|Sunday, 15 September 2019|
RFE/RL Newsline, Vol. 3, No. 38, 99-02-25
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 3, No. 38, 25 February 1999
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 ARMENIA EMBARKS ON PREPARATIONS FOR ELECTIONSCentral Electoral Commission chairman Khachatur Bezirjian told RFE/RL's Yerevan bureau on 24 February that he doubts President Robert Kocharian will comply with that body's request to postpone by one or two weeks the parliamentary elections scheduled for 30 May. The commission, which will be reconstituted prior to the poll, had argued that as the new election law takes effect only on 28 February, there is barely enough time to complete the necessary preparations. Those preparations include checking voter registers, which under the law should be submitted to the commission 95 days before the poll, and dividing the country into 75 electoral precincts, according to Noyan Tapan. Also on 24 February, representatives of six political parties, both pro-government and opposition, met to discuss possible amendments to the law and measures to ensure the elections are free and fair. LF
 U.S. HINTS AT FLEXIBILITY ON PIPELINES VIA IRAN...Speaking in Moscow on 25 February, U.S. presidential adviser on Caspian issues Richard Morningstar said that "should relations with Iran improve, the U.S. side is prepared to study the possibility of building pipelines across Iranian territory for the transportation of Caspian energy resources, " ITAR-TASS reported. But Morningstar added that he thinks an improvement in bilateral relations with Iran is unlikely in the short term. Until now, the U.S. had ruled out the possibility of routing export pipelines for Caspian oil and gas via Iran, backing alternative routes via Azerbaijan and Georgia to Turkey. Speaking in Ankara on 23 February, Morningstar had said that Turkey should provide the financial incentives needed to persuade oil companies to commit themselves to the Baku- Ceyhan pipeline. LF
 ...AS NEW DELAYS ANTICIPATED IN BUILDING BAKU- CEYHAN PIPELINEIn Tbilisi, David Woodward, president of the Azerbaijan International Operating Company engaged in extracting Caspian oil, told journalists on 24 February that the beginning of construction of the Baku-Ceyhan pipeline may be delayed until the end of 1999 because of the large amount of investment that project will require, Caucasus Press reported. He noted that after a firm decision is made to proceed with that project, the estimated minimum cost of which is $2 billion, investors must be found to finance its construction. Certainty is required, he added, that the volume of oil to be exported is large enough to render the project viable. LF
 OSCE REPRESENTATIVE REVIEWS AZERBAIJANI MEDIAFreimut Duve, who is the OSCE's special representative for freedom of the media, has discussed the media situation in Azerbaijan with President Heidar Aliev, Turan reported on 24 February. Duve subsequently told media representatives that those discussions focused on reforming the legislative framework for the media, the media's role, and the need to improve Azerbaijan's state television. Duve said Aliev concurred with this last point. Duve also said that he had urged Aliev to shelve all ongoing court proceedings against independent media and to pardon journalist Fuad Gakhramanli, who was sentenced to 18 months in prison last November for an unpublished article (see "RFE/RL Newsline," 30 June and 30 November 1998). LF
 CORRECTION:"RFE/RL Newsline" on 24 February incorrectly reported that Azerbaijani President Heidar Aliev had written to the French, Russian, and U.S. co- chairmen of the OSCE Minsk Group to urge them to renew their efforts to resolve the Karabakh conflict. That letter was addressed to the presidents of France, Russia, and the U.S.
 GEORGIAN FOREIGN MINISTER IN ABKHAZIAIrakli Menagharishvili held talks in Sukhumi on 24 February with senior Abkhaz officials, including President Vladislav Arzdinba and Konstantin Ozgan, head of the commission to coordinate the return of ethnic Georgian displaced persons to Abkhazia's southernmost Gali Raion, ITAR-TASS reported. Menagharishvili was less dismissive than some other leading Georgian politicians about Arzdinba's proposal to begin the repatriation process on 1 March. But Menagharishvili, too, insisted that the process must be jointly coordinated by Georgia and Abkhazia. Menagharishvili admitted that disagreements between Tbilisi and Sukhumi remain over how to ensure the repatriates' security. He repeated Georgian President Eduard Shevardnadze's 22 February condemnation of guerrilla activities in Gali, which have cost the lives of several dozen people since last May. Menagharishvili also termed the long- discussed meeting between Ardzinba and Shevardnadze "not only possible but necessary" once agreement is reached on the documents that the two leaders are to sign. LF
 GEORGIAN, RUSSIAN INTERIOR MINISTERS SIGN COOPERATION AGREEMENTMeeting in Moscow on 24 February, Kakha Targamadze and Sergei Stepashin discussed cooperation in arresting and extraditing wanted criminals and combating drug-trafficking and trading in stolen cars, ITAR- TASS reported. Stepashin also undertook to expedite the handing over to Georgia of Valerii Gabelia, whom Russian police arrested on suspicion of involvement in last February's attempt to assassinate President Shevardnadze (see "RFE/RL Newsline," 10 February 1999). Gabelia has begun a hunger- strike to protest his arrest, which he considers illegal, according to Caucasus Press on 13 February. LF
 GEORGIAN COMMUNIST LEADER DOUBTS HIS SON IS IN SYRIAPanteleimon Giorgadze, head of the United Communist Party of Georgia, expressed doubts on 24 February that his son Igor has been granted asylum in Syria, as claimed by the "Sunday Telegraph" on 21 February (see "RFE/RL Newsline," 24 February 1999). Giorgadze senior told ITAR-TASS that he is in telephone contact with his son but does not know the latter's whereabouts. LF
 KAZAKHSTAN LAUNCHES CENSUSKazakhstan began taking its national census on 25 February, ITAR-TASS and Interfax reported. Nursultan Nazarbayev's press service quotes the president as saying the previous day that in order to institute socioeconomic and democratic change, "we must rely on our own resources, know how numerous we are, what our educational potential is, the [level] of our living standard, and numerous other things." Nazarbayev added, however, that all personal data will be confidential. This is the first census to be conducted in Kazakhstan since 1989. It will continue until 4 March. BP
 KAZAKHSTAN'S NATIONAL BANK SAYS NO MONEY EMISSIONS THIS YEARKadyrjon Damitov, the chairman of Kazakhstan's National Bank, said on 24 February that there are no plans to print more money this year, Interfax reported. Damitov noted that Kazakhstan's balances of trade and payments have worsened, but he said trends in banking and financing are generally positive. He added that there is every possibility that any devaluation of the national currency, the tenge, will be "insignificant." BP
 UYGHURS IN KAZAKHSTAN COMPLAIN ABOUT DEPORTATIONSKaharman Hozhamberdi, the president of the Almaty-based Association of Uyghurs, said at a press conference on 24 February that Kazakhstan has undermined its international reputation by sending three ethnic Uyghurs back to China (see "RFE/RL Newsline," 17 February 1999), Interfax reported. The three men had been seeking asylum in Kazakhstan "on ethnic and political grounds." Nothing is known of their fate since they were returned to China. BP
 UZBEKISTAN OFFERS REWARD FOR TERRORISTSThe Uzbek Interior Ministry on 24 February announced a $250,000 reward for information leading to the detention of five people believed responsible for the 16 February bombings in Tashkent. Photographs of the men were shown on national television and have been posted at public places throughout the country. The Interior Ministry guarantees that anyone providing information will remain anonymous and that the reward will be paid regardless of the nationality or citizenship of the recipient. BP
 KYRGYZ PRESIDENT COMMENTS ON CUSTOMS UNION...Askar Akayev on 24 February said that "the CIS Customs Union remains on paper only" but that the 26 February summit in Moscow "could be a landmark event for the union," ITAR-TASS and Interfax reported. Akayev said that trade between his country and the other members of the union--Kazakhstan, Russia, and Belarus--accounts for only 30 percent of its total foreign trade, down from 45 percent three years ago. He added that that although all the members agreed to use the same regulations in charging customs fees and value-added tax, Russia taxes Kyrgyz goods at the point of their departure (origin?) while the other members charge tax at the point of destination. And he singled out Kazakhstan's recent decision to impose a 200 percent tariff on some imports from Kyrgyzstan. BP
 ...AND PRIORITIES IN FOREIGN RELATIONSAkayev also said that expanding ties with Russia and other CIS states is his country's foreign policy priority. He argued that the Central Asian Union could act as "a united economic intermediary between East and West" but said that it must first provide "positive impulses for neighborly cooperation, stability, and democracy." Akayev listed Europe, the U.S., Canada and Asian Pacific countries--particularly China, Japan, South Korea, and Malaysia--as countries with which Kyrgyzstan needs to develop better ties. And he commented that his country must improve its image as a "reliable and stable partner." BP
[B] SOUTHEASTERN EUROPE
 KOSOVAR DELEGATION FORMS PROVISIONAL GOVERNMENT...The Kosovar Albanian delegation to the Rambouillet talks has formed a provisional government headed by a member of the Kosova Liberation Army (UCK), according to Kosovapress, the UCK's news agency. The provisional government includes representatives of the Democratic League of Kosova of shadow-state President Ibrahim Rugova and the United Democratic Movement of nationalist academic Rexhep Qosja. Reuters quoted Kosovapress as saying that the new government has a mandate until elections are held in Kosova. The UCK agency did not say what will happen to the German- based, exile shadow-state government of Bujar Bukoshi. FS
 ...PROMPTING PROTEST BY DEMACIThe UCK's political representative, Adem Demaci, called the creation of the provisional government "groundless and without legitimacy." Demaci, who refused to attend the Rambouillet talks, issued a statement in Prishtina on 24 February saying that neither he nor the UCK's General Staff were consulted. He added that the move is "completely contrary" to the goals of establishing "valid institutions" in Kosova, including a parliament and civilian government. Demaci claimed that the formation of the government is an effort to "manipulate" the Kosovar public into accepting an agreement "which is not for the well-being of Albanian people and which is contrary to its determination for freedom and independence," Reuters reported. FS
 SERBS DELAY RETURN OF KOSOVAR DELEGATIONYugoslav authorities declined to give permission for the Kosovar Albanian delegation's plane to land in Prishtina on 24 February, a delegation member told Reuters. The French government has arranged a military flight for the following day. FS
 NATO OFFICIAL WARNS OF POSSIBLE SERBIAN OFFENSIVE...An unnamed official told Reuters on 24 February that NATO is "greatly concerned by a very substantial buildup of Serbian forces including heavy armor, artillery, infantry, special forces, the planting of mines, and demolition preparations." He said the army's moves "could be preparations for a final military push to eradicate opposition in [Kosova] either in conjunction with a failure of the [peace] talks or as a prelude to a resumption of the talks." He said the numbers involved are "more than double" those of Yugoslav troops and special police in October 1998. Another NATO source said the increase constitutes a violation of the agreement reached by the Contact Group and Yugoslavia last October. "What's maybe of more immediate concern than the numbers inside [Kosova] is the qualitative change," he argued, noting that the army is "handing over heavy 30 mm cannon and command and control equipment" to the special police. FS
 ...WHILE ALBRIGHT SHOWS COMMITMENT TO USE FORCEU.S. Secretary of State Madeleine Albright told a Senate Foreign Relations Committee on 24 February that the military moves show Belgrade has not abandoned the idea of an offensive. She stressed that "they are very much under a warning now that they are not to use those forces offensively.Š We are going to work very hard to make it very clear to them that that would be a grave mistake." Albright added that "they have not yet given up their ideas about their spring action.Š Our goal in the next two weeks is to make sure that they change their way of looking at this," Reuters reported. Meanwhile, French President Jacques Chirac told a cabinet meeting in Paris the same day that "we must signal by all available means that we will not accept a resumption of fighting." FS
 PREMIER WANTS TO AVOID NATO ACTION IN MONTENEGROFilip Vujanovic said in Podgorica on 24 February that his government will increase its diplomatic activities to ensure NATO does not attack Montenegro. He argued "there are no reasons why [Montenegro] should become a target of [NATO] air strikes," RFE/RL's South Slavic Service reported. FS
 BRITISH, FRENCH TROOPS SET UP BEACHHEAD IN NORTHERN GREECEBritish and French soldiers landed in Thessaloniki on 24 February to set up the main logistical supply point for the possible deployment of 30,000 NATO peacekeepers in Kosova. FS
 MILO SAYS KOSOVARS AGREED TO DRAFT AFTER U.S. GUARANTEESAlbanian Foreign Minister Paskal Milo told "Gazeta Shqiptare" on 24 February that the Kosovar delegation agreed to the compromise accord in Rambouillet after receiving U.S. guarantees of a NATO presence in Kosova in the near future. Milo said that in an emergency meeting shortly before the talks ended, "the U.S. Secretary of State and the U.S. delegation gave assurances about a NATO presence in [Kosova] for the transitional period, during which democratic institutions would be established." FS
 RAMBOUILLET ORGANIZERS REASSURE THE HAGUE TRIBUNALThe peace conference organizers have reassured the International Criminal Tribunal for the former Yugoslavia that it will be able to fully investigate crimes against humanity, according to the draft peace agreement for Kosova, RFE/RL's South Slavic Service reported. Earlier, tribunal president Gabrielle Kirk McDonald had raised concerns that the conference participants had dropped a specific reference allowing the tribunal access to suspected war crimes sites (see "RFE/RL Newsline," 23 February 1999). FS
 CHINA TO VETO MACEDONIAN UN MANDATE EXTENSIONChina's UN ambassador Qin Huasun told Reuters on 24 February that China plans to use its Security Council veto the following day to prevent a UN peacekeeping force being deployed in Macedonia (see "RFE/RL Newsline 24 February). He said that in the past, Beijing had reservations about the "repeated extension" of the force's mandate but took a "flexible and cooperative" approach. "Now, as known to all, the situation is changed," he said, alluding to Macedonia's decision last month to open diplomatic relations with Taiwan, Reuters reported. FS
 YUGOSLAVIA, BOSNIA AGREE TO REOPEN RAILWAYRepresentatives of the federal Yugoslav and Bosnian railways signed an agreement in Belgrade on 24 February providing for the reopening of a railway crossing near Zvornik, RFE/RL's South Slavic Service reported. The agreement will take effect in two weeks. FS
 ALBANIAN JUDGES STRIKE AFTER SHOOTING OF COLLEAGUEAlbanian judges and lawyers suspended all trials on 24 February, three days after unknown assailants shot and badly wounded Judge Kleanthi Koci, the president of the Bar Association and a former Supreme Court chief. Their strike is in protest against increasing violence against the judiciary, "Albanian Daily News" reported. In other news, police the same day dismissed an officer who was involved in a network that smuggled illegal immigrants into Albania via Rinas airport. FS
 ETHNIC HUNGARIAN POLITICIANS UNDER INVESTIGATION IN ROMANIAThe Prosecutor-General's Office has launched an investigation into members of the "radical wing" of the Hungarian Democratic Federation of Romania (UDMR) who participated in a September 1998 meeting in Cernat (Covasna County) of the Szeklers' Forum for the Renewal of the UDMR. Participants at the forum adopted a resolution demanding Hungarian citizenship for Romania's ethnic Hungarians, territorial autonomy for the so-called Szeklers' lands, the setting up of a Hungarian-language university in Cluj, and the full restitution of Hungarian Churches' confiscated property. Three UDMR parliamentary deputies were questioned in Brasov on 24 February, Mediafax reported. UDMR chairman Bela Marko has protested the investigation. MS
 FORMER ROMANIAN LIBERAL LEADER TO JOIN EXTRAPARLIAMENTARY PARTY?Viorel Catarama, former deputy chairman of the National Liberal Party (PNL), said he is considering joining the extra-parliamentary Romanian Humanist Party. Catarama resigned from the PNL on 18 February to protest the party's "non-liberal policies," following a long conflict between Catarama and the party's leadership. In January, the PNL decided to "suspend" him from membership after he went to the Jiu Valley to seek to diffuse the conflict between the miners and the government but failed to consult either the cabinet or the PNL beforehand. In early February, the party decided to dismiss Catarama as chairman of the Senate's Economic Committee. PNL deputy Mircea Cazacu earlier this week announced he, too, is leaving the PNL in protest against its "non-liberal" policies. MS
 ROMANIAN OPPOSITION DEPUTY TO LOSE PARLIAMENTARY IMMUNITY?The Chamber of Deputies' Judicial Committee on 24 February recommended lifting the parliamentary immunity of Party of Social Democracy in Romania deputy Gabriel Bivolaru. The Prosecutor-General's Office has charged Bivolaru with fraud and forgery of official documents. The chamber is to debate on 25 February whether to endorse that recommendation. MS
 NEW MOLDOVAN GOVERNMENT IN PLACE THIS WEEK?Parliamentary chairman and For a Democratic and Prosperous Moldova Bloc leader Dumitru Diacov told journalists on 24 February following another round of negotiations between representatives of the parliamentary majority and Premier- designate Ion Sturdza that the new cabinet lineup might be submitted to the legislature for approval on 25 February. But RFE/RL's Chisinau bureau reports that Party of Revival and Conciliation (PRCM) chairman Mircea Snegur has said his formation's support for the cabinet is conditional on a PRCM member being appointed as first deputy premier. Such a position did not exist in previous governments. MS
[C] END NOTE
 BALTIC STATES STILL VULNERABLE TO RUSSIA'S TROUBLESBy Michael Wyzan
The Baltic states are more susceptible to spillover effects from the Russian economic crisis than are the Central European countries, because the former (especially Lithuania) trade more extensively with Russia and their banks (particularly Latvia's) have been more active in lending to that country. However, the Balts are much less vulnerable than the CIS countries to that crisis, largely because their trade dependence on Russia is considerably lower.
In terms of international trade, Estonia has long been the least vulnerable of the Baltic States to ill winds blowing from the East. Russia accounted for a modest--by Baltic standards-- 13.4 percent of exports and 10.8 percent of imports from January-November 1998, down from 18.8 percent and 14.4 percent, respectively, in all of 1997. Nonetheless, certain sectors, such as dairy farming, and certain regions, such as the heavily industrial, predominantly ethnic Russian northeast, have been hard hit.
Latvia experienced a strong decline in trade with Russia last year: from January-November 1998, exports to that country were 52 percent lower than during the same period in 1997, while total exports rose by 8.5 percent. As a result, its dependence on such trade is now similar to Estonia's. During the first 11 months of 1998, 12.4 percent of Latvian exports went to Russia and 11.5 of its imports originated there, compared with 21 percent and 15.6 percent, respectively, in all of 1997. The fishing and fisheries sectors have been particularly hard hit by the decline in Russian trade.
Lithuania remains the most dependent on trade with Russia, with the latter accounting for 18.6 percent of exports and 21.1 percent of imports from January-October 1998, down from 24.5 percent and 25.2 percent, respectively, in all of 1997. Lithuania's strikingly strong dependence on Russian imports reflects the fact that its Mazeikiai oil refinery is fueled entirely by oil from that country.
The big declines last year in exports to Russia have reduced the three countries' growth prospects. Estonian GDP growth fell from 9.3 percent in the first quarter of 1998 (compared with the same quarter in 1997) to 1.8 percent in the third. Estonia's 1999 budget envisages GDP growth of 4 percent, rather than the 6 percent originally forecast, while the other two Baltic States also expect growth declines of two percentage points this year. However, the forecast decline in Estonia's growth has a silver lining, since that country's economy was in danger of overheating.
Latvia's GDP growth took a similar nosedive in 1998, from 7.6 percent in the first quarter to 1.9 percent in the third, while Lithuania's GDP decline was more modest, from 4.7 percent to 3.2 percent over the same period. Industrial production has been hard hit in all three countries, especially in Latvia, where it was down during the fourth quarter by 11.4 percent relative to the same period in 1997.
Russian contagion also means that the probability of the Baltic States' having their own financial crises has increased. Lithuania seems the most vulnerable in this regard, its current account imbalance reaching 13 percent of GDP in January- September 1998. The equivalent figures for Latvia and Estonia were 9.0 percent and 9.5 percent, respectively. Both those percentages are rather high, although the Estonian figure fell from 13 percent in 1997.
On the other hand, there are some factors suggesting that a crisis in Lithuania is less likely than its current account deficit suggest. Those factors include its large foreign reserves, some $1.4 billion at the end of 1998 (but down from $1.7 billion in July), and its excellent performance with regard to foreign investment in 1998. On 5 July, a 60 percent stake in state-owned Lietuvos Telekomas was sold to Sweden's Telia and Finland's Sonera for $510 million.
Estonian and Latvian banks have lost considerable sums on Russian government and corporate securities. Latvia is the more vulnerable in this respect, with investments in the neighborhood of $300 million in the Russian economy.
Overall, Latvian banks experienced a poor 1998, losing $23 million (2 percent of total assets), while Estonian banks lost $40 million (1.2 percent). Still, neither country experienced a banking crisis, such as Latvia did in 1995, when its GDP declined by 1.6 percent. Ratings agencies remain confident that no similar catastrophe is in the offing in that country now.
Baltic stock markets performed poorly in 1998, the indexes falling by 66 percent in Tallinn, 75 percent in Riga, and 40 percent in Vilnius. These small markets are sensitive to investor attitudes toward emerging markets in general. Thus, their declines began in the aftermath of the East Asian crisis, well before August 1998.
However, the effects of such volatility on the countries' real economies remain insignificant. Unlike in Western countries, few individuals own stock, and there are no large institutional investors, such as pension funds, that have invested heavily in the stock market.
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