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Newsline - August 27, 1998


The Central Bank on 27 August suspended trading for the second day in a row, with the ruble opening at nearly 9.5 rubles to $1, according to ITAR- TASS. The previous day, the ruble dropped to 8.26 rubles to $1 from the previous day's level of 7.86, and a spokesman for the Central Bank announced that the bank does not think that massive currency interventions will serve any purpose. Analysts point to a likely dearth of hard-currency funds. According to the "Financial Times" on 20 August, from late July to late August, the Central Bank spent all of the $4.8 billion of support provided by the IMF to defend the ruble. State Duma Budget Committee Chairman Aleksandr Zhukov of the Russian Regions faction told reporters on 26 August that the central government should impose currency restrictions to ease the current monetary crisis. However, a Central Bank official told Interfax that the bank will not impose such restrictions because they would signify "a transition to a different economic model." JAC


According to Ekho Movsky on 26 August, branches of Sberbank, Russia's largest bank, are not allowing their customers to make withdrawals from their foreign-currency accounts because of a lack of cash. Several branches in Moscow had no foreign currency whatsoever that day. Customers are able to withdraw money from their ruble accounts but only in sums of up to 2,000 rubles ($254) per day. JAC


According to "Parlamentskaya gazeta" on 27 August, the Federation Council will hold an emergency session on 3-4 September. Council Chairman Yegor Stoyev said that Council members will discuss the country's economic situation. JAC


The latest to join the chorus of policymakers criticizing the Central Bank is acting Prime Minister Viktor Chernomyrdin himself, who said "Financial and economic policy are questions to which I am giving my full attention. I am extremely dissatisfied with the work of the Central Bank for the last two days." Also disparaging was Dmitrii Vasiliev, head of the Federal Securities Commission, who told Interfax on 26 August that the Central Bank not only failed to maintain sufficient foreign exchange reserves but also delayed the devaluation unnecessarily, making the restructuring of short-term debt unavoidable. Former Minister for Foreign Economic Relations Sergei Glazev described the Central Bank's leadership as the "main culprit" in Russia's current financial disaster. Glazev forecast further declines in the ruble to 12 to 15 rubles to $1 by the end of the fall, unless the government centralizes foreign-exchange reserves, "re-dollarizes" the banking system, and freezes prices. JAC


"Noviye Izvestiya" reported on 26 August that "there is persistent talk of that old lion of the banking system Viktor Gerashchenko being invited back" to head the Central Bank. Gerashchenko, chairman of the Central Bank under Chernomyrdin, was at the helm on 11 October 1994, dubbed "Black Tuesday," when the ruble lost more than 25 percent of its value . Another candidate more widely touted for the position is Aleksandr Shokhin, leader of the Our Home is Russia faction. JAC


"Izvestiya" on 27 August reports that a number of smaller banks, such as Dialog, MDM, and Probiznesbank, have protested the recent announcement of a merger between Uneximbank, Menatep, and Most (see "RFE/RL Newsline," 26 August 1998). They argue that the Central Bank policy's is creating special conditions for selected banks at the expense of the remaining banks, which may not be as big but are possibly more reliable. According to the newspaper, some skeptical observers consider the merger purely one of convenience and that once the financial crisis is over, the three banks' mutual attraction will fade. In addition, they note that those three banks are headed by powerful personalities, Vladimir Potanin, Mikhail Khodorkovskii, and Vladimir Gusinskii, whose past relations with one another have not always been smooth. "Kommersant-Daily" reported on 26 August that several more banks are expected to merge before the week's end. JAC


The reaction of both foreign and domestic investors to the government's plan to restructure short-term debt was less than enthusiastic (see "RFE/RL Newsline," 26 August 1998). "Izvestiya" of 27 August concludes that the "blow to investor confidence" will reverberate for many years to come. The "Financial Times" reports that foreign investors are facing losses ranging from more than $33 billion to $50 billion. Credit Suisse First Boston, which was believed to own a large proportion of Russia's short-term debt, said that its net profits plunged from $754 million as of 30 June 1998 to $500 million. JAC


The Russian press was highly critical of the Russian government for its more than 24-hour delay in announcing details of its debt plan. "Noviye Izvestiya" of 26 August argued that "two trading days on the exchange were spent in uncertainty." It added that the market needs "clear, immediate, and positive news" but is getting "more and more questions." "Kirienko acted correctly but always three to four weeks late," while Chernomyrdin did "much that was useful and necessary but was several months late," according to the newspaper. "Izvestiya" wrote the same day that markets fell because Chernomyrdin has not said a word about his intended economic policy. Although "Kirienko was slow to act because of his catastrophic lack of political support," the newspaper argued that Chernomyrdin has no such excuse. "Every hour of delay" is expensive, it added, saying "money will start pouring out of the economy." JAC


Sergei Rogov, director of the Moscow-based USA and Canada Institute, told reporters on 26 August that the "financial collapse of the ruble has radically changed the entire agenda of the U.S. president's visit." Russia's economic situation will overshadow all other issues, he noted. Rogov concluded that "the financial crisis in Russia may be viewed as a failure of U.S. policy toward Russia since 1991." U.S. President Bill Clinton will not bring "a bag full of money"; instead, he will most likely offer only advice. Clinton is scheduled to visit Russia from 1 to 3 September. JAC


According to "Kommersant-Daily" on 26 August, Germany, Russia's steadfast supporter and largest lender and foreign investor, had suspended its usual policy of providing financial support in times of crisis. Instead, Chancellor Helmut Kohl "offers only advice," such as overhaul the country's financial and banking systems and create attractive conditions for foreign investors, while German Finance Minister Theo Waigel is even more blunt: "Russia must do it by itself." Meanwhile, Japan, according to the newspaper, is accelerating its plans to provide a $1.5 billion credit to Russia. Japanese policymakers believe that Chernomyrdin will succeed in enabling the country to conform to IMF objectives. JAC


Chernomyrdin, following orders from President Yeltsin, flew to Crimea in the evening of 26 August to meet with IMF Managing Director Michel Camdessus, Interfax reported. According to the Russian government information department, the two men discussed Russia's steps to minimize the impact of the financial crisis on the Russian economy and its efforts to stabilize the country's finances. Chernomyrdin also met with Ukrainian President Leonid Kuchma and visiting Belarusian President Alyaksandr Lukashenka, whom he informed about the situation on the Russian financial market (see related items in Part II). He stressed the need for concerted action by the three countries since their economies are closely integrated. JM


Chernomyrdin's attempts to establish a coalition government is meeting with resistance from some Duma factions. Grigorii Yavlinskii, leader of the Yabloko faction, told Interfax on 26 August that his party will not negotiate for seats in the government and will vote against Chernomyrdin as prime minister. He said that the "downfall of the ruble, which is not over, is a direct consequence of the earlier Chernomyrdin government." ITAR-TASS reported on 26 August that the Agrarian faction has also threatened that it will vote against Chernomyrdin if the two documents being drawn up by a "trilateral commission" of Duma and government officials are not approved in advance. Those two documents are the political treaty between the executive and legislative branch and the new anti-crisis plan. Chernomyrdin has been insisting that the Duma consider the issue of his candidacy first. JAC


"Russkii telegraf" on 25 August predicts that the current banking crisis will trigger a "second" large-scale redistribution of wealth. Corporate clients who keep their working capital in banks rather than engage in barter will suffer. It added that some will likely go bankrupt, while those companies that operate primarily with cash, such as export-oriented companies, will sell "for a song to domestic investors." Moreover, the "financial exhaustion of the center" will accelerate separatist trends in the regions, who will be forced to rely on their own resources to survive the current crisis, according to the newspaper. JAC


"Kommersant-Daily" reported on 26 August that the French oil company Elf Aquitaine has canceled its plans to acquire a 12-15 percent stake in Sibneft. Elf was planning to invest more than $500 million in the Russian oil firm. Observers suspect that the drop in Sibneft's credit rating from BB- to B- on 17 August and the general financial crisis in Russia prompted the French company to alter its plans. An Elf spokesman cited changing economic conditions and the continuing drop in the price of oil for the turnabout. JAC


In a recent interview with Interfax, Mintimer Shaimiev said that the Russian government "remains indifferent" toward non-Russian nationalities and religious affairs in Tatarstan and other regions of the Russian Federation, RFE/RL's Kazan bureau reported on 27 August. Shaimiev added that he is concerned about the possibility of conflict in Dagestan, where he said the Russian Ministry for Nationality Affairs and Federal Relations, headed by Yevgenii Sapiro, is doing nothing to ease tensions. LF


The demonstrators who converged on the capital of Dagestan on 26 August returned to their home towns of Kizilyurt and Khasavyurt later that day, following talks with representatives of the republic's government and an appeal by the father of murdered Mufti Said-Mukhamed Abubakarov not to engage in violence during the period of mourning. The protesters had demanded the immediate resignation of State Council chairman Magomedali Magomadov and the clarification of the mufti's murder last week. Talks continued between the protesters and government representatives in Kizilyurt on 27 August, RFE/RL's North Caucasus correspondent reported. Deputy Prime Minister Gadji Makhachev told the protesters that the republic's leadership is ready to consider the question of Magomadov's resignation providing the legal requirements for his impeachment are observed. LF


"Nezavisimaya gazeta" on 27 August quoted one of the leaders of the three Dagestani villages that last week declared an independent Islamic territory as denouncing as a "provocation" former Chechen acting Prime Minister Shamil Basaev's statement that his men are ready to defend Islamic radicals in Dagestan if the latter are attacked by Dagestani government forces (see "RFE/RL Newsline," 21 August 1998). Russian newspapers are increasingly reporting that the alleged links between Islamic radicals in Chechnya and Dagestan are the reason for the crackdown on Wahhabis in Dagestan. LF


Turkish President Suleyman Demirel has invited his Armenian counterpart, Robert Kocharian, to attend the 75th anniversary celebrations of the founding of the Republic of Turkey, RFE/RL's Yerevan bureau reported on 26 August, quoting presidential public affairs adviser Gassia Apkarian. Apkarian said that Kocharian has accepted the invitation on behalf of Armenia and will soon announce who will represent the country. Demirel was one of numerous heads of state who congratulated Kocharian on his election as president in March. Turkey and Armenia currently do not have diplomatic relations, and Turkey has said the opening of a border crossing with Armenia is conditional on the withdrawal of Armenian forces from occupied Azerbaijani territory adjacent to Nagorno-Karabakh and on Yerevan's recognition of Azerbaijani sovereignty over the disputed enclave. LF


During a visit to Tehran on 24-25 August, Vartan Oskanian met with Iranian President Mohammad Khatami, parliamentary speaker Ali Akbar Nateq Nouri and Foreign Minister Kamal Kharrazi, Noyan Tapan and IRNA reported. Oskanian described bilateral relations as "excellent," while Khatami termed them "deep, historical, and strong." The talks focused on expanding bilateral trade, transport ties, and economic cooperation, including laying a gas pipeline from Iran to Armenia and the construction of a highway from Meghri (on Armenia's southern frontier with Iran) via Georgia to the Black Sea port of Poti. Oskanian and Kharrazi also discussed the prospects for resuming talks on resolving the Karabakh conflict and for trilateral cooperation between Iran, Armenia and Georgia, and between Iran, Armenia and Greece. The Iranian, Armenian, and Greek foreign ministers will hold talks in Tehran on 7 September. "Yerkir" on 27 August quoted Artashes Baghumian, an ethnic Armenian deputy of the Iranian parliament, as saying that the Kocharian government has "great confidence in the Iranian government." LF


An Azerbaijani government delegation led by First Deputy Prime Minister Abbas Abbasov and including Foreign Minister Tofik Zulfugarov met with President Saparmurat Niyazov and other officials in Ashgabat on 24 August to discuss, among other issues, the delineation of the dividing line between the two countries' respective sectors of the Caspian Sea, ITAR-TASS and ANS-Press reported. Baku and Ashgabat have held two rounds of lower-level talks on dividing the Caspian, most recently in late March. Azerbaijani officials expressed their disapproval and concern when the U.S. oil company Mobil won a tender in June to develop the disputed Kyapaz/Serdar field. Both Azerbaijan and Turkmenistan claim ownership of that field. LF


An attack on the mayor's office in Tursunzade on 27 August left six people dead and four others seriously wounded, RFE/RL correspondents reported. Among those killed was the mayor of the city, Nurullo Khairullaev, and the head of his administration. Armed men in masks and camouflage uniforms opened fire outside the building, also killing two guards and a policeman. One of the attackers was also killed. The Tajik president's spokesman, Zafar Saidov, said the attack was politically motivated. Tursunzade was a haven for criminal groups during Tajikistan's five-year civil war and has frequently witnessed shootouts. BP


UN special envoy to Tajikistan Jan Kubis met with United Tajik Opposition (UTO) leader Said Abdullo Nuri and parliamentary deputy Abdumajid Dostiyev on 26 August to discuss the peace process, ITAR-TASS reported. Nuri again mentioned the fate of the more than 200 UTO fighters still awaiting transport back to Tajikistan from northern Afghanistan. Kubis said the UN will help once the UTO hands over four people located in UTO-held territory and suspected of killing UN employees in Tajikistan in late July. Nuri said that the order has been given to send them to Dushanbe but that for "technical reasons," it has not been possible as yet. Nuri said the suspects will arrive in Dushanbe in the "next few days." BP


The Russian Embassy in Dushanbe has complained about increased security measures at the U.S. Embassy in the Tajik capital, Interfax and ITAR-TASS reported on 26 August. Both the Russian and U.S. Embassies are located in the Oktyabr Hotel. The previous day, U.S. Embassy guards demanded to search the car of an Iranian diplomat who wanted to visit the Russian Embassy. The Iranian official refused to allow them to do so and returned to his embassy. Russian Ambassador to Tajikistan Yevgenii Belov complained to U.S. charges d' affaires Patricia Campeter over the incident. Campeter sent apologies to both the Russian and Iranian Embassies, saying the guards are new and not yet acquainted with proper protocol. BP


Pakistani Minister of State for Foreign Affairs Mohammed Kanju and Turkmen President Saparmurat Niyazov agreed on 26 August that they will insist U.S. company UNOCAL fulfill its part of a planned pipeline project, Interfax reported. UNOCAL owns 56 percent of shares in the Centagaz consortium, which plans to build a pipeline from Turkmenistan via Afghanistan to Pakistan. The U.S. company announced it had suspended its participation in the project following last week's attack by the U.S. on terrorist positions in Afghanistan. BP


In the "End Note" entitled "Improving Economy Has Yet To Affect Living Standards In Armenia" (see "RFE/RL Newsline," 26 August 1998), the last two sentences of the sixth paragraph should read as follows: "Negotiations are under way on the release of the last $45 million tranche, Anayiotos told RFE/RL. Yerevan has reason to expect that it will receive the loan, as it is on schedule to meet most ESAF targets for 1998. "


The IMF will decide on a $2.2 billion loan to Ukraine "in a few days," ITAR-TASS reported on 27 August, quoting the Ukrainian president's press service. That pledge was made by IMF Managing Director Michel Camdessus to Ukrainian President Leonid Kuchma at their meeting on 26 August in Crimea. According to the press service, Camdessus positively assessed Kuchma's recent economic decrees to stabilize and reform the Ukrainian economy. JM


Belarusian President Alyaksandr Lukashenka met with President Kuchma in Crimea on 26 August to discuss bilateral relations and the financial crisis in Russia, Interfax reported. According to Kuchma's press service, the Ukrainian leader stressed the importance of finalizing the demarcation of the Ukrainian-Belarusian border, developing mutually beneficent economic ties, and reforming the CIS. Lukashenka told journalists before the meeting that the Belarus-Ukraine partnership "needs dynamics. We have even frozen trade turnover," he commented. He also said he disagrees with Ukraine's proposals to make the CIS a consultative body rather than a decision-making one and to focus on expanding bilateral ties between post-Soviet countries. JM


Commenting on his meeting with Lukashenka and acting Russian Premier Viktor Chernomyrdin in Crimea later on 26 August (see Part 1), Kuchma welcomed Russia's striving to develop regional cooperation with CIS countries, calling it a "good form of integration," ITAR-TASS reported. Kuchma said that "Kyiv is always ready for [the] closest cooperation" within the CIS. Kuchma added that Ukrainians are also worried by Russia's financial plight and realize that it may soon have a "serious impact" on Ukraine as well. "A successful overcoming of that difficult situation will have a decisive influence on the stability of state power," the agency quoted Kuchma as saying. JM


The Belarusian leader said in Crimea before meeting with Kuchma and Chernomyrdin that Russia "should change the course of its policy, and it does not matter who is put in charge of that course," Interfax and AP reported on 26 August. Lukashenka added that he could accept neither the course pursued by former Russian Premier Sergei Kirienko's government nor "the people who implemented" it. He did not comment directly on the appointment of Viktor Chernomyrdin as Russian acting prime minister, saying that individuals are not important in such circumstances. JM


Beginning on 28 August, the Belarusian National Bank is to set a single Belarusian ruble exchange rate at the Interbank Currency Exchange, Belapan reported on 26 August. The official exchange rate will be 49,000 Belarusian rubles to $1. The black market exchange rate stands at some 80,000 to $1. Under a presidential edict, Belarusian enterprises are obliged to sell 10 percent of their revenues in hard currency to the National Bank according to the official exchange rate. JM


Prime Minister Mart Siimann told journalists on 26 August that the de facto devaluation of the Russian ruble poses no threat to the Estonian kroon because the latter is pegged to the German mark, BNS and ETA reported. "The devaluation of the Russian ruble will not rock the kroon, because its stability is secured by the currency board system," according to Siimann. At the same time, he did not rule out an indirect impact of the devaluation on the Estonian economy, noting that Russian market is attractive to many businessmen and that the risk in trading with Russia is always high. JC


Russian Deputy Foreign Minister Aleksandr Avdeev, addressing a news conference following a regional foreign ministers' meeting in Vaesteraas, Sweden, said he has confidence in Latvia's commitment to changing its citizenship legislation, which left many ethnic Russians stateless after Latvia became independent in 1991. But at the same time, he said the proposed amendments contain provisions that "raise doubts about the government's sincerity." "Latvia will still have to do a lot to improve political and civil rights," he commented. Singling out the provision for automatically granting citizenship to all children born of stateless parents in Latvia since 1991, Avdeev noted that the proposed change requires that a citizen have no criminal record for five years. Since the children in question would be no more than seven years old, that provision implies the citizenship process will drag on for years, he argued. JC


Valdas Adamkus told AP in an interview on 26 August that he is committed to closing down the Ignalina nuclear power plant, which uses Soviet-era reactors like those at Chornobyl. Neighboring countries, expressing fears that an accident like the one in Chornobyl could occur at Ignalina, have urged that the plant be shut down. A former official at the U.S. Environmental Protection Agency, Adamkus said the plant will be phased out over the next 15 years. At the same time, he stressed that safety at the plant has improved. "I believe Lithuanians are not now exposed to any emergencies, nor is Ignalina a threat to any of our neighbors," he commented. JC


The National Bank of Hungary on 26 August intervened on the foreign exchange market to reduce forint devaluation, saying they are unjustified by domestic economic developments. The Polish zloty and the Czech and Slovak crowns also lost ground against the U.S. dollar and the German mark. In Romania, the stock exchange fell 11 percent, to its lowest level since opening in 1996, AP reported. MS


Miroslav Sladek, leader of the ultra nationalist Republican Party, who was acquitted of charges of instigating racial and national hatred in January, faces a retrial on the same charges, AP reported, citing CTK. The charges were brought after Sladek said during a visit by German Chancellor Helmut Kohl in 1997 that "we can only be sorry that we killed too few Germans during the war." Stanislava Pichova, chairwoman of the Appeals Senate of the Prague City Court, on 26 August said the court is dissatisfied with the decision of the Prague district court and that the case will be returned to that court for a reassessment of the evidence submitted by the prosecution. MS


The election campaign in Slovakia started officially on 26 August, and a spokesman for Vladimir Meciar's ruling Movement for a Democratic Slovakia (HZDS) dismissed allegations that the party is ready to apply any tactics needed to win the elections, AP reported. Ivan Mjartan accused the opposition of being "aggressive" and is always criticizing something, "because it is only driven by its desire for power." The HZDS has prepared thousands of leaflets with caricatures of opposition politicians and crude jokes about them, but Mjartan said that "the decision on whether to use them depends on what the opposition does against us." MS


Speaking on Slovak radio on 26 August, Meciar said that he did not invite election observers from the U.S., Britain, the Czech Republic and Hungary because those countries are "unfriendly" to Slovakia, RFE/RL's Bratislava bureau reported. He added that he did not want those observers to "abuse their presence" in order to criticize the elections, In other news, speaking after a meeting with visiting Slovak Construction and Public Works Minister Jan Mraz, Turkish State Minister Yucel Seckiner said in Ankara on 26 August that Turkey and Slovakia are working on an agreement for the joint production of a tank at a Slovak arms factory, Turkish media reported. MS


"Magyar Hirlap" on 27 August reports that the illegal gathering of information on Federation of Young Democrats-Hungarian Civic Party leaders under the previous government was carried out by a private company with secret service connections (see "RFE/RL Newsline," 26 August 1998). The daily's report was confirmed by police and secret service sources, but it is still unknown who ordered the company to gather the information. The government on 26 August authorized Interior Minister Sandor Pinter, political state secretary at the Prime Minister's Office, Ervin Demeter, and senior adviser Bela Gyuricza to open an investigation into the case. MS


Unknown persons threw a Molotov cocktail at the United States Information Center in Prishtina on 26 August, causing some damage to the entrance of the building. U.S. officials then asked Serbian police to increase their protection for the office and the hotel where most of the staff lives, which the Serbs agreed to do, Reuters reported. An unnamed Western diplomat said that "we take [the attack] as a message," but he declined to speculate as to who might be behind it. He added that local Serbs and ethnic Albanians alike are generally friendly toward the staff. The center functions as the de facto U.S. diplomatic representation in Kosova, and U.S. officials frequently meet with Kosovar political leaders there. Assistant Secretary of State Julia Taft is slated to arrive in Prishtina on 27 August. PM


London's "Financial Times" wrote on 27 August that "evidence is mounting of systematic human rights abuses against ethnic Albanians arrested in [Kosova] on suspicion of links with separatist rebels. Police have released the bodies of four men who have died in custody since last month, but many others are missing." The newspaper noted that officials of the UN and of the Hague-based war crimes tribunal "are investigating widespread allegations of torture and abuses of the [Serbian] judicial system." One unnamed investigator added that "the UN is very concerned. [Evidence of abuse of rights] is starting to be fairly systematic." PM


Kosovar shadow-state Prime Minister Bujar Bukoshi said on Albanian Television on 26 August that Kosovars are "undergoing the most difficult moments of their history." He charged that "Belgrade butchers [have launched] a total war of extermination" against the Kosovars, who have no choice but to "institutionalize their self-defense" around the Kosova Liberation Army (UCK). Bukoshi called the UCK "an expression of the inalienable right of a peace-loving and freedom-loving people to defend themselves and oppose the most anti-human regime that post-World War II Europe has seen." The prime minister criticized the international community's response to the crisis in Kosova as "inadequate" and warned that those unidentified foreigners who deny the Kosovars the right to self-determination may some day regret having taken that position. Bukoshi nonetheless said the role of the U.S. in mediating and eventually "guaranteeing" a political settlement is "indispensable." PM


Adem Demaci, who is the leading political spokesman for the UCK, told the "Sueddeutsche Zeitung" of 27 August that the UCK fighters have returned to a policy of engaging in classical guerrilla hit-and-run tactics (see "RFE/RL Newsline," 25 August 1998). When asked if the UCK intends to engage in terrorism, he replied: "It is not terrorism when one fights for freedom or when one attacks representatives of the enemy, such as spies or agents." Demaci criticized shadow- state President Ibrahim Rugova as "not suitable for his office. He is a weak person, who lacks courage, talent and knowledge," Demaci charged. He added that Kosovars elected Rugova because they thought he could deliver U.S. support for Kosovar independence. Demaci concluded that now Kosovars realize that they must fight for independence, because that "is the only way to bring the Serbs to the conference table." PM


Republika Srpska Prime Minister Milorad Dodik and Montenegrin President Milo Djukanovic told a conference in Alpbach, Austria, on 26 August that the keys to peace in the Balkans are open borders, free trade, democratization, and educating a new generation in a spirit free of nationalism. Dodik stressed that nationalism has led the Bosnian Serbs into almost total isolation but that now democracy must be built from the ground up, "Die Presse" reported. He appealed to the EU to help educate at least 500 to 600 Bosnian Serb future leaders as an investment in the democratization process. Djukanovic argued that Yugoslav President Slobodan Milosevic has brought Yugoslavia to the brink of ruin through "catastrophic" economic policies and by indulging in "nationalist mysticism." The Montenegrin leader stressed that Yugoslavia is suffering from a lack of democracy. PM


Djukanovic said in Alpbach on 26 August that the solution to the Kosova crisis is a negotiated settlement, "Die Presse" reported. Dodik, however, suggested that animosities between Serbs and Kosovars may have become too deep to permit reconciliation and that the two peoples may have to go separate ways. Addressing the same conference, Polish Foreign Minister Bronislaw Geremek, who holds the OSCE chair, urged Russia to end its support for Milosevic on Kosova. Austria's Foreign Minister Wolfgang Schuessel, who holds the EU chair, called for an international conference to end the Kosova dispute. He said that such a gathering should be modeled on the 1995 Dayton conference that ended the Bosnian war. PM


The Albanian Foreign Ministry issued a statement on 26 August rejecting a federal Yugoslav protest over a bomb that destroyed an Orthodox Church building in Shkodra last week (see "RFE/RL Newsline," 20 August 1998). The Yugoslavs had called the blast "an attack on the human and religious rights of ethnic Serbian and Montenegrin minorities." The Albanian statement countered that "the Orthodox church in Shkodra is owned by the Orthodox community, which is composed, first and foremost, of [ethnic] Albanians." The statement added that the Albanian authorities have no evidence as to who was behind the bombing, but it hinted that the blast might have been organized by Serbian intelligence services: "The attack was the work of a devilish mind that tried to provoke conflict among religious communities in this city." FS


U.S. Ambassador to Albania Marisa Lino told VOA's Albanian-language service that Washington is "very concerned about the democratic process in Albania" following the arrest of six former high- ranking officials who now belong to the opposition (see "RFE/RL Newsline," 26 August 1998). She said Albanian political parties should abide by the rule of law, stressing that the courts are "a place for justice, not a place for politics, and that there is no point in perpetuating a cycle of revenge." Socialist Prime Minister Fatos Nano has denied that the arrests were politically motivated. Albanian politics are sharply polarized between supporters of the Socialists and backers of the opposition Democrats. FS


On 26 August, spokesmen for the opposition Democratic Party in Tirana called on the U.S., the EU, and the OSCE to investigate those arrests. An OSCE spokesman said his organization is monitoring the situation. Meanwhile, Democratic legislator Azem Hajdari called on supporters during a rally in Tirana "to seize weapons and to die for freedom," ATSH reported. Former President Sali Berisha of the Democratic Party added that "in addition to our peaceful protests, we shall use all other means until our demands are fulfilled." He called for the resignation of the government. The next day, Tirana police banned an opposition rally slated for 27 August. Police spokesmen said that they feared that "terrorist acts" would be committed at the rally if it went ahead. FS


Foreign Minister Andrei Plesu on 26 August told the Senate's Foreign Relations Committee that the teaching of Romanian in minority schools in Ukraine is to be replaced by the teaching of the "Moldovan language." He said textbooks printed in Romanian are to be replaced by ones using the Cyrillic alphabet in response to a proposal made by the chairman of the Association of Ukrainian Romanians. Plesu said he has asked Romania's Department for Minorities to present counter-proposals, which will then be handed to the joint Romanian-Ukrainian Commission on Minority Problems. The same day, the opposition Party of Social Democracy in Romania protested the Ukrainian decision, saying it is a "continuation of the de- nationalization policies pursued by the former Soviet authorities." MS


The Senate on 26 August approved a law aimed at increasing the financial independence of local government, RFE/RL's Bucharest bureau reported. According to the law, 50 percent of taxes on wages will go to the state budget, 40 percent to the local government, and 10 percent to the county councils. Since the Chamber of Deputies has approved a different version of that law, a mediation commission will have to find a formulation acceptable to both houses. In other news, the largest miners' union on 26 August said that pending negotiations with the government, it is revoking its decision to call an indefinite strike MS


The Joint Control Commission, which is observing the truce in the security zone in the Transdniester, has approved bringing 10 Ukrainian peace keepers to the security zone, Infotag reported on 26 August. The decision to bring the Ukrainian peacekeepers was taken at the March summit in Odessa, but Chisinau and Tiraspol both failed to approve the plan until now. MS


The Moldovan Supreme Security Council, meeting on 26 August, discussed the issue of double citizenship. According to a press release by the presidential office, parliamentary chairman Dumitru Diacov, Deputy Prime Minister Nicolae Andronic, and Justice Minister Ion Paduraru said the proliferation of the "double citizenship phenomenon" was "abnormal" and that the existing legislation must be amended to provide for loss of Moldovan citizenship for those who do not renounce a second citizenship "within six months." The Russian-language media in Chisinau have lately warned against the "tacit assimilation of Moldova by Romania" through Moldovans' taking up Romanian citizenship, BASA-press reported. MS


Ivan Kostov, on a two- day visit to Athens, on 26 August discussed with his Greek counterpart, Kostas Simitis, nuclear safety and bilateral relations, Reuters and AP reported. Kostov handed Simitis a report on a nuclear safety program at the controversial Kozloduy plant, which is to be examined by the Greek Atomic Committee. MS


by Paul Goble

Estonians, Latvians, and Lithuanians agree that they cannot defend themselves and that no one is likely to defend them, but they disagree profoundly about the nature of the threat to their countries and about just how useful various international groups are likely to be in helping them deal with it.

Both the points of agreement and those of disagreement are likely to make it increasingly difficult for the three Baltic governments to maintain a common position on their efforts to join NATO and the EU and for the West to treat them as a single bloc, rather than as three very different countries.

Earlier this summer, the Estonian Saar polling company interviewed 1,000 adults in each of the three Baltic countries to determine popular attitudes toward a variety of security questions and to find out how people in each think their governments should proceed.

Commissioned by NATO and the Lithuanian Foreign Ministry, the poll revealed a remarkable pattern of agreement and disagreement along national lines.

Huge majorities--76 percent of Estonians, 81 percent of Latvians, and 72 percent of Lithuanians--believe that their countries would not be able to effectively defend themselves in the event of a military attack. And most also believe that the West would be unlikely to help them in the event of such an attack.

According to the poll, only 23 percent of Estonians, 15 percent of Latvians, and 15 percent of Lithuanians are confident that Western countries would provide military assistance. Instead, small majorities in all three believe that the West's assistance in such circumstances would be limited to diplomatic activities.

Such judgments about the willingness of the West to help, however, apparently do not disturb most people in these three countries. Indeed, the Saar poll found that more than 95 percent of the residents in each country were convinced that their state does not currently face any real military threat from another country.

But that is where the unanimity ends and the differences begin. According to this poll, Estonians, Latvians, and Lithuanians disagree on the nature of the threats facing their countries, on whether they should join NATO, and on what mix of international memberships they believe would best meet their security needs.

Estonians believe that the greatest threats to their security come from abroad, but Latvians and, to a lesser extent, Lithuanians believe that the greatest security threats are domestic ones. Only 35 percent of Estonians believe that they face a domestic security threat, while 62 percent of Latvians and 45 percent of Lithuanians hold that opinion.

According to the Estonian director of the poll, Andrus Saar, this pattern reflects what he called Estonia's more balanced pattern of economic development, one in which there is much less variation among sectors, as compared with the situation in the other two countries.

The three nationalities also diverge, if somewhat less dramatically, over the value of NATO membership for their countries. A bare majority of Lithuanians--51 percent-- support the idea of joining NATO, with only 25 percent opposed to that step. In Estonia, 43 percent want to join the Western alliance, but 25 percent are opposed. And in Latvia, only 37 percent support the idea of membership, with 29 percent opposed.

But perhaps most interesting are the differences among the three peoples on the approaches they believe would give them the greatest amount of security. Some 30 percent of Estonians believe that membership in both NATO and the EU would provide the best guarantee, while 29 percent think that neutrality would be the best stance.

Among Latvians, 29 percent believe that neutrality would be best, with 26 percent favoring membership in both NATO and the EU, and smaller percentages backing membership in only NATO or only the EU.

Finally, 26 percent of Lithuanians believe NATO membership would give their country the best chance for security, with 23 percent backing neutrality and 23 percent backing membership in both the Western alliance and the EU.

Obviously, these numbers could quickly change if the geopolitics of the region change or if national leaders expand their own efforts to promote particular security agendas.

But the differences this poll reveals suggest that the three countries are likely to move in increasingly different directions and that the international community, long accustomed to thinking of them as the undifferentiated Balts, is going to have to respond to that development.