|Monday, 28 September 2020|
RFE/RL Newsline, Vol. 1, No. 151, 97-11-03
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 1, No. 151, 3 November 1997
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 ARMENIAN PRESIDENT ARGUES NEED FOR KARABAKH CONCESSIONSIn an article published by most Armenian dailies on 1 November, Levon Ter- Petrossyan castigated the opposition for responding with "insults, smear, and slander" to his 26 September statement that it is unrealistic for Armenia to demand independence for Nagorno-Karabakh, RFE/RL's Yerevan bureau reported. Ter-Petrossyan said it is neither possible nor desirable to maintain the status quo indefinitely and that "mutual concessions" are the only way to ensure that Armenians continue to populate Karabakh. He suggested that the "phased" and "package" options for resolving the conflict "may easily be combined." Ter-Petrossyan warned that "serious complications" may arise if a draft document that could serve as a basis for negotiations is not signed before the Organization on Security and Cooperation in Europe's foreign ministers meet in December. He called for the resumption of talks with Azerbaijan, which were put on hold in November 1996. lf
 OPPOSITION PROTESTS KARABAKH POLICYSome 10,000 people took part in an opposition demonstration in Yerevan on 31 October to denounce the leadership's Karabakh policy, RFE/RL's bureau in the Armenian capital reported. Rally organizers accused President Ter- Petrossyan of preparing for what they called Nagorno-Karabakh's surrender and capitulation to Azerbaijan. They also demanded that Armenia not sign any peace agreement subordinating Karabakh to Azerbaijan and that the details of a peace plan proposed by the OSCE's Minsk Group be disclosed. lf
 UN SECRETARY-GENERAL ON ABKHAZ SITUATIONKofi Annan has warned that the withdrawal of the CIS peacekeepers and UN observer mission stationed on the border between Abkhazia and the rest of Georgia could lead to a resumption of the conflict, ITAR-TASS reported on 1 November. The CIS heads of state summit in Chisinau on 23 October prolonged the mandate of the peacekeepers until 31 December1997, but Russian First Deputy Foreign Minister Boris Pastukhov warned five days later that the force will be withdrawn unless there is progress toward a political settlement of the conflict. Meanwhile, addressing the Georgian parliament on 31 October, Foreign Minister Irakli Menagharishvili implied that Tbilisi may reject further Russian mediation in favor of the peace talks that several Western countries and Russia initiated in August under the aegis of the UN, Interfax reported. lf
 ECHIBEY CRITICIZES OSCE KARABAKH PEACE PLANFormer Azerbaijani President Abulfaz Echibey told journalists in Baku on 31 October that the latest OSCE peace proposal is "unacceptable" because it fails to preserve Azerbaijan's territorial integrity, Russian agencies reported. The Azerbaijani leadership has agreed to that plan. Elchibey said Karabakh should have no more than "cultural autonomy" and that he advocates military action to resolve the Karabakh conflict if it proves impossible to do so by peaceful means. He added he has not yet decided whether to contend the 1998 presidential elections or to support an alternative opposition candidate such as Musavat Party chairman Isa Gambar. He noted he will advocate a boycott if the elections are not held under democratic conditions. lf
 KAZAKHSTAN RESTRICTS ALCOHOL SALESThe Eastern Kazakhstan Oblast administration has banned street sales of alcohol, according to ITAR-TASS on 2 November. Over the past two years, 677 people are reported to have died from alcohol poisoning after drinking adulterated alcohol. So far this year, police have impounded 800 tons of inferior contraband alcohol from China. lf
 TAJIK OPPOSITION FIGHTERS CONTINUE TO REGISTERTajik Prime Minister Yakhye Azimov and United Tajik Opposition leader Said Abdullo Nuri were in Garm on 31 October to monitor the registration of former opposition fighters who recently returned to the region from Afghanistan, Interfax reported. The two men will also study the economic situation in eastern Tajikistan in anticipation of a $10 million World Bank loan to help restore the region's economic infrastructure. The UTO and the Russian peacekeeping force in Tajikistan have recently disagreed over which border crossing the returning UTO fighters are to use, according to "Nezavisimaya gazeta" on 31 October. lf
[B] SOUTHEASTERN EUROPE
 DISCORD AMONG ALBANIANS OVER KOSOVO QUESTIONAlbanian President Rexhep Meidani said in Geneva on 1 November that the "international community must intervene" to persuade the Serbian authorities to implement the 1996 agreement with the Kosovars on restoring Albanian-language education. He warned that violence may erupt in Kosovo if the agreement is not implemented. But in Tirana the next day, Prime Minister Fatos Nano said a solution to the Kosovo question can be found only through direct dialogue between Serbs and Kosovars. Kosovo insists on U.S. or EU participation in such talks. Kosovar shadow-state President Ibrahim Rugova told Albanian dailies of 2 November that Nano should not attempt to make an agreement on Kosovo with Yugoslav President Slobodan Milosevic when the two meet on Crete for the 3-4 November Balkan summit. He added that the Kosovars should have been invited to the meeting. pm
 DISARRAY CONTINUES IN ALBANIAN JUDICIAL SYSTEMThe Prosecutor-General's Office is investigating numerous cases in which judges and state prosecutors are suspected of having links to criminal gangs in Kruja, Tirana, Lac, and Gjirokaster. In particular, the justices are suspected of having illegally freed many criminals from prison this year, "Gazeta Shqiptare" reported on 2 November. Meanwhile, judges, prosecutors and court clerks who took part in a six-month training course in 1993 are threatening to go on strike on 3 November to protest planned sackings and demotions of some 175 graduates of the course. They are also demanding that the authorities examine the professional qualifications of all judges and prosecutors. Critics charge that the Democratic Party sent its loyalists to the six-month course so that they could take control of the judicial system. fs
 PLAVSIC WON'T RUN FOR PRESIDENT IF FOES WIN PARLIAMENTARY VOTERepublika Srpska President Biljana Plavsic has said she will not take part in the 7 December presidential vote if her hard-line rivals win the 22-23 November legislative elections. Plavsic added, however, that she believes that "Serbs are not suicidal" and that voters will not support her enemies. Also in Banja Luka, a presidential spokesman said Plavsic feels it is imperative that the Bosnian Serb army participate in the U.S.-sponsored "Train and Equip" program. He added that the alternative for the Serbs is isolation. pm
 BANJA LUKA TV BEAMED THROUGHOUT REPUBLIKA SRPSKAPlavsic's television broadcasts reached all Bosnian Serb territory on 31 October after SFOR had repaired a transmitter in eastern Bosnia. Pale hard- liners deliberately damaged the facility to prevent peacekeepers from using it to broadcast Plavsic's programs (see "RFE/RL Bosnia Report," 22 October 1997). pm
 BOSNIAN OFFICIAL DENIES CORRUPTION CHARGESMirsad Kurtovic, the head of Bosnia's Agency for State Reserves, said in Sarajevo on 1 November that Carlos Westendorp, the international community's chief representative in Bosnia, was wrong the previous day when he reported widespread fraud by Bosnian authorities. Kurtovic rejected the charge that his own office has misappropriated more than $13 million since January. Westendorp claimed that top Muslim and Croatian officials have redirected tax and aid money to agencies that should have been dismantled under the Dayton agreements. Westendorp said that if the Bosnian government does not end the practice within two weeks, he will publish evidence on the alleged fraud. pm
 BOSNIAN GENERAL SAYS ARMY WILL BE MULTI-ETHNICArmy commander General Rasim Delic said in Sarajevo on 1 November that he is looking for 35,000 recruits under the "Train and Equip" program. He added that he wants to enlist young men from mixed marriages as well as Muslims, Croats, Serbs, and Albanians. Delic was responding to recent speculation in the Muslim press that recruits from mixed marriages would be banned from enlisting on the grounds they might prove disloyal. Observers noted that the Sarajevo government retired most of its top Serbian and Croatian officers following the signing of the Dayton agreements at the end of 1995. pm
 RUSSIAN GAS RETURNS TO BOSNIARussian gas deliveries to Bosnia resumed on 31 October after a break of seven months. The state-owned Sarajevogas recently reached an agreement with Gazprom on terms for repaying the mainly Muslim and Croatian federation's share of Bosnia's outstanding $16.2 million debt to Gazprom. Some $4.7 million out of the federation's total debt of $7.3 million will be paid by the Dutch government via a grant to the World Bank. The Bosnian Serbs have not reached a deal with Gazprom on repaying their part of the debt and consequently remain cut off from Russian gas supplies. pm
 DRASKOVIC, SESELJ TO RUN FOR PRESIDENCYIn Belgrade on 2 November, the leadership of the Serbian Renewal Movement named Vuk Draskovic as its candidate in the 7 December Serbian presidential elections. The governing body of the Serbian Radical Party chose Vojislav Seselj as its standard bearer. Both men ran for the presidency in the inconclusive 21 September vote. They will face the Socialist candidate, Milan Milutinovic, in the December race. The key question is whether the moderate opposition will select a joint candidate (see "RFE/RL Newsline," 31 October 1997). pm
 ALLEGED SERBIAN AGENTS REMAIN IN MONTENEGRIN JAILA Podgorica court on 1 November ruled that 11 men from Belgrade and Novi Sad will remain in custody and that police investigations of their case will continue. Security forces arrested the men on charges of attempting to disrupt the Montenegrin presidential vote (see "RFE/RL Newsline," 18 October 1997). pm
 ISRAELI LEGISLATORS SAY TUDJMAN UNWELCOMEYossi Sarid, head of the Meretz Party, and Labor deputy Yossi Beilin said in Jerusalem on 2 November that Croatian President Franjo Tudjman will not be welcome if he comes to Israel on a planned visit in December. Sarid added that he has introduced legislation in the parliament to ban Tudjman's trip. Sarid and Beilin claim Tudjman denies that the Holocaust took place. Tudjman, for his part, says he wants to visit Israel to apologize for Croatia's role in the Holocaust. pm
 ROMANIAN PREMIER IN ISRAELVictor Ciorbea on 2 November paid a one-day "unofficial visit" to Israel to meet with Prime Minister Benjamin Netanyahu and several of his cabinet ministers. Among the topics discussed were improving trade relations, Israeli investments in Romania, the problem of Romanian guest workers in Israel, and the restitution of Jewish property, an RFE/RL correspondent in Tel Aviv reported. Ciorbea also met with former opposition leader Shimon Peres. ms
 ROMANIAN LIBERALS SEEK TO UNIFYThe National Liberal Party (PNL) on 31 October called on the Liberal Party, the Party of Civic Alliance (PAC), and the Alternative for Romania party to merge with the PNL. Liberal Party executive chairman Dinu Patriciu said his party favors such a merger. Meanwhile, the PAC on 2 November decided to rejoin the Democratic Convention of Romania, which it quit in June 1996. A PNL spokesman said that decision is a "step toward liberal unification," Mediafax reported on 2 November. ms
 ROMANIA'S COMMUNIST PARTY REBORNAt its congress in Bucharest on 1-2 November, the extra-parliamentary Romanian Workers' Party voted to change its name to the Romanian Communist Party (PCR), "Libertatea" reported. PCR leader Cristian Ion Niculae said the party wants to "oust the incumbent government and participate in forming the next one." The PMR was set up in 1995 and claims 17,000 members in 31 county branches. Meanwhile, Corneliu Vadim Tudor, the leader of the extremist Party of Greater Romania, announced that since 1993, membership has increased fourfold and now stands at 72,000, Radio Bucharest reported on 31 October. ms
 MOLDOVAN PARLIAMENT POSTPONES BUDGET DEBATEThe parliament has postponed the first reading of the government's 1998 draft budget, RFE/RL's Chisinau bureau reported on 31 October. A majority of deputies believe the projected 6 percent growth in GDP is "unrealistic" given that GDP sunk 8 percent in 1996 and shows the same tendency this year. The government foresees a 19.5 percent increase in tax revenues and a 23 percent rise in expenditures. Responding to a parliamentary motion to return the draft to the government, Prime Minister Ion Ciubuc said no "essential modifications" are possible, adding that the budget must "mobilize" the country's economic forces. ms
[C] END NOTE
 IS SLOVAKIA'S ECONOMIC REPUTATION ABOUT TO TARNISH?by Michael Wyzan
According to the Western view, Slovakia's economy is a solid performer and only political factors have kept the country out of European institutions and NATO. Indeed, the European Commission said as much when it explained its decision in mid-July not to recommend Slovakia among the five postcommunist countries to be invited to accession negotiations. But this year, there have been indications of looming economic problems, especially growing foreign sector imbalances. Until now, however, fiscal--and especially monetary--policy has been run competently, resulting in low inflation and rapid economic growth.
Some indicators suggest 1997 is shaping up to be another satisfactory year for the Slovak economy. Consumer prices rose by 6 percent in the 12 months to July, compared with 9.3 percent in the Czech Republic, 18.2 percent in Hungary, and 15.0 percent in Poland. Gross domestic product (GDP) grew by 6.2 percent in the first half, while industrial output was up 3.7 percent in the first seven months. Among transition economies, only Estonia and Poland are growing more rapidly.
On a less positive note, the unemployment rate remained high at 12.8 percent in July, compared with 12.5 percent a year earlier. Recent declines in Polish unemployment rates mean that Slovakia now has Visegrad's highest jobless figures. Slovakia also has a large and growing budget deficit, predicted to reach between 4.6 and 5.7 percent of GDP this year. That figure is much higher than in Poland or the Czech Republic and is similar to Hungary's. It reflects a steady increase from 4.4 percent last year and 1.6 percent in 1995.
But the main cause for concern is the foreign sector. The first seven months of the year revealed a current account imbalance of $1.006 billion and a trade deficit of $986 million. Predictions for the size of the former for all of 1997 range from 10.4 to 15 percent of GDP, the highest among the Central European and Baltic economies. Moreover, Slovakia is a relatively unattractive country for foreign investors. As of mid-1996, Slovakia's per capita foreign direct investment stood at $152, compared with $1,299 in Hungary, $586 in the Czech Republic, and $265 in Poland.
With so little foreign investment and such large current account deficits, it is not surprising that Slovakia's official foreign exchange reserves declined from $3.47 billion at the end of 1996 to $3.181 billion in August. Reserves of approximately the current level would cover 2.7 months worth of imports, while the equivalent figures for the Czech Republic, Hungary, and Poland are 3.8, 4.4, and 5.6, respectively.
Such low reserves mean that Slovakia is ill prepared to defend the crown against speculative attack. Pegged to a currency basket that includes the U.S. dollar, it has strengthened recently against the German mark and the Czech crown. Whereas in January 1996 one Slovak crown was worth 90 percent of a Czech one, that figure is now 99.24 percent following the economic turmoil in the Czech Republic earlier this year
The Slovak situation resembles that in Mexico in 1994 or in Thailand last year, when both countries were on the verge of currency crises that turned into macroeconomic disasters. When "The Economist" magazine examined a number of macroeconomic indicators for the Visegrad and Baltic nations, it gave Slovakia 10 points on a scale from 1 to 12, with 12 representing the greatest risk. Only Lithuania was rated riskier, with 11 points (pre-crash Mexico scored 10 points). Many analysts hold that a significant weakening of the crown is virtually inevitable, resulting in higher inflation and slower growth.
The key to Slovakia's prospects is the quality of policy-making. As in Southeast Asia this year, inadequate responses to the first alarming signs sharpen and prolong subsequent crises. Slovakia is especially worrisome because policy-makers have responded to troubling indicators by resorting to counterproductive actions.
To reduce the budget deficit, Bratislava has raised value-added tax, slapped a 7 percent surcharge on most imports, and is discussing levying a tax on portfolio investment. The leadership remains opposed to following the Czech lead and devaluing the crown, which in Slovakia is defended with high interest rates and tight money.
Pulling in the opposite direction from the fiscal standpoint, recent "economic revitalization" measures allow firms in high-unemployment areas to apply for debt forgiveness from the state and to defer tax, excise duty, and social security payments. Another source of budget revenue loss are the tax holidays for foreign investors who meet certain conditions.
Slovakia's relatively good figures for inflation and economic growth have obscured an important fact. Slovakia's economic policy-makers are often as heavy-handed as the Bulgarian Socialists under Zhan Videnov, who by February 1997 had brought the Bulgarian economy to the verge of total collapse.
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