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Newsline

Newsline - February 1, 2008

MEDVEDEV CALLS ON RUSSIANS TO INVEST ABROAD
First Deputy Prime Minister Dmitry Medvedev, who is also the presidential candidate of the Unified Russia party, told a gathering of the Russian Union of Entrepreneurs and Industrialists (RSPP) in Krasnoyarsk on January 31 that Russian businesses should follow China's example and buy up companies worldwide, thereby boosting Russia's economic and technological development, Britain's "Financial Times" reported on February 1. He said that the Kremlin should help companies wanting to acquire assets abroad. Medvedev argued that "this is a very important task. The majority of powerful countries are engaged in this. Many of them are very active, like China. And we should be active, too." He added that expanding abroad "will allow us to retool Russian enterprises with technology, improve their way of doing things, and give them the opportunity to diversify investments and win new markets." Alluding to opposition in the EU and elsewhere to Russian companies entering foreign markets, Medvedev argued that "this is no cause for hysteria, and that Russia should try to "convince people that investments from Russia are effective, transparent, and necessary for the countries involved." He also stressed that Russian business needs a strong state. Medvedev said that "it is not possible for a country to have a good image when business is strong but the population is poor or, for example, when business is strong and state power is weak." The daily noted that Russian companies invested $36.8 billion abroad in the first half of 2006 (see End Note). The Russian daily "Gazeta" noted on February 1 that one day before Medvedev's statement, economist and former acting Prime Minister Yegor Gaidar "recalled China in comparison with Russia. Gaidar said that Russia will never catch up in this race because its foreign policy does nothing to make procurement of assets in foreign countries easier for Russian business. Could Medvedev's statement be an answer to Gaidar?" The paper also suggested that Medvedev might be following up on recent proposals by Finance Minister Aleksei Kudrin that Russian businesses take more advantage of opportunities in crisis situations (see "RFE/RL Newsline," January 30, 2008). PM

POLISH MINISTER ACCUSES RUSSIA OF BLACKMAIL
In an apparent allusion to Russia, Polish Foreign Minister Radoslaw Sikorski said in Washington on January 31 that his country "has come under political pressure and has even been blackmailed by some of our neighbors who fiercely oppose" the proposed U.S. missile-defense project, news agencies reported. That missile defense entails locating 10 interceptors in Poland and a radar site in the Czech Republic. Sikorski did not elaborate, but in June, President Vladimir Putin and First Deputy Prime Minister Sergei Ivanov threatened to target European sites with missiles if the United States goes ahead with the program. Ivanov and Lieutenant General Vladimir Shamanov, who heads the General Staff's training department, more recently linked missile defense to the unspecified military role of the Kaliningrad Oblast, from which tactical ballistic missiles could reach Poland. But also in recent weeks, Foreign Minister Sergei Lavrov and the state-run media praised the government of Prime Minister Donald Tusk for being willing to discuss missile defense with Moscow (see "RFE/RL Newsline," January 11, 14, 16, 22, and 31, 2008). On January 31, Sikorski appeared to dismiss Russian concerns, suggesting that Moscow is being as unreasonable as a neighbor who asks one to dismantle one's satellite dish on the grounds that it could make him sick. Sikorski added: "you and I know, a dish does not make you sick. The question is, what can we do together to address an unreasonable neighbor." Sikorski, who previously called for the United States to provide Patriot missiles to Poland if it accepts the interceptors, suggested that Poland would like to host a major NATO military installation as well. It is not clear if he raised that idea in his recent talks with Lavrov. PM

FORMER PRIME MINISTER SAYS 'UNIPOLAR WORLD' IS COMING TO AN END
Middle East expert and former Prime Minister Yevgeny Primakov returned on January 30 to one of his favorite themes, namely that an era of U.S. domination is coming to an end because a "multipolar world" is becoming a reality, ITAR-TASS reported. Primakov said that "as regards gross national product, China's annual growth rate is six times that of the United States, India's is four times as large, and the EU's annual growth rate is 50 percent larger than that of the United States." He noted the growing roles of China, South Korea, and the EU in world technological development. Primakov argued, however, that "this is not a return to the multipolar world in the form it had prior to World War II. Its present specific feature is the strengthening of the interdependence of [various] centers based on globalization." PM

AIRCRAFT STAGE EXERCISES OVER ARCTIC, ATLANTIC OCEANS
An air force spokesman announced on February 1 that more than 40 aircraft are participating in exercises over international waters of the Arctic and Atlantic oceans. The aircraft taking part in the exercise include Tupolev Tu-160 (White Swan or Blackjack), Tu-22MZ (Backfire), and Tu-95 (Bear) bombers, which were developed decades ago, and Il-78 (Midas) refueling aircraft. The spokesman said that the "crewmembers are practicing reconnaissance tasks, missile and bomb strikes against the enemy's offensive naval groups, and midair combat. They are also involved in air patrolling." He did not specify who the fictional enemy might be or exactly where the drills are being carried out. PM

ZYUGANOV BACKTRACKS ON ELECTION DEBATES
Communist Party leader Gennady Zyuganov has reversed himself and has agreed to participate in televised presidential-election debates with Liberal Democratic Party of Russia leader Vladimir Zhirinovsky, Russian media reported on February 1. Earlier, Zyuganov said he would not debate unless First Deputy Prime Minister and presumed presidential successor Dmitry Medvedev also agreed to debate. Medvedev has declined (see "RFE/RL Newsline," January 29, 2008). Prior to that, Zyuganov had said that he would consider withdrawing from the race altogether if all candidates are not granted equal access to the media and if the Kremlin did not distance itself from the use of administrative resources to promote Medvedev. Analysts, however, noted that the Communist Party has never come into such direct conflict with the Kremlin and downplayed Zyuganov's statements. "Kommersant" commented on February 1 that the party has "once again demonstrated that it is not capable of decisive measures and, as a result, the presidential elections will seem solid, which is what the Kremlin wants." INDEM foundation analyst Yury Korgunchyuk told the daily that refusing to debate would have been a powerful gesture that would have gained Zyuganov votes and would have made the entire campaign look "absurd." Zhirinovsky and Democratic Party of Russia head Andrei Bogdanov have agreed to participate in debates. RC

ROSTOV OPPOSITION ACTIVISTS REPORT HARASSMENT
Activist from the opposition Other Russia coalition in Rostov-na-Donu have reported a high level of pressure from law-enforcement agencies in recent days, RFE/RL's Russian Service reported on January 31. The crackdown comes on the eve of an expected visit to the southern Russian city by First Deputy Prime Minister and presumed presidential successor Medvedev. According to the report, local United Civic Front leader Sergei Volodin was arrested and sentenced to five days of administrative detention. Although there is no official information about Volodin's case, activists say he was sentenced for public swearing at a downtown bus stop. He was reportedly detained outside his residence by two men in plainclothes. Other Russia activist Boris Batyi told RFE/RL that local officials carried out similar "preventative arrests" prior to a visit to the city by President Putin in June 2007. "Pressure is being applied," Batyi said. "People are being called on the phone, followed, watched. Not everyone, but a lot of [activists], that's for sure. They are coming to the homes of oppositionists for 'prophylactic conversations.'" RC

STABILIZATION FUND CLOSED, TWO NEW FUNDS CREATED
The Stabilization Fund, which was created in 2004 to accumulate windfall oil profits and which had reached a value of $156 billion, was officially liquidated on February 1, "The Moscow Times" reported (see End Note). The Finance Ministry has split the fund into two new funds, a $125 billion Reserve Fund and a $32 billion National Welfare Fund. The Reserve Fund will continue to function as the Stabilization Fund did, while the National Welfare Fund will be used to bolster the Pension Fund and for other goals. The National Welfare Fund will pursue a "growth-oriented" investment policy and function as a sovereign wealth fund, investing in corporate bonds and shares. According to "The Moscow Times," Deputy Prime Minister and Finance Minister Kudrin is under growing pressure to use the new fund to purchase Russian stocks, provide long-term capital to Russian companies, or to pay down the country's burgeoning corporate debt. RC

CONSTITUTIONAL COURT STANDS UP FOR INDEPENDENCE OF JUDGES
The Constitutional Court has overturned part of a controversial 2005 law that replaced in-kind social benefits with cash payments, gazeta.ru reported on January 31. The court ruled that part of the law which changed the way in which judges are given housing benefits violated the constitutional separation of the executive and judicial branches and sent the law back to the Duma for reconsideration. Under the old system, judges were provided housing by local administrations and apartments were given to them to own. Under the revised system, housing benefits are paid to judges from the federal budget under terms established by the government. The case was filed by the Higher Arbitration Court, and according to documents filed by the plaintiff, a total of 2,000 judges nationwide (including some 300 arbitration judges) are currently in need of housing support. The Constitutional Court ruled that the judicial branch is the only branch of government the financing of which is determined by the constitution. Therefore, the court ruled, "the financing of judges cannot be determined by the will of the legislative or executive branches." Former judge Sergei Pashin told the website that it is too early to say this is a victory for judicial independence and it depends on what new legislation the Duma comes up with. The court did not give the Duma a deadline and the website predicted it will take "not just one year" for lawmakers to pass a new law. RC

HUMAN RIGHTS OMBUDSMAN CALLS FOR PROBE OF POLICE CRACKDOWN IN INGUSHETIA
Vladimir Lukin issued a statement on January 31 affirming that the Ingushetian authorities had no legal grounds to detain journalists who sought to report on a mass meeting in Nazran on January 26, the independent website ingushetiya.ru reported (see "RFE/RL Newsline," January 28, 2008). The stated rationale for the police intervention against both journalists and would-be participants in the meeting was the alleged conduct of a "counterterrorism" operation on the public square where the meeting was to take place. But Lukin pointed out that the Ingushetian authorities had no legal grounds to conduct such an operation insofar as no act of terrorism had been committed, nor was there any danger of one; in addition, any such counterterrorism measures must be carried out by federal, rather than republican forces. Lukin noted that police used tear gas, beat demonstrators and fired over their heads, but he did not explicitly condemn those actions. He did, however, call for a comprehensive analysis of the legal aspects of the police intervention. Thirty-nine people have been charged with "administrative crimes" in connection with the planned demonstration, kavkaz-uzel.ru reported on January 29 quoting the republican prosecutor's office. LF

ARMENIAN OPPOSITION PRESIDENTIAL CANDIDATE LAMBASTES CURRENT, FORMER REGIMES
Vahan Hovannisian, the candidate of the Armenian Revolutionary Federation-Dashnaktsutiun (HHD) in the February 19 presidential election, criticized on January 31 in a campaign speech in the southeastern town of Martuni the economic policies pursued under former President Levon Ter-Petrossian and by successive coalition governments in which the HHD has since 2003 been a junior partner, RFE/RL's Armenian Service reported. Hovannisian accused Ter-Petrossian, who is perceived as the main challenger in the ballot to the authorities' candidate, Prime Minister Serzh Sarkisian, of contributing to the economic collapse of the early 1990s by the "illiterate privatization" of state-owned enterprises, and he challenged Martuni residents to say whether and how the 12 percent annual economic growth proclaimed by the government in recent years has improved their lives. Also on January 31, three parliamentarians from Sarkisian's Republican Party of Armenia who are also veterans of the Karabakh war sought to secure the release from detention of four Ter-Petrossian supporters arrested on January 27 in the town of Talin after a scuffle during an election rally, RFE/RL's Armenian Service reported (see "RFE/RL Newsline," January 30, 2008). The Prosecutor-General's Office in Yerevan announced on January 31 that an unknown gunman fired one shot at its headquarters in Yerevan during the night of January 30-31 in what was described as an attempt to "destabilize the situation" in the run-up to the February 19 ballot, RFE/RL's Armenian Service reported. LF

AZERBAIJANI OPPOSITION PARTIES ESTABLISH NEW UMBRELLA ORGANIZATION
Up to 20 small opposition parties have recently signed an agreement establishing a Center for Democratic Elections, echo-az.com reported on February 1. Its objectives are to lobby for amendments to the Election Law and for an improvement in election campaign conditions, including parity representation for the opposition on election commissions at all levels. Member parties include the conservative wing of the divided Azerbaijan Popular Front Party (AHCP); the Azadlyq party (not be confused with the eponymous bloc); the Great Creation, Civic Unity, Terregi, Greens, and United Azerbaijan parties; and Ata Vatan and its partner parties. Several parties listed by echo-az.com on December 14 as having signed two days earlier a preliminary memorandum on establishing the center have apparently not formally committed themselves to working with it; they are the Civil Society Party established last year by exiled former parliament speaker Rasul Quliyev; the National Independence Party of Azerbaijan; and Umid. Azerbaijan's major opposition parties -- the AHCP progressive wing, the Liberal party, and the Musavat party -- have ignored the initiative to date. LF

GEORGIAN PARLIAMENT APPROVES NEW CABINET
The Georgian parliament approved on January 31 by a unanimous vote of 141 in favor the composition of the new cabinet announced by Prime Minister Lado Gurgenidze one week earlier, Caucasus Press and civil.ge reported (see "RFE/RL Newsline," January 25, 2008). Gurgenidze then outlined to parliament the government's new program, titled "United Georgia Without Poverty," Caucasus Press reported. Also on January 31, deputies voted by 135 votes in favor to approve a formal request from the Prosecutor-General's Office to strip their colleague, Valeri Gelbakhiani, of his immunity from prosecution. Gelbakhiani, a businessman and controversial oligarch Badri Patarkatsishvili's campaign manager in the preterm January 5 presidential ballot, has been formally charged, as has Patarkatsishvili, with plotting to overthrow the Georgian government (see "RFE/RL Newsline," December 27 and 28, 2007, and January 10 and 29, 2008). The Our Georgia parliament faction that Gelbakhiani headed collapsed on January 31 after one of its 10 members quit, leaving it with less than the required minimum number, Caucasus Press reported. The remaining members hope to form a new faction within days. LF

KAZAKHSTAN, U.S. ASSESS MILITARY COOPERATION
Kazakh State Secretary Kanat Saudabaev met in Astana on January 31 with visiting U.S. Deputy Assistant Secretary of Defense Mitchell Shivers to assess implementation of a five year (2003-08) bilateral military-technical cooperation program, regnum.ru and Interfax-Kazakhstan reported. Kazakhstan is the only Central Asian state to have embarked on such a program, under which it has received two military helicopters and over 50 off-road Hummer vehicles, and the number of military personnel from Kazkhstan studying in U.S. military academies has increased. Both men expressed satisfaction with the current level of cooperation, noting in particular the support provided by Kazakhstan for the NATO-led international force in Afghanistan. Also on January 31, a group of Kazakh parliamentarians met separately with Shivers and asked him to help secure the release of an unnamed citizen of Kazakhstan currently being held at Guantanamo Bay, Interfax reported. Shivers undertook to relay to the Defense Department the request for the man's release. LF

KAZAKH PRESIDENT CALLS ON INTERNATIONAL INVESTORS TO TRAIN NATIVE PERSONNEL
Nursultan Nazarbaev suggested on January 30 that foreign oil, gas, and mining companies active in Kazakhstan should undertake to send between 100-200 local personnel abroad each year for specialist training, regnum.ru reported. He also proposed drafting a new program, titled "Intellectual Nation -- 2020," intended to train young people in creative thinking. LF

KYRGYZ PARLIAMENT APPROVES 2008 BUDGET IN FIRST READING
At the urging of Prime Minister Igor Chudinov, Kyrgyzstan's parliament approved on February 1 in the first reading by 67 votes in favor the draft budget for 2008, 24.kg reported. Chudinov pointed out that the government urgently needs a legal basis for dispensing funds for agricultural work. The draft sets revenues at 44.2 billion soms ($1.22 billion) and expenditures at 48.6 billion soms, resulting in a deficit of 3.3 billion soms, according to 24.kg on January 19. One of the few dissenting voices was Isa Omurkulov of the opposition Social Democratic Party, who protested that the structure of the budget has remained unchanged for the past three years; he argued that before passing the annual budget, parliament should first have adopted a new Tax Code. LF

EXPLOSION REPORTED IN TAJIK CAPITAL
An explosive device detonated in the courtyard of a house in central Dushanbe on February 1, causing considerable structural damage to neighboring buildings but no injuries, asiaplus.tj reported. The city prosecutor's office described the blast as an act of terrorism. A similar explosion took place on January 19. On January 30, Tajikistan's parliament approved new legislation on the security services intended to make them more responsive to "contemporary challenges and threats," tribun.tj reported on January 31. State Security Committee Chairman Khayruddin Abdurakhimov told deputies the draft formalizes changes in the structure of the security services introduced in December 2006. LF

BELARUSIAN PRESIDENT SAYS HE DOES NOT UNDERSTAND WESTERN AMBASSADORS' MISSION
Alyaksandr Lukashenka said on January 31 at a meeting with German Ambassador to Belarus Gebhardt Weiss that he does "not understand very well the mission of most EU ambassadors [to Belarus] and the American ambassador in particular," Belapan and RFE/RL's Belarus Service reported. "I do not want to make a secret of this, and that is why I sometimes make harsh remarks," he added. He also said that the major mission of foreign ambassadors consists of establishing friendly relations with the host country, but "Western ambassadors do not have such a desire." "Belarus is a sovereign, independent state and has been such for 15 years," Lukashenka continued. "It is a fact that we are stable and that we do not create problems for anyone, not for our neighbors, Germany, France, or the U.S. So, what do they want from us?" he added. AM

BELARUSIAN JUSTICE MINISTRY SUSPENDS CLOSURE OF OPPOSITION COMMUNISTS
Belarus's Justice Ministry has asked the Supreme Court to suspend its suit demanding the closure of the opposition Belarusian Party of Communists (PKB), Belapan and RFE/RL's Belarus Service reported on January 31. The ministry filed the suit against the PKB on January 4, accusing the party -- which was suspended for six months by the Supreme Court on August 2, 2007 -- of actions that are prohibited during the suspension period. Representatives of the ministry and the PKB met in the Supreme Court on January 30 and presented new materials relating to the case. "The Justice Ministry decided to study our report and filed a request for the suspension of the suit in connection with this," PKB Deputy Chairman Valery Ukhnalyou said. He also said that after February 2 -- the expiration of the suspension period -- the PKB intends "to resume its full-scale activities and catch up with all events that took place in this period." AM

UKRAINIAN CONSTITUTIONAL COURT THROWS OUT LAW ON LAWMAKERS HOLDING SECOND JOBS
The Ukrainian Constitutional Court announced on January 31 that the law prohibiting lawmakers from holding other positions contradicts the constitution, RFE/RL's Ukrainian Service reported. The legislation required deputies to give up other employment or lose their seat in the Verkhovna Rada. The law was adopted over two years ago, but a group of lawmakers asked the Constitutional Court to examine its consistency with the constitution. The court said that the law contradicts the constitution's guarantee of the right to employment. The court also said that the issue of sharing a parliamentary seat with other job is fully resolved by the constitution itself. The Ukrainian Constitution allows deputies to hold positions in academic or creative fields, in addition to their parliamentary seats. AM

SERBIAN PREMIER REFUSES TO BACK PRESIDENT IN ELECTION
Boris Tadic's prospects of winning a second term as Serbia's president have been hit by the refusal of Prime Minister Vojislav Kostunica to throw his party's support behind Tadic. Kostunica's decision, which he made public on January 30, could both boost Tadic's rival, Tomislav Nikolic, and significantly damage Serbia's governing coalition, which is dominated by Tadic's Democratic Party (DS) and Kostunica's Democratic Party of Serbia (DSS). Speaking at a press conference, Kostunica said the DSS will not be endorsing Tadic because he refused to accede to a DSS ultimatum that Belgrade should sign a key agreement with the EU, a Stabilization and Association Agreement (SAA), only if the EU agreed not to deploy an administrative mission to Kosova. "We wanted to support...our coalition partner Boris Tadic in these elections, but since he did not accept our proposal...we cannot support him in these elections," Kostunica said. "Our message is that the people should choose by themselves what to do," he added, but he also stressed that the DSS "does not support the candidate of the Serbian Radical Party," Nikolic. Asked by the broadcaster B92 whether he himself would vote on February 3, Kostunica said that "frankly, I have not thought about it...I will see." Nikolic emerged from the first round of the elections on January 20 with a four-point lead over Tadic, but, with 39 percent of the vote, he was still well short of the 50 percent needed to secure victory. The last opinion poll released before the February 3 runoff indicates that Tadic has come from behind to take a slight lead, but the figures are extremely narrow and well within the margin of error. Few analysts are willing to predict the result of the election. AG

PRESIDENTIAL RIVALS TRADE BLOWS OVER DEFENSE...
Tadic and Nikolic clashed strongly across a broad front of issues in a televised debate held on January 30. While focusing on issues, Nikolic claimed, as he had in preceding days, that Tadic's campaign waged "the dirtiest campaign imaginable" (see "RFE/RL Newsline," January 29, 2008). "Everything boils down to you frightening Serbian citizens by my victory," Nikolic declared in his opening remarks to his nationwide audience. Nikolic also launched a sharp attack on Tadic's record as defense minister between 2003 and 2004, accusing him of demoralizing the army, lowering its status in society, and slashing its size. He suggested that one of Tadic's motivations was the belief that those dismissed were involved in war crimes. "None of them was ever accused or convicted of any crime," he declared. Nikolic also argued that "on U.S. orders" Tadic forcibly retired "generals who were 48 years of age," and, in an attack that will have resonated with many of Nikolic's older voters, he portrayed this as part of a broader rejection of the older generation by Tadic. "I ask the former president how old one needs to be to be a general without being eligible for retirement. Perhaps 30, because in the Democratic Party you become president and assembly speaker and minister at the age of 25." Tadic dismissed the figures cited by Nikolic, and counterattacked by arguing that Nikolic and the SRS's leader, Vojislav Seselj, were complicit in the misuse of the military under the late Slobodan Milosevic. Seselj is currently on trial at The Hague on war crimes charges, but he remains the nominal head of the SRS. AG

...IN DEBATE CENTERED ON EU
President Tadic made the EU the central plank of his opening statement, and relations with the EU were central to the debate. He defended his support of the EU, saying that Serbs are faced with a choice, between isolation and joining the EU, and arguing that "everyone is better off through European integration." Tadic, who said he hopes Serbia will gain EU candidate status "by early 2009," also attacked Nikolic's style and implied that his position on the EU is duplicitous. "No one has joined Europe by insulting her," Tadic said. "No one has joined her by claiming in elections that he wants to join her, but actually his entire policy and entire past testifies to his attempts to distance Serbia from that evil Europe." "In order to finally join Europe," he continued, "we must believe in it. The SRS and Vojislav Seselj, including Tomislav Nikolic who is Seselj's deputy, believe in Europe just as much as is shown by the title of the book written by Vojislav Seselj in 2006 and published by the SRS: 'EU -- Satan's Creation.'" During his campaign, Nikolic has argued that Serbia should be a "link between the West and the East," and in the debate he said that Serbia should travel along "at least two paths," one of them being "completely open" -- toward Russia -- and another one, "full of obstacles," leading to the EU. He said he supports membership of the EU and declared, "I will never oppose our membership of the EU." "Serbia has only one condition: to join the European Union as a whole," with Kosova still part of Serbia, he said. Nikolic described his foreign policy as one of "cooperation not concessions." Both Tadic and Nikolic spoke warmly of Russia, which has championed Serbia in its attempt to retain sovereignty over Kosova. Nikolic had just returned from a two-day trip to Moscow, where he met the presumed successor to President Vladimir Putin, Dmitry Medvedev (see "RFE/RL Newsline," January 30, 2008). Tadic spent January 25 in Moscow with Putin himself (see "RFE/RL Newsline," January 28, 2008). AG

INCUMBENT TAKES TO STUMP IN KOSOVA
President Tadic's final stop on his campaign trail was in the Kosovar Serb community of Gnjilane on January 31. According to local media, Tadic told Serbs in the small enclave in eastern Kosova that "Serbia will never give up our Kosovo and our people" and that "I shall do everything in my power for us to exist here, for Serbia to exist in Kosovo, because Serbian people live in Kosovo through you." The Kosovar Albanian daily "Zeri" reported that Tadic wanted to visit "all" of the ethnic-Serbian enclaves in Kosova, but was refused permission by the UN Mission in Kosova (UNMIK). Tadic and Nikolic have both committed themselves to trying to keep Kosova part of Serbia, both have vowed not to go to war over Kosova, and both have said Serbia retains the right to enter Kosova if its Serbian minority needs additional protection (see "RFE/RL Newsline," December 18, and January 4, 9, 11, and 18, 2008). With little to distinguish the two rivals' positions on Kosova, symbolism is seen as an important asset and both have visited Kosova during the campaign. Their general profile -- Tadic as a relative liberal, Nikolic as an extreme nationalist -- and their attitude toward the EU are also being seen as a cipher for their relative willingness to take a firm stance in defense of Serbian sovereignty when Kosova declares itself a state. The first round of the election showed that Kosovar Serbs themselves have a preference for Nikolic, but the gap was not sizable and both have the support of leaders representing different elements of the Kosovar Serb community. AG

KOSOVAR INDEPENDENCE 'NOT IMMINENT'...
A declaration of independence is "not imminent," Kosovar Prime Minister Hashim Thaci told the BBC's Albanian Service on January 31. "On independence day, Kosova will have finished preparing the constitution, as well as the state symbols," Thaci said. He did not say when questions about the constitution or symbols -- chiefly Kosova's flag -- will be settled, but there has been no recent indication that decisions will be reached within a matter of days or weeks. Only a week earlier, both Thaci and Kosovar President Fatmir Sejdiu said a declaration would be made within a matter of days, and, according to local and international media, Thaci made a similar statement on January 30. Thaci told the BBC that, in his view, the exact timing of a move by Kosova is not important. What is important, he said, is that "Kosova is in the end-phase of the official preparations for organizing the proclamation of independence." He did not explain why he is now downplaying the date of a declaration so soon after stressing that a declaration will be made within days. Thaci and other Kosovar leaders have repeatedly said any declaration of independence would be coordinated with Western powers and not made unilaterally. AG

...AND MAY DEPEND ON SERBIAN ELECTION
Unnamed senior Western diplomats cited by the British daily "Financial Times" on January 29 say that the precise timing of Kosova's expected declaration of independence now depends on whether the pro-EU Tadic wins his bid for a second term as president in the runoff scheduled for February 3. A victory by his rival, the hard-line nationalist Nikolic, would reportedly trigger a swift move by Kosova and its supporters. "If Nikolic, the conservative, gets elected, then no one in Europe will see any benefit in waiting any longer with the independence declaration," one diplomat told the "Financial Times." If Tadic were to win, the EU would be willing to wait several weeks in order, as the paper put it, "flesh out an agreement on closer EU-Serbian ties." It did not say whether that agreement would be an SAA, which would cause problems both within the Serbian government and within the EU, or the diluted deal offered by EU foreign ministers on January 28 (see "RFE/RL Newsline," January 29, 2008). "The question will then be how we handle the independence declaration in a way that contains the damage for the Serbian president," the diplomat said. The latest date mentioned in the article is the first half of March. A Reuters report published on January 30 also indicated that a Nikolic victory would trigger a swift move, with one -- again unnamed -- senior political source saying a declaration could be made on February 9 and 10. AG

MONTENEGRIN PREMIER STEPS DOWN...
Zeljko Sturanovic stepped down on January 31 from his post as Montenegro's prime minister, citing poor health. In a letter to the speaker of parliament, Ranko Krivokapic, Sturanovic wrote that "the development of Montenegro...objectively requires the full devotion of all, especially those in the most responsible offices, so that our country can continue on its way to Europe." There has been increasing speculation in recent days that Sturanovic would step down, and Montenegrin radio reported on January 30 that uncertainty about Sturanovic's plans prompted Sturanovic's Democratic Party of Socialists (DPS) to delay by one week a scheduled party conference. Sturanovic, who turned 48 on January 31, underwent treatment in Paris in January 2007 for lung cancer and has received treatment at home and abroad since then for his rare form of cancer. Sturanovic spent part of last week in Paris, where he reportedly met with specialists. AG

...AMID REPORTS OF DJUKANOVIC'S RETURN
The resignation of Prime Minister Sturanovic has fueled speculation that Milo Djukanovic, the leader of Sturanovic's party and his immediate predecessor as prime minister, will return to the post. Djukanovic stepped down as prime minister in October 2006, citing fatigue after 15 years in leading political positions and expressing the wish to become a businessman. However, Djukanovic remained as the party's chairman and is seen as the power behind Sturanovic's throne. Djukanovic himself contributed to the speculation about Sturanovic's departure by saying, according to "Vecernje novosti" on January 31, that he would consider it his "obligation" to become prime minister "if developments called for it." On another note, Djukanovic has been making headlines in recent days by saying that Montenegro will ultimately recognize Kosova as a state if it declares independence, a statement that incensed some of Montenegro's many Serbs and affected the delicate balancing act that Montenegro is seeking to pull off. "We have chosen to be a part of the European Union, and will have to honor its decisions," the Serbian news agency FoNet quoted Djukanovic as saying in an interview aired on January 27 by the Bosnian television station Hayat. "Naturally, Montenegro is not taking the role of the leader when it comes to Kosovo's independence. But, in the end, we will recognize Kosovo's independence just as other regional countries will," Djukanovic reportedly said. Djukanovic has since said his comment was misinterpreted. AG

THE POT OF GOLD AT THE END OF RUSSIA'S STABILIZATION FUND
Some $150 billion has accumulated in Russia's Stabilization Fund, which was created in 2004 to amass the windfall profits from high energy prices in a fund intended to dampen the effects of a potential future downturn in those prices. Ninety percent of all revenues above $20 a barrel go into the fund, inflating it by around $171 million per day in 2007 alone.

But could $150 billion be enough to destabilize the country's economy and its political structures? That question has come to the fore, because the Stabilization Fund will formally cease to exist on February 1, to be replaced by a Reserve Fund and a smaller National Welfare Fund.

The former will start off with some $139 billion and will perform essentially the same function as the old Stabilization Fund. That is, it will accumulate energy profits and hold them in conservative investments to buffer the economy if energy prices fall. The National Welfare Fund, which will hold $11 billion, will be used to fund shortfalls in the pension system. In addition, some funds from it have already been allocated to the State Investment Fund, the state's Development Bank, and the state Nanotechnology Corporation.

The Stabilization Fund was created at the urging of then-presidential economic adviser Andrei Illarionov, Finance Minister Aleksei Kudrin, and then-Economic Development and Trade Minister German Gref. Since that time, Kudrin's ministry has been in charge of the fund and has doggedly insisted that spending its wealth domestically would spur inflation. As a result, the only significant spending from the fund since its creation has been to pay off some $80 billion in Soviet-era debt, something that has been touted as one of the main achievements of Vladimir Putin's presidency.

To be sure, pressure to draw on the fund has been building from the start. The Communists and some regional leaders -- back in the days before the regional leaders were cowed by the Kremlin -- spoke out in favor of boosting pensions or social benefits. Moscow Mayor Yury Luzhkov in December 2005 criticized the policy of "accumulation for its own sake."

Business leaders also proposed schemes to dip into the fund, including setting up investment-guarantee funds or boosting domestic lending resources. In 2005, Arkady Volsky, then the head of the Union of Russian Entrepreneurs and Industrialists, dismissed Kudrin's conservatism as "some kind of blockheadedness." While Luzhkov accused the government of "supporting the foreign producer," Volsky said the money in the fund should "work for the country instead of for foreign banks."

Such debates were already shrill back when the fund held a mere $16 billion and was solidly under Kudrin's control. They could become deafening now that there is $150 billion at stake and the post-Putin political transition could be seen as an opportunity to test the government's resolve. Illarionov is gone -- and has been sounding the alarm about the possibility the ruling elite might abscond with the fund. Gref is gone. Kudrin now seems isolated at the very moment the Stabilization Fund is being divided and looser rules established for using the new National Welfare Fund.

The populist calls haven't changed much since 2005. Although governors rarely speak, commentators in the regions often remark on how useful the funds could be. "Tverskiye novosti" wrote in January that the Stabilization Fund represents "the means we need to resolve crucial problems plus the start-up capital for a leap into the future." The paper added that "the people think the Stabilization Fund has already been completely or partially pillaged." Federation Council Chairman Sergei Mironov suggested last month that the funds could be used in part to finance the construction of new subway systems in regional cities. Calls to use the funds for roads construction also rarely fall silent.

Economists, however, almost uniformly reject such proposals. For one thing, experts argue that such spending would produce inflation, leading ultimately to the evaporation of the fund itself. Perhaps more importantly, they note realistically that massive construction projects are nests of corruption and mismanagement. They like to point to the Moscow-St. Petersburg high-speed railway, which was supposed to be completed in 2000, but which in reality is nothing but a large hole in downtown St. Petersburg that cost tens of millions of dollars. Economist Yevsei Gurvich told "Izvestia" that before spending the fund, "we must first raise the quality of the management of state spending."

Big business is also repeating its claims on the money. On January 15, the government daily "Rossiiskaya gazeta" printed a long article by Russian Chamber of Industry and Commerce President and former Prime Minister Yevgeny Primakov that echoed Volsky's 2005 assertions. Primakov noted that while the state's debt has been reduced in the last three years, corporate debt -- particularly debts owed by state companies like Gazprom, Rosneft, and Vneshtorgbank -- has skyrocketed to over $300 billion. Furthermore, the interest on these debts is far higher than the interest the conservatively invested Stabilization Fund is earning. Therefore, Primakov concluded, the state should develop mechanisms for expanding access to affordable domestic credit.

Although Primakov could not make the argument explicitly, everyone knows that much of the debt of these state companies was racked up pursuing the Kremlin's political goals at home and abroad. Gazprom, for instance, spent millions to buy the money-losing Zenit soccer team in St. Petersburg and to fund a ski resort in Sochi for the 2014 Winter Olympics, to say nothing of its voracious appetite for pipelines and other energy resources in Europe and the former Soviet Union. It also took over and props up the loss-making quasi-private NTV television network and is buying up key portions of the power-generating sector that supposedly is being privatized. In the event of a global economic downturn, companies that have been so helpful to the Kremlin would have powerful arguments for demanding relief. The anti-Westernism inherent in big business's arguments from 2005 has been boosted by the Kremlin's rhetoric during the current political transition.

The biggest shift in Russia's landscape since 2005, however, has been the creation of sector-spanning state megacorporations. Such structures have been set up in aviation, shipbuilding, nuclear energy, nanotechnology, and machine building, and all of them have powerful political lobbies within the highest levels of the Kremlin, within Putin's inner circle.

In April 2007, prominent economist and presidential adviser Arkady Dvorkovich leveled a damning critique of the state megacorporations, arguing that they had so much political clout that not even the Audit Chamber could monitor them. Dvorkovich noted that, because the president personally names these corporate heads, even the government has no oversight. He documented cases in which Kudrin was forced to appeal to Putin directly to forestall their efforts to gain major tax concessions. Dvorkovich argued that these companies are unable to compete under open-market conditions and will not hesitate to use their overwhelming political advantages.

In an editorial about Dvorkovich's declaration in May 2007, "Nezavisimaya gazeta" wrote: "Our economy is fragile. Our institutions are weak. The quality of the state apparatus is low. Corruption is high. In these conditions, burdening the economy with state spending is perilous." In his end-of-the-year assessment from December 2007, Illarionov -- the father of the Stabilization Fund -- named its "death" as the most important domestic-policy development of the year. He also named the creation of state corporations as the "bad decision of the year," claiming that the government had "found the most ineffective way of spending 600 billion rubles."

Putin and his anointed successor, First Deputy Prime Minister Dmitry Medvedev, have voiced their support for limiting the role of the megacorporations, reducing the role of the state in the economy, and -- most importantly -- maintaining the course of Deputy Prime Minister and Finance Minister Kudrin. Kudrin got another small boost last month when he was named to head the government's working group on inflation. However, with Illarionov and Gref out of the picture, Kudrin looks increasingly isolated. In December, a key member of his team, Deputy Finance Minister Sergei Storchak, who oversaw the Stabilization Fund and foreign-debt negotiations, was arrested in an opaque case that many have seen as an effort to pressure Kudrin to change his policies. Storchak remains in custody.

The next few months will be a stern test for a government that has ironically eliminated all the institutions -- an independent judiciary, empowered auditors, independent journalists, a legislature with effective means of oversight, and so on -- that could bolster it in the conflict that seems to be on the horizon.

AL-QAEDA AFGHAN COMMANDER KILLED IN PAKISTAN
Abu Laith al-Libi, a top Al-Qaeda commander who led operations in Afghanistan, is said to have been killed in a missile strike by an unmanned U.S. Predator drone aircraft this week, along with up to 13 militants in the North Waziristan area bordering Afghanistan, international news agencies reported on February 1. Unidentified U.S. officials in Washington said there were "very strong indications" that al-Libi was killed, but provided no further details. The U.S. military and NATO-led forces in Afghanistan offered no information, and U.S. Defense Secretary Robert Gates refused to comment. However, at a news conference in Islamabad, Pakistani Interior Minister Hamid Nawaz Khan denied the reports, RFE/RL's Radio Free Afghanistan reported. Khan said Pakistani troops in the area could not confirm that al-Libi was among the dead. DW

SUICIDE BOMBERS ATTACKS TWICE IN ONE DAY IN AFGHANISTAN
On January 31, two separate suicide bombings killed seven people in Afghanistan, including the deputy governor of the southern Helmand Province, and wounded several others, Bakhtar news agency reported. The first strike was a car bomb in the morning targeting an Afghan National Army bus in Kabul that killed a passerby and wounded four others, the Afghan Interior Ministry said. Hours later, a suicide bomber struck inside a mosque in Helmand's provincial capital, Lashkar Gah, while people were praying, killing six people and injuring 21. Among those killed was Deputy Governor Pir Mohammad, local police said. The Taliban claimed responsibility for the attacks. MM

UN VOICES CONCERN OVER TALIBAN USE OF CHILDREN AS HUMAN SHIELDS
The United Nations issued a report on January 30 accusing Taliban insurgents in Afghanistan of using children as human shields and of terrorist attacks that targeted schoolgirls, Pajhwak Afghan News reported. UN Secretary-General Ban Ki-moon said in the report, titled "Children and Armed Conflict," that children continue to be a major victim of the conflict, and he accused Taliban insurgents of killing and maiming children and attacks on schools. Ban urged the Security Council to refer violations against children in armed conflict to the International Criminal Court for prosecution. According to the report, between August 2006 and July 2007 there were at least 133 documented incidents of school attacks attributed to Taliban insurgents, causing at least 10 reported deaths among students, mainly in the southern provinces, including deliberate attacks on female students and teachers. MM

FORMER TALIBAN COMMANDER SAYS FIGHTERS COME FROM OUTSIDE AFGHANISTAN
In an exclusive interview with Pajhwak Afghan News on January 30 in Musa Qala in Helmand Province, former senior Taliban commander Abdul Salaam, who recently defected to the Afghan government, said that the Taliban fighters are trained outside Afghanistan and "come here for fighting against Afghan and foreign forces." Salaam defected from the Taliban movement and was appointed the chief of Musa Qala district when a joint NATO-Afghan operation recaptured the area in December. He urged the Afghan government and the international community to help rebuild the district and deliver public services to improve people's lives. He also claimed that the district is mostly secure, despite occasional attacks and threats left by Taliban insurgents and their foreign allies who aim to intimidate the local populace. MM

UN SECURITY COUNCIL NEEDS TIME FOR SANCTIONS ON IRAN
George Nene, a South African Foreign Ministry official, told the press in Pretoria on January 31 that the UN Security Council could spend a month considering a draft sanctions resolution on Iran over its nuclear program, Reuters reported. South Africa is a nonpermanent member of the Security Council; it is, along with other nonpermanent member states, discussing the draft proposed by the five permanent members and Germany. The draft proposes enhancing measures such as asset freezes and travel bans on some Iranian officials, following Iran's refusal to comply with two Security Council resolutions calling for an end to sensitive nuclear fuel-making activities. Nene said a month's delay would not cause a "nuclear disaster." South Africa and other nonaligned UN member states have in the past been reluctant to endorse strict and immediate punitive measures against Iran sought by the United States and Israel. Iran says its nuclear program is peaceful and lawful and rejects charges that it may develop nuclear weapons in the future. VS

IRANIAN CONSERVATIVES DIVIDED OVER LIST
Three prominent conservatives and reputed rivals of President Mahmud Ahmadinejad -- Ali Larijani, Mohsen Rezai, and Mohammad Baqer Qalibaf -- met in Tehran on January 29 to discuss the mid-March parliamentary elections and the efforts by the right to forge a single list of conservatives or "fundamentalists," Iranian news agencies and other media have reported. Larijani is the former head of the Supreme National Security Council and considered close to Supreme Leader Ayatollah Ali Khamenei, Mohsen Rezai is a former head of the Islamic Revolution Guards Corps (IRGC) and current Expediency Council secretary, and Qalibaf is Tehran's mayor. The three are thought to represent a right-wing faction competing with Ahmadinejad supporters. Larijani has since the meeting called on the "5+6" -- a committee of prominent conservatives working on a consensual list -- not to put "particular people" on the list "to please this or that person," "Etemad" reported on January 31. He may have been referring to Ahmadinejad supporters. The 5+6 committee represents the wider United Front of Fundamentalists, which it is hoped will represent all right-wing factions in the upcoming polls, though the factions are currently jostling for greater influence within it. In comments on January 30, Larijani urged "the gentlemen who have come to be known as the 5+6" to be "broadminded and include "all those with the competence and science to serve in parliament" on the United Front's list. A separate report in "Aftab-i Yazd" on January 31 cited unconfirmed website reports that the United Front is drafting a preliminary election list for Tehran that has given a greater share to presidential supporters at the expense of traditionalists, including some present members of parliament. The list for Tehran's 30 seats is considered high-profile and of particular importance. VS

IRANIAN MAY BE STONED FOR ADULTERY
Abdollah Farivar-Moqaddam, a 49-year-old music teacher from Sari, northern Iran, may be stoned after being convicted of adultery, Radio Farda quoted his relatives as saying on January 31. His sister said that Iran's Supreme Court has approved a stoning sentence that may be carried out as soon as written confirmation of its approval arrives in Sari. Farivar is married and was convicted of having an affair with a girl in 2005; his family has said there was no "illegitimate" liaison as he had contracted a "99-year temporary marriage" with the girl -- or she had legally become a concubine. His sister told Radio Farda that Farivar was arrested in November or December 2005, and the local judiciary began to process his case in late 2006. She said the judiciary ignored evidence that he contracted a temporary marriage, and used what she said was unsound or even fictitious confessions obtained after his arrest. "His entry and departure from the court was not registered at the prison; in fact there was no trial allowing these people to say that he confessed on this or that date," she said. She said she has sought in vain to take the "overlooked" evidence to senior officials, and tried to see judiciary chief Ayatollah Mahmud Hashemi-Shahrudi in Qom on January 28. She was told he was not working for the next two months, until after the Persian New Year holidays in late March, she said. It was not immediately clear when local officials would be instructed to carry out the execution. VS

IRANIAN POLICE SHOOT BANDITS, ARREST 'LOUTS'
Police and other troops have shot dead 14 drug traffickers in the southeastern Kerman Province in operations over the past month, Mohammad Arab, a spokesman for the Rasul-i Akram operational base in the eastern South Khorasan province, told IRNA on January 30. Arab said these operations yielded 6 tons of various drugs, four cars, and six motorbikes belonging to the traffickers, plus arms and ammunition. He said that in a separate operation on January 29 in South Khorasan, police seized over 5 tons of opium, 73 kilograms of heroin, and 14 kilograms of hashish, two cars, two motorcycles and unspecified arms and ammunition. Arab, an IRGC colonel, did not provide figures for any casualties among Iranian troops or police. Separately on January 30, police arrested 16 "louts" or thugs in two districts of Karaj, a satellite town outside Tehran, Fars news agency reported. Two of them were arrested in their houses in Karaj, where drugs and knives were found. The head of the Tehran provincial police public security department, Naser Sarkari, told Fars that all the arrested had records of activities including armed extortion, "banditry," unspecified harassment of local families or women, rape, and kidnapping. VS

IRANIAN DISTRICT GOVERNOR'S BROTHER MURDERED
Karbalai Mohammad Ali Hajian, the brother of the Isfahan district governor, was kidnapped at an unspecified date and his body was found on January 29 in a park in Shahreza, presumably a town near Isfahan, central Iran, "Kayhan" reported on January 31. It reported that the 45-year-old teacher was killed "by being fed acid" but that police did not know yet who might have killed him and why. VS

MORE THAN 50 DEAD IN TWO BOMBINGS IN IRAQI CAPITAL
Two popular pet markets were bombed on February 1 in Baghdad, leaving more than 50 dead, international media reported. A female suicide bomber killed some 45 people when she blew herself up at the Al-Ghazil pet market, with another 80 wounded. The bombing is one of several recent attacks in the capital carried out by a female bomber. Police called it the deadliest attack in the capital in six months, with several children among the dead and wounded. A second blast targeting another pet market located in a Shi'ite area of southeast Baghdad killed 10 people and wounded 30. The Al-Ghazil market, which is only open on Fridays, has been the target of several bomb attacks since 2003, most recently in November. U.S. officials blamed that attack on Iranian special forces (see "RFE/RL Newsline," November 26, 2007). KR

SUNNI ARAB LEADER SAYS IRAQI SECURITY FORCES PREVENT VISIT BY IRANIAN AMBASSADOR
Adnan al-Dulaymi, leader of the Iraqi Accordance Front, claimed on January 31 that Iraqi security forces prevented Iranian Ambassador to Iraq Hasan Kazemi-Qomi from visiting al-Dulaymi at his Baghdad home, Iraqi media reported the same day. "An Iraqi [security] force stationed near my house prevented [Kazemi-Qomi] from entering my residence," al-Dulaymi claimed. Kazemi-Qomi "is the ambassador of a friendly neighboring country who wanted to come for talks on achieving security in the country and reinforcing relations between both nations in order to ease tensions triggered by the political crisis," he added. The Sunni leader further claimed the security forces were trying to impede national reconciliation. In November, Al-Dulaymi's son and some 30 other staffers were arrested in connection with the discovery of two booby-trapped cars parked in al-Dulaymi's compound (see "RFE/RL Newsline," November 30, 2007). Al-Dulaymi denied any wrongdoing or knowledge of the bombs, while Iraqi security officials contended the bombs were constructed and planted by al-Dulaymi's bodyguards. KR

IRAQ'S SUNNI VICE PRESIDENT WILL NOT ENDORSE DE-BA'ATHIFICATION LAW
Vice President Tariq al-Hashimi told Reuters on January 31 that he will not endorse the Accountability and Justice Law recently passed by parliament, which serves as a revision of the Coalition Provisional Authority-era de-Ba'athification law. "We cannot regard this law as a step in the national-reconciliation process," al-Hashimi said. "It is not only me who objects to signing it, but the whole Presidency Council" -- a reference to the three-party body that includes al-Hashimi and Shi'ite Vice President Adil Abd al-Mahdi and President Jalal Talabani, a Kurd. Instead, the Presidency Council will seek revisions to the law, he said. Regarding the possibility of the Iraqi Accordance Front ending a six-month boycott of the government, al-Hashimi told Reuters, "I am optimistic that the Accordance Front will return to the government, but it is a cautious optimism." He added: "There are positive indications from the government that suggest the final position will be in favor of [the front] returning. We will be flexible." Al-Hashimi said earlier this week that it appears the government is willing to meet some of the front's demands, which would pave the way for ministers from the front to return to work (see "RFE/RL Newsline," January 28, 2008). KR

IRAQI GOVERNMENT REARMS FEMALE POLICE OFFICERS
The Interior Ministry has quietly rearmed female police officers, several weeks after demanding female officers hand over their weapons, the "Los Angeles Times" reported on February 1 (see "RFE/RL Newsline," December 11, 2007). The original order to hand over weapons said the decision was made after several female officers quit the force without turning over their weapons. The order also claimed the guns were needed for male officers, a claim U.S. officials refuted. U.S. Brigadier General David Phillips said he believed the decision was the result of growing influence from conservative Shi'ite Muslims who believe women should not seek work in areas traditionally held by men. Phillips told the daily that only some of the original 1,000 female recruits remain on the job. Many female officers complained in December of being forced to work desk jobs, and rarely being assigned to carry out policing tasks. Advocates have said it is necessary to have female officers on duty who can carry out body searches on female civilians, particularly given the recent rise in female suicide bombers. Women have carried out at least five bomb attacks since November. The policy reversal was reportedly announced on January 17. KR

SWEDISH AVIATION AUTHORITY SAYS FLIGHTS TO IRAQ CAN RESUME
The Swedish aviation authority gave the green light on January 31 for flights to resume between two Swedish cities and the northern Iraqi city of Irbil, AFP reported. Viking Airlines, which operates the flights, said in an announcement on its website that new flight schedules will be posted shortly. Flights between Sweden and Iraq were grounded some six months ago following a suspected missile attack on a plane after takeoff from Al-Sulaymaniyah Airport in northern Iraq. The Viking Airlines permit will expire on March 29, after which it must be renewed following a review of the security situation. The airline can expect brisk business until that time, as Iraqis from Sweden head back to northern Iraq for the Norouz new year, which falls on March 21. KR

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