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Newsline - January 3, 2007


GERMAN LEADER SAYS EU-RUSSIAN RELATIONS REQUIRE 'RECIPROCITY'
German Chancellor Angela Merkel, whose country took over the rotating EU Presidency on January 1, was quoted by Britain's "Financial Times" on January 3 as saying that she wants to deal "firmly, but fairly, with Russia." She argued that "it is perfectly legitimate for Russia to seek greater access to Western European markets [but] we must have reciprocity. If obstacles are being erected to protect Russian companies from European investors, nobody should resent it if the Europeans take reciprocal action." She acknowledged the importance of good relations with Russia, which provides 40 percent of Germany's gas imports and is regarded by many German businessmen as a potential source of major deals. Merkel said that negotiations on a new EU-Russia partnership agreement "will not be easy" but could be finished before the current pact expires in the fall. She was nonetheless critical of several aspects of Russian domestic policy and stressed that she will defend her principles in dealing with Moscow. Referring to the Kremlin's domination of the media, she noted that she has told President Vladimir Putin "many times that contrary opinions are a normal part of society.... Yet in the end, it is much preferable to have a genuinely free press." Merkel also said that "Russia's attitude towards nongovernmental organizations (NGOs) gives ground for concern. The...[recent] NGO legislation, while not problematic in itself, creates in its application a lot of red tape and insecurity for NGOs. We always mention such observations [to the Russians], and so does the foreign minister." Merkel denied that she has criticized as too weak on human rights a strategy paper drawn up recently by the Foreign Ministry, which is controlled by former Chancellor Gerhard Schroeder's Social Democratic Party (SPD) and which drafted the plan independently of Merkel and her Christian Democratic Union (CDU-CSU). She said that the paper dealt only with "rapprochement through integration. That thinking is correct. Cooperation projects, for instance in the energy sector, create partnerships. That's why we call our relationship with Russia a strategic partnership. As far as this strategic partnership is concerned, there are no differences of opinion within the German government." The British daily added, however, that her "tone differs from that of ...Schroeder...who clashed with the [United States] over Iraq and embraced...Putin" (see "RFE/RL Newsline," December 1, 19, 20, 21, and 22, 2006). PM

GERMANY DRAWS CONCLUSION FROM RUSSIAN-BELARUSIAN GAS DISPUTE
German Economy Minister Michael Glos said in Berlin on January 1 that his government welcomes the agreement reached the previous night between Gazprom and Belarus on securing Russian gas supplies to Belarus and Russian gas transit across Belarus from 2007-11, dpa reported (see Part II). Glos added that "the conflict shows that Europe ought not to make itself too dependent on gas supplies from the East." He stressed that Germany needs a balanced mix of oil, gas, coal, nuclear power, and renewable energy. PM

EBRD REPORTEDLY SET TO REJECT SAKHALIN-2 LOAN
A spokesman for the European Bank for Reconstruction and Development (EBRD) said in Moscow on January 1 that the bank is unlikely to approve a planned $300 million loan for the Sakhalin-2 gas and oil project "following its effective renationalization by the Kremlin," Britain's "Financial Times" reported on January 2 (see "RFE/RL Newsline," December 22, 2006). The official said that no decision has been reached, but added that the acquisition by Gazprom of a majority share "makes it more difficult" for the EBRD to approve the loan. He also noted that Gazprom's entry into the project may make the EBRD's money "less necessary" for completing Sakhalin-2 than before. PM

RUSSIA SAID TO OFFER JAPAN NEW FORMULA ON TERRITORIAL DISPUTE
Akihiro Ota, who is a leader of Japan's governing Komeito party, and other, unnamed Komeito and diplomatic sources said recently in Tokyo that Russian Deputy Foreign Minister Andrei Denisov told a Komeito delegation in Moscow on November 23 that the two countries should settle their decades-old dispute over the southern Kuriles by splitting the territory on the basis of land area and not according to the number of islands, Japan's "Mainichi Daily News" reported on January 3 (see "RFE/RL Newsline," December 14 and 15, 2006). Ota noted that Denisov mentioned that Russia and China in 2005 settled their dispute over three islands along their common border by splitting the land area. Denisov reportedly told the Japanese, however, that the dispute between their two countries "is not an issue that can be settled simply by drawing a line. There are problems involving public opinion [in both countries]." But he also reportedly said that "President Putin has no intention of freezing the territorial issue. We'd like to pursue conditions acceptable to both parties." PM

ESTONIAN MINISTER SLAMS RUSSIAN 'PROPAGANDA'
Estonian Foreign Minister Urmas Paet was quoted by Interfax in Tallinn on January 1 as dismissing allegations made by some Russian politicians and media that some recent Estonian legislation aims at "revising the results of World War II" (see "RFE/RL Newsline," October 11 and December 13, 2006). Paet said that the charges, made in response to legislation outlawing the display of Nazi and Soviet symbols, are "inappropriate...[and] mainly emotional rhetoric." He added that "we haven't taken a single step or put forward a single idea that would have been a real reason for discontent on Russia's part.... Everyone knows what took place during World War II, who was fighting whom, and what were the results of those battles, including for Estonia." Paet stressed that "it is in Russia's own interest that neighboring states should be countries with steadily developing democracy. We should cooperate with our neighbors and not look for reasons to avoid interacting." He noted that "the Estonian nation organizes its own life, just as Russia does its own. Russia should have enough self-confidence not to respond in a nervous way to the organization of life in neighboring states." PM

WIDESPREAD CRITICISM OF EXECUTION OF FORMER IRAQI DICTATOR
Russian Foreign Ministry spokesman Mikhail Kamynin said in a statement on December 31 that the execution in Baghdad the previous day of former Iraqi President Saddam Hussein could lead to "a new wave of fratricidal conflict and numerous fatalities," mid.ru and Interfax reported. Kamynin called the hanging "hasty and cruel, and shamelessly broadcast to the world." He stressed that the possible consequences of the execution "must be understood by all those who sent their troops to Iraq and whose coalition...[bears] the full weight of responsibility for what is happening in that country, and for the open disregard for the humanistic values they are zealously teaching others." Kamynin stressed that Iraq needs "well thought-out steps to ease the military-political confrontation and guarantee security and the rule of law, not acts of intimidation." Ravil Gainutdin, who heads Russia's Council of Muftis, said on December 31 that "Russia's Muslims condemn Saddam's execution, carried out at a time when the Islamic world is celebrating the Kurban Bayram [Eid Al-Adha] holiday, as an act that will only worsen the situation and will not bring peace to Iraq," Interfax reported. Gainutdin argued that the hanging "is a violation of the behest of Allah, who banned human sacrifice." A spokesman for the Russian Orthodox Church said that "the execution again raises the issue of justice [in today's] world order, the issue of [whether] punishment depends on the actual crime that has been committed or on the political orientation" of the person executed. Federation Council Speaker Sergei Mironov, who heads the new party called A Just Russia, said on December 30 that life imprisonment would have been an "adequate punishment" for Hussein. Mironov added that "if you call a spade a spade, the Iraqi authorities followed the will of the United States" in executing Hussein at a holy time in the Islamic calendar. Mikhail Margelov, head of the Federation Council's International Affairs Committee, told reporters that the hanging will "fuel the flame of civil war in Iraq and trigger a new spiral of jihadism." Communist Party (KPRF) leader Gennady Zyuganov said that "this savage reprisal has been meted out by the Americans, not Iraqi justice. Unfortunately, Texas law has triumphed, namely the rule of the strongest, the cruelest, and the least principled." Liberal Democratic Party of Russia (LDPR) leader Vladimir Zhirinovsky argued that the "outrageous" killing "will be [considered] the most monstrous crime of the 21st century." PM

CHECHEN DEPUTY EXPRESSES SUPPORT FOR INGUSHETIAN PRESIDENT
In footage screened on December 28 on Ingushetian television and posted two days later on the independent website ingushetiya.ru. Ruslan Yamadayev, who represents Chechnya in the Russian State Duma, praised the efforts of Ingushetia's President Murat Zyazikov to maintain order and develop the republic's economy, and appealed to the population to support him. Switching from Russian to Chechen, Yamadayev rejected as untrue written denunciations of Zyazikov, but did not identify the authors. Ingush oppositionists have repeatedly accused Zyazikov of cronyism and turning a blind eye to widespread corruption. On December 22, Zyazikov appointed as a deputy prime minister Sherip Alikhadzhiyev, a former close associate of slain pro-Moscow Chechen administration head Akhmed-hadji Kadyrov, ingushetiya.ru reported on December 26. Alikhadzhiyev, who is 40, later served as first deputy chairman of the pro-Moscow Chechen State Council. LF

ARMENIAN AUTHORITIES ANNOUNCE ARREST, SEIZURE OF ARMS CACHE
Armenia's National Security Service announced on December 29 the discovery the previous day in a house in the southern village of Lusarat of a huge cache of arms and ammunition, including grenade launchers and surface-to-air missiles, RFE/RL's Armenian Service reported. The owner of the house, identified as Vahan Aronian, has been arrested within the framework of the investigation into the putative coup planned by Zhirair Sefilian and Vartan Malkhasian, who were arrested in mid-December (see December 11 and 12, 2006 and End Note, "RFE/RL Newsline," December 27, 2006). Armen Yeghian, a senior member of the Alliance of Armenian Volunteers (HKH) recently established by Sefilian, said Aronian fought during the Karabakh war in the detachment commanded by Sefilian, but is "practically not involved" in the HKH. LF

GEORGIA PRESIDENT VISITS SOUTH OSSETIA
Mikheil Saakashvili traveled on January 2 to the Georgian-populated village of Tamarasheni, which is located less than one mile outside Tskhinvali, the capital of the unrecognized Republic of South Ossetia, Caucasus Press reported on January 3. Saakashvili reiterated his earlier offers to the population of those districts of South Ossetia not under Georgian control to rebuild schools, highways, and other infrastructure damaged during the 1990-1992 conflict. The South Ossetian Foreign Ministry released a statement on January 2 denouncing Saakashvili's visit as intended to fuel tensions and demonstrate support for "destructive forces" based in the village of Kurta, meaning the alternative South Ossetian leadership elected by the region's Georgian voters two months ago (see "RFE/RL Newsline," November 13, 2006). The statement appealed to the international community to call on Georgia to "refrain from provocative actions" and to seek a mutually acceptable solution to the conflict within the framework of the existing format for negotiations. LF

GEORGIAN PARLIAMENT ADOPTS RESTITUTION LAW...
Deputies approved on December 28 in the third and final reading the draft law on restitution for victims of the conflict in South Ossetia, Caucasus Press and Civil Georgia reported on December 29 and 30 respectively. The law recognizes the right of persons who fled during the conflict to return to their abandoned homes providing they can prove ownership, and it envisages compensation for material damage. The Georgian Justice Ministry has calculated that 60,000 Ossetians fled Georgia, mostly to Russia. A nine-person commission, on which Georgia, South Ossetia, and international organizations will be represented, will be established to assess demands for compensation. LF

...BUT SHELVES DEBATE ON LUSTRATION
The Georgian daily "Rezonansi" has quoted opposition Democratic Front faction leader Kakha Kukava as saying the parliament majority is not ready to begin debate on the lustration law his faction drafted and wants that debate postponed until February, according to "The Messenger" on December 29. The bill, which would bar former KGB operatives from holding senior government posts but not from running in elections, was drafted in 2005 and initially approved by members of the parliament majority, according to Caucasus Press on July 1, 2005. But in early 2006, the parliamentary committee on legal affairs rejected the Democratic Front bill and proposed that the majority and opposition should jointly draft an alternative, Caucasus Press reported on February 23. Majority deputies have pointed out that implementation of any lustration law would prove difficult as the Soviet-era KGB archives for Georgia have been handed over to Russia. LF

ABKHAZIA APPEALS TO UN OVER GEORGIAN KILLINGS
The Foreign Ministry of the unrecognized Republic of Abkhazia released a statement on December 29 appealing to the UN and Russia to condemn the killing several days earlier, which it blamed on Georgian guerrillas, of three Abkhaz police officials in Abkhazia's southernmost Gali Raion, ITAR-TASS reported (see "RFE/RL Newsline," December 29, 2006). Also on December 29, Abkhaz President Sergei Bagapsh told journalists in Sukhum(i) that Georgia was moving its armed forces towards the border with Abkhazia and might attempt over the New Year holiday to seize the Inguri hydroelectric power station in Gali. He said additional troops have been deployed to protect that facility. Bagapsh also reaffirmed that Abkhazia will not resume talks with Georgia until the Georgian forces deployed last summer to the upper reaches of the Kodori Gorge are withdrawn. In Tbilisi, Georgian Minister for Conflict Resolution Merab Antadze said on December 29 that Abkhaz warnings of possible Georgian aggression are unfounded and intended to mislead the international community, ITAR-TASS reported. He said the tensions in Gali are easing following the release of several dozen Georgians temporarily detained by Abkhaz police following the killings of the three police officers. LF

CENTRAL ASIA REACTS TO HUSSEIN EXECUTION
Central Asian governments reacted negatively to the December 30 execution of former Iraqi President Saddam Hussein, news agencies reported. Kazakh Foreign Ministry spokesman Erzhan Ashikbaev said on December 31 that Hussein's execution is unlikely to "speed up the stabilization of the internal political situation in Iraq," Interfax-Kazakhstan reported. "On the contrary," Ashikbaev continued, "it may lead to a further exacerbation of the military and political situation and escalation of conflicts on religious and ethnic basis." Uzbekistan's Jahon news agency, controlled by the Foreign Ministry, said that the "execution on the first day of the sacred holiday of Eid al-Adha has been received with regret in Uzbekistan," government-controlled newspaper "Khalq Sozi" reported on January 2. Speaking on December 29, Tajik Foreign Ministry spokesman Igor Sattorov speculated that carrying out Hussein's death sentence could negatively affect the internal situation in Iraq, Tajik television reported. DK

CHINA CEDES STAKE TO COMPLETE KAZAKH OIL PURCHASE
The state-run China's International Trust & Investment Corporation (CITIC) Group has purchased the Kazakh oil assets of Canadian-registered Nations Energy for $1.9 billion, AP reported on December 31. Citic has agreed, however, to give Kazakh state-owned oil and gas company KazMunaiGaz the option to acquire a 50-percent stake in the purchase, which had generated opposition within Kazakhstan (see "RFE/RL Newsline," November 20, 2006). The purchase gives China a stake in the Karazhanbas field in western Kazakhstan, which has, according to AP, proven oil reserves exceeding 340 million barrels of oil and current production levels of more than 50,000 barrels a day. DK

KAZAKH MINISTER DENIES AFGHAN-TROOP-DEPLOYMENT 'RUMORS'
Kazakh Foreign Minister Qasymzhomart Toqaev told the "Novoe pokolenie" newspaper in a December 29 interview that his country has no plans to send troops to Afghanistan. "Afghanistan is in the focus of our attention, but rumors that there are allegedly plans to send a Kazakh military contingent to this country are absolutely unfounded," Toqaev said. Toqaev noted, however, that Kazakhstan is in consultation with "the Americans and the Europeans" on Afghanistan, and that the Shanghai Cooperation Organization (China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan) and CIS Collective Security Treaty Organization (Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan) have set up task forces on Afghanistan. DK

KYRGYZ PARLIAMENT PASSES NEW CONSTITUTION, AMENDMENTS
Kyrgyzstan's parliament on December 30 passed a new constitution and amendments giving the president the right to appoint cabinet members without parliamentary approval, akipress.org reported. The amendments broadening presidential powers will stay in force until a new parliament is elected. Additionally, the amendments place law-enforcement and security organs under presidential control, Interfax reported. Kanybek Imanaliev, a parliamentary deputy and member of the opposition For Reforms movement, said on December 30 his opposition movement plans to appeal to the Constitutional Court and ask it to rule the parliament's decision to adopt a new version of Kyrgyzstan's constitution on December 30 illegitimate," Interfax reported. Azimbek Beknazarov, also an opposition deputy and member of For Reforms, told a news conference the same day that "by expanding the president's powers, the new version of the Kyrgyz Constitution will lead to the usurpation of power." For Reforms members vowed to organize protests to oppose the new constitution. DK

KYRGYZ PRESIDENT RAISES LAW-ENFORCEMENT SALARIES
President Kurmanbek Bakiev signed a decree on December 29 granting a 50-percent pay hike, starting January 1, to employees of the Interior Ministry and Justice Ministry's Penal Department, Kabar reported. The report stated that an additional 310 million soms ($8 million) will be needed from the state budget to cover the pay raise. DK

RUSSIAN GAS COMPANY GRANTED TAJIK LICENSES
Russia's state-controlled gas company Gazprom announced in a December 29 press release on the company's website (http://www.gazprom.ru) that it has received two licenses from the Tajik government to explore oil and gas reserves. The Rengan field, located 20 kilometers from the Tajik capital, Dushanbe, has possible gas reserves of 35 billion cubic meters, according to Gazprom; Sargazon, located in Khatlon province 150 kilometers from Dushanbe, has possible reserves of 30 billion cubic meters. DK

TURKMEN PRESIDENTIAL CANDIDATES SAY POLICY WILL NOT CHANGE
The six officially registered candidates for Turkmenistan's February 11 presidential election (see "RFE/RL Newsline," December 29, 2006) announced in published statements on January 1 that they will continue the political course charted by recently deceased Turkmen President Saparmurat Niyazov (see "RFE/RL Newsline," December 21, 2006), RosBusinessConsulting reported. Additionally, acting President Gurbanguly Berdymukhammedov stated that the election will be conducted "in accordance with the conception of democracy as understood by Niyazov." DK

13 UZBEK REFUGEES RETURN HOME FROM UKRAINE
A group of 13 Uzbek refugees who fled their homeland after the May 2005 unrest in Andijon have returned home from Ukraine even though they apparently received approval for relocation to Sweden, Interfax reported on December 30, quoting an unnamed source in Uzbek law enforcement. Their return brings to 66 the number of Uzbek refugees who have gone home. A total of 439 Uzbek asylum seekers were airlifted out of Kyrgyzstan in 2005. DK

BELARUS, RUSSIA SIGN LAST-MINUTE GAS ACCORD...
On December 31, 2006, in Moscow, two minutes before the expiration of the previous contract for natural-gas supplies, Belarus and Gazprom signed a new deal securing Russian gas supplies to Belarus and Russian gas transit across Belarus for 2007-2011, Belarusian and Russian media reported. Under the new contract, Belarus is to pay $100 for 1,000 cubic meters in 2007 compared with $46.68 in the previous 2 1/2 years. The gas price for Belarus is to gradually increase to the European market level by 2011: 67 percent of the level in 2008, 80 percent in 2009, 90 percent in 2010, and 100 percent in 2011. The two sides also agreed that the price of transit via Belarus through Belarus's pipelines will increase from $0.75 in 2006 to $1.45 for 1,000 cubic meters per 100 kilometers and will not change during these five years. Gazprom also agreed to pay $2.5 billion for its 50 percent stake in Beltranshaz, Belarus's gas-distribution network, in equal installments during the following four years. JM

...AS BELARUSIAN PRESIDENT ALERTS COMPATRIOTS TO 'DIFFICULT AND EXCEPTIONAL DECISIONS'
Alyaksandr Lukashenka said in his New Year's address to the nation that the government will have to be ready for making "difficult and exceptional decisions," Belapan reported on January 1. "Those seeking to land nice pieces of property in Belarus won't abandon their attempts to break us economically and politically," he added. Lukashenka lambasted the West for "threatening us with economic sanctions and isolation" and had also a few bitter words to say to "certain government circles" in the East, which "deal a blow to our centuries-long friendship." "They appear to have forgotten the old Russian saying that 'God is not in strength but in truth,'" the Belarusian president said. JM

BELARUS TO RAISE GAS, ELECTRICITY PRICES FOR CORPORATE CUSTOMERS
First Deputy Prime Minister Uladzimir Syamashka told journalists in Minsk on January 2 that the cost of gas for Belarusian companies will soon be increased to $150-$153 per 1,000 cubic meters, RFE/RL's Belarus Service reported. He added that electricity rates for corporate customers will grow by 54 percent and heat tariffs by 55 percent. According to Syamashka, the annual increase in housing and utility payments for the population in 2007 will amount to some $5-$6. JM

BELARUS OFFERS MOSCOW A DEAL TO DROP OIL DUTIES
First Deputy Prime Minister Syamashka told journalists in Minsk on January 2 that the Belarusian government wants to split between Belarus and Russia profits from its exports of refined Russian oil on a 50-50 basis if Moscow drops its plan to impose duties on Russian crude supplies to Belarus, Belapan reported. Last month, the Russian government slapped a duty of $180.7 per ton on crude oil exported to Belarus as of January 1, claiming that Russia was losing billions of dollars every year by allowing its firms to send duty-free oil to Belarus's two refineries in Navapolatsk and Mazyr, which then re-exported refined products to Europe. Belarus's state oil concern Belnaftakhim suspended 2007 oil deals with Russian firms after the oil duty was introduced. Syamashka said the two Belarusian refineries have reserves of oil sufficient for their operation during the next two weeks. JM

U.S. DIPLOMAT SAYS TOP WAR CRIMES SUSPECTS MUST FACE INTERNATIONAL JUSTICE
John Clint Williamson, the U.S. ambassador-at-large for war crimes, said Radovan Karadzic and Ratko Mladic should face an international court even if they are captured after the Hague tribunal's mandate expires, Reuters reported on January 2. Williamson told the Sarajevo daily "Dnevni avaz" that if Karadzic and Mladic are captured before 2010, they will be tried by the International Criminal Tribunal for former Yugoslavia (ICTY). "But if that didn't happen, there needs to be found a body in the international system that will try them," he said. "The only absolutely unacceptable thing for the government of the United States is for them to be tried, for example, in Belgrade, that is, before local courts." The UN Security Council has been pressing the ICTY to complete all trials by 2008 and appeals by 2010. ICTY chief prosecutor Carla Del Ponte last month asked the Security Council to extend the tribunal's life until key suspects are tried (see "RFE/RL Newsline," December 18, 2006). The council has not yet responded. BW

SERBIAN PRESIDENT SAYS EU CANDIDACY TOP SERBIAN GOAL FOR 2007...
Boris Tadic said on December 31 that Serbia's top priority for 2007 will be to become a candidate for European Union membership, AP reported the same day. "We must show that...we want to become EU members" by wrapping up cooperation with the Hague court and pursuing pro-Western economic reform, Tadic said. "The top priority of all is EU membership. We must achieve candidate status by the end of 2007." The EU cut off negotiations with Belgrade for a Stabilization and Association Agreement in May over Serbia's failure to capture Mladic (see "RFE/RL Newsline," May 3, 2006). Tadic said that in order to establish closer ties with Brussels, Serbia must now either arrest Mladic or prove that he is not hiding in the country. BW

...AS GERMAN DIPLOMAT REITERATES CONDITIONS FOR SERBIA
Andreas Zobel, the German ambassador to Serbia, said on January 1 that the EU will resume premembership talks with Belgrade as soon as Mladic is arrested, UPI reported the same day. Germany took over the EU Presidency from Finland on January 1. Regarding Serbia's January 21 general elections, Zobel said he hopes "democratic forces" will win control of parliament and that a new government will bring about the changes necessary for the resumption of the talks. BW

SERBIAN PREMIER, PRESIDENT REVEAL DIFFERENCES ON KOSOVA
In separate interviews published on January 2, President Tadic and Prime Minister Vojislav Kostunica revealed differing positions on Kosova that could lead to problems in forming a new government after the January 21 elections, AKI reported. "Our potential partners must respect the territorial integrity of the country and the future government would be based on a position toward Kosovo," Kostunica told the daily "Vecernje novosti." Tadic, who like Kostunica opposes independence for Kosova, suggested that Kosova's fate is in the hands of the international community. "Serbia may not accept the solution, but the reality in Kosovo might not depend on our acceptance," Tadic told "Vecernje novosti." "I must warn the people, I don't want to say that everything will be wonderful and we have solved all the country's problems through the constitution. That would not be fair," he added. In September, Serbia adopted a constitution that defines Kosova as an integral part of Serbia, although international officials have said this would have no impact on the province's fate (see "RFE/RL Newsline," October 2, 2006). BW

MACEDONIA ADOPTS FLAT TAX
In a move Skopje hopes will attract investment, Macedonia implemented a flat tax on January 1, Focus reported the same day. Income tax for individuals was set at 12 percent. Corporate tax rates were also reduced from 15 percent to 12 percent. Both individual income tax and corporate tax rates are set to be lowered to 10 percent on January 1, 2008. Flat-tax systems have become increasingly popular among former communist countries in Europe. In addition to Macedonia, Estonia, Lithuania, Latvia, Russia, Serbia, Ukraine, Slovakia, Georgia, and Romania have all replaced traditional progressive income-tax systems with a flat tax. BW

HUSSEIN'S EXECUTION LEAVES IRAQ FACING UNCERTAIN FUTURE
The Arab and international media have been abuzz with rumors and reports concerning the impact of the execution of former Iraqi President Saddam Hussein. But now that Hussein has been hanged, it is unclear what his death will mean for Iraq's future.

There have been several indications that there may be an increase in violence following the former Iraqi leader's execution. Fearing such an upswing, the Iraqi Interior Ministry has implemented new security measures, Al-Sharqiyah television reported on December 29. The ministry indicated that additional security forces would be deployed on the ground to prevent Hussein sympathizers from carrying out revenge attacks.

On December 27, the Iraqi Ba'ath Party issued a statement saying that executing Hussein constituted a "red line," and it vowed to carry out attacks against U.S. interests. "The Ba'ath Party and the resistance are determined to retaliate, with all means and everywhere, to harm America and its interests if it commits this crime [of executing Hussein]," the statement read. The day before Hussein's hanging, the U.S. State Department warned all its embassies to be on the alert for possible threats related to the execution.

Hussein's death may inject new life into the Sunni-led resistance, driving them to increase their attacks. Also, his death may transform the former Iraqi leader in the eyes of some into a martyr who was victimized by an illegitimate Iraqi government backed by the United States. Indeed, the Ba'ath Party and many in the Sunni Arab community have long perceived Hussein's trial as illegal and manipulated by Washington.

"The American administration, not the puppet government in Baghdad, has the final say. This farce called a court was nothing more than an American instrument used to put the responsibility of the crime of execution on the agent government," said a December 27 Ba'ath Party statement.

However, if the past is any indication, there may not be any significant violence. It was widely speculated when the Iraqi Special Tribunal announced its verdict against Hussein and his six co-defendants on November 5 that Hussein sympathizers and supporters of the Ba'ath Party would launch revenge attacks. But although several pro-Hussein demonstrations were reported in Sunni strongholds, especially in Hussein's hometown of Tikrit, there were only sporadic reports of violence.

As for national reconciliation, it is difficult to say whether Hussein's death will enhance it or hamper the process. His execution will most definitely be welcomed by certain segments of Iraqi society. The Shi'a, who were brutally suppressed by the former regime, will no doubt welcome his death as just retribution.

The Kurds may take a more ambivalent approach, since the Anfal trial, in which Hussein and six co-defendants are accused of killing up to 180,000 Kurds in the 1980s, is far from complete. There could be bitterness among the Kurds, who may feel that Hussein should also pay for his crimes committed against the Kurdish people. Keeping Hussein alive could have allowed a larger proportion of the Iraqi population who were subjected to the brutality of his regime to feel they received justice.

However, Hussein's execution may increase the feelings of isolation and disenfranchisement amongst the Sunni Arab population. For many Sunnis, Hussein's downfall and his death are symbolic of their population's steep demise in Iraq's political power structure following the U.S.-led invasion in 2003. The Sunni-led Hussein government, dominated by the Ba'ath Party, filled many of the seats of power in the former regime, only to be dismissed after the invasion.

Furthermore, Hussein's trial and the subsequent verdict were criticized by several Western human rights groups as being fundamentally unfair. On November 20, Human Rights Watch issued a statement describing Hussein's trial as "flawed and unsound," and calling for his death sentence to be overturned. The execution may be viewed by some Sunnis as little more than vengeance by the Shi'a, rather than an attempt to seek justice. This perception could exacerbate the sectarian divisions between the Sunnis and Shi'a, rather than fostering any sense of reconciliation.

It is also doubtful that the execution will do anything to encourage the Sunni-led insurgency to lay down their arms and embrace the national reconciliation process. For them, Hussein's demise may have been a foregone conclusion, but what is more pertinent is the legitimacy of the Iraqi government with respect to the Sunnis. In other words, what place can there be for Sunnis in the Iraqi government?

CIVILIAN DEATHS IN EASTERN AFGHANISTAN SPARKS RIOTS...
Eyewitnesses and local officials said that U.S.-led coalition forces shot and killed two villagers in the Chaparhar district of Nangarhar Province on December 31, the official Bakhtar News Agency reported on January 2. A Chaparhar tribal elder, Hajji Faizullah, claimed the soldiers broke into a house in the district and shot two people. Shaista Khan, father of one of those killed, alleged that his son "walked out of his room to see what had happened" after coalition troops broke into the home and the soldiers "immediately shot him in the forehead." Bakhtar reported that hundreds of residents of Chaparhar, tried to enter the provincial capital, Jalalabad, with the bodies but were persuaded from taking their demonstration to the city as a condition of being granted a meeting with Nangarhar Governor Gul Agha Sherzai. Afghan Interior Ministry spokesman Zmarai Bashari called the shooting a misunderstanding but declined to comment further. AT

...AND REGRET FROM PRESIDENT KARZAI
In a statement released by his office on January 2, Afghan President Hamid Karzai expressed deep regret at the deaths of the two Chaparhar villagers. "Once again, I urge the Afghan and international forces to ensure greater coordination between themselves and to practice maximum caution during their anti-terrorist operations so that civilians are not harmed," Karzai is quoted in the statement as saying. Karzai has dispatched a commission of inquiry to Chaparhar to investigate the incident and to provide financial support to the families of those killed. In an attempt to avoid civilian casualties during military operations, during a visit to his native province of Kandahar in December, Karzai told a gathering of local leaders from southern provinces to encourage civilians to keep their distance from military operations conducted by international forces (see "RFE/RL Newsline," December 13, 2006). AT

NEO-TALIBAN REPORTEDLY KILL DISTRICT POLICE CHIEF IN WESTERN AFGHANISTAN
Taliban forces attacked district offices in Khak-e Safid in Farah Province on 1 January, capturing the district's police chief and three policemen, Peshawar-based Afghan Islamic Press (AIP) reported. Speaking for the Taliban, Qari Mohammad Yusof told AIP that during "the attack, the Taliban captured the district building, which they held until the morning," adding that "the Taliban have taken with them the security commander of the district." A website purporting to represent the Islamic Emirate of Afghanistan -- the name of the country under the Taliban -- posted a message on January 1 in which it said district security chief Nazr Mohammad Khan was killed in an attack on the Khak-e Safid district by "mujahedin of the Islamic Emirate." Mohammad Yusof, speaking to AIP, had identified the security chief as "Abdullah." AT

AFGHAN NATIONAL STONED TO DEATH IN PAKISTAN'S TRIBAL AREAS
An Afghan who allegedly was involved in murder and abduction cases has been stoned to death following a verdict by a tribal council in Mohmand Agency in Pakistan's Federally Administered Tribal Areas (FATA), along the border with Afghanistan, Kabul-based Tolu Television reported on 1 January. The same tribal council reportedly has ordered all Afghan refugees residing the area to leave and issued a warning to anyone sheltering Afghans that they will be fined around $8,000. A separate report by Tolu on 2 January asserted that the Afghan Interior Ministry has strongly condemned the Mohmand stoning. Ministry spokesman Bashari said the tribal "decision contravenes all the treaties signed between the two countries and human rights values," adding, "We call on the government of Pakistan to arrest and hand the perpetrators over to the government of Afghanistan to be tried." Both Afghanistan and Pakistan recently have turned to tribal councils in attempts to control neo-Taliban and other insurgent activities on either side of the Afghan-Pakistani border (see "RFE/RL Afghanistan Report," November 7, 2006). AT

IRAN'S PRESIDENT ENVISAGES COLLAPSE OF 'ARROGANT' POWERS...
Iranian President Mahmud Ahmadinejad told a crowd in Khorramshahr in the southwestern Khuzestan Province on January 2 that Western powers are mired in problems and mistaken if they think they can exclude Iranians from "the arena" by provoking a "hue and cry and discord," IRNA reported. British and American leaders are provoking "wars and bloodshed" around the world to distract the public at home, he claimed. Speaking in a mosque on the first day of a visit to the oil-rich province, Ahmadinejad told the "enemies" of Iran, "You must accept you are moving toward destruction, and the path you have chosen will not lead to your salvation or guidance...[but to your] destruction." "We advised you" not to invade Iraq, he said, but "you did not listen" and "today are you sinking in a bog" with no "escape." Ahmadinejad told his audience of government measures intended to improve the local life and economy, including the "fair distribution" of small loans or "facilities" with "fast returns" to alleviate unemployment, "decision-taking" on the initiation of a large steel plant in the area, the designation of the Minu island near Khorramshahr as a special leisure zone, and instructions to the Oil Ministry to expedite gas supplies to homes in the Khorramshahr district, IRNA reported. VS

...AND LAMBASTES 'INSANE' ENEMIES
President Ahmadinejad told an audience in Abadan in southwestern Iran on January 3 that Iran's "malevolent" enemies are insane and will suffer the fate history reserves for "the arrogant" as they seek to block Iran's progress, IRNA reported. "The enemies of Iran do not have sane minds," he said, adding that the same people appear not to have learned from "the fate of the arrogant in history." The states that invaded Iraq, he said, have earned themselves nothing but "regret and humiliation" after "close to four years." Ahmadinejad declared that the West cannot stop Iran's efforts to access nuclear technology. "Those who imposed a one-sided war on" Iran "for eight years," to "prevent our nation's independence" are pursuing "the same goals today with slogans of confronting nuclear weapons and defending human rights," he alleged, repeating frequent accusations by Iranian officials that Western powers and the Soviet Union supported Saddam Hussein in his 1980-88 war against Iran. "Even with the execution [on December 30] of the traitor Saddam that has made everyone happy, they have gained nothing, and nations have understood the superpowers will not even have mercy on their servants, and when their interests demand it," they even "destroy their servants," Ahmadinejad said. VS

IRAN SAID TO BE FACING GAS SHORTAGES
Iran's state-run gas company has said that 11 of Iran's provinces face gas shortages and there may be a "nationwide" cut in supplies due to falling temperatures and rising demand, Radio Farda reported on January 2, citing Iranian media. The company reported total or partial cuts in gas or other fuel supplies in provinces including Kurdistan, Zanjan, and East and West Azerbaijan, some of the country's colder provinces. It issued a statement asking consumers not to waste fuel and warned that "if gas consumption increases beyond production levels, there is a possibility of a nationwide cut in gas supplies in the country," Radio Farda reported. An unnamed official was quoted as telling Fars News Agency that shortages are in part due to delays in "certain projects" of the National Iranian Gas Company, while "the fuel situation of power plants is also not in very satisfactory conditions." The official urged Iranians to comply with the Energy Ministry and National Iranian Gas Company's pleas by reducing gas and electricity use, Radio Farda reported. Deputy Oil Minister Hasan Kasai told ILNA on January 1 that gas consumption has risen by 45 percent year-on-year and Iran has cut gas exports to meet domestic demands, Radio Farda reported. VS

FORMER IRGC CHIEF CITES 'WILL' AT WORK IN SADDAM HUSSEIN PROCESS
Expediency Council Secretary Mohsen Rezai, who commanded Iran's Islamic Revolution Guards Corps (IRGC) during the 1980-88 war with Iraq, told ISNA on January 2 that former Iraqi dictator Saddam Hussein received divine "retribution" for his deeds but added that there was a "will" at work throughout Hussein's prosecution to assure that he would be swiftly tried and executed and that other dossiers relating to his rule were not opened. Rezai said unspecified disclosures would have produced embarrassing revelations for Western governments assisting Hussein during the Iran-Iraq war. "Saddam's dossier could have opened dozens of cases against Western countries, their statesmen, and Western companies," he said. Rezai said that France sold Iraq fighter jets that allowed it to bomb Iranian tankers, causing grave environmental damage to the Persian Gulf. Interrogations on Iraq's use of chemical weapons would have raised questions about their German suppliers and the German government's role here in the 1980s, he said. Rezai claimed Hussein's execution allows the re-employment "without danger" of Ba'athists and "former cadres in the Iraqi government, because there is no possibility of Saddam rejoining his partisans," ISNA reported. VS

IRAQI GOVERNMENT VOWS TO PROBE HUSSEIN VIDEO...
The Iraqi government announced on January 1 that it has launched an investigation into how mobile-phone footage of former Iraqi President Saddam Hussein's execution was shot and distributed, international media reported the same day. The grainy footage shows Hussein, moments before being hung, being taunted by witnesses while some of them invoked the name of radical Shi'ite cleric Muqtada al-Sadr. This footage differed greatly from the government-released video footage, which showed the hangman talking to a composed Hussein as he placed the noose around his neck. An adviser to Iraqi Prime Minister Nuri al-Maliki, Sami al-Askari, told Reuters on January 1, "There were a few guards who shouted slogans that were inappropriate and that's now the subject of a government investigation." One of the prosecutors during Hussein's Al-Dujayl trial, Munqith al-Farun, told AP that "two top officials...had their mobile phones with them." Hussein was executed on December 30 after an Iraqi court found him guilty for his role in the killing of 148 Shi'a in Al-Dujayl in 1982. He was later buried near his home village of Al-Awja, near Tikrit. SS

...WHILE IRAQI SUNNIS PROTEST HUSSEIN'S EXECUTION
Enraged Sunni Arabs on January 1 protested across Iraq's Sunni heartland, condemning the execution of former Iraqi President Hussein (see End Note), international media reported the same day. In Tikrit, thousands of mourners gathered in special condolence tents, while Iraqi security forces sealed off the town for a third day. Yahya al-Attawi, a member of the Muslim Scholars Association, who conducted the mourning ceremony, said, "We can't render to Saddam Hussein what he did for us, even if we did everything in our power." In Al-Dawr, where Hussein was captured by U.S. forces in 2003, locals unveiled a marble portrait of the former Iraqi leader. In Samarra, an angry mob marched through the courtyard of the Al-Askari Mosque, a Shi'ite shrine, carrying a mock coffin and a photo of the former dictator. The Al-Askari Mosque was the site of the attack in February that set in motion the current cycle of sectarian violence (see "RFE/RL Newsline," February 22, 2006). In Amman, Jordan, Hussein's eldest daughter, Raghad, joined hundreds to protest her father's execution. "God bless you! I thank your for honoring Saddam the martyr," she told the protesters. SS

IRAQI BA'ATH PARTY APPOINTS NEW LEADER...
The Iraqi Ba'ath Party issued a statement on January 1 stating that Izzat Ibrahim al-Duri has been appointed secretary-general of the party, replacing Saddam Hussein, Al-Jazeera satellite television reported the same day. Ba'ath Party spokesman Abu Muhammad said al-Duri has been responsible for leading the party since Hussein's capture by U.S. forces in December 2003. "Comrade Izzat has been leading the party's political and resistance factions since 2003, but it is a matter of protocol and internal regulation to appoint him officially as the party's secretary-general," Muhammad said. He also said that Hussein's execution will strengthen the resistance against Prime Minister al-Maliki's "corrupt rule and the foreign occupation." Al-Duri was the vice chairman of the Revolutionary Command Council and the United States has put a $10 million bounty on his head. SS

...AND DECRIES PURPORTED MEDIA BLACKOUT
Ba'ath Party spokesman Muhammad also accused the Iraqi government on January 1 of imposing a media blackout in covering Iraqis' reactions to Hussein's execution, arguing that many Iraqis have been mourning his death. "Media outlets have been focusing on reactions in President Saddam's hometown and few other Iraqi Sunni Arab cities, but we would like to say that people all over Iraq have been mourning the death of their legitimate president for two days," he said. SS

IRAQI GOVERNMENT CLOSES IRAQI TELEVISION STATION
The Iraqi Interior Ministry on January 1 ordered the closure of the Al-Sharqiyah television station after accusing it of reporting false news and inciting violence, international media reported the same day. Interior Ministry spokesman Brigadier Abd al-Karim al-Khalaf said the government has ordered that the television station be closed indefinitely. "We have warned them many times not to broadcast any false news that would increase tension in Iraq," he said. During coverage of Hussein's execution, Al-Sharqiyah's newscasters wore mourning clothes and referred to him as the "president." Conversely, on state-run Al-Iraqiyah television, Hussein was described as a "tyrant" and a "criminal." Asked if Al-Sharqiyah's coverage of Hussein's execution led to the station's closure, al-Khalaf said, "In the last three days if you watch their channel you can see they are leading people to violence and increasing sectarian tension." SS

MORE THAN 16,000 IRAQIS KILLED IN 2006
The Iraqi government reported on January 1 that 16,273 Iraqis were killed in 2006, international media reported the same day. Tabulations by the Iraqi Health, Interior, and Defense ministries found that 14,298 civilians, 1,348 police officers, and 627 soldiers were killed in violence in 2006. That total figure exceeds by more than 2,500 that cited by AP. Also, data released by the Interior Ministry on January 2 indicates that 1,930 Iraqis were killed in December, up from 1,850 in November. Meanwhile, the United States announced on December 31 that 3,000 U.S. service personnel have been killed in Iraq since the U.S.-led invasion in 2003. The U.S. military said that 112 U.S. soldiers were killed in December, making it the deadliest month for U.S. forces in two years. SS

U.S. FORCES ALLEGEDLY ATTACK OFFICES OF SUNNI LEADER
Salih al-Mutlaq, leader of the Sunni-led Iraqi Front for National Dialogue, on January 1 accused U.S. forces of attacking an office belonging to his party in the Al-Jami'ah neighborhood in western Baghdad, Al-Arabiyah satellite television reported the same day. He said two members of his party were killed and that U.S. warplanes mistakenly bombed a house near his party's offices, killing a family of four. A U.S. military account said that its troops killed six suspected terrorists during a raid on a purported Al-Qaeda in Iraq safe house in Baghdad. Al-Mutlaq rejected the U.S. account, describing the attack as a "disgraceful" act. "If the intended target was the one in which four persons were killed -- a father, a mother, and two children -- then were those Al-Qaeda operatives?" he said. SS

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