|Monday, 20 January 2020|
RFE/RL Newsline, Vol. 2, No. 9, 98-01-15
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 2, No. 9, 15 January 1998
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 ARMENIAN PREMIER RULES OUT SUBORDINATING KARABAKH TO BAKUSpeaking to journalists in Yerevan on 14 January, Robert Kocharian again rejected any settlement of the Karabakh conflict that would entail the subordination of the unrecognized Nagorno-Karabakh Republic to Azerbaijan, RFE/RL's Yerevan bureau reported. Kocharian argued that a confederation in which Azerbaijan and Nagorno- Karabakh would have equal status is the optimum way of preserving Azerbaijan's territorial integrity, according to Noyan Tapan. He acknowledged that serious differences emerged within the Armenian leadership over Karabakh at the 7-8 January Security Council session, adding that such differences are "a normal phenomenon." But Kocharian denied a press report that his resignation was discussed at the Security Council session (see "RFE/RL Newsline," 14 January 1998). LF
 GEORGIAN OFFICIALS RESPOND TO MAFIA CHARGES AGAINST DIPLOMATGeorgian parliamentary chairman Zurab Zhvania and parliamentary Commission for Foreign Affairs chairman Kakha Chitaia have expressed their support for the country's diplomatic corps while acknowledging shortcomings in its work, Caucasus Press reported on 14 January. The two officials were responding to a statement by parliamentary Commission on State and Legal Affairs chairman Mikhail Saakashvili accusing Georgian Ambassador to Italy Begi Tavartkiladze of neglecting his duties and of ties with "dubious" Italian financial circles. LF
 AZERBAIJAN DENIES SELLING MISSILES TO PERUAzerbaijan's Ministry of Defense has officially denied allegations in the "Washington Times" on 12 January that Azerbaijan has sold to Peru air-to- air missiles worth $8 million, Turan reported on 14 January. "The New York Times" on 7 January had cited a Human Rights Watch report that gun-runners from Azerbaijan, Turkmenistan, Ukraine, and Bulgaria had transported arms to Hutu and Tutsi militants in Burundi. LF
 AZERBAIJANI OIL OUTPUT DOWN, BUT EXPORTS UPAzerbaijan in 1997 met its oil production target of 9.02 million metric tons, down 0.9 per cent on 1996 levels, Interfax reported on 12 January. In an interview with "Nezavisimaya gazeta" two days later, Natik Aliev, the president of the state oil company SOCAR, admitted that the target for extraction of natural gas was not met. Aliev disclosed that in 1997 Azerbaijan exported a record quantity of oil, the lion's share of which went to Iran, Georgia, and Dagestan. (That oil was extracted by SOCAR, not by any of the international consortia of which SOCAR is a member.) Aliev said that domestic consumption of oil has fallen since SOCAR began demanding pre-payment for deliveries to all domestic customers, except the Ministries of Defense and Agriculture. LF
 AZERBAIJANI PRESIDENT NAMES EXPERTS TO NEGOTIATE WITH TURKMENISTANHeidar Aliev has appointed a group of oil officials and diplomats to conduct talks with Turkmenistan on delineating the dividing line between the Azerbaijani and Turkmen sectors of the Caspian, Turan and Interfax reported on 13 January . Foreign Minister Hasan Hasanov told journalists that it may prove easier for the five Caspian littoral states to reach agreement on the disputed status of the Caspian after the sea's median line is delineated. Visiting Ashgabat on 13 January, Russian Prime Minister Chernomyrdin expressed the hope that all disputes related to Caspian Sea resources will be resolved this year. LF
 RUSSIAN PREMIER IN TURKMENISTAN ...On the second day of his visit to Ashgabat, Chernomyrdin on 14 January failed to reach agreement with Turkmen President Saparmurat Niyazov on the resumption of Turkmen natural gas exports via Russia. Niyazov rejected Russian offers to purchase 25 billion cubic meters of gas for resale to Ukraine or to pay $32 in transit tariffs per thousand cubic meters of Turkmen gas exported to Ukraine via Russia. But both Niyazov and Gazprom board chairman Rem Vyakhirev, who accompanied Chernomyrdin, hinted that a compromise on export tariffs may be reached, but not earlier than within one month. LF
 ... AND TAJIKISTANIn Dushanbe on 14 January, Chernomyrdin and Tajik President Imomali Rakhmonov signed several bilateral agreements, including one on defense cooperation in 1998. Talks focused on Tajikistan's request for membership in the CIS customs union and a possible 500 million ruble ($85 million) Russian loan to Tajikistan. Tajik Prime Minister Yakhye Azimov told Interfax on 13 January that a "financial injection" is needed to enable Tajikistan to honor previously signed bilateral agreements with Russia. But Russian Deputy Prime Minister Valerii Serov said Russia could not agree to such a loan before adoption of the 1998 budget. Serov also said that complete stabilization of the political situation in Tajikistan is necessary before Russia can complete construction of the Rogun hydro- electric power station, in which it has a 50 percent stake. LF
 KAZAKH OPPOSITION CONDEMNS CHINESE REPRESSION OF UIGHURSMembers of the AZAT, AZAMAT, and ATTAN-Kazakhstan movements convened a press conference in Almaty on 14 January to condemn the execution last month in China's Xinjiang Autonomous Region of 13 young Uighurs for their alleged involvement in terrorist and separatist activities, RFE/RL's Almaty bureau reported on 15 January. Leaders of the ethnic Uighur minority in Kazakhstan have sent a written protest to the Chinese Embassy in Almaty. The Kazakh opposition activists called on the Kazakh government to sever all economic and other relations with China until the oppression of ethnic Uighurs in Xinjiang ends. LF
[B] SOUTHEASTERN EUROPE
 POLICE BAN DEMONSTRATIONS IN MONTENEGROSome 8,000 supporters of outgoing President Momir Bulatovic clashed with police in Podgorica on 14 January, an RFE/RL correspondent reported from the Montenegrin capital. The protesters tried to storm government buildings and attacked police with hand grenades, leaving 45 policemen and six demonstrators injured. Police regained the upper hand only when special units arrived. Interior Minister Filip Vujanovic said on 15 January that Bulatovic's supporters have proven themselves to be violent, and he banned further demonstrations. Vujanovic appealed to "all government and intellectual circles in Serbia" who might be able to help calm the situation in Montenegro to do so. PM
 POLITICAL STANDOFF CONTINUES IN MONTENEGROTalks in Podgorica between Bulatovic, who is an ally of Yugoslav President Slobodan Milosevic, and reformist President-elect Milo Djukanovic ended inconclusively on 14 January. Bulatovic remained adamant that the 19 October 1997 presidential vote was rigged and called the election "a real crime that the Montenegrins will not forget." Yugoslav Prime Minister Radoje Kontic, who led mediation efforts, said he will continue to try to negotiate an end to the stalemate. PM
 U.S. SLAMS BULATOVIC, MILOSEVICRobert Gelbard, the U.S. special envoy to the former Yugoslavia, said in Belgrade on 15 January that Washington "is deeply concerned and the international community...deeply offended by the absolutely outrageous behavior by...Bulatovic in inciting these illegal riots.... I hold him responsible along with his collaborators for this outrageous, illegal behavior." Gelbard added that he also holds "Milosevic responsible for supporting these demonstrations [and] for not restraining his colleague Mr. Bulatovic...." Gelbard said on 14 January in Sarajevo that Secretary of State Madeleine Albright warned Milosevic in a telephone conversation the previous weekend not to disrupt the peaceful transition of power in Montenegro. PM
 MONTENEGRO APPEALS TO MAJOR POWERSOn 14 January, Montenegrin Foreign Minister Branko Perovic sent a letter to the ambassadors of Western countries and Russia asking them to take "urgent diplomatic steps" with the Belgrade authorities to calm the political situation in Montenegro. In related news, "Nasa Borba" reported on 15 January that Djukanovic will visit Washington in February. PM
 ETHNIC ALBANIANS TO JOIN NEW MONTENEGRIN GOVERNMENTRepresentatives of the Democratic Union of Albanians and the Democratic League (two ethnic Albanian political parties represented in the Montenegrin parliament) told BETA news agency in Ulcinj on 15 January that the two parties will join the new Montenegrin government. Votes of Montenegro's Albanian and Muslim minorities played a key role in enabling Djukanovic to defeat Bulatovic. PM
 EASTERN SLAVONIA RETURNS TO CROATIAPresident Franjo Tudjman said in Zagreb on 14 January that his government will continue its policies aimed at peacefully reintegrating eastern Slavonia into Croatia once Croatian sovereignty is restored on 15 January. Tudjman noted that international aid will be vital in ensuring the return of 70,000 Croatian refugees who fled the region when the Serbs conquered it in 1991. Meanwhile in Vukovar, ethnic Serbian political leaders Milorad Pupovac, Vojislav Stanimirovic and Milos Vonjnovic called on Zagreb to regain the confidence of the Serbs by respecting Croatia's commitments in the 1995 Erdut agreement to preserve basic rights for the Serbs, an RFE/RL correspondent reported from Vukovar. PM
 BOSNIAN SERB TV BACK ON AIRHard-line supporters of Radovan Karadzic resumed television broadcasting from Pale on 14 January. Two transmitters beamed the private station's programs to an area approximately 8 miles wide around Pale, which includes eastern Sarajevo. NATO peacekeepers took control of TV Pale's former transmitters and relay stations last fall and gave responsibility for Bosnian Serb state-run TV to supporters of Republika Srpska President Biljana Plavsic in Banja Luka. PM
 ALBANIAN GOVERNMENT DENIES PLANS TO SACK JUDGESSpokesmen for President Rexhep Meidani on 14 January denied reports that the Socialist-led government plans to sack a large number of judges and prosecutors who were trained in six-month crash courses in 1993 and appointed by the previous Democratic Party government (see "RFE/RL Newsline, " 23 December 1997). The spokesmen dismissed demands by some of the judges, who are on hunger strike, for a new law requiring all judges to have university law degrees to be repealed. The spokesmen said that the new legislation will apply only to people appointed to the bench in the future. They added that the law protects the judges and prosecutors appointed by the Democrats since it allows them to appeal to the Supreme Court against disciplinary measures. FS
 OSCE CALLS ON ALBANIAN DEMOCRATS TO PARTICIPATE IN PARLIAMENTGerard Stoudman, the director of the OSCE Office for Democratic Institutions and Human Rights, on 14 January dismissed calls by the Democratic Party for early elections, "Gazeta Shqiptare" reported. Stoudman, at the end of a three-day visit to Tirana, also called on the Democrats to end their boycott of the legislature and to participate in drafting a new constitution. He stressed that the document needs broad public support. Democratic Party leader Sali Berisha, however, said that his formation will not return to parliament simply "to serve as window-dressing for the government." FS
 ROMANIAN DEMOCRATS WITHDRAW SUPPORT FROM PREMIER CIORBEAThe National Council of the Democratic Party on 14 January withdrew its support from Premier Victor Ciorbea, saying a new government should be formed by another premier. The council also tasked the party leadership with negotiating the new cabinet's reform program with the members of the current coalition. The deadline for ending those negotiations is 31 March, and the party will quit the coalition if they are not successfully concluded by then. The council ignored an appeal by President Emil Constantinescu, who urged the Democrats not to dismember the coalition, RFE/RL's Bucharest bureau reported. Democratic Party leader Petre Roman criticized the National Peasant Party Christian Democratic (PNTCD) for promoting the large-scale restitution of property to former owners and for alleged pro-monarchy sympathies. MS
 COALITION PARTNERS REACT TO DEMOCRATS' DECISIONPNTCD chairman Ion Diaconescu, said the Democrats' decision amounted to "blackmail, demagogy, and hypocrisy." He said the government's records show that the Democrats never raised with the cabinet the issues they are now complaining about. He added that the Democrats will be held responsible by the public for halting the reform process and the struggle against inflation as well as for promoting an atmosphere of instability that will discourage foreign investors, RFE/RL's Bucharest bureau reported. On 15 January, Diaconescu told Radio Bucharest that the probable solution to the crisis is early elections. National Liberal Party leader Mircea Ionescu- Quintus said a change of government at this point would lead to "stagnation." MS
 MOLDOVAN OPPOSITION PARTY WANTS TO BAN KGB COLLABORATORS FROM RUNNINGSimion Certan, the co-chairman of the Democratic Forces Alliance (AFD), told journalists in Chisinau on 14 January that the alliance proposes that "former secret collaborators and informers of the [Soviet-era] KGB" be banned from running in the elections scheduled for later this year. Certan said the parliament must pass legislation forcing the Security Ministry to disclose the names of those candidates who are former secret service collaborators or informers. He said he will initiate an amendment to the electoral law to that end, BASA-press reported. According to Certan, the ban should extend to deputies elected in 1994 on the lists of the Agrarian Democratic Party of Moldova and the Socialist Unity-Edinstvo bloc, who "are responsible for the present state of affairs in Moldova." MS
 WORLD BANK LOAN TO MOLDOVAThe World Bank's International Development Association (IDA) on 14 January approved a $5 million loan to Moldova to develop a cooperative rural banking system, an RFE/RL correspondent in Washington reported. The loan carries no interest charges and is repayable over 35 years. The IDA is a World Bank affiliate that helps the poorest nations. MS
 BULGARIAN PREMIER CONSIDERS RETALIATION OVER RUSSIAN GAS SUPPLIESIvan Kostov says Bulgaria might reduce Russia's gas transit across its territory if Gazprom curtails deliveries for Bulgarian consumption, ITAR- TASS reported on 14 January. Kostov said Russia annually pumps 8 billion cubic meters of gas to Turkey, Serbia, Greece, and Macedonia through Bulgaria. Meanwhile, the opposition Socialist Party has submitted a motion of non-confidence in the government, citing the cabinet's bungled talks with Gazprom as one of the reasons. It is unclear whether the other opposition parties represented in the legislature will support the motion, which is to be debated in late January. MS
[C] END NOTE
 YELTSIN ORDERS CABINET TO KICKSTART ECONOMYby Stephanie Baker
President Boris Yeltsin has ordered the government to ensure that 1998 is the first year Russia records solid economic growth, but his finance minister has cast doubt on whether that goal can be realized.
After meeting with First Deputy Prime Minister Boris Nemtsov at a holiday retreat in northwestern Russia on 13 January, Yeltsin issued a statement saying he is instructing the government take steps to ensure Russia achieves 2-4 percent growth in 1998.
Yeltsin called for the government to push through a new tax code this year and reduce tax rates to stimulate the economy. He also urged the government to take steps to bring down interest rates in order to allow private sector lending to get off the ground.
But Finance Minister Mikhail Zadornov said in an interview published the same day that he doubts whether the country can achieve economic growth in 1998. "To be honest, I am not a big optimist about economic growth in 1998.... I think the  parameters will roughly follow figures for 1997, " he told the Russian daily "Nezavisimaya Gazeta."
Zadornov's comments put him at odds with the rest of the government. Prime Minister Viktor Chernomyrdin told a cabinet meeting last week that promising year-end economic results mean that Russia is well placed to achieve growth this year. And First Deputy Prime Minister Anatolii Chubais has said that 2 percent growth in 1998 is realistic.
According to preliminary figures, Russia's gross domestic product was up a modest 0.4 percent in 1997, the first time the country recorded economic growth since the collapse of the Soviet Union. But Zadornov said the recent market crisis had thrown a wrench into the government's economic plans. As he put it: "The market crisis of October-November has thrown Russia back at least half a year." The Finance Minister said it would take a minimum of three months to bring down interest rates.
The global financial crisis that began last October has hit Russia hard, as foreign investors fled both the country's debt and equity markets. Yields on treasury bills jumped to 45 percent in November, before coming down to the current level of roughly 32 percent. But yields are still well above pre-crisis levels of 17 percent.
Central Bank chairman Sergei Dubinin told State Duma deputies on 13 January that foreign investors withdrew $8 billion from the debt and equity markets during the last few months of 1997. He said the bank's hard currency and gold reserves stood at $18 billion as of 1 January 1998, unchanged from 1 December. In September, reserves stood at $25 billion.
As Dubinin put it: "Foreign investors have now calmed down, and practically no money is being taken out of Russia." But he admitted that foreigners were by and large still staying away from the Russian market, which was keeping T-bill yields high.
The market crisis has jacked up the government's cost of borrowing, putting a squeeze on the federal budget. Zadornov said the government would not resort to borrowing to cover budget holes as long as yields on treasury bills remain at current levels. He said the Finance Ministry will continue to place only enough treasury bills on the market every week to retire old debt.
Zadornov said the first quarter of 1998 will be difficult for the budget due to the high cost of borrowing on domestic markets and an expected drop in tax collection rates in January and February. Russia has been struggling to boost tax collection rates, which were dismally low all last year.
Zadornov also said his ministry will press ahead with tax reform and submit a revised tax code to the Duma by the end of January, taking into account proposals from deputies. In his words: "We think that, together with the State Duma, we will succeed in finalizing the draft tax code and passing its basic parts in the first half of the year."
With Duma elections scheduled for 1999 and a presidential election slated for 2000, observers have noted that 1998 is the last year the government can hope to push through tax reform.
The author is a Moscow-based RFE/RL correspondent.
Reprinted with permission of Radio Free Europe/Radio Liberty