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RFE/RL Newsline, Vol. 3, No. 217, 99-11-08

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. 217, 8 November 1999


CONTENTS

[A] TRANSCAUCASUS AND CENTRAL ASIA

  • [01] ARMENIAN PRESIDENT IN MOSCOW
  • [02] NEW SUSPECT DETAINED IN ARMENIAN PARLIAMENT SHOOTINGS
  • [03] AKSENENKO DISCUSSES CHECHNYA, VISAS WITH AZERBIJANI
  • [04] ...FAILS TO PERSUADE AZERBAIJAN TO SHIP MORE OIL VIA RUSSIA
  • [05] GEORGIA AGAIN CONDEMNS RUSSIAN VISA REQUIREMENT
  • [06] THIRD PARTY QUALIFIES FOR REPRESENTATION IN GEORGIAN
  • [07] KAZAKHSTAN'S PARLIAMENT PASSES DRAFT BUDGET FOR 2000
  • [08] ARCHIVES OF HUMAN RIGHTS BUREAU IN KAZAKHSTAN DESTROYED BY
  • [09] KAZAKHSTAN'S FOREIGN MINISTER WARNS AGAINST ISLAMIC THREAT
  • [10] TAJIK PRESIDENT RE-ELECTED...
  • [11] ...AFTER TAJIK OPPOSITION WITHDRAWS BOYCOTT
  • [12] TAJIK OPPOSITION FIGURE CLAIMS POLL WAS RIGGED
  • [13] UZBEK GUERRILLAS WITHDRAW FROM TAJIKISTAN

  • [B] SOUTHEASTERN EUROPE

  • [14] KOSOVARS REBURY MASSACRE VICTIMS
  • [15] KOSOVA SERBS MEET WITH RUSSIAN ENVOY
  • [16] KFOR TO STAY FOR UP TO 10 YEARS?
  • [17] WHO TRIED TO BLOW UP KOSOVA RAILWAY BRIDGE?
  • [18] MONTENEGRIN PRESIDENT GETS WASHINGTON'S BACKING
  • [19] MONTENEGRO TAKES MEASURES FOR ECONOMIC STABILITY
  • [20] FIRST MONTENEGRIN SALARIES PAID IN MARKS
  • [21] SERBIAN OPPOSITION LEADERS PLEASED WITH U.S. VISIT
  • [22] MYSTERY DEATH OF SERBIAN OPPOSITION FIGURE
  • [23] SERBIAN STUDENTS CALL FOR BOYCOTT OF CLASSES
  • [24] TUDJMAN GIVES GO-AHEAD TO CROATIAN ELECTIONS
  • [25] SPECULATION CONTINUES OVER TUDJMAN'S HEALTH
  • [26] ALBANIAN GOVERNMENT WINS VOTE OF CONFIDENCE
  • [27] ROMANIAN WORKERS RAID OFFICE OF BRASOV PREFECTURE
  • [28] ROMANIAN PREMIER VISITS RFE/RL HEADQUARTERS
  • [29] ROMANIAN MINORITIES MINISTER PROTESTS PLANNED ANTONESCU
  • [30] MOLDOVAN GOVERNMENT ABOUT TO BE DISMISSED
  • [31] CEI TO SEND MISSION TO MOLDOVA
  • [32] BULGARIA, ROMANIA FAIL TO AGREE ON RIVER DANUBE BRIDGE

  • [C] END NOTE

  • [33] RUSSIAN ECONOMY IMPROVING WHILE MOSCOW REMAINS STUBBORN

  • [A] TRANSCAUCASUS AND CENTRAL ASIA

    [01] ARMENIAN PRESIDENT IN MOSCOW

    Robert Kocharian met with Prime

    Minister Vladimir Putin and Foreign Minister Igor Ivanov

    Moscow on 5 November. Kocharian also had what ITAR-TASS

    described as a "very warm and cordial" meeting with Russian

    President Boris Yeltsin at the latter's Ogarevo residence, at

    which Kocharian expressed thanks for Russia's expressions of

    support following the killings of eight senior Armenian

    officials in late October. The talks focused on bilateral

    relations and the prospects for resolving the Karabakh

    conflict. Armenian Foreign Minister Vartan Oskanian and

    Defense Minister Vagharshak Harutiunian, who accompanied the

    Armenian president, held meetings with their Russian

    counterparts. LF

    [02] NEW SUSPECT DETAINED IN ARMENIAN PARLIAMENT SHOOTINGS

    Armenian parliamentary deputy Mushegh Movsisian was detained

    for questioning on 4 November in connection with the 27

    October shootings in the Armenian parliament, RFE/RL's

    Yerevan bureau reported on 6 November. On 5 November,

    opposition parliamentary deputy Arshak Sadoyan told RFE/RL

    that legislators will propose creating an ad hoc committee to

    conduct an independent investigation into the killings and

    deliver a "political assessment." Also on 5 November,

    replacements were named for five of the slain Miasnutyun

    deputies who were elected to the parliament on the bloc's

    party list in the 31 May poll. LF

    [03] AKSENENKO DISCUSSES CHECHNYA, VISAS WITH AZERBIJANI

    PRESIDENT...

    Russian First Deputy Prime Minister Nikolai

    Aksenenko and Energy Minister Viktor Kalyuzhnyi met with

    senior Azerbaijani officials in Baku on 5 November. President

    Heidar Aliev told Aksenenko that Azerbaijan condemns

    terrorism and regards the fighting in Chechnya as Russia's

    internal affair, according top Interfax. But Aliev also

    denied that arms and mercenaries are entering Chechnya via

    Azerbaijani territory. He said the proposed introduction of

    visas for Azerbaijanis wishing to enter Russia will aggravate

    the situation on Azerbaijan's border with the Russian

    Federation as the large Lezgin, Dargin, and Avar minorities

    are divided between the two countries. Aliev added that

    according to the Bishkek agreement on visa-free travel

    between CIS states, Azerbaijan should be notified 90 days in

    advance of the introduction of a visa requirement. LF

    [04] ...FAILS TO PERSUADE AZERBAIJAN TO SHIP MORE OIL VIA RUSSIA

    Meeting with Natik Aliev, president of Azerbaijan's state oil

    company SOCAR, Aksenenko failed to persuade the oil chief

    that it would be advantageous for Azerbaijan to agree to

    export oil via the northern pipeline bypassing Chechnya,

    which is scheduled for completion by mid-2000, rather than to

    continue lobbying for construction of the planned Baku-Ceyhan

    export pipeline. (Turkey, Azerbaijan, and Georgia are

    scheduled to sign a framework legal agreement on that project

    at the upcoming OSCE Istanbul summit, and Georgian President

    Eduard Shevardnadze discussed the project with his Turkish

    counterpart, Suleyman Demirel, in a telephone conversation on

    6 November, ITAR-TASS reported.) Kalyuzhnyi offered to allow

    Azerbaijan to increase from 5 million tons to 12-15 million

    tons the amount of oil it exports annually via Russia. But

    SOCAR President Aliev said his company will abide by its

    agreement to export 5 million tons annually until 2003,

    according to ITAR-TASS. LF

    [05] GEORGIA AGAIN CONDEMNS RUSSIAN VISA REQUIREMENT

    Speaking on

    Georgian state television, Minister of State Vazha

    Lortkipanidze said Russia's plans to introduce visas for

    Georgian citizens wishing to enter Russia is aimed at drawing

    Georgia into the conflict in the North Caucasus, Caucasus

    Press reported on 6 November. The previous day, Georgian

    Ambassador to Moscow Malkhaz Kakabadze said Russia proposed

    introducing those visas as of 1 January. Kakabadze added that

    Georgia sees no reason for the visa requirement but will

    begin talks with Moscow on its implementation. Of the 2,202

    Russians who took part in a recent poll, the overwhelming

    majority (2,048) expressed support for the introduction of

    visas for citizens of Georgia and Azerbaijan entering the

    Russian Federation, according to "Segodnya" on 5 November. LF

    [06] THIRD PARTY QUALIFIES FOR REPRESENTATION IN GEORGIAN

    PARLIAMENT

    Georgian Central Electoral Commission officials

    on 7 November announced updated results of the party-list

    vote in the 31 October parliamentary elections, Caucasus

    Press reported. According to those data, three parties will

    be represented in the new parliament. The Union of Citizens

    of Georgia will retain its absolute majority, having polled

    41.85 percent of the party list vote to receive 85 of the 150

    seats allocated under the proportional system. The Union for

    the Democratic Revival of Georgia polled 25.65 percent (51

    seats) and the bloc Industry Will Save Georgia 7.8 percent

    (14 seats). LF

    [07] KAZAKHSTAN'S PARLIAMENT PASSES DRAFT BUDGET FOR 2000

    A joint

    session of both chambers of Kazakhstan's parliament passed

    next year's budget in the second and final reading on 5

    November, Interfax reported. The budget provides for

    expenditures of 404.8 billion tenge ($276 million) and

    revenues of 340.3 billion tenge, the deficit being equal to 3

    percent of GDP. Passage of the budget removes the final

    obstacle to a new three-year IMF loan program. Prime Minister

    Qasymzhomart Toqaev thanked parliamentary deputies for their

    "realism" in endorsing the draft, adding that it might have

    to be amended to meet social requirements. But "Nezavisimaya

    gazeta" predicted on 4 November that the IMF demand for more

    effective tax collection will drive many Kazakh industrial

    enterprises to bankruptcy. LF

    [08] ARCHIVES OF HUMAN RIGHTS BUREAU IN KAZAKHSTAN DESTROYED BY

    FIRE

    Records dating back six years were destroyed by fire at

    the Human Rights and Legality Bureau in Almaty on 4 November,

    RFE/RL's bureau in the former capital reported on 8 November,

    quoting the bureau's director, Yevgenii Zhovtis. The cause of

    the blaze is unclear. LF

    [09] KAZAKHSTAN'S FOREIGN MINISTER WARNS AGAINST ISLAMIC THREAT

    Speaking in Moscow on 6 November, Yerlan Idrisov said that

    Kazakh security forces have launched an operation against

    "foreign bandit formations" that infiltrated southern

    Kazakhstan from neighboring Uzbekistan, AP reported. Three

    days earlier, a Kazakh Interior Ministry press secretary in

    Astana denied that unidentified gunmen crossed into

    Kazakhstan from neighboring Uzbekistan (see "RFE/RL

    Newsline," 4 November 1999). LF

    [10] TAJIK PRESIDENT RE-ELECTED...

    Imomali Rakhmonov polled 96

    percent of the vote in the 6 November presidential poll, in

    which 98 percent of the country's 2.8 million electorate

    participated, Reuters reported on 7 November, quoting Central

    Electoral Commission spokesman Davlatali Davlatov. Russian

    and CIS observers said they registered no violations of

    voting procedure. The OSCE did not send election observers,

    saying that democratic conditions had not been created for

    the vote. LF

    [11] ...AFTER TAJIK OPPOSITION WITHDRAWS BOYCOTT

    Hours before

    polling stations opened on 6 November, United Tajik

    Opposition (UTO) leader Said Abdullo Nuri lifted the

    opposition boycott on the poll in return for the release from

    prison of 93 Tajik fighters and for unspecified concessions

    related to the conduct of the parliamentary elections

    scheduled for February 2000, Reuters and AP reported.

    Affirming that "peace and reconciliation are more important

    than personal ambition," Nuri also agreed that the UTO will

    resume its participation in the work of the Commission for

    National Reconciliation. The opposition had withdrawn from

    that body and declared a boycott of the elections to protest

    restrictions on the participation of opposition candidates in

    the presidential poll. LF

    [12] TAJIK OPPOSITION FIGURE CLAIMS POLL WAS RIGGED

    Davlat Usmon

    of the Islamic Renaissance Party, which forms the backbone of

    the UTO, told journalists in Dushanbe on 7 November that he

    believes the outcome of the poll was rigged and that only 20-

    30 percent of voters had participated. A minimum turnout of

    50 percent is required for the poll to be valid. Usmon said

    he will call for the poll to be annulled. Usmon had been

    registered as a candidate by the Central Electoral

    Commission, despite having failed to collect the required

    145,000 signatures in his support, and insists that his

    registration was illegal According to official returns, Usmon

    garnered just 2 percent of the vote, losing even in the

    Karategin valley in eastern Tajikistan where support for the

    Islamic Renaissance Party is traditionally strong, according

    to ITAR-TASS. LF

    [13] UZBEK GUERRILLAS WITHDRAW FROM TAJIKISTAN

    Some 450 Uzbek

    Islamic militants who had seized a dozen hostages in southern

    Kyrgyzstan in August left Tajik territory on 5-6 November,

    together with some 100 Uzbek civilians, ITAR-TASS reported on

    6 November. The militants belong to a group headed by Djuma

    Namangani, who had promised during talks on 4 November with

    UTO leader Nuri to withdraw from Tajikistan to Uzbekistan.

    Tajikistan's Minister for Emergency Situations Mirzo Zieyev,

    a former UTO commander who helped negotiate the release of

    the hostages seized in Kyrgyzstan, monitored the Uzbek

    withdrawal. According to him, the withdrawal proceeded

    without incident, according to ITAR-TASS. LF


    [B] SOUTHEASTERN EUROPE

    [14] KOSOVARS REBURY MASSACRE VICTIMS

    Several hundred ethnic

    Albanians attended a reburial ceremony on 7 November for 46

    people killed by Serbian forces in Stutica in April. The

    village, which is in the Drenica region west of Prishtina,

    was a stronghold of the former Kosova Liberation Army (UCK).

    PM

    [15] KOSOVA SERBS MEET WITH RUSSIAN ENVOY

    Father Sava, who is the

    spokesman for Kosovar Serb leader Archbishop Artemije, told

    visiting Russian Ambassador to the UN Sergei Lavrov that

    Kosova "is exposed to severe ethnic cleansing [and] to

    extreme ethnic discrimination, not only against Serbs but

    against all Slav-speaking people." Father Sava added that

    ethnic Albanian extremists also discriminate against other

    Albanians who do not hold nationalist views, AP reported on 7

    November. Momcilo Trajkovic, who heads the Serbian National

    Council's Executive Board, told the Russian visitor that KFOR

    and the province's UN-backed administration have, in effect,

    become instruments of the Albanian nationalists. Lavrov also

    met with representatives of the Serbian government. PM

    [16] KFOR TO STAY FOR UP TO 10 YEARS?

    Daan Everts, who is the

    OSCE's chief representative in Kosova, told a Dutch

    television station in The Hague on 7 November that

    peacekeepers will probably be needed in Kosova for up to

    another 10 years. He condemned increasing attacks on the

    Serbian and Roma minorities in the province. Everts also

    slammed what he called attempts to partition Kosova into

    northern and southern halves, RFE/RL's South Slavic Service

    reported. PM

    [17] WHO TRIED TO BLOW UP KOSOVA RAILWAY BRIDGE?

    Unknown persons

    used up to 50 kilograms of explosives to damage a railway

    bridge near the divided city of Kosovska Mitrovica on 5

    November. It is unclear who planted the charge, nor is it

    clear whether they intended to blow up a passenger train en

    route from Serbia or simply to damage the bridge, Reuters

    reported. UN spokesmen called the blast an act of sabotage.

    Spokesmen for local Serbs charged that ethnic Albanian

    nationalists set off the explosion. PM

    [18] MONTENEGRIN PRESIDENT GETS WASHINGTON'S BACKING

    Milo

    Djukanovic said in Podgorica on 7 November that he is pleased

    with the results of his recent trip to the U.S. Djukanovic

    stressed that he received pledges of $40 million in financial

    support so that he can carry out key reform projects, the

    Belgrade daily "Danas" reported. He added that his hosts

    endorsed his recent introduction of the German mark as legal

    tender alongside the Yugoslav dinar (see "RFE/RL Newsline," 5

    November 1999). PM

    [19] MONTENEGRO TAKES MEASURES FOR ECONOMIC STABILITY

    Economics

    Minister Vojin Djukanovic said in Podgorica on 5 November

    that his country is moving toward a "single currency system,

    which means that the [Yugoslav] dinar may be taken out of

    circulation," Reuters reported. The following day, the

    monetary council decided to limit payments in dinars from

    Serbia to Montenegro to prevent the authorities in Belgrade

    from "undermining Montenegro's monetary stability" by

    flooding the republic with dinars. PM

    [20] FIRST MONTENEGRIN SALARIES PAID IN MARKS

    An unspecified

    number of civil servants received their pay in German marks

    on 6 November. The previous day, some 34.5 tons of German

    coins and banknotes arrived from Germany by air in the

    Croatian port of Dubrovnik. Two trucks with Montenegrin

    license plates then took the marks across the border into

    Montenegro, AP reported. PM

    [21] SERBIAN OPPOSITION LEADERS PLEASED WITH U.S. VISIT

    Democratic Party leader Zoran Djindjic said in Belgrade on 5

    November that he and several fellow opposition leaders

    "achieved every point" on their agenda during their recent

    visit to Washington, AP reported. He noted that he and his

    colleagues received pledges of $1 billion in aid for Serbia

    once democratic changes take place there. PM

    [22] MYSTERY DEATH OF SERBIAN OPPOSITION FIGURE

    In Belgrade on 6

    November, Djindjic demanded that the authorities "conduct a

    detailed investigation" into the recent death of his aide

    Branko Vasiljevic. Djindjic noted that the dead man's "only

    business was politics," AP reported. Police officials

    previously said that they are treating the case as suicide.

    Vasiljevic was shot in the back of the head. PM

    [23] SERBIAN STUDENTS CALL FOR BOYCOTT OF CLASSES

    Vukasin

    Petrovic, who heads the Otpor (Resistance) student movement,

    said in Belgrade on 7 November that his organization will

    hold a large protest on 9 November. He added that Otpor's

    goal is to launch a boycott of classes by all university

    students with the aim of bringing down the government.

    Petrovic said that his group will stage joint protests with

    other opposition organizations only if the demonstrations are

    endorsed by all opposition parties. In Nis, representatives

    of Otpor signed a joint declaration with several opposition

    parties. Vuk Draskovic's Serbian Renewal Movement did not

    endorse the document. PM

    [24] TUDJMAN GIVES GO-AHEAD TO CROATIAN ELECTIONS

    Croatian

    President Franjo Tudjman issued a document from his Zagreb

    hospital bed on 6 November announcing that parliamentary

    elections will take place on 22 December. The previous day,

    the upper house of the legislature endorsed new electoral

    legislation (see "RFE/RL Balkan Report," 2 November 1999).

    The Croatian government, for its part, rejected EU criticism

    of the electoral law. PM

    [25] SPECULATION CONTINUES OVER TUDJMAN'S HEALTH

    Tudjman's

    doctors said in a statement on 6 November that the Croatian

    president remains under intensive care following recent

    emergency surgery for what was officially described as a

    perforated large intestine. The doctors previously said that

    the president is suffering from complications. Tudjman is

    widely believed to have been suffering from cancer for at

    least two years. Zagreb's independent "Jutarnji list" wrote

    on 8 November that the authorities have not informed the

    public very well about Tudjman's condition. As a result,

    speculation about his health and its impact on his political

    future has been rife, the daily noted (see "RFE/RL Newsline,"

    5 November 1999). PM

    [26] ALBANIAN GOVERNMENT WINS VOTE OF CONFIDENCE

    Prime Minister

    Ilir Meta's new cabinet won a vote of confidence in the

    parliament on 5 November. Meta told legislators that his

    approach in governing will be pragmatic and that he will

    continue the fight against corruption and crime. Six

    legislators from the opposition Democratic Party defied party

    leader Sali Berisha's call for a boycott and attended the

    session. Berisha demands new elections (see "RFE/RL

    Newsline," 5 November 1999). PM

    [27] ROMANIAN WORKERS RAID OFFICE OF BRASOV PREFECTURE

    Thousands of workers from the state-owned Roman truckmaker

    in Brasov raided the building of the local prefecture on 5

    November to protest layoffs and unfulfilled promises of

    wage increases, an RFE/RL correspondent in Brasov reported.

    Some 1,800 employees of the company, which has large debts,

    have been made redundant, while another 2,600 are to be

    laid off next year. Owing to the company's poor

    performance, a June 1999 agreement with the government

    providing for a 15 percent wage hike in October and

    November has not been implemented. The Brasov mayor has

    banned any further demonstrations. Seventeen policemen were

    injured in the riots. A team from the Bucharest Prosecutor

    General's Office has opened an investigation into the

    incident. So far one person has been arrested and 20

    detained for questioning. MS

    [28] ROMANIAN PREMIER VISITS RFE/RL HEADQUARTERS

    Radu Vasile,

    who attended the CEI summit in Prague (see above), said on

    6 November that the meeting's most important result from a

    Romanian perspective was the consensus reached on the need

    to remove debris from the River Danube and reopen it for

    navigation. Vasile made the comment during a visit to

    RFE/RL headquarters in Prague. He said he wanted to "pay

    his respects" to RFE/RL for its work in the past as well as

    in the present. MS

    [29] ROMANIAN MINORITIES MINISTER PROTESTS PLANNED ANTONESCU

    STATUE

    Peter Eckstein Kovacs said he learned "with

    indignation" about the decision of the Cluj city council to

    erect a statue commemorating wartime leader and convicted

    war criminal Marshal Ion Antonescu (see "RFE/RL Newsline,"

    1 November 1999). In a facsimile dated 2 November, a copy

    of which was obtained by RFE/RL, Eckstein Kovacs said the

    decision is "an insult" to the memory of Jews and Roma

    killed or persecuted under Antonescu's rule "solely" on

    grounds of their ethnicity or nationality. He appealed to

    the city council to reconsider its decision, saying that

    "otherwise" he will demand that the "responsible state

    authorities" annul it for violating several laws. MS

    [30] MOLDOVAN GOVERNMENT ABOUT TO BE DISMISSED

    A 5 November no

    confidence motion backed by a majority of 52 deputies is

    likely to trigger the government's dismissal when the

    legislature meets again on 9 November, RFE/RL's Chisinau

    bureau reported. The motion was supported by the

    Communists, the Popular Front, and five independent

    deputies who had recently left the For a Democratic and

    Prosperous Moldova Bloc. Also on 5 November, the parliament

    again rejected the government's bill to privatize Moldova's

    two main industries--wine and tobacco. IMF representative

    to Chisinau Hassan Al-Atrash said the decision means the

    fund will now freeze loans to Moldova. He said the World

    Bank and the EU are likely to follow the IMF, meaning that

    Moldova will forfeit some $150 million in loans next year.

    MS

    [31] CEI TO SEND MISSION TO MOLDOVA

    The CEI summit in Prague on

    6 November approved a proposal by Czech President Vaclav

    Havel, whose country holds the organization's rotating

    chairmanship, to send a fact-finding mission to Moldova,

    CTK reported. The mission is to explore possibilities for a

    peaceful solution of the conflict with the separatist

    authorities in Tiraspol and for the withdrawal of Russian

    troops from the country. On 7 November, separatist leader

    Igor Smirnov met with Premier Vladimir Putin in Moscow to

    discuss the conflict with Chisinau and the proposed

    withdrawal from the Transdniester of the Russian

    contingent, Romanian radio reported. MS

    [32] BULGARIA, ROMANIA FAIL TO AGREE ON RIVER DANUBE BRIDGE

    Meeting in Borovets on 5 November, Presidents Petar

    Stoyanov and Emil Constantinescu again failed to reach

    agreement over the location of a second bridge over the

    River Danube, BTA reported. Constantinescu said the meeting

    was "not confrontational" and that Romania would be willing

    to consider an option whereby the country disadvantaged by

    the location of the bridge would receive compensation from

    the EU. Romanian Premier Radu Vasile, speaking in Bucharest

    the same day, said that compensation could come in the form

    of "free of charge or token price" transit of Romanian

    electricity deliveries to Greece and Turkey via Bulgaria.

    Reflecting the irritation of Bulgarians at Romania's

    position, the Bulgarian daily "Demokratsiya" on 6 November

    ran the headline "Let Us Build a Bridge Over, or a Tunnel

    Under, Romania." MS


    [C] END NOTE

    [33] RUSSIAN ECONOMY IMPROVING WHILE MOSCOW REMAINS STUBBORN

    by Sophie Lambroschini

    The IMF delegation arriving in Moscow on 8 November will

    seek to determine the extent of Russia's progress in making

    its financial transactions easily traceable or what

    economists call "transparent."

    The world lending institution has set conditions that

    Russia must meet in order to receive the second installment,

    worth $640 million, of a $4.5 billion loan. The IMF released

    the first installment in July, but the second one was frozen

    in September after several financial scandals suggested

    possible misuse of previous loans.

    The conditions include tighter spending policy, regular

    audits of the Russian Central Bank's dealings with its

    affiliated structures in other countries, an audit of the

    Russian Savings Bank, and the adoption of international

    accounting standards.

    According to Russian media reports, Russian authorities

    have balked at these new conditions. Aleksandr Livshits, the

    Russian minister responsible for relations with international

    financial organizations, complained last month that the West

    is imposing higher standards of transparency on Russia than

    it is applying to itself.

    Russia's relations with the fund have been increasingly

    strained over the past several months amid allegations that

    the country has misused earlier loans and increased its

    military budget to finance the war in Chechnya.

    But Russian authorities express optimism that they will

    receive the installment. And they also express a stiff-necked

    determination to continue their economic policies, despite

    IMF criticism.

    Russian Prime Minister Vladimir Putin announced at a

    cabinet meeting last week that positive economic trends are

    continuing: GDP growth totaled 1.8 percent in the third

    quarter of 1999, inflation is under control, and tax revenues

    are higher than expected. All these indicators are plus

    points for a country struggling to emerge from the economic

    crisis of 1998.

    John Paul Smith is a London-based expert in emerging

    markets with the investment firm Morgan Stanley. In a

    presentation to investors last week, he was guardedly

    optimistic about the Russian economy, saying "there is a

    clear potential for a shift to more positive factors." He

    noted that the economic situation is better than anyone could

    have predicted.

    Smith attributed this to a pick-up in industrial

    production and the rise in global oil prices. He added that

    there has been an improvement in the fiscal situation owing

    to small-scale reform in collecting taxes.

    Smith warned, however, that Russian policymakers should

    not interpret this improvement as the start of an overall

    economic regeneration. He said the rise in industrial

    production is mainly owing to the devaluation of the ruble

    and the resulting cheapness of Russian goods on world

    markets.

    Smith also noted that Russia should build on the

    benefits of the devaluation by implementing further economic

    reforms. He warned that if the federal government increases

    expenditures too much, these advantages might be squandered.

    This is precisely what the IMF is worried about. A tough

    budgetary policy was one of the IMF's conditions for

    releasing the loan installment. But budgetary restraint is

    one of Russia's main "little sins," as the finance minister

    puts it.

    Last month, Russia increased its military budget to fund

    the war in Chechnya, triggering complaints from the IMF.

    Russia argued that the Chechen war is being financed by the

    extra revenues collected. And this month, the State Duma

    approved an extra $6 billion rubles on spending. The

    government said it has to accept the increase to get the

    budget past the leftist-dominated Duma.

    So far, these explanations have not convinced the IMF.

    Russian officials are suspecting the West of using financial

    blackmail to force Moscow to compromise on Chechnya. Putin,

    for his part, has said that Russia will not sacrifice its

    national interests for what he called "financial lollipops."

    Unified Energy Systems head Anatolii Chubais, who is

    also a former prime minister and former Russian contact

    person for the international financial organizations, has

    tried to defuse these tensions.

    "In the list of conditions it is not written that the

    Bank of New York will not work with Russian importers," he

    commented at a press conference in Moscow last week. 'In the

    list of conditions it does not say that Russia should not

    fight terrorism in Chechnya. I am categorically against

    pulling the IMF into semi-political decisions on that

    [issue]. If this does not happen, if the IMF fulfills its

    obligations, if Russia fulfills its obligations in regard to

    its interest, then there is a real chance of solving the

    problem [of releasing the second loan installment] by early

    December.

    But even if the second installment of the loan is

    released, it will not provide Russia with any cash. The loan

    would be used exclusively to repay Russia's debt to the fund,

    bypassing Russian institutions completely and ending up back

    in IMF coffers.

    The author is an RFE/RL correspondent based in Moscow.

    08-11-99


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


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