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Newsline - May 27, 1998


Prime Minister Sergei Kirienko announced on 26 May that the auction for 75 percent plus one share of the state-owned oil company Rosneft will be declared invalid because no bids have been submitted, Russian media reported. He said the government will announce within one week new terms for selling a controlling stake in the company. During the last two months, potential investors repeatedly charged that the government was asking too much for the Rosneft stake (the minimum bid was some $2.1 billion, plus $400 million to invest in the company). In recent days, "Nezavisimaya gazeta" and "Kommersant-Daily" have both alleged that the cash-strapped government was putting pressure on the gas monopoly Gazprom to purchase Rosneft. "Kommersant- Daily" reported on 27 May that shortly before the deadline for submitting bids, Kirienko discussed the Rosneft sale with Gazprom head Rem Vyakhirev and Vladimir Potanin, the founder of Oneksimbank. LB


Russian share values continued to post steep declines in early trading on 27 May after being battered the two previous days. The benchmark index for the stock market dropped by some 7 percent and is down more than 50 percent since the beginning of 1998. According to Reuters, the index has reached an 18-month low. One Western broker quoted by Reuters said a "blind panic" has hit the market. Also on 27 May, prices for government treasury bills (GKOs) continued to fall, pushing up yields that already exceeded 60 percent at the end of the previous day. Speaking to an RFE/RL correspondent in Moscow, an analyst for a Western investment bank suggested that the failure of the Rosneft auction was widely expected and is not the primary cause of the latest market declines. LB


Prime Minister Kirienko and Finance Minister Mikhail Zadornov on 26 May insisted that the government is not considering a sharp devaluation of the ruble, Russian news agencies reported. But "Kommersant-Daily" on 27 May argued that the threat of devaluation is growing and advised readers to put their money in dollars. The newspaper said "only a crazy person could recommend investing money in shares that have almost halved in value in two weeks." "Nezavisimaya gazeta" on 27 May argued that earlier this year the authorities maintained the ruble at an artificially high level and said "sooner or later" there will be a devaluation. The newspaper, which is financed by CIS Executive Secretary Boris Berezovskii's LogoVAZ group, also argued that "the unpredictability of [President Boris Yeltsin's] policy is the main factor in all economic crises in recent years." LB


"Russkii telegraf" and "Kommersant-Daily" on 26 May reported that the government is seeking a special credit from the IMF to help stabilize the markets and prevent a ruble devaluation. Deputy Prime Minister Viktor Khristenko said Russia is conducting negotiations with the IMF and the World Bank on "various forms" of possible financial support, Russian news agencies reported. But Finance Minister Zadornov said the government has made no formal requests for funds from international financial organizations. "Kommersant-Daily" said the IMF is considering a request for several billion dollars. The fund has not yet announced a decision on releasing the next $670 million tranche of a four-year, $10 billion loan to Russia, but an IMF statement on 26 May praised the government's plans to cut spending. Yeltsin signed a decree the same day on measures to reduce expenditures by 40 billion rubles ($6.5 billion) this year, according to Khristenko. LB


Coal miners in Inta (Komi Republic), who started the recent wave of protests that crippled several major Russian railroads, on 26 May agreed to end their nearly two-week blockade of the Vorkuta-Moscow line, Russian news agencies reported. Some 55 million rubles ($8.9 million) from various sources has arrived in Inta in recent days, enough to cover part of the wage arrears owed to the miners. But Tatyana Loginova, a spokeswoman for the local coal company Intaugol, told Interfax that the miners will resume their "rail war" if the money the federal government promised to help deliver does not arrive by 5 June. Economics Minister Yakov Urinson said that as part of the agreement reached with the Inta miners, the government has promised not to ask prosecutors to file criminal charges against those who blocked the railroads (see also "End Note" below). LB


Railroad Minister Nikolai Aksenenko announced on 26 May that his ministry plans to file suits in arbitration courts to compensate for some of the losses caused by the recent blockades staged by unpaid coal miners, ITAR-TASS reported on 26 May. The ministry estimates that the protests cost railroad companies more than 460 million rubles ($75 million). He did not specify who would be the targets of such lawsuits. It is unclear how the unpaid miners who blocked the railroads could be forced to pay damages to the Railroad Ministry. Meanwhile, workers in the Mosbass coal-mining region of Tula Oblast have decided not to block major transportation routes after receiving 27.7 million rubles in the last four days, enough to cover two months of back wages, ITAR-TASS reported on 26 May. LB


When they cannot pay their workers, Russian enterprises often pay their employees in kind by allowing them to shop from special stores and deduct the amount spent from the wages they are owed. While such payment schemes help workers survive during long stretches without paychecks, they often cheat them out of the value of their wages. Special stores run by enterprises sell products at prices far higher than the market value of the goods. For instance, "Kommersant-Daily" on 26 May quoted one coal miner in Rostov Oblast as saying employees at his mine were offered Daewoo video cassette recorders in lieu of cash. But those who accepted the VCRs had 1,800 rubles ($292) deducted from their back wages, even though such VCRs sell locally for 700 rubles. LB


Federal Border Service Director Nikolai Bordyuzha says his service will not be merged with the Federal Security Service (FSB), Interfax reported on 26 May. Earlier this year, Bordyuzha said the president would issue a decree subordinating the border service to the FSB (see "RFE/RL Newsline," 28 January and 4 February 1998). But he told journalists on 26 May that the authorities have determined that it is "expedient" to preserve the border service as a separate entity, which will closely coordinate its activities with other law enforcement bodies, including the FSB. State Duma deputy Andrei Nikolaev, Bordyuzha's predecessor, was a vocal critic of the plans to merge the border and security services. LB


Russia and Norway on 26 May signed an environmental protection agreement that calls for Russian decommissioned nuclear submarines in the Barents Sea to be dismantled, ITAR-TASS reported. Norway will grant loans to Russia worth $35 million to help finance scrapping the old submarines because Moscow is unable to pay for the disposal of radioactive waste. However, Russia's Atomic Energy Ministry said it will take several billion dollars to complete the task. Many of the submarines still have nuclear fuel aboard and are slowly rusting in docks. Also on 26 May, the Norwegian companies Statoil and Norsk Gidro signed a protocol on cooperation with Russia's Gazprom to develop a natural gas field in the Barents Sea. BP


Yeltsin met with seven regional leaders in the Kremlin on 26 May and expressed regret that "a kind of gap has appeared between the governors and the president," NTV and ITAR-TASS reported. Those present were heads of seven of Russia's eight regional associations: Sverdlovsk Oblast Governor Eduard Rossel (representing the Urals association), Astrakhan Oblast Governor Anatolii Guzhvin (the Greater Volga association), North Ossetian President Aleksandr Dzasokhov (North Caucasus association), Khabarovsk Krai Governor Viktor Ishaev (Far East and Trans-Baikal association), Novosibirsk Oblast Governor Vitalii Mukha (Siberian Accord), St. Petersburg Governor Vladimir Yakovlev (North-west association), and Yaroslavl Oblast (Central Russia). Yeltsin promised to meet with the leaders of all regions in late June. The Federation Council, composed of top legislative and executive officials from each region, has increasingly proved willing to adopt legislation opposed by the president (see "RFE/RL Newsline," 21 May 1998). LB


Oleg Dobrodeev, the director-general of the private network NTV, on 26 May responded to Yeltsin's recent charge that media owners are sometimes "the worst censors" (see "RFE/RL Newsline," 26 May 1998). Addressing the world congress of the International Press Institute, Dobrodeev said Yeltsin "offended" many journalists who work for private outlets and understand "the value of free speech," "Kommersant-Daily" reported on 27 May. He noted the authorities are accustomed to viewing television as a political weapon and that journalists partly contributed to that view through their near-unanimous support for Yeltsin's 1996 presidential campaign. (Dobrodeev's predecessor as NTV director, Igor Malashenko, openly worked for Yeltsin's campaign team.) But Dobrodeev predicted that the experience of 1996 will not be repeated in future elections. In an interview with Interfax on 26 May, Dobrodeev promised that NTV will provide "impartial and objective" coverage of the next presidential race. LB


At a parliamentary session on 26 May, Mintimer Shaimiev proposed Prime Minister Farid Mukhametshin to succeed Vassilii Likhachev as parliamentary chairman, RFE/RL's Kazan Bureau reported. Likhachev was appointed Russian permanent representative to the EU earlier this month. The leader of the opposition Tatar Public Center, Fandas Safiullin, has proposed Challi Mayor Rafgat Altynbayev, to succeed Likhachev. "Nezavisimaya gazeta" on 22 May suggested that Shaimiev is eager to replace Mukhametshin as premier because of the latter's inability to manage the republic's economy. LF


The State Council on 26 May voted to proceed with the elections scheduled for 26 June to the council's chairmanship, "Nezavisimaya gazeta" reported. But Security Council Chairman Magomed Tolboev told Interfax he thinks the elections should be postponed for one year to allow for the republic's constitution to amend to provide for direct elections to that post. At present, the State Council chairman is elected by a constituent assembly composed of council deputies and representatives of Dagestan's 34 ethnic groups. Direct elections to that post were one of the demands made by Union of Muslims of Russia chairman Nadirshakh Khachilaev, whose armed supporters temporarily occupied the government building in Makhachkala last week. A Makhachkala police official has said that criminal proceedings may be brought against Khachilaev and his brother for that action. LF


Abkhaz forces have established control over the 12- kilometer security zone on the Abkhaz side of the border between Abkhazia and the rest of Georgia, expelling the last remaining Georgian guerrillas after overnight fighting, AFP reported on 27 May. The Abkhaz have reportedly also taken control of the Inguri hydroelectric power station close to the border. LF


Former Georgian Security Minister Shota Kviraya has accused unnamed foreign intelligence services of instigating Georgian guerrillas to undertake the attack that triggered the fighting, Caucasus Press reported on 27 May. "Nezavisimaya gazeta" reported that Russia and the UN have been aware for several years that the Georgian government is sponsoring the guerrillas, who have bases in western Georgia, but have not formally raised the issue with Tbilisi. Georgian Ambassador to Russia Vazha Lortkipanidze claimed that "certain Georgian forces" had gone to Gali Raion to "fan tensions" that led to the conflict. It is unclear whether Lortkipanizde was alluding to the so- called Abkhaz parliament in exile, which is composed of ethnic Georgian deputies to the Abkhaz parliament elected in 1991. Those deputies had planned to convene in western Georgia in late May. LF


Georgian Foreign Minister Irakli Menagharishvili on 26 May said that the 1,500-man predominantly Russian CIS peacekeeping force deployed along the internal border acted "completely irresponsibly and took no measures to stop the violence," Reuters reported. Parliamentary Defense Committee chairman Revaz Adamia said the Russian troops did nothing to prevent the Abkhaz from bringing heavy artillery into the conflict zone, Caucasus Press reported. Tamaz Nadareishvili, chairman of the Abkhaz parliament in exile, told Caucasus Press that the UN observer force on the border is exclusively engaged in compiling reports to send to UN Secretary-General Kofi Annan. LF


Most events planned to commemorate the 80th anniversary of Georgia's independence were canceled, Caucasus Press reported on 26 May. The official reason was the ongoing hostilities in Gali, but Interfax reported that rumors were circulating in Tbilisi of plans to assassinate Shevardnadze during the celebrations. LF


Finance and Economy Minister Eduard Sandoyan told the parliament on 26 May that the country's external debt continues to grow and is nearing $700 million, RFE/RL's Yerevan bureau reported. He said 45 percent of that sum is owed to the World Bank and the IMF, $109 million to Russia, and some $52 million to EU states. Last December, Armen Darpinian, currently prime minister and at the time finance and economy minister, estimated that the country's external debt would total $668.5 million by late 1997 and reach $797.1 million by the end of this year. Sandoyan rejected allegations that external borrowing encourages embezzlement and makes Armenia politically dependent on donor states and organizations. The parliament nonetheless announced the formation of a special commission "to look into the efficiency of using international loans." LF


The World Bank is to release $50,000 from a $165,000 grant to help the Tajik opposition set up medical centers and vocational training institutes, ITAR-TASS reported on 26 May. World Bank officials, Tajik Deputy Prime Minister Abdurahmon Azimov, and United Tajik Opposition leader Said Abdullo Nuri signed an agreement on the grant in March. BP


Turkmen President Saparmurat Niyazov on 26 May signed an agreement with the U.S. Export-Import Bank whereby the bank will lend Turkmenistan $96 million to develop its gas industry, Interfax reported. Niyazov also signed an agreement with the bank on financing a $212 million project for developing that industry. Interfax reported that Eximbank bank is considering making loans to Turkmenistan without government guarantees. BP


One week after a truck from the Kumtor gold mining company spilled sodium cyanide into the Barskoon River in eastern Kyrgyzstan, 475 people have become sick and sought medical treatment, Interfax reported. Of those, 68 have been kept in the hospital. Officials from the Kyrgyz government and the Kumtor company continue to say that the effects from the spill will be negligible. BP


The Ukrainian Supreme Council on 26 May failed to elect a new speaker for the second time, ITAR- TASS reported. Only 220 deputies took part in the second vote; a valid ballot requires 294 deputies to participate. Communist Party leader Petro Symonenko gained 151 votes, 50 fewer than he received in the first vote (see "RFE/RL Newsline," 25 May 1998). Four center-right parliamentary groups abstained from the vote to prevent the election of a leftist parliamentary leader. They propose the election of a centrist speaker, a leftist first deputy speaker, and a rightist deputy speaker. Dmytro Tabachnyk, former head of the presidential administration, said former parliamentary speaker Oleksandr Moroz "has every chance" to head the Supreme Council if the third round, scheduled to take place next week, also proves fruitless. JM


Borys Tarasyuk and Yevgenii Primakov, the foreign ministers of Russia and Ukraine, told ITAR- TASS on 26 May that they reached "complete understanding" during their talks in Kyiv earlier that day. Tarasyuk said the sides managed to agree "even on those issues that had earlier been a stumbling block in relations." The thorniest issue in bilateral relations is currently the ratification of the Russian-Ukrainian friendship treaty by the Russian State Duma. Deputies in the Russian lower house postponed voting on the treaty following Tarasyuk's statement earlier this month that NATO expansion eastward "fully suits Ukraine's interests." Other outstanding issues include delimiting the Ukrainian- Russian maritime border in the Azov Sea and the signing of additional documents on the stationing in Crimea of Russia's part of the Black Sea Fleet. JM


The Crimean Supreme Council on 27 May approved a new government for the autonomous republic, ITAR-TASS reported. By a vote of 71 to eight, the parliament appointed Serhiy Kunitsyn as prime minister and approved a new cabinet composed mainly of representatives of the Crimean Communist Party, the Popular Democratic Party, and the "Union" Party. Kunitsyn, who heads the regional branch of the Popular Democratic Party of Ukraine, is considered to have strong support in Kyiv. JM


Belarusian Foreign Minister Ivan Antanovich has said the EU and the U.S. committed an "unfriendly act" toward Belarus by bestowing Democracy and Civil Society Awards on two human rights organizations and one opposition figure in the country (see "RFE/RL Newsline," 19 May 1998), Belapan reported on 26 May. According to Antanovich, the EU is pursuing a policy of "double standards" in refusing to maintain contacts with official Minsk and giving monetary awards to the opposition. Antanovich added that the opening of offices of Belarus's Charter-97 human rights group in Washington and Brussels should also be viewed as an unfriendly step vis-a- vis Minsk. JM


Mart Siimann on 26 May announced that Foreign Minister Toomas Hendrik Ilves and Ethnic Affairs Minister Andra Veidemann will remain in office, ETA reported. Both ministers were warned by the ruling coalition last week that they would be dismissed if their parties--the People's Party and the Progressive Party, respectively--did not share political responsibility for the government's actions (see "RFE/RL Newsline," 21 and 26 May 1998). Siimann and Ilves signed an agreement following a board meeting of the People's Party, which said it would support the ruling coalition to ensure the country's stability. At a meeting the same day, the leadership of the Progressive Party was more critical of the government but opted eventually to work with the cabinet on terms similar to those accepted by Ilves's party. JC


Latvian Foreign Minister Valdis Birkavs has said the government will sign a human rights document banning capital punishment and will seek to persuade parliamentary deputies to ratify it, Reuters and BNS reported on 26 May. Birkavs said the cabinet has decided to sign the sixth protocol of the European Convention for Human Rights and Fundamental Freedoms, adding that this decision is a "very, very important step." The parliament recently passed a new criminal code that retains the death penalty. President Guntis Ulmanis has called on lawmakers to review that code. Latvia promised to abolish the death penalty when it joined the Council of Europe in 1995. JC


Some 2,000 Solidarity trade unionists from the Silesia coal mining region, together with their family members, took part in a rally at the parliament building in Warsaw on 26 May to demand that the legislature and government promote a pro-family policy, "Zycie Warszawy" reported. The protesters demanded a five-day work week, tax exemptions, and more benefits for families with a large number of children. A pro-family policy was one of the ruling Solidarity coalition's pledges in last year's election campaign. JM


The government met behind closed doors on 26 May to discuss the European Commission's decision to cut 34 million ecus from the PHARE program intended to help Poland prepare for EU membership (see "RFE/RL Newsline," 26 May 1998). "Gazeta Wyborcza" reported that Prime Minister Jerzy Buzek accused Ryszard Czarnecki, head of the Committee of European Integration, of failing to propose "good" projects in a bid to receive EU aid. Buzek has set up a commission to examine the reasons for the withdrawal of EU funds. Meanwhile, "Gazeta Wyborcza" adds that the future of another 46 million ecus in EU aid is also in doubt. JM


EU negotiators said in Prague on 27 May that the country is unprepared for the process of integrating EU legislation, Reuters reported. Nikolaus van der Pas, the EU's chief negotiator, made his comments after talks with government officials and added that he gave a "very strongly signal" about the country's unpreparedness at the meeting. Another EU negotiator, David Leigh, said the Czech Republic must increase liberalization and deregulation in the energy and telecommunications sectors. Van der Pas added that the EU Commission had been concerned with the Czech handling of the Romany minority and was particularly distressed by recent reports that two cities are planning to build walls to separate the Romani community from the rest of the towns' residents. PB


Zdenka Kramplova sent a letter to the Austrian ambassador in Bratislava on 26 May explaining the Slovak government's position on the opening of the Mochovce nuclear power plant, TASR reported. A Foreign Ministry spokesman said the letter was written after careful examination of the recently completed Austrian report on an investigation of the power plant, in which it deemed Mochovce unsafe. The note stresses that the Western-based companies that helped construct the plant continue to attest to its safety. The letter adds that the International Atomic Energy Agency was also consulted over safety measures. Austrian Chancellor Viktor Klima said that Austria will offer to help fix any flaws in the plant. PB


Zoltan Illes, the vice president of the Young Democrats-Hungarian Civic Party (FIDESZ-MPP), said on 26 May that the new Hungarian government will join Austria in opposing the opening of the controversial Mochovce nuclear power plant, Reuters reported. Illes, a leading candidate to become environment minister in the new government, said FIDESZ-MPP believes the plant, located just 60 kilometers from Budapest, is unsafe. Illes also said the Young Democrats oppose the construction of the controversial dam on the River Danube. He said the decision by the International Court of Justice calling for the Hungarians to complete the unfinished project is "guiding" but not binding. PB


Ethnic Albanian spokesmen have announced the cancellation of the next round of talks between Kosovar negotiators and their Serbian counterparts, Reuters reported on 27 May. Those talks were slated to take place in Prishtina on 29 May. The spokesmen suggested that the reason is that shadow-state President Ibrahim Rugova and his top advisers, some of whom belong to the negotiating team, will be in the U.S. on that date. On 26 May, a State Department spokesman urged the Kosovars and Serbs to make the talks a success. Many Kosovar and Albanian leaders have called for the talks to be canceled to protest the ongoing Serbian offensive in Kosova (see "RFE/RL Newsline," 26 May 1998). In Barcelona, the NATO Assembly passed a resolution on 26 May in which it condemned the Serbian offensive. Kosovar sources said in Prishtina that Serbs killed 20 ethnic Albanians in several places on 25-26 May. PM


The Foreign Ministry issued a statement in Tirana on 26 May supporting President Rexhep Meidani's recent calls for foreign military intervention in Kosova (see "RFE/RL Newsline," 26 May 1998). The statement said "police and military violence by the Belgrade authorities against Albanians in Kosova has increased alarmingly in recent days.... Albania calls on the Contact Group countries and the international community to urgently intervene and implement decisions they have previously [taken] on the crisis in Kosova.... All means should be used to force Belgrade to immediately stop its violence and terror and withdraw its police and military troops from Kosova." PM


A 26 May meeting of Albanian and federal Yugoslav border authorities at the border checkpoint between Kukes and Prizren ended without results. Albanian Commander Beqir Cena informed the Yugoslavs of five recent border incidents, including Yugoslav soldiers entering Albania, violations of air space, and shootings. His Yugoslav counterpart, Momir Zdravkovic, noted 35 cases of border violations, including entry into Kosova of "armed groups and terrorists" from Albania as well as cross-border shooting incidents. Each side rejected the other's charges, saying sufficient evidence was not given, "Koha Jone" reported. The same day, President Meidani inspected military installations in Kukes. It was the first visit of a president to the northern city since the fall of communism. And in nearby Bajram Curri, the UN opened an office to help process Kosovar refugees. FS


The main organization representing ethnic Albanian students in Kosova issued a statement in Prishtina on 26 May informing that a Prizren court handed down a 30-days jail sentence to the three women who were among the student leaders recently arrested in that city (see "RFE/RL Newsline," 26 May 1998). There is no information on the whereabouts of the four male student leaders. The statement added that the student organization understands that the four men will be charged with "preparing for terrorism" because they organized a public first-aid course. PM


The Serbian parliament on 26 May passed a law empowering the government to appoint the rectors and deacons of the universities. Under previous legislation, faculty members elected persons to those positions. Outside the parliament building, police used force to break up a demonstration by some 1,000 students and faculty against the new law. Police injured 10 students and arrested three, RFE/RL's South Slavic Service reported. Student spokesmen said more protests are slated to take place in Belgrade, Nis, and Novi Sad on 27 March. The demonstrators received a telegram of support from Montenegrin President Milo Djukanovic, who expressed his "complete solidarity with their just and democratic struggle," "Nasa Borba" wrote. PM


Foreign Minister Mate Granic said in Zagreb on 26 May that the government will draft a comprehensive plan dealing with refugee return by 20 June. The authorities hope that their plan will be acceptable to the international community, which has threatened Croatia with sanctions if it does not do more to facilitate the return of Serbian refugees, RFE/RL's South Slavic Service reported. Granic denied earlier reports that Croatia plans to repatriate some 80,000 ethnic Croats from Germany this year. He said it would be impossible to integrate so many people in such a short period. President Franjo Tudjman has frequently said he wants Croats living abroad to come home and repopulate areas where Serbs formerly lived. The Croatian economy, however, depends to a large extent on the remittances of emigrants. PM


Elementary and secondary school teachers throughout Albania went on strike on 26 May to protest difficult living and working conditions. The strike was organized by the Independent Teachers Trade Unions and involved up to 90 percent of teachers in Tirana and other cities. The teachers' main demand is a 15 percent pay increase to offset inflation. Teachers receive monthly salaries of between $45 and $65. The Education Ministry declared the strike illegal, arguing that the teachers did not give the ministry enough time to respond to their demands, "Gazeta Shqiptare" reported. FS


Neritan Ceka, head of the parliamentary Commission on Public Order, proposed on 26 May that those voluntarily turning in illegal weapons be given lottery tickets with numbers corresponding to the weapons' serial numbers. After a fixed date, the government would hold a draw and award prizes, "Gazeta Shqiptare" reported. Lawmakers are currently drawing up a draft law that is aimed at disarming the population and will include an amnesty. There are some 500,000 illegal arms in private hands in Albania. Meanwhile in New York, UN spokesman Fred Eckhard said the UN will send an expert team to Albania in early June to prepare a program aimed at encouraging civilians to turn in illegal weapons. FS


Ceka also said that the government has lost some $100 million from untaxed cigarette imports since the summer of 1997. Ceka argued that Finance Minister Arben Malaj was to blame for the customs evasion and demanded his resignation. Malaj countered that Ceka himself was in charge of guarding Albania's coast as interior minister until April 1998, together with former Defense Minister Sabit Brokaj, "Gazeta Shqiptare" reported. FS


Lawmakers on 26 May adopted a draft 1998 budget, which was delayed by the recent government crisis, AFP reported. The approval of the draft will allow the IMF to release credits it has been withholding. The proposed budget allows for 45 percent inflation and a budget deficit of 3.6 percent of GDP. It foresees an unemployment rate of 11.2 percent, up from 8.8 percent last year. Also on 26 May, U.S. Ambassador to Romania James Rosapepe said that it is not a question of "if" but "when" Bucharest will be invited to join NATO, Reuters reported. He added that the government should be "worrying less and reforming more." PB


The South Korean carmaker Daewoo has acquired a 51 percent stake in Romania's Mecatim auto manufacturer for an undisclosed sum, AFP reported on 25 May. Mecatim's chief executive said Daewoo plans to invest $100 million in the plant, which will produce car equipment such as air-conditioning systems and brakes. The Korean company also plans to create 400 new jobs at the plant. In 1994, Daewoo acquired a 51 percent stake in the Rodae car plant. MS


The State Committee for Information in the separatist Transdniester region shut down the newspaper "Novaya Gazeta" on 26 May, Infotag reported. Andrei Safonov, a founder of the paper and the leader of the United Labor Party of Moldova, said the decision is "purely a political act." He noted that the newspaper's "rejection of political extremism" and "its sober" commentary annoyed the Transdniester government. PB


by Floriana Fossato

Over the past several days, Russia's new government had the opportunity to convince angry coal miners, state- sector employees, and increasingly anxious Western investors and domestic businessmen of its ability to govern. However, economic analysts argue that the government will have to show huge political and economic initiative if it wants to achieve some much-needed results.

Following two days of intense negotiations with top government officials, frustrated coal miners on 25 May lifted a 10-day blockade of the Trans-Siberian and North Caucasus railroads. The national protest, which came on the heels of a week of wildcat protests, immobilized more than 600 freight and passenger trains across Russia, causing losses to the railroads that the Transport Ministry estimated at some $29 million. The blockades also hurt many industries, which were unable to transport their goods to markets or obtain vital supplies.

The temporary resolution of the issue came as a surprise to many, as it followed a first round of unsuccessful negotiations in the Siberian region of Kemerovo, in the southern Rostov region, and in the northern Vorkuta region, conducted by Deputy Prime Ministers Oleg Sysuev and Boris Nemtsov and by Economics Minister Yakov Urinson, respectively.

In his 22 May radio address, President Boris Yeltsin raised tensions as he told strikers their protest was "unreasonable" and that they were making a difficult situation worse. Prosecutor-General Yurii Skuratov quoted the president as saying that the miners had "gone too far," and that Yeltsin believed that coal miners "have not yet learned to work in a market economy."

The immediate reaction of the miners, who have not received pay in months and, in some cases, not in the last two years, was to vow to block the railroads until all wages arrears had been paid. However, after intense negotiations, the miners agreed to end the blockade--for the time being.

Key rail lines to Eastern and Southern Russia have been re-opened. Officials in Kemerovo said on 25 May that it will take about a week for trains on the Trans-Siberian railway to get back on schedule. Only miners in the Arctic Komi Republic continued to prevent freight trains from using the Moscow-Vorkuta railroad on 25 May, but they lifted their blockade the following day.

Speaking after his return to Moscow from Rostov, Deputy Prime Minister Nemtsov commented "many words have been said in the past, but now there is time only for decisive action." He said that "the government will immediately act to create new jobs for workers made redundant, when financially ailing mines are closed down." But, he added, mines will be closed only in those regions where enough money is found to create new work places and a proper social safety net, including the possibility of relocating and employment in different regions for miners who lose their jobs.

Closing down Russia's unprofitable mines is a measure international financial institutions favor, but which previous governments have been hesitant to implement. Moscow's inability to tackle more resolutely the issue of restructuring the coal industry has led to the spiraling wage arrears problem. Most of the unpaid wages are not owed by the state but directly by the mines, a great number of which have been privatized. However, company heads say they cannot pay their workers because they are not being paid by the government and private customers who buy the coal.

Despite their readiness to appease the miners, neither Sysuev nor Nemtsov contradicted Yeltsin and Prime Minister Sergei Kirienko, who last week had insisted that the government would not give in to mounting demands to loosen its austere monetary policy to pay all wage arrears to miners. The two ministers explained that there would be no printing of money and no re-distribution of funds between regions or between different sectors of the economy. Kirienko, for his part, commented that the new government "is responsible not only for putting out today's fire but also for the future of the country's economy as a whole."

Most analysts suggest that the government's performance during the crisis was effective. Nikolai Petrov, a senior associate with the Carnegie Center in Moscow, told RFE/RL that the government "has dealt rather well with this crisis..., despite subjective attempts by other people to exploit the outcome of the situation for their ends." According to Petrov, trade union activists in the regions played a much more positive role in the negotiations than national leaders. The strike showed, as other protest actions have shown, that "big trade unions, keeping their Soviet-style traditions and their immense properties, don't have real influence over the workers, who are driven mainly by anger and frustration," Petrov commented.

Rory McFarquhar, an analyst with the Russian- European Centre for Economic Policy, told RFE/RL that the government had "successfully defended the budget vis-a- vis the miners' demands." However, he said "the overall economic situation is very precarious, as crises seem to feed on themselves." According to McFarquhar, "objectively, Russia's economic situation was worse in the past two years, but subjectively, for a confluence of difficult circumstances, the new government is in a situation where many people, including concerned investors and financial operators, have lost their previous confidence and perceive [the situation] as being worse now." The author is an RFE/RL correspondent based in Moscow.