|Wednesday, 20 November 2019|
RFE/RL Newsline, Vol. 1, No. 89, 97-08-06
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 1, No. 89, 6 August 1997
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 IMF TEAM SAYS GEORGIA'S SOCIAL SAFETY NET "UNSUSTAINABLE"A team of experts from the International Monetary Fund (IMF) has told Georgian authorities that the country's social support system is "unsustainable" because it is not providing adequate protection to the most vulnerable, an RFE/RL correspondent in Washington reported on 5 August. The Georgian safety net currently costs the equivalent of about 3 percent of GDP (gross domestic product, the size of the economy) or about one-third of the state budget, but the standard monthly benefit level of 9.8 lari (7.70 dollars) is equal to only one-tenth the official minimum subsistence level. The IMF experts said that many people in Georgia have managed to maintain living standards at about subsistence levels with support from relatives and by depleting their assets which in the long term is "unsustainable".
 THREE CANDIDATES REGISTERED FOR KARABAKH PRESIDENTIAL ELECTIONSOn 5 August the Central Election Commission of the self-proclaimed Republic of Nagorno-Karabakh registered three candidates for the presidential elections to be held on 1 September, an RFE/RL correspondent reported from Stepanakert. They are the current Nagorno-Karabakh Foreign Minister Arkadii Ghukasyan, parliament speaker Artur Tovmasyan, and parliament deputy Boris Arushanyan. Acting president Leonard Petrossyan is not running as a candidate. Observers expect that the vote will be a race between Ghukasyan and Arushanyan. The post of president became vacant in March 1997, when incumbent Robert Kocharyan was appointed Prime Minister of Armenia. Kocharyan received a majority of more than 86 percent in the November 1996 presidential elections. The elections were not recognized as valid either by Azerbaijan or by the international community. His closest rival, Boris Arushanyan, polled 6.9 percent.
 CONFUSION OVER LUKOIL'S PARTICIPATION IN KYAPAZ/SERDAROn 5 August the Russian Foreign Ministry issued a statement confirming that the Russian oil companies Rosneft and Lukoil have withdrawn from the contract they signed in early July with the Azerbaijani state oil company SOCAR to develop the Kyapaz (Serdar) Caspian oil field, ITAR-TASS reported. Turkmenistan had immediately protested that the oilfield in question lies in Turkmenistan's sector of the Caspian. On 31 July, a spokesman for Rosneft President Yuri Bespalov told Interfax Rosneft would withdraw from the contract. The "Financial Times" on 6 August, however, quoted a spokesman for Lukoil as saying that Lukoil will not withdraw. Also on 5 August, Iranian deputy foreign minister Mahmud Vaezi criticized the signing by Azerbaijan of four new major oil contracts with U.S. companies, AFP reported. Vaezi said the contracts "ignore the rights and interests of other countries" and risk precipitating a crisis in the Caspian region.
 JAILED KYRGYZ JOURNALIST RELEASEDThe Kyrgyz Supreme Court on 5 August overturned a decision by a Bishkek municipal court and acquitted the editor of the Kyrgyz independent weekly newspaper "Res Publica," Zamira Sydykova, of slander charges, according to RFE/RL correspondents in Bishkek. Sydykova had been sentenced to 18 months in a prison colony after the head of the Kyrgyz state gold company, Dastan Sarygulov, filed suit charging several articles in Res Publica had slandered him. Sydykova was found guilty on 23 May and has been serving her sentence, doing janitorial work at the colony, since that time.
 KAZAKHSTAN PLANS TO INSTALL NUCLEAR REACTORSThe Kazakh government has approved a plan to install six nuclear reactors at its first nuclear power plant by the year 2030, according to a 5 August ITAR-TASS report. The new Russian-made VVER reactors will be installed at a power plant on the southern shore of Lake Balkhash. Kazakhstan is heavily dependent on Russian and Uzbek supplies of energy and is deep in debt to both countries as a result. The project is estimated to cost about $5 billion.
 JAPANESE TRAINING CENTER TO OPEN IN TASHKENTThe Japanese company "NEC" will open a communication's training center in the Uzbek capital of Tashkent, this October, ITAR-TASS reported on 6 August. The center will offer instruction by "highly qualified experts" from NEC in the use of modern communications equipment. NEC and Mitsiu Bissan are already helping Uzbekistan reconstruct its telephone exchange infrastructure. The Japanese company also has already established a similar center in St. Petersburg.
[B] SOUTHEASTERN EUROPE
 GREECE TO LEGALIZE ALBANIAN MIGRANTS' STATUSGreek Foreign Minister Theodoros Pangalos said in Tirana on 5 August that his country will help Albania restore its economy, military, and police. Some 100 Greek troops will stay in Albania, together with a group of military experts. Greece is anxious to curb an influx of drugs, arms, and criminals from across the border. Pangalos added that Albanian migrant workers in Greece will receive temporary work permits. Many of the Albanians have been working there illegally and are subject to immediate deportation. There are perhaps 300,000 such migrants, who often live and work under poor conditions, but whose presence has become essential to some branches of the Greek economy. Their remittances home are a mainstay of the Albanian economy.
 HOLBROOKE STARTS BALKAN MISSION TO SAVE DAYTON AGREEMENTU.S. envoys Richard Holbrooke and Robert Gelbard arrive in Split on 6 August for meetings with Croatian President Franjo Tudjman and his Bosnian counterpart Alija Izetbegovic. The diplomats want the two leaders to put into effect long-standing agreements regarding the Croat-Muslim Federation in Bosnia. On 8 August Holbrooke is expected to tell Yugoslav President Slobodan Milosevic in Belgrade that his country could face new sanctions if it does not observe its obligations under the Dayton agreement and "ideally" send Bosnian Serb leader Radovan Karadzic to the Hague-based war crimes tribunal. In Novi Pazar, Sandzak Muslim leader Sulejman Ugljanin said on 5 August that he wants to tell Holbrooke personally about Serbia's persecution of its Muslim minority. Ugljanin also appealed to Bosnian Co- Prime Minister Haris Silajdzic to make the Sandzak Muslims' plight known, an RFE/RL correspondent reported from Novi Pazar.
 RIFT GROWS BETWEEN U.S., WESTENDORPCarlos Westendorp, the international community's chief representative in Bosnia, has refused to meet Holbrooke, news agencies reported from Sarajevo on 5 August. Westendorp's spokesman said in the Bosnian capital that Westendorp "is in Spain. He is on holiday. He'll be back at the end of the week." The former Spanish foreign minister's apparent decision not to meet the U.S. envoy comes in response to recent negative remarks about Westendorp made by an unnamed U.S. diplomat (see "RFE/RL Newsline," 5 August 1997). Westendorp's spokesman added that "some of the statements which I've seen attributed to various diplomats are extraordinary. Anonymous briefings to the press are unhelpful in this context." Among the criticisms of Westendorp is that he spends too much time away from Bosnia.
 BOSNIAN UPDATEWestendorp's office announced in Sarajevo on 5 August that Muslim and Croat representatives have agreed that Muslim villagers may soon return to their homes near Jajce (see "RFE/RL Newsline," 4 August 1997). German officials said in Bonn that Germany has suspended all aid to the Croat-held Jajce region until the Muslims are allowed to go home. Elsewhere, Switzerland and Russia have joined at least 12 other countries in following Westendorp's call for a freeze on contacts with Bosnian diplomats until the three Bosnian sides agree on new ambassadorial appointments.
 U.N. POLICE FREE TWO ILLEGALLY HELD SERBSMembers of the International Police Task Force (IPTF) on 5 August found and obtained freedom for two Serbs whom the Bosnian authorities were holding in a prison in Zenica in violation of the Dayton agreement. The IPTF paid an unannounced visit to the facility and found Nenad and Dusan Skrbic, whom the police had not seen on previous, announced visits. The two were on the list of missing persons of the International Committee of the Red Cross, but the Bosnian authorities at first refused to free them. The men were taken to Banja Luka and reunited with their families, who had alerted the IPTF to their plight.
 OSCE SAYS IT WILL NOT MONITOR SERBIAN VOTEA spokesman for the OSCE said in Vienna on 5 August that his organization will turn down Serbia's invitation to monitor the September local elections there unless Belgrade removes some conditions it wants to place on the operation. The Serbian authorities seek to determine which countries may send monitors, which the OSCE calls "unacceptable." The spokesman added that Belgrade has failed to implement recommendations that the OSCE made late last year to improve the democratic process in Serbia.
 SLOVENIA LOSES KEY COURT BATTLEA court in Nicosia, Cyprus, ruled on 5 August that Slovenia has no claim to money deposited in Beogradska Banka Cyprus for the former Yugoslav National Bank (NBJ). The court lifted an injunction that Slovenia obtained last year against the Serbian offshore bank and charged Slovenia for costs. Slovenia, Bosnia, Croatia, and Macedonia object to federal Yugoslavia's claim to be the sole legal successor to Tito's state and hence entitled to its assets. Acting on the principle that former Yugoslav property should be divided equitably among all the successor states, Slovenia charged that some of the NBJ's money on deposit in Cyprus actually belongs to Slovenian citizens.
 ROMANIAN GOVERNMENT AGREES ON RESTRUCTURED BUDGETAt a meeting that ended in the early morning hours of 6 August, the government agreed on the details of the restructured budget, Radio Bucharest reported. Details will be presented by Prime Minister Victor Ciorbea at a press conference later on 6 August. Deputy Minister of Finance Dan Rusanu said the restructured budget continues to be one of "austerity" and that it reflects the priority given to social protection, health and education. He said the 4.5% deficit agreed on with the IMF will be respected and predicted that in 1998 the deficit will be between 2.2 and 2.5 percent of the GDP. Earlier, Ciorbea met leaders of the main trade unions, RFE/RL's Bucharest bureau reported. After the meeting, they said it was agreed that salaries will be indexed by 17 percent in the third quarter of 1997 and by 6 percent in the last quarter.
 ROMANIAN INTERIOR MINISTER ENDS TRANSYLVANIAN TOUREnding a tour of Transylvania on 5 August, Minister of Interior Gavril Dejeu told a press conference that he found inter-ethnic Romanian-Hungarian relations to be "reasonable." But he complained that Romanian ethnics living in the countryside in counties with a Hungarian majority are being subjected to "inadmissible efforts" of assimilation, Radio Bucharest reported on 6 August.
 EUROPEAN UNION URGES IMPROVEMENT OF TREATMENT OF ROMAS IN ROMANIAA European Commission official on 5 August urged Romania and other Central and Eastern European countries to crack down on discrimination and violence against their Roma minorities, the media reported on the same day. Steffen Skovmand, a member of the European Commission's delegation in Romania, said in a news conference that the situation of the Roma is "still a weak point" in Romania's record of respect of human rights and in the rest of the region. Roma rights activist Nicolae Gheorghe told reporters that Roma are subject to harassment and aggression in Central and Eastern Europe. He cited violence against Roma by "skinhead" youth gangs in the Czech Republic and Slovakia, police brutality against them in Romania and Bulgaria, and labor and education discrimination in Hungary.
 FIVE DIE IN ROMANIAN FLOODSTwo men trying to cross a small Romanian river in a horse-drawn cart drowned when they were swept away by a sudden torrent of water. A police spokesman said on 5 August that the accident occurred in the town of Zarnesti, 50 kilometers southwest of Brasov. Police in the eastern Danube river port of Tulcea said the bodies of three men were found in one of the tributaries of the Danube. The three were washed away by floodwater following heavy rains late last month.
 EVACUATION OF RUSSIAN MILITARY EQUIPMENT FROM TRANSDNIESTER POSTPONEDThe evacuation of the first dispatch of Russian military equipment from the breakaway Transdniester region, scheduled for August 3, has been postponed, BASA-press reported on 4 August, citing "reliable sources" close to the Tiraspol authorities. No new date for the beginning of the evacuation was mentioned. The military convoy carrying the equipment should have transited the Moldovan territory. The breakaway region's leadership opposes the evacuation and claims ownership of the equipment. Stefan Chitac, a military adviser of Transdniester leader Igor Smirnov, told BASA-press that he knows nothing about the evacuation but noted that the problem of ownership of the assets will be the subject of separate negotiations between Transdniester and Russia.
 TRANSDNIESTER DECLARES ITSELF "CUSTOMS CONTROL ZONE"A decree signed on 5 August by the leader of the breakaway Transdniester region, Igor Smirnov, stipulates that the region is setting up a separate "custom control zone" on all its territory. The decree says the measure "corresponds to custom legislation and similar practice in the CIS," BASA- press reported on 5 August. The Transdniestrian custom service is headed by Igor Smirnov's son, Vladimir Smirnov. In other news, in the wake of the "motorcade incident" during which Moldovan Defense Minster Valeriu Pasat was barred from entering the territory under the separatists' control (see RFE/RL Newsline," 4 August 1997), the Joint Control Commission which oversees the truce between Chisinau and Tiraspol has ordered the commandment of the three peace-keeping forces (OSCE, Russia and Ukraine) to work out within two weeks a mechanism aimed at removing obstacles for crossing the security zone dividing the two conflicting sides.
[C] END NOTE
 RUSSIA: THREE ZEROS TO GO OFF RUBLE BILLSBy Stephanie Baker Declaring an end to the era of inflation, Russian President Boris Yeltsin on 4 August announced that the Central Bank will lop three zeros off the ruble next year with the introduction of a new ruble note. He also said that the bank will bring back the kopek, which will be one one-hundredth of a ruble.
Analysts said Russia's decision to issue a new ruble note was a mostly cosmetic confidence building exercise. But they say it is significant for being the first time Russia will revamp its currency without wreaking havoc and robbing the population of hard-won savings.
Starting January 1, 1998, the Central Bank is to issue new notes and coins, including a shiny new kopek, which will be used in parallel with the old bills for one year. An old 1,000 ruble note will be equal to a new 1 ruble note. By the start of 1999, the government plans to phase out use of the old notes, but old rubles can be exchanged for new notes until 2002.
Yeltsin said in a nationwide address that over the last 50 years, monetary reform had hit the "common people" particularly hard. But now the government is determined to prevent any suffering. As he put it: "Nobody is going to lose anything as a result of the reform. Nobody's interests will be trampled on -- the reform will not amount to confiscation." By announcing plans to introduce the new bills a full five months in advance, the Central Bank hopes it will have enough time to persuade Russians not to panic. It has even set up a hot-line to field inquiries.
During previous currency reforms in 1991 and 1993, many Russians lost their savings when they were forced to switch old notes for new ones virtually overnight. The government hopes to avoid the characteristic chaos this time by introducing the new notes gradually.
In Yeltsin's words: "I want everyone to be well-prepared for it, so that there will be no haste or stress."
After weathering hyperinflation and several botched attempts at monetary reform, most Russians hold their savings in dollars. On the streets of Moscow, most people greeted the announcement calmly, noting that the exchange rate to the dollar is unlikely to fluctuate.
The reforms should slim down the average consumer's wallet by getting rid of worthless bills, such as the hated 100 ruble note. The new notes, which look almost identical to the rubles currently in circulation but minus three zeros, will be issued in five denominations: 5, 10, 50, 100, 500.
Coins will be revived with the introduction of 1, 2 and 5 ruble denominations. Kopeks will be issued in 1, 5, 10 and 50 denominations.
Central Bank Chairman Sergei Dubinin said the new notes would help boost public confidence in what he called a "new heavy and firm ruble." He added that redenomination would not affect Russia's monetary policy next year.
Dubinin said the decision to introduce the new notes signals an end to inflation and the economic slump of years past. Once rampant inflation, which peaked in 1992, has been largely brought under control, with the government forecasting a 12 percent rate this year.
Dubinin dismissed speculation that the cost of printing new notes would drain the Central Bank's resources or put added pressure on the government's cash-strapped budget. He said there is constant demand to replace old notes with crisp new bills, spurred by the proliferation of automatic teller machines.
Pavel Teplukhin, an economist at Troika Dialog, said previous attempts at monetary reform had essentially amounted to a confiscation money from the population. As he put it: "This time people will not suffer."
Others said the decision to knock of three zeros from the ruble only signals that the government has the muscle and confidence to stick to a stable ruble and low inflation.
Rumors of a re-denomination first surfaced last February, but the government waited until now to announce the reforms, apparently cheered by upbeat news on the economic front and increased political stability.
The move could give a boost to the government's economic reforms by removing inflationary expectations and persuading Russians to choose rubles over dollars, luring some of the so-called "mattress money" into ruble bank accounts.
As Roland Nash, an economist at the Moscow investment bank Renaissance Capital, put it: "It should encourage people to hold their savings in rubles, which should free up some capital to invest in the real economy."
The author is an RFE/RL correspondent based in Moscow.
Reprinted with permission of Radio Free Europe/Radio Liberty