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Newsline - June 12, 1997


The State Duma has passed a draft land code by a vote of 285 to 10 with six abstentions, Russian news agencies reported on 11 June. An earlier version was passed by the Duma in May 1996 but rejected by the Federation Council the following month. The revised code would allow individuals or legal entities to own or lease land that previously belonged to municipalities. Former members of state or collective farms could own or lease farmland, but its purchase and sale would still be prohibited. The code also would not allow foreigners to buy land, although foreigners could lease land for a maximum of 50 years. Also on 11 June, the Duma passed in the second reading a draft law on mortgages, which would not allow mortgages on land that is currently state or municipal property.


The Duma voted by 259 to 70 with four abstentions to create a commission to examine the government's proposed 1997 spending cuts and announce its conclusions by 18 June, RFE/RL's Moscow bureau reported on 11 June. The same day, the Duma voted down a proposal calling for an additional monetary emission of 330 trillion rubles ($57 billion), which was backed by Duma Security Committee Chairman and Communist Viktor Ilyukhin. The Duma also rejected a draft law supported by Budget Committee Deputy Chairman Aleksandr Zhukov of the Russian Regions faction. Zhukov's proposal would have given the government the right to impose cuts in non-essential spending without parliamentary approval, provided that the cuts were applied proportionally in all areas. First Deputy Prime Minister Anatolii Chubais did not attend the Duma session, but, speaking to reporters, he praised the Duma for rejecting Ilyukhin's proposal.


The government has not waited for Duma approval before implementing its proposed budget cuts. First Deputy Finance Minister Vladimir Petrov announced on 11 June that expenditures for June conform to the figures outlined in the draft law on the budget sequester, ITAR-TASS reported.


The Duma has passed a final version of a resolution condemning the results of Russian privatization policy as unsatisfactory, Russian news agencies reported on 11 June. The resolution calls on the government to file lawsuits to cancel privatization auctions carried out "in violation of Russian legislation." It also demands that the government draw up a list of "strategic property" that cannot be privatized and provide annual reports to the parliament on the previous year's privatization results. The resolution was inspired by a highly critical report recently issued by the chairman of a special Duma commission on privatization (see "RFE/RL Newsline," 6 June 1997).


After twice rejecting presidential nominees to the Constitutional Court in recent months, the Federation Council voted by 104 to 10 to approve Lyudmila Zharkova to fill a vacancy on the 19-member court, RFE/RL's Moscow bureau reported on 11 June. Zharkova, a little-known judge from the Constitutional Court of the Republic of Karelia, will be the third woman on Russia's Constitutional Court. The presidential press service announced her nomination only one day before the Council vote. RFE/RL's legal affairs analyst Leonid Nikitinskii commented that Zharkova's confirmation follows a pattern: the less that is known about a presidential nominee for a judicial post, the more likely the Federation Council is to approve that nominee. Also on 11 June, the Council confirmed four judges President Boris Yeltsin had nominated for Russia's Supreme Court, ITAR-TASS reported.


The Federation Council on 11 June rejected a law that would ban reconstruction and new construction on Moscow's Red Square, Russian news agencies reported. ITAR-TASS said only 26 deputies supported the measure, which would grant Red Square the status of a national cultural heritage. The agency did not report how many deputies voted against the law, which now goes to a conciliatory commission. Meanwhile, Yeltsin on 11 June again advocated removing Vladimir Lenin's body from the mausoleum on Red Square. The Communist opposition strongly opposes such plans.


First Deputy Prime Minister Boris Nemtsov on 11 June signed an agreement with Primorskii Krai Governor Yevgenii Nazdratenko outlining the responsibilities of federal and krai authorities in energy policy, RFE/RL's correspondent in Vladivostok reported the next day. In line with recommendations of a federal government commission, electricity rates for local residents will be raised. Nemtsov warned local officials against encouraging residents not to pay the higher charges, according to Reuters. Nemtsov also suggested that both Nazdratenko and his longtime enemy, Vladivostok Mayor Viktor Cherepkov, should step down, saying that their political rivalry has damaged the krai, ITAR-TASS reported. Meanwhile, First Deputy Prime Minister Chubais told journalists in Moscow that Nazdratenko bears "personal responsibility" for the problems that have afflicted Primore.


Nemtsov on 11 June promised to introduce a series of measures to encourage foreign companies to ship cargo on the Trans-Siberian Railroad, RFE/RL's correspondent in Vladivostok reported. Speaking in the Primorskii Krai port of Nahodka, where the railroad begins its westward run, Nemtsov said he hopes reduced tariffs and taxes, as well as a simplification of the customs and border procedures, will make the railroad more commercially viable. The head of Nahodka's port, Gennadii Zhebelev, said a drop in freight traffic on the Trans-Siberian is costing Russia $800 million a year, ITAR-TASS reported on 11 June. Zhebelev added that the railroad carried only 20,000 cargo containers to Western Europe in 1996, down from 140,000 in 1981.


Two journalists from the Russian TV production company VID were kidnapped in Grozny on 11 June, Russian and Western agencies reported. Chief of staff of the Chechen security service Lecha Khultygov said one of the two men, Ilyas Bogatyrev, was implicated in earlier kidnappings of journalists, according to RFE/RL's correspondent in Grozny. On 10 June, the imam of a Grozny mosque was shot dead in what Chechen security officials called a "spontaneous quarrel" rather than a clash between representatives of rival sects, Reuters reported. The imam's relatives apprehended and shot the murderer.


In an interview with Interfax on 11 June, newly appointed Russian Security Council Deputy Secretary Boris Agapov said the federal authorities' failure to expedite the repatriation of some 40,000 ethnic Ingush expelled from North Ossetia's Prigorodnyi Raion in 1992 was "offensive" to both the Ingush and Ossetian peoples. Agapov warned that the conflict between North Ossetia and Ingushetia is "on hold rather than resolved and an explosion may occur sooner or later." Agapov said that the creation of an "Organization for Security and Cooperation in the Caucasus," proposed by Chechen representatives at a meeting of North Caucasus leaders in Kislovodsk on 31 May, similarly demonstrates Russia's failure to play an adequate role in the North Caucasus.


Yeltsin on 11 June spoke by telephone with Vladimir Yelshin, the head of a raion in Kostroma Oblast, ITAR-TASS reported, citing the presidential press service. Yeltsin reportedly promised to think about ways to solve the problems in Yelshin's raion, including wage arrears to state employees totaling some 5 billion rubles. While chairing the first session of the Council on Local Self-Government on 10 June, Yeltsin promised to "turn the Kremlin's head toward local administrations and local self-government," ITAR-TASS reported. Yeltsin created the council in late May. On 9 June, he had spoken by telephone with the mayor of Chelyabinsk and promised to grant a two-year tax exemption to the Chelyabinsk Tractor Factory.


The Federation Council has decided to establish an official newspaper of the Russian parliament, ITAR-TASS reported on 11 June. A working group of deputies from the Council and the Duma have drafted plans for the daily newspaper. One of its primary goals will be to advance "the formation of objective public opinion on the work of the legislative branch." Newspapers sympathetic to Yeltsin frequently portray the parliament, especially the Duma, in an unflattering light. The parliament has been without an official publication since October 1993, when Yeltsin forcibly disbanded the Supreme Soviet and "Rossiiskaya gazeta"--at the time the parliamentary newspaper--became an official government publication.


The government has decided to shut down the monthly magazine "Rossiiskaya Federatsiya," citing revenue shortfalls and the need to reduce 1997 budget spending, ITAR-TASS reported on 10 June. The magazine's editor, Yurii Khrenov, was fired in May. At the time, First Deputy Prime Minister Chubais said Khrenov's dismissal had "nothing to do with freedom of the press." But he commented that "it is impossible to understand...a person who receives a salary from the government criticizing [the executive] in his publication," RIA-Novosti reported on 23 May.


New data released by the State Statistics Committee indicate that Russian GDP declined by 0.2% in the first five months of 1997 compared with the same period last year, Interfax and ITAR-TASS reported on 11 June. Earlier this year, the committee said the Russian economy had begun to grow, but critics charged that accounting tricks produced the optimistic figures. The government recently revised its earlier positive economic forecast for the year and said a decrease in GDP of up to 2% was now expected (see "RFE/RL Newsline," 15 April and 4 June 1997).


Babken Ararktsyan offered his resignation on 11 June after his proposed draft law on military conscription received only 55 votes, Reuters and Armenian agencies reported. Ararktsyan's law retained deferment for students. Deputies voted instead to consider an alternative draft law drawn up by Defense Minister Vazgen Sargsian after President Levon Ter-Petrossyan proposed that its provision on abolishing deferment for students go into effect only next year. Ararktsyan said he was resigning because the Defense Ministry had exerted "brutal" pressure on deputies to vote for Sargsian's draft, RFE/RL's Yerevan bureau reported. The parliament voted by 131 votes to 11 not to accept Ararktsyan's resignation. Also on 11 June, Prime Minister Robert Kocharyan dismissed rumors that Ter-Petrossyan is to receive medical treatment abroad, saying "as far as I know, the president is in good health," Noyan Tapan reported.


Georgian Ambassador to Russia Vazha Lortkipanidze and an Abkhaz delegation that included President Vladislav Ardzinba met in Moscow on 11 June to discuss a peace settlement, Interfax reported. Ardzinba told journalists later that a number of bilateral Abkhaz-Georgian agreements, including one on repairing the Inguri hydro-electric power station, are currently being drawn up. Col.-Gen. Andrei Nikolaev, the head of the Russian Federal Border Service, told Interfax on 11 June that an eventual withdrawal from Abkhazia of the CIS peacekeeping force deployed there will not affect the Russian border troops stationed on the frontier between Abkhazia and Russia.


Ali Akbar Turajonzoda, the deputy leader of the United Tajik Opposition, has refuted accounts by Russian border guards of violence that reportedly broke out along the Tajik-Afghan border. Various media sources reported that 30 fighters were killed when a group of 80-100 armed men tried to force their way past Russian border guards (see "RFE/RL Newsline," 11 June 1997). According to some sources, the armed men were members of the UTO. But in an interview with RFE/RL's Tajik service, Turajonzoda said no UTO fighters have attempted to cross into Tajikistan. He claimed that, in an act of "pure provocation," Russian border-guard helicopters and artillery fire were directed at the northern Afghan village of Nusahir, where UTO fighters have a base. Turajonzoda also questioned why any UTO fighters would fight their way into Tajikistan when they will be able to enter the country legally after the 27 June signing of the final treaty with the Tajik government.


Chi Haotian, met with his Kazak counterpart, Mukkhtar Altynbayev, in Almaty on 11 June, and discussed expanding military ties, ITAR-TASS reported. Chi said after the meeting that China will offer boats to Kazakstan for patrolling the Caspian Sea and that some Kazak officers will learn Chinese to facilitate future exchanges and negotiations. Chi is also scheduled to meet with Kazak President Nursultan Nazarbayev. His visit is expected to accelerate the implementation of the troop reduction treaty that Kazakstan signed with China in late April.


Two freight cars carrying 60 tons of raw uranium have been impounded by Kazak customs officials, ITAR-TASS reported on 11 June. Customs officers in Aktyubinsk halted the shipment when the proper documentation could not be found for the uranium. It was later discovered that the uranium originated from the Karabaltinskii ore-processing factory in Kyrgyzstan and was sold to the U.S.-based Allies Signal company through the mediation of Russia's Izotop company. The Kyrgyz supplier of the uranium claims it did not know the rules for transporting uranium through Kazakstan. In addition, radiation levels were above admissible norms. The cargo is nonetheless expected to continue after correct documentation has been obtained.


Kyrgyz President Askar Akayev met with Iranian Foreign Minister Ali Akbar Velayati on 11 June and said he is pleased with his country's relations with Iran, according to RFE/RL correspondents. Akayev noted that trade between the countries was $3.9 million in the first quarter of 1997 and is steadily increasing. An Iranian consulate will soon open in Kyrgyzstan's second-largest city, Osh, while a Kyrgyz consulate will begin operations in Meshhed, Iran. Velayati praised Akayev and Kyrgyzstan for the role played in the Tajik peace process and said he hoped Kyrgyzstan would send a representative to the 27 June signing in Moscow of the final Tajik peace treaty.


The Russia-Belarus union treaty went into effect on 11 June with the exchange of the two countries' ratification documents. Russian Foreign Minister Yevgenii Primakov and Belarusian President Alyaksandr Lukashenka attended the ceremony in Minsk. ITAR-TASS quoted Primakov as calling the exchange of ratification documents an "historic event." He said the treaty provides an "exceptionally important mechanism for the unification of the two peoples." Belarusian Foreign Minister Ivan Antanovich said the union has a great chance for success. He described the union as a peaceful entity that will help the two nations "overcome difficulties together and ensure the well-being and security of the two peoples." Lukashenka told Interfax he intends to meet Russian Prime Minister Viktor Chernomyrdin in Sochi to discuss attempts by some Russian government officials to "water down" the union treaty. Lukashenka is scheduled to start his vacation in the Black Sea resort on 12 June.


Pavlo Lazarenko told Chinese Defense Minister Chi Haotian during a meeting in Kyiv on 11 June that Ukraine and China are capable of increasing trade turnover to $1 billion a year, Interfax reported. Turnover was $846 million in 1996 and $347 million in the first four months of 1997. Lazarenko said Ukraine is prepared to cooperate with China in all areas where it is "on the cutting edge," including aircraft, ship and tank building, missile and space technology, and joint research into and utilization of outer space. The two leaders called for the expansion of military and military technological cooperation.


Lawmakers voted by 43 to 28 on 11 June to adopt a widely disputed law on advertising that imposes a total ban on advertisements of tobacco products, ETA reported. The new legislation also prohibits the advertising of narcotic substances and strictly limits alcohol advertisements. The Reform Party has strongly criticized the draft law, arguing, among other things, that it prevents the revival of the Estonian tobacco industry and endangers the freedom of the press by depriving it of advertising income. The law still has to be signed by the president.


Guntis Ulmanis on 11 June condemned the bombing of the controversial World War II monument in Riga, BNS reported. Two people were killed in the 6 June blast at the monument, which commemorates the Soviet victory over Nazi occupying forces. Ulmanis called the incident a "provocative and defiant attempt to damage Latvia's international relations." He said ties with Russia are deeper and stronger than those responsible for the blast likely believe them to be. Also on 11 June, Prime Minister Andris Skele described the attack as an "absurd provocation" that might have "unpleasant" consequences both inside and outside the country. Meanwhile, the chief investigator into the bombing has said up to 20 kg of plastic explosives were used rather than TNT, as earlier reported, according to BNS.


Police have discovered two separate caches of stolen uranium totaling 50 kilograms, BNS and Western agencies reported on 11 June. Some 30 kg were located in an underground vault near Vilnius, while the other 20 kg were found in the town of Visaginas. The discoveries were made after police interrogated suspects in the 1992 theft of 170 kg of uranium from the Ignalina nuclear power plant. The Prosecutor's Office launched an investigation when 10 kg uranium were discovered close to the nuclear plant last October. A former plant engineer believed to be behind the theft is reported to be in hiding in either Russia or another former Soviet republic. His suspected accomplices have been ordered not to leave Vilnius. The Lithuanian penal code provides for prison sentences of 10 years for the theft of radioactive substances.


An administrative court in Gdansk ruled on 11 June that Lech Walesa does not have to pay tax on $1million he received in 1989 for film rights. The court rejected a motion by the local tax office, which had argued that Walesa owes taxes for money he received from the Warner Brothers company for the right to make a film about his life. The court ruled that even if Walesa was required to pay tax, he should have done so by the end of 1994 and thus was no longer obliged to do so. The issue of Walesa's taxes became public during the 1995 presidential election in which he was defeated by Aleksander Kwasniewski. Walesa argued at the time that the money was not liable to taxation in Poland and that taxes had been paid in the U.S. Walesa told Reuters he felt only partially vindicated by the court's ruling because his reputation had been damaged.


Following a meeting of government coalition parties on 11 June, Slovak Premier Vladimir Meciar has proposed holding talks with President Michal Kovac. Meciar said he wants private discussions with Kovac about halting mutual recriminations, RFE/RL's Bratislava bureau reported. Meanwhile, Kovac on 11 June formally appointed Zdenka Kramplova as the country's new foreign minister. Kramplova has said foreign policy will not change during her term and that Slovakia will continue to pursue its goal of entering NATO and the EU. Kramplova replaces Pavol Hamzik, who resigned two weeks ago in protest over the way in which a controversial referendum on whether to join NATO was conducted.


Kalman Kocsis, the former head of the Hungarian Intelligence Office, on 11 June appeared before the parliament's National Security Committee to testify in the investigation into the so-called "Operation Birch Tree." In March, it was revealed that the Intelligence Office spied on members of the parliament (see "RFE/RL Newsline," 18 April and 12 May 1998). Kocsis, who has meanwhile been appointed ambassador to Bosnia, said the law has not been broken and those guilty of violating internal regulations have been punished. Committee chairman Kalman Konya said the committee must not only investigate the breach of the law but also determine what made it possible. He suggested the committee now hear testimony from Civil Secret Service Minister Istvan Nikolitis and chief of staff, Maj.-Gen. Tamas Somogyi, Hungarian media report on 12 June.


Agriculture Minister Frigyes Nagy on 11 June dismissed Deputy State Secretary Lajos Buzassy because of a university degree said to have been obtained "under dubious circumstances," Hungarian media reported on 12 June. Buzassy received a degree from the University of Horticulture in just three months, without having registered as a student there He claims to have obtained the degree lawfully but acknowledges that the university revoked it after a parliamentary investigation into the case. He says he will appeal the decision.


An Albanian freighter carrying 700 people fired at an Italian Coast Guard ship near Durres on 11 June. The Italians returned fire and forced the ship to return to port. Albanians on the ship denied that any of them had fired on the Italians. Also on 11 June, five Albanians were robbed and killed near the Greek border by an armed gang after they returned from Greece. In nearby Gjirokaster, the Greek consulate closed temporarily after it was fired on. And in Tirana, Nikolle Lesi, the publisher of the independent daily "Koha Jone," said that President Sali Berisha's bodyguard recently sprayed Lesi's car with machine gun fire and nearly attacked his home. Lesi threatened "blood revenge" if he or any of his family is hurt.


Albanian authorities have not yet set up all polling stations, even though the deadline passed on 31 May, "Dita Informacion" reported from Tirana on 12 June. Many of the district commissions do not have regular meeting places, either. The Central Election Commission wants computers set up in all 115 districts, but it is unclear whether the Institute for Applied Mathematics will be able to do so in time. Meanwhile in London, Brian Pridham, who recently quit as OSCE election coordinator, told reporters that he resigned because his moral and professional standards would not permit him to continue. He said the OSCE is determined to validate the Albanian elections, despite widespread irregularities.


Socialist Party leader Fatos Nano continued his tour through southern Albania on 11 June, holding meetings in Tepelena, Memaliaj, and Ballsh, "Zeri i Popullit" reported on 12 June. He told the rallies that most Albanian dailies wrongly reported his speech in Vlora the day before (see "RFE/RL Newsline," 11 June 1997). He denied that he intends to compensate investors for money lost in the collapse of the pyramid schemes. He made clear, however, that he will try to track down the money and give it back if he can find it. He then left for Athens to meet with representatives of the Greek government and Albanian immigrants.


The steering committee of the Socialist Party of Serbia has officially nominated Serbian President Slobodan Milosevic for the federal Yugoslav presidency, an RFE/RL correspondent reported from Belgrade on 11 June. Incumbent Zoran Lilic's term runs out on 25 June. But in Podgorica, the steering committee of the governing Democratic Socialist Party (DPS) voted to postpone until 23 June any decision on the federal presidency, an RFE/RL correspondent reported from the Montenegrin capital. The issues at stake are whether the DPS should endorse Milosevic's candidacy as well as his calls for increased federal presidential powers and the direct election of the federal president. Milosevic needs the support of the increasingly independent-minded DPS in the federal parliament to succeed on all three counts.


Women from 12 Serbian families from Istok on 11 June joined a hunger strike in a park outside the Belgrade offices of Serbian President Milosevic. The men from those families began their hunger strike the previous day. The Serbs demand apartments and other social benefits that they say the authorities promised them in 1991. The government settled the families in Istok after they fled their homes in Slovenia and Croatia. The hunger-strikers told BETA that no top government officials have met with them, despite promises to do so. One woman complained that the authorities have time only for "war criminals [and not for] ordinary people." Meanwhile in Kosovo, a judge in Vucitrn said that a bomb went off in the center of town near a Serbian cafe the previous day but that nobody was injured.


OSCE monitors said in Sarajevo on 11 June that they are closing all four voter registration offices in Brcko because of massive fraud by the Bosnian Serb authorities in registering voters. The monitors added that all voters in the strategic northern town will probably have to register again. Last year, local elections across Bosnia were postponed until September 1997 because of massive fraud in signing up voters, especially by the Serbs. Each of the three sides has registered voters in such a way as to consolidate its hold over key territories. Also in Sarajevo, monitors said on 10 June that a Muslim hospital director in Zenica has been dictating to his staff how to register. The monitors said that every Bosnian must be free to choose whether to register and, if so, where to do so.


A spokesman for the Hague-based war crimes tribunal said on 11 June that the court is tightening security measures following leaks of confidential information to the press in the former Yugoslavia, an RFE/RL correspondent reported from The Hague. In Zagreb, the attorney for Jadranka Reihl-Kir said on 10 June that his client will ask the tribunal to press charges against Ante Gudelj, her husband's murderer, an RFE/RL correspondent reported from the Croatian capital. The Croatian authorities recently pardoned Gudelj after he had barely begun serving a 20-year sentence for the 1991 murder of Josip Reihl-Kir. Reihl-Kir was a Slavonian moderate police chief whose murder by Croatian hard-liners was a key development in the run-up to the war between Serbs and Croats.


Spokesmen for Social Democratic presidential candidate Zdravko Tomac said on 12 June that the Zagreb city authorities will not give Tomac a permit to hold a rally in central Jelacic Square on 13 June. The spokesmen said they interpret the authorities' decision as tantamount to a ban on the rally, an RFE/RL correspondent reported from Zagreb. President Franjo Tudjman will hold a rally in Jelacic Square on 12 June, while Liberal candidate Vlado Gotovac spoke there the previous night. Polls currently put Tomac in second place behind Tudjman for the 15 June elections. Meanwhile, Development Minister Jure Radic said on 10 June that only 4,353 Serbian refugees have formally applied to return to their homes in Croatia. Radic was responding to claims by U.S. Ambassador to Croatia Peter Galbraith and others that tens of thousands of Serbs are waiting to return, an RFE/RL correspondent reported from Zagreb.


Victor Ciorbea, addressing a Movement of Civic Alliance meeting in Bucharest on 11 June, confirmed that German Chancellor Helmut Kohl has promised to back Romania's bid for admission to NATO in the first wave of expansion, RFE/RL's Bucharest bureau reported. The German leader was reported to have made that pledge at a meeting of the European People's Party faction in the European Assembly in Strasbourg the previous day (see "RFE/RL Newsline," 11 June 1997). In response to a question of an RFE/RL correspondent in Berlin, however, the chief of the German Federal Press Office in Bonn said he "could not confirm" the position attributed to Kohl. Meanwhile, the "Frankfurter Allgemeine Zeitung" on 12 June quotes the Chancellor's Office as saying that while in Strasbourg Kohl "expressed sympathy" for Romania's NATO bid but that the Christian Democratic leaders' expression of support cannot be viewed as a decision that only NATO can take.


Thousands demonstrated on 11 June in Bucharest and nine other towns against the government's economic policies, RFE/RL's Bucharest bureau reported. The demonstrations were organized by the National Syndicate Block (BNS), one of Romania's largest trade unions. BNS leader Dumitru Costin said the previous day that his union is protesting the lack of dialogue between the government and the unions and the slow pace of implementing social protection measures. The BNS is demanding pay rises and indexing salaries to reflect price hikes, as well as cutting value-added tax on basic food products. In other news, Gen. Ion Stan, the commander of Romania's air force, and his co-pilot were killed on 11 June near Timisoara when their two-seater Czech-made L-39 plane crashed while attempting to land. A military commission has been set up to investigate the incident.


At the CIS Parliamentary Assembly session in St. Petersburg on 8-9 June, the Transdniester breakaway region applied for membership in that body, Moldovan media reported. Moldovan parliamentary deputy chairman Dumitru Diacov told Infotag that a Transdniester Supreme Soviet delegation attended the meeting because the forum was scheduled to discuss the settlement of the Chisinau-Tiraspol conflict. He said the delegation used this opportunity to apply for membership, adding he was confident no CIS member would "risk" backing the application. Diacov also said the Moldovan delegation refrained from responding because "it was clear that such a request cannot be considered by the assembly," which, he said, can accept only internationally recognized states as members.


The World Bank's International development Association (IDA) on 11 June approved a $9 million credit to Moldova to expand a program for training business managers to work competitive market economies. An RFE/RL correspondent in Washington cited the bank as saying the virtual non-existence of a supportive network for small and medium-sized industrial enterprises is a "particularly acute problem in Moldova" because of the small domestic market and traditional agricultural specialization. A similarly-funded IDA loan granted in February helped radically restructure 15 enterprises. The new program will train at least 400 managers from 200 private enterprises. The bank says that unless such training is quickly undertaken, a majority of the country's private enterprises will be forced into bankruptcy in the next few years.


Prince Cyril of Saxe-Coburg-Gota, the son of exiled king Simeon, was received by President Petar Stoyanov on 11 June and attended a meeting of the presidential Economic Development Council that discussed ways to stabilize the economy, RFE/RL's Sofia bureau reported. The prince, a 33-year-old economist with the Lehman Brothers bank in London, also met with Prime Minster Ivan Kostov and Deputy Prime Minister Alexander Bozhkov. The previous day, Reuters quoted Prince Cyril as saying the international finance community considers Bulgaria's introduction of a restrictive monetary system under the new currency board as an "extremely positive step."


The cabinet on 10 June approved changes to the insurance law in a bid to stop organized crime using insurance companies as a front for racketeering. The U.S.-based "Journal of Commerce" reported on 12 June that the amended law raises the minimum authorized capital for incorporating life insurance companies from 200 million leva (some $127,000) to 2 billion leva. It also bans insurers from running other businesses, such as security services. More than 100 companies registered as insurers are reported to be involved in racketeering. Kostov said no measure against organized crime would be efficient without first fighting the '"pressure insurers." A National Insurance Council is to monitor and supervise the activity of insurance companies.


A court on 11 June acquitted the defendant in the country's first case on alleged piracy of compact discs, Reuters reported. Bulgaria ranks second, behind China, in CD piracy. The prosecution accused Marko Mihailov, manager of a local firm, of organizing the production of CDs in 1995-96 in breach of the country's copyright laws. The discs were sold in Russia, Romania, and the Czech Republic. A representative of a Dutch company said the acquittal was owing to "some serious gaps in the materials presented to the court." She added that the case was nonetheless a "positive indication" that the authorities are fighting CD piracy.


by Paul Goble

Growing links between countries on either side of what was once the border of the Soviet Union are the latest evidence of a trend that expands Eastern Europe, reduces the likelihood of conflicts among countries there, and improves the chances that those countries will gradually be absorbed into Western institutions.

The most dramatic and potentially the most important of those new linkages are between the two largest countries in the region, Poland and Ukraine. Last month, Polish President Aleksandr Kwasniewski and his Ukrainian counterpart, Leonid Kuchma, signed a joint declaration intended to overcome the often difficult past relationships of their peoples and lay the foundation for the development of closer economic, political, and security ties.

The product of intensive diplomatic efforts by both sides, this document is one of a series of agreements between Poland and other traditionally East European states, on the one hand, and the Baltic countries and former Soviet republics, on the other. Also likely to have an impact on future developments across this region are the recent rapprochement between Poland and Lithuania and, to an even greater degree, the agreement between Ukraine and Romania defining their common border.

Speaking before the signing of the Polish-Ukrainian declaration, Kwasniewski said that he and his fellow leaders in the area want agreements like the one he and Kuchma signed to have an "effect on the region and on Europe as a whole." Those hopes may well be justified. Accords of precisely the kind signed by Kuchma and Kwasniewski may come to play a larger role in the transformation of both Europe and international relations than even the well-publicized NATO-Russia Founding Act.

There are three reasons for this. First, agreements across what was the border between Eastern Europe and the former Soviet Union further reduce the importance of that frontier in the thinking of leaders on either side of that line and in the calculations of leaders in countries further afield. Ukrainian, Moldovan, and Baltic leaders increasingly see themselves as part of Eastern Europe, thus expanding the boundaries of that concept. Moreover, leaders of countries beyond this region increasingly view those countries in that way, thereby reducing the relevance of the boundaries of the former USSR for any current or future purpose--regardless of what some Russian nationalists may say.

Second, such agreements also reduce the possibility of new conflicts between countries and peoples that have frequently been at odds in the past. Poles and Ukrainians, for instance, have often been locked in conflict; their leaders have now pledged that they never will be again. To the extent that they are adhered to, such pledges not only integrate Eastern Europe as an entity in its own right but also transform the meaning of that region for Europe as a whole and the rest of the world. For many people in Western Europe and even further afield, Eastern Europe has been almost a synonym for internal divisions and conflict--except when it has been occupied or dominated by some outside power. With accords like the ones signed between Poland and Ukraine and between Ukraine and Romania, East Europeans are demonstrating that these are misconceptions and that Eastern Europe is ready to take its place in a truly united Europe.

Third, the willingness and ability of countries such as Poland and Ukraine to cooperate sends a strong signal to NATO and the European Union that they are now able to engage in precisely the kind of integrative activities that lie at the basis of both those Western institutions. As a result, those countries who reach such agreements may make themselves stronger candidates for inclusion in those Western bodies.

The U.S. and many European countries have made such cooperation among the countries in the region a test and precondition for their inclusion in Western institutions. On occasion, Eastern Europeans have chafed at those requirements, but the leaders who have sought to meet them are likely to be the beneficiaries