing legislation, while the upper house would represent the interests of the country's various regions. But he gave no hint of how or when the reform would take place. The present 250-deputy parliament was elected in December 1999 for a five-year period. LF




BELARUS PLANS TO HAVE SINGLE RUBLE EXCHANGE RATE THIS FALL

National Bank Deputy Chairman Mikalay Luzhin has said Belarus will achieve a single ruble exchange rate by the end of September, Belarusian Television reported on 25 May. "[The single rate] is required by economic interests in general, it is required by integration processes with Russia and, of course, it is also named as a condition in negotiations with international financial organizations," Luzhin noted. Currently the bank's exchange rate is 550 rubles to $1, while the street rate stands at 970 rubles. Belarusian exporters are obliged to sell 30 percent of their hard currency revenues to the central bank at its official exchange rate. Luzhin denied reports in some Russian media that Russia's Central Bank has agreed to lend $200 million to Belarus to stabilize its currency (see "RFE/RL Newsline," 24 May 2000). JM

WHEREABOUTS OF DISAPPEARED BELARUSIAN OPPOSITIONISTS UNKNOWN

Prosecutor General Aleh Bazhelka told journalists on 25 May that investigators have no information about the whereabouts of former Interior Minister Yury Zakharanka, former Deputy Prime Minister Viktar Hanchar, and Anatol Krasouski, who disappeared in 1999, Belarusian Television reported. Bazhelka also said that official expertise has confirmed that it was former National Bank Chairwoman Tamara Vinnikava who had called Belarus last year after her disappearance from house arrest (see "RFE/RL Poland, Belarus, and Ukraine Report," 21 December 1999). He added that her whereabouts are also unknown. Bazhelka announced that it is not ruled out that the Prosecutor-General's Office will appeal the verdict on former Premier Mikhail Chyhir (see "RFE/RL Newsline," 19 May 2000), adding that investigators are now working on different "episodes of Chyhir's illegal activity" from those examined by court. JM

UKRAINE TO DESTROY ALL STRATEGIC BOMBERS BY END OF 2001

Defense Ministry official Volodymyr Shapovalov told Interfax on 25 May that Ukraine will dismantle its last 15 Soviet-era strategic bombers and 354 cruise missiles by the end of 2001. Shapovalov added that Kyiv will also destroy five Tu-95 aircraft that Russia had sent to Ukraine for repairs but failed to pay for that service. According to Shapovalov, Ukraine will sign an agreement with two U.S. companies in May on destroying 46 SS-24 intercontinental missiles and their launching complexes by the end of 2005. "The U.S. government guarantees sponsorship of all work until the end regardless of their duration," Shapovalov noted. JM

CONCERNS REMAIN OVER DISMISSAL OF CRIMEAN GOVERNMENT

Ukraine's First Deputy Premier Yuriy Yekhanurov on 25 May said the Crimean legislature's ouster of the Crimean cabinet (see "RFE/RL Newsline," 25 May 2000) will destabilize the situation on the peninsula, Interfax reported. "The economy is improving and positive trends are increasing, so the tension that took place [in Crimea] is quite absurd," Yekhanurov commented. Presidential administration staff chief Volodymyr Lytvyn said the same day that President Leonid Kuchma has every reason "to cancel" the ouster of Serhiy Kunitsyn's cabinet. Kunitsyn said the legislature dismissed him to protect patrons in the peninsula' energy sector from an anti-corruption drive he had launched. He noted that there "were no economic arguments" against his government, adding that it had spurred industrial growth early this year and reduced its debt to public sector workers, AP reported. JM

'VILNIUS STATEMENT' HAILED BY NATO MEMBERS

Officials from NATO and member countries hailed the so-called "Vilnius declaration" made by countries reaffirming their commitment to join NATO (see "RFE/RL Newsline," 22 May 2000). A communique issued at the 24-25 May meeting of the North Atlantic Council in Florence confirmed that "the alliance expects to extend further invitations in coming years to countries willing and able to assume the responsibilities and obligations or membership and [if] NATO determines that their inclusion would serve the overall political and strategic interests of the alliance and enhance overall European security and stability," BNS reported. The Vilnius statement was also praised by U.S. Secretary of State Madeleine Albright, German Foreign Minister Joschka Fischer, and others. MH

MANAGER OF FAILED ESTONIAN BANK CONVICTED

Malle Eenmaa, manager of the now-defunct Maapank, was convicted by a Tallinn city court on 24 May and sentenced to 18 months in prison, ETA reported. Eenmaa was accused by prosecutors of misusing deposited funds. The court also ordered Eenmaa to pay 29.5 million kroons ($1.72 million) in damages resulting from the bank's 1998 crash (see "RFE/RL Newsline," 26 August 1998). Eenmaa denies the charges and plans to appeal. MH

ACCUSED LATVIAN WAR CRIMINAL TO ANNUL CITIZENSHIP

Vasilii Kononov has expressed his wish to renounce his Latvian citizenship, LETA reported on 25 May, citing the Russian- language daily "Chas." An official from the Citizenship and Migration Department said that his request, received on 23 May, would follow normal procedures, which means Kononov's Latvian citizenship could be annulled by fall. Kononov requested and received Russian citizenship last month. His appeal is currently pending further legal inquiries by the court (see "RFE/RL Newsline," 26 April 2000). MH

RUSSIA'S ROAD TO WTO PASSES THROUGH LATVIA

Officials from Russia and Latvia met in Geneva on 24 May to discuss trade issues that have a bearing on Russia's bid to become a member of the World Trade Organization (WTO), LETA reported. Latvia, which is already a WTO member, is interested in Russia's revoking various decisions and policies viewed as discriminatory, such as deeming some Latvian banks to be offshore. MH

POLISH PREMIER TO ACCEPT 'ANY RESOLUTION' OF COALITION CRISIS

Jerzy Buzek on 25 May said he is ready "to work on any resolution" of the current standoff between the Solidarity Electoral Action (AWS) and the Freedom Union (UW), PAP reported. "It is normal in a democracy to change not only ministers but also premiers. Our democracy is stable and such changes do not generate threats to the country," Buzek noted. According to AWS lawmaker Jan Maria Rokita, the AWS Presidium has agreed to discuss with the UW a new government lineup. Rokita added, however, that the withdrawal of UW ministers from the cabinet, as threatened by the UW earlier this week, cannot be ruled out. AWS leader Marian Krzaklewski and UW leader Leszek Balcerowicz met late on 25 May, but no details of their meeting have been made known. Former Solidarity leader Lech Walesa on 26 May urged Krzaklewski to head the government. JM

IRELAND PLEDGES SUPPORT FOR POLAND'S EU BID

Irish Prime Minister Bertie Ahern said in Warsaw on 25 May that Ireland will do everything possible to help Poland join the EU, PAP reported. According to him, 51 percent of the Irish people support Poland's EU accession. Ahern added that Ireland can help Poland modernize its agricultural sector. Polish Premier Jerzy Buzek noted that Poland will need 15 years to upgrade its agriculture to Western standards. Buzek also said Poland is hoping for larger Irish investment, particularly in food processing and the railways. Last year's Irish investments in Poland totaled nearly $1 billion. JM

CZECH LOWER HOUSE APPROVES CONSTITUTIONAL AMENDMENT...

The Chamber of Deputies on 25 May approved an amendment to the constitution making it possible for the government to decide whether to send troops abroad or to allow foreign troops to be deployed in the Czech Republic. Until now, that prerogative has belonged to the legislature alone. The amendment was necessary to expedite compliance with obligations arising from NATO membership and participation in peace-keeping missions abroad. The vote was 149 for and 21 against. The amendment has yet to be approved by the Senate, CTK and AP reported. MS

...AMENDS LAW ON POLITICAL PARTIES' FINANCING

Legislators also approved a government-sponsored bill making the funding of political parties more transparent, CTK reported. Under the amended law, a political party cannot receive donations exceeding 40 million crowns ($1 million) a year. Annual membership fees cannot exceed 50,000 crowns. Those individuals sponsoring a political party may receive tax breaks but state-owned companies, subsidized organizations, municipalities, professional associations and non- governmental organizations cannot be such sponsors. The Senate has still to approve the legislation. MS

CZECHS SPLIT OVER SALE OF 'MEIN KAMPF'

Thirty-nine percent of Czechs are opposed to the sale of a Czech-language edition of Adolf Hitler's "Mein Kampf" while 30 percent do not mind its being available on the free market, CTK reported on 25 May, citing a poll conducted by the IVVM Institute. Thirty- one percent had no opinion on the matter. Among those approving the sale, 49 percent said they oppose any censorship, while 28 percent said they believe that the book provides a lesson about the dangers of Nazism and 12 percent said the book "is part of history." Four percent of those opposed were of the opinion that a ban would increase interest in the book. MS

SLOVAKIA SATISFIED WITH EU NEGOTIATIONS...

Deputy Foreign Minister Jan Figel on 25 May said that together with Malta, Slovakia has advanced to the top of the "second group" of EU candidates, following talks in Brussels on the first chapters of the aquis communautaire, CTK reported. Slovakia and Malta have now closed six chapters; Romania, Latvia, and Lithuania five; and Bulgaria four. Slovakia the same day submitted to the EU documents on five more chapters. Figel said his country is not asking for any transition periods and that Bratislava hopes that by the end of 2000, it will have concluded negotiations on 15 chapters, which amount to "about half of the agenda." MS

...BUT OPPOSITION DEMANDS EARLY ELECTIONS

The opposition Movement for a Democratic Slovakia (HZDS) on 25 May renewed protest demonstrations, calling for early elections and protesting against the alleged police mishandling of its leader, Vladimir Meciar. Demonstrations were held in several towns, and Meciar and other HZDS leaders took part. One HZDS leader, Sergej Kozlik, told demonstrators in Kosice that his party will hand President Rudolf Schuster a petition in August supporting a referendum on early elections. He said the document will contain more than 700,000 signatures--twice the amount required for such a plebiscite, CTK reported. MS

FIDESZ MP SEEKS TO AMEND HUNGARIAN MEDIA ACT

FIDESZ deputy Szilard Sasvari, who is also chairman of the parliament's Cultural Committee, has submitted a motion to amend the Media Act. His proposal would allow all parliamentary groups to delegate a member to public media boards of trustees, based on the model of the National Radio and Television Board. Opposition Free Democrat Ivan Peto proposed instead that board appointments be split equally between coalition parties and the opposition. Sasvari's motion is an attempt to solve a recent crisis that emerged after the parliament's February vote in favor of media boards of trustees that consist solely of representatives of governing parties. MSZ




MILOSEVIC SHUTS UNIVERSITIES

The Serbian Education Ministry on 25 May ordered all universities to close the following day, which is one week before the scheduled end of the semester. The ministry's decree added that "students will be allowed to enter schools only on the day of their exams and will not be able to use libraries," Reuters reported. The decree added that "there must be no gatherings or demonstrations at the faculties," AP reported. The opposition Democratic Party said in a statement that the universities have become "forbidden zones." The decree comes on the eve of a planned student strike against the rule of Yugoslav President Slobodan Milosevic. Observers suggest the decree indicates that the regime is worried about the growing influence of the Otpor (Resistance) student movement. Unlike the fractious parties of the opposition, Otpor has a broad membership and does not have any highly visible, egotistical leaders. PM

PROTESTS CONTINUE IN SERBIA

Some 2,000 persons attended a rally in Belgrade on 25 May, which is the ninth straight day of small protests following the regime's crackdown on non- state electronic media. In Nis, some 2,000 students marched on the police station to protest the government's latest moves against Otpor. PM

SERBIA TO ORDER DEATH PENALTY FOR 'TERRORISM'?

Serbian Deputy Prime Minister Vojislav Seselj told a Belgrade news conference on 25 May that "anyone carrying out terrorist actions and killing our citizens upon an American order should face death penalty, as well as those who are kidnapping our people," Reuters reported. Yugoslav Deputy Prime Minister Nikola Sainovic, who is an indicted war criminal, called for improved efforts against "terrorism" and noted that a new law to that effect will be ready "within days," "Danas" reported. He added that the law will not apply to Montenegro because the Montenegrin government "openly supports those who carry out terrorism in Serbia," "Blic" reported. The Belgrade regime recently accused Otpor of "terrorism" and routinely calls Kosovar activists "terrorists." PM

CLINTON KEEPS SANCTIONS ON BELGRADE

U.S. President Bill Clinton extended for an additional six months the sanctions first imposed on Milosevic's Yugoslavia in April 1999. Clinton said in documents sent to Congress on 25 May: "This situation [presented by Milosevic's policies] continues to pose a continuing and unusual and extraordinary threat to the national security, foreign policy interests, and the economy of the United States," Reuters reported. The sanctions ban the import of Yugoslav goods to the U.S. and export of U.S. goods to that country. Most medicines and agricultural products are excepted. PM

HAGUE COURT CALLS SERBIAN LETTER 'PARANOID'

Graham Blewitt, who is a deputy prosecutor at the Hague-based war crimes tribunal, said on 25 May that an inflammatory letter from a Serbian minister to Chief Prosecutor Carla Del Ponte "is a sign of paranoia coming out of Belgrade," Reuters reported (see "RFE/RL Newsline," 25 May 2000). Blewitt added that "the fact the prosecutor has not received the letter, I think, is an indication that it's part of a disinformation campaign, and I expect we'll see more of this in coming weeks and months." PM

SERB SENTENCED IN MITROVICA

Swedish judge Christer Karphammer sentenced Nebojsa Mutavdzic to six months imprisonment for setting fire to the abandoned house of an ethnic Albanian in 1999. Mutavdzic had pleaded guilty, saying that he was drunk at the time and that three Albanians had provoked him. The judge ordered him released because he has already spent almost 10 months in prison awaiting trial. This is the first trial held in the divided city since NATO took control in 1999. PM

DJUKANOVIC WANTS MORE ACTION FROM INTERNATIONAL COMMUNITY

Montenegrin President Milo Djukanovic said in Sveti Stefan on 25 May that "unlike in Bosnia and [Kosova]...the international community must use preemptive diplomacy and other security measures to prevent another conflict.... As long as Milosevic is in power, we have to be concerned for peace and stability not only in Montenegro but in the region as well," AP reported. Elsewhere, Djukanovic said that he regrets that some unnamed members of the Serbian opposition are not willing to treat Montenegro as an equal partner in the Yugoslav federation, "Vesti" reported. Montenegro's population is roughly one-tenth that of Serbia. PM

MESIC: CROATIAN INTELLIGENCE SERVICES TO BE MORE PROFESSIONAL

Croatian President Stipe Mesic told RFE/RL's South Slavic Service on 25 May that the intelligence services will soon be reorganized (see "RFE/RL Newsline," 25 May 2000). Their staffs will be reduced and their new managers appointed for their professional qualifications rather than political loyalties. Prime Minister Ivica Racan said that the Croatian Intelligence Service "was a center of political power" under the late President Franjo Tudjman, "Vecernji list" reported. PM

TWO CROATIAN NCOS INDICTED FOR ANTI-SERB INCIDENT

The district attorney's office in Karlovac on 24 May indicted two of five non-commissioned officers who recently destroyed an anti-fascist World War II monument in the mainly Serbian village of Veljun near Slunj in the Kordun area (see "RFE/RL Newsline," 19 May 2000). If convicted, the men could face three months in prison or the loss of 100 days' pay. The district attorney ruled that there is not sufficient evidence to indict the other three men. PM

COURT INVESTIGATES CROATIAN TYCOON

The Zagreb county court began a criminal investigation on 24 May of Josip Gucic, his son Zvonimir, and five of their associates, AP reported. They are suspected of embezzling some $24 million from the NIK textile company. The elder Gucic owns more than 25 companies in his Gucic Group. He is in Germany, allegedly for medical treatment. Scarcely a day passes in Croatia without new revelations in the media of scandals involving persons close to, or who grew rich during the rule of, the Croatian Democratic Community. PM

TWO KILLED, NINE WOUNDED IN CROATIAN GRENADE INCIDENT

A 25- year-old veteran of the 1991-1995 independence war pulled the pins on two hand grenades in a post office in Vinkovci on 25 May, killing himself and a postal clerk. Police are investigating the incident. PM

PETRITSCH WARNS BOSNIANS: SHAPE UP OR LOSE AID

Wolfgang Petritsch, who is the international community's high representative in Bosnia, said in Sarajevo on 25 May that foreign donors' patience is running out with Bosnia because of local officials' failure to enact major reforms. "You need to understand that many people in other countries that are financing [Bosnian reconstruction efforts] have their own problems and they don't want to be bothered with your problems. If they do not see that there is progress in this country then they will put pressure on their politicians to stop the support for Bosnia-Herzegovina," AP reported. Petritsch added that it "is now known all over the world that the politicians here in Bosnia-Herzegovina are doing a lousy job." He stressed that he has not hesitated to use his powers in the past and will not hesitate to do so in the future. He recently sacked 22 officials whom he said were obstructing the implementation of the Dayton peace agreement. PM

MUSLIM PARTY STRIPS GANIC OF MEMBERSHIP

The Party of Democratic Action (SDA) has expelled from its ranks Ejup Ganic, who has been one of the leading Bosnian Muslim politicians for the past decade. The move comes following Ganic's refusal to resign the post of president of the mainly Muslim and Croatian federation, despite the SDA's recent vote of no confidence in him. Party officials blame him and five other politicians for the SDA's poor showing in the April local elections. PM

ROMANIAN PREMIER SEEKS BETTER RATING FOR HIS COUNTRY

Prime Minister Mugur Isarescu met with officials from the Thompson Bank Watch and Standard & Poor's on 25 May to seek an improvement of Romania's country risk status, an RFE/RL correspondent in New York reported. Standard & Poor's officials promised to send a fact-finding team to Romania. Meanwhile, the chairwoman of Sovinvest, the company administering the failing National Investment Fund, , has resigned citing health grounds. Ioana Maria Vlas went into hiding when police opened an investigation into the fund's administration. Also on 26 May, the country's two leading trade unions, the National Sindicate Bloc and Fratia, announced they will set up a joint trade union confederation "of a social democratic orientation." MS

ROMANIAN PROSECUTORS QUESTION FORMER OFFICIALS

Mircea Cosea and Floring Georgescu, former ministers in Nicolae Vacaroiu's cabinet, were questioned on 26 May by Romanian prosecutors about their ties to Adrian Costea in the money-laundering affair, RFE/RL's Bucharest bureau reported. Cosea, now a deputy chairman of the Union of Rightist Forces, told the prosecutors he knows nothing about either the circumstances of an oil supplies deal cut by companies headed by Costea or the contract under which Costea received money to pay for a photo-album on Romania. Cosea admitted that Costea had paid for three of the former minister's trips to and vacations in France. Georgescu said he "knows nothing" about Costea's commercial affairs and that he was never involved in the deal on oil deliveries. The media speculate that those deliveries were destined for Yugoslavia in violation of the embargo imposed on that country. MS

BULGARIA GETS HIGH IMF MARKS

IMF First Deputy Managing Director Stanley Fischer said in Sofia on 25 May that the fund may soon sign a new stand-by agreement with Bulgaria, AP and Reuters reported. Fischer said that if Bulgaria continues "behaving like an exemplary member of the fund," it is "possible to consider signing a new three-year agreement." In 1998, the IMF approved a $840 million loan for Bulgaria. Fischer said that "serious reforms always take several years to bear fruit" and that since Bulgaria may register a growth of about 4 percent this year, 2000 may be "just that year." MS

BULGARIANS REACT DIPLOMATICALLY TO RUSSIAN OBJECTIONS

"Bulgaria highly values Russia's respect of its sovereign right to choose the best guarantees for its own national security," Deputy Foreign Minister Marin Raikov told journalists on 25 May. Raikov was responding to a statement by Russian First Deputy Foreign Minister Aleksandr Avdeev, who had said in Sofia that his country views "skeptically" the declarations adopted by nine East Central European countries-- among them Bulgaria--in Vilnius last week asking NATO to invite them to become members (see above). Also on 25 May, Gazprom chief Rem Vyakhirev told Prime Minister Ivan Kostov in Sofia that his company rejects Bulgarian demands that the price of gas deliveries be lowered, Reuters reported. MS




SHIFTING THE BALANCE IN CENTRAL ASIA


By Paul Goble

Iran's new efforts to close its border with Afghanistan appear likely not only to shift the balance of power within and among the countries of Central Asia but also to transform the ties these states have with the Russian Federation and the U.S.

If Tehran is successful in blocking the flow of drugs and refugees from Afghanistan into Iran, even more of these two destabilizing forces are likely to flow into the post-Soviet Central Asian states. And such flows are likely to prompt governments there to crack down on their own societies, to tighten security among these states, and to turn to those outside governments ready and willing to help them do so.

Those moves, in turn, will transform the geopolitics of the region, especially since both Moscow and Washington have an interest in providing drug interdiction technology--the former in order to expand Russian influence in the region and the latter to prevent the flow of Afghan-produced drugs to Western Europe and the U.S.

All three of these converging moves--Iran's decision, Central Asian concerns about border security, and the geopolitical competition between Russia and the U.S.--have been very much on public view so far this year.

Last week, the Iranian parliament allocated $116 million to increase security along its border with Afghanistan. The lawmakers took this step both to reduce the number of refugees from the Taliban regime and to block the flow of drugs from Afghanistan into Iran.

Tehran has accused Afghanistan of smuggling two- thirds of its annual drug production of 3,000 tons into Iran both to develop an Iranian market and to use that country as a trans-shipment point to Europe. And its politicians have suggested, in the words of one, that this drug trafficking has "driven the eastern Iranian provinces into a state of chaos."

Earlier Iranian efforts to block the border have failed because of a shortage of funds and the corruption inevitably accompanying the drug traffic. But Tehran now has more funds available, having received a World Bank loan last week over the objections of the U.S. Moreover, it has compelling domestic and foreign policy reasons for preventing the influx of drugs.

Domestically, the Iranian authorities must contend with up to 3 million drug users and the social and medical problems they present. And for foreign policy reasons, an Iran actively fighting drugs is likely to receive more international support, especially in Western Europe.

But if Iran is successful, the drugs will still continue to be produced and shipped out, most likely via the still weak states of Central Asia. In recent months and weeks, these countries have begun to step up border security, after a decade in which both regional leaders and major outside powers pressured them to keep the borders as open as possible to promote cooperation.

As a result of such pressure, most of the frontiers between these states remain extremely weak. And a new flood of drugs and refugees would almost certainly overwhelm those countries, especially because of the corruption among local officials that would almost certainly follow. That pattern almost certainly will pit each of these countries against the others as they scramble to defend themselves.

The most immediate consequence, however, is that the governments there will use the fight against the drug trade and refugees--what some are already calling "Narco-Islam"--to justify ever more repressive policies, an approach that some governments beyond the region may find convincing but one that could leave these regimes even weaker than they are today.

During his visit to Uzbekistan and Turkmenistan last week, Russian President Vladimir Putin played to the fears of local leaders over Afghanistan to try to win their support for a special Russian role in the region. Arguing that "a threat to Uzbekistan is a threat to Russia," Putin promised to do whatever was necessary to block ideological and criminal influences coming from the south--including unspecified "preventive actions."

Putin's remarks were obviously keyed to local concern about the influence of the Taliban. But he also pointedly noted that "there have been attempts to redivide criminal spheres within the post-Soviet space using extremism and international terrorism," terms used to apply to the drug trade and the criminal structures that it supports and spawns.

Meanwhile, the U.S. has also demonstrated its interest in combating any expanded flow of drugs northward through Central Asia. In the last two months, Washington has sent the CIA director, the FBI director, and Secretary of State Madeleine Albright to the region both to reaffirm U.S. interest in Central Asia and to stress its nervousness about the spillover of Afghan events there.

These three actions to combat the Afghan-originated drug trade by Iran, Central Asian governments, Moscow, and Washington simultaneously break down existing alliances and create new ones as all these countries try to figure out how to address the interrelated problems of drugs and crime originating in Afghanistan.

At the very least, the fight against the drug trade may, like politics, create some very strange bedfellows. More likely, it will lead to a fundamental rearrangement of the geopolitics of Central Asia and the broader world.


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