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Newsline - May 25, 1998


Unpaid coal miners on 24 May lifted their blockade of the Trans-Siberian railroad, which began in Anzhero-Sudzhensk (Kemerovo Oblast) 10 days earlier, Russian media reported. The move followed several days of negotiations between government representatives, led by Deputy Prime Minister Oleg Sysuev, and Kemerovo miners. Sysuev told journalists that the government has recognized the need to provide greater social support for miners, ITAR-TASS reported. The government has promised to spend 39 million rubles ($6.3 million) on creating new jobs for employees of mines slated for closure, and the Railroad Ministry has also pledged to allocate 53 million rubles toward helping miners find new jobs. On 15 May, the government proposed some 526 million rubles in spending cuts to free up extra funds for the coal industry (see "RFE/RL Newsline," 18 and 21 May 1998). LB


On 23 May, miners in Shakhty (Rostov Oblast) ended their six-day blockade of the North Caucasus Railroad. Deputy Prime Minister Boris Nemtsov held two days of negotiations with miners, local officials, and representatives of the mining company Rostovugol, NTV reported. According to ITAR-TASS, during Nemtsov's visit funds were found to pay three months of back wages to the miners. Meanwhile, as of 25 May, miners in Komi Republic continue to prevent freight trains from traveling on the Moscow-Vorkuta railroad. Economics Minister Yakov Urinson visited Komi but returned to Moscow on 23 May, having failed to end the protest. He promised miners that by the end of May, the government would find some 55 million rubles ($8.9 million) from various sources to help settle wage arrears. However, he said the government could not immediately help the miners receive all 172 million rubles that they are owed. LB


Prosecutor-General Yurii Skuratov told journalists on 22 May that President Boris Yeltsin considered it necessary to restore order in the coal industry and to investigate the actions of miners blocking railroads, ITAR-TASS reported. Following a meeting with Yeltsin, Skuratov quoted the president as saying that the miners had "gone too far" and that their actions violated the constitution. Skuratov also said Yeltsin believed that coal miners "have not yet learned to work in a market economy." The Railroad Ministry announced on 22 May that the stoppages had incurred 181.4 million rubles ($29 million) in financial losses for Russia's railroads. The blockades also hurt numerous industrial enterprises that could not transport their goods to markets or obtain vital supplies, such as fuel. LB


A police officer was shot dead on 23 May in the village of Karamakhi, southwest of the Dagestani capital, Makhachkala, Russian media reported. Some 25 police officers had converged on the village to investigate an attack on a police post two days earlier. The village inhabitants, most of whom are Wahhabis, surrounded the policemen and demanded that they surrender their weapons. The officers escaped, but shooting ensued in which an unknown number of people were injured. Additional policemen were brought to the district on 24 May but were later withdrawn after an agreement was reached with the villagers on investigating the previous day's killing. LF


A government resolution has named Foreign Minister Yevgenii Primakov, Defense Minister Igor Sergeev, and Interior Minister Sergei Stepashin to the cabinet's presidium, ITAR-TASS reported on 23 May. The other eight members of the presidium, named earlier this month, are Prime Minister Sergei Kirienko, Deputy Prime Ministers Nemtsov, Viktor Khristenko and Sysuev, Economics Minister Yakov Urinson, State Property Minister Farit Gazizullin, Finance Minister Mikhail Zadornov, and Science and Technology Minister Vladimir Bulgak. The functions of the presidium have not yet been clearly defined. LB


Kirienko told ITAR-TASS on 23 May that the government will provide financial support for Russia's military nuclear program. The prime minister on 22-23 May visited the federal nuclear research center in Sarov (formerly Arzamas-16, Nizhnii Novgorod Oblast) in order to prepare for a June session of the Security Council. That session will consider a government program for developing Russia's strategic nuclear forces, Kirienko said. Last July, on the eve of a gubernatorial election in Nizhnii Novgorod, then Prime Minister Viktor Chernomyrdin visited Sarov and promised that the government would pay its debts to the center. However, the Sarov center and nuclear research in general continued to face chronic underfunding (see "RFE/RL Newsline," 16 September and 22 December 1997). LB


The Communist Party of the Russian Federation (KPRF) held an extraordinary congress in Moscow on 23 May to adopt changes to the party charter and discuss strategy, Russian news agencies reported. The congress was closed to journalists, but according to a KPRF press release on 25 May, the congress adopted a statement calling for the president to step down, early presidential elections, and constitutional amendments to reduce presidential powers. Only a "massive popular protest" can force Yeltsin to step down, the statement said. The appeal also charged that unnamed "appeasers" in the leadership of the Communist- led Popular-Patriotic Union of Russia are "impeding the battle of the people for their rights." That union was formed in August 1996 out of parties and movements that supported Gennadii Zyuganov's presidential bid earlier that year. LB


KPRF leader Gennadii Zyuganov told journalists on 23 May that delegates to the party congress unanimously rejected an attempt to change the party's charter to allow groups to form "political platforms" within the KPRF, ITAR-TASS reported. Some members of the KPRF's Central Committee are trying to form a "Leninist- Stalinist platform," and State Duma deputy Valentin Kuptsov, a high-ranking KPRF official, told Interfax on 23 May that a Central Committee plenum in June will involve a "detailed discussion" of that platform. The Communist dissenters have released a statement saying the formation of a Leninist-Stalinist platform is needed because "the influence of national-reformist and religious-democratic views within the [Communist] party leadership has grown, and the deviation from Leninist ideological and organizational principles of party-building has strengthened," Interfax reported on 24 May. LB


The State Duma on 22 May elected Communist legal expert Oleg Mironov as Russia's human rights commissioner, RFE/RL's Moscow bureau reported. Mironov ran unopposed in the second round of balloting, because in the first round, he was the only one of the 11 candidates for the job who received the two-thirds majority needed to advance to the second round. Mironov will give up his Duma seat, but he told NTV on 22 May that as human rights commissioner, he will retain his immunity from criminal prosecution unless the Duma votes to strip him of it. The Duma sacked Sergei Kovalev, an outspoken critic of the war in Chechnya, as its human rights commissioner in March 1995. LB


Although the federal constitutional law outlining the duties of Russia's human rights commissioner was adopted in March 1997, attempts to elect a commissioner in April and September of that ended in stalemate. In each attempt, Mironov gained more votes than any other candidate, but no candidate received enough votes to advance to the second round of balloting in the Duma. A deal between the Our Home Is Russia (NDR) and Communist factions finally broke the deadlock, RFE/RL's Moscow bureau reported on 22 May. The Communists agreed to allow the NDR to appoint Roman Popkovich as Duma Defense Committee chairman, replacing Lev Rokhlin (see "RFE/RL Newsline," 21 May 1998). In exchange, the NDR agreed to support Mironov as human rights commissioner. LB


Duma Speaker Gennadii Seleznev says the lower house of the parliament will on 2 June consider a Communist-backed motion to impeach Yeltsin, Interfax reported. Many Russian commentators say the Duma has no chance of forcing Yeltsin to end his term and have described the impeachment effort as a publicity stunt to shore up support within the Communist camp. The constitution outlines an arduous procedure for removing the president from office. First, at least two-thirds of Duma deputies must support an impeachment motion. Second, the Supreme Court must rule that there is evidence the president committed high crimes or treason. The Constitutional Court must then rule that no procedural violations were committed during the adoption of the impeachment motion. Finally, at least two-thirds of Federation Council deputies must vote to remove the president from office. LB


Also on 22 May, the Duma passed a resolution asking the president and government to preserve the Ministry for Cooperation with CIS States, ITAR-TASS reported. That ministry was created in summer 1996, but Yeltsin recently ordered that it be abolished and that its functions be transferred to the Foreign Ministry. Boris Pastukhov was recently named first deputy foreign minister in charge of relations with the CIS. LB


Russian oil exporting company Zarubezhneft and Vietnam's PetroVietnam on 22 May signed a deal to construct the first oil refinery in Vietnam, ITAR-TASS reported. The refinery will be built in Quang Ngai Province by 2001 and will have an annual capacity of 6.5 million tons of oil. The estimated cost of the project is $1.3 billion. Zarubezhneft expects that its investment will be returned after five years of operation. Russian Deputy Minister of Fuel and Power Anatoly Kozyrev said it may be possible to "increase the status of the agreement" and have it signed as a Russian-Vietnamese governmental accord on cooperation in the fuel and energy sector. BP


At a 22 May meeting in Tbilisi of the UN-sponsored Coordinating Council, Georgian and Abkhaz representatives signed a cease-fire agreement aimed at ending sporadic clashes over the past several days between Georgian guerrillas and Abkhaz police in Abkhazia's southernmost Gali Raion. But the same day, four people were killed in new fighting in the village of Tskhiri, and fierce hostilities continued on 23-25 May. More than 20 Georgian civilians, four Georgian guerillas and 40 Abkhaz troops have been killed in the past few days, according to ITAR-TASS. On 23 May, Georgian officials denied Abkhaz claims that Georgia has airlifted Interior Ministry forces to the region. Meanwhile, Georgian guerrilla leader Zaur Samushia on 25 May warned that his men will target the Russian peacekeeping force deployed in Abkhazia unless that force stops supplying the Abkhaz with artillery. Georgian Television reported that some 15,000 Georgian repatriates to Gali have again been force to flee fighting in the area. LF


The Georgian National Security Council on 23 May adopted unspecified measures to aid the Georgian fugitives from Abkhazia, Interfax reported. Georgian parliamentary chairman Zurab Zhvania telephoned twice with Abkhaz President Vladislav Ardzinba to discuss how to "normalize" the situation in Gali. Georgia's ambassador to Russia, Vazha Lortkipanidze, met with Ardzinba on 24 May in Sukhumi and drafted a protocol aimed at ending hostilities, Reuters reported. The Georgian Foreign Ministry issued a statement the same day calling on the UN and the Russian peacekeeping force to take all possible measures to end the fighting. Addressing Georgian fugitives in Zugdidi, close to the border with Abkhazia, Georgian Defense Minister Davit Tevzadze warned that "we cannot unleash a full-scale war." LF


Vartan Oskanian said on 21 May that Armenia currently advocates neither complete independence for the unrecognized Nagorno-Karabakh Republic nor its unification with Armenia. He explained that Yerevan wants the relationship between the region and the central Azerbaijani government to be one of two equal entities, RFE/RL's Yerevan bureau reported. NKR President Arkadii Ghukasian had told "Respublika Armeniya" on 19 May that Nagorno-Karabakh is de facto an independent state but is prepared to compromise on concluding "parity and treaty relations" with Azerbaijan. Four days earlier, Armenian parliamentary speaker Khosrov Harutiunian said the agreement on bilateral cooperation concluded between the parliaments of Armenia and the NKR constitutes "de facto but not de jure" recognition by Armenia of the NKR's independence from Azerbaijan, RFE/RL's Stepanakert correspondent reported. LF


The Turkish Foreign Ministry issued a statement on 23 May criticizing an Armenian Foreign Ministry protest against plans to have Istanbul as the venue of the next bi- annual summit of the Organization for Security and Cooperation in Europe, the "Turkish Daily News" reported on 25 May. That summit, scheduled to take place in 1999, is to adopt a landmark charter on a European security model for the 21st century. An Armenian Foreign Ministry spokesman told journalists on 21 May that Foreign Minister Oskanian informed his OSCE counterparts that Armenia will oppose the choice of Istanbul as venue for the 1999 summit. The spokesman said Armenia cannot agree to sign the OSCE charter in a country with which it has no diplomatic relations and that has blockaded Armenia for the past five years. The Turkish Foreign Ministry expressed surprise at the Armenian protest, noting that Armenian officials have attended summits of the Black Sea Economic Cooperation in Turkey. LF


Speaking at a press conference on 22 May, Sheikh-ul-Islam Haji Allakh-Shukur Pashazade, the head of the Spiritual Department of Muslims of Azerbaijan, claimed that the activities of Hare Krishna, Wahhabi, and Christian missionaries have created a "dangerous situation" and could "split the country," Turan reported. Pashazade said his department has written to heads of all Baku local councils asking them for information on "illegal activities" by religious bodies. He also said that using the terms "Allah" and "Prophet" in addressing or greeting Azerbaijani President Heidar Aliyev constitutes a "sin." LF


Lawmakers on 23 May adopted a draft law banning religious parties and parties that receive financing or "ideological guidance" from other countries, RFE/RL correspondents reported. The law also prohibits parties whose goals include the overthrow of the constitutional system or inciting inter-ethnic, social, or religious unrest. The leader of the United Tajik Opposition (UTO), Said Abdullo Nuri, has requested that President Imomali Rakhmonov veto the law. The backbone of the UTO is the Islamic Renaissance Party, which was first banned in 1993. Nuri said that such legislation must be proposed by the National Reconciliation Commission, which he heads. Under the new legislation, it appears that the Communist Party's property will be nationalized. A member of that party said the law will leave only the president's party registered ahead of elections scheduled for next year. BP


The debate on political parties precluded a second vote on the candidacy of UTO members Khoja Akbar Turajonzoda as first deputy prime minister and Davlat Usmon as economics minister. The parliament had voted against both on 21 May, and a second vote had been expected to take place the following day, after Rakhmonov returned from a donor conference in Paris. Nonetheless, lawmakers did find time to adopt a law defending the honor of the president, ITAR-TASS reported. Insulting or slandering the president is now punishable by a fine or prison sentence. Moreover, only the president of Tajikistan can use the title "president." Heads of enterprises and organizations must employ another designation. Finally, a law on security agencies was adopted that largely leaves the agencies' powers in tact. A number of deputies had wanted those powers curtailed. BP


Following an accident in which nearly two tons of sodium cyanide leaked into a river close to Kyrgyzstan's biggest lake, Issik-Kul (see "RFE/RL Newsline, 22 May 1998), Deputy Environmental Minister Tilekbai Kyshtobayev said at the scene of the accident that "there are no grounds for panic. No ecological disaster is expected," ITAR-TASS reported. That viewpoint was echoed by Gerhard Glates, the head of the nearby Kumtor gold mine. Glates said there will be no serious environmental consequences and that his company will cover all expenses for the cleanup. BP


Both ITAR-TASS and RFE/RL correspondents report that dead fish and cattle have been found near the scene of the accident. They also say that residents of the area have been warned against drinking unboiled water or swimming in the river or lake. Minister of Ecology Kulubek Bokonbayev told RFE/RL correspondents that since the 20 May accident, some 250 residents of the Issik-Kul region have sought medical help. Issik-Kul is a major tourist attraction in Central Asia. BP


Some 1,000 miners have begun to march from Dnipropetrovsk to Kyiv to demand wage arrears for the last 10 months, ITAR-TASS reported on 24 May. Some 3,000 miners from the Pavlovhrad mining basin have remained in Dnipropetrovsk to picket the regional administration building. They threaten to travel by bus to Kyiv on 26 May unless the directors of Pavlovhrad mines resume hot food supplies to protesters. Those supplies were suspended following the directors' claim that they have no money for transportation expenses. Following a 100-kilometer march, some 1,000 miners from Pervomaysk arrived at Luhansk to demand back wages from the oblast administration. On 22 May, the government released a statement saying that the miners' strikes are a "planned political action" and accusing the miners of an "unwillingness to seek a reasonable compromise" with the government. JM


With only 214 out of 437 deputies taking part in the vote, the parliament on 22 May failed to elect a speaker, Ukrainian Television reported. The caucuses of the Popular Rukh, the Social Democrats, the Popular Democratic Parties, and the Greens refused to pick up ballots, and thus the necessary two-thirds majority of deputies present at the session was not achieved. Of the five candidates for the post, Communist Party leader Petro Symonenko obtained 191 votes. JM


Eduard Hurvits says he wants a referendum on his mayoralty after the Supreme Court upheld the decision of an Odessa district court annulling his election in March, Ukrainian Television reported. The district court ruled in favor of Hurvits's rival Ruslan Bodelan, saying that the city electoral commission, which is mostly made up of Hurvits appointees, violated the electoral law. Last week, a 200-strong commission, headed by Prime Minister Valeriy Pustovoytenko, was in Odessa to investigate Hurvits's election. Pustovoytenko sharply criticized Hurvits for the way he was running his office and called Odessa the most crime-infested city in Ukraine. Observers say President Leonid Kuchma may introduce direct presidential rule in Odessa to end the standoff. JM


Aleksander Kwasniewski and Leonid Kuchma on 24 May called for international institutions to urgently grant Kyiv help for vital economic reforms, Reuters reported. Together with Lithuanian President Valdas Adamkus, Kwasniewski and Kuchma were taking part in a two-day Polish-Ukrainian business forum in Rzeszow, southeastern Poland. Kwasniewski rejected arguments put forward by the IMF and the World Bank that Ukraine should tackle reform before it receives assistance. "Each day of delay may be impossible to catch up," Kwasniewski commented. Kuchma voiced fears that Poland's intended membership in the EU may create a barrier between Poland and Ukraine. JM


Guntars Krasts told nationwide radio on 22 May that the recent increase in Communist activities in Latvia can be attributed to the upcoming general elections and the tensions in relations between Riga and Moscow, BNS reported. Krasts noted that there are organizations in Latvia that tend toward "violent methods." He also urged that an investigation be carried out into the 14 May rally in a Riga park, which was attended by youths attired in communist and fascist regalia. JC


President Valdas Adamkus on 22 May signed a decree appointing attorney Stasys Sedbaras as minister of internal affairs, BNS and Reuters reported. The previous day, Adamkus had accepted the resignation from that post of Vidmantas Ziemelis, whom many held responsible for the ministry's inability to solve the recent wave of bomb attacks in the country (see "RFE/RL Newsline," 22 May 1998). Sedbaras is a former Constitutional Court judge and until recently worked as a government consultant on state and human rights issues. "My most important task will be to strengthen the police force and to give more autonomy to the different divisions of the ministry," the new minister told Reuters. JC


Stephen Flangan, special adviser to President Bill Clinton, told journalists in Bratislava on 22 May that the U.S. is concerned about Slovakia's new electoral law and warned that irregularities in the elections scheduled for September could hinder Bratislava's efforts to join NATO and the EU, Reuters and CTK reported. Flangan said it is not only the law but also possible non-compliance with Organization for Security and Cooperation in Europe recommendations that endangers Slovakia's international reputation. Slovak parliamentary chairman Ivan Gasparovic on 22 May rejected an opposition demand that OSCE observers be invited to monitor the elections, despite the fact that the government has said such observers will not be banned. MS


Foreign Minister Wolfgang Schussel on 22 May handed over to the Slovak charge d' affaires in Vienna a report drawn up by an international commission on the controversial Mochovce nuclear plant. Earlier the same day, Slovakia protested against the occupation of its embassy by anti-nuclear protesters (see "RFE/RL Newsline," 22 May 1998). The protesters were evicted by the Austrian police after six hours. Also on 22 May, the Greenpeace environmentalist movement announced it intends to take legal action against the Slovak state electricity company, Reuters reported. MS


With 148 seats in the 386-strong parliament, the opposition Federation of Young Democrats-Hungarian Civic Party (FIDESZ-MPP) has emerged as the largest party in the parliament following the 24 May runoff. The Socialist Party gained 134 seats, followed by the Independent Smallholders' Party (FKGP) with 48 seats, the Alliance of Free Democrats (SZDSZ) 24, the Hungarian Democratic Forum (MDF) 17, and the far-right Hungarian Justice and Life Party 14 seats. One seat was won by an independent candidate. At 57 percent, turnout was higher than in the first round. Since 194 seats are required for a simple majority in the parliament, it is still uncertain whether the next government will be a FIDESZ-MDF-FKGP coalition or a "grand coalition" of FIDESZ and the Socialists. MSZ


FIDESZ-MPP leader Viktor Orban said he expects a new government to be formed within four weeks but added that it is premature to speak about which party will join the FIDESZ-MDF alliance in the new coalition. Outgoing Prime Minister Gyula Horn advised FIDESZ to "focus on stability" when forming the new cabinet. SZDSZ party leader Gabor Kuncze, together with the entire executive board of the party, resigned because of the SZDS's poor performance. He said the party will remain in opposition. MSZ


Serbian guns pounded ethnic Albanian villages in the vicinity of Klina on 23 and 24 May. Western journalists said the attacks on the settlements appeared to have been going on for several days and that most local Kosovars have fled. They also said Serbian paramilitaries as well as the police and army took part in attacks on Kosovar villages in the Gjakova area near the Albanian frontier on 23 May. According to Serbian sources, forces of the Kosova Liberation Army (UCK) shot at Serbian columns there. Serbian spokesmen in Prishtina charged that armed Kosovars took a Serbian police official off a train between Prishtina and Klina. He is the 15th Serb to be kidnapped since the Serbian offensive began in February, none of whom has been heard of since, Reuters reported. Serbian and Kosovar sources say the UCK has set up detention camps in some areas. PM


A spokesman for the Kosovar leadership said in Prishtina on 23 May that Yugoslav President Slobodan Milosevic continues to conduct talks with Kosovars representatives at the same time as his "military and paramilitary forces attack the Albanian population" in Kosova. The spokesman called the two-pronged policy "dangerous," because it hinders efforts to find a peaceful, political solution to the region's problems, RFE/RL's South Slavic Service reported. The next day, Veton Surroi, who is a leading Kosovar spokesman, told Belgrade's Radio B-92 that progress in finding a political solution to the Kosovar crisis would help put an end to fighting. PM


Fehmi Agani, who led the Kosovar delegation in talks with Serbian officials on 22 May in Prishtina, said that both sides agreed to continue discussion this week in Belgrade, despite major differences between them. Christopher Hill, who is the U.S. ambassador to Macedonia, was present at the talks as what U.S. sources called "an observer." Agani stressed after the talks that top priorities for the Kosovars are securing an end to the Serbian blockade of Kosovar commercial traffic, which has led to widespread food shortages, and the cessation of hostilities by Serbian forces. In Barcelona, NATO Secretary-General Javier Solana said international mediation will be necessary to end the crisis in Kosova and that "the only person who has the mandate from the international community [to negotiate] is...[Spain's] Felipe Gonzalez." PM


The Assembly of the Serbian Orthodox Church issued a statement in Belgrade on 23 May calling for an end to "violence and terrorism" in Kosova. Church leaders expressed concern over recent clashes in the province and warned that dialogue is the only means to a settlement. The assembly also called on Serbian and ethnic Albanian leaders to include representatives of Kosova's other ethnic groups in the talks. PM


Albanian President Rexhep Meidani said in Tirana on 22 May that "only an international, active, and deterrent presence in Kosova and the region that involves establishing monitoring missions along the borders of its neighbors can guarantee the continuity of the [Kosovar-Serbian] talks...[and prevent] the further radicalization of the situation." He added that "ethnic cleansing of Albanians from the cradles of their ancestors, even genocide [of the Kosovars]...remind us of Bosnia, which is still fresh in our collective imagination." Albania has repeatedly called for the stationing of NATO troops along its border with Kosova. NATO is currently examining options to help contain the fighting in Kosova. In Barcelona on 23 May, Kosovar shadow-state Foreign Minister Edita Tahiri asked representatives of the Atlantic alliance to send troops into Kosova itself. PM


President Meidani made those remarks in Tirana on 22 May to the deputy defense ministers of Albania, Bulgaria, Greece, Italy, Macedonia, Romania, and Turkey. Those officials signed a letter of intent to set up a joint regional peacekeeping force that will consist of up to 3,000 soldiers in cooperation with the UN, the OSCE, and NATO. Officials from the U.S. and Slovenia signed the letter as observers. A formal agreement to launch the force is slated to be signed in Skopje on 26 September, RFE/RL's South Slavic Service reported. It is unclear when the contingent will be set up. PM


Police spokesmen said in Podgorica on 22 May that they have filed charges against three bodyguards of Yugoslav Prime Minister Momir Bulatovic for possessing illegal weapons. Outside the Montenegrin capital, police and supporters of President Milo Djukanovic clashed with backers of Bulatovic, who is Djukanovic's rival (see "End Note" in "RFE/RL Newsline," 22 May 1998). Some Djukanovic supporters stoned Bulatovic's car, which prompted a Bulatovic spokesman to charge Djukanovic with using "tyranny" against his opponents. PM


Carlos Westendorp, who is the international community's chief representative in Bosnia, said in Barcelona on 23 May that he wants NATO to arrest Radovan Karadzic, who heads the list of indicted war criminals, and deliver him to the Hague-based war crimes tribunal. "I said two months ago that Karadzic should be in The Hague in April. He's not in The Hague and I am very sorry for that, and I think that if he doesn't go on a voluntary basis it is the responsibility of our [NATO] nations to bring him to The Hague." In April, "The Washington Post" reported that a French officer warned Karadzic that he was about to be arrested, prompting Washington to call off the operation. The French Defense Ministry denied the story. PM


Police on 22 May confiscated a ton of dynamite from the premises of a construction company in Vora, near Tirana. The company, which mainly produces bricks, has a license to buy explosives from the army for professional use. Police spokesmen said the company does not have permission to store such large amounts of explosives and does not have the necessary documentation to prove that it had acquired the dynamite legally. "Koha Jone" quoted experts as saying that the dynamite would have been sufficient to destroy large parts of the city had it gone off by accident. FS


The parties represented in the national government coalition and two other parties signed a pact on 23 May for the 21 June local elections. They agreed to create the Alliance for the State and nominate joint candidates for the seven municipalities and nine smaller communities that will participate in the vote (see "RFE/RL Newsline," 22 May 1998). FS


At a 22 May meeting convened to discuss the consequences of the cigarette smuggling affair, the Supreme National Defense Council announced it will reduce the staff of the Service for Protection and Guard by 25 percent and disband the intelligence service known as Military Unit 0215. That unit was set up in 1990 and subordinated to the Ministry of Internal Affairs. Citing the council's official communiqu, RFE/RL's Bucharest bureau reported that Military Unit 0215 included "people who were members of the former [communist] political police." The council also noted that 22 percent of the staff of the Romanian Intelligence Service were employees of the former Securitate who are now engaged in "strictly technical activities." The Foreign Intelligence Service is 41 percent composed of former Securitate employees who, according to the council, were not engaged in "political police activities" before 1989. MS


Standard & Poor's has downgraded Romania's credit rating from BB- to that of B+, which means doing business in the country is now considered to be riskier. The warning is directed primarily at potential lenders, but is likely to discourage foreign investors as well, RFE/RL's Bucharest bureau reported. As reasons for the downgrading, the agency mentioned political instability, foreign currency vulnerability, and the slow pace of economic reforms. Finance Minister Daniel Daianu said the decision was "hasty" and unjustified by the real economic situation. MS


Ivan Kostov on 23 May traveled to the southern town of Dzhebel to seek to persuade some 1,000 tobacco farm workers, mainly ethnic Turks, to end their strike, an RFE/RL correspondent in Sofia reported. They are protesting a German-Bulgarian joint venture's failure to pay for last year's tobacco harvest. Kostov announced that the Bulgartabak state enterprise will immediately start paying the workers the money they are owed. Analysts say Kostov's intervention is unusual since he has refused to discuss strikers' demands in other protests. The visit took place just days after a large rally in Dzhebel commemorated the communist suppression of ethnic Turks. Leaders of the ethnic Turk Movement for Rights and Freedom, including chairman Ahmed Dogan, were booed by the rally participants, who accused them of failing to protect minority rights. MS


by Michael Wyzan

The leadership of Turkmenistan has chosen to move slowly on economic reform. It is tempting to see that attitude as indicative of the government's unwillingness to jettison the command economy owing to a lack of interest in establishing market institutions or its desire to keep on the old guard at enterprises and in ministries.

However, there are structural features of Turkmenistan's economy that make reform unusually difficult. Production and exports are dominated by gas, cotton, and oil. In 1994, gas accounted for 66 percent of both GDP and export revenues. Those percentages have declined enormously since then (gas represented less than 21 percent of GDP in 1997), but that the decline is the result of falling gas production and exports, rather than of increased output and exports of other goods. Once pipeline issues are settled, gas will undoubtedly resume its commanding position in the economy.

Turkmenistan's energy sector is dominated by five monopolies. Since January 1996, the functions formerly belonging to the Ministry of Oil and Gas have been performed by five enterprises: gas exports are under Turkmenrosgaz, which is 51 percent owned by Turkmengaz (the state monopoly responsible for gas production), 45 percent by Gazprom, and 4 percent by a Russian trading company. The other four monopolies are Turkmenneftegaz (oil and gas marketing), Turkmenneft (oil production), Turkmenneftgazstroy (construction), and Turkmengeologia (exploration).

Countries are usually hesitant to privatize such strategically important assets, and even when such companies are privatized, they tend to wield enormous power both domestically and abroad (as in the case of Gazprom). The distribution and sale of gas are a natural monopoly; there is always only one pipeline from a gas field to a given destination The real question concerns the fate of the revenues generated for the state by the energy sector: are they used to diversify the economy and to allow the entire population to share in the wealth?

The other mainstay of the economy is agriculture, especially cotton. Production and exports of the crop have plummeted since the Soviet era, but it has accounted for as much as 18.5 percent of GDP and almost 21 percent of exports (both figures from 1995).

Cotton production is another sector in which it is difficult to employ conventional privatization methods. Peasants continue to work on the large farms that are the descendants of the Soviet kolkhoz. When growing an industrial crop (that is, one intended for processing) under desert conditions, the key issues are access to water and the provision of credit and procurement activities.

Those activities remain in the hands of the state. Local branches of the Ministry of Water make all decisions on water allocation; this is not surprising, given that once again this activity is a natural monopoly. However, although purchasing the cotton harvest and providing credits to farmers are also large-scale activities, it is less clear why they should be undertaken by the state.

Moreover, agriculture has seen little reform. The provincial authorities continue to own most of the land and to set output targets for producers of cotton and wheat. Under a December 1996 decree, land is leased to farmers free of charge for 10-15 years; for the first two years, they are required to grow and achieve target yields for specified products. If at the end of this period performance is acceptable, as judged by a local commission, the farmer earns the right to grow whatever crops he sees fit, to lease the land, and to use it as collateral; he may not sell it, however.

Banking remains specialized and noncompetitive. One commercial bank, Investbank, is responsible for crediting the gas sector, while 53 local branches of the Daykhan Bank provide banking services to the former Soviet collective farms.

The reform approach has also been timid for industrial enterprises that cannot be deemed natural monopolies. A program in September 1994 listed 4,343 enterprises to be privatized. Although the list contained all state firms except those in various sectors, in practice only small enterprises have been privatized, mostly through sale to their employees.

However, there has been some progress recently on privatization. Legislation passed in March 1997 stipulates that industrial enterprises will be privatized by auction and that foreigners may participate in the auctions (and own up to 50 percent of firms). In February, it was decided that 18 medium-sized enterprises would be turned into open joint-stock companies and the stock sold to the public. Moreover, Turkmenistan has been successful in forming joint ventures with Turkey (and other Western countries) for producing textiles. During his recent visit to the U.S., President Saparmurat Niyazov said that there are such facilities in the country.

However, unless attempts are made to privatize the energy and agricultural sectors, Turkmenistan will remain one of the world's few economies with most of production in the hands of the government. The author is an economist living in Austria.