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Baltic Report: May 8, 2000

8 May 2000, Volume 1, Number 16
Baltic Stock Exchanges Moves Toward Norex
Leaders of the Estonian, Latvian and Lithuanian stock exchanges on 2 May signed a letter of intent to join the pan-Nordic stock exchange Norex. The three will begin work on harmonizing their procedures with Norex and hope to join Norex as soon as mid-2001, BNS reported. Norex links the Copenhagen and Stockholm stock exchanges, while its Oslo and Reykjavik counterparts have also signed letters of intent.

Baltic Populations Predicted To Dwindle In 50 Years
The UN Economic Commission for Europe predicts that the populations in Estonia and Latvia will drop drastically in 50 years due to low birth rates, LETA quoted the "New York Times." The report indicates that Latvia has the lowest fertility rate on the continent at 1.09 child per woman. The report predicts that if current trends continue, Estonia's population will drop by 34 percent and Latvia's by 31 percent in 50 years.

Tallinn To Privatize Water
The Tallinn city government on 3 May decided to privatise Tallinna Vesi (Tallinn Water). The sale of a majority stake, or 50.4 percent in the company, should bring in about 580 million kroons ($33.14 million), ETA reported. The conditions require bidders to have operated water utilities in at least four countries, and for at least three years. Bidders would also need to present detailed plans for the utility, as well as water tariffs for a five-year period. Tallinn plans to retain a "golden share" in the utility. Earlier the city had planned to sell off only a minority stake.

Sudden No-confidence Vote On Estonian Minister Fails
A sudden no-confidence motion against Interior Minister Tarmo Loodus failed on 4 May. A group of 30 opposition deputies raised the motion the same morning, though it was defeated soundly with 42 votes by the governing majority, ETA reported. Opposition deputies accuse Loodus of losing control of his ministry, especially on issues relating to the police.

Estonian Fm Confident On Eu Road
Toomas Hendrik Ilves expressed confidence at Estonia's EU integration during an interview at RFE/RL's headquarters in Prague. Ilves said that to some it was a "surprise" that Estonia "is really in the frontline of countries negotiating" for EU membership. At the same time, Ilves criticized EU members for subsidizing exports to non-members: "I personally believe that the use of export subsidies on the part of rich countries to sell products in poor countries that will sooner or later become members of the European Union is probably not the best idea -- morally." Ilves, the former director of RFE/RL's Estonian service, also reaffirmed that Estonia does not see Russia as a threat and hopes that Russia is successful in becoming democratic and with a free-market, adding that Estonia is "crossing its fingers." Ilves is in Prague to attend a conference organized by the European Socialist Party on EU enlargement.
* An administrative court in Tallinn ruled that the sacking of Andres Kollist, former head of Citizenship/Migration, was improper and reinstated him. The court also ruled that the Interior Ministry owes him back wage and legal fees. Kollist has said that he will not return to the position.
* The Estonian Institute of Human Rights reported that government red tape, not discrimination, hinders minorities from exercising their rights.
* Thousands demonstrated with red communist flags as well as imperial Russian ones in Narva for 1 May.
* Helicopter service between Tallinn and Helsinki began on May 1. The copterline will make the 18-minute trip a dozen times every workday. They are targeting business executives since the entire trip from check-in to arrival will total less than 45 minutes. The cost is about 2500 EEK each way -- competitive with an airplane ticket.
* Moscow-Tallinn flights which had been suspended because of a landing rights dispute have resumed. Estonian Air will fly 4 times a week and Aeroflot-partner ELK will fly 3 times a week.
* Deputy Mayor Ivar Virkus endorsed a red-light district for Tallinn saying it would be a "new tourist attraction". He suggested Tatari street as the site because many brothels already exist there.
* The "love" computer virus caused massive problems in Estonia -- Eesti Telekom, Hansapank, Ühispank, as well as the Customs Service, the parliament and other government agencies were affected.

Latvian Government Approved
On May 5 the Latvian parliament on a party line vote of 69 to 24 with 7 abstentions approved the new government of Prime Minister Andris Berzins which includes four centrist parties. The fifteen member cabinet replaces the government of Andris Skele which collapsed after nine months over differences on privatization. The former coalition of People's Party, Latvia's Way and For Fatherland and Freedom has been joined by the New Party headed by Raimond Pauls. Almost half of the new cabinet are members of the former government. Prime Minister Berzins, a member of Latvia's Way, is the former mayor of Riga, Latvia's capital and largest city.

Latvia Celebrates Historic Declaration
Latvia celebrated the tenth anniversary of the 4 May 1990 declaration by the Supreme Council on the restoration of independence. About 200 former and current parliamentary deputies took part in a procession to lay flowers at Riga's Freedom Monument, LETA reported. Parliament Speaker Janis Straume, in his special address, criticized politicians for losing the trust of the people and reminded deputies that they represent the people who elect them, BNS added. Another historic event was celebrated this week. 1 May marked the 80th anniversary of the first Latvian Constitutional Assembly, which convened under the nation's first President Janis Cakste.

Privatization Efforts Hindered At Ventspils NAFTA
The controversial auction of state-owned shares in oil transhipment firm Ventspils Nafta (VN) apparently failed on 28 April when only one share was purchased at the auction, BNS reported. Preliminary data from the auction at the Riga Stock Exchange showed that only one VN share out of 5.2 million offered was sold at the minimum price of 1.94 lats ($3.22). The auction had been heavily criticized for the high minimum price which was double what VN shares closed at on 28 April--0.84 lats. MH

Latvians Defeat Russians -- In Hockey
On May 6 the Latvian national hockey team defeated the Russians 3-2 at the Ice Hockey World Championships in St. Petersburg, reported Reuters. With this win, the LatvianS effectively knocked the Russians out of a chance of reaching the quarter-finals. "The city of St. Petersburg has not seen such a nightmare since 1917" said daily Sports-Express, referring to the Bolshevik Revolution. And the headline in the daily Sovietsky Sport read, "Shock". Reuters reported that Alexander Shokhin, a member of the Duma, Russia's lower house of parliament, said, "This is a national humiliation and our players had no right to lose, especially to Latvia, with which we have fairly tense relations".
* About 200 people marched on 1 May in Riga -- all from the Socialist Party who denounced Latvia's restoration of independence.
* SKDS released a poll showing that the most trusted institution in the country remains the church with 73.7%, then radio at 76.2% and TV at 75.2%. The Privatisation Agency has the least public trust with only 13%, while the government, Saeima and customs service also receiving low rattings.
* The head of the HIV prevention center estimates 10% of IV drug users are HIV positive.
* There are still 33,350 people without new passports due to the recent expiration of the old Soviet passports. More than half of Latvia's affected residents are between 16-44 and only 7700 are over 60.
* The Liepaja memorial to the downed US naval airmen was defaced with symbols of the National Bolsheviks as well as anti-NATO slogans.

Lithuania Sees Good First Quarter Growth
The Statistics Department on 28 April announced that Lithuania's economy grew by 4.2 percent in the first quarter of 2000 compared to the same period in 1999, ELTA reported. This is the first quarterly growth in Lithuania's economy in 18 months. The first quarter of 1999 saw a disastrous drop of 5.7 percent. The unemployment rate dropped, but only 0.2 per cent. The rate at the start of May nationally is 11.2% with the industrial towns of northern Lithuania considerable above that-- Pasvalys still the highest at 20.1%, Akmenë at 19.7%, Siauliai at 16.1% and Panevezys at 14.5%. The southern resort city of Druskininkai is at 19.9%.

Cuban Wto Payback For Lithuania Supporting U.S.?
"Kauno Diena" speculated that Cuba may be taking revenge for Lithuania's position in a human rights vote in the UN via its World Trade Organization (WTO) membership, BNS reported on 2 May. The daily reported that Cuba made an unexpected request to begin bilateral trade talks, which prompted speculation Cuba wanted free access for its sugar -- a worry for Lithuania, which has itself a sugar surplus. The daily linked the trade talks to Lithuania's vote for a U.S.-sponsored UN resolution condemning Cuba's human rights, as Deputy Foreign Minister Algimantas Rimkunas said that it was "clear proof" that the WTO entry mechanism was "undoubtedly politicized." BNS also quoted "Verslo Zinios" saying that a group of countries, including the U.S., is blocking Lithuania's WTO entry over export subsidies and support for agriculture.

Brazauskas Is Back
Former President Algirdas Brazauskas announced his return to politics in a nationally televised program on May 3, Interfax reported. Brazauskas said that he had helped engineer the electoral alliance of the Democratic Labor Party, the party he founded and led, and the Social Democratic Party. He declined to confirm reports that he will head the combined ticket for the October 8 parliamentary elections, nor would he say if he wanted to run for prime minister. He stressed the need for a consolidation of Social Democratic forces in the country.
* There was another one-week stoppage at Mazeikiu Nafta due to lack of crude from Russia.
* At a weekend conference 200 delegates founded the Modern Christian Democratic Union and elected MP Vytautas Bogusis its chairman.
* The second unit at Ignalina was turned back on after completing routine maintenance on 3 May, and the first unit was shut down for five months of repair. The parliament voted to set January 1, 2005, as the deadline for completing preparations to close down the first of the two units, while a group calling itself, "For Independent Lithuania" held a rally in front of the parliament protesting the pre-term closure of the nuclear power plant.
* Lithuanian officials said on 5 May they would investigate the local origins of the "Love Bug" computer virus. Local hackers altered the text and resent it with a subject line reading, "Susitikim si vakara kavos puodukui" ("Let's meet this evening for coffee")

In an interview with BBC on 1 May, Latvian President Vaira Vike-Freiberga said that recent Russian statements opposing Latvia's bid to join NATO were reminiscent of the Cold War and had sparked concerns about Russia's new military doctrine. She pointedly added that "Any attack on Latvia will be an attack on the European Community," noting that "it will be by implication an attack on the NATO Alliance which, after all, supports so far, on principle, the enlargement of NATO in this region of the world." These remarks of Vike-Freiberga, known for her directness, have provoked a round of criticism from Moscow.


(Unofficial translation from Russian)

Statement Of The Russian Foreign Ministry

Remarks unprecedented in their anti-Russian tone and following the worst traditions of the Cold War have come from Riga. In a BBC interview the Latvian President, Vaira Vike-Freiberga has alleged that Russia is harboring plans to attack her country of which she was informing the whole world. Without having any serious arguments - and there can¹t be any - the president of a neighboring state gave her own interpretation of the military doctrine recently approved in Moscow. The doctrine is known to be exclusively defensive in character and is not aimed against any other states. That was how it was perceived in the world. But this did not deter the Latvian president who gave free rein to her apparently fertile imagination. Not that she is being original. This is not the first time Riga is trying to portray Russia as an enemy in order to divert internal and international public opinion from domestic problems. Clearly, the nervousness that permeates the interview of the Latvian president has its reasons. The international, and indeed, Latvian public opinion is increasingly aware of the deteriorating problem of inter-ethnic relations in that country. The rights of national minorities in the sphere of language and education set down in the documents of the Council of Europe and the OSCE are crudely violated, the problem of granting citizenship to hundreds of thousands of permanent Latvian residents is being solved very slowly and numerous and substantial differences in the rights of citizens and non-citizens persist. Those who would like to rehabilitate collaborators with fascism and in effect revise the results of the Second World War feel increasingly comfortable in Latvia. Plans of prosecuting veterans of the anti-Hitler coalition are still on the agenda in spite of being patently untenable from the legal and procedural points of view. Even after the Supreme Court of the Latvian Republic rescinded the sentence of the former Soviet partisan, V.M. Kononov, top Latvian officials, including the president, continue to call him "a war criminal" in spite of the principle of presumption of innocence.

One is also put on the alert by the fact that such crude unfriendly rhetoric with regard to our country is being used to argue the case that Latvia has no alternative but to join NATO. Likewise, it is obvious with what luggage that country is knocking on the doors of the North Atlantic Alliance.

As for Russia, we have favored and favor now the development of goodneighborly mutually beneficial relations with Latvia and are ready for it. It is up to Riga to give up the cliches of the past and to build its internal and external policy on universally recognized principles of the civilized world.