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Baltic Report: April 10, 2000

10 April 2000, Volume 1, Number 12
Nato Commander In Baltics
NATO's supreme commander in Europe, General Wesley Clark, made a farewell visit to Latvia and Lithuania on 2-3 April. Latvian President Vaira Vike-Freiberga after her meeting with the general told the press that membership of the Baltic states in NATO "would help ensure stability in this part of Europe and that it no way poses threats to Russia," BNS reported. Clark also expressed his satisfaction at NATO integration efforts by both Latvia and Lithuania, calling Latvia a "real competitive contender" for NATO membership, AP added. In Lithuania, Clark praised the increase in defense spending, but he warned that the total economic picture must be considered as well, according to ELTA. Clark criticized Russia's draft defense strategy, saying it represents "a turning away from the previous policy of increased openness and cooperation with the West, which the Russian military put in place in the early 1990s," Reuters reported.

EURO Commissioner Sees Estonia In 'First Round'
While visiting Tallinn on 31 March, European Commissioner for Enlargement Guenter Verheugen said he sees no reason for Estonia to be excluded from the first wave of EU enlargement. Verheugen encouraged Estonia to "continue as before" in its integration efforts and noted that key decisions on the timetable of enlargement will be made later this year, BNS reported. Verheugen also discussed the possibility of one Baltic country joining before the others saying, "It is extremely advisable for geographic and political regions to stay together but it is not obligatory."
* The European Commission on 6 April provisionally concluded four negotiating chapters with Estonia while opening negotiations on two others--regional policies and fiscal supervision--thereby bringing the country in-line with other EU candidates in the 'Luxembourg' group.
* Foreign Minister Toomas Hendrik Ilves on 3 April traveled to Washington to discuss bilateral ties. U.S. Deputy Secretary of State Strobe Talbott promised Ilves improvements in trade links. Ilves also met with members of the U.S. Congress to discuss various topics including NATO enlargement.
* Estonian and Russian consular officials, meeting on 4 April in Haapsalu, agreed to issue 4,000 free, long-term, multiple-entry visas for those with relatives, property, or religious congregations across the border.
* Thirty-two opposition members of parliament filed a no-confidence motion against Finance Minister Siim Kallas on 6 April. They called Kallas "unethical" for remaining in office while he is a defendant in a corruption trial. The government set the vote on the motion for 10 April.
* The Estonian government and Canada's Suncor began negotiations over investments into the oil shale sector on 3 April. The Canadian company is interested in building an oil shale processing plant that would cost 2.5 billion kroons ($153.2 million).
* Estonia's new ambassador to the UN, Merle Pajula, presented her credentials to Secretary-General Kofi Annan on 3 April in New York.
* London's School of Slavonic and East European Studies and the Education Ministry signed on 3 April a memorandum of understanding on the exchange of students.
* Officials from the Taxation Department said that 11,760 people filed their annual declarations via the Internet, but about 3,000 of them were not completed properly, thus requiring paper versions.
* The Finance Ministry announced on 3 April that as of the first three months of the year, 20.4 percent of the year's expected revenues, or 5.822 billion kroons ($356.7 million), have been collected.
* Estonia's trade deficit rose to 1.5 billion kroons ($91.9 million) in February, according to a Statistical Department report on 5 April. Exports totaled 3.6 billion kroons and imports totaled 5.1 billion kroons.

Latvian Economics Minister Sacked
Prime Minister Andris Skele on 6 April fired Economics Minister Vladimirs Makarovs after a protracted dispute on the leadership of the Latvian Privatization Agency (LPA). Makarovs, a long-time critic of LPA Director Janis Naglis, signed an order a day earlier revoking the right of Naglis to sign documents on behalf of LPA, citing the expiration of Naglis's term of office (see "RFE/RL Newsline," 8 March 2000). Skele accused Makarovs of going about his business "in a roundabout way" since the majority of the cabinet did not share his view on Naglis's status, BNS reported. Skele temporarily assumed the portfolio until Makarovs's party, For Fatherland and Freedom, nominates a candidate for the post. The opposition Social Democrats launched a no-confidence motion against Skele and two of his party's cabinet ministers.
* Supreme Court justice Voldemars Cizevskis, appointed by the Court to investigate the conduct of outgoing Prosecutor-General Janis Skrastins, on 31 March cleared the official of any wrongdoing. However, Cizevskis said that Skrastins's deputy, Biruta Ulpe, violated professional ethics in speaking about a possible link in an ongoing investigation.
* Prosecutor Rudita Abolina became acting prosecutor-general on 4 April as Janis Skrastins ended his tenure in office. Skrastins has been the only person to hold the office since the restoration of independence. Supreme Court Chairman Andris Gulans is due to nominate another candidate following the parliament's refusal to confirm Supreme Court justice Ilmars Zigfrids Septeris on 30 March.
* The Latvian History Commission signed an agreement with 25 historians to study the Holocaust, Nazi occupation, and the Soviet occupation. The Commission, established by former President Guntis Ulmanis, aims to compile a report on Soviet and Nazi occupied Latvia, and help create a basis for further educational efforts.
* The People's Party of Prime Minister Andris Skele on 4 April submitted a petition to revoke the parliamentary mandate of Social Democrat Janis Adamsons. In February, a court found Adamsons guilty of links to the KGB. The petition in filed under electoral laws, which prohibit KGB operatives from holding parliamentary seats. Social Democrat leader Juris Bojars is not a member of the parliament also for this reason.
* The Constitutional Protection Agency, Latvia's intelligence service, reported to Prime Minister Andris Skele on 4 April that the officials named in the so-called pedophilia scandal have no relation to the case. Skele, who is among those named by opposition deputy Janis Adamsons in this case, attacked the attempt by the Social Democrats to call for a vote of no confidence in his government, saying "only scoundrels may take such actions against their own country," BNS reported.
* Russia's Duma sent a bill on sanctions against Latvia back to its parliamentary committee. Latvian officials praised the move.
* The Citizenship and Migration Department on 3 April said that some 38,500 old Soviet passports remained outstanding as of 31 March, the day they became invalid. Citizens and permanent residents can be fined a fee of 25 lats ($42) if they don't have a valid passport, which serves as the primary identification document.

Mayoral Election Fails In Two Lithuanian Cities
Mayoral elections on 6 April failed in Kaunas, the second-largest city and Panevezys, the fourth-largest. In both cities competing factions failed to secure a majority vote. In Kaunas, where 21 votes are needed in the city council, Vytautas Sustauskas of the radical Freedom Union gained 16 votes, while Gediminas Zemaitis of the leftist New Alliance (Social Liberals) gained ten, ELTA reported. In Panevezys, where 16 votes are needed, Centrist Union member Valdemaras Jakstas garnered 14 votes and incumbent Conservative Vitas Matuzas 12. Under the Constitution, if the councils fail to elect a mayor within two months, the council is dissolved and rule imposed from the central government. In Klaipeda, incumbent Eugenijus Gentvilas of the Liberal Union was re-elected with 26 of 31 votes because the various parties agreed to cooperate. As of 6 April, 47 of 60 local councils have resolved the mayoral situation.
* President Valdas Adamkus visited Poland 4-6 April to discuss bilateral ties and NATO integration with his Polish counterpart Aleksander Kwasniewski. Adamkus thanked Poland for acting as an "excellent advocate" for Lithuania's membership in NATO, BNS and ELTA reported. Adamkus also met with Prime Minister Jerzy Buzek to discuss connecting the two countries' electrical grids. They also discussed ethnic minorities in the two countries, an issue which has strained bilateral ties at times.
* The ruling Conservative Party on 3 April delivered an ultimatum to ex-Prime Minister Gediminas Vagnorius and other breakaway party members to return to the fold by 16 April or face expulsion. A dozen parliamentary deputies, supporters of the former premier established the independent Moderate Conservatives faction in the parliament immediately after the March local elections.
* Czech Premier Milos Zeman stressed his country's support for Lithuania's NATO and EU aspirations during a visit to Vilnius on 31 March. Zeman, while meeting with his counterpart Andrius Kubilius, expressed the desire for closer bilateral cooperation in economic, political, and military spheres.
* Ex-Premier Rolandas Paksas on 2 April was re-elected mayor of Vilnius, receiving 30 votes in the 51-seat City Council. The opposition from the center and left boycotted the final vote after failing to block his candidacy.
* Speaking to a conference on the Holocaust in Lithuania on 2 April, President Valdas Adamkus stressed the importance of understanding fully the Holocaust and its implications for Lithuania. Adamkus said, "This is in effect the opportunity for the younger generation to learn the truth and to discover history without 'hush-ups' and ambiguities," BNS reported.
* The national news agency ELTA celebrated its 80th anniversary on 1 April 2000.
* Prosecutors have brought charges against six former Soviet agents accused of killing 15 Lithuanian partisans and deporting one to Siberia in 1952-53.
* On 3 April mayors were elected in various municipalities. The Peasants' Party, which came in second nationwide during the 19 March elections, gained four mayoral seats in rural districts: Birzai, Ignalina, Sirvintai and Siauliai region. The New Alliance (Social Liberals), which came in first, took won mayoral posts in Siauliai, Alytus and Svencionys. The Center Union took the mayoral post in the newly established Rietavas district, and the Polish Electoral Action took the top job in Salcininkai and Vilnius region. Vida Stasiunaite of the New Alliance (Social Liberals) became mayor of fourth city Siauliai on 31 March. She gained 18 votes out of 31 total, all from coalition partners Centre Union and Social Democrats.
* Parliamentary Chairman Vytautas Landsbergis on 4 April in Strasbourg accused Russia of waging a propaganda campaign against Lithuania concerning the nation's policies on minorities while meeting with Council of Europe Human Rights Commissioner Alvaro Gil-Robles and Parliamentary Assembly Chairman Lord Russell-Johnson.
* Unemployment as of the beginning of April rose to 11.4 percent, a rise of 0.2 percent from March. The highest regional jobless rate came from Akmene (21 percent) and Salcininkai (20.3 percent), while Vilnius registered 8 percent unemployment.

Oil Prices And Political Possibilities

By Paul Goble

Recent increases in the price of oil are giving Moscow ever greater opportunities to adopt policies at home and project power abroad without having to take into consideration the attitudes of the international community.

These increases by themselves set the stage for greater independence of action by the government of President-elect Vladimir Putin. But even more, they appear likely to power a new kind of geopolitical competition between Russia, which earns much of its hard currency through petroleum exports, and Western countries, whose economies depend on importing gas and oil.

Both Russian and Western commentators have already noted that Moscow has been able to finance its war in Chechnya because of rising oil prices. And they have pointed out that the revenues the Russian government has received from oil exports have allowed the Putin regime to talk about a future without dependence on international loans.

But last week, there were three additional developments that suggest the oil price surge is likely to have an even greater impact on Russian policy in the future than it has up to now.

First, Russia's deputy fuel and energy minister Vladimir Stanev announced on Friday that testing of the section of the Baku-Novorossiisk oil pipeline bypassing Chechnya will be over by the middle of May. He said that 230 kilometers of this pipeline have been tested successfully so far and that another 90 kilometers will be tested over the next six weeks.

Once the pipeline is fully tested and certified, it will be able to carry 18 million tons of oil a year. And that in turn will certainly affect Chechnya's ability to earn the money it needs for reconstruction. But more important, this new route will seriously reduce the attractiveness of alternate oil routes out of the Caspian basin, including the U.S.-supported Baku-Ceyhan pipeline.

At a minimum, Western governments are likely to find it harder to raise funds for the latter route, now that a Russian pipeline is clearly available. But even more, the opening of this Russian route will change the geopolitics of the Caucasus and Central Asia, undercutting American and European influence and increasing Moscow's leverage in both regions. Second, and also on Friday, the Russian authorities began construction of a new oil terminal on the Gulf of Finland near St. Petersburg. When completed, this port will be Russia's second largest, capable of exporting up to 12 million tons of oil to the West. But perhaps even more important, the opening of this port will allow Russian firms to bypass the Baltic states.

Until the price of oil rose, the Russian authorities frequently had talked about starting this project but had not been able to find the funds to construct it. Now, with oil revenues at a new high, Moscow has the opportunity to build something which Russian officials and analysts have suggested will allow them to save money and increase their influence in the Baltic region.

The new port is likely to allow Moscow greater flexibility in its dealing with the Baltic states by allowing Russian firms to send oil through some or none of the three at Moscow's discretion. That will simultaneously reduce the revenues each of the Baltic countries now receive from transit trade and increase their uncertainty about the future, both of which the Russian authorities are likely to exploit to expand their influence there.

And third, according to a report from Baghdad earlier last week, the Russian government lined up with those in the Organization of Petroleum Exporting Countries to oppose the increase in production the United States and other Western countries had sought to send oil prices in a downward direction.

Russia did not prevail this time. It is not a member of OPEC, and American influence proved to be too strong. But by clearly supporting those within the cartel who oppose increasing production, Russia has positioned itself not only to cause more trouble for the Western economies in the future but also to cement its friendship with anti-Western oil-exporting countries.

That too points to a new geopolitical competition based almost entirely on an increase in the price of oil. Obviously, if prices fall significantly, Moscow will find its ability to move in all three of these directions reduced. But even if they do, Russia's willingness to exploit the politics of oil prices is likely to remain a major new component of the post-post-Cold War international system.