YELTSIN SAYS HE'S READY TO FIGHT WESTERNERS...
Speaking on his arrival in Bishkek for the Shanghai Five meeting, President Boris Yeltsin said on 24 August that he now feels fine and is "in excellent combat form," Interfax reported. He added that "I am ready to fight, especially with Westerners." (In a related development, several State Duma deputies said they want to increase defense spending next year, Interfax reported.) In other comments, Yeltsin said that he expects the five-country grouping to continue to be as effective as it has in the past in promoting cooperation within the region. The Russian leader met with Chinese head of state Jiang Zemin as well as the presidents of Kazakhstan, Kyrgyzstan, and Tajikistan. The five leaders are slated to sign a joint declaration at the conclusion of the two-day meeting in the Kyrgyzstan capital on 25 August. PG
...WHILE IVANOV ENGAGES IN DAMAGE CONTROL
On 25 August, Russian Foreign Minister Igor Ivanov sought to explain Yeltsin's comments about doing battle with the West, Reuters reported. "[Yeltsin] was talking about the fact that now...there is an active struggle over the future of global order," Ivanov said. While China, Russia, and other countries favor a multi-polar world "in the interests of all states," he continued, "there is also an attempt to introduce another structure, polar or bi- polar. Russia has spoken out against this. Now there is a serious struggle for the future --what the world order will be in the 21st century." JC
RUSSIAN TROOPS CONSOLIDATE CONTROL IN DAGHESTAN
A spokesman for the Daghestan branch of the Russian Federal Security Service told Interfax on 24 August that federal forces have secured control of the villages of Ansalta and Shodroda, to which they retreated after being driven out of Tando, Rakhata, and Ashino the previous day. Later the same day, a Russian Interior Ministry spokesman said that Russian forces now control all villages in Daghestan's Botlikh Raion and that the occupying militants have crossed back over the border into Chechnya. "Nezavisimaya gazeta" reported on 25 August that the order to retreat to Chechnya was given by field commander Shamil Basaev, who three days earlier had announced the start of a new phase of operations against Daghestan. But a Russian Defense Ministry spokesman said on 25 August that some militants remain in the village of Ziberkhali. In Bishkek, where he is accompanying President Yeltsin at the Shanghai-Five summit, Defense Minister Igor Sergeev said on 25 August that the militants have switched to partisan tactics, adding that the operation to neutralize them has moved into the "final phase." LF
LUZHKOV SAYS RUSSIA NOT A DEMOCRACY
Moscow Mayor Yurii Luzhkov said on 24 August that the political system in Russia does not appear democratic or enjoy the trust of the population, Interfax-Moscow reported. He said that he has "suspicions that his own telephone has been tapped," that pressure on his wife and his aides is politically motivated, and that "an unprecedented information war" with a budget "comparable to the city budget" has been launched against his Fatherland movement. The Moscow mayor added that he believes it is extremely important to prevent fraud during the upcoming Duma elections. PG
RUSSIA EXPECTS IMF DISBURSEMENT ON SCHEDULE
First Deputy Prime Minister Viktor Khristenko told Ekho Moskvy on 24 August that Moscow can expect to receive the second $640 million tranche of an IMF loan on schedule. He said Moscow has met most of the conditions that the IMF set, including the size of the primary budget surplus. In other comments, Khristenko said that he believes it "would be appropriate at present" to increase the oil export duty to 7.5 euros ($7.8) per ton from 5 euros. PG
PUTIN PLEDGES TO CREATE HEALTHY INVESTMENT CLIMATE
Speaking at the opening of a Moscow automobile show, Prime Minister Vladimir Putin said his government will work to create a healthy investment climate fully consistent with a market economy, Interfax reported on 24 August. He added that the tax code will be modified to make it more investor-friendly and that the automobile industry will be a central part of Russia's future economic growth. PG
MOSCOW RESTRICTS EXPORT OF FOREIGN CURRENCIES
Yelena Starozhilova, the head of the Russian customs department for currency control, told AP on 24 August that from now on the Russian authorities will prohibit foreign travelers from taking even pocket change out of the country unless they have a special permit. She said that ATM slips or bank transfer notices will not be valid, but she added that any money seized will not be confiscated but rather held until such documentation can be provided. Until now, foreigners were required to provide evidence of the legitimacy only of sums greater than $500. PG
STEPASHIN, YAVLINSKII FORM ELECTORAL ALLIANCE
Former Prime Minister Sergei Stepashin and Yabloko leader Grigorii Yavlinskii have agreed to form an alliance to contest the December Duma elections, Interfax reported on 24 August. Earlier the two had been unable to reach agreement. Russian media outlets suggested that their accord will help Yabloko gain seats in the Duma while making it more difficult for Yeltsin to fashion a reformist group to challenge the Luzhkov-Primakov alliance. However, the new alliance may not be without problems of its own: Sergei Nikiforov, who was elected to the Krasnoselskii constituency in St. Petersburg, told ITAR-TASS that he has no intention of yielding his position to Stepashin and that he will run and win against him unless some agreement can be reached. PG
PRO-DEFENSE ELECTORAL GROUP FORMS
Communist leader Viktor Ilyukhin's Movement in Support of the Army, Defense Industry and Science is forming an alliance with other similar groups and will announce an election list by 31 August, ITAR-TASS reported on 24 August. The group is slated to hold a constituent congress on 11-12 September. PG
CHERNOMYRDIN BACKS PRIVATE OWNERSHIP OF LAND
Speaking in St. Petersburg on 24 August, former Prime Minister and head of Our Home Is Russia (NDR) Viktor Chernomyrdin said that private property in land should be legalized as soon as possible, ITAR-TASS reported. He said that such a situation would serve as "an alternative to gangster capitalism." PG
GOVERNMENT RECEIVES DRAFT BUDGET
The Finance Ministry is slated to submit a revised 2000 draft budget to the government on 25 August, Russian agencies reported. According to Interfax, the budget calls for increased revenues and spending amounting to 1.58 billion rubles ($63.7 million at the current exchange rate) with the budget deficit left unchanged at 57.87 billion rubles. The draft assumes inflation of 18 percent and an exchange rate of 32 rubles to the dollar. PG
PENSIONS TO BE ADJUSTED UPWARD
Deputy Prime Minister Valentina Matvienko told ITAR-TASS on 24 August that pensions will be adjusted upward for inflation by 15 percent in November. She also reported that wage arrears fell to 7.8 billion rubles ($315 million) by August 1999, 8.2 billion rubles less than a year ago. PG
RUSSIAN HARVEST MAY FALL BELOW 60 MILLION TONS...
Although harvest figures are higher than last year's figures, the harvest as a whole may fall below the 60 million tons that officials have projected, Interfax reported. Russian Deputy Prime Minister Vladimir Shcherbak said that "slow harvesting" will contribute to the shortfall because of mounting losses in the fields. PG
...WHILE WINTER FUEL CRISIS LOOMS OVER RUSSIAN FAR EAST
Energy officials in Primorskii Krai told ITAR-TASS on 24 August that lagging rates of accumulation of fuel supplies threaten "yet another energy crisis" in that region this winter. PG
MOSCOW DENIES ANY SOFTENING ON NATO EXPANSION
An unidentified Russian Foreign Ministry official told Interfax on 24 August that there is no truth to claims that the Russian government has become "more tolerant" of NATO expansion. He said that "our country's view on the possibility of NATO's further expansion...remains unchanged," a position based on the conviction that "such a course is a major political mistake not contributing to the buildup of trust in international relations." He added that Russia reserves the right to take whatever measures it deems necessary to defend its own interests in the event that the Western alliance takes in new members. PG
RUSSIAN FOREIGN MINISTRY SLAMS RAHOVEC PROTESTS...
The Russian Foreign Ministry on 24 August said that the blockade of Russian peacekeepers by ethnic Albanians in the Kosovar town of Rahovec constitutes "provocations, which are no doubt pre-planned and well-orchestrated" (see Part II). It added that the blockade poses "an open challenge to the international community," Reuters reported. The statement did not name those responsible for the blockade but said the action directly contradicts "UN Security Council Resolution 1244, the G-8 principles [for a settlement of the Kosova conflict], as well as the document on Russian participation in [KFOR]." Russian Deputy Defense Minister Aleksander Avdeev told ITAR-TASS that "there is a system which coordinates extremist and propagandist activities" in Kosova. He did not elaborate. FS
...PLEDGES BALANCED POLICY
The Russian Foreign Ministry also said that "from the very beginning of the [Kosova] crisis, Russia has consistently followed a balanced line towards its settlement through exclusively political means, maintaining equal rights of all citizens irrespective of their ethnic origins.... Russian peacekeepers [in Kosova] will consistently adhere to this line in future," Reuters reported. FS
FOUR-COUNTRY EXERCISE BEGINS IN ASTRAKHAN
Some 1,000 soldiers from Russia, Belarus, Armenia, and Kyrgyzstan have begun a joint Comradeship-in-Arms '99 exercise near Astrakhan, ITAR-TASS reported. The group will practice defending against the use of cruise missiles directed at the CIS. PG
MOSCOW PLANS TO DEFEND ITS INTERESTS IN CENTRAL ASIA
Sergei Prikhodko, Yeltsin's deputy chief of staff, told a Chinese newspaper that "Russia will continue to protect its interests in Central Asia as a whole and also in individual Central Asian states," Interfax reported. He added that Moscow is "seriously concerned about any attempts to promote other interests in the region to the detriment of Russia's position." And he suggested that the Russian authorities will work together with the countries there to increase military and economic cooperation and to "rebuff Islamic fundamentalism and regional separatism." PG
CHINA WELCOMES COOPERATION WITH RUSSIA
At a meeting with visiting Deputy Prime Minister in charge of the military industrial complex Ilya Klebanov on 24 August, Chinese Premier Zhu Rongji said Beijing welcomes the growing level of cooperation between China and Russia, ITAR-TASS reported. Klebanov, for his part, said that the two countries are "strategic partners," with "a high level of mutual confidence" in each other. And he confirmed that Moscow plans to sell Beijing Su-30 jet fighters, ITAR-TASS added. In an interview published on 24 August in "Slovo Kyrgyzstana," Russian President Yeltsin stressed that neither Russia nor China "views their strategic partnership as a union aimed at other states." But a Russian Foreign Ministry official stressed that both sides are against U.S. and Japanese plans to deploy an anti-missile defense system, ITAR- TASS reported. PG
ARMENIAN, KARABAKH PRESIDENTS MEET
Robert Kocharian met with Arkadii Ghukasian, president of the unrecognized Nagorno-Karabakh Republic, in Yerevan on 24 August and briefed him on his 22 August meeting in Geneva with his Azerbaijani counterpart, Heidar Aliev, RFE/RL's Yerevan bureau reported. Kocharian and Ghukasian focused on "measures aimed at strengthening the cease-fire along Karabakh-Azerbaijani section" of the line of contact, the Armenian presidential press service said. They also stressed the "need to resume peace negotiations within the framework of the OSCE's Minsk Group and Karabakh's full participation in that process," according to the press service. LF
AZERBAIJANI FOREIGN MINISTER VISITS GEORGIA...
Visiting Tbilisi on 23-24 August, Tofik Zulfugarov held talks with his Georgian counterpart, Irakli Menagharishvili, parliamentary speaker Zurab Zhvania, Minister of State Vazha Lortkipanidze, and Georgian President Eduard Shevardnadze, all of whom underscored the broad convergence of geopolitical and economic interests between the two countries, Caucasus Press and Turan reported. Menagharishvili noted that friendship and cooperation between the two countries contribute to regional stability and security. In a joint statement, the two ministers pledged their governments' mutual support for their integration into European and Euro-Atlantic structures. Zulfugarov noted Georgia's interest in the planned Baku- Ceyhan and Trans-Caspian pipeline projects. He also told journalists that he does not exclude the possibility of Azerbaijani peacekeeping troops being deployed in Abkhazia. Some Georgian politicians are lobbying energetically for the withdrawal of the present Russian peacekeeping force deployed under the aegis of the CIS. LF
...DISCUSSES GUUAM
Zulfugarov told journalists on 23 August that the legal basis for the GUUAM grouping (Georgia, Ukraine, Uzbekistan, Azerbaijan, and Moldova) is almost complete, according to Caucasus Press. He said that more active military cooperation between GUUAM's members cannot be excluded, adding that such cooperation "should cause no anxiety to Russia, as it will be purely defensive in character." Meeting with Zulfugarov the following day, Minister of State Lortkipanidze called for intensifying economic, political, and military-strategic cooperation among GUUAM members, saying there should be no "serious limitations" on the group's development. Shevardnadze likewise noted the need to activate cooperation within the parameters of GUUAM. Speaking to journalists in Kyiv on 18 August following talks with his Moldovan counterpart. Petru Lucinschi, Ukraine's President Leonid Kuchma said there is "no need" to discuss turning GUUAM into either a political or military alliance. LF
AZERBAIJAN'S CENTRAL ELECTORAL COMMISSION REJECTS CHARGES AGAINST ITS HEAD
The Central Electoral Commission issued a statement on 24 August dismissing three opposition party leaders' allegations against long-time commission chairman Djafar Aliyev as slander, Turan reported. Etibar Mamedov, Nizami Suleimanov and Ashraf Mehtiev, all of whom unsuccessfully contended the October 1998 presidential election, claimed that Veliev said in an interview with the independent ANS TV station that 12-15 percent of the ballots cast in that poll were falsified. They demanded the opening of criminal proceedings against Veliev. The 24 August statement denied that Veliev had given an interview to ANS or made any such a comment on the elections. All three defeated candidates dispute the official outcome of the poll, in which Aliyev was reelected for a second term with 76 percent (see "RFE/RL Newsline," 15 October 1998). LF
ABKHAZIA PUTS GEORGIAN FISHING CREW ON TRIAL
The trial has begun at Abkhazia's Supreme Court of nine crew members of a Georgian fishing vessel intercepted in April in what Abkhazia claims are its territorial waters, Caucasus Press reported on 25 April. The Abkhaz authorities offered to release the men in exchange for the release of four Abkhaz held hostage in western Georgia by Georgian guerrillas, but the guerrillas rejected that proposal (see RFE/RL Newsline," 14 April and 28 June 1999). LF
FIRING OF TOP KAZAKH OIL OFFICIAL CLARIFIED
Nurlan Qapparov was fired as president of the state KazakhOil company because he opposed the proposed sale of part of Kazakhstan's 25 percent stake in the Tengizchevroil joint venture, Interfax reported on 24 August quoting an unnamed KazakhOil official (see "RFE/RL Newsline," 24 August 1999). Qapparov reportedly objected that the sale would weaken Kazakh positions on the domestic oil extraction market. The KazakhOil source said that Qapparov also objects to a second deal whereby the Canadian firm Hurricane Hydrocarbons will transfer 49 percent of its shares in its daughter company Hurricane Kumkol Munai to the oil refinery Shymkentnefteorgsintez in return for a stake in that facility. Qapparov reportedly argued that such deals give rise to monopolies in the oil industry. LF
KYRGYZ TROOPS FAIL TO RELEASE HOSTAGES...
Kyrgyz army troops exchanged fire on 24 August with the militants holding a police general and four Japanese geologists hostage in southern Kyrgyzstan's Batken Raion, killing 10 of the guerrillas. Those troops failed, however, to release the hostages. Kyrgyz President Askar Akaev assured Japanese Prime Minister Keizo Obuchi by telephone on 24 August that everything will be done to secure the hostages are released unharmed. Akaev told journalists in Bishkek on 25 August that the guerrillas have received reinforcements from neighboring Tajikistan, Reuters reported. He estimated their strength at 350-400. LF
...AS ABDUCTORS' IDENTITY REMAINS UNKNOWN
On 24 August, Tajik presidential press spokesman Zafar Saidov again denied any connection between the hostage-takers in southern Kyrgyzstan and the United Tajik Opposition, claiming that the guerrillas are part of ethnic Uzbek field commander Djuma Namangani's private army, which UTO formations helped to drive out of Tajikistan, according to Interfax. Saidov added that the guerrillas belong to the so-called Movement for the Islamic Resurrection of Uzbekistan. But a senior Kyrgyz trade official told Interfax on 24 August that the kidnappers have links with the Islamic Hizb-ut-Tahrir (Liberation Party) group headquartered in Pakistan. He said that organization recently intensified its operations in Uzbekistan with the aim of creating an Islamic state in the Fergana valley. LF
POET SUGGESTS TURKMEN PRESIDENT SHOULD RETAIN POST FOR LIFE
In an article published recently in "Neitralnyi Turkmenistan," Durdymuhammet Kurbanov, a former press spokesman to Turkmenistan's President Saparmurat Niyazov, proposed that the country's constitution be amended at the next parliamentary session, which will take place in December, to allow Niyazov to occupy that post for life, Reuters and Interfax reported on 24 August. At present, one individual may serve only two consecutive presidential terms. Niyazov was elected president in 1992 for a five- year term, which was prolonged in a referendum two years later. LF
BELARUSIAN WORKERS STRIKE OVER UNPAID WAGES
Two strikes over unpaid wages began this week in Mahileu Oblast, RFE/RL's Belarusian Service reported on 24 August. Some 2,000 workers at the tractor components plant in Babruysk stopped work on 23 August, demanding wage arrears for June and July. The same day, four workers of the Invest-Dom enterprise in Mahileu went on strike, also over wage arrears. According to Belapan, their action has the "moral" support of the 200-strong labor force. JM
UKRAINE CELEBRATES INDEPENDENCE DAY WITH MILITARY PARADE
More than 3,000 servicemen took part in a parade along Kyiv's central street on 24 August to mark Ukraine's eighth anniversary of independence. Some 120 tanks and other military vehicles and 36 aircraft also participated in what was Ukraine's largest military display since 1991. "Over the past eight years..., there has emerged a state that by its size, natural resources, and economic potential is equal to leading states on the continent," Defense Minister Oleksandr Kuzmuk said in his address at the parade. Meanwhile, other Ukrainians seem more doubtful about their country's achievement in the period of independence. In a recent poll by Socis-Gallup, only 31 percent of respondents said they are "absolute supporters of independence," while 27 percent said they disapproved of it. JM
KUCHMA'S RIVALS UNITE TO FIELD ONE PRESIDENTIAL CANDIDATE?
Four hopefuls in the presidential elections--presidential speaker Oleksandr Tkachenko, former Premier Yevhen Marchuk, former speaker Oleksandr Moroz, and Cherkasy Mayor Volodymyr Oliynyk--signed a statement on 24 August pledging "joint actions" in the presidential election campaign, AP reported, citing Interfax. "We know that in response to this carefully weighed step, the electorate will give an absolute majority of votes to one of us--whose name we will announce later--and there will be no need for a second round," Reuters quoted them as saying in the statement. Along with Communist leader Petro Symonenko and Progressive Socialist leader Natalya Vitrenko, Tkachenko, Marchuk, and Moroz are the strongest challengers to incumbent President Leonid Kuchma in the 31 October presidential elections. JM
ESTONIA CHANGES NEGOTIATING TEAM WITH RUSSIA
The Estonian government on 24 August voted to change the composition of its delegation negotiating with Russia. Foreign Minister Toomas Hendrik Ilves told Interfax that the changes mainly pertain to members of the working groups and reflect the change in government since Mart Laar became prime minister in March 1999. Representatives of the Estonian Ministries of Transport and Communications, Foreign Affairs, Agriculture, and Education will be included in the delegation. AB
FALL IN ESTONIAN INDUSTRIAL SALES STABILIZES
Estonia's State Statistical Office reported on 23 August that the year-on-year slump in Estonia's industrial sales was 7 percent in July, the same level as in May and June. The decline has slowed since the beginning of 1999, when the year-on-year figures showed a 16 percent decline in industrial sales. AB
LATVIAN PENSION LAW CHANGES SUSPENDED
At the request of 35 opposition members, Latvian parliamentary chairman Janis Straume has suspended the recently adopted amendments to the pension law, which raise the retirement age and cease payments to working retirees. The Latvian Pensioners Federation and other groups opposed to those changes are to begin gathering signatures for a referendum on the amendments. The government has said that the amendments to Latvia's pension law will stabilize the pension system, which is currently running a deficit of 37 million lats ($62 million). That figure is predicted to reach 70 million lats by the end of the year. AB
LATVIAN STATE LANGUAGE LAW TO BE ADOPTED ON 9 DECEMBER
The ruling coalition in the parliament has agreed on a schedule for reconsidering the state language law recently vetoed by President Vaira Vike-Freiberga. The language bill has been referred to the parliament's commissions but will be adopted at its final reading on 9 December. OSCE High Commissioner on National Minorities Max van der Stoel is in Latvia on a regular working visit. He declined to comment to reporters on the language law. AB
LITHUANIA'S HISTORICAL COMMISSION CHARGES GOVERNMENT OBSTRUCTION
The commission for the assessment of crimes committed by the Nazi and Soviet occupations in Lithuania has appealed to the government and the president to "use all powers granted to them" to provide access for the commission to all documentation and investigations related to crimes committed during the occupation periods. According to commission members, that appeal follows recent revelations that some Lithuanian government ministries were ordered not to cooperate with the commission out of fear that "revelations might aggravate friendly relations with neighboring countries, particularly those that are the successors to the occupation regimes." AB
LITHUANIAN DEPUTY FINANCE MINISTER ON BUDGET DEFICIT
Violeta Latviene told journalists on 24 August that at present Lithuania's budget expenditures exceed revenues by some 300 million litas ($75 million). The deficit is currently covered by borrowed funds, and the Finance Ministry is hoping to eliminate the budget deficit by the end of the year. Latviene acknowledged that the 1999 year budget was drawn up using unrealistic forecasts of economic growth. Acting Lithuanian State Tax Inspectorate head Jurgis Gurauskas reported that tax arrears total some 2 billion litas, 44 percent of which may be recovered. In the first half of this year, the inspectorate recovered about 100 million litas in unpaid taxes and hopes to collect another 100 million litas before the end of the year. AB
POLES INCREASINGLY CRITICAL OF RULING COALITION
A poll conducted by the CBOS agency last week shows that the combined support for the ruling coalition of the Solidarity Electoral Action and Freedom Union fell from 38 percent in July to 25 percent the following month. The popularity of the opposition Democratic Left Alliance rose to 38 percent from 22 percent last month. Polish commentators attribute the declining support for the coalition to the four reforms introduced by Jerzy Buzek's cabinet. According to this month's poll by the Demoskop agency, 80 percent of respondents criticized the health care reform, 44 percent the administration reform, and 42 percent the pension reform. The education reform, slated for 1 September, also drew criticism among those polled (see "RFE/RL Newsline," 24 August 1999). JM
CZECH POLL SHOWS COMMUNISTS STILL SECOND IN PARTY PREFERENCES
A public opinion poll conducted by Sofres- Factum shows the Communist Party of Bohemia and Moravia (KSCM) continues to be ahead of the ruling Social Democratic Party (CSSD) in electoral preferences, CTK reported. The KSCM is backed by 16.8 percent, while support for the CSSD is 15.2 percent. The field is led by the opposition Civic Democratic Party, with 23 percent. Last month, the KSCM surged ahead of the CSSD for the first time. The opposition Freedom Union is backed by 9 percent and the Christian Democrats by 7.9 percent. MS
SLOVAK PRESIDENT RULES AGAINST REFERENDUM...
Rudolf Schuster has decided not to call a referendum on the laws on the use of minority languages in contacts with the authorities and on the privatization of "strategic companies," CTK and SITA reported on 24 August. The referendum drive was organized by the opposition Movement for a Democratic Slovakia (HZDS) and Slovak National Party (SNS). Schuster said that five out of the six experts consulted, as well as the OSCE High Commissioner on National Minorities Van der Stoel, advised him that holding the referendum on the language law would infringe on the constitutional provision prohibiting plebiscites on human rights issues. The experts advised him that in line with the basic law, three years must pass before submitting the same issue to a plebiscite. A referendum on the privatization of "strategic companies" was held at the same time as the 1998 general elections. It was declared void owing to insufficient turnout. MS
...WHILE OPPOSITION WALKS OUT OF PARLIAMENT IN PROTEST
The parliamentary groups of the HZDS and the SNS walked out of a special session of the parliament to protest the presidential decision. HZDS Chairman Vladimir Meciar said the president should have asked the Constitutional Court to rule on the matter, arguing that the decision "deprives Slovak citizens of their rights." HZDS deputy Tibor Cabaj said Schuster acted "under the pressure of the ruling coalition." In a statement released on 24 August, the organizers of the petition drive called on Slovaks to defend "their human rights, respect for the constitution, and the preservation of democracy." MS
HUNGARIAN GOVERNMENT APPROVES BUDGET FIGURES FOR 2000
Based on projected economic growth of 4-5 percent, annual inflation of 6-7 percent, a deficit of 3.5 percent of the country's GDP, the government on 24 August approved the main parameters of the 2000 budget. Finance Minister Zsigmond Jarai said "the budget is totally clean, meaning it does not contain any one-off revenues." He said it will give priority to support for families, regional development, the defense forces, as well as for small and medium-sized enterprises. The biggest increase in budgetary allocation, 43.5 percent, is planned for the armed forces, Jarai explained the hike is due to the extra costs involved in Hungary's joining NATO. MSZ
RAHOVEC BLOCKADE CONTINUES
Several thousand ethnic Albanians continued to block roads leading to Rahovec on 25 August, AP reported. The previous day, negotiations between Dutch, German, and Russian KFOR officials and representatives of the Albanians had yielded no results. Protest leader Agim Hasku said the protests will continue until KFOR gives up plans to deploy Russian troops there. He added: "We told [KFOR] that the Russians will only destabilize the situation." Hasku accused Russian mercenaries of committing atrocities in the region during the recent conflict. He stressed that "the Russians can be sent where there were no massacres committed by Russians. Why station them here, where so many crimes were committed by Russians?" In the Serbian quarter of the city, several hundred Serbs rallied in support of the Russians. FS
IS UCK HEADING FOR AN OPEN CONFRONTATION WITH KFOR?
The "Frankfurter Allgemeine Zeitung" on 25 August reported that the Kosova Liberation Army (UCK) issued orders in Rahovec two days earlier that all shops, restaurants, and cafes must close and that only food stores can remain open. The daily noted that the UCK thus "artificially increased the pressure in Rahovec and mobilized the inhabitants [to take part in] the road blocks." He added that "on one hand, the Russian troops can hardly fight their way through. On the other hand, KFOR cannot allow the UCK to tell them what to do. The issue in Rahovec is who will have the final say." FS
KOSOVA TRANSITIONAL COUNCIL DISCUSSES CANTONIZATION...
UN Special Representative Bernard Kouchner put a plan for "cantonization" high on the agenda of the third meeting of the Kosovar transitional council on 25 August, RFE/RL's South Slavic Service reported. Kosovar Serbian leader Momcilo Trajkovic recently unveiled the plan (see "RFE/RL Newsline," 9 August 1999). Trajkovic told RFE/RL's South Slavic Service on 24 August that the plan calls for setting up five large multi-ethnic cantons, in each of which "decisions will be made by consensus." He added that "we have asked for extra-territorial status for monasteries, so that they can belong to Serbia or Serbian cantons..... The [demographic] basis of cantonization will be the situation [that existed] before the NATO bombing." And he stressed that "cantonization is a means and not our goal. It is a means to create a multi-ethnic [Kosova]." FS
...BUT VEDRINE OBJECTS
French Foreign Minister Hubert Vedrine said in Prishtina on 24 August that the cantonization of Kosova is not provided for by UN Security Council Resolution 1244, Reuters reported. He stressed that "it is not an advisable way of organizing things. But saying this does not prevent us from dealing with the underlying issue, which is security.... If this idea is once again in the forefront, it is precisely because the safety of Serbs, who...are scattered, has not been guaranteed." Vedrine was visiting Kosova with his German counterpart, Joschka Fischer. Fischer told RFE/RL's South Slavic Service that "after all the horrible events, after all the years of repression and apartheid policy by Belgrade toward the Kosovar Albanian population, we cannot expect the implementation of the peace process and the transition from violence to democracy to be without difficulties." FS
BELGRADE WANTS END TO UN CUSTOMS SERVICE...
Vladislav Jovanovic, who is Yugoslavia's chief envoy to the UN, sent a letter to the world organization on 24 August to demand an end to the UN's customs service. He stressed that the existence of the service violates Yugoslav sovereignty and Belgrade's June agreement with NATO. He noted that customs agents collect duties on goods coming from Serbia into Kosova, which Belgrade points out is still legally part of Yugoslavia. In early August, UNMIK installed customs controls on Kosova's borders with Macedonia and Albania to collect urgently needed revenues and stop the influx of uncontrolled and untaxed imports. Serbian authorities have repeatedly called for Serbian customs agents to return to the province (see "RFE/RL Newsline," 26 July 1999). PM
...AND NATO PRESENCE
General Nebojsa Pavkovic, who commands southern Serbia's Third Army, said that "our country has the right to demand that the international forces leave [Kosova] and let us make order the way it should be. I am convinced it will happen soon," AP reported from Belgrade on 25 August. He predicted that clashes between NATO and UCK forces will become more frequent in the near future. PM
SERBS CONTINUE TO LEAVE KOSOVA
The UNHCR's spokesman Chris Janowski said in Geneva on 24 August that only 30,000 Serbs remain in Kosova. He added that each exodus of Serbian civilians triggers the next one. PM
SERBIAN GENERALS WARN OPPOSITION
Several generals published a letter in the mass-circulation Belgrade daily "Blic" on 24 August saying that the army will quash any politically inspired violence. The military leaders added that any political change must come through "democratic means" and not through street protests. The generals criticized retired General Momcilo Perisic, who is their former chief but now leads an opposition party. They accused him of "receiving instructions" from NATO during the Atlantic alliance's recent bombing campaign. PM
U.S. ENVOY MEETS SERBIAN OPPOSITION LEADERS
James Dobbins, who recently replaced Robert Gelbard as U.S. special envoy for the former Yugoslavia, met in the Montenegrin resort of Budva on 24 August with several Serbian opposition leaders. They included Democratic Party leader Zoran Djindjic, the Social Democrats' Vuk Obradovic, and the Alliance for Change's Vladan Batic. It is unclear who also attended. The Serbian Renewal Movement's Vuk Draskovic was not invited, RFE/RL's South Slavic Service reported. Batic later told the private BETA news agency that Washington wants the fractious opposition to overcome its differences. At the same time, the U.S. seeks to identify and promote any rifts within government ranks, he said. Batic added that the opposition leaders agreed to meet again with Dobbins but did not set a date. PM
SERBIAN UNIONS GIVE MILOSEVIC ULTIMATUM
The Association of Free and Independent Labor Unions issued a declaration in Belgrade on 24 August calling on Milosevic to resign by 10 September (see "RFE/RL Newsline," 14 July 1999). If he does not meet that deadline, the unions will decide on launching a general strike, which in Serbia means short protests rather than a complete stoppage, Reuters reported. The independent unions are deeply divided, just like the political opposition. State-run unions have a much larger membership. PM
MONTENEGRIN LEADERS IMPATIENT WITH SERBIAN OPPOSITION
Justice Minister Dragan Soc said in Podgorica on 24 August that Milosevic is not strong enough to defeat the opposition. Soc fears, however, that the opposition will lose its battle "because of its own incompetence," AP reported. He added that he believes that "widespread poverty and public pressure" will force Draskovic and Djindjic to sink their differences and form an alliance to oust Milosevic. Draskovic has rejected any such alliance (see "RFE/RL Newsline," 23 August 1999). PM
VOJVODINA DAILY ON STRIKE
The staff of the Hungarian- language Novi Sad daily "Magyar Szo" began a strike for back pay on 24 August. The workers also demand that the staff have greater control over the paper's finances, RFE/RL's South Slavic Service reported. PM
AUSTRIA ARRESTS SERBIAN WAR CRIMES SUSPECT
War crimes chief prosecutor Louise Arbour said in The Hague on 25 August that Austrian authorities have arrested Bosnian Serb General Momir Talic. She said Talic, whom the court indicted secretly, is wanted for crimes committed against Muslims and Croats in the Prijedor area during the 1992- 1995 conflict. PM
GREEK PRIME MINISTER PLEDGES TO LEGALIZE ALBANIAN IMMIGRANTS...
Kostas Simitis said in Tirana on 24 August that "we are moving towards the legalization of those immigrants who already have a job or are in the process of getting one. In future, [proof of employment in Greece] should be a precondition for those who come," Reuters reported. Simitis signed two cooperation agreements with Albania's Prime Minister Pandeli Majko. Under the terms of one of those agreements, Greece will donate $1.5 million for infrastructure projects in southern Albania, $500,000 of which will be used in border areas where the Greek minority lives. Greece and Albania also agreed to jointly patrol the Corfu Straits. FS
...WANTS YUGOSLAVIA INTEGRATED INTO EUROPE
Simitis also said that "it is time for all Balkan countries to be integrated into Euro-Atlantic structures.... I mean all countries, without exceptions, regardless of who's the head of that country," AP reported. Simitis added that Balkan borders should not be changed. Majko, however, said that "according to the Albanian government, the essence of the [regional] stability pact is the respect for the new Balkan realities, created after the conflict in Kosova." Majko also said that "in today's Serbia, the main problem is not Milosevic, because it is clear to everybody who Milosevic is. The main problem in Serbia today is the opposition, which does not present a clear and democratic alternative." FS
ROMANIAN DEPUTY APOLOGIZES FOR ANTI-SEMITIC REMARK
In a letter addressed to Petre Roman, Party of Social Democracy in Romania (PDSR) deputy Miron Mitrea apologized for his anti-Semitic remark directed at the Senate chairman, Romanian media reported on 24 August. Mitrea said the remark had been "cited out of context." Adrian Nastase, PDSR first deputy chairman, said on 24 August that Mitrea was misquoted, but he added that if he made the remarks, he "will be sanctioned." The daily "Cronica romana" quoted deputy Dorel Dorian, who represents the Federation of Jewish Communities in the parliament, as saying that Roman, whose mother was a Gentile, is not a Jew. "If he wanted to convert, he would be turned down," he commented, adding that Roman has "a greater chance of become Romania's patriarch than its chief rabbi" (see "RFE/RL Newsline," 23 August 1999). MS
ROMANIAN OPPOSITION WALKS OUT OF PARLIAMENT
Deputies representing the PDSR, the Greater Romania Party, and the Party of Romanian National Unity walked out of the Chamber of Deputies on 24 August to protest the chamber's decision not to debate their amendments to the restitution laws currently under debate, RFE/RL's Bucharest bureau reported. Nastase told journalists that the parliamentary majority wants to " restore pre-WWII conditions, when 5 percent of the population owned 95 percent of the national wealth." The Hungarian Democratic Federation of Romania said it will support the government-proposed restitution laws only if that legislation extends restitution to properties confiscated by the Communists from the Churches. MS
BULGARIAN CONSTITUTIONAL COURT REJECTS OPPOSITION APPEAL
The Constitutional Court on 24 August rejected the opposition Socialist Party's appeal against the recently amended law on local elections, which the parliament has passed, BTA reported. The Socialists challenged the provision obliging candidates to state whether they were informers or on the payroll of the communist secret police, arguing that the requirement limits constitutional rights. The court ruled that the provision does not disqualify candidates from running but has "a moral character." The Socialist also appealed the provision abolishing the election of councilors in settlements with a population of fewer than 500. The court ruled that it is the parliament's prerogative to decide on such administrative matters. MS
GERMANY WARNS AGAINST RUSSIAN SPYING
By Roland Eggleston
Germany's intelligence service has warned that as many as 200 Russian agents may be actively collecting military and economic secrets in the country.
The warning came from Germany's counter-espionage organization, the Office for the Protection of the Constitution. A spokesman recalled that since 1995 it has regularly warned German industry and business that Russia is as interested in collecting commercial information as it is in learning German and NATO military secrets. In 1996, the counter-intelligence organization published a pamphlet warning industry against Russian espionage.
A spokesman who spoke with RFE/RL on the condition of anonymity said the organization's warnings have "often not been taken seriously enough." He added that "the evidence indicates that too often information about new technology and other secrets is not sufficiently protected against espionage from within the company."
The government's security adviser, Ernst Uhrlau, said a few days ago that an "energetic protest" was made in Moscow against Russia's continuing espionage activities, despite Germany's massive financial assistance to the Russian economy. But commentators noted that Uhrlau's predecessors, and even former Chancellor Helmut Kohl, made similar protests without any apparent effect. Kohl raised the issue at a November 1997 meeting in Moscow with Russian President Boris Yeltsin.
Uhrlau said it is unlikely that Germany will impose economic sanctions on Russia, as has been demanded by the chairman of the parliamentary internal affairs committee, Wilfried Penner. But Penner has said he may ask questions about the damage caused by Russian espionage in an open session of the parliament.
The latest warning about Russian espionage in Germany follows the arrest of two men alleged to have passed to Russia secret military information.
One of them, Peter Sommer, is a 52-year-old engineer at Daimler-Chrysler Aerospace (DASA), which has research contracts for various military projects. He is said to have been active since 1997 and is suspected of having stolen studies about the latest developments in military helicopters and anti-tank weapons and possibly information about the weaponry carried by the new fighter aircraft, the Eurofighter.
The other man accused is a 39-year-old landowner in Lower Saxony, Michael Koch. The authorities believe it was he who persuaded Sommer to obtain the information. Koch is the son of an arms dealer who was formally accused in 1979 of trying to recruit former German officers for the Libyan army of Muammar Gaddafi.
The Federal Prosecutors Office has declined to give details of the case while investigations continue. But lawyers for the two say Koch is suspected of having tried to recruit several people to obtain sensitive information. When Koch was arrested in Hannover on July 28 he was allegedly about to leave for Moscow with a briefcase full of secret documents. The head of the provincial security organization in Lower Saxony, Rolf-Peter Minnier, told journalists that with Koch's arrest "we caught a really big fish."
Koch appeared in the Federal court in Karlsruhe last week but refused to make a statement. He and Sommer are detained in separate prisons. Officials say they are unlikely to go on trial until next year.
The counter-espionage organization says it is also worried about economic espionage. Its spokesman said Russia appears to be interested in new technology in industry, in computer technology, micro-electronics, and in gene technology. "Apparently, the goal is to improve Russia's economy by obtaining information about Western advances in the industrial, scientific, and electronic fields," he added.
Russia makes no secret of its activities. A Russian Federation law obliges the foreign intelligence service to "support the economic development and scientific progress of the country." German newspapers frequently report that President Yeltsin endorsed economic espionage for the good of the country in a speech to Russia's Security Council in February 1996. But German officials concede that in many cases, Russia now obtains its economic information through joint ventures with German companies.
By the same token, the German counter-intelligence agency says other countries are also active in trying to obtain information in Germany about Western technology. Among them are Iran, Iraq, Libya, Syria, and China.
Moreover, accusations have also been made against the U.S., which maintains a Cold War electronic listening station at Bad Aibling, near Munich, and in some other parts of the country. Some German politicians charge that the U.S. monitors phone conversations and other communications inside German industry. The chairman of the parliament's Internal Affairs Committee, Wilfried Penner, renewed those charges last week. The author is an RFE/RL correspondent based in Munich, Germany.