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Newsline - January 4, 1995

Russian artillery and aerial bombardment of Grozny and surrounding villages intensified on 3 January as Russian ground troops withdrew in disarray from the city center, Russian and Western agencies reported. Some 100 people were killed when Russian planes bombed a hospital in the town of Shali 30 kilometers southeast of the Chechen capital, according to AFP quoting Radio Moskvy. Russian press coverage of the fighting was at odds with developments on the ground, claiming that Russian forces had regained the initiative and were consolidating control of Grozny, the Los Angeles Times reported on 4 January. A spokesman for the Russian Defense Ministry quoted by Interfax on 3 January denied Chechen claims that as many as 600 Russians had been killed during the storming of Grozny on 30 December-1 January, and hundreds more, including one general and four colonels, taken prisoner; the Los Angeles Times quoted eyewitnesses in Grozny who claimed to have counted over 400 Russian corpses and 150 disabled tanks and armed personnel carriers in the streets. * Liz Fuller

AFP of 4 January quoted Ostankino Television as reporting on 3 January that Russian parliament deputy Sergei Kovalev had sent an open letter from Grozny to Russian Prime Minister Viktor Chernomyrdin stating that at the request of Russian Foreign Minister Andrei Kozyrev he had held informal talks with the Chechen leadership. Kovalev said that the Chechens had expressed their readiness to begin talks immediately on a cease-fire and the coordinated disengagement of forces, on condition that Russian forces withdraw to the positions they occupied before the onslaught on Grozny on 30 December. Chernomyrdin began talks on the Chechen situation on 3 January with State Duma Speaker Ivan Rybkin and Federation Council Chairman Vladimir Shumeiko; they are to continue on 4 January. * Liz Fuller

Both Western military experts and Yeltsin's spokesman Vyacheslav Kostikov argued on 3 January that blame for the military debacle in Grozny lies squarely with the Russian military leadership. Reuters on 3 January quoted unnamed Western experts as commenting that the assault on Grozny was badly planned and incompetently executed with demoralized troops who had minimal experience street fighting and little combat experience in general. Kostikov for his part was quoted by ITAR-TASS as contending that "the legitimacy of the president's and the government's actions should not be questioned . . . instead we should question the professionalism of the people who planned this operation." Also on 3 January, former Prime Minister Egor Gaidar told a news conference in Moscow that the Chechen crisis increases the chances of a coup that would lead to the imposition of a dictatorship in Russia, according to the Los Angeles Times of 4 January. Arguing that "only the president can stop the bloodshed in Chechnya" Gaidar said that "Yeltsin must get rid of those who pushed him into the Chechen adventure, above all, Egorov, Grachev, and Lobov." * Liz Fuller

AFP reported on 4 January that US Secretary of State Warren Christopher and Russian Foreign Minister Andrei Kozyrev are to meet in Geneva, probably on 17 and 18 January. Recently, the Chechnya crisis has placed a strain on US-Russian relations, and AFP quotes State Department representative Michael McCurry as saying that while "Chechnya is by international recognition part of Russia," Washington's view is that "we don't like innocent civilians losing their lives." Recently Kozyrev defended Russian actions in Chechnya by comparing the situation there to that in the secessionist US South during the US Civil War more than 125 years ago. * Stan Markotich

On 2 January Interfax reported on a poll of 145 political analysts throughout Russia, conducted by the Russian Academy of Public Service this past December. According to the report, half those questioned described the current social and political climate in Russia as "alarming and threatening." Survey respondents indicated they felt that social conditions will make conflict likely in 1995, with possible "conflicts between the public and the authorities . . . especially dangerous." Analysts also saw opportunities for continuing ethnic conflict, but speculate that tensions between federal and regional authorities will not be as grave as other forms of strife. A full 60% observed that some form of "mass social protest actions" are likely in the regions where they live. On the brighter side, analysts predict that most conflicts will not escalate to the point where aggrieved parties opt for violent solutions. Non-violent forms of protest, including strikes and demonstrations, are projected as dominating the political and social landscape. * Stan Markotich

If the government clears its arrears of 11 trillion rubles (current exchange rate is approximately 3,500 rubles to $1) for last year's farm purchases and retains the same volume of subsidies in the agro-industrial sector, farm production will fall by 6 to 7% this year, compared with 1994, Deputy Prime Minister Aleksander Zaveryukha told Interfax on 3 January. Zaveryukha said the government allotted only 10 trillion of the 18 trillion rubles that was planned for the farming sector in 1994. This year's budget allocates 8 trillion rubles, a considerable reduction. Zaveryukha said the farm sector will have to repay a total of 8 trillion rubles on interest alone in 1995 for the normal term for the 7.5 trillion ruble credit it received from the government last year. As a result, Zaveryukha said that this is the main cause of the grain, meat , milk, sugar and cooking oil shortages the population is presently encountering. * Thomas Sigel

According to Russian Minister of Economics Evgeny Yasin in a 31 December article in Rossiskiye Vesti, the economic situation in Russia should brighten, but not without sacrifice and difficulties in 1995. Yasin said that in order to prevent Russia's financial structure from further deteriorating, the government will have to infuse money into the economy. So far, 9.3 trillion rubles have been committed from the federal budget, a 33% increase from 1994. Yasin further stressed the "politics of effective investment," that is, financing only projects that will enable quick and large profits. Although Yasin abstained from giving a prognosis for inflation in 1995, he hoped that toward the end of the year the level will settle around 2 to 3% per month. * Thomas Sigel

The Russian Ministry for Cooperation with CIS Countries told Interfax on 3 January that Russia has fulfilled most of its obligations in supplying energy to CIS countries.
According to the report, in the first three quarters of 1994 Russia supplied Belarus with 28% more gas than agreed to, Moldova received 15% more than contracted, and Ukraine received 55% more. These three countries are, ironically, Russia's largest gas debtors. In all, Russia supplied over 28 million tons of oil, 64 billion cubic meters of gas, over 4 million tons of coal, 600 tons of gasoline, 1.5 million tons of diesel and 1.4 million tons of fuel to CIS states in the first 10 months of 1994. Russia did not meet its full obligations of oil supplies to Armenia, Georgia, and Kazakhstan. * Ustina Markus

Perm Motors--
Russia's leading manufacturer of jet engines and one of its 15 largest joint-stock companies--announced on 2 January that it was restructuring in an effort to work its way out of its current financial crisis. According to Interfax, Financial Director Oleg Skvortsov told the company's shareholders that the company's debt was more than 200 billion rubles and the monthly interest on this debt exceeded the company's revenues. Perm Motors plans to split into four major affiliates: one producing jet engines, another natural gas pumping units and small gas turbine engines, a third devoted to space technology--Perm builds the second stage of the Proton space-booster rocket--while the fourth would build reduction gear boxes for helicopters. Eleven smaller companies will engage in other businesses and trade. Perm President Mikhail Makarov said it might take the company as long as three years to end its financial problems. * Doug Clarke

Due to financial problems, the construction of a railway link from the Chinese border to the main railway in the Khasan region has not been completed, Interfax reported on 3 January. The 21-kilometer stretch of rail was begun in 1992 and should have been finished by the end of 1994 at which time the Chinese were to link the railway to the rails on their side of the border. Presently only 10% of the project is complete. The joint stock company Golden Link, which is building the railway, has been given another year to finish the project, while the territorial administration is planning to establish a mortgage fund to attract foreign investment into the project. * Ustina Markus

An official of the Royal Thai Air Force has indicated that for the first time it is considering Russian and European fighters as well as the U.S. planes it has traditionally purchased. UPI on 3 January quoted Group Capt. Khatiatip Koonchorn Na Ayudhaya as saying that his service would be looking at the MiG family of fighters as well as the Su-27. "The Su-27 is better than the MiG-29," he said, "and as good as the top-of-the-line U.S. F-15 or F-14." Thailand belongs to the Association of Southeast Asian Nations (ASEAN), a prime target for Russian arms salesmen. Malaysia--another ASEAN member--last year became the first country in the region to buy Russian arms when it signed a contract for 18 MiG-29s. * Doug Clarke

Several newspapers in Moscow and St. Petersburg reported recently on the results of a Public Opinion Foundation survey in which the respondents were asked to name the persons they regarded to be the "best" and the "worst" personality of 1994. Sergei Kovalev, the veteran human-rights campaigner, currently in Grozny as an eyewitness to the events in Chechnya, was "almost unanimously" chosen as the "man of the year." Russian President Boris Yeltsin was awarded the title of "worst man of the year." In a separate development, RFE/RL and Russian TV reported that Kovalev's colleagues from the Russia's Choice faction in the State Duma, Nikolai Vorontsov and Egor Gaidar, urged on 3 January that Kovalev be nominated for the Nobel Peace Prize. * Julia Wishnevsky

Interfax reported on 3 January that management at a Sakhalin joint-stock paper company has paid a portion of its workers' salaries in "mostly low-quality wine" shipped in from the mainland and bartered for the paper produced by the company. Previously, firemen working with the firm were paid in red wine, perhaps explaining why "they failed to extinguish fire in a coal gallery on the same day." * Stan Markotich

No report today.

The Kaunas-based company Minta and 18 individuals won in a contest the right to purchase the Kedainiai Chemical Factory, the largest producer of mineral phosphorus fertilizers in the Baltic States, BNS reported on 3 January. They will pay 135 million litai ($33.75 million)--26.5 million litai more than the initial asking price--for 69.7% of the factory's shares. The 18 unnamed individuals were described as businessmen who previously were engaged in the nonferrous metals trade. The factory is the most expensive enterprise privatized in Lithuania. The new owners estimate that necessary modernization will cost $50-60 million. * Saulius Girnius

Estonian Justice chancellor Eerik-Juhan Truuvali said that he had not yet received a request sent late last year by police investigators to prosecute former Justice Minister and parliament deputy Heiki Kranich, BNS reported on 3 January. Kranich is accused of abuse of power in his position as head of the Haapsalu branch of the West Estonian Bank in 1992 when he allegedly interfered in money transfers between several competing companies. Truuvali noted that he would be obliged to request parliament to lift Kranich's legislative immunity, but there are no laws regulating the issue. He said that parliament could pass the necessary laws rather quickly since several drafts were already under consideration, but the process could be dragged out to influence the preelection campaign. Kranich is a member of the Reform Party. * Saulius Girnius

Polish President Lech Walesa told reporters on 3 January that he will refuse to pay personal income taxes at the higher rates set by Waldemar Pawlak's government last week, PAP and international agencies report. Walesa said he does not recognize the government's decision. The rates were changed without the passage of new tax legislation. Asked by reporters on what basis he will pay his taxes, Walesa said he will abide by the 1991 tax law. Reuters quotes the president's legal adviser, Lech Falandysz, as saying that if Pawlak cannot reach an understanding with Walesa, he should either quit or be prepared for a fight. The two leaders have recently been at loggerheads over economic policies and control over key ministries. Meanwhile, the Senate on 3 January passed the 1995 state budget approved by the Sejm (the lower house of the parliament) last week. Out of the 100 senators, 74 voted in favor of the budget's passage. Walesa, who was opposed to two key measures eventually removed from the Sejm's final version, now has 30 days in which to give his seal of approval to the document. He told reporters that he will sign it, but not before the end of the week. * Jan Cleave

The Federation of Trade Unions of Belarus and the Belarusian Confederation of Industrialists and Manufacturers issued a statement criticizing the government's program for pulling the country out of its economic crisis, Belarusian Radio reported on 3 January. They were especially critical of the new taxation law. According to their statement, the new law does not alleviate taxes on manufacturers; it is not conducive to encouraging import or export operations; it does not encourage investment; and it taxes banks which could otherwise issue credits. The unions also charge that the law does not support small and medium businesses and levies taxes on non-state enterprises which are three times as high as those for state enterprises. The unions appealed to the parliament to reconsider the reform policy. * Ustina Markus

Ukraine will introduce its new national currency, the hryvna, in 1995 in its effort to reform its monetary system and ailing economy, President Leonid Kuchma told Ukrainian Television on 3 January during a tour of the newly-renovated National Bank of Ukraine. On the same day, Kuchma signed a decree creating a presidential advisory Council on Economic Reforms, formally establishing his current team of economic advisors as a group charged with developing economic policy. The new council will be chaired by Viktor Pynzenyk, the first deputy prime minister for economic reforms. * Chrystyna Lapychak

The Ukrainian government has decided that the sixth nuclear reactor at the Zaporizhzhia atomic energy station, considered the largest of its kind in Europe, will go on line for testing purposes in the first quarter of 1995 in preparation for its planned commercial usage by the end of the year, Ukrainian Radio reported on 3 January. Heavily dependent on and debt-ridden from Russian energy imports, Ukraine obtains up to 40% of its energy from five nuclear power stations throughout the country, including Chornobyl. Despite protests from environmental groups, Ukrainian authorities have said the energy crunch in the country is forcing them to continue to rely on and even expand their civilian nuclear program, including completing construction on unfinished reactors such as the sixth bloc at Zaporizhzhia, left idle after the collapse of the former USSR. * Chrystyna Lapychak

The Czech government agreed at its 3 January session to amend the existing law on conflicts of interest, Czech media reported. The proposed law will cover only politicians: the president, prime minister, ministers, and parliamentary deputies, but will not apply to their relatives or civil servants. If the amendment is approved by parliament, politicians will not be allowed to sit on executive boards of companies and firms; they will also not be allowed to own firms or serve as company administrators. The politicians covered by the law will be allowed to accept gifts but will have to inform the chairman of the parliament about receiving any such gift and about their overall income. The government approved the amendment in the wake of several corruption scandals that recently shook Czech politics. * Jiri Pehe

In its session on 3 January, the Slovak cabinet asked Foreign Minister Juraj Schenk to prepare Slovakia's application for EU membership by 30 June, Pravda reports. Schenk said this move clearly confirms the continuity of Slovakia's foreign policy and its orientation towards West European structures. The cabinet also approved the removal of Police Chief Stefan Lastovka, who was appointed by the Moravcik government in March, and replaced him with Jozef Holdos. A proposal for a Slovak-Russian intergovernmental commission, chaired by Deputy Premier Sergej Kozlik, as well as for a trade agreement between Slovakia and Iran were also passed. * Sharon Fisher

In a press conference on 3 January, newly-appointed Slovak TV Director Jozef Darmo said he plans to implement several basic changes at the station, which include guaranteeing STV's independence and financial means, and returning production of main programs from external sources back to the station. Darmo justified the recent personnel changes at STV, which include replacing the directors of the Banska Bystrica and Kosice studios, saying that it is normal for management to resign when leadership changes occur. Concerning the recent cancellation of the political satire "An evening of Milan Markovic," which with 62.3% of viewers was STV's most popular show, Darmo said that viewership is not the only criterion to consider, Sme reports. * Sharon Fisher

Hungarian Defense Ministry spokesman Lajos Erdelyi, in an interview with Magyar Hirlap on 3 January, says his country wants British and German troops to hold joint exercises with Hungarian forces in Hungary later this year. Erdelyi explained this is part of a Hungarian plan to take a more active role in NATO's Partnership for Peace program. He added that Hungary has set aside 400 million forint ($3.5 million) for this purpose. Hungarian troops are to participate in NATO exercises in Italy this year. Erdelyi also said the Hungarian military would be further reorganized to bring it up to the standards of "Euroatlantic integrational structures." Personnel changes in 1995 are to include dismissing some 20% of army officers and drafting 7,000 fewer conscripts than in 1994. Also on 3 January, Foreign Ministry spokesman Gabor Szentivanyi said Hungary expects Austria, a member of the European Union since 1 January, to tighten border controls, AFP reports. Szentivanyi noted that although no irregularities have yet been reported on the Hungarian-Austrian border, Hungarian officials were reckoning with the introduction of stricter tourist and transport checks. * Jan Cleave

International media report on 4 January that the truce between the Bosnian government and rebel Serb forces signed on 31 December is largely holding. Fighting around Sarajevo on 3 January was so low that the main tram line along Marshall Tito Boulevard was able to resume running with little fear of sniper fire, the Los Angeles Times says. On 4 January government and Serb forces are expected to meet at the airport under UN mediation to discuss further steps to implement the ceasefire. UN spokesmen told reporters, moreover, that government troops are expected to withdraw from the demilitarized zone on Mt. Igman by mid-day on 4 January. Government representatives, however, pointed out to AFP that any such move would be conditional upon the UN's monitoring the road from that mountain to Hrasnica. The mainly Muslim army has stayed on Mt. Igman to help control the Hrasnica road, which is Sarajevo's link with other government-held territory. Meanwhile in London, British government spokesmen called for a rapid follow-up to the truce in order to produce a lasting political settlement to the conflict. * Patrick Moore

News agencies reported on 3 January from the embattled Bihac pocket in northwestern Bosnia that some 250 shells had landed near Velika Kladusa. The town is the main base for local kingpin Fikret Abdic, who recently retook it following its loss to government forces in August. UN spokesmen said it was not clear whether the firing came from Abdic's forces or from those of his Krajina Serb allies. Abdic verbally agreed to the ceasefire on 28 December, but the Krajina forces have yet to sign on. Meanwhile, refugees loyal to Abdic have been returning to Velika Kladusa from their primitive camps in Krajina despite warnings from the UN that the area is not safe. Vjesnik on 4 January describes conditions in the nearby Sector North region of Krajina as "chaos," and suggests that other refugees are trying to leave the area for a third country. * Patrick Moore

Vecernji list reports on 4 January that the highway linking Zagreb and Lipovac (and ultimately Belgrade) has been used by more than 14,000 cars, buses and trucks since it was reopened to traffic on 23 December. The stretch between Nova Gradiska and Novska runs through Krajina Serb territory and is monitored by UNPROFOR, which makes sure that vehicles do not stray from the main road into Serb-held areas, the New York Times adds. The Zagreb daily cites UN spokesmen as saying that the highway will now be in use only from 6 a.m. to 6 p.m., following 24-hour access during the holiday period. That regimen may return as early as next week, however, since UN spokesmen note that arrangements are nearly complete with Croatian and rebel Serb authorities for round-the-clock access. Croatia regards the reopening of the road as a key step in the reintegration of Serb-held territories into Croatian life, while the Krajina Serbs have misgivings about the disruption of the hitherto closed "border." In another Croatian development, Novi list writes on 4 January about problems surrounding vacancies for top judicial positions. Some 37 jobs will be contested by only 67 individuals, virtually all of whom are virtually unknown to the public and to much of their profession. * Patrick Moore

Reuters reported on 30 December that the independent staff of Borba under chief editor Gordana Logar will resist government takeover attempts by setting up a new firm of their own. Their company will be called Fininvest and will be located in Novi Sad. Their paper will be named Nasa Borba to differentiate it from the old Borba, which the Milosevic government took over just before Christmas and put in the hands of a top government information official. Fininvest will be owned by Dusan Mijic, the former leading shareholder of the old daily. The Frankfurter Allgemeine Zeitung noted on 31 December that the government is actively persuing its attempts to take over or shut down the other leading voices in the independent media, namely the weekly Vreme, the TV station Studio B, and the radio broadcaster B-92. Vreme on 2 January reported on Serbia's 50-odd local TV stations, but concluded that they are not yet willing or able to become centers of independent broadcasting. * Patrick Moore

OIL POLLUTION AT ROMANIAN-HUNGARIAN BORDER. Quoting a spokesman for the Environment Ministry, Romanian television said on 3 January that an oilfield accident has polluted more than 40 kilometers of the river Barcau and the pollution might cross the border into Hungary. The spokesman said the oil from a refinery in the Bihor county was detected on 30 December. About 35 tons were removed by technicians but it was impossible to collect it all and the pollution was now spreading down-river. The Barcau enters Hungary above the town of Oradea and becomes the Berettyo, which eventually joins other rivers in the Hungarian plain. The deputy prefect of Oradea county was quoted by Reuters as saying that a special commission was investigating the cause of the spill. * Michael Shafir

Residents of the Sapareva Banya region temporarily blocked work on a new pipeline that is to connect rivers in the Rila Mountains with Sofia's water supply system, Otechestven Front reported on 3 January. Members of the Committee for Civil Disobedience blocked streets and stopped workers from entering the construction site. The project is scheduled to be finished by the end of March and is part of a new system to end Sofia's water crisis. The residents of the Rila region fear that this will mean a shortage of water for them. * Stefan Krause

Greece wants to negotiate a new treaty with Bulgaria regarding use of water from the Mesta River, Standart reported on 3 January. The present agreement divides 300 million cubic meters annually between the two countries and is valid for 30 years. Greece wants a permanent agreement but apparently is willing to conclude one for 50 years. Ekoglasnost, a political formation in coalition with the Bulgarian Socialist Party, said that Bulgaria should insist on financial compensation in case Greece wants more water from the Mesta. * Stefan Krause

Albania's parliamentary commission on foreign policy has expressed concern over recent developments in Macedonian-Albanian relations, the Tirana edition of Rilindja reported on 4 January. The legislators are responding to the continuing refusal by the Macedonian authorities to allow an Albanian-language institution of higher education in that republic, and to the recent deportation of exiled Kosovar parliamentarians from Macedonia to Serbia. The legislators issued a declaration that described calls for an Albanian-language pedagogical faculty as a "minimum demand." They added that the violent police raid on the Albanian university illegally founded in Tetovo in early December "stands in contradiction to Albania's friendly orientation, goodwill and concrete moves for promoting stability in Macedonia." The commission also criticized the arrests and expulsions of the Kosovar legislators, who have been meeting in Macedonian exile since 1991. The deportations followed the police attack on the university on 14 December. Reuters noted on 29 December, however, that Macedonia has deported over 660 people to rump-Yugoslavia in the last six months. * Fabian Schmidt

Citizens of a Tirana district have complained about a three-week electricity cut-off and a 10-day absence of water in a letter to Zeri i Popullit published on 4 January. This one case is indicative of a much larger water and power problem, and Albania will soon import electricity from Bulgaria via the rump-Yugoslav grid, Politika reported on 28 December. The committee on sanctions against rump-Yugoslavia at the UN Security Council agreed to the arrangement under the precondition that the amount of current entering and leaving rump-Yugoslavia be monitored. However, Politika said that "the transport will not be free of charge" and implied that some of the electricity will remain in Yugoslavia. Albania has cut its own production in hydroelectric power plants from about 15 million kWh to about eight million kWh because of a lack of water in the recent dry season. Albania has also negotiated to receive Greek and Romanian current via the Greek grid. * Fabian Schmidt

[As of 1200 CET]

(Compiled by Pete Baumgartner and Steve Kettle)