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RFE/RL Newsline, Vol. 3, No. 172, 99-09-03

Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next Article

From: Radio Free Europe/Radio Liberty <http://www.rferl.org>

RFE/RL NEWSLINE

Vol. 3, No. 172, 3 September 1999


CONTENTS

[A] TRANSCAUCASUS AND CENTRAL ASIA

  • [01] ARMENIA, KAZAKHSTAN PLEDGE TO BOOST ECONOMIC TIES
  • [02] AZERBAIJANI PRESIDENT WILLING TO AMEND LOCAL ELECTION LAW
  • [03] GEORGIAN MINISTERS MEET WITH CHECHEN VICE PRESIDENT
  • [04] RUSSIAN FOREIGN MINISTER VISITS AZERBAIJAN
  • [05] OSCE TO MONITOR PARLIAMENTARY ELECTIONS IN KAZAKHSTAN
  • [06] KAZAKHSTAN STILL PLANS TO SELL TENGIZCHEVROIL STAKE...
  • [07] ...DESPITE GROWING OPPOSITION
  • [08] KAZAKH OPPOSITION CLAIMS MORE STATE COMPANIES TO BE SOLD
  • [09] KAZAKHSTAN'S STATE PUBLISHING HOUSE REFUSES TO PRINT SOME
  • [10] KYRGYZ LEADERSHIP DISCUSSES HOSTAGE CRISIS
  • [11] KYRGYZ OFFICIALS DISCUSS DEBT RESTRUCTURING
  • [12] TAJIKISTAN SETS DATE FOR PRESIDENTIAL ELECTIONS

  • [B] SOUTHEASTERN EUROPE

  • [13] UCK TO BECOME CIVILIAN CORPS OR NEW ARMY?
  • [14] THACI APPEALS TO SERBS
  • [15] UN 'REMOVES' KOSOVA FROM YUGOSLAV CURRENCY SYSTEM
  • [16] AUSTRALIAN SAYS SERBS TORTURED HIM
  • [17] U.S. AIR FORCE: DOWNED PILOTS RESCUED FROM SERBIA SWIFTLY
  • [18] PARTY MEMBERSHIP A KEY TO SERBIAN JOBS?
  • [19] HOLBROOKE LAUDS DODIK
  • [20] PLAVSIC ON HAGUE LIST?
  • [21] CROATIAN PARTIES REAFFIRM PACT
  • [22] ITALY DEMOLISHES ALBANIAN BUNKERS
  • [23] ROMANIA INVESTS IN MOLDOVA'S ENERGY SECTOR
  • [24] MOLDOVAN PARLIAMENTARY CHAIRMAN ATTACKS PRESIDENT
  • [25] BULGARIAN VICE PRESIDENT EXPECTS POLITICAL CLIMATE TO
  • [26] PARTIES GALORE IN BULGARIAN LOCAL ELECTIONS

  • [C] END NOTE

  • [27] REFORMING THE BULGARIAN MILITARY

  • [A] TRANSCAUCASUS AND CENTRAL ASIA

    [01] ARMENIA, KAZAKHSTAN PLEDGE TO BOOST ECONOMIC TIES

    On a

    one-day visit to Astana on 2 September, Robert Kocharian

    met with his Kazakh counterpart, Nursultan Nazarbaev, to

    discuss bilateral relations, Interfax and Noyan Tapan

    reported. Both presidents noted that there are no

    outstanding political differences between their countries

    but agreed on the need to expand bilateral trade, which

    currently totals less that $1.5 million annually. Kocharian

    noted that Armenia could supply food products and equipment

    to Kazakhstan, purchasing grain and raw materials in

    return. He also said Armenia is interested in gaining

    observer status within the Central Asian Cooperation

    Organization. A friendship and cooperation agreement and an

    agreement to establish a joint commission for economic

    cooperation were signed during the visit. LF

    [02] AZERBAIJANI PRESIDENT WILLING TO AMEND LOCAL ELECTION LAW

    Meeting in Baku on 1 September with Gerard Stoudmann,

    director of the OSCE Office for Democratic Institutions and

    Human Rights, Heidar Aliev expressed willingness to accept

    the OSCE's recommendations for amendments to the

    controversial law on municipal elections, which opposition

    parties claim is undemocratic. But Aliev predicted that

    problems might occur during the municipal elections, which

    are scheduled for 12 December. Azerbaijan parliamentary

    speaker Murtuz Alesqerov told Stoudmann earlier that day

    that the law takes account of recommendations by the OSCE

    and other international organizations and complies with

    international standards (see "RFE/RL Newsline," 2 September

    1999). Also on 2 September, the political parties

    represented in the Movement for Electoral Reform and

    Democratic Elections said they will monitor the municipal

    elections, Turan reported. LF

    [03] GEORGIAN MINISTERS MEET WITH CHECHEN VICE PRESIDENT

    Minister of State Vazha Lortkipanizde and Georgian

    Intelligence chief Avtandil Ioseliani met on 31 August in

    Tbilisi with Chechen Vice President Vakha Arsanov, who is

    recuperating in Tbilisi from spinal surgery, Caucasus Press

    and Interfax reported on 2 September. The talks focused on

    allegations made by Arsanov last week that Russian special

    services are recruiting Chechens who will be sent to

    destabilize Georgia's Black Sea autonomous republic of

    Adjaria in order to create a pretext for Russian military

    intervention there. Arsanov said the Chechen leadership

    will do all in its power to thwart those plans. Speaking at

    a press conference in Batumi on 31 August, Adjar Supreme

    Council Chairman Aslan Abashidze downplayed Arsanov's

    statement, commenting that Russia has no interest in

    destabilizing the situation in his republic, according to

    Caucasus Press. LF

    [04] RUSSIAN FOREIGN MINISTER VISITS AZERBAIJAN

    On the first

    leg of a three-day tour of the South Caucasus, Igor Ivanov

    held talks in Baku on 2 September with his Azerbaijani

    counterpart, Tofik Zulfugarov, Prime Minister Artur

    Rasizade and President Aliev. Ivanov tried hard to convince

    his interlocutors that Russia "is taking very seriously

    criticism of its Caucasus polices by the Azerbaijani

    leadership" and wants to develop equitable relations with

    all three South Caucasus states, according to Interfax.

    Aliev, for his part, criticized Moscow's military

    cooperation with Armenia and the failure of the OSCE Minsk

    Group, of which Russia is a co-chairman, to make progress

    toward resolving the Karabakh conflict. But Aliev

    characterized relations between the two countries as

    "friendly," despite their disagreements. Rasizade said

    relations with Russia "will remain a priority" for Baku. LF

    [05] OSCE TO MONITOR PARLIAMENTARY ELECTIONS IN KAZAKHSTAN

    Senior OSCE official Linda Edgeworth told journalists in

    Almaty on 2 September that the organization will send a

    full mission to monitor the parliamentary elections on 17

    September and 10 October, Reuters and Interfax reported.

    The OSCE had declined to send such a mission to monitor the

    January 1999 presidential elections on the grounds that the

    election law did not create equal conditions for all

    candidates. Edgeworth noted improvements to that law to

    ensure the accuracy of the vote tally. But she expressed

    concern over the practice of invoking administrative

    offenses to bar potential candidates from running and over

    restrictions on freedom of speech. Edgeworth stressed that

    sending an observers' mission does not constitute approval

    of the conditions under which the elections are held. LF

    [06] KAZAKHSTAN STILL PLANS TO SELL TENGIZCHEVROIL STAKE...

    Chevron Oil Company President Richard Matzke told

    journalists in Atyrau on 2 September that Kazakhstan's

    government has informed Chevron of its intention to proceed

    with the planned sale of part of its 25 percent stake in

    the Tengizchevroil consortium, Interfax reported. That

    consortium was created in 1994 to exploit the country's

    largest oilfield. LF

    [07] ...DESPITE GROWING OPPOSITION

    Meanwhile, more senior

    Kazakh officials have expressed reservations over the

    planned sale. Uzaqbay Qarabalin, acting president of the

    state oil company KazakhOil, whose predecessor Nurlan

    Qapparov was fired 10 days ago for opposing the sale, said

    on 2 September that the sell-off is "shortsighted" and will

    weaken KazakhOil. At the same time, he admitted that

    KazakhOil has no choice but to bow to the government's

    decision (see "RFE/RL Newsline," 25 August and 1 September

    1999). Marat Ospanov, chairman of the lower house of the

    parliament, said that selling part of the stake in

    Tengizchevroil is not the right way to solve Kazakhstan's

    financial problems, according to Interfax on 2 September.

    He pointed out that the value of the 10 percent stake in

    question may double within 2-3 years from the present $1-

    1.5 billion. On 1 September, Kazakhstan's Energy, Industry,

    and Trade Minister Mukhtar Ablyazov told Interfax that the

    value of Kazakhstan's stake in Tengizchevroil is likely to

    increase significantly. But he pointed out that the country

    must repay about $900 million in foreign debts this year.

    LF

    [08] KAZAKH OPPOSITION CLAIMS MORE STATE COMPANIES TO BE SOLD

    OFF

    Leaders of the Democratic Azamat (Freedom) Party told

    a press conference in Almaty on 2 September that the

    planned sale of part of Kazakhstan's stake in

    Tengizchevroil is only the first step in what they termed

    the distribution of state property among the ruling class,

    RFE/RL's bureau in the former capital reported. Party

    chairman Ghalym Abelseitov said government sources have

    informed him that the Aqtobe-Munay and Aqtau-Munay oil

    companies, the Qazaq-Mys copper smelter, the National Bank

    of Kazakhstan, and KazTeleCom will also be put up for

    tender. LF

    [09] KAZAKHSTAN'S STATE PUBLISHING HOUSE REFUSES TO PRINT SOME

    LOCAL NEWSPAPERS

    Following last month's decision by the

    Kazakh government to suspend financing most official

    newspapers, the state publishing house in Almaty is

    refusing to publish some local newspapers, RFE/RL

    correspondents in the former capital reported on 2

    September (see "RFE/RL Newsline," 5 August 1999). Although

    some newspapers have secured alternative sources of

    funding, they cannot find another publisher. LF

    [10] KYRGYZ LEADERSHIP DISCUSSES HOSTAGE CRISIS

    President Askar

    Akaev chaired a meeting with power ministers on 2 September

    to discuss how to deal with the threat posed by ethnic

    Uzbek militants still holding some 13 hostages in southern

    Kyrgyzstan. Akaev insisted that those hostages must be

    freed unharmed. He ordered the army to set up road blocks

    to prevent the militants advancing further north and

    charged the government with providing all necessary

    assistance to villagers who fled or have been evacuated.

    Also on 2 September, First Deputy Prime Minister Boris

    Silaev told journalists in Bishkek that preparations are

    being made for a protracted standoff with the guerrillas.

    Silaev, who held talks in Moscow with Russian government

    officials earlier this week, said that promised military

    hardware, including planes and helicopters, will arrive in

    Kyrgyzstan soon. LF

    [11] KYRGYZ OFFICIALS DISCUSS DEBT RESTRUCTURING

    Also on 2

    September, Akaev met with a visiting U.S. delegation to

    discuss strengthening bilateral economic ties, RFE/RL's

    Bishkek bureau reported. The delegation also held talks

    with Prime Minister Amangeldi Muraliev. At that meeting it

    was disclosed that in 2000 Kyrgyzstan will have to meet

    foreign debt repayments equal to 40 percent of the annual

    budget. The lion's share consists of a $130 million Russian

    loan. Talks are under way with the governments of Russian

    and Pakistan on restructuring those loans. LF

    [12] TAJIKISTAN SETS DATE FOR PRESIDENTIAL ELECTIONS

    Meeting on

    3 September, Tajikistan's parliament scheduled presidential

    elections for 6 November, AP and dpa reported. But AP noted

    that the presidential poll may not take place if the

    electorate votes in a 26 September referendum to endorse a

    proposed amendment to the country's constitution that would

    extend the presidential term from five to seven years.

    Incumbent Imomali Rakhmonov was elected president in

    November 1994. LF


    [B] SOUTHEASTERN EUROPE

    [13] UCK TO BECOME CIVILIAN CORPS OR NEW ARMY?

    "The New York

    Times" on 3 September reported that officials of NATO, the

    UN, and the Kosova Liberation Army (UCK) have agreed that

    some 3,000 guerrillas will soon become a "lightly-armed

    civilian emergency force." Western officials described the

    new corps as a civilian force that will deal with

    emergencies such as "forest fires, earthquakes, mountain

    rescue, and reconstruction." The corps will have a military

    organization, however, as well as uniforms and "sidearms to

    protect equipment," the daily continued. It will also have

    helicopters. UCK officers "see it as a potential core of a

    national army, and are selling it to their followers as

    such." General Agim Ceku, who is the UCK's chief of staff,

    said: "We will build a new army in the future, and the

    Kosova Corps will be one part of it." A KFOR spokesman

    stressed, however, that the corps is not a new army but

    rather a form of "uniformed public service." PM

    [14] THACI APPEALS TO SERBS

    The UCK's Hashim Thaci said in

    London on 2 September that Kosova's Serbs should return

    "because we are interested in establishing in Kosova a

    multi-ethnic society." The UNHCR previously estimated that

    170,000 of Kosova's 200,000 Serbs fled the province during

    or since the recent conflict (see "RFE/RL Newsline," 12

    August 1999). Also on 2 September, Serbian Deputy Prime

    Minister Vojislav Seselj said in Belgrade that Serbian

    police must return to Kosova "as soon as possible" to

    ensure the safety of local Serbs. He stressed that "if

    there are no peaceful means available, we shall have to

    find other ways" to enable Serbian forces to return to the

    province. PM

    [15] UN 'REMOVES' KOSOVA FROM YUGOSLAV CURRENCY SYSTEM

    A

    spokeswoman for Bernard Kouchner, who is the UN's chief

    civilian administrator in Kosova, said on 3 September in

    Prishtina that he has issued an order allowing currencies

    other than the Yugoslav dinar to legally circulate Kosova.

    She added that Kouchner's own office will use German marks.

    It will accept dinars only for an additional fee, dpa

    reported. Observers note that since KFOR forces entered

    Kosova in June, local ethnic Albanians have generally

    refused to use dinars, which they regard as a symbol of

    Serbian rule. The Serbian authorities are certain to

    protest Kouchner's decision as a violation of Yugoslav

    sovereignty in Kosova. In practice, the German mark has

    been the second currency throughout the former Yugoslavia

    for decades. PM

    [16] AUSTRALIAN SAYS SERBS TORTURED HIM

    Steve Pratt, who is one

    of the two Australian aid workers just released from prison

    by Yugoslav President Slobodan Milosevic, said in Sydney on

    3 September that he confessed to spying under duress (see

    "RFE/RL Newsline," 2 September 1999). He said that he made

    the confession in April after his Serbian captors told him

    "to cooperate or be strangled," Reuters reported.

    Australian Prime Minister John Howard said that he will

    investigate Pratt's charge, which he said he has not heard

    before. PM

    [17] U.S. AIR FORCE: DOWNED PILOTS RESCUED FROM SERBIA SWIFTLY

    An Air Force spokesman said in Hurlburt Field, Florida, on

    2 September that the military used highly sophisticated

    technology in order to rescue two U.S. airmen downed in

    Serbia on 26 March and 2 May, respectively. In each case

    the pilots were rescued within hours of crashing. The

    helicopters that picked them up spent "less than one

    minute" on the ground. PM

    [18] PARTY MEMBERSHIP A KEY TO SERBIAN JOBS?

    In response to an

    "initiative" by Milosevic's Socialist Party of Serbia,

    local employers in Pozarevac have signed contracts with 105

    young professionals, the Frankfurt-based Serbian daily

    "Vesti" reported on 3 September. The local branch of the

    opposition Democratic Party said in a statement that it is

    "immoral" that a powerful party uses its influence to win

    jobs for its young members at the expense of other job

    seekers. Pozarevac is Milosevic's home town and power base.

    Among the firms giving jobs is the Bambi cookie company,

    which recently helped finance an amusement park built by

    Milosevic's son Marko. PM

    [19] HOLBROOKE LAUDS DODIK

    U.S. Ambassador to the UN Richard

    Holbrooke said in Banja Luka on 2 September that Republika

    Srpska caretaker Prime Minister Milorad Dodik is "the most

    promising leader of his generation in his country," Reuters

    reported. Referring to Dodik's hard-line opponents,

    Holbrooke added: "Throughout this area there are people who

    are separatists, racists, criminals, and crooks. These are

    people not only trying to destroy the [1995] Dayton peace

    accords but to walk the Serb people of Bosnia-Herzegovina

    back to the dark ages of six years ago" when Bosnia was

    still torn by war. Holbrooke proceeded the same day to

    Mostar, which he called "the most broken city in Europe, a

    city whose failures exemplify the tragedy of the Balkans."

    The U.S. diplomat met on 3 September in Zagreb with

    Croatian President Franjo Tudjman, who assured Holbrooke

    that Croatia will cooperate with the Hague-based war crimes

    tribunal. PM

    [20] PLAVSIC ON HAGUE LIST?

    Republika Srpska Justice Minister

    Milan Trbojevic, citing unspecified "sources," said the

    Hague-based tribunal has prepared a list of 10 past or

    present Bosnian Serb officials whom it wants to question in

    conjunction with a case being prepared against Milosevic

    for war crimes he allegedly committed in Croatia and Bosnia

    before the Dayton agreement, "Vesti" reported on 3

    September. Trbojevic added that his "sources" tell him that

    some or all of the 10 might face indictment themselves by

    the tribunal. The minister noted that he himself is on the

    list, as are former President Biljana Plavsic, and Momcilo

    Krajisnik, the former ethnic Serbian representative on the

    Bosnian joint presidency (see "RFE/RL Newsline," 30 August

    1999). PM

    [21] CROATIAN PARTIES REAFFIRM PACT

    Representatives of six

    opposition parties signed an agreement in Zagreb on 2

    September pledging to continue their alliance against the

    governing Croatian Democratic Community at least until

    after the upcoming parliamentary elections, RFE/RL's South

    Slavic Service reported. The ceremony was intended to

    dispel rumors that the coalition is about to break up. The

    coalition includes all significant opposition parties

    except those on the far right. PM

    [22] ITALY DEMOLISHES ALBANIAN BUNKERS

    Albanian officials

    formally thanked Italian military engineers in Durres on 2

    September for demolishing 32 of the country's 300,000

    concrete bunkers, Reuters reported. Local soccer teams will

    use the reclaimed space, and the broken concrete will be

    used to build a marina. Former dictator Enver Hoxha built

    the bunkers in the 1970s to defend the country against a

    foreign invasion. The attack never came, but the bunkers

    continue to litter the landscape. Removing them is a costly

    and time-consuming task. PM

    [23] ROMANIA INVESTS IN MOLDOVA'S ENERGY SECTOR

    Romania intends

    to "invest heavily" in Moldova's energy sector, Prime

    Minister Ion Sturza told journalists in Chisinau on 2

    September on returning from that country. Sturza said

    Bucharest has agreed to write off Chisinau's $13 million

    electricity debt in exchange for a 51 percent stake in

    Moldova's Tirex-Petrol state company, RFE/RL's bureau in

    the Moldovan capital reported. Sturza added that he and

    President Emil Constantinescu agree that the Moldovan-

    Romanian basic treaty must be concluded by the end of 1999.

    MS

    [24] MOLDOVAN PARLIAMENTARY CHAIRMAN ATTACKS PRESIDENT

    LUCINSCHI

    In an interview with the governmental Russian-

    language daily "Nezavisimaya Moldova" on 2 September,

    parliamentary chairman Dumitru Diacov said President Petru

    Lucinschi's drive to change the Moldovan system to a

    presidential one has "tarnished the country's image"

    abroad. Diacov, who heads the formerly pro-presidential

    Movement for a Democratic and Prosperous Moldova Bloc, said

    the changes proposed by Lucinschi have nothing in common

    with the U.S. Constitution; rather, it resembles the

    constitutions of "under-developed countries, with all their

    dictatorships and authoritarian rulers." Diacov said that

    some of Lucinschi's proposals, such as changing the

    electoral system for parliamentary elections and reducing

    the number of seats in the legislature, are designed to

    "deflect attention...from the essence of the draft," which,

    he said, is "aimed at imposing an authoritarian regime in

    Moldova of the likes existing in some CIS, African, and

    Asian countries." MS

    [25] BULGARIAN VICE PRESIDENT EXPECTS POLITICAL CLIMATE TO

    IMPROVE

    In an interview with BTA on 2 September, Todor

    Kavaldjiev said he expects the country's political climate

    to improve after the October local elections because, he

    said, the "democratic community" will gain access to local

    government structures. Most of these structures are now

    dominated by the opposition Bulgarian Socialist Party.

    Kavaldjiev added that his "optimism" is nonetheless

    "limited" because an "undemocratic" provision in the

    amended local election law abolished the right of

    inhabitants of places with a population of fewer than 500

    to elect mayors directly. He also said he supported

    demolishing the mausoleum of communist leader Georgi

    Dimitrov, noting that Dimitrov opponents such as Nikola

    Petkov or Krustyu Pastouhov are "not even buried in proper

    graves where friends and relatives can pay [their]

    respects." MS

    [26] PARTIES GALORE IN BULGARIAN LOCAL ELECTIONS

    A spokeswoman

    for the Central Electoral Commission on 2 September said 87

    parties and coalitions of parties have so far registered

    for the October local elections, BTA reported. A total of

    94 parties and coalitions have applied for registration.

    Also on 2 September, controversial Business Bloc leader

    George Ganchev told journalists that if the Republican

    Party wins the U.S. presidential elections next year, it

    will back him if he decides to run for the Bulgarian

    presidency. MS


    [C] END NOTE

    [27] REFORMING THE BULGARIAN MILITARY

    By Michael Shafir

    When General Mikho Mikhov criticized the government in

    an interview with "Standart" late last month, military

    observers must have wondered whether his days as Bulgarian

    chief of staff were numbered. Mikhov spoke of "tensions"

    and "insecurity" among the armed forces stemming from

    government plans to substantially reduce their number in a

    bid to achieve integration into NATO. Saying that the plan

    is "increasingly demoralizing and infuriating" the officer

    corps, Mikhov noted that the Ministry of Defense's plans to

    close down military schools would "reduce us to the state

    of many African and Asian countries." He added that the

    ministry has no plans to help those discharged under the

    envisaged reform.

    Judging by past practice, Mikhov is unlikely to see

    the reform through. Similar criticism, for similar reasons,

    triggered the dismissals in 1998 of commander of the

    construction troops General Radoslav Peshleevsky, commander

    of the missile and artillery forces General Angel Marin,

    and two deputy defense ministers, Simeon Petkovski and

    Rumen Kunchev. On one of those occasions, Prime Minister

    Ivan Kostov commented that "the fairest way for all

    officers who do not accept the reform of the army is to

    resign."

    It is not difficult to see why these officers are

    opposed to the envisaged reforms. Schooled in Warsaw Pact

    doctrine, with its stress on numbers rather than quality,

    the Bulgarian commanders have no reason to welcome the

    gradual transformation of the country's armed forces into a

    significantly smaller and, eventually, professional army

    that can subsist on a reduced budget.

    The Kostov government has obstinately pursued the

    goal of joining NATO ever since it took office, defining

    that goal as a "strategic" one in its "Bulgaria 2001"

    program. That plan is based on recommendations that NATO

    made in its "Plan for Activities of the Candidates for

    Membership in NATO," issued earlier this year, and outlines

    the first of two stages envisaged by the military reform.

    Covering the period 2000-2001, the first stage is viewed by

    the government as decisive for securing an invitation to

    join the alliance. The second stage, extending from 2002-

    204, aims at ensuring that the talks with NATO will be

    successfully concluded.

    According to Deputy Defense Minister Velizar

    Shalamanov, who presented the plan on 19 August, it is

    estimated that by 2004, Bulgaria will need no more than

    300-400 graduates from military academies annually. Hence,

    it is unrealistic to continue financing five military

    educational establishments. Rather, a new National Higher

    Military School is to be founded to train officers and

    sergeants.

    Detailing the plan (which must be approved by the

    government and the parliament) Defense Minster Georgi

    Ananiev on 31 August said that by 2004, the armed forces

    will be reduced from their present number of 93,100 to

    45,000, and a total of 10,620 officers and 12,530 sergeants

    will be discharged. Contrary to Mikhov's claim that no help

    is foreseen for those about to become unemployed, Deputy

    Defense Minister Zdravko Zafirov said "social adaptation

    centers" are to be set up in major towns, where training

    and retraining courses will be offered to such individuals.

    These are to be paid the equivalent of 20 monthly wages on

    being released from duty.

    Military equipment is also to be drastically reduced.

    By 2004, the number of tanks is to decrease from 1,475 to

    750, air defense radars from 230 to 100, "aviation

    equipment" from 665 to 225 pieces, and "navy equipment"

    from 149 to 120 pieces. Out of the current 94 army

    garrisons and 178 other units, only 49 and 71,

    respectively, will remain by 2004. This will save some 75

    million leva (nearly $41 million), according to Ananiev.

    Further savings of some 40 million leva will be made from

    the sale of Defense Ministry housing.

    Another source of revenue is to be the privatization

    of the country's defense industry. By 2004, according to

    the plan, the assets of the army's trade companies are to

    be transferred to private hands. As early as 2002, the

    ministry expects some 30-40 million leva to be generated as

    a result of that transfer. The income is to be partly used

    toward updating the country's arsenal, although in view of

    Bulgaria's economic situation, purchases of modern

    technology are not expected before 2010.

    The privatization of the defense in industry has

    already been launched, with several companies formerly

    owned by the ministry being privatized in management-

    employee buy-outs. The Arsenal company in Kazanluk, the

    Beta company in Cherven Bryag, and the Optielecton company

    in Panagyurishte have all been privatized this way, and the

    VMZ ordnance factory in Sopot may soon follow suit. That,

    however, may necessitate converting at least part of the

    production from military to civilian. It also poses

    problems with regard to licensing and competing on foreign

    markets, since it is clear that a downsized Bulgarian army

    is unlikely to become a prospective client. For the time

    being, the state has kept a 34 percent stake in such major

    military-industrial plants as Arsenal. Whether it continues

    to do so will likely depend on both military priorities and

    on the pace of reform.

    03-09-99


    Reprinted with permission of Radio Free Europe/Radio Liberty
    URL: http://www.rferl.org


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