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Newsline - August 4, 1997


On 1 August, Yeltsin issued a decree naming former Russian Federation Council deputy chairman and current State Duma deputy Ramazan Abdulatipov as the seventh Russian deputy prime minister, Russian media reported. Abdulatipov, an ethnic Avar from Dagestan and the author of numerous theoretical works on nationality problems, will be responsible for ethnic relations, federal development and the Russian regions. Yeltsin admitted his relations with Abdulatipov had not always been "cloudless" -- an allusion to the latter's criticism both of the war in Chechnya and of aspects of Moscow's nationalities policy. But Yeltsin conceded that "in recent years he [Abdulatipov] has supported the course of the president and the government." In an interview with ITAR-TASS, Abdulatipov characterized nationality relations within the Russian Federation as "one of the most difficult and crisis-ridden spheres" in which "very many mistakes were made and little constructive was achieved."


Abdulatipov's appointment met with unequivocal approval from several leading North Caucasus politicians. North Ossetian President Akhsarbek Galazov described him as "a wise politician" whose familiarity with the North Caucasus "will certainly be beneficial for the region," according to Interfax. Ingush President Ruslan Aushev noted that Abdulatipov had first-hand experience of the North Caucasus, and observed that "it is a pity that many of the things he once suggested to stabilize the situation in the region did not find understanding within the federal government." The chairman of the Confederation of Peoples of the Caucasus, Yurii Soslambekov, said that Abdulatipov "can always count on the support" of his organization, ITAR-TASS reported.


Meeting with deputies to the North Ossetian parliament on 2 August, the chairman of the Confederation of Peoples of the Caucasus, Yusup Soslambekov, expressed concern at the escalation of tensions between Ossetians and Ingush repatriates in North Ossetia's Prigorodnyi raion, ITAR-TASS reported. Soslambekov said his organization is willing to try to mediate between the conflict sides, and that it plans to establish its own peacekeeping force to help overcome inter-ethnic clashes in the North Caucasus. On 1 August, Russian State Duma speaker Gennadii Seleznev rejected a call by 60 deputies for a special session on the North Caucasus, Interfax reported.


On 1 August, Ingush President Ruslan Aushev proposed that Security Council Deputy Secretary Boris Berezovskii be charged with mediating in the North-Ossetian-Ingush conflict, according to Interfax. Aushev said that Berezovskii's talks in Chechnya have given him a good understanding of the region and "he is capable of unconventional decisions in complicated situations." Kommersant-Daily" on 2 August quoted Berezovskii as saying that he is on good terms with both Aushev and Galazov and will assume the duties of mediator if Yeltsin asks him. On August 1, Yeltsin excluded imposing presidential rule on Prigorodnyi raion, saying this would not help to defuse tensions, and is contrary to the direction in which federalism in Russia should develop, "Nezavisimaya Gazeta" reported on 2 August. Aushev had repeatedly called for the imposition of presidential rule, which Galazov opposes.


President Boris Yeltsin announced on 4 August that the Russian ruble will be redenominated as of 1 January 1998, Reuters reported. One new ruble will be worth 1,000 old rubles, Yeltsin said in a statement, adding that the reduction in inflation had made the change possible. According to the official exchange rate fixed by the Central Bank on 4 August, one U.S. dollar is currently worth 5,801 rubles. The Central Bank has predicted that inflation in 1997 will not exceed 13 percent, ITAR-TASS reported on 15 July. Yeltsin and Central Bank Chairman Sergei Dubinin agreed on the redenomination at a 1 August meeting in Samara Oblast, where Yeltsin has been vacationing. New ruble notes will be introduced, but old ruble notes will be valid for all purchases until the end of 1998. Citizens will be able to exchange the old notes at bank offices through 2002.


Yeltsin on 1 August signed two decrees "significantly reducing" the personnel of troops subordinated to the Federal Agency for Government Communications and Information (FAPSI) and the Railways Ministry, Russian news agencies reported. No other details about the decrees have been released to date. Yeltsin signed the decrees while discussing military reform issues with Prime Minister Viktor Chernomyrdin. The troops subordinate to FAPSI and the Railways Ministry were not affected by previous presidential decrees ordering reductions in various branches of the armed forces.


Liberal Democratic Party of Russia leader Vladimir Zhirinovsky and Nizhnii Novgorod businessman Andrei Klimentev have accused First Deputy Prime Minister Boris Nemtsov of taking several large bribes while he was governor of Nizhnii Novgorod, RFE/RL's Moscow bureau reported on 1 August. Zhirinovsky also accused Nemtsov of seeking to arrange his murder. Nemtsov's spokesman Andrei Pershin dismissed Klimentev's accusations as "absurd and false," noting that the businessman has himself been convicted of embezzlement. According to the 2 August "Kommersant-Daily," Klimentev's conviction was recently overturned by the Supreme Court. Pershin said the Supreme Court had not vindicated Klimentev but merely objected to the light sentence handed down against the businessman. As for Zhirinovsky's accusations, Pershin said they were a matter for examination by a psychiatrist. Nemtsov's lawyer Vitalii Khavkin told ITAR-TASS on 2 August that Nemtsov plans to sue Klimentev for slander.


Communist Party leader Gennadii Zyuganov has accused Yeltsin of leading an attack on Russian statehood, spirituality, and independence, RFE/RL's Moscow bureau reported on 1 August. Zyuganov argued that instead of resting during his vacation, Yeltsin has been "consuming the last of his life's strength" to harm Russia on several fronts. Zyuganov again criticized Yeltsin's veto of the religion law and said policies toward the energy and telecommunications sector had destroyed the economic foundations of Russia's national security. In addition, Zyuganov said recent presidential decrees on military reform would destroy the army, and blamed Yeltsin for complicating Russia's relations with Belarus (see related stories in Part 2 of today's Newsline). Zyuganov said the opposition has gathered nearly 3.5 million signatures calling for Yeltsin's resignation, a change in government policies and the formation of a government of national trust.


Communist State Duma deputy Vladimir Semago, who chairs the Duma's commission on fighting corruption, announced on 1 August that lobbying "in its dirtiest forms" exists in the lower house of parliament, ITAR-TASS reported. Semago added that the Duma has received interest-free credits from some commercial banks, a practice he said invites abuses. He criticized Duma Speaker Gennadii Seleznev, also a Communist, for taking frequent trips abroad on chartered flights while the Duma lacks the funds to pay deputies' assistants. Semago also charged that the Duma apparatus had ignored numerous requests to release information on various allocations of funds. Semago said he would put the question of whether Seleznev has exceeded his authority before Duma deputies, "Kommersant-Daily" reported on 2 August. Semago is one of the few wealthy entrepreneurs openly associated with the Communist Party.


Duma Speaker Seleznev described Semago's accusations as a provocation "aimed at stirring up a scandal," Interfax reported on 2 August. Seleznev added that "every word" of Semago's assertions was slanderous and that Semago would have to answer for them in court if he were not protected by parliamentary immunity. Seleznev has recently advocated allowing Duma factions to strip deputies of their mandates under some circumstances (see "RFE/RL Newsline," 1 August 1997). If that rule change were implemented, Semago would be among the first deputies targeted by the Communist faction. In recent months, Semago has called for downsizing the Duma's apparatus and criticized Seleznev's leadership on several occasions. In a 28 June article in the official newspaper "Rossiiskaya gazeta," Semago said he had repeatedly asked the Duma's leadership to audit the Duma's apparatus, but his requests had been ignored.


Unikombank officials announced on 1 August that the bank's deputy chairman, Andrei Gloriozov, has been missing since 30 July, Russian news agencies reported. The whereabouts of Gloriozov's car, driver, and one assistant also are unknown. Central Bank Chairman Dubinin recently charged that Unikombank had been involved in deals that defrauded the budget of more than $500 million (see "RFE/RL Newsline," 14-16, 18, and 21 July 1997). Central Bank officials had sought to replace Gloriozov and two other Unikombank executives following an audit that revealed accounting violations at Unikombank and alleged attempts by that bank's executives to obstruct the audit.


Yeltsin and Samara Oblast Governor Konstantin Titov on 1 August signed a power-sharing agreement between the federal authorities and the oblast, ITAR-TASS reported. Similar agreements have been signed with more than 30 of the 89 Russian regions (see "RFE/RL Newsline," 8 July 1997). According to the 31 July "Nezavisimaya gazeta," Titov has said that in principle, he is against the practice of signing such power-sharing agreements. (Under similar agreements, republics such as Tatarstan have gained far more privileges than other Russian regions.) Titov, a prominent figure in the pro-government movement Our Home Is Russia, was reportedly offered a cabinet post in March but turned down the job. Yeltsin subsequently appointed Boris Nemtsov, then the governor of Nizhnii Novgorod, as first deputy prime minister and Oleg Sysuev, then mayor of Samara, as deputy prime minister.


On 1 August, ITAR-TASS annulled its report on the criminal case against Duma deputy Aleksandr Korzhakov (see "RFE/RL Newsline," 1 August 1997). According to the corrected version issued by the news agency, the Moscow Procurator's Office is investigating whether Korzhakov slandered NTV journalist Yevgenii Kiselev. (In recent months Korzhakov has accused Kiselev of collaborating with the KGB.) However, in the corrected ITAR-TASS story, there is no mention of Kiselev having requested that charges of revealing state secrets be brought against Korzhakov as well.


In a three-hour meeting at the White House on 1 August, Bill Clinton and Heidar Aliyev signed a bilateral investment treaty and a joint statement expressing support for the efforts of the Organization for Security and Cooperation in Europe (OSCE) Minsk Group to mediate a settlement of the Karabakh conflict, according to a correspondent for RFE/RL. On 2 August, Aliyev flew to Houston for private meetings with oil company representatives.


During the White House meeting, representatives of Azerbaijan's state oil company SOCAR signed separate agreements estimated at $10 billion with Exxon, Mobil, Chevron and Amoco to develop offshore Caspian oil fields, AFP reported. Aliyev subsequently told journalists that these new agreements do not infringe on Russia's interests in the Caspian, Interfax reported. On 2 August, Azerbaijani Prime Minister Artur Rasi-Zade told the independent Azerbaijani TV station ANS that he regretted the annulment by the Russian oil firms Rosneft and Lukoil of a contract signed in early July to develop the Kyapaz Caspian oilfield to which Turkmenistan has laid claim, according to AFP.


On 2 August, Yeltsin told journalists at his vacation residence that he intends to invite the presidents of Georgia and Abkhazia, Eduard Shevardnadze and Vladislav Ardzinba, to Moscow to discuss proposals for resolving the Abkhaz conflict, Russian and Western agencies reported. Yeltsin warned that the Russian peacekeepers cannot stay in Abkhazia indefinitely, and proposed that the two sides sign an agreement similar to those between Moscow and federation subjects that would preserve Georgia's territorial integrity while giving Abkhazia substantial autonomy. Shevardnadze expressed his approval of Yeltsin's draft proposals on 2 August, according to Interfax. On 1 August, Russia's envoy for Abkhazia, Gennadii Ilichev, told Interfax Russia might lift economic sanctions currently in force against Abkhazia. An advisor to Shevardnadze said on 3 August that Georgia would consider this "an unfriendly move" by Russia.


On 1 August, the Armenian government decided to increase electricity prices for individual consumers by 12% to the dram equivalent of $.042 per kilowatt/hour beginning on 1 September, an RFE/RL correspondent in Yerevan reported. Energy prices for enterprises will rise by 20%, but enterprises will be entitled to a 50% price discount at night. Energy Ministry officials said the increases are in line with an earlier agreement signed with the World Bank. The officials said that electricity prices will have to be raised to 6 cents per kilowatt/hour by January 1999 in order to make Armenia's energy sector profitable. In Georgia, energy prices for both commercial enterprises and domestic consumers will rise to 4.5 tetri ($.035) per kwt hour beginning on 1 August, "Kavkazioni" reported on 31 July. Georgian State Energy Company director Vazha Metreveli said the tariffs are not high compared with those in Europe and other CIS countries.


Three sons of Tajikistan's Islamic spiritual leader, Amonullo Negmatzoda, were kidnapped by a group of 15-20 armed, masked men late at night on 31 July-1 August, according to ITAR-TASS and Interfax. Two of the three were at Negmatzoda's home outside of Dushanbe, the third was captured at a nearby house. Negmatzoda was not at home at the time. ITAR-TASS reported a demand for $100,000 has been made in exchange for Negmatzoda's sons. Authorities are investigating.


Tajik wages are now worth less than at the start of the year, ITAR-TASS reported on 3 August. The Tajik state statistics agency reported that real income dropped by 1.8 percent from April to May and has dropped by 37.9 percent since the beginning of 1997. The official average wage is reportedly 3,699 Tajik rubles per month ($1= 320 Tajik rubles, officially) but a kilogram of beef costs 1,200 rubles, a liter of vegetable oil more than 1,000 and a kilogram of sugar 650 rubles.


The head of Gazprom, Russia's gas giant, said his company will end its cooperation with Turkmenistan on gas shipments to Ukraine, Interfax reported on 1 August. Rem Vyakhirev said that after Turkmen President Saparmurat Niyazov issued a decree in late June which dissolved Turkmenrosgaz, Gazprom is "ready to give up on Turkmenistan entirely." Gazprom owned 45 percent of Turkmenrosgaz. Turkmenistan soon after terminated further shipments to Ukraine, citing a $780 million unpaid bill. Vyakhirev told Ukrainian President Leonid Kuchma Gazprom could supply Ukraine, saying "From here on you don't need to use Turkmen deliveries." Vyakhirev confirmed he is meeting with Niyazov on 6 August at the latter's request.


Pavel Sheremet, one of two Russian state television (ORT) journalists detained by the authorities in Belarus, may go on a hunger strike, his lawyer told Interfax on 2 August. The Belarusian authorities have charged the journalists with illegally crossing the border from Lithuania, where they had been filming a report on smuggling. They could face up to five years in jail. Meanwhile, Belarus's KGB issued a statement on 1 August saying its agents acted on a Lithuanian request when they detained the ORT crew. The statement directly contradicts earlier assertions by Lithuanian authorities that they had no objections to the TV crew's border crossing. Fifteen journalists arrested on 31 July while demonstrating against the ORT journalists' detention appeared before a Minsk court on 1 August. They were charged with violating a decree banning unauthorized public gatherings near government buildings. Six of the journalists were fined the equivalent of about 180 dollars and the rest were given warnings.


Russian President Boris Yeltsin on 1 August expressed hope that Russian criticism of the treatment of Russian journalists by Belarusian authorities will not affect cooperation between the two countries, Russian news agencies reported. Yeltsin characterized his Belarusian counterpart Alyaksandr Lukashenka as a "young" and "quick-tempered" leader who "takes criticism badly," but said the incident over ORT journalists would not affect Russian-Belarusian relations. The same day, Yeltsin's spokesman Sergei Yastrzhembskii criticized Kaliningrad Oblast Governor Leonid Gorbenko, who had asked Lukashenka to postpone a visit to the oblast because of "complications" in Russian-Belarusian relations. Gorbenko's statement had not been cleared with the Russian Foreign Ministry, Yastrzhembskii said. On 2 August, Yastrzhembskii criticized ORT for not reporting on the official explanations for the postponement of Lukashenka's visit to Kaliningrad Oblast, ITAR-TASS reported (see "RFE/RL Newsline," 1 August 1997).


A Russian-Belarusian currency union appears as far away as ever now that the Russian Central Bank has cut off negotiations with the National Bank of Belarus, "Kommersant-Daily" reported on 2 August. Under a March agreement, the two central banks were scheduled to announce measures on coordinating the two countries' currency policies on 1 August. However, the Russian Central Bank says Minsk has not fulfilled any of the main points of the March agreement. For instance, the National Bank still restricts the purchase and sale of Belarusian rubles in Belarus and still sets the exchange rate for the Belarusian ruble without regard for supply and demand. Furthermore, the National Bank of Belarus on 28 July limited the rights of non-residents to perform certain currency operations, after which the Russian side concluded that continuing negotiations would be "senseless," according to Central Bank Deputy Chairman Aleksandr Potemkin.


The World Bank has suspended disbursements of a $317 million loan to Ukraine because the Ukrainian parliament failed to raise electric rates as it promised, RFE/RL's Washington correspondent reported on 1 August. The bank says the parliament's indefinite postponement of the higher rates "has jeopardized the financial viability of the thermal generation companies" which are getting the loan disbursements. The loan, approved in October 1996, was to be used to build up fuel stocks and spare parts, and to install metering and other modern equipment over three years to get Ukraine's electric utility industry up to standard. The bank says the power companies will continue to deteriorate. without an increase in wholesale and retail prices. The bank says it will still support power industry reforms with technical assistance, but will only reopen the loan when electric rates are adjusted.


Lennart Meri arrived in Denmark on 2 August for a five-day visit which takes place at the invitation of Uffe-Ellemann Jensen, the president of the union of liberal democratic parties and former Danish foreign minister, ETA reported. Meri gave a speech on 2 August on the topic "NATO and European Union Expansion from Estonia's Position" at the annual conference of the Venstre Party at Nymindegab. On 4 August, the Estonian president is scheduled to give a speech on "Estonia and Euro-integration" at the Danish Society of Foreign Politics. Meri and Ellemann-Jensen also are due to hold a joint press conference the same day.


Latvian President Guntis Ulmanis, on a visit to the U.S., told Reuter in San Francisco on 2 August that his country will do everything possible to be included in a next round of NATO expansion. Ulmanis expressed the hope that Latvia will win an invitation to join the alliance in 1999. Ulmanis also said that Russian objections to the Baltic states' possible NATO membership "are not decisive." Ulmanis said Latvia also will continue efforts to be included in a first group of nations invited to join the European Union.


Guntar Krasts on 1 August pledged to speed up reforms. Krasts told state-owned Radio Latvia in an interview that the Baltic republic needed a better economic performance. Krasts has been chosen to replace Andris Shkele, forced to resign after quarrels with the seven parties that formed his cabinet. "We have to achieve better economic results in the second part of 1997 and in 1998 and therefore we have to increase the pace of reform," Krasts said. A deficit-free budget is currently in doubt due to an income tax shortfall but Krasts insisted a balanced budget was his goal. "We will aim to achieve a balanced budget in 1997, and even if we fail, it is a must for 1998, which we will implement," Krasts said.


Latvia and Lithuania opened their first border checkpoint on 2 August, BNS reported. The border point Grenctale-Salociai will substantially reduce the time needed for routine procedures upon crossing the border, since the customs and documents control will take place only once. The opening ceremony at the border crossing was attended by Latvian Acting Interior Minister Juris Kaksitis and Lithuanian Interior Minister Vidmantas Ziemelis.


Seven major Czech banks on 1 August started selling government bonds, Czech television reported. The government hopes the sale will raise some 5 billion crowns to help regions devastated by recent floods. All seven banks reported that the bonds were selling faster than expected. President Vaclav Havel and his wife, Dagmar, were among the first to buy some of the bonds. The bonds will mature in five years, and interest will be 2.5 percent above inflation. For the first year, the interest rate was set at 12.5 percent. The damage caused by the floods that hit eastern Czech Republic is estimated to be at least 60 billion crowns. Industry and Trade Minister Karel Kuehnl told Czech Television on 3 August that damages to industrial companies alone are estimated at 35 billion crowns.


European Commission spokesperson Louisewies Van der Laan told Slovakia on 1 August in Brussels that the European Commission welcomes the ruling by the Slovak Constitutional Court on the case of former Slovak parliament deputy Frantisek Gaulieder, and will watch carefully further steps to be taken by the Slovak Parliament in the issue. The Constitutional Court ruled on 25 July that the parliament had acted unconstitutionally in stripping Gaulieder of his mandate after he quit Prime Minister Vladimir Meciar's Movement for a Democratic Slovakia.


President Arpad Goencz on 2 August, at a press conference held at the RFE/RL headquarters in Prague, said Hungary will do everything in its power to help Romania and Slovakia be admitted to NATO and the European Union. He expressed support for NATO-Ukrainian cooperation, which would bolster Ukraine's independence and sovereignty. Goencz said he regards the incidents triggered by the attempt of the Romanian nationalist mayor of Cluj, Gheorghe Funar, to block the display of the Hungarian flag over the Hungarian consulate as "insignificant." He said Hungary has its own "extreme nationalists" and added that he will always remember the warmth with which both the Romanian and the Hungarian population of the town received him when he visited there earlier this year. Goencz said Hungary's option for integration into Western structures is unlikely to change regardless of the outcome of the May 1998 elections.


The National Gypsy Minority Council on 1 August demanded collective compensation for grievances suffered by Gypsies in World War II, Hungarian media reported. According to Florian Farkas, parliamentary representative of Hungary's 500,000 strong Gypsy minority, at least 50,000 Hungarian Gypsies died in concentration camps. Farkas said the community as a whole is entitled to collective compensation for the crimes committed against it by the Hungarian Arrow Cross fascist movement. Hundreds of people, including Foreign Minister Laszlo Kovacs, gathered on 2 August in front of the Parliament building for a candlelight vigil to honor Hungarian victims of the Gypsy Holocaust.


Interior Minister Neritan Ceka said in Tirana on 3 August that he intends to rid the roads of gangs and robbers within 60 days (see "RFE/RL Newsline," 1 August 1997). He said that police have arrested several gang members in recent days, and that "there will be no compromise on crime." But much of the country remains affected by gangs, including Berat, Cerrik, Vlora, Gjirokaster and Korca in the south, and Burrel and Shkoder in the north. Last week, 60 people were killed and 100 injured in armed violence across Albania. In Tirana, 15 were killed during that period, including five on 1 August.


Some 12,000 people have signed a petition to the Constitutional Court to demand that former President Sali Berisha be denied his seat in the new legislature, news agencies reported from Tirana on 3 August. The petition, which originated in Vlora, claims that Berisha is responsible for the deaths that followed the collapse of pyramid schemes in March and hence has no moral right to a seat in parliament. Meanwhile in Durres, some 360 French soldiers and 116 military vehicles left for Toulon. And on Tirana money markets, the lek has stabilized at about 150 to the dollar. The rate was about 190 to the dollar at the height of Albania's crisis, but demand for the local currency has increased following the June elections and the gradual resumption of normal business life.


Federal Yugoslav border guards killed two ethnic Albanians from Serbia's Kosovo province on 3 August, the official Tanjug news agency reported. The guards said that one group of Albanians was trying to cross the border into Albania as another was attempting to enter Yugoslav territory. The guards ordered the men to halt, but fired on the Albanians only after the Albanians fired first, Tanjug added. A spokesman for the Democratic League of Kosovo, the leading ethnic Albanian political party, said in Pristina, however, that the guards fired without warning. Smuggling is endemic along Albania's borders with Yugoslavia and Macedonia, and incidents along the frontier have been common since anarchy broke out in Albania in March. On 31 July, Macedonian border guards killed two illegal migrant workers attempting to go home to Albania.


The steering committee of Zoran Djindjic's Democratic Party (DS) decided in Belgrade on 3 August that the DS will not participate in the Serbian elections slated for 21 September. Spokesmen said that conditions for fair and free elections are not present. Also in Belgrade, the Republican Elections Commission ruled that parties must present their lists of candidates to the Commission by 6 September. And in Podgorica, supporters of Momir Bulatovic, the deposed president of the Democratic Socialist Party, announced on 1 August that they do not recognize Bulatovic's ouster and will hold a party congress in northern Montenegro on 6 August, an RFE/RL correspondent reported from the Montenegrin capital.


Police in Zemun said on 2 August that five teenagers were responsible for the 24 July vandalism of a Jewish cemetery. Police ruled out any political motives in the incident in which unknown people turned over nine huge grave stones. Jewish community leaders said on 28 July, however, that the stones were so heavy that the vandalism could not have been the work of a few individuals but rather of an organized gang. The mayor of Zemun is Serbian nationalist politician Vojislav Seselj, whom opposition groups charge with beating up a human rights lawyer and with driving a Croatian family out of Zemun (see "RFE/RL Newsline," 18 July 1997). Seselj is a candidate for the Serbian presidency and often acts as a tacit ally of Milosevic.


Recently returned Muslim refugees fled their three home villages near Jajce on 3 August after two days of violence. Angry Croat gangs had attacked the Muslims and torched some of their homes, burning one man alive inside his house. Some Western media reports said that the Croats were drunk and that local police helped them drive out the Muslims. Carlos Westendorp, the international community's chief representative in Bosnia, wrote to Croat and Muslim leaders that the Muslims must be able to go home within 48 hours, and criticized the behavior of the police and other local authorities. The central Bosnian town of Jajce had previously been one of the few places in that country where refugees had been able to go home to areas governed by authorities of a different nationality.


Germany on 3 August became the first country to enforce the new international ban on contacts with Bosnian ambassadors. Westendorp announced the ban the previous day after the Muslims, Croats and Serbs failed to agree among themselves on a division of ambassadorships in the joint foreign ministry. German Foreign Minister Klaus Kinkel said in Bonn that "it is time that the Bosnian politicians see that our patience is at an end." Most Bosnian ambassadors are Muslims, but the Croats and Serbs demand a greater number of posts for themselves. Sven Alkalaj, the ambassador to Washington, is a Jew who may lose his job after the three main nationalities have finished fighting among themselves. The Foreign Ministry and the other joint institutions are, in any event, largely paper institutions. The Serbs in particular conduct their own foreign policy independent of the other two ethnic groups.


In an interview with the BBC on 1 August, President Emil Constantinescu urged the government to speed up economic reforms and said he intended "to intervene" if the government failed to do so. In case of failure, he said he will "propose a government reshuffle or the whole government will have to go." Prime Minister Victor Ciorbea said on the same day that it was "premature" to speak of a reshuffle and that he enjoyed the president's "full confidence." The government continued to debate on 1 and 3 August the restructuring of the country's budget. In an interview with Radio Bucharest, Ciorbea said the revised budget and other harsh reform measures will be finalized in the next days.


The National Agency for Privatization has drafted a law providing for the compensation of owners of enterprises that were nationalized by the communists between 1948 and 1950, Romanian television reported on 3 August. The law provides for the compensation of owners of factories, banks, mines, hospitals, hotels, movie theaters or insurance companies. Those who lost a judicial appeal against the nationalization or those already compensated will not benefit from the provisions of the law. The compensation will be in form of stocks now owned by the state. The draft law, which must be approved by the government and parliament, says former Romanian citizens now residing abroad can benefit from the compensation.


The bureau of the Democratic Convention of Romania (CDR), which is the largest component of the ruling coalition, on 1 August ruled that the Liberal Party must reapply for membership in the CDR because it is "a new political formation." The Liberal Party was set up earlier this year through the merging of the National Liberal Party-Democratic Convention, which was a CDR member, and the Liberal Party '93, which was not a component of the CDR, having left it in 1995. Liberal Party leader Nicolae Cerveni said his formation will not reapply for membership.


The Prahova, Dambovita, Arges and Ialomita counties were severely affected by heavy rainfalls on 3 August. Several parts of Bucharest also were reported to have been flooded. Radio Bucharest said some 300 homes are affected in the four counties. Rail traffic had to be suspended between Bucharest and Brasov. There were also reports of landslides.


An official Moldovan motorcade on its way to Bendery-Tighina was denied right of entry into the town by the Transdniester breakaway authorities, Radio Bucharest reported on 4 August. The most prominent member in the motorcade was the Moldovan Defense Minister, Valeriu Pasat. The Moldovan officials were invited by the commander of the Russian troops in Transdniester, Gen. Valerii Yevnevich, to participate in an "open day" of the contingent. The Tiraspol authorities said they had been unaware of Pasat's presence in the motorcade. The Russian ambassador to Chisinau, as well as other diplomats who traveled with Pasat, returned with him to Chisinau in a sign of solidarity.


Ivan Kostov, in an interview with Radio Sofia on 3 August, said his countrymen should be bracing for further economic hardship as the government carries out harsh economic reforms. Kostov said the difficulties will continue until about next spring, when he predicted the beginning of a steady revival and a takeoff in economic development. He said unemployment is likely to grow as the government closes down unprofitable state enterprises. Kostov said the government will seek foreign investments and will finance a series of infrastructure projects in order to create new jobs. Among the projects under consideration are a gas pipeline to Turkey and an oil pipeline to carry Russian crude oil from the Black Sea port of Bourgas to Alexandroupolis in Greece.


By Liz Fuller

The expiration of the 31 July mandate of the CIS peacekeeping force in Abkhazia prompted new diplomatic moves to resolve the conflict. When these moves failed, a series of uncompromising statements by both Georgian and Russian politicians seemed to risk precipitating new fighting. The peacekeeping force, which is composed entirely of Russian troops although it operates under a CIS mandate, has been deployed along the internal border between the separatist republic of Abkhazia and the rest of Georgia since July 1994. The Georgian leadership has stated repeatedly that it would demand the force's withdrawal after its mandate expired unless a resolution adopted at the CIS heads of state summit in March 1997 is implemented. That resolution calls for the peacekeepers' deployment over a broader geographical area and gives them more extensive powers to protect an estimated 200,000 ethnic Georgians who fled from Abkhazia during the war of1992-3, and who are impatient to return to their abandoned homes. The Abkhaz leadership immediately rejected this proposal, arguing that the force's original mandate cannot be amended without the approval of the Abkhaz government. The Abkhaz leadership has since made it clear that it wants the peacekeeping force to continue its duties.

The original rationale for deploying peacekeepers along a 13 km zone on both sides of the River Inguri, which marks the border between Abkhazia and the rest of Georgia, was to expedite the return of ethnic Georgian displaced persons. Many of these have been quartered for the past three years in hotels in Tbilisi, and are without employment. Despite the peacekeepers' presence, few Georgian fugitives have returned to Abkhazia. The Abkhaz leadership has consistently blocked any plans for their large-scale repatriation, and some families that returned spontaneously were attacked and killed by Abkhaz guerrillas. The peacekeeping force itself has lost up to 50 men killed by mines and shot by members of the so-called "White Legion" -- a Georgian guerrilla force that advocates a military campaign to restore Georgia's hegemony over Abkhazia.

The peacekeepers have, however, become an instrument that various parties in both Tbilisi and Moscow are seeking to use to extract political concessions. The Georgian parliament adopted a resolution on 30 May hinting that it would consider demanding that Georgia leave the CIS if the resolution of the March CIS heads of state summit on broadening the peacekeepers' mandate was not implemented. Visiting the U.S. in late July, Georgian President Eduard Shevardnadze tried unsuccessfully to persuade U.N. Secretary-General Kofi Annan and U.S. President Bill Clinton to agree to send UN peacekeeping troops to replace the CIS force -- a move that would have undercut Russia's influence in the Transcaucasus.

The Russian Foreign Ministry, which in June had proposed a conflict resolution plan that was accepted by the Abkhaz side but rejected by Tbilisi, threatened that if Georgia refused to make a formal request that the peacekeepers remain after 31 July, they would be withdrawn, creating a serious risk of spontaneous clashes between Abkhaz and Georgian irregular forces. (Although Georgian and Abkhaz foreign ministry representatives had signed an agreement in Geneva on 25 July rejecting the use of force after the expiration of the peacekeepers' mandate, both the "White Legion" and a contingent of some 3,000 ethnic Georgian former members of the Abkhaz police force and Abkhaz militia forces had warned that they would advance into the 13 km zone to take the peacekeepers' place.) Russian observers estimate that the Abkhaz army, which numbers approximately 4,500 regular troops plus some 25,000 reservists, is disciplined enough, and has enough tanks and heavy artillery, to withstand a Georgian incursion and then keep the Georgian forces pinned down in a lengthy war of attrition. It also has been suggested that some influential Chechen field commanders opposed to Chechen President Aslan Maskhadov might agree to fight on the Chechen side. Protracted hostilities could delay the construction of the planned Baku-Supsa pipeline that is scheduled to begin transporting Azerbaijan's Caspian oil to the Georgian Black Sea coast no later than next fall.

On 29 July, Shevardnadze appeared to modify his uncompromising rhetoric, stating that although Georgia would not formally ask the peacekeepers to stay, it would not insist on their withdrawal. A Russian Defense Ministry spokesman argued that the decision on revoking the peacekeepers' mandate could only be taken by the CIS heads of state, who had originally endorsed the peacekeepers' dispatch to Abkhazia. This in effect would mean that the force will remain in its present positions at least until the CIS heads of state summit scheduled to take place in Chisinau in October. It also would provide Shevardnadze with a breathing space in which to lobby for international forces under the aegis of the UN to be deployed alongside the Russian troops.

Then on 2 August, Russian President Boris Yeltsin called on both Shevardnadze and Abkhaz President Vladislav Ardzinba to meet with him in Moscow for "one last serious talk" before signing an agreement on delimitation of powers between Abkhazia and the central Georgian government in Tbilisi. The agreement would be comparable to the power-sharing agreements Moscow has signed with other federation subjects. (The previous day, Russian special envoy for Abkhazia Gennadii Ilichev said that Moscow was considering lifting the economic sanctions imposed on Abkhazia in early 1996.) Shevardnadze immediately expressed his approval of Yeltsin's proposals. Ardzinba has not yet made any comment. For the moment, then, the three most important parties to the conflict have stepped back from the brink. But there is no guarantee that radical forces in Georgia or Abkhazia will not independently resort to violence to sabotage a Russian-mediated agreement, as they did at the beginning of the conflict in September 1992.

CORRECTION: In the End Note "Walking the Moldovan Tightrope," by Michael Shafir, published on 1 August 1997, Valeriu Pasat was described as Moldovan Foreign Minister. He is, of course, that country's Defense Minister. Also note that the basic treaty between Moldova and Russia was signed in September 1990 and that the PUMA helicopters are produced under French rather than U.S. license.