NEW CRIMINAL CODE GOES INTO EFFECT.
A new criminal code came into force on 1 January 1997 after President Yeltsin signed the corresponding law on 27 December 1996, Russian media reported. The new code replaced the RSFSR's criminal code of 1960. Although it retains capital punishment and increases the maximum sentence for banditry and murder from 15 to 20 years, it significantly reduces the number of crimes punishable by death and reduces sentences for non-violent crimes. The code also includes almost 100 new articles. Convicts serving time for offenses no longer considered criminal may be eligible for early release, Radio Rossii reported on 27 December, citing the presidential press service. On 25 December, the Federation Council approved Russia's new Criminal Correctional Code, which will come into effect on 1 July 1997 if signed by Yeltsin. Meanwhile, Yeltsin signed the law on the judicial system, ITAR-TASS reported on 31 December (see OMRI Daily Digest, 30 December). * Nikolai Iakoubovski
FAPSI CONTROLS GOVERNMENT, COMMERCIAL NETWORKS.
In a 24 December interview with Krasnya zvezda marking the fifth anniversary of the founding of the Federal Agency for Government Communications and Information (FAPSI), the agency's chief of staff, Maj.-Gen. Ivan Shepotkov, said FAPSI's main purpose is to provide a "reliable" and "independent" communications network for the Russian president. He said the experience of the August 1991 coup, when the KGB cut off communications links to then Soviet President Mikhail Gorbachev, showed the need for an independent communications agency. He also said FAPSI protects government secrets from the "information war" which Western countries are waging against Russia. Emphasizing the importance of economic secrets, he added that FAPSI runs and is developing secure networks over which electronic commercial, financial, and banking transactions in Russia are conducted, and angrily denied suggestions that the agency might eavesdrop on confidential business transactions. * Scott Parrish
WHAT SOME JOURNALISTS WERE AFRAID TO WRITE IN 1996.
The year-end issue of the weekly newspaper Kommersant asked 16 journalists what they had been afraid to write in 1996. One Kommersant reporter was afraid colleagues would accuse him of taking bribes, another mentioned that he was afraid of provoking libel suits, and a third had feared for his physical safety after writing one article about business dealings, adding that to protect himself he shaved off his beard and did not answer the phone for a week. Aleksandr Loktev, chief editor of Kommersant-Daily, said, "Most of all we were afraid that we would have to write, `[Communist Party leader Gennadii] Zyuganov became president of Russia.'" Kseniya Makhnenko, chief editor of the glossy magazine Domovoi, said her magazine did not publish a feature about presidential Chief of Staff Anatolii Chubais, because "there are too many emotions surrounding his personality, and our magazine tries to avoid openly scandalous subjects." Nataliya Gevorkyan of Kommersant said she had been tempted to criticize fellow journalists for engaging in what she called "brainwashing" but decided to adhere to the principle, "don't touch your own." * Laura Belin
MASKHADOV STEPS DOWN.
On 2 January, Aslan Maskhadov stepped down as Chechen prime minister in order to run in the 27 January presidential race, AFP and ITAR-TASS reported. He will be temporarily replaced by Ruslan Gelaev, a former field commander. President Zelimkhan Yandarbiev will continue serving in office until the election results are known. Also on 2 January, 16 candidates were formally registered for the presidential election, ITAR-TASS reported, citing the press secretary of the Chechen Central Election Commission, Shaaman Akbulatov. * Peter Rutland
NEW YORK MAYOR DEMANDS RECALL OF RUSSIAN DIPLOMAT.
New York Mayor Rudolph Giuliani has sent letters to the Russian and Belarusian UN missions demanding that two diplomats involved in a recent altercation with New York police be sent home, Reuters reported on 2 January. Rejecting Russian demands for an apology over the incident (see OMRI Daily Digest, 3 January 1997), Giuliani said he is "very proud of what the police officers did," adding that they "did their job trying to stop drunk people from driving." The incident began when police officers attempted to ticket the diplomats for illegal parking. Giuliani said that in the first six months of 1996, 122 vehicles registered with the Russian UN mission received 14,437 traffic citations. Under the 1961 Treaty of Vienna, foreign diplomats are obligated to observe U.S. law but have diplomatic immunity from prosecution * Scott Parrish
MORE INTERIOR MINISTRY TROOPS TO PATROL MOSCOW STREETS.
The head of the Moscow branch of Interior Ministry troops, Lt.-Gen. Arkadii Baskaev, told ITAR-TASS on 3 January that 10,000 additional Interior Ministry troops will patrol the streets of the capital in 1997. Baskaev claimed that in other Russian cities where the presence of such troops has increased, the crime rate decreased by 22% last year, but he did not cite any specific examples. In 1996, approximately 4,000 Interior Ministry troops patrolled the streets of Moscow every day. * Laura Belin
DRUG-RELATED CRIMES UP IN MOSCOW IN 1996.
Although the overall crime rate in Moscow dropped in 1996, the number of registered drug-related crimes increased to 4,600, up from 3,000 in 1995, Reuters reported on 2 January, citing figures released by the Moscow branch of the Interior Ministry. Drug-related crimes have increased sharply in Russia in recent years, as the country has become an important transit point for traffickers bringing drugs from Central Asia to Europe. In all, there were about 87,600 registered crimes in Moscow in 1996, compared with 92,600 the previous year. * Laura Belin
ILLEGAL IMMIGRANT UPDATE.
In recent months, Afghans have become the largest group of illegal migrants to Russia, ITAR-TASS reported on 2 January, citing Yurii Arkhipov of the Federal Migration Service (FMS). Arkhipov estimated that 150,000 illegal Afghan migrants live in the Moscow area. Like many Russian officials who blame illegal immigrants for crime, Arkhipov complained that Afghan migrants bring their political disputes with them to Russia, often sparking violent conflicts. Overall, he estimated that between 500,000 and 1 million illegal migrants from some 52 countries are currently on Russian territory, many hoping to move on to Western Europe. Arkhipov predicted that illegal immigration would increase in 1997 but said recently passed legislation on refugees would help the FMS deal with the situation. * Scott Parrish
POPULATION DECLINE CONTINUES.
Between January and December of 1996, Russia's total population declined by 430,000, to reach 147.5 million at the end of the year, AFP reported on 2 January, citing data released by the State Statistics Committee. The natural decrease of the population, the difference between the number of deaths and births, was even greater (661,600), but the net inflow of migrants partially offset the population loss. Although the death rate fell from 15.0 to 14.4 per 1,000 in the course of the year, it continued to exceed the birth rate, which also dropped from 9.5 to 9.0 per 1,000. The birthrate is even lower in St. Petersburg and Moscow: 6.7 and 7.2 per 1,000, respectively. The State Statistics Committee predicted in 1995 that the Russian population would decrease by 5.1 million by the year 2005. * Nikolai Iakoubovski
DE BEERS DIAMOND CONTRACT LAPSES.
.. De Beers has announced that from 1 January 1997 it will no longer adhere to its previous arrangement for handling Russian diamonds, international media reported. The contract between De Beers and the Russian government, which gave the former the right to sell 95% of Russian diamonds, lapsed in December 1995. In 1995, Russia accounted for about $1.1 billion, or 26%, of De Beer's global sales. Through 1996, De Beers continued to adhere to the old arrangement, and in February 1996 they negotiated a new three-year contract, under which Russia would sell 87.5% of its diamonds through De Beers. The new deal included letting the pick of $650 million worth of stones go to Russia's own cutting industry. However, in 1996 Russian producers began independently selling large amounts of diamonds on the world market, perhaps as much as $500 million worth. In June, the Australian firm, Argyle--a small-stone producer like Russia--quit the cartel, so De Beers cut prices for small stones, causing the market to collapse, the Independent reported on 29 December. * Peter Rutland
... ALMAZY ROSSII-SAKHA ARGUES IN FAVOR OF DE BEERS CONTRACT.
Vyacheslav Shtyrov, the head of Almazy Rossii-Sakha (ARS), Russia's main diamond producer, has argued in favor of signing the De Beers contract, but he has reportedly been blocked by government officials who want Moscow to reap more benefits from the diamond trade. In what may be an unrelated incident, on 30 December Lev Safronov, the vice-president of ARS, was beaten on a Moscow street by two assailants. Earlier that day, he was quoted by ITAR-TASS as saying that a deal with De Beers would be signed soon. * Peter Rutland
AZERBAIJANI PRESIDENT ON 1996.
In his New Year's Day address, Heidar Aliev described 1996 as a year of peace and stability, RFE/RL reported on 1 January. He highlighted the effectiveness of the1993 Nagorno- Karabakh ceasefire and termed the OSCE Lisbon summmit last month as very important to the conflict's ultimate resolution. He said the country has survived "attempts mounted by internal and foreign forces" to destabilize it and said much work had been accomplished in building a democratic, secular, and law-abiding state. Aliev said the economy grew for the first time since the collapse of the USSR (albeit by only 1.2%), the decline in the rate of production slowed, and agricultural output rose by 3%. He also noted that monthly inflation was less than 1% and foreign investments doubled last year. * Lowell Bezanis
TURKISH PRESIDENT TO FURTHER SUPPORT AZERBAIJAN.
In a televised New Year's Day interview, Suleyman Demirel said Turkey will stand behind its "brother," Azerbaijan, at all future international negotiations, Asbarez-on-line reported on 2 January, citing Cumhuriyet and Turkiye. Demirel claimed that Azerbaijan occupies an "extremely important and exclusive place" in Turkey's foreign policy. Demirel excluded the possibility of "forcible" border changes in the disputed Nagorno- Karabakh region. Demirel praised President Heidar Aliyev for managing to "achieve internal stability" and stop the war in Nagorno-Karabakh. * Emil Danielyan
MANUKYAN ON 1996, NEED FOR NATIONAL FRONT.
The leader of Armenia's opposition National Democratic Union, Vazgen Manukyan, said the "Armenian state" failed a crucial test last year, pointing to what he termed the undemocratic presidential elections which took place last September. According to a 30 December Interfax report monitored by the BBC, Manukyan harshly criticized the governemnt's social and economic policy while applauding the high political activity of the Armenian population. He said he is willing to maintain a dialogue with the authorities only to discuss new presidential elections and a new constitution; he also called for the establishment of a "national front" of "political parties and various public forces" to effect change. * Lowell Bezanis
TURKMENBASI TO CONTINUE ECONOMIC REFORMS IN 1997.
In his New Year's Day address, Turkmen President Saparmurad Niyazov said he his pleased with the accomplishments of 1996, RFE/RL reported on 1 January. He argued that Turkmenistan's ties with neighboring countries have been consolidated. While acknowledging that Turkmenistan's agricultural output was below the desired level (the cotton and grain harvests were disastrous in 1996), he said living standards were starting to improve. Niyazov vowed to press on with economic reform and pledged to invest more than 2 trillion manats (about $400 million) in social programs. * Lowell Bezanis
GEORGE SOROS NAMED "MAN OF THE YEAR" IN KYRGYZSTAN.
The Rukhaniyat organization of Kyrgyzstan has awarded its 1996 Man of the Year award to philanthropist George Soros, RFE/RL reported on 2 January. In 1996, Soros donated more than $4 million to fund programs helping educational and cultural programs in Kyrgyzstan. The award's previous winners are Kazakstani President Nursultan Nazarbayev, Uzbek President Islam Karimov, and the head of the UNDP office in Kyrgyzstan, Erjan Murat. * Bruce Pannier and Naryn Idinov
NEW MUFTI FOR KYRGYZSTAN.
The controversial Muslim Congress held in Bishkek on 26 December elected Absatar-Agy Majitov as the head mufti of Kyrgyzstan, RFE/RL reported. Majitov replaces Kimsanbai-Agi Abdurakhmanov, who did not take part in the congress, claiming the schedule agreed to in 1993 stated the congress would meet every four years. Abdurakhmanov, however, has been accused of corruption, a possible reason for convening the congress early. The new mufti named his four top deputies,. representing four different ethnic groups, on 2 January. They are: Abdylda Aslankulov-Kyrgyz, Lukmar Agi-Dungan, Abdymajit Kary-Uyghur, and Rakhmatulla Kary-Uzbek. * Bruce Pannier and Naryn Idinov
NEW RULE ON RAISING PRICES IN KAZAKSTAN.
The chairman of Kazakstan's Anti-Monopoly Committee, Nikolai Radostovets, announced on 1 January that the country's businesses will only be allowed to raise their prices on a quarterly basis, RFE/RL reported. Prices for heating and electricity will remain at 1996 rates and in some areas will be reduced. He also said that the cost of cargo transportation services is expected to rise in 1997. * Bruce Pannier and Merhat Sharipzhan
TERRORISM IN TAJIK CAPITAL.
The ceasefire agreed to by Tajik President Imomali Rakhmonov and United Tajik Opposition leader Said Abdullo Nuri in Moscow on 23 December appears to be holding, although the number of terrorist attacks on Russian soldiers and support personnel in Dushanbe has increased since 23 December, according to Russian media reports. On 28 December, five soldiers were wounded when their vehicle was attacked: on 2 or 3 January, a Russian soldier was shot and killed in Dushanbe's Sakhovat district and the bodies of a Russian doctor and nurse were found on a Dushanbe street on 3 January. Both the Tajik government and opposition are blaming the attacks on groups that are trying to derail the peace agreement. * Bruce Pannier
BELARUSIAN POLITICAL UPDATE.
President Alyaksandr Lukashenka has appointed Piotr Prakapovich first deputy prime minister, Belarusian radio reported. Prakapovich, an economist, is considered a moderate. He will be responsible for implementing the government's socio-economic development program until the year 2000. In other news, several regions-- including Minsk, Mahileu, and Hrodna--have nominated candidates to the Council of the Republic, the new upper chamber of the legislature, Belapan reported on 31 December. The lists of candidates are to be submitted to the Central Electoral Commission on 4 January. Lukashenka has the final say over the candidates. * Ustina Markus
UKRAINIAN PRESIDENT INCREASES CONTROL OVER ARMS EXPORTS.
President Leonid Kuchma has issued a decree aimed at increasing control over defense-related exports, Ukrainian Radio reported on 28 December. The decree transforms the State Export Commission into the State Commission for Export Control Policy. The Export Technical Committee will be renamed the State Export Control Service under the cabinet of ministers. The reorganization is meant to establish strict control over international transfers of arms and military technology as well as raw materials and skills that may be used for the production of weapons and other military technology. * Ustina Markus
UKRAINIANS SAY THEIR LIVING STANDARDS CONTINUE TO DECLINE.
An opinion poll asking 1,200 Ukrainians about their living standards in 1996 showed the majority still feel their standards are declining, Den reported on 31 December. Of the respondents, 37% said their living standards declined significantly in 1996, 33% said they declined somewhat; and 23% said their standards did not change. Only 6% said their standards improved somewhat; and 1% said they improved significantly. The average wage in the first 11 months of 1996 was 144.76 hryvnyas ($77), but real wages fell by 23% over the same period owing to inflation. Official unemployment levels remained at a low 1.1%, but real unemployment is believed to be at least nine time higher. Prices rose by 38.5% over the first eleven months of the year. * Ustina Markus
FREE AGRICULTURAL TRADE ZONE GOES INTO EFFECT IN BALTICS.
The agreement on a free agricultural trade zone in Lithuania, Latvia, and Estonia went into effect on 1 January, ETA reported. The pact, signed in Vilnius last June, abolishes customs duties, tariffs, and import-export quotas in agricultural trade. At the same time, it allows a member country to implement some protective measures if its economic situation takes a turn for the worse. In April 1994, an agreement on the free trade of industrial goods in the Baltics went into effect. * Ustina Markus
LATVIA CONCERNED ABOUT EU REPORT ON CORRUPTION.
Interior Minister Dainis Turlais has criticized an EU report alleging corruption at all levels in Latvia, BNS reported on 2 January. In particular, the police, which are subordinated to the Interior Ministry, were singled out for criticism for accepting bribes and other irregularities. Turlais said citing corruption without mentioning specific names or instances makes no sense, adding that Latvia is not the only country suffering from corruption. The minister admonished the country for presenting itself in a bad light. * Ustina Markus
YOUNG POLISH OFFICERS COMPLAIN ABOUT ARMY CONDITIONS.
Ensigns from the 17th Mechanized Brigade have sent a letter to President Aleksander Kwasniewski complaining about the lack of funds and out-dated equipment, Gazeta Wyborcza reported on 3 January. They commented that today, the basic training for soldiers is not shooting but reading instructions about shooting. Under such conditions, it would be impossible to train soldiers in 12 months, as the Defense Ministry is currently planning to do. The young officers also complained about high expenditures on ceremonies involving the participation of high-ranking officers, noting that, meanwhile, the basic needs of the army are not being satisfied. Defense Minister Stanislaw Dobrzanski, who is currently on vacation, was unavailable for comment. * Jakub Karpinski
CZECH SECRET SERVICE DENIES INVOLVEMENT IN KOVAC JR. KIDNAPPING.
The Czech intelligence service (BIS) has categorically rejected allegations by the Slovak pro-government newspaper Slovenska Republika that the BIS was involved in the kidnapping of the Slovak president's son in 1995, Czech media reported on 3 January. Slovenska Republika based its accusation on a Czech TV interview with Oskar Fegyveres, a key witness to the kidnapping of Michal Kovac Jr. Fegyveres has been in hiding for more than a year. The paper alleged that the interview took place in a building in southern Moravia that the BIS uses as a base for its activities. The BIS has also denied that is the case. In addition to the BIS, the paper accused the Hungarian and Swiss intelligence services as well as U.S. Ambassador to Slovakia Ralph Johnson of cooperation with Fegyveres. * Victor Gomez
SLOVAK PRESIDENTIAL SPOKESMAN SAYS PARLIAMENT ACTED UNCONSTITUTIONALLY.
Vladimir Stefko told Reuters on 2 January that the parliament violated the constitution last month when it approved a new version of the penal code amendment on the protection of the republic. President Michal Kovac had vetoed an earlier version of the law approved in March; and according to the constitution, the parliament was required to discuss the legislation again before passing a new version. "The president has deemed it unconstitutional that the deputies approved a new, almost identical version, without rejecting the old one," Stefko said. Sme on 3 January wrote that if the parliament passes the later version of the amendment for a second time, Kovac will be unable to sign it until the first version is rejected. * Sharon Fisher
SLOVAKIA'S "LUSTRATION" LAW NO LONGER IN EFFECT.
Jan Langos, Democratic Party chairman and former Czechoslovak interior minister, told TASR that as of 31 December 1996, the 1991 Czechoslovak lustration law is no longer in effect in Slovakia. The law, designed to cleanse state bodies of communist-era secret service (StB) agents and top communist officials, has not been enforced in Slovakia since the 1992 parliamentary elections. Langos and several other opposition deputies submitted a bill in February 1996 on regulations for opening StB files, but the parliament has yet to decide on the issue. The law would prevent the current secret service from illegally using the files and would give each citizen the right to see his file, if one exists. It would also require that the Interior Ministry publish the real names of StB agents and informers. * Sharon Fisher
HUNGARIAN PRESIDENT REFUSES TO SIGN "CONFLICT OF INTERESTS" BILL.
Arpad Goncz on 2 January rejected the parliament's draft law on conflict of interests, saying several of its provisions are inappropriate, Hungarian dailies reported. The parliament passed the much-debated legislation last month. Goncz was particularly critical of a provision permitting deputies to retain private-sector posts secured before the 1994 general elections. Opposition parties said they were pleased that the president has rejected the bill, since they share his concerns. The governing parties, however, claimed to be surprised by his decision. The parliament now has 60 days within which to amend the contested provisions. * Zsofia Szilagyi
SERBIAN ORTHODOX CHURCH BLASTS MILOSEVIC.
Thousands of Belgrade protesters on 2 January continued their latest tactic of making noise with pots, whistles, and other implements during Serbian TV's 7:30 p.m. newscast, CNN reported. Also in the capital, the bishops of the Serbian Orthodox Church issued a declaration blasting President Slobodan Milosevic for "pitting Serb against Serb." They noted that, "Force has been used by the regime with the intention of stifling the freely expressed will of the people. The blood of the innocent [had flowed because the regime was] trying to sow discord and provoke bloodshed just so it can hang on to power. The Holy Synod condemns the authorities who have not only ignored the wishes of the electorate, but...have crushed underfoot our glorious and painful history...[and] national and moral values. Only the respect of democratic principles and human rights, the recognition of the November 17 elections, can bring hope of a better future" to Serbia, AFP and Nasa Borba reported. The bishops also accused him of betraying the cause of the Krajina Serbs. * Patrick Moore
SERBIAN WRITERS SAY MILOSEVIC USES "STATE TERRORISM."
Yet another prestigious Serbian body, the writers' association, has slammed the president. Reflecting the same themes as the Synod, the writers told Milosevic in an open letter that: "By senseless vote stealing, your party has hit a blow against the state, the constitution and the law, and by your incomprehensible decisions you have led Serbia to the verge of civil war. You have deliberately provoked battles in the streets of Belgrade between peaceful demonstrators and people, led astray, whom you brought here [on 24 December]," AFP reported on 3 January. Meanwhile, the U.S. has urged the OSCE to condemn the Serbian authorities if they continue to drag their feet on accepting an OSCE report upholding the 17 November local elections results, Nasa Borba wrote. * Patrick Moore
NATO TO SEIZE UNREGISTERED BOSNIAN ARMY MUNITIONS.
The NATO-led Stabilization Force (SFOR) said on 2 January it will confiscate tank ammunition donated to the Bosnian army through a U.S.-sponsored "Train and Equip" program because the munitions were not properly registered, Reuters reported. NATO spokesman Maj. Tony White said the force in Bosnia strictly insists on peace-time rules requiring armies to fully document all weapons or ammunition stored at designated depots. SFOR troops have confiscated 474 unregistered tank rounds out of a total of 11,000 shipped to the Bosnian federation under the U.S.-sponsored aid program. In other news, NATO announced the same day that at least a dozen houses formerly inhabited by Bosnian Muslims and Serbs were destroyed over the past week in a Croat-held area near Mostar. The attacks are aimed at discouraging non-Croatian refugees from returning to their homes south of Mostar, Reuters reported. * Daria Sito Sucic
CROATIA INDICTS SOROS FOUNDATION FOR TAX EVASION.
Zagreb's public prosecutor is pressing charges against three senior officials at the local branch of the Open Society Institute for alleged financial malpractice and tax evasion, international agencies reported on 2 January. After storming the foundation's premises in Zagreb, Croatian police said they had found evidence of "illegal financial transactions." The prosecutor charged that since December 1995, employees at the OSI's Zagreb office have been receiving two salaries: one in Croatian kuna and another in U.S. dollars. The latter, he said, was not reported to the Croatian tax authorities. Unpaid taxes are said to total 2.7 million kuna ($490,000). But the Soros Foundation in New York implicitly denies the charges, saying there was every reason to believe that its Croatian affiliate complied with local laws. The foundation has spent some $15 million in Croatia since 1992 on humanitarian and cultural projects. * Daria Sito Sucic
CROATIAN RAIL WORKERS END STRIKE.
The Croatian State Railroads (HZ) and the rail workers' union have reached a deal on wages, ending an almost month-long strike, international media reported on 2 January. The HZ management agreed to sign the first part of a collective agreement to guarantee higher wages. In return, the union agreed to halt the protest action. The government has said it wants to lower subsidies to the railway company, which totaled 1 billion kuna ($200 million) in 1996. Croatian TV said parliament will soon discuss a long-term solution for the company. Meanwhile, the HZ has increased rail fares by up to 52% as of 1 January, the Croatian press reported. * Daria Sito Sucic
MACEDONIAN INFLATION REMAINS LOW.
According to year-end figures published by the Macedonian Statistical Institute, inflation reached 3.0% in 1996, Nova Makedonija reported on 3 January. Consumer prices were up 2.3% compared with 1995. Services increased by 6.8%, industrial foodstuff 2.4%, other industrial products 1.8%, and beverages by 1.1%. The price of agricultural products, however, fell by 8.2%. Vecer reported that the Macedonian telecommunications company has halved the price of a new phone line from the equivalent of $650 to $325. * Stefan Krause
ROMANIA IS MOST OPTIMISTIC FORMER COMMUNIST COUNTRY.
According to a recent Gallup poll, 61% of Romanians believe that 1997 will be better than 1996, Radio Bucharest reported on 2 January. Romania took first place in the poll, which was conducted in several former communist countries. Georgians are the second most optimistic nation, while Hungarians are the most pessimistic. A majority of Bulgarians and Slovaks also expect 1997 to be worse than last year. * Michael Shafir
ROMANIA, MOLDOVA GRAPPLE WITH BIG FREEZE.
Forty-three people, most of them homeless, have so far frozen to death in Romania, as temperatures plunged to around minus 25 degrees Celsius, Reuters reported on 2 January. Citing Rompres, the agency said that traffic has nonetheless returned to normal in the eastern and southern parts of the country, which were the most affected by last week's blizzards. Thick ice is still preventing traffic on parts of the Danube, and flights between Bucharest and six provincial towns have been halted due to fog or icy runways. Otopeni, Bucharest's international airport, is operating, however. In neighboring Moldova, 29 people have died as a result of fires caused by the faulty use of electrical devices in attempts to alleviate freezing conditions, BASA-press reported on 2 January. * Michael Shafir
MOLDOVA SUES KAZAKSTAN OVER NON-PAYMENT FOR SERVICES RENDERED.
Moldova has begun legal proceedings against Kazakstan for the non-payment of cereal transportation costs in 1993, Moldpres reported on 2 January. The agency said Kazakstan owes Moldova 17 million tons of cereals or their equivalent in cash. The case is to be heard by the Minsk-based Economic Court of the CIS on 6 February. * Michael Shafir
IS BULGARIAN INDEPENDENT TRADE UNION BACKING SOCIALISTS?
Bulgarian Socialist Party (BSP) Chairman Georgi Parvanov has met with Krastyo Petkov, leader of the Confederation of Independent Trade Unions in Bulgaria (KNSB), to discuss the formation of a new BSP-led government, the Bulgarian press reported on 3 January. Petkov noted that the next prime minister and cabinet must enjoy the confidence of international financial institutions. He proposed that a coalition government be formed, saying that four ministers in the last cabinet--Interior Minister Nikolay Dobrev, Defense Minister Dimitar Pavlov, Agriculture Minister Krastyo Trendafilov, and Trade Minister Atanas Paparizov--were "worthy to stay on." Parvanov said the meeting reflected the BSP's new, "more open" policy. According to Duma, both leaders agreed that over the next few months, the KNSB would ensure that civil peace is maintained in order to allow the cabinet to carry out its duties. * Maria Koinova in Sofia
WHO WILL BE BULGARIA'S NEXT PREMIER?
With consultations on the formation of a new government under way, Bulgarian media are speculating who will head the new cabinet. According to Standart on 3 January, KNSB leader Petkov favors parliamentary speaker Blagovest Sendov or First Deputy Foreign Minister Irina Bokova. Interior Minister Nikolay Dobrev and former Foreign Minister Georgi Pirinski have also been frequently named as possible successors to Zhan Videnov, who resigned last week. Trud reports that Sofia-based foreign diplomats have made it clear that Dobrev would enjoy little, if any, support abroad. 24 chasa says that Dobrev is disinclined to become prime minister and would prefer to keep his present post and become deputy premier. Meanwhile, the newly elected BSP Supreme Council convenes today to elect a new Executive Bureau, the party's highest decision-making body. * Stefan Krause
GREECE PLEDGES TO LEGALIZE ALBANIAN IMMIGRANTS.
The Greek government has said it will issue work permits to illegal Albanian immigrants this month, Deutsche Welle's Albanian-language service reported on 2 January. Immigrants will be given a time-frame in which to register. Those who fail to report to the authorities will risk expulsion. * Fabian Schmidt
A new criminal code came into force on 1 January 1997 after President Yeltsin signed the corresponding law on 27 December 1996, Russian media reported. The new code replaced the RSFSR's criminal code of 1960. Although it retains capital punishment and increases the maximum sentence for banditry and murder from 15 to 20 years, it significantly reduces the number of crimes punishable by death and reduces sentences for non-violent crimes. The code also includes almost 100 new articles. Convicts serving time for offenses no longer considered criminal may be eligible for early release, Radio Rossii reported on 27 December, citing the presidential press service. On 25 December, the Federation Council approved Russia's new Criminal Correctional Code, which will come into effect on 1 July 1997 if signed by Yeltsin. Meanwhile, Yeltsin signed the law on the judicial system, ITAR-TASS reported on 31 December (see OMRI Daily Digest, 30 December). * Nikolai Iakoubovski
FAPSI CONTROLS GOVERNMENT, COMMERCIAL NETWORKS.
In a 24 December interview with Krasnya zvezda marking the fifth anniversary of the founding of the Federal Agency for Government Communications and Information (FAPSI), the agency's chief of staff, Maj.-Gen. Ivan Shepotkov, said FAPSI's main purpose is to provide a "reliable" and "independent" communications network for the Russian president. He said the experience of the August 1991 coup, when the KGB cut off communications links to then Soviet President Mikhail Gorbachev, showed the need for an independent communications agency. He also said FAPSI protects government secrets from the "information war" which Western countries are waging against Russia. Emphasizing the importance of economic secrets, he added that FAPSI runs and is developing secure networks over which electronic commercial, financial, and banking transactions in Russia are conducted, and angrily denied suggestions that the agency might eavesdrop on confidential business transactions. * Scott Parrish
WHAT SOME JOURNALISTS WERE AFRAID TO WRITE IN 1996.
The year-end issue of the weekly newspaper Kommersant asked 16 journalists what they had been afraid to write in 1996. One Kommersant reporter was afraid colleagues would accuse him of taking bribes, another mentioned that he was afraid of provoking libel suits, and a third had feared for his physical safety after writing one article about business dealings, adding that to protect himself he shaved off his beard and did not answer the phone for a week. Aleksandr Loktev, chief editor of Kommersant-Daily, said, "Most of all we were afraid that we would have to write, `[Communist Party leader Gennadii] Zyuganov became president of Russia.'" Kseniya Makhnenko, chief editor of the glossy magazine Domovoi, said her magazine did not publish a feature about presidential Chief of Staff Anatolii Chubais, because "there are too many emotions surrounding his personality, and our magazine tries to avoid openly scandalous subjects." Nataliya Gevorkyan of Kommersant said she had been tempted to criticize fellow journalists for engaging in what she called "brainwashing" but decided to adhere to the principle, "don't touch your own." * Laura Belin
MASKHADOV STEPS DOWN.
On 2 January, Aslan Maskhadov stepped down as Chechen prime minister in order to run in the 27 January presidential race, AFP and ITAR-TASS reported. He will be temporarily replaced by Ruslan Gelaev, a former field commander. President Zelimkhan Yandarbiev will continue serving in office until the election results are known. Also on 2 January, 16 candidates were formally registered for the presidential election, ITAR-TASS reported, citing the press secretary of the Chechen Central Election Commission, Shaaman Akbulatov. * Peter Rutland
NEW YORK MAYOR DEMANDS RECALL OF RUSSIAN DIPLOMAT.
New York Mayor Rudolph Giuliani has sent letters to the Russian and Belarusian UN missions demanding that two diplomats involved in a recent altercation with New York police be sent home, Reuters reported on 2 January. Rejecting Russian demands for an apology over the incident (see OMRI Daily Digest, 3 January 1997), Giuliani said he is "very proud of what the police officers did," adding that they "did their job trying to stop drunk people from driving." The incident began when police officers attempted to ticket the diplomats for illegal parking. Giuliani said that in the first six months of 1996, 122 vehicles registered with the Russian UN mission received 14,437 traffic citations. Under the 1961 Treaty of Vienna, foreign diplomats are obligated to observe U.S. law but have diplomatic immunity from prosecution * Scott Parrish
MORE INTERIOR MINISTRY TROOPS TO PATROL MOSCOW STREETS.
The head of the Moscow branch of Interior Ministry troops, Lt.-Gen. Arkadii Baskaev, told ITAR-TASS on 3 January that 10,000 additional Interior Ministry troops will patrol the streets of the capital in 1997. Baskaev claimed that in other Russian cities where the presence of such troops has increased, the crime rate decreased by 22% last year, but he did not cite any specific examples. In 1996, approximately 4,000 Interior Ministry troops patrolled the streets of Moscow every day. * Laura Belin
DRUG-RELATED CRIMES UP IN MOSCOW IN 1996.
Although the overall crime rate in Moscow dropped in 1996, the number of registered drug-related crimes increased to 4,600, up from 3,000 in 1995, Reuters reported on 2 January, citing figures released by the Moscow branch of the Interior Ministry. Drug-related crimes have increased sharply in Russia in recent years, as the country has become an important transit point for traffickers bringing drugs from Central Asia to Europe. In all, there were about 87,600 registered crimes in Moscow in 1996, compared with 92,600 the previous year. * Laura Belin
ILLEGAL IMMIGRANT UPDATE.
In recent months, Afghans have become the largest group of illegal migrants to Russia, ITAR-TASS reported on 2 January, citing Yurii Arkhipov of the Federal Migration Service (FMS). Arkhipov estimated that 150,000 illegal Afghan migrants live in the Moscow area. Like many Russian officials who blame illegal immigrants for crime, Arkhipov complained that Afghan migrants bring their political disputes with them to Russia, often sparking violent conflicts. Overall, he estimated that between 500,000 and 1 million illegal migrants from some 52 countries are currently on Russian territory, many hoping to move on to Western Europe. Arkhipov predicted that illegal immigration would increase in 1997 but said recently passed legislation on refugees would help the FMS deal with the situation. * Scott Parrish
POPULATION DECLINE CONTINUES.
Between January and December of 1996, Russia's total population declined by 430,000, to reach 147.5 million at the end of the year, AFP reported on 2 January, citing data released by the State Statistics Committee. The natural decrease of the population, the difference between the number of deaths and births, was even greater (661,600), but the net inflow of migrants partially offset the population loss. Although the death rate fell from 15.0 to 14.4 per 1,000 in the course of the year, it continued to exceed the birth rate, which also dropped from 9.5 to 9.0 per 1,000. The birthrate is even lower in St. Petersburg and Moscow: 6.7 and 7.2 per 1,000, respectively. The State Statistics Committee predicted in 1995 that the Russian population would decrease by 5.1 million by the year 2005. * Nikolai Iakoubovski
DE BEERS DIAMOND CONTRACT LAPSES.
.. De Beers has announced that from 1 January 1997 it will no longer adhere to its previous arrangement for handling Russian diamonds, international media reported. The contract between De Beers and the Russian government, which gave the former the right to sell 95% of Russian diamonds, lapsed in December 1995. In 1995, Russia accounted for about $1.1 billion, or 26%, of De Beer's global sales. Through 1996, De Beers continued to adhere to the old arrangement, and in February 1996 they negotiated a new three-year contract, under which Russia would sell 87.5% of its diamonds through De Beers. The new deal included letting the pick of $650 million worth of stones go to Russia's own cutting industry. However, in 1996 Russian producers began independently selling large amounts of diamonds on the world market, perhaps as much as $500 million worth. In June, the Australian firm, Argyle--a small-stone producer like Russia--quit the cartel, so De Beers cut prices for small stones, causing the market to collapse, the Independent reported on 29 December. * Peter Rutland
... ALMAZY ROSSII-SAKHA ARGUES IN FAVOR OF DE BEERS CONTRACT.
Vyacheslav Shtyrov, the head of Almazy Rossii-Sakha (ARS), Russia's main diamond producer, has argued in favor of signing the De Beers contract, but he has reportedly been blocked by government officials who want Moscow to reap more benefits from the diamond trade. In what may be an unrelated incident, on 30 December Lev Safronov, the vice-president of ARS, was beaten on a Moscow street by two assailants. Earlier that day, he was quoted by ITAR-TASS as saying that a deal with De Beers would be signed soon. * Peter Rutland
AZERBAIJANI PRESIDENT ON 1996.
In his New Year's Day address, Heidar Aliev described 1996 as a year of peace and stability, RFE/RL reported on 1 January. He highlighted the effectiveness of the1993 Nagorno- Karabakh ceasefire and termed the OSCE Lisbon summmit last month as very important to the conflict's ultimate resolution. He said the country has survived "attempts mounted by internal and foreign forces" to destabilize it and said much work had been accomplished in building a democratic, secular, and law-abiding state. Aliev said the economy grew for the first time since the collapse of the USSR (albeit by only 1.2%), the decline in the rate of production slowed, and agricultural output rose by 3%. He also noted that monthly inflation was less than 1% and foreign investments doubled last year. * Lowell Bezanis
TURKISH PRESIDENT TO FURTHER SUPPORT AZERBAIJAN.
In a televised New Year's Day interview, Suleyman Demirel said Turkey will stand behind its "brother," Azerbaijan, at all future international negotiations, Asbarez-on-line reported on 2 January, citing Cumhuriyet and Turkiye. Demirel claimed that Azerbaijan occupies an "extremely important and exclusive place" in Turkey's foreign policy. Demirel excluded the possibility of "forcible" border changes in the disputed Nagorno- Karabakh region. Demirel praised President Heidar Aliyev for managing to "achieve internal stability" and stop the war in Nagorno-Karabakh. * Emil Danielyan
MANUKYAN ON 1996, NEED FOR NATIONAL FRONT.
The leader of Armenia's opposition National Democratic Union, Vazgen Manukyan, said the "Armenian state" failed a crucial test last year, pointing to what he termed the undemocratic presidential elections which took place last September. According to a 30 December Interfax report monitored by the BBC, Manukyan harshly criticized the governemnt's social and economic policy while applauding the high political activity of the Armenian population. He said he is willing to maintain a dialogue with the authorities only to discuss new presidential elections and a new constitution; he also called for the establishment of a "national front" of "political parties and various public forces" to effect change. * Lowell Bezanis
TURKMENBASI TO CONTINUE ECONOMIC REFORMS IN 1997.
In his New Year's Day address, Turkmen President Saparmurad Niyazov said he his pleased with the accomplishments of 1996, RFE/RL reported on 1 January. He argued that Turkmenistan's ties with neighboring countries have been consolidated. While acknowledging that Turkmenistan's agricultural output was below the desired level (the cotton and grain harvests were disastrous in 1996), he said living standards were starting to improve. Niyazov vowed to press on with economic reform and pledged to invest more than 2 trillion manats (about $400 million) in social programs. * Lowell Bezanis
GEORGE SOROS NAMED "MAN OF THE YEAR" IN KYRGYZSTAN.
The Rukhaniyat organization of Kyrgyzstan has awarded its 1996 Man of the Year award to philanthropist George Soros, RFE/RL reported on 2 January. In 1996, Soros donated more than $4 million to fund programs helping educational and cultural programs in Kyrgyzstan. The award's previous winners are Kazakstani President Nursultan Nazarbayev, Uzbek President Islam Karimov, and the head of the UNDP office in Kyrgyzstan, Erjan Murat. * Bruce Pannier and Naryn Idinov
NEW MUFTI FOR KYRGYZSTAN.
The controversial Muslim Congress held in Bishkek on 26 December elected Absatar-Agy Majitov as the head mufti of Kyrgyzstan, RFE/RL reported. Majitov replaces Kimsanbai-Agi Abdurakhmanov, who did not take part in the congress, claiming the schedule agreed to in 1993 stated the congress would meet every four years. Abdurakhmanov, however, has been accused of corruption, a possible reason for convening the congress early. The new mufti named his four top deputies,. representing four different ethnic groups, on 2 January. They are: Abdylda Aslankulov-Kyrgyz, Lukmar Agi-Dungan, Abdymajit Kary-Uyghur, and Rakhmatulla Kary-Uzbek. * Bruce Pannier and Naryn Idinov
NEW RULE ON RAISING PRICES IN KAZAKSTAN.
The chairman of Kazakstan's Anti-Monopoly Committee, Nikolai Radostovets, announced on 1 January that the country's businesses will only be allowed to raise their prices on a quarterly basis, RFE/RL reported. Prices for heating and electricity will remain at 1996 rates and in some areas will be reduced. He also said that the cost of cargo transportation services is expected to rise in 1997. * Bruce Pannier and Merhat Sharipzhan
TERRORISM IN TAJIK CAPITAL.
The ceasefire agreed to by Tajik President Imomali Rakhmonov and United Tajik Opposition leader Said Abdullo Nuri in Moscow on 23 December appears to be holding, although the number of terrorist attacks on Russian soldiers and support personnel in Dushanbe has increased since 23 December, according to Russian media reports. On 28 December, five soldiers were wounded when their vehicle was attacked: on 2 or 3 January, a Russian soldier was shot and killed in Dushanbe's Sakhovat district and the bodies of a Russian doctor and nurse were found on a Dushanbe street on 3 January. Both the Tajik government and opposition are blaming the attacks on groups that are trying to derail the peace agreement. * Bruce Pannier
BELARUSIAN POLITICAL UPDATE.
President Alyaksandr Lukashenka has appointed Piotr Prakapovich first deputy prime minister, Belarusian radio reported. Prakapovich, an economist, is considered a moderate. He will be responsible for implementing the government's socio-economic development program until the year 2000. In other news, several regions-- including Minsk, Mahileu, and Hrodna--have nominated candidates to the Council of the Republic, the new upper chamber of the legislature, Belapan reported on 31 December. The lists of candidates are to be submitted to the Central Electoral Commission on 4 January. Lukashenka has the final say over the candidates. * Ustina Markus
UKRAINIAN PRESIDENT INCREASES CONTROL OVER ARMS EXPORTS.
President Leonid Kuchma has issued a decree aimed at increasing control over defense-related exports, Ukrainian Radio reported on 28 December. The decree transforms the State Export Commission into the State Commission for Export Control Policy. The Export Technical Committee will be renamed the State Export Control Service under the cabinet of ministers. The reorganization is meant to establish strict control over international transfers of arms and military technology as well as raw materials and skills that may be used for the production of weapons and other military technology. * Ustina Markus
UKRAINIANS SAY THEIR LIVING STANDARDS CONTINUE TO DECLINE.
An opinion poll asking 1,200 Ukrainians about their living standards in 1996 showed the majority still feel their standards are declining, Den reported on 31 December. Of the respondents, 37% said their living standards declined significantly in 1996, 33% said they declined somewhat; and 23% said their standards did not change. Only 6% said their standards improved somewhat; and 1% said they improved significantly. The average wage in the first 11 months of 1996 was 144.76 hryvnyas ($77), but real wages fell by 23% over the same period owing to inflation. Official unemployment levels remained at a low 1.1%, but real unemployment is believed to be at least nine time higher. Prices rose by 38.5% over the first eleven months of the year. * Ustina Markus
FREE AGRICULTURAL TRADE ZONE GOES INTO EFFECT IN BALTICS.
The agreement on a free agricultural trade zone in Lithuania, Latvia, and Estonia went into effect on 1 January, ETA reported. The pact, signed in Vilnius last June, abolishes customs duties, tariffs, and import-export quotas in agricultural trade. At the same time, it allows a member country to implement some protective measures if its economic situation takes a turn for the worse. In April 1994, an agreement on the free trade of industrial goods in the Baltics went into effect. * Ustina Markus
LATVIA CONCERNED ABOUT EU REPORT ON CORRUPTION.
Interior Minister Dainis Turlais has criticized an EU report alleging corruption at all levels in Latvia, BNS reported on 2 January. In particular, the police, which are subordinated to the Interior Ministry, were singled out for criticism for accepting bribes and other irregularities. Turlais said citing corruption without mentioning specific names or instances makes no sense, adding that Latvia is not the only country suffering from corruption. The minister admonished the country for presenting itself in a bad light. * Ustina Markus
YOUNG POLISH OFFICERS COMPLAIN ABOUT ARMY CONDITIONS.
Ensigns from the 17th Mechanized Brigade have sent a letter to President Aleksander Kwasniewski complaining about the lack of funds and out-dated equipment, Gazeta Wyborcza reported on 3 January. They commented that today, the basic training for soldiers is not shooting but reading instructions about shooting. Under such conditions, it would be impossible to train soldiers in 12 months, as the Defense Ministry is currently planning to do. The young officers also complained about high expenditures on ceremonies involving the participation of high-ranking officers, noting that, meanwhile, the basic needs of the army are not being satisfied. Defense Minister Stanislaw Dobrzanski, who is currently on vacation, was unavailable for comment. * Jakub Karpinski
CZECH SECRET SERVICE DENIES INVOLVEMENT IN KOVAC JR. KIDNAPPING.
The Czech intelligence service (BIS) has categorically rejected allegations by the Slovak pro-government newspaper Slovenska Republika that the BIS was involved in the kidnapping of the Slovak president's son in 1995, Czech media reported on 3 January. Slovenska Republika based its accusation on a Czech TV interview with Oskar Fegyveres, a key witness to the kidnapping of Michal Kovac Jr. Fegyveres has been in hiding for more than a year. The paper alleged that the interview took place in a building in southern Moravia that the BIS uses as a base for its activities. The BIS has also denied that is the case. In addition to the BIS, the paper accused the Hungarian and Swiss intelligence services as well as U.S. Ambassador to Slovakia Ralph Johnson of cooperation with Fegyveres. * Victor Gomez
SLOVAK PRESIDENTIAL SPOKESMAN SAYS PARLIAMENT ACTED UNCONSTITUTIONALLY.
Vladimir Stefko told Reuters on 2 January that the parliament violated the constitution last month when it approved a new version of the penal code amendment on the protection of the republic. President Michal Kovac had vetoed an earlier version of the law approved in March; and according to the constitution, the parliament was required to discuss the legislation again before passing a new version. "The president has deemed it unconstitutional that the deputies approved a new, almost identical version, without rejecting the old one," Stefko said. Sme on 3 January wrote that if the parliament passes the later version of the amendment for a second time, Kovac will be unable to sign it until the first version is rejected. * Sharon Fisher
SLOVAKIA'S "LUSTRATION" LAW NO LONGER IN EFFECT.
Jan Langos, Democratic Party chairman and former Czechoslovak interior minister, told TASR that as of 31 December 1996, the 1991 Czechoslovak lustration law is no longer in effect in Slovakia. The law, designed to cleanse state bodies of communist-era secret service (StB) agents and top communist officials, has not been enforced in Slovakia since the 1992 parliamentary elections. Langos and several other opposition deputies submitted a bill in February 1996 on regulations for opening StB files, but the parliament has yet to decide on the issue. The law would prevent the current secret service from illegally using the files and would give each citizen the right to see his file, if one exists. It would also require that the Interior Ministry publish the real names of StB agents and informers. * Sharon Fisher
HUNGARIAN PRESIDENT REFUSES TO SIGN "CONFLICT OF INTERESTS" BILL.
Arpad Goncz on 2 January rejected the parliament's draft law on conflict of interests, saying several of its provisions are inappropriate, Hungarian dailies reported. The parliament passed the much-debated legislation last month. Goncz was particularly critical of a provision permitting deputies to retain private-sector posts secured before the 1994 general elections. Opposition parties said they were pleased that the president has rejected the bill, since they share his concerns. The governing parties, however, claimed to be surprised by his decision. The parliament now has 60 days within which to amend the contested provisions. * Zsofia Szilagyi
SERBIAN ORTHODOX CHURCH BLASTS MILOSEVIC.
Thousands of Belgrade protesters on 2 January continued their latest tactic of making noise with pots, whistles, and other implements during Serbian TV's 7:30 p.m. newscast, CNN reported. Also in the capital, the bishops of the Serbian Orthodox Church issued a declaration blasting President Slobodan Milosevic for "pitting Serb against Serb." They noted that, "Force has been used by the regime with the intention of stifling the freely expressed will of the people. The blood of the innocent [had flowed because the regime was] trying to sow discord and provoke bloodshed just so it can hang on to power. The Holy Synod condemns the authorities who have not only ignored the wishes of the electorate, but...have crushed underfoot our glorious and painful history...[and] national and moral values. Only the respect of democratic principles and human rights, the recognition of the November 17 elections, can bring hope of a better future" to Serbia, AFP and Nasa Borba reported. The bishops also accused him of betraying the cause of the Krajina Serbs. * Patrick Moore
SERBIAN WRITERS SAY MILOSEVIC USES "STATE TERRORISM."
Yet another prestigious Serbian body, the writers' association, has slammed the president. Reflecting the same themes as the Synod, the writers told Milosevic in an open letter that: "By senseless vote stealing, your party has hit a blow against the state, the constitution and the law, and by your incomprehensible decisions you have led Serbia to the verge of civil war. You have deliberately provoked battles in the streets of Belgrade between peaceful demonstrators and people, led astray, whom you brought here [on 24 December]," AFP reported on 3 January. Meanwhile, the U.S. has urged the OSCE to condemn the Serbian authorities if they continue to drag their feet on accepting an OSCE report upholding the 17 November local elections results, Nasa Borba wrote. * Patrick Moore
NATO TO SEIZE UNREGISTERED BOSNIAN ARMY MUNITIONS.
The NATO-led Stabilization Force (SFOR) said on 2 January it will confiscate tank ammunition donated to the Bosnian army through a U.S.-sponsored "Train and Equip" program because the munitions were not properly registered, Reuters reported. NATO spokesman Maj. Tony White said the force in Bosnia strictly insists on peace-time rules requiring armies to fully document all weapons or ammunition stored at designated depots. SFOR troops have confiscated 474 unregistered tank rounds out of a total of 11,000 shipped to the Bosnian federation under the U.S.-sponsored aid program. In other news, NATO announced the same day that at least a dozen houses formerly inhabited by Bosnian Muslims and Serbs were destroyed over the past week in a Croat-held area near Mostar. The attacks are aimed at discouraging non-Croatian refugees from returning to their homes south of Mostar, Reuters reported. * Daria Sito Sucic
CROATIA INDICTS SOROS FOUNDATION FOR TAX EVASION.
Zagreb's public prosecutor is pressing charges against three senior officials at the local branch of the Open Society Institute for alleged financial malpractice and tax evasion, international agencies reported on 2 January. After storming the foundation's premises in Zagreb, Croatian police said they had found evidence of "illegal financial transactions." The prosecutor charged that since December 1995, employees at the OSI's Zagreb office have been receiving two salaries: one in Croatian kuna and another in U.S. dollars. The latter, he said, was not reported to the Croatian tax authorities. Unpaid taxes are said to total 2.7 million kuna ($490,000). But the Soros Foundation in New York implicitly denies the charges, saying there was every reason to believe that its Croatian affiliate complied with local laws. The foundation has spent some $15 million in Croatia since 1992 on humanitarian and cultural projects. * Daria Sito Sucic
CROATIAN RAIL WORKERS END STRIKE.
The Croatian State Railroads (HZ) and the rail workers' union have reached a deal on wages, ending an almost month-long strike, international media reported on 2 January. The HZ management agreed to sign the first part of a collective agreement to guarantee higher wages. In return, the union agreed to halt the protest action. The government has said it wants to lower subsidies to the railway company, which totaled 1 billion kuna ($200 million) in 1996. Croatian TV said parliament will soon discuss a long-term solution for the company. Meanwhile, the HZ has increased rail fares by up to 52% as of 1 January, the Croatian press reported. * Daria Sito Sucic
MACEDONIAN INFLATION REMAINS LOW.
According to year-end figures published by the Macedonian Statistical Institute, inflation reached 3.0% in 1996, Nova Makedonija reported on 3 January. Consumer prices were up 2.3% compared with 1995. Services increased by 6.8%, industrial foodstuff 2.4%, other industrial products 1.8%, and beverages by 1.1%. The price of agricultural products, however, fell by 8.2%. Vecer reported that the Macedonian telecommunications company has halved the price of a new phone line from the equivalent of $650 to $325. * Stefan Krause
ROMANIA IS MOST OPTIMISTIC FORMER COMMUNIST COUNTRY.
According to a recent Gallup poll, 61% of Romanians believe that 1997 will be better than 1996, Radio Bucharest reported on 2 January. Romania took first place in the poll, which was conducted in several former communist countries. Georgians are the second most optimistic nation, while Hungarians are the most pessimistic. A majority of Bulgarians and Slovaks also expect 1997 to be worse than last year. * Michael Shafir
ROMANIA, MOLDOVA GRAPPLE WITH BIG FREEZE.
Forty-three people, most of them homeless, have so far frozen to death in Romania, as temperatures plunged to around minus 25 degrees Celsius, Reuters reported on 2 January. Citing Rompres, the agency said that traffic has nonetheless returned to normal in the eastern and southern parts of the country, which were the most affected by last week's blizzards. Thick ice is still preventing traffic on parts of the Danube, and flights between Bucharest and six provincial towns have been halted due to fog or icy runways. Otopeni, Bucharest's international airport, is operating, however. In neighboring Moldova, 29 people have died as a result of fires caused by the faulty use of electrical devices in attempts to alleviate freezing conditions, BASA-press reported on 2 January. * Michael Shafir
MOLDOVA SUES KAZAKSTAN OVER NON-PAYMENT FOR SERVICES RENDERED.
Moldova has begun legal proceedings against Kazakstan for the non-payment of cereal transportation costs in 1993, Moldpres reported on 2 January. The agency said Kazakstan owes Moldova 17 million tons of cereals or their equivalent in cash. The case is to be heard by the Minsk-based Economic Court of the CIS on 6 February. * Michael Shafir
IS BULGARIAN INDEPENDENT TRADE UNION BACKING SOCIALISTS?
Bulgarian Socialist Party (BSP) Chairman Georgi Parvanov has met with Krastyo Petkov, leader of the Confederation of Independent Trade Unions in Bulgaria (KNSB), to discuss the formation of a new BSP-led government, the Bulgarian press reported on 3 January. Petkov noted that the next prime minister and cabinet must enjoy the confidence of international financial institutions. He proposed that a coalition government be formed, saying that four ministers in the last cabinet--Interior Minister Nikolay Dobrev, Defense Minister Dimitar Pavlov, Agriculture Minister Krastyo Trendafilov, and Trade Minister Atanas Paparizov--were "worthy to stay on." Parvanov said the meeting reflected the BSP's new, "more open" policy. According to Duma, both leaders agreed that over the next few months, the KNSB would ensure that civil peace is maintained in order to allow the cabinet to carry out its duties. * Maria Koinova in Sofia
WHO WILL BE BULGARIA'S NEXT PREMIER?
With consultations on the formation of a new government under way, Bulgarian media are speculating who will head the new cabinet. According to Standart on 3 January, KNSB leader Petkov favors parliamentary speaker Blagovest Sendov or First Deputy Foreign Minister Irina Bokova. Interior Minister Nikolay Dobrev and former Foreign Minister Georgi Pirinski have also been frequently named as possible successors to Zhan Videnov, who resigned last week. Trud reports that Sofia-based foreign diplomats have made it clear that Dobrev would enjoy little, if any, support abroad. 24 chasa says that Dobrev is disinclined to become prime minister and would prefer to keep his present post and become deputy premier. Meanwhile, the newly elected BSP Supreme Council convenes today to elect a new Executive Bureau, the party's highest decision-making body. * Stefan Krause
GREECE PLEDGES TO LEGALIZE ALBANIAN IMMIGRANTS.
The Greek government has said it will issue work permits to illegal Albanian immigrants this month, Deutsche Welle's Albanian-language service reported on 2 January. Immigrants will be given a time-frame in which to register. Those who fail to report to the authorities will risk expulsion. * Fabian Schmidt