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Newsline - January 16, 1998


Prime Minister Viktor Chernomyrdin has redistributed the responsibilities of top cabinet officials, ITAR-TASS reported on 16 January. First Deputy Prime Minister Anatolii Chubais will continue to oversee some economic policies and agencies such as the tax inspectorate and tax police. However, Chernomyrdin will now be directly responsible for the Finance Ministry, budget and monetary policy, and development of the banking sector. (Mikhail Zadornov reportedly insisted on being directly subordinate to Chernomyrdin before he replaced Chubais as finance minister.) In addition, Deputy Prime Minister Vladimir Bulgak, who was previously charged mainly with issues relating to culture and science, will replace Chubais as the government's coordinator of media-related issues. On 15 January, Bulgak was appointed chairman of the collegium of state representatives in the 51 percent state- owned network Russian Public Television. LB


Under the redistribution of responsibilities, Chernomyrdin will coordinate the activities of the Fuel and Energy Ministry, ITAR-TASS reported. First Deputy Prime Minister Boris Nemtsov previously supervised that ministry's work, even after Yeltsin removed him as fuel and energy minister last November. Chernomyrdin ran the USSR Ministry of the Gas Industry during the Gorbachev period and is considered close to major companies in the Russian energy sector, especially the gas monopoly Gazprom. Nemtsov will continue to coordinate the government's policies on restructuring state subsidies for housing and utilities. LB


Also on 16 January, Interfax quoted Chernomyrdin as denying that he went to the Barvikha sanitarium the previous day (see "RFE/RL Newsline," 15 January 1998). The prime minister said he feels fine, adding that he may take a short vacation after Yeltsin returns to work. The president has been at a government residence in Valdai for nearly two weeks and is scheduled to resume work in the Kremlin on 19 January. LB


An Iraqi spokesman on 16 January welcomed the offer made by Russian Defense Minister Igor Sergeev in Paris the previous day to provide surveillance aircraft to monitor Baghdad's compliance with UN Security Council rulings, AFP reported. Foreign Ministry spokesman Valerii Nesterushkin on 15 January again affirmed that "any use of force against Iraq is inadmissible" and that the ongoing tensions between Baghdad and the UN should be resolved exclusively by political and diplomatic means, Interfax reported. Commenting on plans by Russian Liberal-Democratic Party leader Vladimir Zhirinovsky to send a further consignment of humanitarian aid to Iraq next month, Nesterushkin said that the cargo would be transported by a direct non-stop flight with UN approval. Communist Party leader Gennadii Zyuganov told Interfax on 15 January that Russia should intensify its efforts to secure the lifting of international sanctions on Iraq. LF


Aslan Maskhadov on 15 January signed a decree listing the new 24-member cabinet. Shamil Basaev is one of two first deputy prime ministers and acting premier for a period of six months. As anticipated, former First Deputy Prime Minister Movladi Ugugov is appointed foreign minister, while Basaev's brother, Shirvani, is chairman of the State Committee for Fuel and Energy. Endorsement of the new cabinet by the Chechen parliament may prove problematic. Parliamentary speaker Ruslan Alikhadzhiev on 15 January pointed out that most members of the new government served in the old cabinet, which Maskhadov had accused of inefficiency. Former Russian Security Council Secretary Aleksandr Lebed told Interfax that Moscow should overlook Basaev's former involvement in terrorist activities and embark on a dialogue with his new government, given that "only authoritarian people with a firm will can control the situation in Chechnya." LF


Moscow Mayor Yurii Luzhkov told journalists on 15 January that Russia should allow Chechnya to become an independent state, RFE/RL's Moscow bureau reported. He noted that he opposed the cease-fire agreement negotiated in August 1996 by Maskhadov and then Russian Security Council Secretary Aleksandr Lebed on the grounds that it was a "capitulation." But having implemented that agreement, Luzhkov argued, Russia should recognize that it lost the war in Chechnya. He again praised Interior Minister Anatolii Kulikov's widely condemned proposal to bomb some targets in Chechnya (see "RFE/RL Newsline," 7 and 8 January 1998). Luzhkov argued that "this is done by other countries in the civilized world" in order to keep "bandits" from attacking their territory. He added that if a neighboring state carries out terrorist acts, then "the side defending itself should have the right to carry out preventive strikes." LB


The government on 15 January approved a five-year, 25 billion ruble ($4.2 billion) program intended to provide housing for some 210,000 families of retired military personnel, Russian news agencies reported. The program is to cover 160,000 families of soldiers who have already left the armed forces and 50,000 families of those who will be retired during upcoming military reforms. Families will receive housing certificates to cover 80 percent of the cost of apartments. They will have the right to take out low-interest bank loans to cover the remainder of the cost. LB


Defense Minister Sergeev acknowledged on 15 January that owing to financial difficulties, military reform will not be completed by 2000, ITAR-TASS reported. Yeltsin issued a decree in May 1996 promising to end conscription and create a professional army by 2000. Speaking to reporters in Paris, where he is meeting with French officials, Sergeev said Yeltsin's orders will be fulfilled but gave no timetable. The government has yet to approve a detailed military reform program; experts in the Defense Ministry and Defense Council are still drafting proposals. LB


ITAR-TASS on 15 January reported that Aleksandr Kotelkin has been fired from his post as first deputy minister for foreign economic relations and trade. He had been appointed to that post in September 1997, following his removal the previous month as head of the arms export company Rosvooruzhenie (see "RFE/RL Newsline," 15 September 1997). The official reason cited for Kotelkin's removal from his new post was personnel cuts, but ITAR-TASS and "Kommersant-Daily" on 16 January suggested his strained relations with Deputy Prime Minister Yakov Urinson was the real reason. Foreign Economic Relations Minister Mikhail Fradkov, however, told Interfax that all four first deputy ministers will be fired by 7 March 1998 and that only three first deputies will be reappointed. LF


Sergei Shakhrai, the president's representative in the Constitutional Court, told Interfax on 15 January that Yeltsin will reject proposals on forming a coalition government that would have the support of a majority in the parliament. State Duma Speaker Gennadii Seleznev has pledged to submit proposals on forming a coalition government to Yeltsin by the end of January. He claimed in December that the president had agreed to consider the issue (see "RFE/RL Newsline," 10 December 1997). LB


Communist Party leader Zyuganov has vowed that the Duma will unanimously reject the president's proposals on changing the law on parliamentary elections, Interfax reported on 15 January. Yeltsin recently urged the Duma to abolish the proportional representation system whereby half of Duma deputies are currently elected (see "RFE/RL Newsline," 22 December 1997). Zyuganov denounced the president's proposal as "unconstitutional and absolutely immoral." He noted that Yeltsin himself introduced the proportional representation system in fall 1993. Zyuganov added that Yeltsin's proposal to elect all Duma deputies in single-member districts would harm the development of Russian political parties and would "turn the Duma into a corporation of mafia clans." LB


Vladimir Kazakov, who heads the Department on Especially Important Cases in the Prosecutor-General's Office, told Interfax on 15 January that a criminal case has been opened concerning alleged embezzlement of hundreds of millions of dollars in state funds. Last July, Central Bank Chairman Sergei Dubinin accused several former officials, MFK bank, and Unikombank of arranging the allegedly fraudulent deals (see "RFE/RL Newsline," 14 and 18 July 1997). In particular, Dubinin's accusations involved Former First Deputy Finance Minister Andrei Vavilov, who in February 1997 authorized the transfer of government funds to finance a contract on supplying MiG fighter planes to India. Vavilov became the head of MFK bank, which is part of the Oneksimbank empire, after leaving the Finance Ministry in April 1997. Oneksimbank President Vladimir Potanin was first deputy prime minister from August 1996 until March 1997. LB


According to a new report by the Women's Rights Project of Human Rights Watch, the Russian law enforcement system "creates numerous and substantial obstacles" to combating violence against women, an RFE/RL correspondent in Washington reported on 15 January. For instance, the report says police officers and prosecutors are often hostile to women who have been raped. It urges the Russian government to devote more attention and resources to the problem but charges that diplomatic efforts by U.S. Secretary of State Madeleine Albright and others "have done little to change high-level indifference to the brutality Russian women endure without recourse." Yekaterina Lakhova, who heads a presidential commission on women, children, and demographics, has estimated that some 14,000 women in Russia each year are killed by husbands or family members (see "RFE/RL Newsline," 21 October 1997). LB


Vladimir Kartashkin, who chairs a presidential commission on human rights, announced on 15 January that the commission is preparing recommendations on defending human rights in Russia, ITAR-TASS reported. He said his commission will concentrate this year on tackling poor conditions for soldiers and prisoners and widespread infringement of social and economic rights. Yeltsin has declared 1998 the year of human rights in Russia. In an interview with RFE/RL's Moscow bureau, Kartashkin said his commission has encountered "administrative difficulties," since it has fewer than half as many members as when it was chaired by renowned human rights defender Sergei Kovalev. Kovalev and several others quit the commission in January 1996 to protest Russia's actions during the war in Chechnya. LB


The Duma on 14 January passed a resolution urging the government to speed up compensation payments to citizens whose pre-1992 savings accounts were rendered worthless by high inflation in the 1990s, ITAR-TASS reported. In particular, the resolution called for compensation to be paid sooner to all citizens suffering from cancer. Up to now, only citizens born before 1921 have been able to receive compensation for their old savings accounts. Sberbank has begun paying holders of those accounts up to 1,000 times the face value of their deposits. LB


The presidents of the three Baltic States have defended the partnership charter with the U.S., saying it will help, not damage, their relations with Russia. Speaking in Washington on 15 January, Latvia's Guntis Ulmanis said the document shows that Latvia, Estonia, and Lithuania support attempts to increase mutual trust with Russia. Lithuania's Algirdas Brazauskas said the charter is not directed against a third country and that he does not believe it will worsen ties with Russia. Estonia's Lennart Meri said his country wants to look forward to improved relations with Russia in the future and not dwell on the enmity of the past. U.S. President Bill Clinton and his three Baltic counterparts are due to sign the charter in Washington on 16 January. JC


Foreign Ministry spokesman Valerii Nesterushkin told a news conference in Moscow on 15 January that Russia welcomes any steps aimed at establishing open, equal, and good neighborly cooperation in the Baltics as part of the process of building a new Europe without dividing lines. Nesterushkin said Moscow's attitude to the U.S.-Baltic Charter will depend on the extent to which its content meets that goal. He added that the Moscow will renew its proposal to offer security guarantees to the Baltics at international gatherings next week in Riga and Sweden, Reuters reported. That proposal, first made by President Yeltsin last fall, was rejected by all three Baltic States. JC


Lithuanian President-elect Valdas Adamkus has denied he told a Polish weekly that the status of Kaliningrad Oblast remains an "international problem" (see "RFE/RL Newsline," 15 January 1998), Russian agencies reported. Adamkus's spokesman issued a statement on 15 January saying that the president-elect had not given an interview to "Wprost." Adamkus "regards the question of Kaliningrad Oblast as having been settled long ago and firmly stands for good relations with Russia," the spokesman stressed. The Lithuanian Foreign Ministry told Interfax that Adamkus considers the "Wprost" report to be a "provocation." JC


The United Tajik Opposition on 15 January carried out its threat to withdraw its representatives from the National Reconciliation Commission (see "RFE/RL Newsline," 13 January 1998). UTO leader and commission chairman Said Abdullo Nuri said the government's failure to hand over 30 percent of government positions to the UTO, the delay on an official amnesty for UTO members taken prisoner during the five-year civil war, delays in assigning permanent bases for UTO troops (now part of the Tajik Army), and the failure to bring back the last of the UTO fighters from Afghanistan all contributed to that decision. At the same time, he stressed the UTO's withdrawal from the commission is temporary only, depending on the government's response. BP


Tajik Defense Minister Sherali Khairulloyev and his Chinese counterpart, Chi Haotian, signed an accord on "broader contacts" between their ministries, ITAR-TASS reported on 16 January. Khairulloyev and Chi also discussed regional security, especially the situation in Afghanistan. BP


Kazakh National Bank Chairman Uraz Jandosov has announced that direct foreign investment in Kazakhstan last year totaled $1.7 billion, Interfax reported on 14 January. Jandosov speculated that 1998 would see a drop in direct foreign investment owing to the economic crisis in some Asian countries. He noted that two of Kazakhstan's biggest foreign investors are the South Korean firms Daewoo and Samsung, both of which are heavily affected by the financial problems in Asia. BP


The Prosecutor-General's Office and National Security Ministry on 15 January issued a joint statement accusing former parliamentary speaker Rasul Guliev of conspiring from abroad to overthrow President Heidar Aliev. The statement claimed that while head of Azerbaijan's largest oil refinery, Guliev systematically embezzled millions of dollars with which he funded a series of meetings to discuss ways of destabilizing the present situation in Azerbaijan and training terrorists and assassins. Guliev denied the allegations in a telephone interview with Reuters. Representatives of several opposition parties rejected the charges as "irresponsible" and called on the authorities to provide concrete evidence to substantiate them. Guliev was stripped of his parliamentary deputy's mandate in December 1997 and subsequently announced his intention to contend the presidential election due later this year (see "RFE/RL Newsline," 18 December 1997 and 13 January 1998). LF


Several thousand Armenians staged a march in Yerevan on 15 January to commemorate the anniversary of the 1990 pogroms in Baku, in which dozens of ethnic Armenians were killed, RFE/RL's Yerevan bureau reported. The mass killings, which forced 250,000 Baku Armenians to flee the city, served as a pretext for the Soviet troops' belated intervention during the night of 19- 20 January 1990. Up to 150 Azerbaijanis were killed on that night. Representatives of the Iranian embassy in Yerevan participated in the 15 January march to "pay tribute to innocent victims," Noyan Tapan reported, quoting a senior Iranian diplomat. The march was organized by the opposition Dashnak Party (HHD) and the Organizational Committee to Support Nagorno-Karabakh, which represents various opposition parties. LF


In a statement released on 15 January, the Abkhaz Foreign Ministry questions the international community's objectivity in evaluating the Abkhaz conflict, Interfax reported. The statement claims that Georgia has conducted "undeclared sabotage and a terrorist war" against Abkhazia since the May 1994 signing of a formal cease-fire agreement, and alleged that this policy of "state terrorism" has the tacit support of the international community. The ministry called for a meeting of Abkhaz, Georgian, Russian, UN, and OSCE representatives to assess the situation. On 14 January, one of the members of a group of Georgian saboteurs belonging to the so-called White Legion was killed by an explosion that destroyed a water tower in the Abkhaz town of Ochamchira, Abkhaz Security Minister Astamur Tarba told ITAR-TASS. LF


During his visit to Israel on 14 January, Eduard Shevardnadze met with Prime Minister Benjamin Netanyahu and signed a "declaration of friendship." Shevardnadze invited Netanyahu and Infrastructure Minister Ariel Sharon to visit Georgia later this year to discuss possible cooperation in the energy sector. Shevardnadze was also presented with an award by the Israeli Institute of Democracy for his contribution to promoting democracy in Georgia. LF


Following closed-door meetings in Moscow, Russian Orthodox and Roman Catholic officials have agreed to send a delegation to Ukraine in an effort to resolve a dispute between the Orthodox and Greek Catholic Churches, ITAR-TASS and dpa reported on 15 January. The Russian Orthodox Church claims the Greek Catholic Church has taken over Orthodox churches in western Ukraine. The Greek Catholic Church follows Eastern Orthodox rituals but is loyal to the Vatican. PB


Turkey on 16 January lodged an official protest with the Ukrainian Foreign Ministry after a Turkish fishing boat sank and two seamen drowned during an incident the previous day that involved a Ukrainian coast guard ship, dpa reported. Ukrainian border guards said 17 Turkish boats were fishing in waters that Ukraine claims as its territory. They say that one of those boats capsized only after it tried to ram a Ukrainian coast guard vessel. Alp Karaosmanoglu, the Turkish ambassador in Kyiv, said Turkey has the right to claim damages. PB


More than 500 small businessmen have signed a letter protesting a new tax law that they say is destroying them, RFE/RL's Belarusian service reported on 15 January. The law requires small business owners to pay a retroactive tax on annual income exceeding $450. This is in addition to a fixed monthly tax. The signatories to the letter, which was sent to the government, threatened to stop paying taxes altogether or move to Russia if the new tax is not repealed. PB


The parliament on 15 January approved a bill extending the validity of privatization vouchers by two years, until December 2000, BNS reported. The government explained the move by pointing to the relatively slow pace of privatization and the large number of vouchers still in circulation. So far, privatization vouchers worth 14.6 billion kroons (some $1 billion) have been issued, of which only 58 percent have been cashed in. JC


Health-care Minister Juozas Galdikas and Agriculture Minister Vytautas Knasys have announced they will resign during the cabinet reshuffle expected to take place after President-elect Adamkus is sworn in, BNS reported on 15 January. The two ministers, who have been sharply criticized over their performance, announced their decision at board meeting of the ruling Conservative Party. Conservative faction leader Arvydas Vidziunas told the news agency that the two ministers will step down of their own accord. JC


Rem Vyakhirev, the head of Russian gas producer Gazprom, said that if Poland does not pay a debt of some $200 million, natural gas supplies may be cut off, RFE/RL reported on 16 January. Polish Oil and Gas Company President Janusz Zgorzyinski said that a contract with Gazprom allows for payment rescheduling, and that there are no grounds for cutting off supplies to Poland. Vyakhirev, who is due to visit Warsaw on 18 January to discuss the debt, said Poland could make partial repayment through goods and services. PB


Bohdan Dvorak, elected deputy chairman of the Civic Democratic Party (ODS) on 17 December 1997, has resigned, saying he felt "it was not possible to change the party's image in the media," Czech Radio reported on 15 January. In a letter to ODS chairman Vaclav Klaus, Dvorak hinted that he differed with other party leaders on how to handle the investigation of the financial scandal that had split the ODS, CTK reported. "Mlada Fronta Dnes" on 15 January cited Dvorak as saying that a 7.5 million crown ($209,000) secret donation to the ODS from a businessman, which sparked the dispute leading to the resignation of Klaus's government and the split in his party, had not been paid to a flood relief program as party leaders promised, because the ODS does not have the cash to do so. MS


A spokesman for Premier Vladimir Meciar on 15 January announced that parliamentary and local elections will be held on 25 and 26 September. Jozef Kroslak told Slovak Television that the agreement was reached during a meeting with the ruling coalition and other officials, which Meciar chaired. Meciar also repeated his stand that the candidates proposed by the opposition for the first round of the presidential elections, due later this month, are unacceptable to his Movement for a Democratic Slovakia. MS


The government on 15 January announced that the election of 13 ethnic minority representatives to the parliament will be postponed until October, Hungarian media reported. It had originally been planned to hold the vote at the same time as the May general elections. The relevant bills will be withdrawn for redrafting. "The delay will allow sufficient time for preparations, should the Constitutional Court request a preliminary review of the legislation," Interior Minister Gabor Kuncze explained. Most minority groups said the delay is acceptable to them. Meanwhile, spokesmen for the parliamentary parties have rejected a suggestion by Hungarian Church leaders that Churches be granted representation in the country's legislature. MSZ


Milo Djukanovic took office as president on 15 January in the former royal palace in Cetinje. In his inaugural speech, he warned Yugoslav President Slobodan Milosevic, who was not present, that Montenegro will resist Milosevic's efforts to strengthen his own powers at the expense of Montenegro: "Without equal rights for both Serbia and Montenegro, there is no Yugoslavia.... Only the people of Montenegro, and no one outside Montenegro, can decide on its status within Yugoslavia." The highest-ranking Belgrade leader present at the inauguration was Yugoslav Prime Minister Radoje Kontic. Serbian opposition leaders Vojislav Seselj, Vesna Pesic, Zoran Djindjic, and Vuk Draskovic, also were present. Army Chief-of-Staff General Momcilo Perisic and Serbian President Milan Milutinovic had been expected to attend but did not. PM


President Djukanovic also said in Cetinje on 15 January that "throughout their history, the Serbian people and Serbia have had no more sincere or sure a friend than Montenegro. It will remain so during my mandate." But he added that Milosevic must honor the international commitments he made when he signed the Dayton agreement just over two years ago. Djukanovic warned that if Milosevic does not, "it is certain that Serbia and Montenegro will regress more and more, with unforeseeable, even tragic consequences." Djukanovic has frequently blamed Milosevic's policies, especially on Bosnia, as being responsible for the continuation of international sanctions against Yugoslavia. Djukanovic argues that Yugoslavia must have the sanctions lifted if Montenegro's key shipping and tourism sectors are to prosper. PM


A State Department spokesman congratulated Djukanovic on his inauguration. The spokesman repeated earlier U.S. criticism of Milosevic and of his ally, outgoing Montenegrin President Momir Bulatovic, for the recent riots in Podgorica (see "RFE/RL Newsline," 15 January 1998). The spokesman added that Washington expects Milosevic to restrain Bulatovic and his supporters from resorting to violence in the future. PM


Robert Gelbard, the U.S. special envoy to the former Yugoslavia, told Milosevic in Belgrade on 15 January that unless Serbia and its political leaders accept "international standards of behavior and democratic processes..., the outer wall of sanctions will not be lifted." Those sanctions are linked to Belgrade's policy toward Bosnia and Kosovo as well as to progress on democratization in Yugoslavia itself. The Gelbard-Milosevic talks lasted nearly 12 hours and ended without a planned press conference taking place. PM


Mladen Ivanic has returned to Republika Srpska President Biljana Plavsic the mandate she had given him in late December to form a government, BETA news agency reported on 16 January. A statement released by Plavsic's office in Banja Luka said that Ivanic was unable to find a majority in the parliament for his proposed national-unity government of technocrats. The ultra-nationalist Serbian Democratic Party and its ally, the Serbian Radical Party, which together hold the largest bloc of seats in the parliament, opposed Ivanic. PM


William Walker, the chief UN administrator in eastern Slavonia, presented a UN flag on 15 January to Hrvoje Sarinic, an aide to President Franjo Tudjman, in the former front-line village of Borovo Naselje near Vukovar. The ceremony marked the return of eastern Slavonia to full Croatian control. Sarinic said that Croatia's priority is the return of Croatian and other non-Serb refugees to the region, which has had a Serbian majority since the Serbs took control of the area in 1991. Observers noted that the problem is that most of the refugees' homes have been damaged, destroyed, or taken over by Serbs, who have nowhere else to go. The Croatian authorities have been under strong international pressure recently not to further alienate the local Serbs by staging a triumphal celebration in Vukovar. Tudjman instead marked the reincorporation of eastern Slavonia by attending a special concert in Zagreb. PM


U.S. special envoy Gelbard brought a letter from President Bill Clinton to Vukovar on 15 January. Clinton noted that Croatia has observed the agreements that it signed on eastern Slavonia and that, in so doing, "Croatia has acknowledged that it could not be whole and united unless it was also tolerant and diverse." Clinton said he expects "Croatia to fulfill its responsibilities to guarantee equal treatment and full protection of the rights of all Croatia's citizens. We look to you to prove that people of different ethnic groups can resolve their differences and live together in peace." PM


Officials from the Slovenian Defense and Foreign Ministries confirmed on 15 January that Croatian police recently arrested and expelled two Slovenian intelligence agents. The men had crossed into Croatia in a van full of electronic listening devices. The two men admitted that they had crossed the border between Maribor and Varazdin illegally in order to better pick up an unspecified radio signal. Croatian authorities charged the men only with illegally crossing the border, and both sides sought to play down the incident. PM


Albanian Prime Minister Fatos Nano signed eight cooperation agreements in Skopje on 15 January, "Koha Jone" reported. The agreements provide for reducing customs tariffs, ending double taxation, launching joint investment projects in agriculture and transportation, and promoting cooperation in legal matters. Nano invited Macedonian President Kiro Gligorov to Tirana to sign a mutual friendship and cooperation agreement later this year. In the largely ethnic Albanian city of Tetovo, Nano attempted to discourage separatism by telling local people that the "only future of all citizens in the Balkans, wherever they their integration into a new Europe." Albanian nationalists clashed with police last summer in Tetovo and Gostivar. FS


The parliament on 15 January softened a 1995 lustration law, officially called the genocide law, to allow lower-ranking employees of the communist-era Interior Ministry to apply for jobs in the civil service, "Koha Jone" reported. The law had previously banned all communist-era Interior Ministry staff from state jobs. The lustration law remains in force for informers and others who collaborated with the secret service. It also applies to high-ranking Interior Ministry officials, former Politburo members, and people sentenced by any postcommunist court for criminal offenses. FS


The Democratic Convention of Romania (CDR) on 15 January called on the Democratic Party, its coalition partner, to reconsider its decision to withdraw support for Premier Victor Ciorbea. It said the Democrats have until 19 January to do so. Ciorbea's offer to step down as prime minister in order to resolve the crisis was rejected by the convention. CDR leader Ion Diaconescu said the alliance is not looking for other possible coalition partners and that if the Democrats do not reverse their decision, the outcome is likely to be early elections, RFE/RL's Bucharest bureau reported. Presidential counselor Petru Breteanu said President Emil Constantinescu will "initiate consultations" with the coalition partners to "do away with the tensions." Constantinescu will speak on television about the crisis on 17 January. MS


Democratic Party chairman Petre Roman on 15 January said the CDR's reaction should not be viewed only in its negative light, as the media are inclined to do. He said the CDR's call for a reconsideration is showing that "we are together, we have a joint pledge, and we want to solve the situation," Radio Bucharest reported on 16 January. Earlier, Democratic Party deputy chairman Traian Basescu said no other coalition can offer Romania the "external credibility" it needs. He called on President Constantinescu to mediate in the conflict. National Liberal Party Leader Mircea Ionescu-Quintus said the resignation of Premier Ciorbea would be "a bad thing for the country" but early elections are a "worse alternative, because they harbor a long period of instability." Meanwhile, the Bucharest stock exchange dropped by nearly five percent in response to the crisis. MS


John Hill, the IMF's representative in Bucharest, announced on 15 January that the fund is postponing a planned visit to Bucharest until the political situation there is clarified. The fund was to review the 1998 budget with the government. On 14 January, a delegation of the World Bank led by Kenneth Lay, the bank's chief negotiator for Europe, met with Ciorbea and members of his cabinet, RFE/RL's Bucharest bureau reported. Lay told journalists that the bank will continue to extend support to Romania for privatization and restructuring. In other news, an RFE/RL correspondent in Washington reported on 14 January that three Romanian and three U.S. firms have signed a $180 million accord to build and operate a liquefied petroleum gas terminal at the Black Sea port of Constanta (see "End Note" below). MS


At a press conference marking his first year in office, Petru Lucinschi on 15 January counted among his main foreign policy achievements the resumption of the dialogue with Tiraspol and the economic agreement reached with the separatists, RFE/RL's Chisinau bureau reported. Lucinschi said he has Russian President Boris Yeltsin's "clear promise" to withdraw the forces from the Transdniester whenever Moldova wishes, adding that this was now a matter of "time sequence." The withdrawal of troops before arms would mean that weapons would "be stolen," he argued. "Logically, armament is first withdrawn, and only then the troops," Lucinschi said. He also noted that Ukraine has agreed to the arms transit and that now "all we need is a timetable." MS


The opposition Socialist Party announced on 15 January it will move a no-confidence vote in the government over Prime Minister Ivan Kostov's health policy, BTA reported. The government recently introduced measures requiring patients to pay for out-patient treatment in state clinics, medical check-ups, and hospitalization if they seek treatment outside their area of residence. Medical aid has thus far been free of charge in state hospitals, and the government says the health insurance system can no longer finance the effective functioning of hospitals. In other news, in a 15 January letter to the Bulgarian Energy Commission and Bulgargas, Gazprom warns that it will stop deliveries if a new contract is not signed, ITAR-TASS reported. MS


by Robert Lyle

A Romanian-U.S. joint venture in liquefied petroleum gas (LPG) is expected to have an impact far beyond the relatively modest $180 million investment it will make in Romania over the next four years.

Romanian President Emil Constantinescu says the project will make Romania an energy and raw material hub for Central and East European imports from Central Asia.

The Black Sea LPG joint venture, which was formally signed into existence last week in Bucharest, will jump-start its operations with immediate construction of a new 1 million ton capacity LPG import terminal in the Black Sea port of Constanta.

LPG is a gaseous paraffin hydrocarbon found in crude oil and natural gas. It is made up primarily of propane and butane. It is used as a fuel itself, as an easily transportable source of propane gas for cooking and heating, and as a raw material for chemical synthesis.

Romania has been critically short of natural gas for heating and cooking for several years. Romanian officials have proposed their country as a natural gateway for ships carrying petroleum and natural gas from the newly developing fields in the Caspian Sea. But major oil flows remain a long way off, dependent on the contentious decisions on pipeline routes for the oil out of the land-locked states around the Caspian.

Romania's Black Sea port of Constanta is, however, a natural for receiving LPG from ocean tankers and distributing it within Romania and beyond into the Danube basin region.

The three U.S. companies involved in the Black Sea LPG joint venture--UGI Corporation, the largest U.S. marketer of propane gas, Energy Transportation Group, and North American World Trade--say world demand for LPG is expanding rapidly and that the Romanian venture is at a strategically important area to supply the local needs and to export efficiently and economically using the Danube and the region's extensive transportation network into the rest of East and Central Europe.

The new import terminal will be built at the entrance to the Cernavoda-Constanta Canal, which connects the deep-water port of Constanta to the Danube.

The first phase of the project will be completed by the end of 1998 so that Romania will be able, for the first time in many years, to meet the peak winter demand for gas.

By 2001, the entire project should be finished, including a 210 kilometer LPG pipeline to Bucharest and the construction of propane facilities in the capital and several other cities.

ROMGAZ, Romania's natural gas authority and one of the three Romanian partners, will mix propane from the LPG with air and inject it into Bucharest's gas grid to help satisfy winter peak gas demand. Renel, the state-owned electricity authority and the second Romanian partner, will use the LPG as another source of clean fuel for its generating plants in and around Bucharest.

ROMPETROL, the state-owned oil and gas holding company, is the third Romanian partner and will be involved in building and expanding facilities to use the LPG around Romania.

When completed, the facilities are expected to provide 600,000 tons of LPG to serve 85 million people in the Danube Basin.

ROMGAZ General Director Emil-Constantin Blaga says the import terminal is important because it will help the country diversify its sources of imported fuel. Renel Director-General Aureliu Leca says the electric utility is pleased to be involved because the additional fuel delivery infrastructure will make the privatization of Renel easier.

Brad Hall, the President of UGI Enterprises in the Central-Atlantic U.S. state of Pennsylvania, says his company considers the project is an outright winner. The "geography is compelling and the market potential is large," he says.

The co-chairman of Energy Transportation Group in New York, Kimball Chen, says his company believes that Romania is capable of tremendous economic growth and will be a "key player in the Black Sea region."

The U.S.-Romanian LPG joint venture is not the first to see the potential for Constanta. A recent study by Britain's Ocean Shipping Consultants says Romania is "ideally located to serve as transit gateway for many Central Asian bulk commodities such as crude oil, steel, aluminum, and steam coal."

Japan only last month agreed to lend Romania $194 million to upgrade the port's facilities, including road improvements. Last week, the European Bank for Reconstruction and Development approved a $13 million loan for construction of new grain-handling and storage facilities in Constanta.

Financing for the Black Sea LPG joint venture is expected to come from the World Bank and a group of commercial banks. The author is a Washington-based RFE/RL correspondent.