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Newsline - August 6, 1998


The Federal Tax Service on 6 August ordered the seizure of the assets of the oil companies SIDANCO, ONAKO, and Eastern Oil for non-payment of taxes. Vladimir Popov, head of the department charged with collecting payments from companies in arrears, told reporters that the assets will include buildings, apartments, and cars belonging to the companies' management and subsidiaries. According to Popov, SIDANCO owes 737.8 million rubles ($118 million) and ONAKO 214.5 million rubles. Earlier, Minister of Fuel and Energy Sergei Generalov had announced that SIDANCO and ONAKO will be unable to access export pipelines in August owing to tax arrears (see "RFE/RL Newsline," 3 August 1998).


According to Russian agencies, the Finance Ministry is putting the finishing touches to its 1999 budget which it will submit to the government on 7 August. The ministry is projecting 1 percent growth in GDP and a budget deficit of 80 billion rubles ($12.8 billion) or 2.9 percent of GDP. Revenues are pegged at 376.1 billion rubles (12.97 percent of GDP) and expenditures at 456.1 billion rubles (15.7 percent of GDP). ITAR-TASS reported that the government plans to spend more on services next year--36 percent of total expenditures. In 1998, services accounted for only 31 percent of total spending. At the end of the August, the government will pass along the budget to the State Duma for its approval. According to Interfax, Duma Budget Committee Chairman Aleksander Zhukov has already said that the Duma is unlikely to approve the budget unless it can do so with "a special statement inserted placing the entire responsibility for it on the government." JAC


As the crisis on Sakhalin eased following the delivery of coal to the local power plant during the night of 5 August, workers across Russia in various industries expressed their dissatisfaction. On Komsomolsk na Amure, paintshop workers at the Amur shipyard began a hunger strike to protest two years' unpaid wages, according to ITAR-TASS on 6 August. Meanwhile, miners in Chelyabinsk who have been blocking the Trans-Siberian railroad and ambulance workers in Vladivostok vow to continue their strikes. Air-traffic controllers in Moscow have threatened to strike, but Prime Minister Sergei Kirienko on 6 August declared such action illegal. JAC


"Izvestiya" reports on 6 August that the government has compiled a list of 12 areas with insufficient fuel reserves for the winter: Chukotka Autonomous District, Primore, Khabarovsk and Altai Krais, as well as Magadan, Kamchatka, Sakhalin, Chita, Ivanovo, Novosibirsk, Arkhangelsk and Murmansk Oblasts. In all localities, local energy suppliers have been owed debts for at least eight months. In Ivanovo, for example, residents owe more than 1 billion rubles ($158 million), and in Arkhangelsk, Arkhenergo is owed 2.4 billion rubles. Deputy Prime Minister Boris Nemtsov heads an interdepartmental group established to specify measures of state support; those measures will be elaborated in agreements to be signed with each region. "Izvestiya" concludes that "once again everything will depend on the availability of funds from the state budget." JAC


Deputy State Property Minister Aleksandr Braverman told a press conference on 5 August that Rosgosstrakh, the nation's largest domestic insurance company, will not be privatized either this year or in 1999, ITAR-TASS reported. He added that "no personnel decision has been reached" concerning acting director Valerii Sukhov, who was on sick leave for more than a month and has faced tough questions from Rossgastrakh's board of directors about his financial and personnel policies. In February 1997, the Duma asked the government to postpone the company's privatization until the problem of restoring the value of insurance premiums paid before 1 January 1992 was resolved. JAC


According to ITAR-TASS on 6 August, the Finance Ministry has submitted a plan for the development of a national insurance system. The ministry has proposed that the government provide support with tax incentives and other measures in order to strengthen Russia's domestic insurance companies. Those companies generally do not have enough money to pay indemnity in case of major damage. Under the government's plan, insurance companies' minimum amount of authorized capital would rise at least 5 times by 2000. If approved, the program would be implemented during the remainder of 1998 through 2000. JAC


In an interview with Trud on 6 August, Federal Tax Service director Boris Fedorov proposes broadening the tax base by increasing tax collection from small enterprises, shops, and individuals. He also seems to suggest that foreigners living in Russia could contribute more to government coffers since many of the ones living in Moscow are able to pay as much as $3,000-$4,000 a month for an apartment. According to the first part of the new Russian tax code published in "Rossiiskaya Gazeta" on 6 August, the tax system applies to all Russian residents, without exception. Fedorov argued that the tax burden is squeezing the life out of enterprises, and he proposed easing the profits tax by 10 percent to 15 percent. Earlier, Fedorov denied that he is drawing up a hit list of wealthy tax dodgers (see "RFE/RL Newsline," 6 June 1998). JAC


Fedorov's deputy, Vladimir Gusev, says that the Federal Tax Service's collections in August will be up only marginally from the July level, Interfax reported on 5 August. The agency will collect 12.5 billion rubles ($2 billion) in August, 16 percent less than the government's previously set target of 14.8 billion rubles but 500 million rubles more than in July. According to Bloomberg, Gusev explained that more new tax legislation will be required for the agency to meet its targets. JAC


Russian agencies reported that the organizing committee of a new political organization for women, called the Russian Party for the Protection of Women, convened in Moscow on 5 August. The party's goal is to urge the adoption of laws that would improve the life of women. Tatyana Roshchina, head of the organization Women for the Future of Russia, was elected chairwoman of the committee, according to ITAR-TASS. On 25 August, the new party will hold its founding conference in Moscow; some 5000 members are expected to attend. In 1993, the Women of Russia party received 8 percent of the vote in Duma elections that year, performing better than had been predicted. Analysts believe that the party took away votes primarily from the Communist Party. JAC


According to "Vremya MN" on 5 August, Communist Party leader Gennadii Zyuganov fears that recent staff changes in the Russian military and intelligence services suggest "the beginning of a creeping coup on the threshold of upcoming parliamentary and presidential elections." Zyuganov argued that Anatolii Chubais, presidential envoy to international financial institutions, spearheaded the personnel changes in order to influence upcoming parliamentary and presidential elections. Chubais's next step will be to change the leadership of the Ministry of Defense, he added. JAC


"Kommersant-Daily" on 5 August reported that the Russia's leadership is flying in planes that could crash at any moment. The state transport company, Rossiya, is in dire financial straits and cannot afford to replace outdated engines. Money is so short that even after a near catastrophe in January with a plane flying Russian President Boris Yeltsin and his family, Rossiya could not pay for needed repairs. JAC


In an interview in "Nezavisimaya gazeta" on 6 August, former Chechen acting Premier Shamil Basaev again blamed Russian intelligence for the failed 23 July attempt to assassinate President Aslan Maskhadov. Basaev claimed that the reason President Yeltsin fired Federal Security Service head Nikolai Kovalev was that Kovalev had planned the assassination attempt without informing Yeltsin. The president sacked Kovalev on 25 July (see "RFE/RL Newsline," 27 July 1998) but rumors of Kovalev's impending dismissal were circulating days before 23 July . Basaev also claimed that the assassination bid was intended to plunge Chechnya into civil war and thus prevent an investigation into the clashes in Gudermes on 14-15 July between units from the Chechen National Guard and two Islamic regiments. But Basaev failed to explain what the Russian intelligence's motive might be to seek to thwart such an investigation. LF


A government delegation from the Republic of Sakha-Yakutia met in Kazan on 5 August with Tatar Prime Minister Rustam Minnikhanov to secure financial and technical help in overcoming the aftermath of recent flooding, RFE/RL's Kazan bureau reported. The damage from the floods, which affected 22 of Sakha's 35 regions, is estimated at about 1 billion rubles ($158 million) or 20 percent of the republic's annual budget. The Sakha delegation expressed particular interest in Tatar-produced diesel generators and special vehicles. Minnikhanov promised that Tatarstan will give what help it can afford. The delegation also met with Tatar State Council Deputy Chairwoman Zilya Valeeva to compare the two regions' legislation. LF


Presidential administration head Ramiz Mehtiev told journalists on 5 August that the Azerbaijani authorities still hope that five prominent opposition figures will reconsider their declared boycott of the 11 October presidential election. The five had reaffirmed their intention not to participate in the poll after meetings on 3 and 4 August with Mehtiev. They were informed by Mehtiev that President Heidar Aliyev has rejected their conditions for lifting the boycott but is prepared to postpone the election to give the opposition more time to prepare for it. Aliyev on 4 August had sent a letter to three of the five opposition politicians (Azerbaijan Popular Front Party Chairman Abulfaz Elchibey, Musavat Party Chairman Isa Gambar, and Liberal Party Chairwoman Lala-Shovket Gadjieva, who in 1993 served briefly as his secretary of state) urging them to participate in the poll. The three rejected that appeal, RFE/RL's Baku bureau reported. LF


Mehtiev on 5 August referred respectfully to the Musavat and Azerbaijan Popular Front parties. He described them as ":influential" and expressed the hope that they will free themselves from the influence of former parliamentary speaker Rasul Guliev, whom he termed an unhealthy force. Guliev is also one of the five who declared their intention to boycott the elections. But a second member of Aliev's administration, Ali Hasanov, took a softer line on Guliev, suggesting that he may be allowed to return to Azerbaijan from his U.S. exile to contest the poll, given that presidential candidates enjoy immunity from criminal proceedings. Guliev has been charged in absentia with large-scale embezzlement. LF


An unidentified Azerbaijani National Security Ministry official told Turan on 5 August that he sees no reason for the statement issued the previous day by the U.S. State Department warning U.S. citizens visiting or working in Azerbaijan against possible anti-American provocations. The statement said that unidentified "anti-U.S. elements" have engaged in surveying U.S. companies, property, and personnel in Azerbaijan. It urged increased vigilance and security precautions. The Azerbaijani official said the U.S. statement is groundless, given that the "crime situation" in Baku and Azerbaijan as a whole "is safe." LF


Several leading Azerbaijani opposition figures have criticized the invitation extended by President Heidar Aliyev to his Armenian counterpart, Robert Kocharian, to attend an international conference in Baku in September, Turan reported on 5 August. The same day, Aliev's press service confirmed the invitation has been sent. Liberal Party chairwoman Lala-Shovket Gadjieva said the invitation is proof that the Azerbaijani government is "closing its eyes to Armenian aggression." Democratic Party Secretary-General Sardar Djalaloglu said it is "illogical" to invite a man against whom the Azerbaijani Prosecutor-General has instigated a criminal case. But Armenian presidential adviser Aram Sargsian told Interfax that Armenian participation at the conference, devoted to the EU's TRACECA project, "would be welcome." "Nezavisimaya gazeta" on 6 August quoted unnamed EU sources as similarly expressing the hope that an Armenian delegation will attend. LF


The head of the Armenian Foreign Ministry's national security and conventional weapons department, Armen Kharazian, told RFE/RL on 5 August that Azerbaijan continues to exceed its arms allocations under the 1990 Conventional Forces in Europe (CFE) treaty, thereby posing a "grave threat to Armenia's national security." According to Kharazian, Azerbaijan has officially declared that it possesses 270 battle tanks, 557 armored personnel carriers, and 300 artillery systems, thereby exceeding the CFE allocations of 220, 270, and 285, respectively. The CFE treaty stipulates equal quotas for all three Transcaucasus states. Kharazian said Armenia strictly complies with the CFE provisions and possesses 200 tanks, 218 armored personnel carriers and 225 artillery systems. He said a recent Turkish-led international inspection of an Armenian military detachment registered no violations of the treaty. He said the number of Azerbaijan's military aircraft and attack helicopters is within the CFE quotas but is eight times higher than Armenia's. LF


Speaking at a press conference in Tbilisi on 5 August, Georgian Foreign Minister Irakli Menagharishvili said that the Georgian leadership will decide in the next few days whether to request the renewal of the mandate of the Russian peacekeeping force currently deployed under CIS auspices in Abkhazia, ITAR-TASS reported. That mandate expired on 31 July and can be renewed only by CIS heads of state collectively. Menagharishvili noted that Georgia has repeatedly criticized the peacekeeping force's inability to protect ethnic Georgians in Abkhazia, but he did not advocate its replacement with a UN contingent, as Georgian leaders have suggested in the past. Also on 5 August, Abkhaz President Vladislav Ardzinba told journalists in Sukhumi that any state wishing to participate in a future peacekeeping operation should have the consent of both parties to the conflict. Ardzinba denied that Georgian President Eduard Shevardnadze has made new proposals for resolving the conflict, "Nezavisimaya gazeta" reported on 6 August. LF


Abdul Mutmain, an official spokesman for Afghanistan's Taliban movement, said the movement is not interested in an offer made by Uzbekistan and Russia to mediate the conflict in Afghanistan, ITAR-TASS reported on 6 August. Mutmain said Afghanistan will be "liberated exclusively by military means." He also rejected any deals with the coalition forces opposed to the Taliban. "Kommersant-Daily" reported on 5 August that Taliban forces have seized part of the Hairaton area, which borders on Uzbekistan. That claim was refuted by anti-Taliban alliance commander General Rosi Geldy in an interview with RFE/RL's Turkmen service later the same day. BP


Two foreign toxicologists invited by the management of Kyrgyzstan's Kumtor Mining company to examine findings on the consequences of the 20 May chemical spill have been denied access to that information, RFE/RL correspondents reported on 5 August. The Kyrgyz Health Care Ministry said that the U.S.'s Allen Holl and Russia's Yurii Ostapenko do not have authorization from the World Health Organization to investigate the effects of the incident, in which 1.7 tons of sodium cyanide spilled into the Barskoon River. Kyrgyz Deputy Minister of Health Care Viktor Grinenko said that without such authorization, the two toxicologists are not allowed to talk with people who were hospitalized following the spill. Grinenko added that the information gathered on the accident is now in the hands of the National Security Ministry, which has begun its own investigation. BP


The bodies of Domullo Kiemiddin and one of his students have been found in a mortuary in the Kofarnikhon district about 20 kilometers from Dushanbe, ITAR-TASS and RFE/RL correspondents reported on 5 August. Kiemiddin, a mullah at a Dushanbe mosque, and his student went to Kofarnikhon 10 days ago on "religious business," according to United Tajik Opposition (UTO) leader Said Abdullo Nuri. Nuri has called on the Tajik government to allow UTO fighters to help in investigating "the growing number of murders committed by unidentified armed criminals in Tajikistan." BP


In a desperate move to collect pension and budget-payment arrears, Valeriy Pustovoytenko threatened to lock up some 2,O00 managers in the Ukrayina palace in Kyiv until they pay at least some of their debts. The managers were taking part in an extended cabinet session at the palace that addressed the problem of tax collection. "Only those who pay 30 percent of their debts to the pension fund and 5 percent to the budget" will be allowed out of the hall, Ukrainian Television quoted Pustovoytenko as saying. This radical step immediately resulted in 500,000 hryvni ($240,000) being paid to the pension fund. The final results of Pustovoytenko's initiative will be available on 7 August. JM


Ukrainian Deputy Economy Minister Ihor Shumylo on 5 August presented the government's forecast of basic economic indicators for next year, Ukrainian Television and AP reported. Ukraine expects economic growth to total 2 percent of GDP in 1999, up from 0.5 percent planned for this year. The budget deficit is expected to decrease to 1.5 percent of GDP, down from 2.5 percent forecast for this year. Inflation is envisaged to decrease to 7 percent from 12 percent anticipated in 1998. Shumylo said the government's optimistic economic prognosis stems from economic reform measures taken recently by Ukraine to secure a large loan from the IMF. JM


President Leonid Kuchma on 5 August attended the inauguration of the construction of a new gas pipeline in Crimea, Ukrainian Television reported. The 269 kilometer pipeline will link the Crimean cities of Dzhankoy, Feodosiya, and Kerch, improving gas supplies to some 30 percent of the peninsula's population. The construction will cost $100 million; 20 percent of that sum is to be paid by the Ukrnaftohaz national oil and gas company and 80 percent contributed in construction materials by domestic enterprises in repayment of their debts to the state budget. JM


Some 30 members of the Union of Belarusian Writers met with President Alyaksandr Lukashenka on 5 August to discuss the situation of Belarusian literature and culture, RFE/RL's Belarusian service reported. Lukashenka, who has a long record of suppressing Belarusian media and writers critical of his regime, pledged support to Belarusian writers on a "reciprocal basis" or, in other words, their "loyalty" to the president, as he put it. The president added that during his four years in office he "has never dictated to the intellectuals which course to choose." Union chairman Uladzimir Nyaklyaeu said after the meeting that he notes "some improvements" in the president's approach to Belarusian literature and language. JM


Latvia is urging Belarus to resume talks on the demarcation of their joint border, Latvian Foreign Ministry officials told BNS on 5 August. The ministry has written twice asking Minsk to reconvene the joint committee on demarcation issues. It also stresses that Latvia is not to blame for the delay in concluding the border agreement, adding that it hopes Belarus will solve the financial problems hindering the border demarcation talks. Last week, Riga announced it will begin unilaterally demarcating its border with Russia. JC


The Lithuanian administration has instructed the Economy Ministry to found a Small and Medium-Sized Business Loan Insurance Company, BNS reported on 5 August. No less than 51 percent of the stock of that company will be state-owned. The company will insure loans provided by banks to small and medium-sized businesses that sign loan insurance agreements with the banks. Loan agreements will be signed only for loans granted on the basis of a tender. JC


The Israeli government has officially requested that Poland remove crosses erected in a gravel pit near the former Auschwitz death camp (see "RFE/RL Newsline," 3 August 1998), Television Polonia reported on 5 August. The television station quoted a statement by the office of Israeli Prime Minister Benjamin Netanyahu as saying the crosses "transgress the character of the place of murder of millions of Jews." The following day, the Polish government said it cannot make any decision on the crosses since they were erected on private land. It added that according to the Concordat signed by Poland and the Vatican, the Catholic Church is the "correct addressee for demands related to the conflict." Last week, a Polish Catholic group that has links with the Radio Maryja Catholic station erected 52 crosses to commemorate Poles shot by Nazis in the gravel pit. JM


Health Minister Wojciech Maksymowicz on 5 August said his ministry has already set up 16 health care funds to replace the national budget as the health-care system's source of financing, Reuters reported. Under a bill passed last month, all citizens will contribute 7.5 percent of their income to the funds, making the health care system independent of the budget. The new system will begin operating on 1 January 1999, provided that the president signs the bill. The opposition Democratic Left Alliance is appealing to the president to veto the legislation. It argues that the contribution to the funds is too small and should be increased to 10 percent of an individual's income. JM


President Vaclav Havel, who suffered a life-threatening heart problem during the night of 3-4 August, took solid food for the first time on 5 August and is reading and writing notes, Reuters reported, quoting members of the president's medical team. The head of the doctor's team, Ilja Kotik, told journalists that Havel's blood pressure is stable and that there are only occasional signs of the rapid heart beat that had made doctors fear for his life. Kotik added that the president's temperature is still high and that the lung inflammation is "not completely under control." Nonetheless, he said, the team hopes he will respond better after changing the combination of antibiotics he is receiving. MS


Prime Minister Milos Zeman on 5 August repeated his earlier controversial statement about an organization representing the Sudeten Germans, Reuters reported. He told journalists that the Czech-German Discussion Forum must include only people who supported the 1997 reconciliation agreement, adding that "as on our side there are no Communists or Republicans, I do not see any reason why there should be representatives of the Landsmannschaft [the Sudeten German organization] on the German side." Zeman also said he takes the criticism of his comments made by German Chancellor Helmut Kohl "with a dab of humor and a certain dab of indulgent tolerance [because] I know only too well that some sharp things are sometimes said in a pre-election campaign." MS


The government on 5 August approved the final version of the its policy statement, Zeman told journalists the same day. He said that as a gesture to illustrate the "new kind of relations" between his minority government and the parliament, deputies will receive the statement before it is submitted to the Chamber of Deputies for approval. MS


U.S. special envoy Richard Holbrooke said in Washington on 5 August that Yugoslav President Slobodan Milosevic has broken his recent pledge to stop the offensive by his army and paramilitary police in Kosova. Milosevic, Holbrooke continued, seems bent on obtaining a military victory. As a result, the conflict has entered an "extraordinarily dangerous new phase." The diplomat warned the Yugoslav leader not to underestimate, "as he has done before," the ability of democracies to respond effectively to a threat to international stability and order. Holbrooke added that U.S. Ambassador to Macedonia Christopher Hill delivered a message "of a very forceful nature" to Milosevic from Secretary of State Madeleine Albright earlier on 5 August. Holbrooke said that a continuing problem preventing a negotiated settlement is the inability of the Kosovars to put together a delegation that represents all parts of their political spectrum. PM


The Albanian Foreign Ministry said in a statement in Tirana on 5 August that the time has come "to use all measures to stop the repression against thousands of innocent people who are [living rough] in the mountains, hungry and defenseless." In Prishtina, shadow-state President Ibrahim Rugova noted that "Serbian forces attack and kill unprotected people, systematically destroy and burn property of Albanians, which has led to the displacement of tens of thousands of Albanians." In Washington, a State Department statement charged the Serbian police with looting and committing arson against Kosovar homes and property. In Geneva, a spokesman for the United Nations High Commissioner for Refugees put at more than 200,000 the number of displaced persons in Kosova since Milosevic launched his crackdown in February . In London, the "Financial Times" quoted Red Cross officials in Kosova as saying that the danger there of epidemics such as cholera is high. PM


Colonel Bozidar Filic of the Serbian paramilitary police denied Austrian, German, and Swedish press reports that a mass grave of civilians exists in Rahovec (see "RFE/RL Newsline," 5 August 1998). Speaking in that town on 5 August, he called the accounts "a pure lie and disinformation." He added that "this is not a mass grave. These are the bodies of terrorists, properly buried in accordance with the law in a Muslim cemetery. These are terrorists, not civilians and not women and children." The semi-official Media Center in Prishtina took a group of journalists to visit graves in Rahovec. The reporters counted about 33 small, marked graves next to a rubbish dump. Nearby stood a small bulldozer that local people said had been used to dig and cover the graves. EU observers led by Austria's Walter Ebenberger visited the same site and said that they could not confirm the reports of mass graves. PM


The Vienna daily "Die Presse," whose Erich Rathfelder was one of the journalists to break the story of the mass graves, wrote on 6 August that it is unclear whether the EU observers or the journalists taken to Rahovec by the Media Center saw the same site as Rathfelder and his Swedish colleague. The daily added that a number of local eyewitnesses gave Rathfelder similar accounts about the number of bodies that the Serbs had ordered them to bury in mass graves. The foreign editor of "Die Presse" told Austrian Radio that it is imperative that an independent team of international forensic experts receive unhindered access to the Rahovec area before the bodies further decompose. PM


A UNHCR official said in Tirana on 5 August that about 60 Kosovar refugees crossed into Albania that day, bringing the number of arrivals in the past 10 days to 404. The increase follows a sharp drop in arrivals owing to the virtual closing of the border by Serbian forces last month. The refugees came through the Qafa e Prushit area, west of Gjakova. The total number of registered Kosova refugees in Albania is currently at 12,700. Meanwhile in Skopje, a spokesman for UN peacekeepers said the UN has requested an explanation from Belgrade of reports that Yugoslav forces have mined that country's border with Macedonia, RFE/RL's South Slavic Service reported. FS/PM


Serbian police in Vojvodina are trying to round up ethnic Hungarian reservists who recently refused to comply with orders to enlist for military service in Kosova, Hungarian media reported on 6 August. An Alliance spokesman condemned the round-up and called on authorities to stop what it called "an unlawful police operation." Following a wave of call-ups on 1-2 August, the Alliance of Vojvodina Hungarians urged ethnic Hungarian reservists to display civil disobedience and refuse to accept their induction notices (see "RFE/RL Newsline," 4 August 1998). MSZ


Montenegrin and Yugoslav federal authorities have agreed that Montenegro will not be affected by the federal government's recent decision to extend the security zone along the Albanian frontier from a few hundred yards to 3 miles (see "RFE/RL Newsline," 23 July 1998), the Belgrade daily "Danas" wrote on 5 August. The Montenegrin authorities pledged that they will "tighten controls" in the border area. Montenegro's reform-minded government seeks to revive the economy, which is based primarily on shipping and tourism, and to promote good relations with all countries. The government includes representatives of the ethnic Albanian minority, which lives primarily in Ulcinj and in other communities near the Albanian border. PM


Dietmar Schlee, who is Germany's commissioner for Bosnian refugee affairs, said in Bonn on 5 August that there have been "no mass expulsions" of Bosnian refugees in the runup to the 27 September German elections. He added that of the 75,000 refugees who went back to Bosnia from Germany in 1998, only 1,200 were expelled. He told dpa that "the return of Bosnian war refugees is running according to plan and has in no way been speeded up." Schlee added that Germany is still home to 140,000 of the 350,000 Bosnians who arrived during the 1992-1995 war. An unnamed senior U.S. official told dpa the previous day that President Bill Clinton expressed concern at a cabinet-level meeting that Germany is expediting deportations for domestic political reasons and that the sudden influx of returnees threatens to undermine the delicate Bosnian peace process. PM


Jacques Klein, who is a deputy to the international community's Carlos Westendorp, said in Banja Luka on 4 August that the leadership headed by Republika Srpska President Biljana Plavsic and Prime Minister Milorad Dodik has returned the Bosnian Serbs to membership in the international community after years of isolation. Klein urged voters to cast their ballots on behalf of this change in the September general elections, "Danas" reported. He called on voters to ask themselves whether they are better off now than they were six months ago, shortly after Dodik took office. Klein added that he is sure the answer will be positive. Plavsic, for her part, stressed her main campaign theme, namely that implementing the Dayton agreement is in the Bosnian Serbs' interest because the treaty guarantees that the Republika Srpska will not lose its identity in a unitary Bosnian state. PM


National Liberal Party (PNL) deputy chairman Valeriu Stoica said after a meeting of the PNL's Standing Bureau on 5 August that the party opposes the establishment of a Hungarian-language state university in Cluj. The PNL's coalition partner, the Hungarian Democratic Federation of Romania (UDMR), is demanding such a university. Stoica said the existing "multi-cultural" Babes- Bolyai Cluj university must be allowed to continue in its present form and that a new university could be set up in another Transylvanian town, such as Targu Mures. He said such a new university need not be one where teaching is conducted only in Hungarian. Rather, he argued, the new university should introduce "multi-culturalism," with teaching in Hungarian, German, and possibly other minority languages. MS


The Romanian Journalists' Association on 5 August denounced the sentencing of two journalists from Iasi for libel. It added that it may ask the Parliamentary Assembly of the Council of Europe to put Romania back onto its special list of countries to be monitored. The journalists were sentenced to one year in prison, deprived of their civil rights for one year, and fined 1.5 billion lei ($170,000). The Supreme Court has refused to review the sentence. In an article published in May in the Iasi daily "Monitorul," the two journalists questioned the legality of the fortune amassed by a police officer who was eventually dismissed. They also wrote that the police officer's wife, who is a magistrate, presided as judge over cases investigated by her husband. The former police officer's wife sued for libel following that report. Justice Minister Valeriu Stoica said he may ask the Prosecutor-General's Office to review the case. MS


The trial of 19 people accused of involvement in the cigarette-smuggling affair, which was uncovered in April, opened on 5 August at a military court in Bucharest. The hearings, however, were postponed because six of the defense lawyers did not show up, RFE/RL's Bucharest bureau reported. Only three of the defendants are being detained; the remainder are on bail. The court turned down the prosecution's request to detain those freed on bail as well as the defense's request to free the three defendants still in detention. MS


Former communist dictator Todor Zhivkov died in a Sofia hospital aged 86, Reuters reported on 6 August. The agency quoted doctors as saying Zhivkov died in the hospital's intensive care unit on 5 August. He had been admitted in early July suffering from a viral infection, fever, and pneumonia. His condition continued to deteriorate, and he eventually entered a coma. Zhivkov was in power from 1954 to 1989. MS


A Bulgarian non-governmental organization on 5 August said that more than 10,000 Bulgarian women and girls are enslaved in the west European sex industry. The Bulgarian branch of the international La Strada project said many Bulgarian women are being lured to western European countries (especially Italy and Germany) by promises of decent jobs, only to have their passports confiscated and to be forced to work as prostitutes, AP and Reuters reported. La Strada recently opened an office in Sofia. MS


by Robert Lyle

Of the 183 member nations of the IMF, the countries of the former Soviet Union and its East European allies account for only 14 percent. Yet among the 61 active programs listed by the fund, more than one quarter are with the nations in transition.

Last month, new loans worth $11.2 billion were approved as part of an IMF-led Russian rescue package. A first drawing of $4.8 billion was released immediately, while a $6.4 billion trance will be available in September if Russia implements the required reforms.

IMF First Deputy Managing Director Stanley Fischer was in Moscow recently to review program implementation, a trip one IMF official privately described as part of Fischer's "war against complacency" by Russian officials. Afterward, Fischer said that "the agreed measures are being implemented" and that if this continues, the September tranche should be available on time as well.

In Kyiv, another IMF team reached tentative agreement with Ukrainian officials on a projected three- year extended fund facility loan of $2.2 billion. The head of the IMF delegation, Mohammad Shadman-Valavi, said the new Ukrainian loan would go to the fund's Board of Directors in late August. The long-term loan will replace a one-year $585 million stand-by arrangement that was suspended last spring after the Ukrainian government missed a number of key economic targets.

The new program contains a long list of reforms that the government must implement. Thirty-three of those reforms, including a new reduced-deficit budget, had to be in place before the loan could be approved. The IMF had insisted upon parliamentary passage of the entire package but accepted the assurances of speaker Oleksandr Tkachenko that the parliament will stand behind President Leonid Kuchma's decree putting the new budget into effect.

Yet another IMF team was in Sofia last week and reached agreement with Bulgarian officials on a new, three- year extended loan program worth around $800 million. Anne McGuirk, head of the IMF delegation, said the loan would be part of overall foreign funding totaling $1.6 billion that should be available to Bulgaria over the next three years.

McGuirk said that a key part of the large reform program underlying this proposed new loan is the privatization of state enterprises. The new long term loan will follow up what was begun under a regular stand-by facility of around $502 million. When Sofia drew the final tranche of that loan in May, the IMF praised Bulgaria for its "good track record" of stabilization and reform.

Romania, whose last one-year stand-by loan of around $414 million expired in May with only two of five tranches drawn, has made no noticeable progress on putting together a new IMF program. Fund officials say they are still waiting for details on how Romania proposes to proceed with a new loan program.

A number of other countries continue to work through their IMF reform programs and draw their loans:

Bosnia, which received its first stand-by loan of around $81.8 million at the end of May, has drawn nearly $33 million so far.

Estonia, which received a stand-by loan of nearly $22 million last December, has not drawn any of the money, as planned. But it has used the IMF technical guidance, which is part of the program.

Latvia, similarly, has not drawn any of its loan of around $44.5 million, approved last October. Like Tallinn, Riga took the loans merely to have IMF experts provide advice and guidance.

In addition to Ukraine, countries in the region with extended fund facility loans are:

Azerbaijan, which has drawn around $43.4 million of its $79 million three-year program approved in December 1996;

Croatia, which has drawn about $38.8 million from its $477 million loan, approved in March;

Kazakhstan, which has drawn the entire $417.6 million of its loan, which was granted in July 1996;

And Moldova, whose $182 million loan, first approved in May 1996, has been suspended since last year owing to the failure of the government to meet the goals to which it had agreed. An IMF team was in Chisinau in June and worked out a memorandum on economy policy which, if fully implemented, could reopen the loan this fall, perhaps in October. Moldova agreed to revise its budget, tighten fiscal discipline and speed up privatization as pre- conditions for resuming the loan. It had drawn around $50.6 million of the loan before it was suspended.

Seven East European or former Soviet nations have loan programs under the fund's Enhanced Structural Adjustment Facility, a special program of subsidized loans for poorer nations:

Albania, which has drawn only the first tranche of about $7.9 million from its $47.6 million loan, approved in May;

Armenia, which has drawn $91 million from its $136.6 million three-year loan, approved in February 1996;

Azerbaijan, which has drawn $75 million from its $126 million long-term loan adopted in December 1996;

Georgia, which received approval last week for the latest $37 million drawing from its $224.7 million three- year loan, approved in February 1996. Georgia had previously drawn about $150 million;

Kyrgyzstan, which has not yet taken the first drawing on its $87 million loan, approved in late June;

Macedonia, which has drawn about $36.8 million of its $73.6 million three-year loan, approved in April 1997;

And Tajikistan, which has drawn $24 million from its $130 million loan, approved in early June. The author is a Washington-based RFE/RL correspondent.