|Saturday, 30 May 2020|
RFE/RL Newsline, Vol. 2, No. 90, 98-05-13
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 2, No. 90, 13 May 1998
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 BEREZOVSKII IN YEREVANCIS Executive Secretary Boris Berezovskii held talks in Yerevan on 12 May with President Robert Kocharian and Prime Minister Armen Darpinian, Russian and Armenian agencies reported. Berezovskii described Armenia as one of the most important members of the CIS. Discussing options for reforming that body, he and Kocharian agreed that economic cooperation should take precedence over political integration but that normal economic development is impossible as long as conflicts remain unresolved. They also agreed that the CIS can be transformed into a functioning structure only after "the stereotype that the CIS exists under Russian sponsorship" is dispelled. Berezovskii told journalists that he and Kocharian had discussed the Karabakh conflict, but he gave no details, according to RFE/RL's Yerevan bureau. But he did say that his personal experience mediating between Moscow and Chechnya could be of value in the Karabakh context. LF
 ARMENIAN PRIME MINISTER UNVEILS GOVERNMENT PROGRAMArmen Darpinian on 12 May submitted to the parliament the government's program for socio-economic development based on the transition from stability to economic growth, Noyan Tapan and RFE/RL's Yerevan bureau reported. The program aims to ensure annual GDP growth of 6 percent and low inflation. Taxation will be lowered, with the aim of stimulating investment and creating new jobs, but tax evasion will be targeted even more rigorously than before. The program estimates that privatization of remaining state enterprises will bring more than $1 billion in private investment over the next five years. It also pledges to complete reconstruction by 2001 of the areas of northern Armenia devastated in the 1988 earthquake. LF
 ARMENIAN EDITORIAL APPOINTMENT SPARKS CONTROVERSYThe staff of Armenia's Russian-language government-funded daily "Respublika Armeniya" have made clear their opposition to the proposed appointment of Shamiram Aghabekian as the newspaper's editor, RFE/RL's Yerevan bureau reported on 12 May. Aghabekian was selected by the Armenian parliament, which is a co- founder of the paper, to replace acting editor Ashot Gazazian. The newspaper's staff say they were not consulted over Aghabekian's appointment. Gazazian, meanwhile, has refused to quit, arguing that Aghabekian is not competent to take over his duties. LF
 GEORGIAN PARLIAMENTARY DEPUTY QUITS TO JOIN GUERRILLASGermane Patsatsia, head of the minority Abkhazeti faction in the Georgian parliament, told journalists on 12 May that he will give up his "senseless" legislative activity to join the ranks of Georgian guerrillas fighting in Abkhazia, Caucasus Press reported. Patsatsia claimed that Abkhazia's southernmost Gali Raion is already under the control of the Georgian informal paramilitaries. He said the district's Georgian population is on the verge of revolt and argued that the guerrilla formation should be legalized and provided with state funding and medical care since 90 percent of its members suffer from tuberculosis. LF
 AZERBAIJAN DECLARES MASS AMNESTYThe parliament on 12 May passed a law proposed one week earlier by President Heidar Aliev granting an amnesty to some 10,000 people convicted of minor crimes. The amnesty, which does not extend to those convicted of murder, treason, terrorism, or theft, marks the 80th anniversary of the May 1918 founding of the Azerbaijan Democratic Republic. Also on 12 May, a Baku district court sentenced Meshadi Panakhov, a member of the board of the opposition Azerbaijan Popular Front, to five years' imprisonment on charges of illegal possession of weapons during a state of emergency, Turan reported. LF
 SENTENCES HANDED DOWN TO UZBEK TERRORISTSFour men found guilty in connection with the violence that broke out in the eastern city of Namangan last December were sentenced to between five and eight years in prison, Interfax reported. Vali Egamberdyev, Mukhtor Mannonov, and the brothers Abdullo and Zhobir Shakhbiddinov had pleaded guilty last week in Namangan to charges of terrorism, attempting to undermine the country's constitution, and seeking to promote Wahhabism. Another eight men are scheduled go on trial in Namangan and 15 in Tashkent on similar charges. BP
 IRAN COMPLAINS ABOUT UZBEK CAMPAIGN AGAINST ISLAMA Tehran IRIB Television broadcast on 12 May criticized the "anti-Islam stance" of Islam Karimov, saying the Uzbek president has for some time been trying to form an anti-Islamic alliance with Russia and Tajikistan. The broadcast said that only Karimov seems to be stressing the need for such an alliance. It also claimed that Karimov is attempting to draw the attention of the U.S. and the West to himself "through recourse to an old and meaningless slogan of combating Islam in a region where all nations are Muslim." BP
 POLYGAMY TO BE REINTRODUCED IN KAZAKHSTAN?RFE/RL correspondents in the Kazakh capital, Astana, reported on 12 May that the parliament has begun discussing amending the laws on family and marriage to allow Kazakhs to have more than one wife. Before the Soviet era, polygamy was common among the people of the Kazakh steppe. BP
[B] SOUTHEASTERN EUROPE
 HOLBROOKE ANNOUNCES MILOSEVIC, RUGOVA MEETING...U.S. special envoy Richard Holbrooke said in Belgrade on 13 May that Yugoslav President Slobodan Milosevic has agreed to meet with Kosovar shadow-state President Ibrahim Rugova in the Serbian capital on 15 May without preconditions and without foreign mediators. Holbrooke added that the session "will be followed within one week by a series of meetings to take place at least once a week between the delegations of both sides. These meetings will take place in Prishtina. They will alternate between sites chosen by both sides." Holbrooke made the announcement after five days of shuttle diplomacy between Belgrade and Prishtina, plus one stop in Tirana. The Kosovars made a major concession to Milosevic by agreeing to meetings without foreign mediation. PM
 ...BUT ADVISES CAUTIONHolbrooke, who was the architect of the 1995 Dayton agreements, said in Belgrade on 13 May that the meeting between Milosevic and Rugova is "only the first step for a political solution." The diplomat cautioned that "the vast differences between the two sides remain as wide as ever [and the crisis] could escalate into something worse than Bosnia before Dayton." He praised Milosevic for "taking personal responsibility" in calling for the talks. Milosevic's office said in a statement that the meeting of the two leaders is necessary to end "unnecessary" delays in establishing a dialogue. PM
 YUGOSLAVIA SHUTS LAST CROSSING TO ALBANIAYugoslav border guards on 11 May closed the border checkpoint between Shkodra and Podgorica, "Koha Jone" reported on 13 May. It was the last open checkpoint between Albania and Yugoslavia and was used by primarily Albanian citizens of Montenegrin origin, who do not need visas to visit Montenegro. The Yugoslav army also tightened security along the border and recently began to deploy regularly four patrol boats on Lake Shkodra. Last month, Yugoslavia closed two border checkpoints linking Albania and Kosova. FS
 WEU PLEDGES SECURITY AID TO ALBANIAMeeting on Rhodes on 12 May, defense and foreign ministers from the member states of the West European Union adopted a British proposal to increase the number of WEU police in Albania from 60 to 90. The WEU police will help train Albanian border guards as well as police. The delegates did not act on Albanian calls for a stronger foreign military presence along the border with Kosova. Germany and Greece, in particular, were reluctant to adopt any tough measures, AFP reported. Meanwhile in Washington, the World Bank approved $44 million worth of credits to improve health care, sanitation, roads, and the power supply in Albania. One of the credits will go to modernize the port of Durres. PM
 MILOSEVIC TO STAGE COUP IN MONTENEGRO?The leadership around Milosevic intends to oust federal Prime Minister Radoje Kontic, a Montenegrin, on 18 May and replace him with a Montenegrin whom Milosevic considers more loyal, RFE/RL's South Slavic Service reported on 12 May. The new prime minister will then declare a state of emergency in Montenegro, which is under the leadership of reformist President Milo Djukanovic, a political enemy of Milosevic. Leaders of the Socialist People's Party of Momir Bulatovic, who is Milosevic's main ally in Montenegro, and Vojislav Seselj's Serbian Radical Party said on 12 May in Belgrade that they will introduce a measure in the parliament calling for Kontic's removal "on grounds of incompetence." PM
 DJUKANOVIC SAYS MILOSEVIC PREPARING STATE OF EMERGENCYPresident Djukanovic said in Podgorica on 12 May that Kontic's ouster will be a prelude to Belgrade's declaring a state of emergency in Montenegro. He added that the name of the new prime minister will be made known shortly. RFE/RL's South Slavic Service reported that Bulatovic is likely to be appointed to that post. In Belgrade, spokesmen for the United Yugoslav Left, which is headed by Milosevic's wife Mira Markovic, hailed the move by Bulatovic's and Seselj's parties. Representatives of Vuk Draskovic's Serbian Renewal Movement did not say how they will vote but indicated that the party is unhappy with the government. PM
 BELGRADE MOVES AGAINST ELECTRONIC MEDIAThe Association of Independent Electronic Media in Yugoslavia (ANEM) said in a statement in Belgrade on 12 May that the government has committed "the most flagrant breach of media freedoms in Yugoslavia to date" by imposing stiff fees for radio and television frequency licenses. The government made the decision on 7 April but "kept it secret until now," the statement continued. The new monthly fees of $35,000 are prohibitively high for private broadcasters in Yugoslavia. "It is obvious that the aim of this decision is to stifle media freedoms by economic measures, in view of the fact that administrative" measures have failed to do so, the statement concluded. PM
 CROATIA YIELDS ON REFUGEE RETURNU.S. ambassador to Croatia William Montgomery told RFE/RL's South Slavic Service on 12 May that the Croatian government has accepted all demands made by the international community to liberalize policies regarding the return of Serbian refugees. Montgomery added that the government will issue a statement on its new policies on 15 May, and that the measure will go into force immediately. PM
 IZETBEGOVIC SLAMS KLEINAlija Izetbegovic, the Muslim member of the Bosnian joint presidency, sharply criticized recent remarks on the late Croatian Defense Minister Gojko Susak made by Gen. Jacques Klein, who is a deputy to the international community's Carlos Westendorp in Bosnia. Izetbegovic wrote in an open letter to Klein: "I was amazed at your arrogance. The [Dayton] peace accords did not establish a protectorate in Bosnia, and you are not the protector.... Our people like foreigners as friends but not as tutors. Don't try to be one," "The Los Angeles Times" of 12 May quoted Izetbegovic as saying. Klein praised Susak, who worked closely with Klein when the general was the UN administrator in eastern Slavonia in 1996 and 1997, as a "man of vision." Most Bosnian Muslims regard Susak as a warmonger who would have gladly partitioned Bosnia between Croatia and Serbia. PM
 JEWISH CEMETERY DESECRATED IN ROMANIAUnidentified persons have desecrated the Jewish cemetery in the Transylvanian town of Targu Mures, Mediafax reported on 12 May. Anti- Semitic inscriptions such as "Death to the Jews" and " Jews to Israel!" were scrawled on the cemetery's walls. A local police officer said the incident occurred two days earlier. In 1994, several tombstones were overturned by unidentified vandals in the same cemetery. The Jewish community in Targu Mures today numbers fewer than 100. Of the 7,500 Jews deported to Auschwitz by the Hungarian fascist regime in May-June 1944, only 1,197 survived. MS
 LUCINSCHI WANTS TO 'DE-POLITICIZE' GOVERNMENTSpeaking on national television on 11 May, Moldovan President Petru Lucinschi said Prime Minister Ion Ciubuc must form a government of "genuine professionals" that will not be an "arena for political battles." Lucinschi said the new cabinet must be "as de-politicized as possible" because its main task is that of coping with the country's economic problems. Among the main problems facing the government he listed the de-monopolization of the energy sector, the reform of local government, and speeding up privatization, Infotag reported. MS
 WORLD BANK ON BULGARIAN ECONOMYThe World Bank believes Bulgaria's economic prospects have "improved significantly" in the last year but warns that economic reform is still in its early stages and that the greatest threat to it is complacency. The bank's views are included in a recently adopted "country strategy" document made available to an RFE/RL correspondent in Washington. According to that document, if the government continues to pursue reform, the bank will consider granting over the next three years structural-adjustment loans of up to $300 million and so-called investment financing of up to $400 million. MS
 BULGARIAN DEPUTY PREMIER ON ECONOMYAlexander Bozhkov told the meeting of the European Bank for Reconstruction and Development in Kyiv on 12 May that his country will meet the criteria for membership in the EU currency union by the year 2001. Bozhkov said this increases Sofia's chances of joining the EU in the not too distant future, an RFE/RL correspondent in the Ukrainian capital reported. He attributed the upswing in Bulgaria's economy during the last year largely to the currency board set up at the insistence of the IMF. MS
[C] END NOTE
 TENSIONS WITH RUSSIA OVERSHADOW LATVIA'S ECONOMIC PERFORMANCEby Michael Wyzan
Latvia has recently been buffeted by Moscow's threats to impose unilateral economic sanctions. Russia has sought to justify those threats by citing what it considers to be anti-Russian activities in Latvia and Riga's incorrect treatment of the country's Russian minority.
Russian officials have suggested that their country develop new ports to avoid having to use Latvian ones on the Baltic Sea. Russian border guards have refused entry to Latvian drivers who cannot produce notarized Russian translations of their driver's licenses. And Russia's Transportation Ministry has threatened to limit the number of entry permits issued to Latvian truckers.
The threats have already had an affect on Latvia. The cabinet on 6 May approved legal amendments granting citizenship to all children born in Latvia after 21 August 1991. That change may well be for the best (it was recommended by the Organization for Security and Cooperation in Europe). But meanwhile the economic effects of Russian pressure are proving harmful. Since early April, there has been a significant decline in freight traffic on Latvian railroads and through its ports. And the Dow Jones Riga Stock Exchange Index fell from 336 on 16 March to 275 on 23 April (before recovering slightly more recently).
These shock waves have hit a rather healthy and well- managed economy. In mid-April, the IMF Executive Board lauded Latvia for its excellent performance and "prudent financial policies," although it stressed the need for further progress on large-scale privatization, tax collection and administration, and making the budget process more transparent.
Last year's achievements followed the 1996 strong recovery from the downturn of 1995 (which was sparked by a banking crisis). GDP grew by 5.9 percent in 1997, compared with 2.8 percent in 1996, and the growth of industrial production accelerated from 1.4 percent in 1996 to 6.1 percent in 1997. Unemployment fell from 7.2 percent in December 1996 to 7.0 percent one year later, while the average monthly wage in the public sector rose from $242 in December 1996 to $272 last December.
Consumer price inflation sank to 7.0 percent from 13.1 percent in 1996 (in both years, it was the lowest in the Baltic States). It declined further to 6.1 percent in the 12 months to February 1998. Last year, the state budget was in surplus for the first time since 1993.
The lats has been pegged to the IMF's Special Drawing Right since 1994, so it has not depreciated in tandem with inflation, which, though low for a transition country, remains higher than in Latvia's Western trading partners. The trade deficit rose from $877 million in 1996 to $1.1 billion last year, while the 1997 current account imbalance is projected at $460 million, similar to 1996's and a high 9 percent of GDP.
The foreign reserves rose from $729 million at the end of 1996 to $778 million one year later. Thus, a capital account surplus was sufficient to cover the current account deficit. A rise in cumulative foreign direct investment from $645 million at the end of 1996 to $850 million on 30 September contributed to that surplus.
How much would Russian sanctions hurt Latvia? Russia remains the leading destination for Latvia's exports, accounting for 21 percent in 1997. By the same token, Russia accounted for 15.6 percent of imports, slightly less than the 16.0 percent supplied by Germany, Latvia's leading import source. Latvia's exports to Russia in 1997 were worth more than $350 million.
A special feature of Latvian trade with Russia is the fact that its ports are important entrepots for Russian exports to third countries. Some of this trade is reflected in the goods worth $425 million that Latvia officially imported from Russia last year.
Another factor is Latvia's total reliance on Russia for its natural gas, for which it pays world market prices. Latvia is not in arrears in paying for that gas, and Gazprom is a shareholder in the Latvian gas company. Thus, it would appear that Gazprom, an important foreign policy actor in its own right, is unlikely to favor sanctions against the country. Russia is also a significant investor in Latvia, accounting for 10.4 percent of the total foreign direct investment stock in September 1997, second only to Denmark.
Nonetheless, recent events suggest that Latvia will probably be forced to follow the example of those CIS states that seek to reduce their economic dependence on Russia. If Moscow persists in thwarting the normal economic intercourse between states--for example, by refusing to use Latvian ports or denying Turkmenistan access to its gas pipeline to Europe--for political ends, it will increasingly be seen as an unreliable partner. Developing such a reputation is in no one's interest, least of all Russia's.
The author is an economist living in Austria.
Reprinted with permission of Radio Free Europe/Radio Liberty