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Newsline - July 31, 2001




RUSSIAN ECONOMY IN FIRST HALF OF YEAR PERFORMS BETTER THAN EXPECTED

Russia's economic indicators for the first six months of 2001 were even more favorable than optimists had originally forecast, according to Vladimir Mau, the head of the Economic Reform Center Under the Russian Government, Interfax reported on 30 July. For example, the state budget surplus, excluding the costs of debt servicing, reached 154 billion rubles ($5.3 billion) during that period, or about 4 percent of GNP. State revenues amounted to 713 billion rubles ($24.5 billion), or about 18 percent of GNP. According to the State Statistics Committee the same day, the volume of industrial production increased 5.5 percent during the first half of the year compared to the same period last year. However, measured in absolute figures, the volume of Russia's industrial output in 2000 remained 43.2% lower than in 1989, Mau noted. VY/JAC

BEREZOVSKY TRANSFERS TV-6 TO MEDIA-MOST...

Boris Berezovsky told reporters in Paris on 30 July that shareholders in TV-6 have transferred management of that station to Vladimir Gusinsky's Media-MOST group, Russian agencies reported. Yevgenii Kiselev, TV-6's general director, will represent the group's interests at the station. In an interview with "Kommersant-Daily" on 30 July, Kiselev said that former ORT anchorman Sergei Dorenko, who is considered a protege of Berezovsky, may come to work at TV-6. According to Kiselev, "Dorenko is a star of the first order and one [should] not throw such people away." Kiselev denied that TV-6 will become a political weapon in the hands of Berezovsky, asserting that the "primitive myth" that Berezovsky is a "mercenary, evil oligarch" is a "caricature of Berezovsky -- far from reality." JAC

...AS FORMER NTV TEAM LOSES ANOTHER COURT CASE

Also on 30 July, a Moscow city court threw out an appeal by former NTV General Director Kiselev and other former members of NTV's board. Kiselev's appeal challenged an earlier decision by a lower court that allowed an NTV shareholders meeting to take place on 3 April. That meeting resulted in sweeping changes, including the replacement of Kiselev with U.S.-born financier Boris Jordan (see "RFE/RL Newsline," 4 April 2001). According to "Kommersant-Daily" on 31 July, Media-MOST on 2 August will challenge a Moscow arbitration court decision of 29 May that approved the liquidation of Media-MOST in a federal arbitration court (see "RFE/RL Newsline," 30 May 2001). But the company's chances of winning are considered slim. JAC

PUTIN'S PLANS SUGGEST THAT CIS IS A LESS THAN VITAL INSTITUTION?

Deputy presidential Chief of Staff Sergei Prikhodko said that Russian President Vladimir Putin does not expect "any breakthroughs or agreements" from the informal meeting of the heads of CIS states to be held in Sochi on 1-2 August, Interfax reported on 30 July. VY

MILITARY, MEDIA REACT TO NEW NAVAL POLICY

Speaking at the ceremony on 29 July marking Russian Navy Day in Vladivostok, Defense Minister Sergei Ivanov said he will do "everything he can to restore the Russian Pacific Fleet" from its current sorry state, RIA-Novosti reported. The same day, "Izvestiya" reported that in order to implement the naval doctrine approved by Putin last week (see "RFE/RL Newsline," 30 July 2001), Russia must find funds for about 300-320 modern warships, including 95 submarines and up to 95-100 large surface ships it will need over the next 15 years. Meanwhile, the commander in chief of the navy, Vladimir Kuroyedov, said three main entities will be responsible for implementation of the doctrine: the navy, the coast guard of the Federal Border Service, and the merchant fleet. VY

PROSECUTION WITNESS ADMITS SUTYAGIN DID NOT PROVIDE STATE SECRETS

At the closed trial of academic Igor Sutyagin in Kaluga Oblast, witness for the prosecution Colonel Sergei Koshelev said that, in the opinion of the Defense Ministry, Sutyagin damaged Russia's security "by trading information about its weapons to foreign countries," Interfax reported on 30 July. In a vague statement, Koshelev noted that although "the information supplied by the defendant to foreign countries did not contain secrets," it provided insight into the army's combat readiness. VY

ABRAMOVICH SLATED FOR SPOT ON AEROFLOT BOARD?

In advance of a shareholders meeting on 6 September, Aeroflot's board of directors held a secret meeting on 30 July, "Kommersant-Daily" reported the next day. Executive Secretary of the Board Anatolii Brylov told the daily that results of the session will be made public only in a special press release; however, the daily reported without providing a source that the meeting was convened in part to discuss a list of nominees for the new board, including Chukotka Autonomous Okrug Governor Roman Abramovich. According to the daily, Abramovich declined to comment on the report. JAC

GOVERNOR PRUSAK TOUTED AS KASYANOV REPLACEMENT

"Novaya gazeta" in its issue dated 30 July, citing an unidentified Kremlin source, reported that President Putin plans to put a new team in charge of the country's economic levers this fall. In addition, the weekly reported that a leading candidate to replace Prime Minister Mikhail Kasyanov is Novgorod Governor Mikhail Prusak. According to the weekly, Prusak is a "compromise figure" because he has great authority among the "'Leningrad team' and liberals." Prusak would also reportedly be appealing to the West because he has participated in the Council of Europe for the past five years as a representative for Russia. The weekly also suggested that the presidential envoy to the Volga federal district, Sergei Kirienko, is another strong candidate to be prime minister, a post he occupied briefly under then-President Boris Yeltsin, but the main role of actually forming the new government will be given to veterans from the Federal Security Service and Foreign Intelligence Service. JAC

CIVIL SERVICE REFORMS EXPECTED NEXT MONTH

"Nezavisimaya gazeta" reported on 28 July that the deputy head of the presidential administration, Dmitrii Medvedev, will soon present his proposals for reforming Russia's civil service. According to the daily, the cost of the reforms needs to be finalized and included in next year's budget before it is submitted to the Duma. ITAR-TASS reported earlier that the budget will be sent to the Duma by 15 August (see "RFE/RL Russian Political Weekly," 23 July 2001). An expected feature of Medvedev's plan is raising the status of state sector health-care workers and teachers to that of federal civil servants. JAC

RED GOVERNOR SUSPENDS PARTY MEMBERSHIP...

The governor-elect of Nizhnii Novgorod, Gennadii Khodyrev, announced on 30 July that he will suspend his membership in the Communist Party while he is governor. Khodyrev said that he believes this step will help consolidate the economic and political forces in the region. Presidential envoy to the Volga federal district Kirienko responded positively to Khodyrev's gesture, declaring that he is willing to cooperate with the new governor. Kirienko was widely seen as supporting incumbent Governor Ivan Sklyarov. Former Nizhnii Novgorod Governor Boris Nemtsov, who is currently the leader of the Union of Rightist Forces, also declared the willingness of his party to support Khodyrev. JAC

...AND REACHES UNDERSTANDING WITH KIRIENKO?

According to RFE/RL political analyst Mikhail Sokolov, Khodyrev is not a typical Communist, and on a number of issues is "simply a technocrat." As well as being a former obkom first secretary, Khodyrev is also the former director of a local enterprise in the oblast and is well acquainted with the region's particularities. According to Sokolov on 30 July, Khodyrev promised Kirienko that he will not undertake a massive purge of the local government ranks and will retain former Kirienko aide Sergei Obozov as head of the oblast's government (see "RFE/RL Russian Federation Report," 18 July 2001). JAC

NEW RUSSIAN AMBASSADOR IN TEHRAN PROMISES COORDINATED EFFORT IN THE CASPIAN

The newly appointed Russian ambassador to Iran, Aleksandr Maryasov, said on 30 July that Moscow and Tehran have "similar attitudes" on basic foreign policy issues, such as the problems of the Caspian region and bilateral relations, RIA-Novosti reported on 30 July. In addition, he pledged that Iran and Russia will coordinate their policies in Central Asia and the Persian Gulf. VY

LIBYA SAID TO BE INTERESTED IN RUSSIAN PLANES

A spokesman for the Ulyanovsk-based aviation company, Aviastar-SP, which produces the Tupolev-204 medium-haul passenger airplanes, has announced that it is negotiating the sale of at least four such aircraft to Libyan Arab Airlines, RIA-Novosti reported on 30 July. The spokesman added that Libya also wants to send its pilots to Ulyanovsk for training. VY

BAGHDAD WANTS TO BOOST COMMERCIAL CONTACTS WITH RUSSIA

Iraqi government spokesman Faiz Shakhin announced on 30 July at the Vienna headquarters of the Organization for Petroleum Exporting Countries (OPEC) that his government would like to ink new contracts with Russian oil companies, thus rewarding "Moscow's positive role in the failure of the 'smart sanctions' proposed by the U.S.A. and Britain," RIA-Novosti reported. VY

GRYZLOV NAMES NEW HEADS FOR FEDERAL DISTRICTS

Interior Minister Boris Gryzlov announced on 30 July that President Putin has appointed the chief of Perm Oblast's Interior Ministry Directorate, Yurii Skvordin, as the head of the ministry's directorate for the Siberian federal district. In addition, the head of the Khabarovsk Interior Ministry Directorate, Anatolii Zolotarev, will now head the ministry's directorate in the Far Eastern federal district, Interfax reported. Gryzlov also revealed that one reform his agency will undertake will be to make the selection of new officers competitive, rather than continuing with the "routine recruiting" that is done today. VY

MOSCOW TOP COP KILLS HIMSELF

Sergei Kozarev, the mayor of the Moscow police, jumped off of a bridge in central Moscow on 30 July, killing himself instantly, Ekho Moskvy radio reported. The reason for his suicide has not yet been made clear, according to the station. Last week, Interior Minister Gryzlov said the Moscow police subordinate to his agency have been doing a bad job, as criminal groups are flourishing in Russia's capital city (see "RFE/RL Newsline," 27 July 2001. JAC

GOVERNMENT LAUNCHES NEW INFORMATION PORTAL

As part of its cooperation with the World Bank under the program, "Electronic Russia," the federal government has launched a major new information server and search engine called the Russian Development Portal, ITAR-TASS reported on July 30. The portal -- which can be found at http://www.russia-gateway.ru -- has 27 different sections as well as powerful Russian- and English-language search engines. VY

TRUST IN BANKING SYSTEM CONTINUES TO GROW?

The number of deposits by Russian individuals into Russian banks in both ruble and dollar bank accounts grew by 17.4 percent, or 543 billion rubles ($18.5 billion) as of 1 June compared with the beginning of the year, ITAR-TASS reported on 30 July, citing Goskomstat. In Sberbank, deposits into foreign currency accounts grew at a somewhat faster rate of 21.8 percent compared with 15.3 percent for ruble accounts. JAC

GOVERNMENT NAMES NEW ENVOY TO THE COURTS

Prime Minister Kasyanov signed an order on 30 July naming Mikhail Barshchevskii as the government's representative at the constitutional, supreme, and higher arbitration courts, Interfax reported. JAC

MANILOV LANDS NEW JOB AS LEGISLATOR

Primorskii Krai Governor Sergei Darkin confirmed on 30 July that he will nominate Colonel General Valerii Manilov, the former first deputy head of the armed forces' General Staff, as his administration's representative in the Federation Council (see "RFE/RL Newsline," 16 July 2001). Ren-TV reported without citing a source that the Kremlin "found" the position for Manilov, and presidential envoy to the Far Eastern federal district Konstantin Pulikovskii was heavily involved in the process. Pulikovskii was a commander in Chechnya in 1996 , and Manilov once acted as one of the Defense Ministry's spokesmen for Chechnya policy. JAC

SALVATION ARMY WILL CHALLENGE COURT-ORDERED CLOSURE

The Moscow division of the charitable and religious organization Salvation Army will ask the Russian Constitutional Court to probe the legality of the regulation under which authorities can decline to reregister religious organizations on the basis of their formal title, attorneys for the organization told RFE/RL on 30 July. Moscow authorities last year refused to reregister the Salvation Army, which already has missions in 16 Russian cities, under the pretext that "it is a military organization." VY

CHURCH OFFICIAL'S POSITION ON CHECHNYA NOT 'POLITICALLY CORRECT'

In an interview with "Novaya gazeta" on 30 July, Father Vsevolod Chaplin, an official representative of the Moscow Patriarchate, said that the Russian Orthodox Church does not protest against the Chechen war because it considers the "integrity of the state" no less important than the value of the human life. He added that his statement might not be "politically correct and humanistic," but the church does not follow such guidelines. Chaplin dismissed as "myths" widely circulated reports that many Orthodox clerics collaborated with the KGB during the Soviet era. VY

CHECHEN ADMINISTRATION CHIEF DISMISSES MAYOR OF GUDERMES

Malika Gezimieva, who reluctantly accepted the post of mayor of Gudermes last year after no man would do so, refused on 30 July to relinquish her duties in compliance with a decree signed by administration head Akhmed-hadji Kadyrov. According to Kadyrov, Gezimieva has reached 60, the mandatory retirement age. The Russian presidential envoy to the Southern federal district, Viktor Kazantsev, dispatched his deputy Aleksandr Korobeinikov to Grozny on 30 July to clarify the circumstances of Gezimieva's dismissal. "Nezavisimaya gazeta" on 31 July quoted Gezimieva as saying that if she leaves her post, the situation first in Gudermes and then throughout Chechnya will rapidly deteriorate. She suggested she was dismissed because of her efforts to prevent unnamed individuals from engaging in the theft of Chechnya's resources. LF




LEADER CLAIMS ARMENIAN PARLIAMENT GUNMEN RETURNED FIRE

Testifying on 30 July in his ongoing trial, Nairi Hunanian, the leader of the five gunmen who murdered eight senior officials in the Armenian parliament in October 1999, claimed that he and his associates opened fire in response to shots fired from the rear of the parliament chamber and from the corridor behind the presidium, Noyan Tapan reported. Hunanian has repeatedly denied that the killings were premeditated, insisting that the gunmen opened fire in self-defense (see "RFE/RL Newsline," 15 May and 26 July 2001). LF

IRAN AGAIN VIOLATES AZERBAIJANI AIRSPACE

Iranian military aircraft on 29 July again overflew the disputed Araz-Alov-Sharg Caspian oil field where two survey ships leased by BP had conducted geological surveys until forced by an Iranian gunboat on 23 July to leave the area, Reuters and ITAR-TASS reported on 30 July, quoting independent ANS-TV. The Iranian Embassy in Baku and the Azerbaijani Foreign Ministry refused to comment on that report, while an Azerbaijani Defense Ministry spokesman said he could not confirm it. LF

NEW SCANDAL REPORTED WITHIN AZERBAIJANI DEFENSE MINISTRY

Deputy Defense Minister Gorkhmaz Garaev and the head of the armed forces' uniform supply service have been dismissed from their posts, Turan reported on 30 July. They are suspected of having sold on the black market a consignment of quality military boots donated by the Turkish government and intended for frontline troops. The dismissals are only the most recent in a series of scandals within the Defense Ministry (see "RFE/RL Caucasus Report," Vol. 2, No. 34, 26 August 1999). LF

AZERBAIJAN, TURKMENISTAN FAIL TO REACH AGREEMENT ON GAS DEBTS

An Azerbaijani government delegation headed by Deputy Premier Abbas Abbasov returned on 29 July from talks in Ashgabat without having reached agreement with the Turkmen government on the most basic questions related to Azerbaijan's debts, Turan and Russian agencies reported. According to Baku, Azerbaijan's state debt for gas supplies in 1993-1994 amounts to $18.7 million, and Azerbaijani firms owe a further $8 million. Turkmen Deputy Prime Minister Kurbannazar Nazarov for his part estimated the total debt at $59.6 million. Turkmen Central Bank Chairman Seyitbay Gandimov accused the Azerbaijani delegation of seeking not to reach a compromise but to delay repayment of the debt. President Saparmurat Niyazov refused to receive Abbasov, who admitted on his return to Baku that the talks were "complicated." LF

ARE AZERBAIJAN, GEORGIA AT ODDS OVER PLANNED GAS TRANSIT AGREEMENT?

Turan and Interfax on 30 July both quoted Western diplomatic sources in Baku as suggesting that the real reason for the last-minute postponement of Georgian President Eduard Shevardnadze's planned visit to Baku on 27 July was not the murder the previous day of Georgian journalist Giorgi Sanaya but failure to finalize the agreement Shevardnadze and his Azerbaijani counterpart Heidar Aliyev were due to sign on the export via Georgia of natural gas from Azerbaijan's Shah-Deniz Caspian field. The two sides have reportedly not yet agreed on transport tariffs. LF

THOUSANDS MOURN MURDERED GEORGIAN JOURNALIST

Between 1,000 and 3,000 people lined Tbilisi's main thoroughfare on 30 July to mourn murdered TV journalist Sanaya, Caucasus Press and Western agencies reported. In his customary Monday radio address, President Shevardnadze suggested on 30 July that the killing may have been a deliberate attempt to destabilize the political situation in Georgia. Parliament speaker Zurab Zhvania similarly predicted on 31 July that the political situation in Georgia will deteriorate if the murder is not swiftly solved. But Deputy Interior Minister Zurab Chkhaidze said on 30 July that the circumstances of Sanaya's death suggest the murder was not politically motivated. He said the killer's identity will be known within a few days. LF

GEORGIAN GUERILLAS THREATEN TO BURN DOWN SCHOOLS IN ABKHAZIA

The "White Legion" Georgian guerrilla force that systematically targets Abkhaz police officers and civilians, has distributed leaflets in Abkhazia's southernmost Gali Raion warning that it will burn down schools in the district unless the teaching of the Georgian language and history is introduced at the beginning of the new academic year in September, Caucasus Press reported on 30 July, quoting the Tbilisi daily "Akhali taoba." LF

KYRGYZ COURT THROWS OUT SUITS AGAINST JUSTICE MINISTRY

The Bishkek City Arbitration Court refused on 30 July to consider two suits brought against the Justice Ministry by the editor of the newspaper "My Capital City" and the founder of the newspapers "Agym," "Techenie," and "Joltiken," RFE/RL's Bishkek bureau reported. The ministry registered the newspapers in question in May-June, but subsequently ruled that those registrations were not valid and annulled them (see "RFE/RL Newsline," 22, 25, 26 and 27 June 2001). LF

MORE NGOS SIGN APPEAL TO KYRGYZ PRESIDENT

A further 12 NGOs have appended their signatures to the 27 July appeal to President Askar Akaev expressing concern at new restrictions on the activities of all public organizations, including media outlets, RFE/RL's Bishkek bureau reported (see "RFE/RL Newsline," 30 July 2001). LF

TAJIK INTERIOR MINISTRY CONTINUES PROPAGANDA CAMPAIGN AGAINST FUGITIVE FIELD COMMANDER

Tajik Interior Ministry troops captured 14 more supporters of fugitive field commander Rakhmon Sanginov northeast of Dushanbe on 28-30 July, Interfax reported on 30 July. Interior and army troops have been seeking to neutralize Sanginov's men since they took several hostages last month (see "RFE/RL Newsline," 29 June and 9, 16 and 23 July 2001), and to date have killed more than 50 of them and arrested a further 90. Interfax quoted unidentified "independent experts" as saying that other members of the former United Tajik Opposition do not support Sanginov. "Vremya MN" on 28 July quoted Kyrgyz intelligence sources as saying that the remnants of Sanginov's band are trying to make their way to the Kyrgyz border to join forces with detachments of the banned Islamic Movement of Uzbekistan. LF

EU TO PROVIDE TAJIKISTAN WITH HUMANITARIAN AID

The EU on 30 July announced a 10 million euro (approximately $9 million) humanitarian aid program for Tajikistan intended to alleviate the impact on the rural population of this year's severe drought, AP and dpa reported. LF




LUKASHENKA'S CAMPAIGNING DEEMED NOT TO BE CAMPAIGNING

Lidiya Yermoshina, the chairwoman of the Belarusian Central Election Commission (CEC), ruled on 30 July that a recent speech by President Alyaksandr Lukashenka in which he urged workers to vote for him in the upcoming election could not be considered early campaigning, Belapan reported. Tamara Yunevich, an election observer, filed a complaint with the CEC after a 21 July speech by Lukashenka at the Vityaz TV plant in Vitsebsk during which he exhorted workers to cast their votes for him while he also made insulting comments about some of the other presidential candidates. The speech was broadcast by Belarusian Television the same day. Yunevich argued in her complaint that Lukashenka was engaging in early campaigning, something disallowed under Belarusian election law. PB

POLITICIAN CALLS ON CHOSEN BELARUSIAN OPPOSITION CANDIDATE TO STEP DOWN

Syarhey Haidukevich, the leader of the Liberal Democratic Party, called on Belarusian trade union leader Uladzimir Hancharyk to withdraw from the presidential election campaign and join Haidukevich's team, Belapan reported. Haidukevich said he is the only one of the three opposition candidates who have been approved by the CEC that can defeat Lukashenka. Haidukevich said that "nobody knows Hancharyk outside of Minsk," and claims that he will garner "twice as many votes" as Hancharyk. He said if Hancharyk were to join his team, Haidukevich would grant him a government post if he wins the election. PB

PROSPECTIVE BELARUSIAN PRESIDENTIAL CANDIDATES CLAIM FRAUD IN REGISTRATION PROCESS

Presidential hopefuls Leonyd Sinytsyn and Yury Dankou said separately on 30 July in Minsk that state officials have conspired to keep them from registering for the September presidential election, Belapan reported. Sinytsyn, the former head of President Lukashenka's administration, said that tens of thousands of signatures for his candidacy were suspiciously "lost" in the Mogilyov and Brest regions. The CEC ruled that he only gathered 86,000 signatures, though he said his supporters collected far more than the required 100,000. He said "the will of the people prevails over everything, and definitely over the bureaucrats' decision to shortlist candidates." Dankou, a businessman, claims that although his supporters collected some 130,000 signatures for his candidacy, members of his campaign team were intimidated by "rival groups" into not submitting thousands of signatures. He said, "if I manage to persuade people that nothing threatens them and the law is on their side, I will take the matter to court." PB

KYIV SAYS IT WILL HALT ARMS SALES TO MACEDONIA

Ukrainian Prime Minister Anatoly Kinakh said in the Crimean resort of Foros on 31 July that his country will stop selling arms to Macedonia, dpa reported, citing Ukrainian news agencies. Kinakh made the statement after meeting with Javier Solana, the EU's foreign policy and security chief. Foreign Ministry State Secretary Yuriy Serheyev said at a Kyiv press conference that the decision to suspend weapons sales to Macedonia is a sovereign decision made by the Ukrainian government and is not due to EU pressure. A request for a halt in arms transfers to the Balkan country was made by U.S. National Security Adviser Condoleezza Rice during her 24-25 July visit to Kyiv and again by Solana as he began his five-day visit to Ukraine on 30 July. Ukraine has sold 10 helicopters and four Su-25 attack planes to Macedonia this year. PB

UKRAINE DEMANDS EXPLANATION OF LUZHKOV'S CLAIM ON CRIMEA

The Ukrainian Foreign Ministry asked on 31 July for an explanation from Moscow on a statement by Moscow Mayor Yurii Luzhkov that the Crimea is not a part of Ukraine, dpa reported. Ukrainian Foreign Ministry spokesman Serhiy Borodnikov said in Kyiv that "Relations between Russia and Ukraine have been good up to this point," but he added that "we would prefer that the Russian side explain such behavior." Luzhkov told reporters in the Crimea during a visit last week that "I believe that the Crimea is Russian land. It has always been Russian and never belonged to Ukraine." Crimea was part of the RSFSR from the early 1920s until 1957, when Soviet leader Nikita Krushchev handed it over to the Ukrainian SSR. Luzhkov has made several previous statements in the past, many of which were dismissed by the Kremlin as a statement from a private citizen. Ukraine closed its airspace last autumn to Russian military aircraft flying to the Crimean base of Sevastopol, the home port of Russia's Black Sea Fleet. PB

ESTONIA INKS MAJOR LOAN FOR ROAD REPAIR

Finance Minister Siim Kallas and Nordic Investment Bank President Jon Sigurdsson on 30 July signed a loan contract for 45 million euros ($38.6 million) for the reconstruction of roads, BNS reported. The loan is for 15 years and will be spent on four road-repair projects. The funds will be available by the fall and the repair work is likely to begin only in 2002 and be completed by July 2005. The Maardu-Aaspere section of the Tallinn-Narva highway will be reconstructed, 50 separate stretches of roadway totaling 391 kilometers will be upgraded, and 167 kilometers of gravel roads will be paved. SG

BETTER ECONOMIC FIGURES FORECAST FOR LATVIA

The Latvian Economy Ministry is predicting that the country's major economic figures this year will be better than previously forecast, BNS reported on 30 July. The growth in the GDP was raised from 6 to 7 percent, while the rate of inflation was reduced from 3 to 2.5 percent. The current account deficit, which was 6.9 percent of GDP in 2000, is expected to fall to 6.2 percent of GDP in 2001. The ministry also forecasts that the national budget deficit, which was 2.8 percent of GDP last year, should decline to 1.8 percent of GDP this year. The head of the ministry's National Economy and Structural Policy Department, Olegs Baranovs, told a press conference on 30 July that Latvia's economic development has not been overly affected by the downturn in the U.S. and EU markets in part because exports to the CIS countries, Estonia, and Lithuania in the first five months of the year increased by 30 percent compared to the same period last year, LETA reported. SG

LITHUANIA RATIFIES DEFENSE AGREEMENT WITH POLAND

The parliament on 30 July ratified by a vote of 107 to one, with one abstention, the defense cooperation agreement with Poland that was signed in Vilnius in February, BNS reported. The agreement replaces a 1993 agreement between the two defense ministries and reflects the new situation of Poland being a member of NATO. The agreement reaffirms Poland's support for Lithuania's NATO membership and provides for cooperation in defense policy and strategy formation, the periodic holding of bilateral military exercises and training, as well as military and political consultations. The joint LITPOLBAT battalion will remain the major Lithuanian-Polish defense cooperation project for service in international peace and security-keeping operations. Some experts predict that the agreement may also be an important step toward Lithuanian membership of the trilateral military cooperation agreement between Poland, Germany, and Denmark. SG

FORMER POLISH COMMUNIST LEADER GIEREK DIES

Edward Gierek, who headed the Polish United Workers' Party (PZPR) from 1970 until 1980, died in Cieszyn on 29 July, aged 88, the "Frankfurter Allgemeine Zeitung" reported on 31 July. Gierek worked in his youth as a miner in Belgium and France. He was widely regarded as a successful and pragmatic party leader in Silesia in the 1960s. Many at home and abroad had high expectations of him when he replaced the discredited Wladyslaw Gomulka at the head of the PZPR following a series of violent workers' protests. Gierek proved, however, to be more the master of illusion and of attracting Western credits -- known as the "propaganda of success" -- than of real change. He was forced from office in favor of Stanislaw Kania following the start of the Solidarity protests at the Gdansk shipyards. Gierek lived out his post-communist retirement without much of the political controversy that haunted many other former communist leaders in the region. He published his memoirs in 1990, in which he blamed forces outside his control for his political demise. PM

FLOODS SPARE WARSAW, BUT NEW FLOODING IN EASTERN POLAND

Warsaw residents watched from bridges as a 100-kilometer-long flood crest swept through Warsaw late on 30 July, dpa reported. One casualty was reported, bringing the total to almost 30, but Warsaw was mostly spared widespread damage as dikes along the Vistula River held. Meanwhile, another 100-kilometer flood crest was threatening villages in eastern Poland on 31 July, and as many as 10,000 people have been evacuated from the area around the town of Kamien. Officials have estimated damages at more than $200 million, though that figure is likely to rise once waters recede and the full extent of the disaster can be assessed. DW

FORMER CZECHOSLOVAK OFFICIAL TO FACE TRIAL

The former premier of communist Czechoslovakia, 76-year-old Lubomir Strougal, has been accused of abuse of power for actions during his term as interior minister in 1965, CTK reported on 31 July, citing "Lidove noviny." Strougal is accused of failing to send a file to the Prosecutor-General's Office, thereby hushing up the murders of three people shot by the StB secret police in 1948. The daily also commented on the activity of the Office for the Documentation and Investigation of the Crimes of Communism (UDV), which has brought charges against 160 people in its six-year history, but has only convicted nine of them. Five of those received suspended sentences, while another four were sentenced to prison. None of those four are still in prison; one died following sentencing and the other three were judged too ill to be imprisoned. DW

CZECH PROTESTS AGAINST BRITISH SCREENING CONTINUES

Chamber of Deputies and Civic Democratic Party Chairman Vaclav Klaus publicly added his voice to the growing protests surrounding the screening of London-bound passengers at Prague's Ruzyne airport by British officials, CTK reported on 30 July. "I regard the fact that Britain is solving its own problems with its social and immigration policies in this way as unacceptable. I would prefer the introduction of visas. Either there are visas or there aren't," Klaus said in a statement. Some 100 people, almost all Roma, have been denied permission to fly to Britain since the checks began on 18 July. In other news, Foreign Minister Jan Kavan supported the demand by the Czech Helsinki Committee that its representative be allowed to monitor the screening of passengers at Ruzyne. DW

SLOVAK RULING COALITION HEADS TO HOLD TALKS

Leaders from the Hungarian Coalition Party (SMK), Christian Democrats, the Party of the Democratic Left, and the Party of Civic Understanding have agreed to a roundtable discussion with Prime Minister Mikulas Dzurinda over the future of the ruling coalition, TASR reported on 30 July. The 3 August meeting was requested by Dzurinda in the wake of threats made earlier this month by the SMK to quit the government over a disagreement on the recently passed law on regional reform (see "RFE/RL Newsline," 9 July 2001). The SMK initially refused to attend the talks, but later confirmed that party Chairman Bela Bugar and caucus Chairman Gyula Bardos will attend. "We will only listen. Let's see what they want to talk about," Slovakia news agency quoted Bardos as saying. Bardos earlier said that, regardless of the outcome of the discussions, the party will not make a final decision on leaving the ruling coalition until its extraordinary congress on 25 August. MES

FOREIGN INVESTMENT IN SLOVAKIA ON THE RISE...

Foreign direct investment (FDI) in Slovakia reached 4.7 billion crowns ($95.63 million) in the first quarter of 2001, an increase of 2.7 billion crowns year-on-year, TASR reported on 30 July, citing figures released that day by the Central Bank. Of the new investment, 57.7 percent went to the business sector and the remaining 42.3 percent to banking. Italy was the largest foreign investor in Slovakia in the first quarter of 2001 (42.5 percent of FDI), followed by Holland (27 percent), and France (13 percent). Over half of FDI was made in the Bratislava region. MES

...AS FOREIGN DEBT FALLS

The Central Bank also announced on 30 July that Slovakia's net foreign debt stood at $2.6 billion as of 30 April, a decrease of $600 million compared to the previous month and $300 million since the beginning of the year, TASR reported. A $200 million reduction in commercial bank debt was cited by the agency as the main reason for April's decrease. Gross foreign debt was $11 billion, up $240 million for the year. MES

HUNGARIAN JEWISH ORGANIZATIONS TAKE MEASURES AGAINST INCITEMENT

Six Jewish organizations filed a lawsuit with the Prosecutor General's Office on 30 July, accusing the Hungarian Justice and Life Party (MIEP) of incitement against a community for anti-Semitic comments the party made regarding the sale of the FTC soccer club to a company headed by a Jewish businessman (see "RFE/RL Newsline," 27 July 2001). Oszkar Egri, the legal representative of the Federation of Hungarian Jewish Religious Communities (MAZSIHISZ), said the MIEP statement went beyond the bounds of freedom of speech. The six organizations also cited Independent Smallholders' Party Chairman Jozsef Torgyan's remarks that the sale of FTC to businessman Gabor Varszegi went against the national interest. Meanwhile, MIEP Deputy Chairman Laszlo Bognar said that "it is an old tradition that if MIEP speaks out for a national cause, left-wing, liberal circles label it anti-Semitic and fascist," Hungarian media reported. MSZ

TURKEY OFFERS F-16 FIGHTER JETS TO HUNGARY

The Turkish Government on 30 July offered to lease to Hungary 24 of its F-16 fighter jets on favorable financial terms, the "Nepszava" daily reports. Turkey has entered the contest to supply Hungary's air force with NATO-compatible aircraft, the newspaper said. The offer is about 100 billion forints ($345 million) cheaper than a similar U.S. offer. MSZ




U.S. DEMANDS MACEDONIAN ALBANIAN REBELS OBSERVE AGREEMENT

State Department spokesman Charles Hunter said in Washington on 30 July that the guerrillas of the National Liberation Army (UCK) are not keeping their pledge to observe a cease-fire and withdraw from the Tetovo area, dpa reported (see "RFE/RL Newsline," 26 and 30 July 2001). He said: "We strongly condemn a pattern of deliberate cease-fire violations by ethnic Albanian armed groups in Macedonia... We expect the ethnic Albanian armed groups to come into full compliance with the terms of the cease-fire agreement. We call on all sides to respect the agreement they signed and to exercise restraint." PM

KFOR, ALBANIA CONTINUE CRACKDOWN ON SUPPLIES TO UCK

A KFOR spokesman told a press conference in Prishtina on 30 July that peacekeepers have had a considerable record of success in recent weeks in preventing men and supplies from reaching Macedonia from Kosova, dpa reported. He said that 193 suspected guerrillas have been detained and more than 570 rifles, 190 rockets, 1,000 antitank weapons, 1,350 grenades, and 70,000 rounds of ammunition confiscated. On 31 July, a KFOR spokesman said that peacekeepers arrested three men in Prizren for extorting money to support the UCK, Reuters reported. Meanwhile in Tirana, Albanian police officials said on 30 July that they seized a van carrying four surface-to-air missiles that arrived in Durres from Italy. The van's driver was a Macedonian Albanian (see "RFE/RL Newsline," 16, 25, and 27 July 2001). PM

JANE'S: U.S. ROLE REMAINS DECISIVE IN BALKANS

Britain's "Jane's Intelligence Review" published an article in its 31 July issue, in which it stressed that "the vital ingredient to any Balkans peace plan is the symbolic and practical involvement of the U.S." Author Zoran Kusovac notes that this is the central "lesson learned in Croatia, Bosnia, and Kosovo." He adds that "a substantial international presence in post-agreement Macedonia is unavoidable." PM

MACEDONIAN TALKS CONTINUE

The political negotiations hosted by President Boris Trajkovski in Ohrid continued inconclusively on 30 July (see "RFE/RL Newsline," 27 and 30 July 2001). They are slated to resume on 31 July. PM

MACEDONIAN GOVERNMENT CHARGES UCK LEADERS WITH WAR CRIMES

The state Prosecutor's Office in Skopje filed charges on 30 July against UCK leader Ali Ahmeti and 10 of his associates, RFE/RL's South Slavic Service reported (see "RFE/RL Newsline," 27 July 2001). Charges include: "threatening the territorial integrity of the state," "terrorism and sabotage," and genocide. Observers note that the issuing of such charges may complicate peace talks, in which the ethnic Albanian parties have called for an amnesty for fighters who lay down their arms. PM

ALBANIAN FOREIGN MINISTER IN BELGRADE

Paskal Milo met with Yugoslav Foreign Minister Goran Svilanovic in Belgrade on 30 July, the first visit by an Albanian foreign minister to the Serbian capital in many years, AP reported. The two expressed concern over the situation in Macedonia and condemned the use of violence there. Milo also met with Yugoslav Prime Minister Dragisa Pesic, with whom he discussed bilateral cooperation and regional integration. PM

ALBANIAN OPPOSITION PLEDGES LEGISLATIVE BOYCOTT

Former President Sali Berisha, who heads the Democratic Party (PD) and the Our Union for Victory coalition, said in Tirana on 30 July that he does not recognize the Socialists' victory in the recent parliamentary elections (see "RFE/RL Balkan Report," 20 July 2001). He added that members of his coalition will boycott the parliament. Most foreign observers considered the elections to have been free and fair, with only limited irregularities (see "RFE/RL Newsline," 23 July 2001). Representatives of the international community have frequently criticized Berisha in the past for his obstructionist tactics. PM

CROATIAN GOVERNMENT ANNOUNCES VETERANS' PROGRAM

The government put forward its program to help veterans of the 1991-1995 war find jobs and job training, RFE/RL's South Slavic Service reported on 30 July. Ivica Pancic, the minister for veterans affairs, noted that veterans make up some 10 percent of the unemployed. The government is anxious to improve the social and economic situation of many veterans lest they make common cause with far-right veterans groups, who oppose the government on political grounds. PM

ROMANIA CLOSES EIGHTH NEGOTIATION CHAPTER WITH EU

Romania has closed a new negotiation chapter, on consumer and health protection, its eighth since the beginning of the negotiations for accession to the EU, and its first during the Belgian presidency of the union, Romanian media reported on 30 July. The announcement was made in Brussels by Romania's chief EU negotiator, Vasile Puscas. According to the position paper, Romania did not request any transition period or derogation, only a technical arrangement intended to allow it to apply until 1 January 2010 a threshold of a smaller value than the one provided in EC legislation concerning the liability for defective products. Romania continues to lag behind all other applicants regarding the number of chapters closed thus far. However, the Romanian government wants to open all chapters by the end of 2002, and to finalize the negotiations by the end of 2004. LB

OSCE CHAIRMAN MEETS SEEC CHAIRMAN IN BUCHAREST

On 30 July in Bucharest, Romanian Foreign Minister and OSCE Chairman Mircea Geoana met Albanian Foreign Minister and SEEC Chairman Paskal Milo, Romanian media reported. Their discussion focused on the need to find a quick and peaceful political solution to the conflict in Macedonia. Geoana indicated that Romania, both in its capacity of OSCE chair and as a country in the region, hopes that the two parties solve through negotiations problems related to designating Albanian as an official language and to having the Albanian minority better represented in the Macedonian police. In turn, Milo announced that he hopes that the Macedonian authorities and the Albanian guerrillas can reach a compromise that will end the conflict. Milo stated that the government in Tirana will pursue all necessary efforts to influence the Albanian parties to this end, so that Macedonia will again be a stable country in the region. LB

MOSCOW MAYOR VISITS MOLDOVA TO RESUME ECONOMIC TIES

"The aim of my visit...is not political, it only wishes to lead to resuming economic ties, especially cooperation of industrial companies," Romanian media quoted Moscow Mayor Yurii Luzhkov as saying on 30 July. Representatives of the two municipalities signed three cooperation agreements -- economic, cultural, and medical -- as well as their implementation protocol. As soon as next week a Moscow team of experts will arrive in Chisinau to evaluate several industrial companies. Luzhkov repeatedly emphasized that "Moldova would miss each and every development opportunity in the future if it rejects the Russian language." LB

BALKANS STABILITY PACT COORDINATOR IN BULGARIA

Bodo Hombach, the special coordinator for the Stability Pact for Southeastern Europe, met with Bulgarian officials in Sofia on 30 July, BTA reported. Hombach will hold meetings during his two-day visit with President Petar Stoyanov, Premier Simeon Saxecoburggotski, and various cabinet members, including Economy Minister Nikolai Vassilev. After meeting with Finance Minister Milen Velchev, Hombach praised the new government and said that after its initial steps "it is looked on favorably by Western governments." Hombach said the inclusion of experts in the Cabinet of Ministers is a "good sign" and said those members' "above-party attitude" will allow the government to work well. Hombach said he hopes that funds from the Stability Pact can help Bulgaria join European organizations and achieve "fast economic growth." PB




ARMENIAN PRESIDENT'S CONSTITUTIONAL CHANGES LEAVE FLAWS IN DESIGN


By Emil Danielyan

The Armenian government is to debate this autumn a package of constitutional amendments proposed by President Robert Kocharian. The amendments would reduce sweeping presidential powers but still preserve the inherent flaw in the basic law. The country would continue to have two chief executives, one of whom, the president, would remain more powerful but less responsible for the state of affairs.

The so-called French constitutional model has had an adverse impact on the democratic process in Armenia and most other former Soviet republics that adopted it 10 years ago. The current Armenian Constitution, based on a distorted version of that model, was enacted after a controversial referendum in 1995. Apart from the perceived illegitimacy stemming from fraud allegations that marred the vote, it has long been branded as undemocratic by most political parties.

The forced resignation in February 1998 of President Levon Ter-Petrossian, whose mindset and ambitions it perfectly suited, revealed a broad consensus on the need to put in place a more effective mechanism of checks and balances. Constitutional reform became one of the key pledges of the new President Kocharian, who formed a special multiparty commission shortly after taking office. It was revamped a year later when all politicians were replaced by lawyers holding senior government posts. The long list of draft amendments, unveiled to leaders of the parliamentary parties on July 19, is the result of its two years of work.

Kocharian has said all along that while being ready to give up some of his powers, he is against changing the existing system of government. He argues that Armenia needs a powerful head of state to successfully complete its decade-long transition to democracy and the free market.

The proposed constitutional package is in line with his beliefs. It does envisage some significant curbs on presidential authority. The president would need the parliament's consent to appoint a prime minister; would no longer have to approve or veto government decisions; and would be allowed to dissolve the parliament only in six specific cases. He must name as prime minister a person suggested by the parliament speaker if his candidates for the job are twice rejected by the National Assembly.

The amendments also restrict the president's ability to appoint all judges, except five out of nine members of the Constitutional Court, at will. More importantly, he would lose his right to dismiss those judges, which would become the prerogative of the court. In addition, the constitution would have a new provision listing 37 specific areas to be regulated by laws passed by the parliament.

Lawyers from the so-called Venice Commission of the Council of Europe, which monitors how Armenia is amending its legislation to bring it into compliance with the council's requirements, have welcomed the proposed changes, concluding in a report that they "ensure the separation of the authorities."

Nevertheless, the changes are not as far-reaching as many politicians would like them to be. Some of them leave room for differing interpretations. For example, they stipulate that the president shall name a prime minister "after obtaining the National Assembly's approval." But it is not clarified what concrete form such approval should take. The Venice Commission said it "understands" that the head of state could sack the prime minister only in the event of the latter's resignation or a vote of no confidence from the parliament. But the draft amendments spell out no such limitations. Furthermore, the parliament will be subject to automatic dissolution if it votes no confidence in the executive.

The president would even gain some new powers. He would be allowed to dismiss the ministers of defense and foreign affairs without the prime minister's agreement. His authority to appoint the top brass of the armed forces and Interior Ministry troops as well as that to declare martial law and the state of emergency is to be further reinforced.

The Venice Commission expressed its reservations regarding the president's right to issue decrees and other executive orders. According to the constitution, these substantial powers are meant to "ensure the normal functioning of the legislative, executive, and judicial authorities." The president is, in a sense, placed above the three branches. The government's executive power would remain limited under the proposed changes. Lacking control of all power levers, the cabinet would still be primarily responsible for what is by far the most difficult policy area -- the economy and social affairs.

The amended constitution would allow Kocharian to blame economic failures on ministers, while keeping most of his power reins. The Armenian leader has reason to expect that the increasingly loyal parliament will approve his constitutional package so that he can put it on a referendum, presumably next spring. The referendum will be an important test of his popularity and influence.

Some of the amendments in other, less contentious chapters of the Armenian Constitution are quite significant though. They envisage introducing the abolition of the death penalty; more safeguards against human rights abuses; a separate clause on press freedom; the right of noncitizens to vote in local elections; the lifting of the ban on dual citizenship; and the right of foreigners to own land in Armenia. The Venice Commission believes that these changes would "significantly strengthen constitutional guarantees for human rights protections."


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