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Newsline - August 14, 1998


Arriving in Novgorod on 14 August, Russian President Boris Yeltsin told journalists that "there will be no devaluation--that's firm and definite." He said that there is "no need" for such a step, given that "we shall be able to keep under control the situation on the Russian financial markets," according to ITAR-TASS. Yeltsin argued that the turmoil on Russia's financial markets is to be attributed at least partly to global market troubles. LF


Russia's benchmark stock index on 13 August was 6 percent down on the previous day. According to "Izvestiya," trading was suspended for 45 minutes after "blue-chip" stocks dropped 15-25 percent. Russian Prime Minister Sergei Kirienko described traders' behavior as "psychologically driven," arguing that the Russian economy is in better shape now than it was in July, according to Interfax, He noted that the country's currency reserve is larger and tax collections have risen. Echoing earlier remarks by other administration officials, he said external factors such as the slump in oil prices and the Asian crisis have adversely influenced the Russian market (see "RFE/RL Newsline," 13 August 1998). JAC


"Nezavisimaya Gazeta" on 13 August maintained that economic fundamentals have not changed significantly enough to explain the market's decline. Instead, the newspaper attributed the market turmoil to a coalition of the Russian Central Bank, Sberbank, and other financial institutions, which together own 66 percent of government treasury bills and have conspired to bring the Kirienko government down. According to the newspaper, neither the Central Bank and its cohorts nor the communist opposition in the State Duma is capable of removing Kirienko. Only a mysterious "third force" is powerful enough, and it is "in a hurry to change the government," "Nezavisimaya Gazeta" commented. Boris Berezovskii's LogoVAZ group is a financial backer of the newspaper, which has been highly critical of the Central Bank chairman (see "RFE/RL Newsline," 6 August 1998). JAC


The government's arguments notwithstanding, market analysts continue to predict a devaluation or default. According to "Izvestiya" on 13 August, many bankers believe that a default is more than a 50 percent possibility. Some even predict a default followed by a devaluation. But more believe that a devaluation will occur without a default. Dmitrii Volkov, head of the information and analysis unit at Rossiskii Kredit bank, told "Kommersant-Daily" on 13 August that the risk of a devaluation is much greater than that of a default, arguing that the government will simply keep paying its foreign creditors while ignoring or postponing its domestic obligations. Proponents of devaluation got a boost when international financier George Soros recommended in a letter to the "Financial Times" on 13 August that Russia introduce a currency board after a modest devaluation of 15-25 percent. JAC


Andrei Illarionov, director of the Institute of Economic Analysis, warned on 13 August that inflation is inevitable and only the earliest possible devaluation would cost the least social pain. Illarionov has been promoting the devaluation option since late July (see "RFE/RL Newsline," 31July 1998). JAC


A shortage of liquidity among Russia's major banks has stalled most activity on the interbank loan market. The Central Bank imposed strict limitations on hard currency volumes bought by traders and acquired by banks. Imperial Bank is reportedly one of the banks that has had trouble repaying its loans, according to Interfax. Deputy Fuel and Energy Minister Sergei Chizhov has reportedly ordered its chief shareholders, Gazprom and LUKOIL, not to take actions that would undermine the bank during this time of crisis. JAC


The Duma Council will meet on 17 August to reach a final decision on the timing of an emergency session. President Yeltsin wrote to the Duma on 14 August proposing that it convene such a session, presidential spokesman Sergei Yastrzhembskii told ITAR-TASS. Prime Minister Kirienko had requested that Duma convene mid-August to consider new anti-crisis legislation. However, a meeting of Duma factions and deputies groups declared a meeting impossible before 2 or 4 September. U.S. President Bill Clinton will be in Moscow from 1 to 3 September for meetings with President Yeltsin. JAC


According to "Moskovskii Komsomolets" on 13 August, Director of the Federal Security Service (FSB) Vladimir Putin has ordered his officers to collect information to bring criminal charges against striking miners. Putin's order was greeted with open bewilderment by FSB personnel, who questioned whether such activity came under the FSB's jurisdiction. The newspaper notes that the Lubyanka has had its own problems paying wages. JAC


President of Kalmykia Kirsan Ilyumzhinov explained his theories of governing in an interview with "Parlamentskaya Gazeta" on 13 August. When pressed to admit that he was a dictator, Ilyumzhinov explained that Kalmykia is governed by a team of young people who discuss the republic's problems fiercely and passionately but always democratically. "Once a decision is made, I always demand its implementation," he explained. "In this way, I am a dictator." According to Ilyumzhinov, the political opposition in Kalmykia accounts for only 5 percent to 7 percent of the population, so there is in fact little opposition for him to squelch. JAC


During his visit to Novgorod on 14 August President Yeltsin announced he will sign a decree within days changing the name of the city to Velikii Novgorod, ITAR-TASS reported. JAC


Yeltsin also said in Novgorod that Russia, Tajikistan, and Uzbekistan "are fully capable of resisting the Taliban," ITAR-TASS reported. The previous day, Yeltsin had a phone conversation with Tajik President Imomali Rakhmonov, following which the Kremlin released a statement saying "the CIS must agree on a series of questions on strengthening the Commonwealth's southern borders." BP


Masoor Alam said in an interview with Interfax on 13 August that his country's policy toward Afghanistan "has been not to have favorites." Alam was responding to claims made by several Russian officials recently that Pakistan is giving direct aid to Afghanistan's Taliban movement (see "RFE/RL Newsline," 13 August 1998). Alam said Pakistan has "maintained an attitude of neutrality" and advocates "bringing about a cease-fire and intra-Afghan dialogue." He admitted that Pakistan has "always recognized the group in control of Kabul as the government of Afghanistan." He also said in areas controlled by the Taliban "there has been almost complete peace and a reduction in the crime rate." Russia has not played a "constructive role" in Afghan events, Alam concluded. BP


Nikolai Beletskii and his family escaped unscathed on 13 August after unknown assailants threw two Molotov cocktails through the window of their apartment, "Nezavisimaya gazeta" reported on 14 August. Beletskii is the closest associate of Vladivostok mayor Viktor Cherepkov. Meanwhile, paramedics in Vladivostok have voted to continue their 10-day old strike, despite the allocation by the mayor's office of a 1.243 billion rubles (some $207 million) loan to pay wage arrears for April- May, ITAR-TASS reported on 14 August. The strikers are demanding a decision on a permanent source of financing for the first-aid service. LF


In an interview with Interfax on 13 August, Krasnoyarsk Krai Governor Aleksandr Lebed lamented the Russian leadership's "ostrich" policy toward the North Caucasus and called for creating the post of Russian presidential representative in the region. Lebed suggested that Ivan Rybkin, who succeeded him as Russian Security Council secretary, would be the ideal candidate for such a post. "Nezavisimaya gazeta" on 14 August recalled that one year ago, Lebed harshly criticized Rybkin's activities in Chechnya and accused him of systematically sabotaging the Khasavyurt accord, which Lebed signed with then Chechen chief of staff Aslan Maskhadov (see "RFE/RL Newsline," 1 September 1997). LF


"RFE/RL Newsline" on 12 August cited incorrect Russian agency reports saying that the Russian government is going to sell off 50 percent of the telecommunications giant Svyazinvest. In fact the government will sell only 25 percent minus two shares. Last year, it sold a 25 percent plus one share in the firm.


During talks in Baku on 12 August, Azerbaijani President Heidar Aliyev and Iranian Foreign Minister Kamal Kharrazi affirmed their mutual commitment to expand bilateral cooperation, specifically in the sphere of transporting energy resources and in supplying electricity to the Azerbaijani exclave of Nakhichevan, Interfax reported. But they failed to make substantive progress toward resolving their differences over determining the legal status of the Caspian or to reach agreement on expanded Iranian participation in the exploitation of Azerbaijan's Caspian oil. Kharrazi advocated direct talks between Baku and Yerevan on resolving the Karabakh conflict, saying that Iran is prepared to mediate such talks, ANS-Press reported. LF


Azerbaijani opposition parties on 13 August met to discuss, and finally agreed to, the Baku city authorities' offer to make available a motor-racing stadium on the outskirts of Baku for a mass rally on 15 August. Riot police held practice maneuvers at that stadium last week, according to RFE/RL's Baku bureau. Also on 13 August, the Democratic Congress, which unites a number of opposition parties, issued a statement rejecting claims made the previous day by Interior Minister Ramil Usubov that opposition activists intend to resort to violence during the planned rally, Turan reported. LF


Speaking at a press conference in Moscow on 13 August, Russian First Deputy Foreign Minister Boris Pastukhov criticized what he termed the apparent unwillingness of either Georgia or Abkhazia to make an effort to resolve the Abkhaz conflict and expedite the repatriation of ethnic Georgian displaced persons, Interfax reported. Pastukhov said that "two significant documents prepared with Russia's help" remain unsigned, and he suggested that a meeting between Georgian President Eduard Shevardnadze and his Abkhaz counterpart, Vladislav Ardzinba, might lead to the signing of an agreement on preventing further armed clashes and on repatriating the fugitives. Some Georgian displaced persons have spontaneously established contact with the Abkhaz authorities, who have granted them permission to return on condition that they never take up arms against the Abkhaz, Caucasus Press reported on 14 August. LF


In an interview with "Noviye izvestiya" on 14 August, Robert Kocharian said Armenia's economic upswing is largely the result of innovations in the tax system and budget that he had introduced in his capacity as former premier in the spring of 1997. "We have moved from the concept of survival to that of active development," he remarked. A further key factor, Kocharian said, is the increased willingness of diaspora Armenians to invest in the country's economy. Kocharian said he believes that the ongoing process of determining domestic and foreign policy priorities in all the Transcaucasus states and Caucasus republics militates against regional accord at present. He pointed out that the original venue for the September conference on the TRACECA project to which his Azerbaijani counterpart, Aliev, has invited him was Tbilisi but that Aliyev himself had insisted it be moved to Baku. LF


Speaking at a press conference on 12 August, a spokeswoman for the Assyrian community greeted the introduction of a class with Aramaic-language instruction in one of Yerevan's schools. But at the same time, she called for the reinstatement of an Armenian-Assyrian teacher fired from a school in one of three predominantly Assyrian-populated villages near the capital, RFE/RL's Yerevan bureau reported. The spokeswoman said that the Assyrian community has shrunk in recent years from 9,000 to approximately 4,000, as many of its members have been forced to emigrate for economic reasons. She stressed that "the Armenian state does everything for us not to leave the country." LF


Kazakh President Nursultan Nazarbayev said in Astana on 13 August that he is concerned about events in Afghanistan, ITAR-TASS and Interfax reported. Nazarbayev said Kazakh troops are already deployed in Tajikistan and warned Afghanistan's Taliban movement not to "overstep the boundaries" of its own country. Nazarbayev said that he is against "the use of force" and added that Kazakhstan wants to see a stable Afghanistan and will seek "normal relations" with that country once the war is over. He also said a stable Afghanistan offered the possibility to lay oil and gas pipelines through that country. In the Kyrgyz capital, Bishkek, First Deputy Defense Minister Major-General Ismail Isakov said the same day he does not believe the Taliban will cross CIS borders. "Breaching the border of even one Central Asian state would mean declaring war on all countries in the region, [which are] tied by the [CIS] collective security treaty," he said. BP


ITAR-TASS on 14 August reported that officials in Kazakhstan are worried about "foreign missionaries" propagandizing the teachings of radical fundamentalist Islam. According to news agency, criminal proceedings have been brought against missionaries from Egypt, Sudan, and Jordan. A Turkish citizen has been discovered teaching Wahhabism in the southern Kazakh city of Shambyl, and an Uzbek citizen was recently deported for violating the country's law on freedom of worship and religious associations. The Uzbek citizen was reportedly preaching "radical Islamic fundamentalism" in the town of Kyzylorda, arranging polygamous marriages, and encouraging "young religious fanatics" to follow him "blindly." BP


Kamal Kharrazi arrived in the Turkmen capital, Ashgabat, on 13 August, ITAR-TASS reported. At talks with President Saparmurat Niyazov on the status of the Caspian Sea, the two agreed to form a working group that will develop a plan on the legal framework for dividing the Caspian among the littoral states and present that plan to the presidents of Iran and Turkmenistan by 1 September. There was no progress on Iran's proposal to purchase Turkmen natural gas. Kharrazi offered $32 per 1,000 cubic meters, while Niyazov reminded him that Russia's offer of $36 per 1,000 cubic meters had already been turned down. Kharrazi spoke out against Afghanistan's Taliban movement at a press conference, but there are no reports indicating that Turkmen officials commented on the issue. BP


Ukrainian Prime Minister Valeriy Pustovoytenko is continuing his crackdown on budget debtors (see "RFE/RL Newsline," 13 August 1998) by ordering the authorities to seize personal cars from directors of non- paying companies and to impose severe fines on non- payers, ITAR-TASS and AP reported on 14 August. More than 11,000 cars have been listed for confiscation and 97 cars have already been seized, according to ITAR-TASS. The tax police have fined tax defaulters a total of 3.7 million hryvni ($1.8 million). The previous day, the cabinet appealed to all government employees to surrender 50 percent of their August salaries to the pension fund. JM


Some 30 wives of military pilots have been picketing the military airfield in Myrhorod, Poltava Oblast for the past week to prevent their husbands from conducting duty flights, Ukrainian Television reported on 12 August. The wives are demanding that their husbands wages for the past six months be paid and are threatening to launch a hunger strike. The Myrhorod airfield is the base for Ukraine's largest group of SU-27 fighters, which protect the country's air space. According to the station, the pilots--who are prohibited from striking by military law--support the action and are letting their wives into the airfield despite the fact that military authorities have dug ditches and set up additional sentry posts. JM


Belarusian President Alyaksandr Lukashenka has proposed 20 new residences for the ambassadors who were evicted from the Drazdy settlement in June, Belapan and Interfax reported on 13 August. The offer follows his personal inspection of government housing two days earlier (see "RFE/RL Newsline," 11 August 1998). Lukashenka said that if the West rejects his proposal, Belarus will have to believe that the Drazdy scandal is a pretext to discredit Belarus. "We will not lead anybody by the hand anymore. This decision is final," Interfax quoted him as saying. RFE/RL's Belarusian Service reported on 13 August that the Belarusian-EU negotiations on the diplomatic standoff have been deadlocked since Belarus refused to allow the evicted diplomats back to Drazdy. JM


Adalbert Knobl, IMF representative to Lithuania and Belarus, who is based in Vilnius, said on 13 August that Belarus must liberalize its economy in the face of a financial crisis sparked by a growing trade deficit, Reuters reported. "We don't see any changes in economic policy in Belarus, but circumstances could force them," Knobl said after his talks with Belarusian Premier Syarhey Linh and National Bank Chairman Pyotr Prakapovich. Belarus's trade deficit in the first seven months of this year was $876.7 million, up from $730.6 million in the same period last year. Knobl added that the IMF is concerned about the National Bank's plans to print 16.3 trillion rubles ($400 million, according to the official exchange rate) in the second half of 1998. "If the current credit policy is continued, it will eventually lead to a drop of output," he commented. JM


The Latvian Human Rights and Ethnic Studies Center has launched a campaign against the bid to collect signatures supporting a referendum on amendments to the citizenship law, BNS reported on 13 August. The center has printed 1,000 posters and 8,000 leaflets urging people to think before they sign up in support of such a plebiscite. The action is supported by several non-governmental organizations, including the local branch of the UN Children's Fund (UNICEF), and sponsored by the U.S.-Baltic Foundation. A local representative of UNICEF stressed that Latvia has signed the UN convention on the rights of the child, which provides for the right of children to acquire citizenship from birth. JC


The Lithuanian Defense Ministry says that Russian representatives were invited to observe the "Baltic Challenge '98" exercises in Klaipeda last month but that Moscow ignored the invitation, BNS reported on 13 August. NATO member countries and states participating in the Partnership for Peace took part in those maneuvers. The statement came after a Russian Foreign Ministry official publicly expressed surprise that Lithuania allegedly refused "to invite Russia to participate in the exercises." It added that in March, the Lithuanian Foreign Ministry had invited Russia to send military observers to the exercises. JC


German treasurer-hunters on 14 August are to begin digging at a site they believe could hold Peter the Great's Amber Room panels, seized by the Nazis during World War II, AP and BNS reported. Earlier this month, the team detected a large amount of metal buried in a shallow lagoon near Preila, on Lithuania's coast. They were searching the area because a wartime resident had said he saw German soldiers burying boxes there. The lagoon is to be drained, and a Lithuanian mine squad will be on hand in case the buried metal turns out to be explosives. Germany has contended that the panels were destroyed during the Soviet Union's bombing of Koenigsberg, now the Russian exclave of Kaliningrad. But others claim the treasure was buried by the Nazis. JC


Economy Minister Janusz Steinhoff on 13 August said that coal miners have accepted the proposed safety net for those workers laid-off in the government's mining restructuring plan, PAP reported. Under the plan, some 25,000 miners are to be laid off this year and another 100,000 by 2002. This year, 5,503 dismissed miners were paid one-off severance sums and 3,389 took a five-year pre-retirement leave of absence, during which they receive 75 percent of their last wage. Some 340 received retraining benefits. Meanwhile, 12 coal mining trade unions announced on 13 August that they have drafted an alternative restructuring plan and will seek support for it in the parliament. JM


Marian Dziurowicz, president of the Polish Soccer Association (PZPN), has offered to form a soccer league independent of the PZPN in exchange for retaining his job, "Zycie" reported on 14 August. Clubs belonging to Poland's premier soccer league have demanded Dziurowicz's resignation in the recent standoff between the PZPN and the government. Those clubs boycotted last weekend's matches. The sports minister suspended the entire PZPN leadership in May for alleged incompetence and corruption but was forced to reinstate it after the International Federation of Football Associations threatened to exclude Poland from international soccer events (see "RFE/RL Newsline," 10 August 1998). The Polish premier league clubs will continue their boycott of matches until a formal agreement on the creation of a new league has been signed. JM


Speaking from the hospital where he recently underwent surgery, President Vaclav Havel on 13 August said recent cooperation with Germany has been "excellent" in many areas, which "shows how close actual relations between our two nations are." He said the results of the last Czech parliamentary elections demonstrate that "in the Czech Republic one cannot get votes by creating a negative picture of citizens from a neighboring partner state." And he commented that German politicians must also abstain from trying to win votes "by sniping at the Czechs," Reuters and dpa reported. Deputy Premier Egon Lansky told CTK that the government in Prague "never intended to influence the election campaign in Germany" and will avoid comments on statements made there during the run-up to the September elections. MS


Foreign Ministry spokesman Milan Tokar on 13 August said Prime Minister Vladimir Meciar has invited observers from 18 countries to monitor the 25-26 September parliamentary elections, CTK reported. He said the list does not include observers from the Czech Republic and Hungary. Slovakia's relation with both of those countries are strained. Tokar told CTK that the Foreign Ministry is convinced that the cabinet will approve an invitation to the OSCE to send observers. This invitation has been repeatedly postponed, and the opposition has strongly criticized the government for the delay, saying OSCE observers should have been invited three months before the elections, which is the usual procedure. MS


Speaking on Slovak Television on 12 August, Meciar said he would be content if relations with the Czech Republic were "normal," rather than "above normal," as some Czech politicians say they must be. He argued that relations are in fact "below normal" owing to political developments in the neighboring country, CTK reported. Meciar said Czechs have not implemented the agreement on the division of Czechoslovak federal property reached by himself and former Prime Minister Vaclav Klaus at their meeting in Piestany in fall 1997. With regard to Slovak-Hungarian relations, he said there is "no reason for optimism" because Hungarian Prime Minister Victor Orban's policies on Hungarian minorities abroad "represent a step backward." Meciar said the basic treaty with Hungary does not entitle Budapest to interfere in internal Slovak affairs, and he criticized the Orban cabinet's readiness to support demands for autonomy for Slovakia's ethnic Hungarians, Hungarian media reported. MS


The government will soon appoint a new commissioner to tackle the controversy with Bratislava over the construction of the Gabcikovo-Nagymaros dam. The controversy has arisen over the September 1997 decision of the International Court of Justice in The Hague, an environmental expert of the ruling Federation of Young Democrats-Hungarian Civic Party said on state television on 13 August. Laszlo Szekely said the decision does not oblige Hungary to build a dam either at Nagymaros or at Pilismarot, northern Hungary. Nor, he continued, does it specify that Hungary must fill up the Danube reservoir at Dunalikilti, northwestern Hungary. Slovak Foreign Ministry spokesman Milan Tokar responded that Slovakia is "strictly adhering" to the court's decision and "cannot accept that Hungary tries to willfully reinterpret this ruling," TASR reported. MS


Kosovar shadow- state Ibrahim Rugova said in Prishtina on 13 August that he has appointed a negotiating team for talks with the Serbian authorities. The new body represents Rugova's Democratic League of Kosova, the Christian Democrats, and the Social Democrats. It consists of Fehmi Agani, Fatmir Sadiu, Edita Tahiri, Tadei Radiqi and Iliaz Kurtesi. Adem Demaci and Mehmet Hajrizi, who are close to the Kosova Liberation Army (UCK), declined Rugova's invitation to join. Unidentified senior Western diplomats told Reuters that the seriousness of the crisis made it imperative for the international community and Rugova to put together a negotiating team even without representatives of the UCK. One diplomat added that he hopes the team will achieve "early success [that] will pull in the doubting Thomases," by which he presumably meant the UCK. But on 14 August, Rugova said that the ongoing Serbian offensive must stop before talks can begin. PM


The UCK issued a statement to the Kosovar and Albanian media on 13 August announcing its forces are making a "tactical withdrawal" in response to the Serbian offensive. The text also made clear that Rugova's team does not speak for the guerrillas. Instead, the UCK's announcement said that the guerrillas have asked Adem Demaci to be their chief representative and to resign his other positions in Kosova's political arena. The text added that the UCK's other political representatives are Xhavit Haliti, Bardhyl Mahmuti, Hashim Taqi, Faton Mehmetaj, Sokol Bashota, and press spokesman Jakup Krasniqi. Veton Surroi, who is Kosova's best-known journalist and a top aide to Rugova, told the BBC on 14 August that Rugova's team is a "lame duck" because it does not include the UCK and because no serious talks are possible as long as the Serbian offensive continues. PM


The governments of the U.S., the U.K., France, Austria, Russia, and Serbia hailed Rugova's announcement on 13 August, Western news agencies reported from Prishtina. U.S. Ambassador to Macedonia Christopher Hill, who is also Washington's chief envoy in the Kosova crisis, said that foreign diplomats and Rugova's team will meet on 14 August to draft a negotiating platform, RFE/RL's South Slavic Service reported. Serbian Deputy Prime Minister Nikola Sainovic praised Rugova's decision to appoint negotiators as a "smart move." Sainovic also told state television in Belgrade that the authorities "always differentiated between citizens of Albanian [ethnic origin] and bandit-terrorist groups." PM


Unnamed U.S. and NATO officials say that Russian Foreign Minister Yevgenii Primakov is blocking any future NATO decision to intervene in the Kosova crisis by threatening to veto an authorization for such a move in the UN Security Council, the "International Herald Tribune" reported on 14 August. The newspaper noted that "senior Clinton administration officials, speaking privately, complained bitterly this week that Mr. Primakov had secretly told [Yugoslav President Slobodan] Milosevic that he need not worry about the risk of a NATO intervention without a Security Council resolution. Russia has vowed to veto any such UN resolution." It also quoted a senior U.S. official as saying this week that "right now, we've got a situation in which Western policy on a major issue is being run by Yevgenii Primakov." PM


The Foreign Ministry issued a statement on 13 August saying that continuing Serbian attacks on Kosovar settlements are "intolerable." The statement said that "every delay in ending the Kosova conflict increases the magnitude of the bloodshed and the humanitarian catastrophe there, as well as the danger of its spreading to the rest of the region." Meanwhile, some 600 Kosovar refugees crossed into Albania near Tropoja the same day. A representative of the United Nations High Commissioner for Refugees told Reuters that only some 250 are civilians and that the rest are UCK fighters who "escorted" them. An Interior Ministry spokesman said in Tirana that Albanian helicopters brought 12 wounded Kosovars from Tropoja to the capital for treatment. He added that Serbian troops fired artillery shells 700 meters into Albania near Tropoja on 12 August and that a military observation tower at Padesh came under small arms fire the following day. FS


Rexhep Meidani on 13 August returned to the parliament the controversial draft law on the National Information Service (SHIK, see "RFE/RL Newsline," 12 August 1998). He asked that the legislators change the text to further limit the powers of the secret service. An article that refers to "the obligation of the managers of central or local [government] institutions [as well as of] legal, state, or private entities to give information to SHIK officers" has been protested by human rights groups, the press, and the some members of the public. Meidani proposed instead that SHIK members should simply have the "right" to talk to public officials and private businessmen. He argued that the existing formulation leaves "room for the detriment of the freedoms and rights of citizen." FS


An unidentified source in Albania's Interior Ministry told Reuters on 13 August that three Egyptian Islamists arrested in Tirana in late June were suspects in the November 1997 massacre of tourists in Luxor, in which 62 people were killed. Egypt's largest militant group, al-Gama'a al-Islamiya, took responsibility for the massacre. Close cooperation between SHIK and the CIA led to the arrests. The source could not confirm a report from the "International Herald Tribune" the previous day that the three men and a fourth Islamist arrested in Tirana in July have ties to the Saudi dissident Osama bin Laden (see "RFE/RL Newsline," 13 August 1998) . FS


Republika Srpska police have arrested some 33 persons since the assassination on 8 August of Srdjan Knezevic, a police official loyal to President Biljana Plavsic (see "RFE/RL Newsline," 12 August 1998), AP reported on 13 August. UN police spokesmen said that the wave of arrests reflects a "showdown" between supporters of Plavsic and those loyal to her hard-line predecessor, Radovan Karadzic. The spokesmen added that the UN police are seeking access to the arrested persons and can confirm only 14 arrests. Pale- based Karadzic loyalists have demanded the replacement of Interior Minister Milovan Stankovic, whom the hard- liners say has launched "a reign of terror against innocent people." Stankovic has charged the Pale leadership headed by Momcilo Krajisnik with ordering the assassination. The tensions come in the run-up to the Bosnian general elections slated for 12-13 September. PM


Emil Constantinescu said in Cluj on 13 August that he is backing "multiculturalism" for universities in Romania and that the setting up of a state university in the Hungarian language is a "Romanian internal problem" that "cannot be the object of transactions" with other states. He added that the "multicultural model" of the Cluj university is one he is attempting to persuade Ukrainian President Leonid Kuchma to introduce at the Cernivici [Cernauti] university for the benefit of Romanian students. In reply to a question by a journalist concerning Hungarian suggestions that double citizenship be granted to ethnic Hungarians abroad to ensure links after Hungary joins the EU, Constantinescu said that the "time for responding" has not yet come but that consideration will have to be given to "our interest in Romanians in neighboring countries who face difficult conditions." MS


The Ecologist Movement on 13 August said it may block the transit of nuclear waste from Bulgarian's Kozloduy reactor to Russia, Infotag reported, quoting Ioan Bobina, the director of the movement's information center. One day earlier, the government officially approved the transit, for which Bulgaria is to pay $50 million and another $5 million as compensation in the event of an accident. Deputy Prime Minister Valentin Dolganiuc of the Democratic Convention of Moldova voted against that decision. Nicolae Andronic, a deputy premier representing the For a Democratic and Prosperous Moldova Bloc, said it is wrong to call the transit cargo "nuclear waste" because it is in fact processed fuel that, he claimed, does not pose any threat to the population's health. Two Moldovan specialists will oversee the loading of the fuel in Bulgaria. MS


Konstantin Shushulov, chairman of the National Electricity Company Board, and Georgi Kashciev, head of the government Committee for Peaceful Use of Atomic Energy, on 13 August dismissed fears in neighboring Greece that the Kozloduy nuclear reactor poses a threat, AP reported. Shushulov said that the plant "is by no means at a lower safety level than other [such facilities] in Europe." Both officials were responding to a report in the Greek daily "Kathimerini" saying the EU has assured Greece it will keep exerting pressure on Bulgaria to close four of Kozloduy's six reactors that are considered unsafe. MS


by Paul Goble

The most remarkable feature of the current Russian economic crisis is one that most commentaries have overlooked: namely, that the Russian collapse has not spread to the other post-Soviet states.

Even five years ago, most of the former Soviet republics were still sufficiently integrated that difficulties in the largest of them would inevitably have a large and immediate impact on all the others.

Now that has changed. More and more post-Soviet countries have succeeded in diversifying their trading partners so that problems in Russia will not be the determining factor in their development.

That is not to say that the problems in Moscow will not have an impact. Rather, the ways in which these Russian problems will affect the non-Russian countries are very different and more indirect than many are now assuming.

First, some but by no means all of the post-Soviet states remain sufficiently integrated with the Russian economy that problems in Moscow will have precisely the kind of impact that some are assuming will happen across the region. Ukraine, Belarus and Kazakhstan, for example, will be under enormous pressure to devalue their national currencies if the Russian ruble continues to fall.

Second, many of the post-Soviet states have not yet completed the reform of their economic and legal systems that would make them able to withstand negative trends abroad. These countries--which are in the majority--thus suffer from many of the same kind of problems that Russia does and for the same reasons. Without reforms, they cannot attract the kind of investment that will help power their future development. Indeed, the exceptions to this general pattern--Estonia, Latvia, and Lithuania--prove the rule.

The three Baltic countries rapidly liberalized their economies and now enjoy some of the highest rates of Western investment and economic growth anywhere in the region. Those that have failed to reform their economies, on the other hand, are in increasing difficulty. But the primary cause of their problems is the absence of reform rather than difficulties in the Russian marketplace.

Third, all of these countries are profoundly affected by the attitudes of Western investors. Because the Russian market is the best-known, many in the West have concluded that all post-Soviet states and indeed all emerging markets are in the same situation. That is absolutely wrong. In the most recent quarter for which economic statistics are available, virtually all the post- Soviet states did better than Russia on virtually every measure of economic development, relative to the size of their markets.

But while those judgments are incorrect, they have an impact on the economies of the other countries in the region, an impact that some analysts in both Moscow and the West will undoubtedly suggest shows just how "integrated" the region remains.

To a large extent, this misreading of the economic situation in the post-Soviet states reflects a larger misunderstanding of the situation there. Nearly seven years after the Soviet Union collapsed, all too many in the West continue to refer to the countries there as "new independent states" and to think about the region as a single whole rather than as 12 new countries and the three restored Baltic States.

Such observers thus have missed the broad diversification over the last few years in a region dominated until a decade ago by a single center. If the Russian economic crisis does in the end have an impact across all these countries, it is far more likely to be the result of Western misperceptions than the product of integration left over from Soviet times.