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Baltic Report: March 13, 2000

13 March 2000, Volume 1, Number 8
Fourth Quarter Growth Lower Than Expected
The Estonian economy grew by 1.9 percent in the fourth quarter of 1999 compared to the same period in 1998, ETA reported. In releasing the preliminary findings on 3 March, the Statistical Department noted that this was the first period of quarter-on-quarter growth since 1998. Despite this, many observers had predicted a higher growth rate, in the 3-5 percent range.

Finnish Foreign Minister In Estonia
New Finnish Foreign Minister Erkki Sakari Tuomioja made his first trip abroad in that capacity to Estonia, visiting Tallinn on 6 March. Tuomioja met his counterpart Toomas Hendrik Ilves and discussed the issue of property restitution for those who evacuated to Finland during the Soviet and Nazi occupations, BNS reported. The two also discussed cooperation in anti-drug efforts and EU integration.

Estonian President In Britain
Lennart Meri visited Great Britain 6-12 March to promote bilateral relations, BNS and ETA reported. In a meeting with Foreign Secretary Robin Cook, Meri discussed strengthening bilateral ties, including expanding education opportunities for Estonians in Britain. The discussions also featured ways to support countries in the Caucasus.
* The parliament formed a Taiwan friendship group, led by Juri Kaver.
* The parliament on 8 March rejected an opposition bill to restrict land sales to foreigners.
* The government on 7 March closed a tax loophole for foreign military pensioners, and such foreign pensions will be subject to taxation over the standard monthly deductible of 800 kroons ($49.50). This affects about 9,000 Russian military pensioners, but also about 400 who served with the Finnish military. Russian officials called this a violation of the 1994 troop withdrawal agreement.
* Twelve of 24 anti-drug squad members threatened to quit, following the resignation of squad commissioner Kalev Kukk.
* The Merchants Association on 9 March said that one-quarter of Estonia's retail trade is in the gray or black market.
* The parliament on 9 March approved a law on the legality of digital signatures and ratified the European Convention on Money Laundering.
* Some 9 percent of Estonians use the Internet daily, according to an EMOR poll published on 8 March.

Court Says Latvian Lawmaker Was KGB Agent
The Riga City Zemgale District Court on 3 March ruled that parliament member Janis Adamsons had been a KGB staff officer during the Soviet occupation, LETA reported. The court linked Adamsons' long tenure as a Soviet border guard officer with KGB service, a charge Adamsons denies. Adamsons said he would appeal the verdict. The parliament could revoke the mandate of Adamsons on the basis of a lustration rule which does not allow former KGB operatives to serve as parliament members.

Riga To Keep Current Privatization Head
The Latvian government on 8 March voted to retain Janis Naglis as head of the Latvian Privatization Agency (LPA). Prime Minister Andris Skele argued it would not be prudent to change the person at the helm because the process is near completion, BNS reported. The government earlier decided to end the activities of the LPA in 1 January 2001.
* Mikhail Farbtukh, convicted of genocide in the deportations of Latvians during the Soviet occupation, lost a procedural challenge with the Supreme Court on 6 March.
* Foreign Minister Indulis Berzins traveled to the United States to discuss NATO integration and bilateral relations.
* The parliament on 9 March banned beauty pageants for those under 18 years of age in the wake of the continuing pedophilia scandal.
* The Prosecutor-General's office on 9 March opened a case against suspected war criminal Karlis Ozols. Ozols, believed to be residing in Australia, is accused of killing Jews in the Riga ghetto during the Nazi occupation of Latvia.
* Latvia received three T-55 tanks from the Czech Republic.
* According to a poll by SKDS released on 8 March, the number of Euroskeptics is growing in Latvia, rising by 9 percent to 37.7 percent. Supporters of EU membership was 43.5 percent, down by 6.2 percent from November.
* The Latvian embassy in Moscow on 3 March was attacked by vandals who defaced the building with a black liquid and broke some windows.
* Latvia's consumer price index rose by 0.5 percent in February, the highest in the Baltics.

U.S. Congress Honors Lithuania
The speaker of the U.S. House of Representatives, Dennis Hastert, hosted a dinner on 8 March marking the 10th anniversary of the legislative act in Lithuania which restored the country's independence. Vytautas Landsbergis, the current chairman of the parliament and the chairman of the Supreme Council in March 1990 when Lithuania declared that it was moving to recover its independence, was the guest of honor. Landsbergis also discussed NATO enlargement with various officials, such as Deputy Secretary of State Strobe Talbott and Senator Jesse Helms.

Lithuania Faces Conscription Problems
Only 20 percent of young men currently qualify for military service, ELTA reported on 8 March. Of the 97,000 young men between 19 and 25, some 30,000 failed to meet health requirements. Another 24,000 received student deferments, while 4,000 had a previous criminal record. About 6,000 young men are called up for military service each year in Lithuania.

Lithuanian Unions Stage Anti-Government Protests
ELTA reported on 4 March that 1,000 representatives of professional associations and trade unions staged a demonstration in Vilnius and other Lithuanian cities to demand the introduction of a minimum monthly wage and a tax-free category for minimum income earners. The protesters also accused the government of working for the IMF and World Bank rather than the interests of Lithuania.
* President Valdas Adamkus signed the law allowing for the trial of war criminals in absentia when they are too ill to attend court sessions. The cases of suspected Nazi war criminal Aleksandras Lileikis and several others, suspended because of the defendants' ill health, can now resume under the new law.
* President Adamkus on March 8 suspended the awarding of state honors after public outrage erupted over the Independence Day ceremonies where he conferred awards on two former government ministers--both of whom have been found to be collaborators with Soviet security organs.
* Denmark announced plans to increase military aid to Lithuania in 2000 to about $2.9 million, an increase from the previous $1.1 million in previous years.
* Oil giant Mazeikiai Nafta posted a 1999 loss of 130.86 million litas ($32.7 million), largely due to stoppages resulting from a lack of crude oil from Russia.
* The European Commission on 8 March decided to start membership talks with Lithuania on eight chapters of negotiating areas.
* A group of 108 Mormons from Visaginas has asked Sweden for political asylum. The group says its members are subject to religious persecution in Lithuania. The group traveled to Sweden from Poland, after being refused entry by Germany.
* The unemployment rate rose to 11.2 percent at the end of February, a 0.4 percent increase from the month. Regionally the highest rate remained in Akmene (21.1 percent) and Salcininkai (20.6 percent).
* The IMF on 8 March approved a new annual standby agreement with Lithuania.
* The privatization of oil exploration company Geonafta failed after the Norwegian company J.O. Odfjell pulled out. The company publicly suggested that a detailed audit showed the deal to be a heavy risk in the deal.

Estonia Taking Serious Steps Toward NATO Membership

By Rebecca Tyler

During a Washington visit last week, Estonian Defense Minister Juri Luik told U.S. government officials that Estonia is substantially increasing defense expenditures, upgrading its military forces and equipment to NATO standards, and maintaining good relations with Russia.

With a NATO summit scheduled for 2002, Estonia and the other NATO aspirants have precious little time to meet criteria and convince the 19 member states of their readiness to contribute to the common defense. Like its neighbors, Latvia and Lithuania, Estonia has built its defense forces from scratch over the last nine years since the end of Soviet colonial rule. In important ways, this challenge has given the Baltic countries a certain advantage because Estonia has few "red colonels"--as military officers trained by the Soviet Union are often called--to impede or even undermine military reforms. And while the old Warsaw Pact members are downsizing their military forces, Estonia can build an efficient, integrated defense force schooled in Western military values.

According to Luik over the past year, Estonia's governing coalition has taken "serious steps" to raise defense expenditures to 2 percent of GDP, the spending level recommended for new NATO members. Despite the legal restrictions of maintaining a balanced budget, defense expenditures are to be raised by two-tenths of a percent each year, until they reach 2 percent of GDP in 2002. To meet that goal, Estonia will have to maintain healthy economic growth and restrain spending on social services.

The increased funds are to be used to improve the quality of life for military personnel, to improve communications capabilities and to strengthen air surveillance and defense systems. Estonia is modeling its defense forces on Finland's military. With a small professional military, Estonia will depend on a large, active reserve. If attacked, Estonia will employ a "total defense" concept with the reservists prepared to mount a guerrilla war against any invading enemy. Luik is confident that this strategy provides Estonia with a credible defense.

The Estonian military has received small arms and other military equipment from regional neighbors such as Finland, Sweden, Denmark, and Norway, as well as the United States. The government itself is also purchasing sophisticated radar and communications equipment to bring its forces up to NATO standards. This assistance is in part provided to joint Baltic defense forces such as the Baltic Peacekeeping Battalion (BALTBAT), the Baltic Naval Squadron (BALTRON), the regional air space initiative (BALTNET), and the Baltic Defense College (BALTDEFCON).

Luik said that Estonian Prime Minister Mart Laar recently created a government commission to better address issues of defense preparedness and NATO membership. The five-member commission includes the finance minister so that funding issues are addressed before decisions on spending are adopted. This is a major step in guaranteeing that the military is not undermined in fulfilling its commitments. Luik suggested that this arrangement will also help to maintain public opinion in favor of military preparedness and the drive for NATO membership.

While in Washington, Luik reiterated Tallinn's long-established view that there is no need for all three Baltic countries to be admitted to NATO at the same time. "The entrance of one of the Baltic states is a victory for all three," Luik said.

Rebecca Tyler is an RFE/RL intern from Colgate University.