|Thursday, 14 November 2019|
RFE/RL Newsline, Vol. 1, No. 128, 97-09-30
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 1, No. 128, 30 September 1997
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 KYRGYZ JOURNALIST SENTENCEDYrysbek Omurzakov on 29 September was sentenced to 30 months in a penal colony, RFE/RL correspondents in Bishkek reported. Omurzakov was found guilty of libel for writing an article that claimed a Bishkek factory manager was abusing his authority. He based the article on statements made by factory employees, two of whom also went on trial. They received six months in a penal colony but are pardoned under a 30 July amnesty law signed by President Askar Akayev. Omurzakov is not included in the amnesty because of previous convictions. Meanwhile, the Kyrgyz weekly newspaper "Asaba" was criticized by presidential spokesman Kanybek Imanaliyev as trying to discredit Akayev's economic and political reforms. Imanaliyev, who earlier was a journalist for "Asaba," said the 26 September issue of the newspaper carried eight articles that gave a negative portrayal of Akayev.
 UZBEK GOVERNMENT RESHUFFLEPresident Islam Karimov on 29 September signed a decree relieving Rustam Akhmedov of his duties as defense minister and reappointing him as minister for emergency situations, RFE/RL correspondents in Tashkent reported. First Deputy Prime Minister Ismail Jurabekov was removed as minister for emergency situations to make room for Akhmedov but retains his deputy premiership. The new defense minister is Major-General Khimatullah Tursunov, until now the head of the Uzbek border guards.
 RUSSIAN BORDER GUARD CHIEF IN KAZAKHSTANColonel-General Andrei Nikolayev, the director of the Russian Federal Border Service, and Kazakh President Nursultan Nazarbayev met in Almaty on 29 September and agreed that they will sign a border accord, Russian media reported. Nazarbayev said the goal of the accord is not to "fix a rigid border" but "safeguard our citizens." Nikolayev commented that "no informal units will guard the border," referring to Russia's recent "experimental" use of Cossack units to patrol its side of the border. That move drew heavy criticism from the Kazakh government. Nazarbayev and Nikolayev also said there is a need to strengthen the borders of the four countries (Russia, Kazakhstan, Kyrgyzstan, and Belarus) belonging to the intra-CIS customs union.
 CENTRAL ASIAN WATER COMMISSION MEETSThe Central Asian water resources commission met in Tashkent on 26 September, Interfax reported. Representatives of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan agreed to install equipment to measure the flow of water into the Aral Sea. Under a 1992 agreement between the five countries, 14 billion cubic meters of water were to flow into the sea each year. However, that goal has not been met. The five countries also decided to set up a Central Asian water and energy consortium.
 AZERBAIJAN RADIO BROADCASTING TO IRANAzerbaijani Radio currently broadcasts three hours each day to an estimated audience of 30 million Azeris in Iran, according to an article by Movlud Suleymanli, the head of Azerbaijani Television and Radio, published in "Azerbaijan" on 20 September and summarized by "Turkistan Newsletter" on 29 September. Suleymanli said that programming in Azerbaijani to Iran was discontinued in 1990 but has now resumed. Suleymanli argued that his audience in Iran has "made revolutions many times in the 20th century" and needs to be informed about its language and history. He added that his staff must carry out its duties "rationally" and "without false patriotism." Azerbaijani Radio also broadcasts to Azerbaijan's Kurdish, Lezgin, and Georgian minorities.
 NEW LEFT-WING ALLIANCE FORMED IN ARMENIASeveral tiny socialist oriented political parties and groups have united to create a Union of Socialist Forces, Noyan Tapan reported on 26 September. Representatives of the Democratic Party of Armenia and the banned Dashnak Party attended the founding meeting as observers. The union's primary objective is to draft social programs and submit them to the government. "Molorak" on 26 September quoted Aghasi Arshakyan--one of the leaders of the National Initiative, which is lobbying for Armenia's accession to the Russia-Belarus union--as saying the new alliance may support the National Initiative.
[B] SOUTHEASTERN EUROPE
 SPEAKER OF BOSNIAN PARLIAMENT DENOUNCES PLAVSICSlobodan Bijelic, the Bosnian Serb speaker of the all Bosnian parliament, told SRNA on 29 September that Republika Srpska President Biljana Plavsic, has already violated the 24 September Belgrade agreement by postponing parliamentary elections by eight days until 23 November. He said her unilateral move could contribute to the further disintegration of Republika Srpska and to a "renewed flare up of emotions." Meanwhile, Momcilo Krajisnik, the Bosnian Serb co-president of Bosnia, met with Yugoslav President Slobodan Milosevic in Belgrade on 29 September. According to Tanjug, the two leaders said that "an important step forward" was taken when the Bosnian collective Presidency agreed that Republika Srpska citizens will be able to apply for Yugoslav citizenship in addition to retaining their status as citizens of Bosnia-Herzegovina.
 BOSNIAN SERB PREMIER WARNS AGAINST ARRESTING KARADZICRepublika Srpska Prime Minister Gojko Klickovic, speaking on Montenegrin Television on 27 September, said that arresting Radovan Karadzic "would lead to a complete collapse of the Dayton Agreement and new conflicts in Bosnia-Herzegovina." He said the international community will "gain nothing if they destroy the 80 percent of the Dayton Agreement implemented so far." Klickovic stressed that the Serbs will not "give up" Karadzic, who, he added, has withdrawn from all political functions and "is just doing his earlier job." But Klickovic stressed that Karadzic is still a leader and that his name cannot simply be forgotten. According to Klickovic, Karadzic "is now forced to hide, although he is guilty of nothing except defending his people." The Bosnian Serb premier argued that no one has any evidence of his guilt, Montena-Fax reported.
 KOSOVAR STUDENTS PLEDGE TO PROCEED WITH PROTESTSEthnic Albanian students in Kosovo have rejected pleas by Kosovar leader Ibrahim Rugova and a visiting delegation of Belgrade-based diplomats to postpone protests due to begin in seven Kosovo towns on 1 October. Senior diplomats from the U.S., Russia, and European countries argued that the protests should not take place between the first and second rounds of the Serbian elections. The students are protesting the failure to implement an Albanian-language education agreement signed in 1996 by Rugova and then Serbian President Slobodan Milosevic. The diplomats met separately with Rugova and local Serbian authorities. Veljko Odalovic, the Serb-appointed deputy leader of Kosovo, told the delegation that ethnic Albanian political leaders must give up the idea of an independent Kosovo.
 MONTENEGRIN PRESIDENT SEEKS MUSLIM, ALBANIAN VOTEMomir Bulatovic, who is running for reelection as president, took his campaign to the multi-ethnic mountain town of Plav near the border with Albania and Kosovo . He told a crowd of several thousand people that "what hurts most is the fact that an attempt is being made to divide us along ethnic lines.... I hope that Muslims and [ethnic] Albanians will vote like full-fledged citizens in line with their beliefs," Radio Belgrade reported on 29 September. Bulatovic added that "enormous pressure is being exerted on Muslim and ethnic Albanian residents by the secret police," which he accused of "spreading untruths and fear."
 FORMER CROATIAN CHIEF OF STAFF DENOUNCES TUDJMANGeneral Anton Tus, in an interview with the Rijeka daily "Novi list" on 27 September, accused President Franjo Tudjman of having "frequently subordinated military operations to political decisions" during fighting against the Yugoslav Army (JNA) and rebel Serbs in 1991-1992 and 1995. Tus said Tudjman foiled his attempt to lift the Serbian siege of Vukovar in 1992 by yielding to EU pressure to grant passage to a humanitarian convoy. Tus says he ignored Tudjman's orders not to attack JNA barracks and seized military facilities in Karlovac, Bjelovar, Delnice, Samobor, and Buna. He added that Tudjman opposed his suggestions, at the end of 1992 and again in 1995, to take western Bosnia and the area along Bosnia's Sava river area. Tus was Tudjman's chief military adviser until fall 1995.
 ALBANIAN SUPREME COURT OVERTURNS CONVICTIONSThe Supreme Court on 29 September overturned the convictions of all 32 former communist officials sentenced to prison for crimes against humanity. Brief verdicts read by Supreme Court Chairman Avni Shehu declared the former officials innocent of "genocide," for which they had been sentenced by lower courts. Prosecutors said the charges were dropped because communist Albanian legislation did not refer to such a crime. They noted that the former officials should have been prosecuted for abuse of power, for which many have already been sentenced. Only four of the former leaders are serving time. Shehu said they will be freed.
 ROMANIA'S FORMER INTELLIGENCE CHIEF ON POLITICAL AIMSIn an interview with RFE/RL's Bucharest bureau, Virgil Magureanu, the former director of the Romanian Intelligence Service, has denied he intends to set up a new political party (see "RFE/RL Newsline," 29 September 1997). Magureanu said he wants to "contribute" to the setting up of a "center- left" political alliance, which, he believes, will come into being "within two months." He also said it is not his intention to head the new alliance but to be a member of its leadership.
 ROMANIAN PRESIDENT PROMOTES EU MEMBERSHIPEmil Constantinescu, meeting in Brussels on 29 September with European Commission President Jacques Santer, again argued in favor of simultaneous negotiations with all candidates for EU membership, an RFE/RL correspondent in Brussels reported. Constantinescu also met with Belgian Prime Minister Jean-Luc Dehaene. In other news, the Senate on 29 September amended a 1990 law on compensation to victims of the communist dictatorship. The legislation provides for monthly payments of 60,000 lei (about $7.50) for each year spent in prison or as a deportee abroad and 30,000 lei for each year spent in psychiatric wards as punishment. The law applies also to Romanian citizens residing abroad.
 MOLDOVA CRITICIZES CONTINUED RUSSIAN PRESENCE IN TRANSDNIESTERAddressing the UN General Assembly on 29 September, Moldovan Foreign Minister Nicolae Tabacaru said Russia is stalling over the withdrawal of its troops and weapons from the breakaway Transdniester region, ITAR-TASS reported. In response, Aleksandr Gorelik, Russia's deputy permanent representative at the UN, said the Moldovan position contradicts the agreements reached at the recent meeting in Moscow between the two countries' presidents. He said that according to those agreements, the withdrawal should not be "hasty" in order to prevent "creating a situation beyond control, especially [given] the large arsenals of weapons in this area."
 RUSSIA WITHDRAWS EQUIPMENT FROM TRANSDNIESTERColonel Aleksandr Baranov, the deputy commander of the Russian troops stationed in the Transdniester, told journalists on 29 September that 49 railroad cars have been loaded with engineering equipment and will leave for Russia "in the next days," RFE/RL's Chisinau bureau reported. Infotag reported the same day that a convoy left on 27 September. Observers note that such equipment has been withdrawn in the past and that the latest move does not necessarily mean an end to the dispute over ownership of Russian armaments in the region. A military adviser to Igor Smirnov, the leader of the breakaway republic, said the Russian military equipment will be sold "in line with the agreement reached between Russia and the Transdniester." The adviser added that "Moldova has no right whatever" to those weapons.
 BULGARIAN NUCLEAR WASTE POSES ENVIRONMENTAL PROBLEMSome 15,000 cubic meters of fluid radioactive waste from the Kozloduy nuclear plant threaten the environment along the River Danube, BTA reported on 29 September. Citing experts from the Academy of Sciences, the agency said the waste is being stored in containers. A reprocessing plant for the waste has not yet been built. In other news, President Petar Stoyanov on 29 September began a three-day private visit to Germany at the invitation of the Konrad Adenauer Foundation. He will meet with German President Roman Herzog.
[C] END NOTE
 LATVIA LEADS WAY ON PENSION REFORMby Michael Wyzan
All transition countries are dealing with problems posed by the pension systems they inherited. The difficulties are similar to those currently experienced by many advanced and developing countries that now find themselves with systems they cannot afford. Moreover, those systems provide disincentives for the working-age population to find employment in the formal sector (meaning those enterprises that pay taxes and social insurance contributions) and to save.
The pension systems used by most countries are provided by the state on a "pay-as-you-go" (PAYG) basis and offer "defined benefits" to retirees. The pensions paid to current retirees are funded by contributions from current workers. A retiree's pension is determined in advance according to various criteria (age, gender, length of employment). It does not reflect the contributions that the retiree paid into the system during his working life.
In developed countries, PAYG systems become problematic as the population ages and the number of beneficiaries increases relative to the number of contributors. People retiring during the first years of such a system receive pensions that exceed the amount they paid in. Later generations, on the other hand, receive less than they contributed.
Moreover, people can retire before they reach the official retirement age, with only a small reduction in benefits. To fund such largesse, high payroll taxes are necessary, which people avoid by working in the informal sector. Such practice reduces the tax base and requires still higher taxes on those who cannot avoid them. In Latin America and the former communist countries, there are additional problems. In the former East bloc, in particular, retirement ages are low, especially for women and in certain sectors.
Many countries have reformed their pension systems. In 1981, Chile replaced its PAYG system with a mandatory savings scheme, whereby a worker's pension is financed by a savings account into which he pays during his working life. That pension depends on the contribution rate, the growth in the worker's salary, the interest rate, and the number of years at work and in retirement. Such schemes are "fully funded," because a worker's contribution finances all his benefits, and are based on "defined contributions," which are determined in advance.
"Averting the Old Age Crisis," a book published in 1994 by the World Bank, outlines a recommended "three-pillar" pension reform. Acknowledging the popularity of PAYG schemes, especially among older workers, the bank proposes that the first pillar be mandatory, tax-financed, and publicly managed. The second pillar is mandatory, fully funded, privately managed, and publicly regulated (as in Chile). The third pillar differs from the second one largely in that it is voluntary.
Among transition countries, Latvia was the first to heed the bank's recommendations on pension reform (with Poland, Estonia, and Hungary following its lead). Riga benefited from technical assistance offered by Sweden, which in 1994 passed legislation providing for a two-pillar system. In the summer of 1995, Latvia passed similar laws.
A new PAYG system based on "notional accounts" went into effect in Latvia on 1 January 1996, while a funded scheme will begin in 2000. Such accounts differ from the standard PAYG system in that an individual account is maintained for each worker, although benefits are paid by someone else's contributions.
The contribution rate is 20 percent of income, of which 2 percent will be channeled to the funded ("second") pillar as of 2000. In time, 6-7 percent of income will go toward the second pillar. Privately managed individual accounts will be provided to workers born in or after 1949.
At retirement, a worker receives a PAYG annuity based on the balance in his notional account and his life expectancy. PAYG benefits are indexed to price inflation until 2000 and thereafter to both price inflation and wage growth. Retirement can be either partial or full after age 60, and additional wages earned during partial retirement add to the balance of the notional account and increase the benefits. There is also a "social pension" for the elderly poor who are not eligible for any other such payment. That pension is currently set at 25 percent of the average wage.
The new system pays benefits to anyone who worked in the formal sector for 10 years. Participation does not depend on citizenship, so the system does not discriminate against the Russian minority.
Pension reform is one of several examples of radical economic measures undertaken by both Latvia and its northern neighbor, Estonia. Others include a currency board (Estonia), a tough line toward failed banks (both), and a favorable attitude toward foreign investors (especially Estonia). It is striking that such measures have occurred amid unstable political environments, especially in Latvia, with its frequent changes of ministers and governments. It is even more striking that Latvia has been able to undertake a more comprehensive pension reform than more advanced and prosperous countries such as the Czech Republic or Slovenia--not to mention France or the U.S.
The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria.
Reprinted with permission of Radio Free Europe/Radio Liberty