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Newsline - December 22, 1998


Nikolai Bordyuzha, chief of the presidential administration, is studying proposals on changes in the administration, Oleg Sysyuev, deputy chief of the presidential administration, told reporters on 21 December. Sysuev said that he expects a decision will be made on them soon. In the course of studying the proposals, Bordyuzha met with Kemerovo Governor Aman Tuleev, ITAR-TASS reported. JAC


The State Duma will consider the 1999 budget at an extraordinary meeting on 24 December, one day later than had been previously scheduled, Interfax reported. The Duma's Budget Committee will recommend that the lower house adopt the budget in its first reading, Committee Chairman and member of Russian Regions Aleksandr Zhukov told reporters on 19 December. Earlier, Zhukov warned that if the budget is not passed quickly, then key figures will have to be revised by the second reading, which "would mean that the budget may not be adopted at all." Duma Chairman Gennadii Seleznev said that the budget has a good chance of passing by a wide margin on 24 December, since all factions except Yabloko agreed to support the budget. On 18 December, deputies approved in the first reading a package of tax bills submitted by the government. JAC


Russia may demand the resignation of UN weapons inspector Richard Butler at the next UN Security Council meeting, Interfax reported on 21 December. Meanwhile, Yulii Vorontsov, Russia's ambassador to the U.S., will be returning to Washington in a few days and Russia's ambassador to London will follow later (see "RFE/RL Newsline," 21 December 1998), according to ITAR-TASS. The ambassadors had been recalled to Moscow for consultations shortly after the U.S.-British air strikes against Iraq were launched. JAC


Almost every fifth missile launched by the U.S. and U.K. missed their target, according to a Russian General Staff report, Interfax reported on 21December. The same day, Colonel-General Leonid Ivashov, head of the Defense Ministry department for international relations, said that while Russia will not sever military ties with London and Washington, it will seek to limit them, "canceling many joint military exercises and other planned ventures." Cooperation with NATO, on the other hand, will proceed as planned, he said. JAC


Addressing colleagues from nine of the 12 CIS states in Moscow on 21 December, Russian Defense Minister Igor Sergeev said that in view of the "unpredictable policy" of the U.S., as exemplified by the air strikes against Iraq, CIS member states should develop a common understanding of key military-political problems and a common approach to future defense cooperation, Russian agencies reported. A report analyzing the results of those strikes, which the defense ministers condemned as "a totally unjustified act of aggression," was discussed at the meeting. Participants also discussed the CIS joint air defense system, cooperation within the parameters of the 1992 Collective Security Treaty, and the automatization of control operations, according to Interfax. LF


In its World Economic Outlook, the IMF predicted that Russian GDP will dip 8.3 percent in 1999, compared with 5.7 percent in 1998. Inflation, according to the fund, will rise to 56 percent, compared with 26 percent this year and the 30 percent forecast in the government's 1999 budget. The fund reduced the forecast for GDP that it had made in a report published in October. Duma Budget Chairman Aleksandr Zhukov suggested that the fund based its figures on the assumption that Russia will receive no foreign loans in 1999. Meanwhile, real incomes plunged 25.1 percent in November, compared with the same month last year, according to the State Statistics Committee. Real per capita wages plummeted 35.4 percent over the same period. JAC


A Russian delegation led by Prime Minister Yevgenii Primakov wrapped up its visit to India on 22 December after signing seven agreements, Russian and Indian media reported. Primakov and Indian Prime Minister Atal Behari Vajpayee attended the signing of an agreement on military- technical cooperation that is valid until 2010. Other agreements covered air links between the two countries, cooperation in communications, and the development of trade and economic relations, industrial, financial, scientific and technological cooperation. Primakov said a "comprehensive document defining political relations between the two countries" will be signed when Yeltsin visits India next year. Primakov said trade with India, expected to reached $1.5 billion in 1998, should be doubled by the year 2000 and quadrupled by the year 2005. He also said that he favors giving India a permanent seat on the UN Security Council. BP


Primakov also clarified his 21 December statement about a "strategic triangle" composed of Russia, India, and China, saying it was "not a formal proposal," ITAR-TASS reported. Primakov added that he had thought it was "a good idea" and that he had wanted to say a partnership between the three powers could reliably stabilize the situation in the [South Asian] region." At the same time, he noted that "a lot depends on the policies of India and China." He emphasized that "a military bloc" is not the goal and that "in no case would this strategic triangle be directed against a third country." The Russian daily newspaper "Izvestiya" on 22 December dismissed Primakov's proposal, ascribing it to "the coincidence of the three states views on the Iraq issue" and arguing that it "in no way means that the formation of such an 'axis' is a possibility." BP


Officials in Russia's Defense Ministry have said they are aware of preparations for a ballistic missile test by North Korea, ITAR- TASS reported on 21 December. The ministry said the test will likely be conducted before the end of this year. Interfax on 21 December quotes "diplomatic sources" in Moscow as saying the test is consistent with international norms, explaining that "North Korea is a sovereign state that has the right to conduct such tests." The same sources claimed that "greater worry should be aroused by North Korea's intention to export missile and rocket technologies." BP


A new bankruptcy suit was filed against Russian Public Television (ORT) on 21 December, just three days after the Moscow Arbitration Court had dismissed another one, ITAR-TASS reported. "Argumenty i Fakty" reported that the government is preparing to sell 10 percent of the government's shares in the company to "a serious investor" and that Rupert Murdoch is allegedly interested in acquiring the stock so that he will possess a truly global network. Meanwhile, ORT Director-General Igor Shabdurasulov wrote an open letter to President Boris Yeltsin accusing the Moscow Mayor Yurii Luzhkov and Communist members of the Duma of "putting colossal pressure" on the station before parliamentary elections. "Kommersant-Daily" reported on 18 December that Yevgenii Primakov's government is considering replacing Shabdurasulov because they do not think he has coped well with ORT's current difficulties. JAC


The administration and people of regions where chemical weapons are stored and will be destroyed are demanding financial compensation, such as investment in their local infrastructure, "Krasnaya zvezda" reported on 18 December. Republics such as Udmurtia and Chuvashia want financing for the construction of water and gas pipelines and other housing and social benefits to compensate them for their exposure to higher health risks because of the weapons' presence on their territory, according to the military daily. Meanwhile, the government is having trouble finding enough international financial assistance to fund its participation in the International Chemical Weapons Convention, under which Russia must start destroying weapons by December 1999 (see "RFE/RL Newsline," 1 November 1998). JAC


Duma Chairman Seleznev has said he believes the Duma will vote in January to launch impeachment proceedings against President Yeltsin, Interfax reported. According to Seleznev, the impeachment vote will likely focus on one item, Yeltsin's unleashing of the war against Chechnya. The Yabloko faction supports impeachment only on this item. Two-thirds of the deputies would have to vote in favor of impeachment, then the Supreme Court and the Constitutional Court would have review the charges, after which the Federation Council would have to approve. It is not considered likely that Yeltsin will be impeached. JAC


Leader of Our Home is Russia (NDR) Viktor Chernomyrdin has asked NDR faction leader Aleksandr Shokhin to resign from the party, "Moskovskii komsomolets" reported on 22 December. Shokhin had been suggesting lately that Chernomyrdin should not seek the presidency of Russia in 2000 (see "RFE/RL Newsline," 1 December 1998). According to the daily, Shokhin refused but Chernomyrdin is likely to ask again. The newspaper also noted that Shokhin is not the only "powerful rebel" in the NDR, since Samara Oblast Governor Konstantin Titov and Saratov Oblast Governor Dmitrii Ayatskov have also openly criticized Chernomyrdin. Therefore, the newspaper concluded, Shokhin's departure "may only speed up NDR's disintegration." "Moskovskii komsomolets" is considered close to Moscow Major Luzhkov. JAC


Financial magnate Boris Berezovskii oversaw negotiations between Krasnoyarsk Governor Aleksandr Lebed and Anatolii Bykov, head of the Krasnoyarsk aluminum plant, who has recently opposed Lebed (see "RFE/RL Newsline," 10 December 1998), "Izvestiya" reported on 19 December. Bykov reportedly suggested that Lebed redistribute power in favor of the government and at the expense of the governor. Bykov also wants Lebed to refocus his efforts from politics to the economy. On 17 December, directors of large plants, factories, and coal-mining companies followed Bykov's lead by announcing that Lebed's policies are leading the region to catastrophe, the daily reported. The newspaper argued that Lebed must hand power over to the local elite or his government "will be finished." It added that gathering enough signatures for an impeachment referendum could be easily accomplished. JAC


An agreement of sorts has been reached between the new and old mayors of Vladivostok, Russian Television reported on 21 December. With a group of State Duma deputies acting as mediators, supporters of former Mayor Viktor Cherepkov agreed to stop picketing the mayor's office, where the police have also abandoned their vigil. According to the report, dual power will exist in the city until new mayoral elections are held on 17 January. Six contestants have registered to run, including Cherepkov. JAC


Chechen presidential spokesman Mairbek Vachagaev told ITAR-TASS on 21 December that the decapitated heads of one New Zealand and three British telephone engineers would be handed over to the respective embassies in Moscow on 22 December. But Prosecutor- General Masur Tagirov told that agency on 22 December that the Chechen authorities are still trying to locate the headless bodies and plan to hand over both the bodies and the heads simultaneously at some unspecified future date. Tagirov also denied media reports that the killers are demanding payment of $2,000 for each of the bodies. But he admitted that the abductors want to exchange the bodies for an accomplice arrested on unspecified criminal charges. LF


Chechengazprom head Salambek Khadzhiev was abducted on his way to work in Grozny on 21 December, ITAR-TASS reported. Khadzhiev previously headed the Chechen government of national accord that elicited Russian support to overthrow President Dzhokhar Dudaev. He resigned from that post in October 1995. LF


Maverick field commander Salman Raduev, until recently regarded as posing a serious threat to the authority of President Aslan Maskhadov, was admitted to a Grozny hospital on 20 December, where he will shortly undergo craniocerebral surgery to alleviate the aftereffects of earlier injuries, Russian agencies reported. Raduev was seriously wounded and believed killed in a shootout in the spring of 1996, but he resurfaced months later after extensive plastic surgery abroad. The Chechen Sharian Supreme Court has ruled that in view of his poor health, the four-year jail sentence handed down on him in early November should be suspended (see "RFE/RL Newsline," 5 November 1998). LF


David Woodward, newly appointed president of the Azerbaijan International Operating Company engaged in developing three offshore Azerbaijani oilfields, told journalists in Baku on 21 December that the consortium will decide in mid-1999 which route it considers optimum for the so-called Main Export Pipeline for Azerbaijan's Caspian oil, ITAR-TASS reported. That decision, which was to have been taken during the second half of 1998, was twice postponed. The Azerbaijani, Turkish, and U.S. governments are all lobbying for the Baku-Ceyhan route, rather than alternatives to either Supsa in Georgia or the Russian terminal at Novorossiisk. The AIOC has misgivings about the Baku-Ceyhan option, which is by far the most expensive of the three. The estimated cost of building that pipeline is between $2.5 billion and $3.7 billion. LF


The Azerbaijani Foreign Ministry has issued a statement characterizing the ongoing defense cooperation between Russia and Armenia as a "factor that hinders peace, stability, and security in the South Caucasus," Turan and ITAR-TASS reported on 21 December. The statement was pegged to the 15-16 December visit to Armenia of Russian air force commander Colonel-General Anatolii Kornukov, during which Russia sent five MiG fighter aircraft to the Russian military base in Armenia to participate in the joint defense of CIS air borders (see "RFE/RL Newsline," 17 December 1998). The statement also appealed to the Russian leadership to suspend implementation of the August 1997 Russian- Armenian Treaty on Friendship, Cooperation, and Mutual Security. LF


Karen Demirchian addressed the founding congress of a local branch of his People's Party of Armenia in Yerevan on 20 December, RFE/RL's bureau in the Armenian capital reported. Demirchian criticized the present authorities for allegedly tampering with the results of the March 1998 presidential election, in which he lost in the runoff to Robert Kocharian. Demirchian also said that Armenia's industry and agriculture "are in tatters" and advocated a greater role for the state in regulating the economy. He characterized his party's program as social-democratic. Demirchian commands strong support among voters impoverished by the collapse of the former command economy, and he believes that with their support, his party will win the 1999 parliamentary elections, provided the poll is free and fair. LF


Levan Aleksidze, foreign policy adviser to Georgian President Eduard Shevardnadze, told Interfax on 21 December that the 17-18 December Geneva talks under UN auspices were unexpectedly fruitful. He said that although the two sides failed to resolve their "sharp differences," they expressed readiness for unspecified compromises, and resumed work on a protocol on the repatriation to Abkhazia of ethnic Georgian displaced persons. Aleksidze noted what he termed the positive role in those talks of Abkhaz Prime Minister Sergei Bagapsh, who also expressed satisfaction at their outcome, according to Caucasus Press, citing "Alia" of 21 December. LF


Bagapsh met in Gali on 21 December with Georgian Minister of State Vazha Lortkipanidze and the interior and security ministers to discuss the recent upsurge of terrorist activity in Gali, Caucasus Press reported. The two sides agreed on the withdrawal of Georgian Interior Ministry forces from the village of Khurcha, a Georgian exclave on the Abkhaz side of the River Inguri, which forms the internal border between Abkhazia and the rest of Georgia. Tamaz Nadareishvili, chairman of the so-called Abkhaz parliament in exile, condemned that decision as tantamount to ceding Georgian territory to the Abkhaz, Caucasus Press reported. In his weekly radio address on 21 December, President Shevardnadze again called for a compromise solution to the conflict and abjured the use of force, according to ITAR-TASS. In an oblique reference to the Georgian guerrilla formations operating in Gali, Shevardnadze described official Georgian support for terrorist organizations as "unacceptable." LF


Independent journalist Seydakhmet Kuttykadam announced the formation of a new political movement on 21 December, RFE/RL correspondents in Almaty reported. The Orleu-Progress movement will be composed of members of the country's intelligentsia, and branches will be opened in all regions. Kuttykadam said the movement's main task is to prepare for the next parliamentary elections. However, the movement's first priority will be to register. Another movement, "For Fair Elections" announced itself in early October but has still not been registered by the Ministry of Justice. BP


Kazakh President Nursultan Nazarbayev met with Russian officials in Astana on 21 December, RFE/RL correspondents there reported. He called for better cooperation with the governors of Russian regions bordering Kazakhstan, and he criticized Russia for creating "obstacles" to Kazakhstan's exporting oil via Russian pipelines, saying that Kazakhstan "has to struggle" for every kilometer of the pipeline. He added that such obstruction is "not understandable for me as leader of a country that is known to be one of the main economic partners of Russia." Pipelines are certain to be on the agenda when Nazarbayev meets Russian Prime Minister Yevgenii Primakov in Astana on 23 December. Meanwhile, Nazarbayev has scheduled meetings with officials from the U.S. Mobil Oil Company on 22 December. BP


Kazakh Foreign Minister Kasymjomart Tokayev and his Ukrainian counterpart, Boris Tarasyuk, met on 21 December and signed a protocol on cooperation between the two countries' Foreign Ministries in 1999-2000, ITAR- TASS reported. The two also discussed CIS reforms, and Tarasyuk said "the reform process is continuing, but it is too early to speak of results." Tokayev said it is "necessary to improve the effectiveness of the Commonwealth," especially in adhering to accords signed by the heads of member states. BP


Turkmen President Saparmurat Niyazov has been unanimously re-elected chairman of the country's Democratic Party, the only official party in Turkmenistan, Interfax reported on 21 December. Niyazov announced a second political party will be registered in the near future, RFE/RL correspondents in Ashgabat reported. BP


Kyrgyz Prosecutor-General Asanbek Shirshenaliyev announced at a 21 December press conference that a hotline has been established so that residents of the country can file complaints about corrupt officials, Interfax reported. Shirshenaliyev said the project will work in conjunction with the Council Against Corruption and Economic Crime, set up by presidential decree earlier this month. The prosecutor pointed out that during the last five years, 383 government officials, mostly lower level ones, have been dismissed from their posts. The latest anti-corruption campaign began when the head of the presidential administration, Omar Sultanov, was sacked on 10 December. Government officials who asked to remain anonymous told RFE/RL correspondents in Bishkek that Economics Minister Taalaibek Koichumanov and Interior Minister Omurbek Kutuev may soon be dismissed. Koichumanov has tendered his resignation following the dismissal of two of his deputies on corruption charges. It is rumored that Prime Minister Kubanychbek JumAliyev will do the same. BP


Ukrainian Prosecutor-General Mykhaylo Potebenko asked lawmakers on 21 December to lift the parliamentary immunity of former Prime Minister Pavlo Lazarenko so that he can be tried on corruption charges, Ukrainian Television reported. Potebenko said he is ready to charge Lazarenko--who was freed on $3 million bail from a Swiss prison last week--with embezzling some 2.2 million hryvni ($620,000) in state funds. He added that Lazarenko is also guilty of embezzling "considerably larger" funds, but their size will be announced after receiving a "consent from certain states." Mykhaylo Obikhod, Potebenko's deputy, said Lazarenko may face up to 15 years in prison if he is stripped of his immunity and tried. Lazarenko told the parliament on 22 December that he did not break Swiss law and that the charges against him are aimed at eliminating a "serious political rival." JM


Ten nationalist parties on 21 December demanded that parliamentary speaker Oleksandr Tkachenko be sacked for appealing during his trip last week to Moscow that Ukraine integrate with Russia (see "RFE/RL Newsline," 21 December 1998), ITAR-TASS reported. Tkachenko said in Moscow that Ukraine must integrate closer with Russia by creating a "common defense doctrine and economic space" and sharing a "single currency." Tkachenko told journalists in Kyiv on 21 December that when he was in Moscow, he was expressing the Ukrainian parliament's point of view, not only his own. "I express my opinions as head of the Supreme Council, as a state official. I have said some time ago [that] I am not the first [official], but neither am I the second," Ukrainian Television quoted him as saying. JM


Some 1,000 Crimean Tatars demonstrated in Simferopol on 21 December to protest the adoption of the Crimean Constitution in its current version (see "RFE/RL Newsline," 16 December 1998), Ukrainian Television reported. They called on the Ukrainian parliament not to approve that constitution until it incorporates provisions that would guarantee Tatar representation in the Crimean legislature and local government. The Supreme Council rejected the constitution last week after some lawmakers argued that it contains separatist provisions. JM


An unidentified high-ranking Belarusian official told Interfax on 21 December that Belarus and Russia will sign a "crucially important" political declaration laying down the "guidelines for the development of the [Belarus-Russia] Union" during Belarusian President Alyaksandr Lukashenka's visit to Moscow on 25 December. According to Interfax's source, the draft document envisages deciding which assets are the property of the union, "establishing a common monetary system, but without a single currency at the present stage, and founding large companies working for the union." It may also mention the two countries' intent to introduce a single Russian-Belarusian citizenship, the source added. JM


Konstantin Zatulin, Moscow Mayor Yurii Luzhkov's adviser and a major proponent of the Russian-Belarusian integration, told a correspondent for RFE/RL's Belarusian Service that it will hardly be possible to achieve an integration "breakthrough" during Boris Yeltsin's presidency. According to Zatulin, the main obstacle to integration is the "incompatibility of the political regimes in Russia and Belarus." He added that mutual rapprochement is opposed both by Yeltsin's retinue, which is afraid of Lukashenka, and by the Belarusian nomenklatura, which "pays lip service to integration but in actual fact does not want any Moscow higher leadership." Zatulin said a union of both countries based on the "one country-one vote" principle is unrealistic. He added that realistic integration scenarios include introducing into Russia the post of vice president, which would automatically be held by Belarus's elected president. JM


Yauhen Luhin, leader of the Belarusian Peasant Party, told his party congress on 20 December that Belarus is witnessing "the establishment of a Stalinist-type totalitarian regime, which is economically based on state ownership," RFE/RL Belarusian Service reported on 21 December. The congress was also addressed by former Prime Minister Mikhail Chyhir, who recently announced his intention to run for the Belarusian presidency (see "RFE/RL Newsline, " 7 December 1998). Chyhir criticized the state policy of regulating prices of agricultural products, adding that Belarus might achieve financial success primarily in the agricultural sector if that policy were changed. Commenting on Belarusian-Russian integration, Chyhir said Belarus and Russia "are so sick today that bringing them into one ward will weaken both state organisms even further," Belapan reported. JM


Vilis Kristopans has appointed Environment Protection and Regional Development Minister Vents Balodis of the Fatherland and Freedom party as acting agriculture minister, BNS reported on 21 December. The portfolio is still vacant because the Fatherland and Freedom party has postponed until next month taking a decision on whether to approve Social Democrat Peteris Salkazanovs as agriculture minister. Kristopans has proposed Salkazanovs for that post, but the Fatherland and Freedom party has said it is opposed to any Social Democratic involvement in the government. Under the coalition agreement, there must be a consensus among the coalition partners over inviting non- coalition members to join the cabinet. JC


Latvia's Way Chairman Andrejs Pantelejevs criticized the Fatherland and Freedom party, one of the three government coalition members, at the party's weekend congress, BNS reported on 21 December. He pointed to the "indecisiveness" of that party and expressed concern that cooperation with it may face a "difficult trial." Pantelejevs also said some members of the People's Party, which won the October elections but does not belong to the government coalition, do not rule out replacing the Fatherland and Freedom cabinet ministers with members of their own party. But Gundars Berzins said on 21 December that the People's Party does not want to replace the Fatherland and Freedom party in the government, since all "strategically important posts" are held by Latvia's Way. And Fatherland and Freedom party member Guntars Krasts told reporters that it still cannot be ruled out that the coalition partners will cooperate closely, given the similarity of their programs. JC


The Lithuanian parliament on 21 December voted by 76 to three to abolish the death penalty, dpa reported. The parliament also commuted the sentences of the nine inmates on death row to life imprisonment. Earlier this month, the Constitutional Court ruled that capital punishment contravenes the country's basic law (see "RFE/RL Newsline," 10 December 1998). President Valdas Adamkus supported that decision and urged the parliament to quickly amend the penal code to implement that ruling. His predecessor, Algirdas Brazauskas, had imposed a moratorium on the death penalty in 1995. JC


Polish coal miners staged a two-hour warning strike on 21 December to defend their retirement benefits (see "RFE/RL Newsline," 21 December 1998), Polish media reported. Some 415 miners at 50 mines continued their underground strike. The same day, a vote was held on whether to launch a general strike in the coal industry. It is widely believed that miners will favor such a strike. Prime Minister Jerzy Buzek commented that the miners' protest is a "misunderstanding" since the government has not planned to deprive miners of their retirement benefits. Under the new pension law, the government is proposing so-called "bridge pensions" to be paid to miners with 25 years' service until they become eligible to regular pensions at the age of 65. JM


President Vaclav Havel on 21 December told Prime Minister Milos Zeman that "I shall certainly not stay in office against the will of our people," CTK reported. Havel was responding to a poll conducted by the Institute for Public Opinion Research, published earlier that day, showing that 55 percent of Czechs believe he should consider resigning from his post. Of those, 52 percent cite health grounds, 18 percent loss of prestige, and 12 percent the alleged negative influence of Dagmar Havlova on her husband. Zeman said polls are not necessarily a mirror of reality, pointing to the frequent discrepancy between pre-election surveys and ballot results. Zeman also said he believed the poll was badly conducted. MS


Havel told journalists on 21 December that Vaclav Benda, the former head of the Office for Documentation of Communist Crimes, "is deliberately telling lies" by claiming he informed the president about former Vienna Mayor Helmut Zilk's having been screened for alleged collaboration with the communist secret police. Benda said that Ivan Medek, who on 18 December was dismissed as former head of the presidential office, requested that Benda screen candidates for top state awards. Benda also said he had personally spoken to Havel twice about the suspicion that led to the withdrawal of such an award to Zilk last October. Zilk was later cleared of the charges. Presidential spokesman Martin Krafl told CTK on 21 December that several times in the past years, Medek had asked Benda for information on candidates for state awards without Havel's knowledge. MS


Following the 18-19 December local elections, the opposition Movement for a Democratic Slovakia (HZDS) has 30 percent more mayoral posts than in 1994, according to preliminary results, CTK reported. The HZDS heads 602 local councils, compared with 446 four years ago. But it did not win a mayoralty in the country's eight largest cities. Independent candidates head 816 local councils, 16 more than in 1994. Of the coalition parties, the Party of the Democratic Left heads 401 local councils (502 in 1994) and the Christian Democratic Party, which is a member of the Slovak Democratic Coalition, 220 (415 in 1994). The Hungarian Coalition Party won in 224 towns and villages. The Democratic Union and the Democratic Party have 29 and 28 mayors, respectively. The opposition Slovak National Party will head 114 councils (58 in 1994). Turnout was 53.9 percent. MS


Serbian forces sealed off Podujeva on 21 December following the slaying of a policeman nearby (see "RFE/RL Newsline," 21 December 1998). The Kosovars' KIC news agency reported that gunfire could be heard in the vicinity of villages northeast of the town, which is located in the far north of Kosova, close to the border with Serbia proper. A spokesman for the Kosova Liberation Army (UCK) told AP that "the enemy was forced to withdraw and one of their tanks was destroyed," but there has been no independent confirmation of the spokesman's account. KIC noted that tensions have been on the rise in the Podujeva area recently because of a growing police presence. Local Serbs had asked the authorities for protection because of what the Serbs said was an influx of UCK fighters, AP reported. PM


Several hundred angry Serbs booed and jeered Serbian Interior Minister Vlajko Stojiljkovic in Fushe Kosova on 21 December after he told them that "terrorism has been defeated [and] only gangs of criminals remain in the field." The Serbs demanded increased police protection following the killing of the town's deputy mayor (see "RFE/RL Newsline," 21 December 1998). Many Kosova Serbs feel that the government of Yugoslav President Slobodan Milosevic has not done enough to protect them and that he has already reconciled himself to the loss of the province to its approximately 90 percent ethnic Albanian majority. PM


On 21 December, U.S. General Wesley Clark, who is NATO's chief commander in Europe, and General Dragoljub Ojdanic, the head of the Yugoslav General Staff, discussed "technical details" regarding NATO's aerial surveillance of Kosova. AP quoted unidentified "sources close to the talks" as saying that Clark warned his hosts that NATO might intervene in Kosova if the violence does not stop. There has been no independent confirmation of the news agency's account. PM


Daan Everts, who is the OSCE's ambassador to Albania, said that the guerrillas "don't see the prospect of a negotiated settlementthat they would be willing to accept, so they're getting ready for the alternative. There has been an enormous rise in militancy [among Kosovars] as a result of the Serb violence over the summer." The diplomat added that "the romantic, rag-tag UCK seems to have given way to more serious, professional military leadership. The holiday fighters have gone home. This is a much more disciplined lot," Reuters reported from Kruma, Albania, on 21 December. The news agency added that the UCK has moved its center of operations in Albania from Tropoja to Kruma and that the guerrillas exercise more discretion in public than they did in Tropoja, where the "flamboyant atmosphere and combustible mixture of greed and violence soon proved trouble for both Albanian officials" and the UCK. PM


Unnamed UCK sources told Reuters in Kruma on 21 December that the 14 December border clash that resulted in the death of 36 guerrillas at the hands of Serbian forces was due to the inexperience of the fighters' commander and "possibly [also due] to a traitor" in their ranks (see "RFE/RL Newsline," 21 December 1998). The sources did not elaborate. They added that incidents have become rare on the border owing to the increasing professionalism of the guerrilla units. PM


OSCE chair Bronislaw Geremek said in Sofia on 21 December that neither side in the Kosova conflict has the political will to launch serious talks. In Belgrade the next day, "Danas" quoted unnamed sources "close to the Serbian negotiating team" as saying that the Serbian side remains adamant that it will never enter into talks with the UCK, whom the Serbian authorities call "terrorists," or with the UCK's civilian representatives. In Tirana, the government issued a statement on 21 December calling on the UCK and the moderates led by the Democratic League of Kosova to agree on a joint political platform. The Albanian authorities offered to host talks to that end. PM


The Social Democrats, who form part of the governing coalition, tabled a proposal in the parliament on 21 December that would make "Montenegro a sovereign state that would be internationally recognized." The mountainous republic would be linked to Serbia only through a "union similar to that joining the Benelux countries," RFE/RL's South Slavic Service reported. Supporters of the measure noted that Montenegrin citizenship is a concept that dates back "several centuries," "Danas" added. The pro-Milosevic opposition called for Yugoslav citizenship to be primary and that of Montenegro secondary. The debate continued on 22 December. PM


Zagreb Archbishop Josip Bozanic said in his Christmas message on 21 December that the Roman Catholic Church does not engage in politics but cannot be silent about "topical questions regarding human freedom and the future of democracy," RFE/RL's South Slavic Service reported. In what observers said was a swipe at President Franjo Tudjman and the governing Croatian Democratic Community, Bozanic criticized unnamed persons and political organizations whom he said equate their own interests with those of Croatia. He added that such individuals and groups polarize society and have contributed to an atmosphere in which corruption and injustice flourish. PM


The Zagreb district court ruled on 21 December that Victor Ivancic, who is the former editor-in- chief of the Split-based satirical weekly "Feral Tribune," and Marinko Culic, who is a journalist with that paper, did not slander Tudjman in a 1996 article in which they compared the Croatian president to Spain's Francisco Franco. A court acquitted the two of the charge in 1996, but Tudjman's lawyers appealed the decision. In their defense, the journalists noted that Tudjman has publicly compared himself to Franco. PM


Albanian Prime Minister Pandeli Majko and former President Sali Berisha met in Tirana on 21 December and pledged to help end a 12-day student hunger strike (see "RFE/RL Newsline," 18 December 1998). Berisha said he is "optimistic" that the government and the students will soon come to an agreement. He told AP that "this government is more sensitive on different issues than [previous] Socialist governments." Majko and Democratic Party Secretary-General Genc Pollo held talks with students later that day, "Albanian Daily News" reported. Student leader Besnik Jaku said later that the students have dropped their demand for the government to resign, and he stressed that their main demands are for better housing and higher scholarships. Pollo told Reuters that the government has shown "flexibility" in trying to meet the students' demands. FS


Berisha proposed to Majko that an independent prosecutor be appointed to investigate the Azem Hajdari murder case (see "RFE/RL Newsline," 17 December 1998). He suggested that the mandate of that special prosecutor be defined in a separate law. According to Reuters, Majko agreed to the proposal. Following the meeting, Berisha said that he and Majko had agreed on a "common" stand on the Kosova problem. He did not elaborate. FS


Prosecutor-General Arben Rakipi told the "Albanian Daily News" of 22 December that he will not order Berisha's arrest. He had earlier threatened the opposition leader with imprisonment unless he testifies as a defendant over his alleged involvement in a 14 September coup attempt. Rakipi, however, stressed that Berisha has lost the chance to clarify his role in the unrest. Rakipi declined to say whether he will remove his subordinate Bujar Himci from the investigation, as Berisha's lawyers have demanded (see "RFE/RL Newsline," 21 December 1998). FS


A joint session of the parliament's two chambers on 21 December rejected a no- confidence motion moved by the leftist-nationalist opposition (the Party of Social Democracy in Romania, the Greater Romania Party, and the Party of Romanian National Unity). The vote was 283 to 163. The opposition accused the government of driving the country to economic collapse and demanded early elections. Premier Radu Vasile accused the opposition of having stalled on privatization between 1990 and 1996. He said former communist countries that carried out privatization earlier are better off than Romania, where, as a result of the world economic uncertainty, there are low revenues from the cabinet's privatization drive. He also said that unless Romania satisfies IMF and World Bank conditions and quickly introduces reforms, it may have to default on its international debt. MS


President Petru Lucinschi has returned the law on administrative-territorial reform to the parliament "for improvements," presidential spokesman Anatol Golea told journalists on 21 December. Golea said that Lucinschi believes the law pays too little attention to the means of financing new local government structures. The president also disagrees with the stipulation that the parliament, rather than the government, should arbitrate in case of border disputes between the newly established counties. In addition, Lucinschi said the Taraclia district, which has a large Bulgarian minority, must be preserved as a separate local administration entity and be turned into an administratively independent county, Infotag reported. MS


Bronislaw Geremek met with his Bulgarian counterpart, Nadezhda Mihailova, on 21 December and discussed bilateral relations, international issues, and Bulgaria's bid to join the EU, BTA reported. Geremek praised Bulgaria's role in the search for a solution to the Kosova problem. He was also received by Premier Ivan Kostov and parliamentary chairman Yordan Sokolov. MS


BTA reported on 19 December that Gazprom has agreed "in principle" to accept Bulgarian deliveries of food worth $14 million in exchange for 30 percent of its gas deliveries, on condition that the gas is supplied directly to consumers rather than channeled to them through the Bulgargaz state company. Gazprom says the deliveries must be done through Overgaz, a Gazprom subsidiary registered in Bulgaria, to cover Overgaz's debts to the Russian company. MS


by Julie A. Corwin

The rise of former Inkombank President Vladimir Vinogradov to the top of Russia's financial and political circles was rapid, but his fall was even quicker. In a little over two months, Vinogradov went from being one of Russia's handful of "oligarchs," a small elite of powerful businessmen and financiers who reportedly rule the nation, to the disgraced former head of a financial institution on the brink of receivership.

Come 28 January, when a Moscow arbitration court hears a bankruptcy case filed by private creditors against Inkombank, the bank's actual status will be clearer. However, few analysts believe that much remains of Inkombank that is worth preserving. Those individuals and institutions who once expressed an interest in saving the bank--National Reserve Bank Chairman Aleksandr Lebedev, Gazprom Deputy Chairman Sergei Dubinin, and Union of Industrialists and Entrepeneurs head Arkadii Volskii--say that Inkombank is beyond saving. Its liabilities exceed its assets, Lebedev announced on 23 November. Volskii was more blunt, saying top managers at Inkombank "had been playing dishonest games" and were "transferring Inkombank assets to other firms."

Ten years ago, Inkombank started in the kitchen of Vladimir Vinogradov's communal apartment. Vinogradov was working in a state bank at a "low-paying" job that was "boring." So, according to him, he and two friends started a commercial bank. Later, they moved their "headquarters" to the top room of a bar on the outskirts of Moscow, where they managed to attract nine shareholders including the economics think-tank, the Plekhanov Institute; the association of aircraft manufacturers, Sokol; and the oil and gas pipeline operator, Transneft. They then approached Central Bank for a credit of 10 million rubles. They got it, although the official who okayed the loan was let go soon after, according to Vinogradov.

In September 1998, Inkombank got its last break from the Central Bank--a $100 million loan--from another outgoing official, its chairman, Sergei Dubinin. The loan was just one of many parting gifts to troubled commercial banks from Dubinin, who knew he was leaving, a source at an international financial institution told RFE/RL. When Viktor Gerashchenko replaced Dubinin, Inkombank's last hope was to be designated one of Russia's "socially important" banks. These banks, though basically insolvent, were still considered worth saving with a massive influx of government cash.

As Russia's second-largest bank in terms of private deposits and third-largest in terms of assets, Inkombank might have seemed a good candidate. It also serviced 10 percent of Russia's total foreign trade and 4-5 percent of the country's bank accounts, according to "Kommersant-Daily." But if Inkombank's example is any indication, then the emphasis in the phrase "socially important" should perhaps be on the first word, socially. Gerashchenko and Vinogradov do not like each other, according to a variety of sources. Vinogradov had earned Gerashchenko's hostility during Gerashchenko's last reign at the Central Bank through his frequent criticisms of Gerashchenko's policy as a vocal member of the Association of Russian Banks.

In an official statement after it pulled Inkombank's license on 29 October, the Central Bank explained that Inkombank "had taken excessive risks ahead of the 17 August [ruble] devaluation and its obligations dwarfed its assets." It is true that Inkombank persisted in writing forward currency contracts much longer than its counterparts. According to Fitch IBCA estimates, Inkombank had concluded between $12-14 billion in forward currency contracts by mid August. It is not clear, however, that Inkombank acted that much more imprudently than Menatep, Most Bank, and SBS-Agro, all of which have been granted a second life.

It is also not yet clear whether Vinogradov's tale is one of rags to riches back to rags again. In addition to Volskii's charge, the head of Moscow's Tax Police accused Inkombank management of diverting funds intended for tax payment. And analysts cited by the "Moscow Times" on 15 December noted that Inkombank's ownership in food-processing, metals, and aerospace enterprises had been carefully structured to allow for easy asset-stripping, since most of the holdings are not owned directly by Inkombank but by "affiliated persons" possibly leading back to Vinogradov. Among the bank's holdings were a 26 percent interest in the giant Magnitogorsk steelworks, of which only 3 percent is owned directly by the bank. The bank also owned an extensive collection of Russian avant-garde painting, including Kazimir Malevich's "Black Square," according to "Argumenty i Fakty."

In the meantime, at least some of Inkombank's depositors are anxious about the fate of their savings. Three years ago, Galina Oleinikova, a university professor in St. Petersburg, put her entire life savings, as well those of her mother, which she had inherited, into an Inkombank interest-bearing U.S. dollar account. On 5 September 1998, she sent a registered express letter, asking that her account be transferred to a U.S. bank in California, where she is now living. She got no response, and although she was worried, she didn't panic because she believed "President Yeltsin and other Russian leaders who said that bank accounts of individuals would be protected."

Now she is panicking. A friend in St. Petersburg acting on her behalf told her that she still has the option of transferring her money to Sberbank, but she will have no access to it for two years and will be reimbursed in rubles, not dollars. In the meantime, her daughter, a high school senior, is heading off to college, but since she is not yet a U.S. citizen, will not qualify for a scholarship, despite her excellent grade point average. Her American husband, who is recuperating from two surgeries, cannot provide any financial assistance. Perhaps the Central Bank can spare her a few dollars short of $100 million, but she is likely not considered "socially important" enough.