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Baltic Report: August 24, 2000

24 August 2000, Volume 1, Number 29
A poll by the EMOR agency indicated that a majority of Estonians oppose the planned sale of 49 percent of the country's main power plants to U.S. company NRG Energy, ETA reported on 17 August. Among respondents, 67 percent voiced opposition to the deal, while only 8 percent expressed support. Another 19 percent had no opinion. Pollsters say that the high negative numbers can be attributed to opposition of the sale to foreigners of prime economic assets, and also questions raised by President Lennart Meri and the country's business elite to the deal. Meanwhile, both sides in the protracted negotiations are working on finalizing the deal. The government voiced its commitment to the sale, while the leader of the opposition Center Party, Edgar Savisaar, pledged on 19 August to continue protests, including a referendum, to stop the sale, BNS reported.

At an extraordinary session of parliament called on 14 August to discuss the proposed sale of minority shares in Estonia's Narva power plants to U.S.-based NRG Energy, 45 members of the opposition, led by the Center Party, registered a no-confidence motion against Economics Minister Mikhel Parnoja for his role in the NRG negotiations, ETA reported. After a recess called to allow deputies to study documents related to the sale, the quorum for the session collapsed with only 41 parliament members returning. Prime Minister Laar accused the opposition for failing to turn up to hear Economics Minister Mihkel Parnoja speak about the deal, BNS added. Laar said it was "absurd" that the no-confidence motion was raised. The ruling coalition's council decided to request a special session of parliament in October to debate the sale to NRG. Council chairman Andres Tarand said that the time would also be spent to amend the constitution, since the current deal may have minor violations, ETA reported on 15 August.

A council of bishops of the Russian Orthodox Church, meeting in Moscow, reaffirmed their non-recognition of the Constantinople-backed Estonian Apostolic Orthodox Church and forbade its members to take part in events hosted by its Estonian rivals, BNS reported on 18 August. The order comes as Ecumenical Patriarch Bartholomew I announced a visit to Estonia in late October, "Postimees" reported a day earlier. The council's resolution termed as "forced" the division of the Church in Estonia and declared recognition of the rival branch "not possible." An unnamed Russian Orthodox cleric told BNS that the argument centered on property rights. Both churches claim to be the official Orthodox Church in Estonia and battle each other on both legal and jurisdictional issues.
* The Estonian daily "Eesti Paevaleht" on 18 August published an exclusive interview with a participant in the 1991 bombings in Estonia, who charged that Russian paratroopers carried out the attacks at the behest of Russian leaders of the anti-independence movement in Estonia. Boris Sleptsov, who confessed his involvement last year, said "the explosions were organized by Mikhail Lyssenko, who also provided us with 20 kilograms of explosives from the Pskov paratrooper division and took us there for training." According to Sleptsov, Lyssenko organized the bombings to provoke the Soviet Army into suppressing Estonia's independence movement. Sleptsov still lives in Tallinn and has not been prosecuted because his confession was made after the time limit set by Estonia's statute of limitations. He is, however, paying a certain amount every month as restitution for the estimated 2,111,649 kroons in damages caused by the five bombings in which he participated. The organizer of the bombings, Lyssenko, left Estonia in 1992 and was involved in the Transdniester conflict in Moldova. Currently, he is reported to be active in Chechnya as a mercenary.
* The Center Party, Estonia's largest opposition party, charged in its weekly paper "Kesknadal" on 16 August that Economics Minister Mikhel Parnoja collaborated with the KGB in Soviet-occupied Estonia. The paper printed what is purported to be the full text of Parnoja's statements to KGB investigators who were probing the activity of one of Estonia's best know dissidents, Juri Kukk. BNS reported that the statement, which is not in Parnoja's handwriting, also appeared in the daily "Postimees" in 1993. As Economics Minister, Parnoja is one of the government's main advocates for privatization of Eesti Energia's (Estonian Energy's) Narva power plants.
* Estonia's opposition parties announced they had collected more than 150,000 signatures on a petition calling for a referendum on the privatization of Eesti Energia and Eesti Raudtee (Estonian Railways), BNS reported on 15 August. The four opposition parties said they would continue their campaign through September in hope of reaching 200,000 signatures.
* The Estonian parliament will meet in two more extraordinary sessions during August before resuming its normal session in September, ETA and BNS reported on 15 August. On 28 August, the parliament will meet to consider the dismissal of defense forces commander Lieutenant-General Johannes Kert and also bills on health management, government procedures, and amendments to the criminal code. On 29 August, the parliament will continue consideration of the balance of a list of 16 bills, including those on intellectual property, public procurement, the state budget law, and possibly the opposition initiated no-confidence motion in Economics Minister Mikhel Parnoja.
* The Estonian government set a spending limit of 29.5 billion kroons ($1.73 billion) during a 15 August cabinet meeting to consider the 2001 state budget, ETA reported. This represents a 1 billion kroon increase over current spending. The government had hoped to cap the proposed budget at 29 billion kroons, but the ministries of education, culture, interior, and social affairs had lobbied for an additional 2 billion kroons in spending for their programs. The government compromise provides only 574 million kroons in additional spending, to cover salary increases for teachers, cultural, and social welfare workers, as well as social sector benefits. The proposed budget must now be approved by the parliament, where it faces opposition even from members of the ruling coalition parties because the proposal calls for increases in taxes to keep its legal obligation for a balanced budget.
* The Estonian government on 15 August decided to tax the interest individuals earn on bank deposits, BNS and ETA reported on 16 August. If the parliament approves the move, as of 1 January 2001, interest income will be taxed at a rate of 26 percent on the estimated 2 million accounts in the country's banks. The government hopes to earn an estimated 50 million kroons ($2.9 million) to help offset a projected 2001 government budget deficit of 574 million kroons.
* Estonia's leading bank, Hansapank, announced it would consider ending interest payments on bank deposits if the government imposes a 26 percent income tax on interest, ETA reported on 18 August. According to Hansapank Finance Director Errik Raasuke, taxation of interest would cause additional operating expenses for the banks, which would have to deduct the tax and transfer it to the Tax Board. Raasuke said, "The question is who will pay for these extra costs that can amount to tens of millions of kroons." Slo Suurkask, vice president of Estonia's second largest bank, Shispank, does not support the idea of ending interest payments on deposits, but is concerned that the government's decision to again tax interest will reduce the volume of bank deposits.
* The town of Paldiski, site of a former Soviet nuclear naval facility, has asked for the Estonian government's help in averting a financial collapse, BNS reported on 18 August. Interior Minister Tarmo Loodus said, "The situation is not an emergency but just very serious financial trouble," after meeting with leaders of the municipal government and town council. Paldiski's debt has grown since 1997 to include almost 10 million kroons ($647,000) of unpaid state taxes, 12 million kroons ($706,000) of loans from Estonian banks due in 2007, and the courts have ordered the town to pay a 1.7 million kroon debt to a state heating utility. Paldiski town officials say they need an additional 15 million kroons ($877,000) this year, and 10 million annually for the next five years "to avoid further deterioration of the town's financial situation."
* The policy-making council of Estonia's largest opposition party, the Center Party, led by former Prime Minister and Interior Minister Edgar Savisaar, issued a statement on 19 August accusing the three-party ruling coalition of "crushing opposition and the media," BNS reported. The statement reads, "Our young society is again divided into just two camps and the easier way is to gag the other side like happened in 1934." The statement gives no examples to support the charges. The statement also claims "mistakes" that will place Estonia under foreign control must be avoided, charging that a "narrow circle of people" who benefited from the collapse of the Soviet command economy "have in the name of their personal well-being given up hundreds of companies to foreigners" who often disregard Estonian laws and the country's needs.
* The Estonian Ministry of Social Affairs announced that the number of recipients of subsistence benefits dropped 5.8 percent in the first half of 2000 as compared with the same period a year ago, BNS reported on 14 August. The number of people receiving unemployment benefits dropped from 17.8 percent to 14.5 percent, while the number of low-salaried employees dropped from 10.4 percent to 7.8 percent. In the first half of 1999, children made up 44.3 percent of all recipients of the subsistence benefit, while in the same period of 2000 the ratio dropped to 39.5 percent. The total amount of money dispersed in subsistence payments in the first six months of this year is 174 million kroons ($10 million), while in the first half of 1999 it was 200.4 million kroons ($11.76 million).
* The council of the Estonian Privatization Agency announced on 16 August that all applicants in the tender to privatize the Estonian railway company qualified for the second round of bidding, ETA reported. The privatization tender announced in April drew a total of four bids: Raudtee Erastamise Rahva AS (representing a group of Estonian businessmen), Baltic Rail Services (a group of U.S., British, and Estonian companies), the U.S. railway company CSX Transportation, and SJ International (a subsidiary of Swedish State Railways).
* The board of the Estonian Employers and Industry Central Union voted on 17 August to support raising the minimum monthly wage to 1,470 kroons starting next year, ETA reported. Currently, the minimum monthly wage is 1,400 kroons and the trade unions have demanded it be raised to 1,650 kroons.
* The prime suspect in the May bombing of the Stockmann department store in Tallinn, missing since being released from pre-trial detention in July, was discovered in Tallinn's psychiatric hospital, BNS reported on 16 August. Denis Balynski, who had confessed to the two small bombings that injured two on 19 May, was released on his own recognizance by judge Valeri Loonik in a Tallinn City Court. On 7 August, when a higher court ordered the revocation of the release order, Balynski was found to be missing and it was feared that he had fled to Russia. However, a doctor at the psychiatric hospital said that Balynski had been in the hospital for nearly a week when he recognized the man from a newspaper photo. Balynski was returned to prison.

The downtown Riga shopping center "Centrs" was rocked by two explosions at about 5:30 pm on 17 August, injuring at least 35 persons--three seriously, AP, BNS, and LETA reported. Criminal Police Chief Valdis Pumpurs was among the injured, but investigators do not believe he was the target. The blasts occurred in the RIMI supermarket's lobby area, where shoppers leave their bags. The store's general director and two women employees were the most seriously injured and have been evacuated to Norway and Sweden to undergo treatment at burn centers there. BNS added that the government called an emergency session and border guards increased security at the country's borders. This was the largest explosion in a public place since the restoration of independence in 1991. According to the police, explosives with a capacity equal to one kilo of TNT was used in the first explosion and the second blast equaled 200-300 grams TNT, and could only have been set by someone skilled with explosives.

A poll conducted by SKDS indicated that most residents of Latvia feel that unemployment is the most pressing issue for the government, BNS reported on 15 August. The poll shows that 35.4 percent of respondents think the government should place employment issues on the top of its agenda, followed by social policy issues and social guarantees (35.2 percent), education (26.8 percent), and the standard of living (26.5 percent). Only 0.6 percent believed that national defense should be the government's top priority.

Tilts Communications, the foreign-owned company running Latvia's telephone monopoly Lattelekom, filed a complaint against the Latvian government at the Paris-based arbitration court of the International Chamber of Commerce, LETA reported on 15 August. The two sides are at odds over the shortening of Lattelekom's monopoly period under an umbrella agreement concluded in 1993. Tilts, which paid $160 million for its 49 percent stake (the remaining 51 percent of Lattelekom is owned by the state) and is owned by Finnish telecom company Sonera, wants to be compensated if the original agreement giving Lattelekom a monopoly on fixed-line telephone service until 2014 is broken. Latvia has promised the World Trade Organization to end the monopoly in 2003 and the two sides have been negotiating on compensation.
* Latvian Finance Minister Gundars Berzins, after touring the Presidential Palace on 16 August, announced that profits from the State Real Estate Agency this year would be earmarked for repairs to the palace. Berzins estimated that 300,000-350,000 lats ($496,000-578,000) would be made available to renovate the palace, which President Vaira Vike-Freiberga has complained is in a state of disrepair, LETA reported. Berzins also said he will look for additional funding to fix the palace, which features cracks in walls and an insecure foundation; the main reception hall may have to be shut down due to the foundation problems.
* The Latvian government on 15 August endorsed the draft law on accession to the Council of Europe's Anti-Corruption Convention, BNS and LETA reported. The document still needs to be ratified by the parliament. The object of the convention is to improve international cooperation in fighting corruption as well as to coordinate criminal legislation against corruption. The European Commission cited the need for Latvia to ratify the Convention in its latest progress report on the country's efforts to meet EU membership requirements.
* The Latvian Constitutional Court agreed to review a case brought by 23 parliament members on 21 March challenging the Saeima election law banning members of organizations declared to be unlawful in Latvia after 13 January 1991 from participating in the parliamentary elections. The law also prevents former KGB operatives from running for public office, LETA reported on 14 August.
* The Latvian Ministry of Justice sent to Organization for Security and Cooperation in Europe (OSCE) High Commissioner for Minorities Max van der Stoel the final version of draft regulations to implement Latvia's language law, including a letter explaining why certain earlier OSCE recommendations have not been incorporated, BNS and LETA reported on 16 August. The government on 24 August will--along with any OSCE comments--consider the draft regulations, which must be adopted by 1 September when the country's language law comes into effect.
* The Russian newspapers "Vremja novostei" and "Izvestiya" criticized the draft regulations of Latvia's language law, LETA reported on 16 August. "Vremja novostei" accused Latvia of trying to "reanimate the draconian state language law" and both papers falsely claimed that the OSCE and the Council of Europe disapproved of the law. "Vremja novostei" wrote, "It is all the same, whether you are an American, Russian or French, if you live in Latvia--you have to learn Latvian, if you have arrived on a business trip--look for an interpreter, otherwise--a huge fine."
* The Latvian Constitution Protection Office has initiated a criminal case against the business magazine "Kapitals" for publishing the article "Jews Rule the World," which violates Latvia's criminal code paragraph on national and race equality, BNS reported on 14 August. The author, editor, and other persons related to the publication are being questioned. If convicted, the author, editor, and publisher can face up to three years in prison and a fine of 60 minimum wages. "Kapitals" Editor in Chief Guntis Rozenbergs resigned early in August after the Latvian Jewish communities' representatives protested the publication of the article.
* The Prosecutor-General's Office, for the first time, invited experts from Russia to attend a planned international meeting on the criminal cases of suspected war criminals Konrads Kalejs and Karlis Ozols, BNS reported on 15 August. An earlier meeting on the cases was held on 17 February, where international experts from a number of Western countries helped develop Latvia's extradition agreement with Australia and exchanged information on how to proceed with the cases. The Latvian parliament may ratify the Latvian-Australian extradition treaty at its next session on 7 September, LETA reported on 14 August.
* At the request of Janis Jurkans, the chairman of the organization For Human Rights in a United Latvia, four representatives of the Israeli parliament, the Knesset, arrived in Latvia to review criminal proceedings against former Baltija Bank head Aleksandrs Lavents and his petition before the European Court of Human Rights, LETA reported on 16 August. The human rights court in Strasbourg decided to review Lavents' complaint against Latvia's courts, where he is currently being tried on fraud charges for his role in the collapse of Latvia's largest bank in 1995.
* The Ministry of Justice told reporters at a press conference that there are 14 laws the ministry cannot implement due to a lack of funds, LETA reported on 16 August. Minister of Justice Ingrida Labucka said that there is a catastrophic situation with judges' qualification grades, since the ministry cannot raise the qualification grades of at least 100 judges because it cannot afford the cost. Labucka also said that the law giving a released jail inmate a 50 lats ($80) benefit on release is not implemented because the Correctional Institutions Administration doesn't have the necessary funds. The most serious problem concerns the 175 prisoners throughout Latvia's prisons infected with HIV who cannot receive adequate treatment. The same is true for prisoners suffering from tuberculosis.
* The Latvian Citizenship and Migration Affairs Department have granted all five Latvian pilots recently released from a prison in Calcutta, India residence permits, BNS reported on 16 August. The pilots had served five years of a sentence for smuggling illegal arms and were released unexpectedly after Russian President Vladimir Putin appealed for their release. All five had accepted Russian citizenship during the appeal process and were flown to Moscow before returning home to Latvia. Navigator Igor Moskvitin, who became infected with tuberculosis in the Calcutta prison, is receiving free medical treatment at a center in Latvia, ITAR-TASS reported on 16 August.
* Central Statistical Bureau data shows that foreign visitors spent about 20 million lats ($32 million) in Latvia in the second quarter of this year, an increase of six million lats over the previous quarter, LETA reported on 15 August. According to the bureau, foreign tourism has surged by 8 percent this year and the amount of money spent by tourists in Latvia by 15 percent compared to 1999. Travelers transiting through Latvia accounted for 35 percent of all visitors, while 22 percent were on business trips, 15 percent were visiting friends and relatives and 13 percent were in Latvia for vacations. The overwhelming majority, 82 percent, traveled to Latvia by motor vehicle, 8 percent by plane, 6 percent by ship, and 4 percent by train.
* The Latvian State Revenue Service released a list of major tax scofflaws, LETA reported on 18 August. The largest debtors of social taxes and social insurance payments as of 1 August are: Radiotehnika 98 Ltd. (also known as Kompresors), owing 1,063,800 lats ($1.7 million); Sonolat Ltd., owing 1,003,800 lats ($1.6 million); and the joint-stock company Dambis, which owes 945,300 lats ($1.3 million). A German joint-venture, Redeks, also owes Latvian taxes of 734,100 lats; the Riga Aviation University some 605,100 lats; the joint-stock company VEF 545,100 lats; Rigas elektromehaniska rupnica 539,800 lats; Rigas aditajs 535,200 lats; and the bankrupt Banka Baltija 512,700 lats.
* Latvia's foreign trade volume in actual prices rose 13.3 percent to 565.3 million lats ($904 million) for the period from January to June this year as compared to the same period in 1999, LETA reported on 17 August. The gap between total volume of imports and exports remained almost constant for the period, with imports accounting for 59.6 percent of total trade, compared to 59.3 percent for the same period in 1999.
* The volume of freight carried by Latvia's railroads increased 10.3 percent in the first seven months of this year, LETA reported on 16 August. The joint-stock company "Latvijas dzelzcels" has already carried 21.3 million tons of cargo in the first seven months of 2000 compared to 19.3 million tons last year. This includes domestic cargo, which is up 4.9 percent for the year, while international railroad cargo is up by 11.1 percent. Of the international cargo, the greatest gain was in export cargo--up 26.3 percent for the year. The Ministry of Transport also announced on 16 August that volume of oil products handled at Latvia's ports totaled 1.6 million tons in the first seven months of this year--an increase of 412,100 tons over the same period last year.
* The joint-stock company Liepajas Metalurgs (Liepaja Metals) will lodge an appeal against the U.S. International Trade Commission's decision to continue investigating the company for violating U.S. anti-dumping regulations on steel rebars, LETA reported on 15 August.
* The joint-stock company Ventspils Nafta (Ventspils Oil) announced an opening for the position of director-general for the company, LETA reported on 18 August. Gundega Varpa, the press secretary for VN, said that VN board chairman and President Igors Skoks had fulfilled the duties of director-general earlier. However, since Skoks is also a council member at the LatRosTrans company, under Latvian regulations he can no longer act as director-general of VN.

Lithuanian Deputy Foreign Minister Vygaudas Usackas summoned Russian Ambassador Yuri Zubakov on 17 August to voice concern over violations in the military transit procedure to and from Kaliningrad, BNS reported. This comes as an 11-car train carrying military cargo, discovered in the Vilnius region, was sent back to Belarus due to the discovery of four armed Russian military escorts on board in violation of a 1993 agreement regulating Russian military transport through Lithuania. Ambassador Zubakov said such violations will not happen again, and that they will follow the agreement "to the letter."

The five remaining hunger strikers at the bankrupt Inkaras boot factory in Kaunas vowed to continue their protest action and even stop drinking water, ELTA reported on 18 August. The protestors, all former workers at the bankrupt factory, demand that the government pay back wages for all employees, which in some cases stretches back 16 months. The government has refused, saying that Inkaras factory management was already given a loan to pay these wages from a special fund. The Inkaras hunger strikers on 16 August sent an appeal to 18 foreign embassies in Vilnius asking them to "help save the lives of the workers and their children" by paying the back wages, BNS reported. In a sign that such discontent may spread, a worker of the Taurage furniture factory announced that he would begin a hunger strike for back wages in front of the president's office in Vilnius and was ready to commit suicide, ELTA reported on 16 August.

Prime Minister Andrius Kubilius on 17 August ordered the Ministry of Economics to develop a streamlined bankruptcy procedure and more effective laws for seizing assets in fraud cases such as the one at the Inkaras factory. Government statistics show that there are 407 companies in Lithuania awaiting bankruptcy procedures with an estimated obligation of 98 million litas ($24.5 million) of unpaid wages. The Inkaras factory is owned by the notorious Kaunas-based holding company EBSW, which defaulted on tens of millions of dollars borrowed from the State Commercial Banks in 1995-96 during the tenure of former Prime Minister Adolphas Slezevicius. The daily "Lietuvos Rytas" reported on 21 August that funds loaned to the Inkaras factory to pay employee back wages was used to pay for the security detail of EBSW Vice President Algis Pasukevicius.

A petition drive calling for changes to Lithuania's electoral system failed after the initiators could not collect the necessary 300,000 signatures in support of the motion, BNS reported on 16 August. A member of the initiative group, former deputy and signatory of the restoration of independence Kazimieras Uoka, said that the group gave the Central Election Commission only 44,300 signatures. The petition proposed that a referendum be held to reduce the number of members in the Lithuanian parliament from 141 to 71 and make all of those seats single mandate, thereby eliminating party candidate lists. Two previous attempts at structural reform of the parliament collapsed earlier this year. The next parliamentary elections for all 141 Seimas mandates will take place on 8 October.
* The Lithuanian parliament will meet in extraordinary session from 21-31 August to reconsider laws previously vetoed by President Valdas Adamkus, ELTA reported on 18 August. These include a controversial media law that sets up a control board on pornography and violence, the polygraph law for civil servants, free port status for Lithuania's largest seaport, Klaipeda, and the revamping of civil servant salaries. The parliament will also consider amendments to the bankruptcy law to shorten and simplify the procedure, and a package of administrative justice bills and consumer protection.
* In spite of Germany's decision to pay compensation to Lithuanian citizens used as Nazi slave labor during World War II through a special fund set up by Russia, the Lithuanian government continued its appeals to Germany to allow such compensation to proceed through Lithuanian organizations, ELTA reported on 18 August. Lithuania's deputy foreign minister, Oskaras Jusys, again met with German ambassador in Vilnius, Detloff von Bern, to ask him to transmit the repeated appeal to his government, according to BNS. Lithuania proposes that payments be made to victims through the Lithuanian Research Center of the Population's Genocide and Resistance, or through the International Migration Organization in Geneva. Compensation claims by Lithuanian citizens could reach several hundreds of millions of dollars.
* The unregistered radical Lithuanian National Social Union held a rally outside of Kaunas City Hall on 16 August, one week after a similar rally in the city of Siauliai, BNS reported. Party leader Mindaugas Murza, speaking to a crowd of about 150--some bearing Swastika-like symbols--boasted that they are coming "to rescue the nation and would soon attract thousands of supporters." The report indicated that anti-Semitic and anti-African statements were made at the rally, in addition to harsh criticism of the national government. Radical Kaunas Mayor Vytautas Sustauskas, himself linked to various anti-Semitic statements, stood with his deputy and listened to the rally for about half hour and spoke to Murza at one point. Siauliai Mayor Vida Stasiunaite, of the New Alliance (Social Liberals), who took part in a similar rally a week ago, is fending off criticism of being allied with the National Socialists. Although the National Social Union is not registered at the national level, it is with many local jurisdictions such as Kaunas and Siauliai.
* Kaunas Mayor Vytautas Sustauskas' own political party, the Freedom Union, held a demonstration outside the local offices of the Ministry of Education and Science on 18 August to protest uneven educational reform in city high schools, the Kaunas daily "Laikinoji Sostine" reported on 19 August. Although the mayor and his deputy for education issues, Deputy Mayor Gediminas Jankus, did not speak at the rally, Jankus told reporters the protest was organized after Minister of Education Kornelijus Platelis made the decision to exclude nine of the city's schools from the reform plan. The rally included members of the Freedom Union from Kaunas and also the cities of Taurage and Mazeikiai who were bussed in for the event. A small group of teachers and concerned parents also attended the rally.
* Two Lithuanian parties, the Christian Democrats and the moderate Social Democracy 2000 party have vowed to "dam up the wave of populism and radicalism in the country" ahead of the 8 October parliamentary election, ELTA reported on 16 August. Both groups, in talks about a possible electoral alliance, said that Lithuania is experiencing a rising tide of populism which is not ashamed of using radical methods, fueling negative feelings and scapegoating among the population. Deputy Rimantas Dagys, leader of Social Democracy 2000, was joined by Foreign Minister and Christian Democratic Party board chairman Algirdas Saudargas in promising a campaign to promote credible solutions and explaining how the burdens of ongoing reforms can be reduced.
* Lithuania's trade with Russia was revived during the first half of this year, ELTA reported on 18 August. Exports to Russia surged by 29.7 percent while imports soared by 53.7 percent in the first six months compared to the same period in 1999. Lithuania's exports to Russia were valued at 484.6 million litas ($121.15 million) and imports from Russia were valued at 2.77 billion litas ($692.5 million) creating a trade deficit of 2.3 billion litas ($575 million). Oil and oil products accounted for much of the imports from Russia, making Russia Lithuania's major import partner. Exports to Russia accounted for only 7 percent of all Lithuanian exports--nonetheless Russia ranked third among Lithuania's export partners after Latvia and Germany. The volume of cargo at Lithuania's seaport Klaipeda was also up significantly in the first six months of the year--a 43.2 percent increase over the same period in 1999.
* The government rejected a proposal by deputy Jonas Valatka to lower the national value added tax (VAT) on vital foodstuffs from 18 percent to 5 percent, ELTA reported on 16 August. The government said that the measure would deprive the state of 355 million litas ($88.75 million) of desperately needed revenues over the next year. The proposed drop in VAT on domestic bread, milk and meat would require the government to reduce tariffs on the same categories of imported foodstuffs, because of World Trade Organization (WTO) requirements which maintain that imported goods shall not suffer any discrimination with respect to local goods. Lithuania is days away from passing its final hurdles to WTO membership, needing only to gain agreement from WTO members Australia, Canada and New Zealand.
* Representatives of U.S.-based Williams International told reporters at a press conference on 16 August that it had lodged a formal complaint against a state Competition Council ruling that imposed a 100,000 litas ($25,000) fine on the company as the operator of the Mazeikiu Nafta (Mazeikiai Oil) plant for breaching a competition law in regard to prices of domestic oil products, ELTA reported. Furthermore, Williams charged one of the refinery's customers--Klevo Lapas--with abuse of the ruling by the Competition Council and ignoring a debt to Mazeikiu Nafta for the purchase of 5 million litas ($1.25 million) worth of oil products. Mazeikiu Nafta board chairman Jim Scheel said that "Klevo Lapas failed to settle payments for oil products, supplied by Mazeikiu Nafta, notwithstanding the fact that the terms of the credit had been extended."
* The government's proposals to reform the debt-ridden social insurance fund, SoDra, has come under heavy criticism by labor unions, ELTA reported on 16 August. Alma Smilgiene, chair of the Lithuanian trade union for communications workers, told a news conference that the proposal to have banks issue monthly pensions rather than have the postal workers continue to deliver monthly pension checks, would burden Lithuania's seniors and disabled. Smilgiene's trade union has collected over 200,000 signatures from pensioners protesting the proposed changes. Postal workers are also concerned that as many as 1,400 could lose their jobs if banks take over responsibility for delivering SoDra benefits.
* At a news conference on 17 August, Vice Minister of Health Rima Vaitkiene announced that all legislation and regulations required for transplantation work was in place and that the Ministry of Health was beginning to register and issue donor cards for individuals who want to be organ donors, ELTA reported. Any individual who wishes to donate his/her organs post mortem for transplantation can fill out the necessary form at a health care institution and have it certified by a doctor. The donor cards have the same legality as a will and cannot be changed after death by a family member.
* A high-ranking police official in Lithuania, Martas Jasevicius, has been found guilty of taking a bribe and has been sentenced by a Vilnius district court to 6.5 years in jail, ELTA reported on 16 August. The officer had served in his post as director of the Smuggling and Narcotics Control Office under the Interior Ministry's Organized Crime Investigation Service barely five months before being caught taking a $20,000 bribe from an intermediary for alleged metals smuggler Aleksandr Baidenko. Law enforcement officers taped their former colleague negotiating the price of the bribe. The court confiscated half of Jasevicius' property and also stripped him of his right to work in the civil service for five years after he serves his prison term. Jasevicius has 20 days to appeal the verdict.
* Former Eurominister and deputy Laima Andrikiene voiced concern about the surging crime rate in Lithuania's second largest city, Kaunas, saying it was becoming an "epicenter of crime" ELTA reported on 17 August. Andrikiene called for a tightening of police patrols, particularly at night. She called for units of the Interior Ministry based in Kaunas and Vilnius, whose principal task is to bring the imprisoned to court, to be dispatched in aid of local police. Andrikiene's statement comes in the wake of the execution-type slaying of four night watchmen at the Senukai building supply company warehouses in Kaunas last week.
* The Rokiskis district police in northern Lithuania have detained three residents of the city of Panevezys for siphoning diesel fuel from the Polockas-Birzai oil trunk pipeline, BNS reported on 17 August. The three men arrested have previous convictions for racketeering and are believed to belong to one of the organized crime families of Panevezys. On the night of 16 August, workers at the Birzai pipeline company owned by Mazeikiu Nafta (Mazeikiai Oil) reported to police that they had found a hole in the pipeline a few kilometers from the Lithuanian-Latvian border. According to calculations, thieves had siphoned off about 10,000 liters of diesel fuel. Another drilled hole was discovered about eight kilometers from the first one. The thieves had not yet gotten any fuel, but had put in place power-pumping equipment. The Polockas-Birzai oil product pipeline transports diesel fuel from Russia to Latvia's port at Ventspils for export.
* Portland Trailblazers center Arvydas Sabonis will not play for the Lithuanian national team in the upcoming Sydney Olympics because he is still recovering from major foot surgery, AP reported on 17 August. The 7-foot-3-inch Sabonis is considered one of the world's better centers and was a key player for the Lithuanian team when it won bronze medals in the last two Olympics. Lithuania will also play without Cleveland Cavaliers center Zydrunas Ilgauskas. The loss of the two players dims Lithuanian hopes of winning a medal. BNS reported on 18 August that Lithuania will send a total of 62 athletes to the Sydney Olympics: a 12-member basketball team and 50 athletes in other sports, including 19 in track and field, eight cyclists, six swimmers, three canoeists, two boxers, women table tennis players, wrestlers, women rowers and one competitor each in yachting, judo, gymnastics, shooting, and the pentathlon. The 1992 Olympic gold medal winner in the discus, Romas Ubartas, will carry Lithuania's flag in the opening ceremony on 15 September.
* A joint commission of the Lithuanian parliament and the Lithuanian-American Community, Inc., adopted a resolution in Vilnius on 12 August urging Lithuanian political parties running for seats in the October parliamentary election to maintain support for Lithuania's NATO candidacy, which the statement says is the "key aim of Lithuanian foreign policy," ELTA reported on 15 August. The resolution also calls upon the country's government to honor its financial obligations to fund the national defense and implement NATO preparedness programs.
* A leftist party election coalition, led by former President Algirdas Brazauskas and made up of the Democratic Labor Party (LDDP) and the Social Democratic Party (LSDP), is offering a confidential "political phone line" to voters to express their opinions and to seek information about the coalition's electoral program and candidates, ELTA reported on 16 August. The phone calls are free to the caller. A leading member of the electoral coalition staff, MP Juozas Bernatonis said: "To our mind such a way of communicating with voters is much easier than getting them to fill in questionnaires or forcing them to wait for the arrival of a nine-headed campaign bus."