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Newsline - November 11, 1998


Almost all members of Yevgenii Primakov's government turned out for a closed session with the State Duma to present the cabinet's economic program on 10 November, apparently winning widespread support from among deputies, Russian media reported. Even Aleksandr Shokhin, a former member of the cabinet and leader of the Our Home is Russia faction, said First Deputy Prime Minister Yurii Maslyukov's presentation showed some "liberal elements," although he added that "we will not know until the last moment what kind of policy will be pursued," "Kommersant-Daily" reported on 11 November. Duma deputy and former Communist Party member Vladimir Semago emerged convinced that next year Russia will adopt "the toughest budget of all time anywhere." Communist Party leader Gennadii Zyuganov called the government's "plan" a "step forward." Oleg Morozov, leader of the Russian Regions faction, told ITAR-TASS that the majority of deputies are prepared to support the government. JAC


However, according to Russian media, the cabinet did not present a preliminary budget or draft legislation. Instead, First Deputy Prime Minister Maslyukov spent much of his presentation reviewing the government's previously adopted anti-crisis program, "Izvestiya" reported on 11 November. According to "Kommersant-Daily," Maslyukov sketched out three scenarios for 1999. Under the optimistic scenario, the IMF releases the $4.5 billion tranche, oil prices rise, taxes are collected, annual inflation for 1999 does not exceed 30 percent, and the government achieves a primary budget surplus (not including debt payments) of 2 percent. Under the pessimistic scenario, the IMF does not release any money, monetary emissions reach 130 billion rubles ($8.4 billion), and inflation soars to 300 percent. Between these two extremes, the government is aiming for the "golden middle," the daily reported. Maslyukov hinted that the government will restrict spending sharply. He pledged to submit a "super-tough" budget to the Duma by 1 December. JAC


Yurii Skuratov has reopened an investigation into the involvement of Deputy Prime Minister Gennadii Kulik with the circulation of Harvest Bonds in 1990, when he was first deputy prime minister in charge of agriculture in the Soviet government. According to Interfax on 10 November, the government rewarded agricultural producers with bonds that were supposed to entitle them to receive items, such as home appliances and cars, but the government for the most part failed to honor them. The Yabloko faction cited this affair in a letter to Prime Minister Primakov asking about allegedly corrupt activities of officials in his government (see "RFE/RL Newsline," 3 November 1998). "Nezavisimaya gazeta" condemned the food aid agreement with the U.S. concluded by Kulik, suggesting that agreement is "only profitable for American farmers" and "large [Russian] trading companies." "Nezavisimaya gazeta" receives financial backing from Boris Berezovskii's LogoVAZ group. JAC


First Deputy Prime Minister Maslyukov urged the Duma to ratify the START II treaty during the government's closed-door session on 10 November. He linked ratification with an improvement of Russia's image in the West. According to "Vremya MN," "ratification or at least perceivable progress in that direction will be one of the main arguments of the Primakov's government during negotiations with the West for financial assistance." Valentin Kuptsov, Duma deputy and member of the Communist faction, said that the issue might be included on the Duma's agenda before 17 November but added that it will be difficult to receive the Duma's backing for the treaty without members' first reviewing a number of technical documents, Interfax and ITAR-TASS reported. Duma Deputy Speaker and member of Our Home Is Russia Vladimir Ryzhkov also said that the majority of Duma factions are not ready to support the idea of START-2 ratification. JAC


Russia's continuing economic problems are likely to put a serious crimp in its plans to eliminate its stockpile of chemical weapons. Aleksandr Pikaev of the Carnegie Endowment's Moscow Center told reporters on 10 November that even before the onset of the most recent crisis, only 14 percent of the federal money budgeted for chemical weapon destruction was actually released during 1995-1997. Foreign aid has provided for some of the shortfall, with the U.S. supplying nearly $200 million since 1994. Russia is obliged to destroy the weapons under the International Chemical Weapons Convention, which it ratified last year. There is a danger, according to Pikaev, that the chemical weapons will have to be destroyed by the old method of incineration, which is harmful to the environment. The Duma has petitioned the presidential administration to suspend or discontinue Russia's participation in the convention, "Izvestiya" reported on 5 November. JAC


Workers constructing a tunnel on the Baikal-Amur Railway continued a week-long strike to protest a seven-month backlog of unpaid wages by staying underground, ITAR-TASS reported on 10 November. The next day, one of the protesters, a father of three, committed suicide, the agency reported. The Eastern Siberian Railway and the Railway Ministry owes the workers 78 million rubles ($5 million). Meanwhile, in Irkutsk Oblast, wages for public-sector workers have been delayed in many towns and districts for three or more months, despite the increased funds flowing to the regional budget, the agency reported. JAC


Temperatures below freezing combined with insufficient supplies of fuel forced schools and daycare centers to close on 10 November in Vladivostok. Mayor Viktor Cherepkov charged the local Dalenergo energy company with beginning the heating season too late, while Dalenergo said the city has not paid its debts or signed a contract for the winter season. JAC


Discussion of a ban on the Communist Party, first raised by Boris Berezovskii in response to the anti-Semitic remarks of Duma deputy Albert Makashov, continued on 10 November. Prime Minister Primakov told reporters that a "ban on a party that has a majority in the parliament may destabilize the situation" and described his attitude toward the proposal as "strongly negative." Moscow Mayor Yurii Luzhkov said that while Makashov's remarks were "disgraceful" and "savage," they are not sufficient reason to ban the party. Chairman of the Duma Foreign Affairs Committee (Yabloko) Vladimir Lukin said that "Communists should not be turned into martyrs by demanding that the Communist Party be outlawed." "Izvestiya" argued on 11 November that the current controversy is less the result of outrage at Makashov's remarks and more a product of a "struggle for the redivision of power after the successful passage" of the 7 November holiday. LUKoil and Oneksimbank are major investors in "Izvestiya." JAC


Paavo Lipponen completed a one-day trip to Moscow on 10 November after meeting with Prime Minister Primakov. According to Russian Public Television, Primakov and Lipponen discussed potential projects and purchases, such as the construction of a gas pipeline to ship Russian supplies to Western Europe and the sale of 20 to 30 Russian Mi-17 multi-purpose helicopters. The two leaders also discussed boosting cooperation in customs, taxation, and the provision of humanitarian aid to Russia, ITAR-TASS reported. Primakov thanked Finland for its support in "trying times" and declared that there has been no exodus of Finnish capital from Russia. JAC


Aslan Maskhadov issued a decree on 10 November demoting field commander Salman Raduev from the rank of brigadier-general to private and depriving him of the right to a personal bodyguard, Interfax reported. Raduev is one of three field commanders who for months have been demanding Maskhadov's impeachment for his pragmatic approach to negotiations with Moscow. Raduev has suspended the activities of the Pan-National Congress of the Chechen People in accordance with an agreement reached at a meeting between Maskhadov and field commanders on 9 November, "Izvestiya" reported two years later. The Russian newspaper adds that Maskhadov is rapidly forfeiting the support of field commanders who have until now remained loyal to him. LF


Addressing the Azerbaijani parliament on 10 November, Interior Minister Ramil Usubov and Security Minister Namik Abbasov charged that the country's opposition parties are collaborating with the intelligence services of foreign countries, including Russia, Turan reported. Prosecutor-General Eldar Hasanov said that criminal proceedings will be opened against five opposition politicians in connection with statements made at demonstrations on 7 and 8 November, which he said "defamed the honor and dignity" of President Heidar Aliev, according to Reuters. Hasanov accused Azerbaijan Popular Front Party chairman Abulfaz Elchibey, Musavat Party leader Isa Gambar, and Azerbaijani National Independence Party chairman Etibar Mamedov of "attempting to destroy state structures" and seize power. LF


Just three months after the formal abolition of media censorship, the Azerbaijani parliament issued a statement on 10 November calling on the Ministry of Information to take "all legal measures" to preclude the publication of "unconfirmed and provocative materials" and to "defend the honor and dignity of the president," Reuters and Turan reported. Meanwhile, Reporters Sans Frontieres and the Committee to Protect Azerbaijani Journalists have both condemned the beating of journalists during the unsanctioned 7 November demonstration in Baku. The U.S. State Department has also issued a statement condemning police violence against demonstrators on 7-8 November. LF


President Aliyev has dismissed Gyulabbas Gakhramanov from his post as chairman of the State Committee for Refugees, Interfax reported on 10 November. Gakhramanov's deputies were similarly fired, and Deputy Prime Minister Izzat Rustamov was reprimanded for his failure adequately to monitor the distribution of humanitarian aid to persons displaced during the Karabakh conflict. Prosecutor-General Hasanov told a government session on 6 November that criminal proceedings have been brought against 49 persons in connection with the embezzlement of humanitarian aid worth $1 million. The theft of humanitarian aid valued at several million dollars was uncovered by a special commission one year ago (see "RFE/RL Newsline," 21 November 1997). LF


Vazha Lortkipanidze ended a two-day visit to Baku on 10 November during which he met with President Aliev, Prime Minister Artur Rasi-zade, and representatives of the Azerbaijan International Operating Committee engaged in exploiting three offshore Caspian oil fields, Azerbaijani agencies reported. Some of that oil is to be exported via a pipeline from Baku to the Georgian Black Sea terminal of Supsa beginning in April 1999. Alluding to the disagreement between the AIOC and the Azerbaijani state oil company SOCAR over the financing of repairs to the Baku-Supsa pipeline, AIOC Vice President John Hollis told Lortkipanidze that the budget for doing so "will not exceed $590 million." The original estimated cost of the repairs was $315 million (see "RFE/RL Newsline," 12 June 1998). The Georgian and Azerbaijani leaders agreed on the need to expand economic cooperation and signed inter-governmental agreements on tourism and combating economic crime. LF


The Georgian Supreme Court on 10 November handed down sentences in the 11-month trial of 15 members of the paramilitary organization Mkhedrioni, including its 72-year-old leader Djaba Ioseliani, Caucasus Press reported. Ioseliani was sentenced to 11 years' imprisonment on charges of treason, the attempted assassination attempt against then Georgian head of state Eduard Shevardnadze in August 1995, and robbery. Former Georgian Interior Minister Temur Khachishvili, a close associate of Ioseliani, received a 15-year sentence and the remaining defendants between three to 15 years. Unknown assailants threw a grenade through the windows of Mkhedrioni's Tbilisi headquarters on 10 November shortly before the sentences were pronounced, AP reported. LF


The French, Russian, and U.S. co-chairmen of the OSCE Minsk Group met with Armenian President Robert Kocharian and Foreign Minister Vartan Oskanian in Yerevan on 10 November to unveil their new proposals for resolving the Karabakh conflict, RFE//RL's Yerevan bureau reported. Speaking to journalists after those talks, Russian co-chairman Yurii Yukalov said both the Armenian and Azerbaijani leaderships found the OSCE proposals "very serious" and pledged to "thoroughly consider" them. He declined to confirm media reports quoting Azerbaijani presidential adviser Vafa Gulu-zade as saying that Baku has rejected the co-chairs' proposal of a "common state" comprising Azerbaijan and the unrecognized Nagorno-Karabakh Republic because that term is ambiguous. LF


Members of the Armenian Pan-National Movement (HHSh) who held top government posts under former President Levon Ter-Petrossian issued statements on 10 November saying that allegations of corruption made by members of the Armenian Revolutionary Federation (HHD) at a rally in Yerevan on 30 October constitute a "witch hunt," RFE/RL's Yerevan bureau reported. Speakers at that rally accused former government officials of illegally acquiring fortunes through the embezzlement of public funds (see "RFE/RL Newsline," 2 November 1998). The HHSh-controlled Hanrapetutyun [Republic] parliamentary faction termed the allegations unfounded and slanderous, while former national security chief David Shahnazarian said that the present government is behind those allegations. Several of the former officials incriminated have said they will bring libel suits against the HHD. LF


Kazakhstan's Central Electoral Committee on 9 November registered three more candidates for the 10 January presidential election, raising the total to eight, RFE/RL's Almaty bureau reported on 11 November. The three most recent candidates are Amantay-Haji Asylbek, leader of the anti-nuclear movement ATTAN, former dissident Karishal Asanov, and former Kazakh Customs Committee chairman Gani Qasymov. Each candidate must collect 170,000 signatures in support of his candidacy from at least 14 of Kazakhstan's regions. LF


Russian Foreign Ministry spokesman Vladimir Rakhmanin on 10 November said he has no information that would shed light on unconfirmed reports that Colonel Mahmud Khudaberdiyev, the key figure in last week's rebellion in northern Tajikistan, is in Russia, Interfax reported. In a telephone conversation the same day, Kyrgyz President Askar Akayev assured his Tajik counterpart, Imomali Rakhmonov, that Khudaberdiyev and his associates will be apprehended and extradited to Tajikistan if they enter Kyrgyz territory, according to ITAR-TASS. LF


Finance Minister Ihor Mityukov told the parliament on 10 November that Ukraine's domestic debt was $14.9 billion, or 48.4 percent of GDP, as of 1 October. The foreign debt totaled $10.9 billion, of which $2.4 billion was to CIS countries and $4.6 billion to international financial organizations. Mityukov said the foreign debt grew by $1.4 billion, or 14.4 percent, since the beginning of the year owing to borrowing to finance the budget deficit and to provide guarantees for export contracts. He added that Ukraine currently has no overdue payments to foreign creditors. Planned spending on servicing the foreign debt amounts to 25.7 percent of budget revenues. Mityukov said he believes that a debt crisis in Ukraine is "unlikely." JM


The government on 10 November requested that the Prosecutor-General's Office investigate companies suspected of hiding their hard- currency earnings abroad to avoid paying taxes, AP reported. The government has published a list of 363 companies in its daily, "Uryadovyy Kuryer," each of which is said to have concealed at least $100,000 in revenues in foreign bank accounts. Premier Valeriy Pustovoytenko told a cabinet meeting on 10 November that as of 1 October, Ukrainian exporters have failed to report to tax authorities a total of $836 million. The cabinet's request is seen as another desperate move to collect money from debtor companies in order to pay off mounting wage arrears. This summer, Pustovoytenko locked managers in a government building, held them in a tent camp, and threatened to have money taken from their bank accounts to force them to make tax payments. JM


U.S. financier George Soros said after a meeting with Ukrainian President Leonid Kuchma in Kyiv on 10 November that tension between the government and the leftist-dominated parliament puts Ukraine in danger of being left without IMF aid, AP reported. "It's very dangerous because without an IMF program, Ukraine could follow in the footsteps of Russia," Soros commented. He added that both Russia and Ukraine still can avoid a deeper crisis by reforming their economies. But he added that he currently does not see the "political will and leadership" to pursue reform. Soros admitted that Ukraine is maintaining economic stability but commented that it is achieved "at the expense of not paying social security arrears." JM


Turkish Deputy Prime Minister and Defense Minister Ismet Sezgin visited Minsk on 9-10 November and held talks with President Alyaksandr Lukashenka and Defense Minister Alyaksandr Chumakou, Belapan and Belarusian Television reported on 10 November. According to Belapan, both sides showed interest in developing bilateral relations, while "paying special attention to issues of military-technical cooperation." Referring to an unofficial source, the 11 November "Vremya MN" reported that the Belarusian-Turkish talks focused on supplies of Russian S-300 anti-aircraft systems to Cyprus, which are opposed by Turkey and the U.S. The Russian daily suggested that Moscow is seeking to provide Greek Cyprus with S-300s using Belarus as an intermediary. JM


The Narva city authorities have cut off water supplies to the Russian border town of Ivangorod, citing a 18.3 million kroons ($1.4 million) debt to the water company Narva Vesi, ETA and BNS reported on 11 November. Narva will continue to treat sewage from Ivangorod for the time being after the Estonian government allocated 370,000 kroons from its special reserve for humanitarian aid to cover the costs. Ivangorod acting mayor Tatyana Dyachkova told BNS that the Ivangorod municipal authorities will use tank trucks to supply residents with water "in accordance with norms for time of war: 10 liters per person per day." Meanwhile, Estonian and Russian government officials are scheduled to discuss the issue on 11 November. Ivangorod's water debt to Narva has long been a source of friction between the two towns. JC


The government has approved introducing duties on imports beginning January 1999, ETA reported on 11 November. Economy Minister Jaak Leimann said the resolution complies with the principles of the Common Agriculture Policy of the EU, which the government adopted in February. The opposition Reform Party, however, has criticized the government decision, claiming it is in conflict with the principles of a free market economy. The parliament must now vote on the decision. JC


Vilis Kristopans, who has been charged with forming a new government, says the parliamentary vote on his cabinet will take place before the end of this month, BNS reported on 10 November. Kristopans was speaking to reporters following talks between the three-party coalition members: Latvia's Way, the Fatherland and Freedom party, and the New Party. He admitted that there are disagreements within each of the coalition parties over whether to cooperate with the centrist People's Party or the leftist Social Democrats. But he stressed that a choice between the Social Democrats and the People's Party will be made by consensus. The three-party coalition, which has 46 seats in the 100-strong parliament, is due to hold discussions with both the Social Democrats and the People's Party on 11 November, according to "Diena." JC


On the eve of Poland's Independence Day, a joint session of the two parliamentary chambers adopted a resolution paying tribute to "the generations of Poles whose sacrifice of lives, solid work, and belief in the sense of sacrifice helped our homeland survive oppression and regain independence and sovereignty," PAP reported on 10 November. Former President Lech Walesa laid flowers at the tomb of Marshal Jozef Pilsudski, who is considered the architect of Poland's independence. President Aleksander Kwasniewski stressed that "the importance of cooperation between various political groups is the lesson we learn from the events of 1918." The celebrations in Warsaw are attended by the presidents of Lithuania, Latvia, Estonia, Ukraine, Hungary, and Romania. JM


The Constitutional Court has ruled that two provisions of the 1997 lustration law are unconstitutional, Polish media reported on 10 November. Under the law, state officials are obliged to submit written declarations as to whether they collaborated with the Communist-era secret services. The court questioned the provision providing for repeated screening procedures and that depriving those who make false declarations of the right to elect Poland's president. The parliament can reject the court's verdict by a two-thirds majority. The opposition Democratic Left Alliance, which took the law to the court, welcomed the verdict. The ruling Solidarity Electoral Action (AWS), however, said the court has made a mistake by questioning the law's two provisions. The Freedom Union, the AWS's coalition partner, believes that the parliament should amend the lustration law by adapting it to the tribunal's ruling. JM


Leading opposition politicians on 10 November called on Foreign Minister Jan Kavan to resign, accusing him of having leaked information about the alleged presence in the Czech Republic of an Islamic terrorist, AP reported. Kavan said the previous day that he had been speaking "off the record" to journalists and did not expect his comments to be published. He also denied having broken the law on leaking secret information, because, he said, "I have not seen any classified file, nor did I gain the information from official sources." "Lidove noviny" on 7 November reported that a terrorist suspect recently spent some time in the country and showed interest in RFE/RL, which began broadcasts to Iran and Iraq on 30 October. MS


Slovak Economy Minister Ludovit Cernak on 10 November said new studies have been commissioned on the feasibility of building a third and fourth unit at the controversial Mochovce nuclear plant. He said the decision whether to proceed with the plans will be delayed by several months, AFP reported. The former cabinet, headed by Vladimir Meciar, was to have decided on expanding Mochovce by the end of this year. A second unit at the Russian-designed reactors is now under construction. The first unit began operating in June, triggering strong protests in neighboring Austria. MS


Ibolya David on 10 November refused to countersign President Arpad Goncz's decision the previous day pardoning former Agrobank executive Peter Kunos. David explained that Kunos's appeal on health grounds has not been supported by medical expert opinion. She also said she does not want to overrule the Supreme Court's verdict. Kunos, who was accused of bribery and sentenced to two years in prison on 30 April 1998, will now serve out his jail term at a prison hospital. The president's office said this is the first time that a decision by the president has not been countersigned by a minister. MSZ


U.S. Ambassador to Macedonia Christopher Hill, who is also Washington's chief envoy in the Kosova crisis, has drafted a plan for an interim political settlement in Kosova that will give the province wide-ranging autonomy, the "International Herald Tribune" reported on 11 November. Under the plan, Kosova will have its own president, laws, police, and courts as well as one-fifth of the seats in the federal parliament. The proposal also includes a wider range of "human rights and fundamental freedoms" than Serbian citizens currently enjoy. The draft does not cover several thorny issues, such as how much power to grant the Serbian minority and who will obtain the profits from privatization. Hill is using the same negotiating tactics the U.S. delegation used at the 1995 Dayton conference, namely to begin with the least complex issues and leave the most difficult ones for last. PM


The "International Herald Tribune" also wrote on 11 November that Hill's proposal contains several elements that one side or the other may find difficult to accept. The plan gives Kosova as a province too much self-rule in the eyes of Belgrade, which wanted autonomy to be concentrated at the local level. Yugoslav President Slobodan Milosevic may object to allowing Kosovars to elect one-fifth of the parliament, lest the Albanians combine their votes with those of Montenegrin deputies and anti-Milosevic Serbs to oust him. The Kosovars demand at least republican status equal to that of Serbia and Montenegro. The Kosovars also want their own constitution and guarantees that the interim political settlement can be changed. In Brussels on 10 November, a spokesman for the Kosova Liberation Army (UCK) said that the UCK must be a signatory to any settlement and that no talks are possible as long as the "Serbian occupiers" remain in Kosova. PM


The Serbian Media Center in Prishtina reported on 10 November that two Serbian civilians went missing in the Skenderaj area and that the two may have been kidnapped by the UCK. The ethnic Albanians' Kosova Information Center reported that 13 buses carrying Serbian paramilitary police passed through the Podujeva area en route to Prishtina and that a Serbian tank "deliberately ran over" a horse-drawn cart near Gjakova and injured its four Kosovar passengers. In Washington, the State Department said in a statement that both sides must observe the cease-fire in Kosova. "It is the responsibility of both the Serbian security forces and the [UCK] to exercise restraint and prevent a resurgence of violence," the text added. In London, a Foreign Office spokesman called "on all sides to show restraint and support the efforts of [Hill] bring about a political settlement. Violence is not the answer," he added. PM


The French Ministry of Defense has chosen paratroop Brigadier-General Marcel Valentin to head NATO's 1,500-strong "extraction force" that will rescue unarmed OSCE monitors in Kosova should they find themselves in danger, Reuters reported from Paris on 10 November. The force is expected to be based in Macedonia once that country's new government takes office and gives its approval. Valentin commanded the Sarajevo sector for UNPROFOR peacekeepers in 1993 and has also served in Chad. PM


An unspecified number of police raided the Belgrade offices of the independent daily "Dnevni Telegraf" during the night of 9-10 November and confiscated all copies of the10 November edition. The Serbian authorities have tried in recent weeks to put the newspaper out of business through legal restrictions and fines. In order to circumvent the restrictions, the editors have re-registered "Telegraf" in Montenegro and sold individual copies not as newspapers but as scrap paper, RFE/RL's South Slavic Service reported. PM


Hard-line Republika Srpska President Nikola Poplasen said in Banja Luka on 10 November that he will select a prime minister "by the end of the week." He did not indicate whom he will pick but noted that he "cannot nominate the candidate without the consent of the biggest party in the parliament," which is Radovan Karadzic's Serbian Democratic Party. PM


In Washington on 10 November, representatives of the international Contact Group said in a statement that outside assistance to Bosnia will be "gradually reduced" but did not specify a time frame. This a long-planned move aimed at reducing aid-dependancy. At the same time, the diplomats warned Bosnia that it must make greater progress in moving toward a market economy in the near future or risk even deeper aid cuts. In Sarajevo, Mirza Hajric, who is a top aide to Muslim leader Alija Izetbegovic, rejected a recent statement by an unnamed U.S. official, who charged that the Muslims are the chief opponents of the move toward a market economy, Reuters reported. PM


Unnamed Croatian generals and Defense Ministry officials told "Jutarnji List" of 11 November that the armed forces of Croatia and the U.S. have cooperated well together in recent years but that Washington refuses to sell Zagreb advanced fighter aircraft. The Croatian military want the planes to help bring the air force up to NATO standards in preparation for membership in the alliance's Partnership for Peace Program. Croatia is currently seeking Israeli help to modernize its aging fleet of MiG-21s, the daily added. In other news, the same newspaper reported that a recent study shows that the number of declared bankruptcies has risen ten-fold since 1994. The study warned that "dramatic" political and social consequences on the Russian model could follow if the trend continues. PM


About 30 gunmen blocked the office of the prefecture and the town hall of Shkodra on 10 November, firing weapons into the air and capturing a police car. They demanded the release of three people whom police had arrested the same day in Tirana for reasons that are unclear. The crowd dispersed after representatives had talked with Prefect Ali Lacaj. An Interior Ministry spokesman told Reuters that Shkodra police have meanwhile received reinforcements and restored order. The three arrested men included a former member of the elite Presidential Guard and two of his friends, all from Shkodra. The guardsman, who also had served as a bodyguard to recently murdered opposition politician Azem Hajdari, was sent to a high- security prison in Tirana, dpa reported. Police released the other two men independently of the protests in Shkodra. Their subsequent appearance there helped calm the situation, AP added. FS


A spokesman for the OSCE said in Tirana on 10 November that unknown people entered its office in Shkoder during the unrest. They stole or damaged computers, telephones, and furniture and took one vehicle parked outside. Meanwhile, dpa reported that some of the protesters identified themselves as members of anti-communist trade unions. They said they will hold protest demonstrations unless the imprisoned former guardsman is released on 11 November. FS


Italian Prime Minister Massimo D'Alema and his Albanian counterpart, Pandeli Majko, signed a cooperation agreement in Rome on 10 November aimed at curbing illegal migration and fighting organized crime. D'Alema told journalists that smuggling migrants across the Strait of Otranto "has already produced too many victims an...unacceptable form of crime." He stressed that "we are trying to hit the smugglers, not the immigrants." Italian authorities last week started handing out some 38,000 residence permits to illegal Albanian immigrants to help regulate their status. Meanwhile, representatives of Albania's secret service (SHIK) asked that the trial of suspected Islamist terrorist Claude Cheik Ben Abdel Kader be suspended while SHIK further investigates his case (see "RFE/RL Newsline," 9 November 1998). FS


The leaders of the ruling coalition have approved a plan to restructure the government, cutting the number of ministries from 23 to 17, RFE/RL's Bucharest bureau reported on 10 November. Including the premier, there will be 18 ministers in the cabinet. Among those ministries to be abolished are privatization and reform, both of which are to be transformed into government departments under the premier's supervision in a bid to speed up reforms. The Tourism and the Communication Ministries will be transformed into national agencies, and the Research Ministry will be subsumed into the Education Ministry. The National Peasant Party Christian Democratic will now have six ministers, the Democratic Party four, the National Liberal Party three, the Hungarian Democratic Federation of Romania two, and the Social Democratic Party one. The parliament will vote on the streamlined structure after the government officially approves it. MS


Petar Stoyanov and his Romanian host, Emil Constantinescu, told journalists on 10 November that their two countries suffer from a false image in the West, whose perception of the impact of the world economic crisis and the Russian economic crisis on the Bulgarian and Romanian economies does not reflect reality. Constantinescu said it is "not true" that the EU recently gave Bulgaria and Romania the lowest marks in its evaluation of candidate member countries. The two leaders agreed to intensify economic cooperation. Five cooperation agreements in agriculture, transportation, education, science, and customs were signed. Constantinescu said "regional traffic" is "likely to intensify" once a new bridge over the Danube River is constructed. But to date there is no sign that an accord on the location of such a bridge is imminent. The two states have long differed over this issue. MS


The government has approved the budget for next year, RFE/RL's Bucharest bureau reported on 10 November. Finance Minister Anatol Arapu said the budget envisages revenues of 2.8 billion lei (some $3.9 billion), which, he said, amount to 28.3 percent of GDP, and expenses of 3 billion lei. He said some 23 percent of the budget will service the country's foreign debt but added that this servicing is not included in the budget figures since it will be financed from revenues obtained from privatization and from international loans. Arapu said that while drafting the budget, the cabinet has "conducted a dialogue with the IMF" that was "tense" but ended in agreement. The government said it intends to introduce a 5 percent tax on all imports, excluding energy supplies. MS


Patriarch Maxim on 10 November rejected the conclusions of a two-day meeting of clergymen at which new statutes for the Bulgarian Orthodox Church were adopted in a bid to stage elections for a new Church leader by the end of 1999. The meeting was a follow-up to the world gathering of Orthodox Church leaders in Sofia in September, which informally advised Maxim to step down in the near future and to receive back into the Church the followers of rival Patriarch Pymen. Maxim, who served the communist regime, said on 10 November that the recent gathering "had no legal or religious value" and "violated the statutes of the Bulgarian Orthodox Church, as it was not convened by the Holy Synod," Reuters reported. MS


by Julie A. Corwin

At the beginning of November, the Russian government announced that it was officially canceling its third attempt to sell 75 percent of the state-owned company Rosneft. The news was not unexpected: Prime Minister Yevgenii Primakov had said on several occasions that the state could no longer raise the revenues that it had expected. The previous government of Sergei Kirienko hoped to use proceeds from the sale to plug a growing budget deficit and foreign debt. With the country now in worse economic shape than under the past government, Moscow needs the cash more than ever.

It is perhaps for this reason, that the Primakov government appears to have adopted a more realistic plan for privatizing Rosneft: this time it is selling off the company piece by piece, asset by asset. Sakhalin Governor Igor Farkhutdinov told Interfax on 2 November that Rosneft is seeking buyers for a 49 percent share of its stake in the giant Sakhalin-1 project. The company's stake in Sakhalin-1 was one of three pieces of the company that initially attracted potential buyers as diverse as British Petroleum, Oneximbank, LUKoil, Gazprom, and Royal Dutch Shell; the other two pieces were its small stake in the Caspian Pipeline Consortium and the oil production enterprise Purneftegaz, which contributed 8 million tons of Rosneft's annual 13 million oil output. The other parts of Rosneft, according to Matthew Sagers, director of energy services at Washington-based PlanEcon, are liabilities rather than assets.

In March of 1998, CentreInvest Group, a Moscow-based consulting firm, estimated the present net value of Rosneft's entire 17 percent stake in Sakhalin-1 at $265 million. But according to Sagers, the entire Sakhalin-1 stake--broken off from the rest of Rosneft--could fetch as much as $400 million. Of course, one half of $400 million-- or $200 million --may seem like a drop in the bucket compared with the Kirienko government's $1.6 billion starting price for all Rosneft, but with more than $17 billion in debt payments coming due in 1999, the Primakov government may have decided to settle for whatever cash it can raise.

Pragmatism as well as poverty may have motivated selling off Rosneft in piecemeal fashion. It could be months, if not years. before Rosneft is reunited with its main production enterprise, Purneftegaz. Rosneft lost 38 percent of Purneftegaz in September, when a court ordered the sale of company shares as part payment for a bank loan on which Rosneft had defaulted. Rosneft had put up the block of shares as collateral for a $10 million dollar debt it owned to MAPO-Bank, Mestbank, and GIVTSneftegaz. According to "Russian Petroleum Investor," MAPO-Bank has close ties to LUKoil: together, they own the large oil production enterprise, Arkhangelskgeoldobycha. On 2 November, a Moscow arbitration court postponed the hearings of two lawsuits Rosneft had filed to regain control of Purneftegaz.

The Russian government and the State Duma have been outspoken in their condemnation of the Purneftegaz transaction. A 38 percent stake of a company valued at a minimum of $600 million went for the grand price of $10 million to three companies, Feniks, MAK-Invest, and PAK-Invest, which are reportedly controlled by LUKoil and Boris Berezovskii, whose LogoVAZ group controls Sibneft. On 14 October, President Boris Yeltsin ordered that Prime Minister Primakov ensure that shares in Purneftegaz be returned to Rosneft, and on 5 November Federal Security Service (FSB) Chairman Vladimir Putin called the sale an act of "astounding fraudulence." According to ITAR-TASS, Putin declared that the FSB will spare no effort to prevent similar deals in the future and will "do its best to return to the state the resources and property that belong to it."

The Duma, meanwhile, passed a special resolution declaring the Purneftegaz sale illegal and struck Purneftegaz's fields off lists included in pending legislation that would have made them eligible for production-sharing agreement terms. And on 20 October, Prosecutor-General Yurii Skuratov promised to investigate the sale, saying it showed signs of collusion, "Nezavisimaya gazeta" reported.

However, most analysts familiar with the Purneftegaz sale, "Kommersant-Daily" reported on 7 October, believe that finding a legal means to overturn it--short of nationalization--may prove difficult. Valerii Garipov, first deputy fuel and energy minister, told the newspaper he believes that in order to return Purneftegaz to Rosneft, "it will be necessary to use 'Soviet' methods." Part of the problem is that employees of Rosneft may have purposefully engineered the loan default, which caused the subsequent sale of Purneftegaz. According to "Russian Petroleum Investor," some staff members of the Duma's Industry Committee claim that various Rosneft managers, including members of former company president Yurii Bespalov's team who are close to Berezovskii, conspired with the potential buyers and deliberately delayed payment of the $10 million credit in order to force the sale of the Purneftegaz stake.

Regardless of the circumstances of the Purneftegaz sale, it is clear that annulling it and settling all outstanding legal issues to the satisfaction of potential new buyers will take time. In the meantime, the government can concentrate on selling its 2.5 percent stake in Gazprom and one-half of Rosneft's stake in Sakhalin-1. It will meet only a tiny segment of the country's financing needs, but it is at least a start.