|Thursday, 23 January 2020|
RFE/RL Newsline, Vol. 2, No. 30, 98-02-13
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 2, No. 30, 13 February 1998
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 RADUEV CLAIMS RESPONSIBILITY FOR SHEVARDNADZE ASSASSINATION BIDSpeaking on his private Chechen Television channel on 12 February, radical field commander Salman Raduev claimed that his Caucasian Home organization was responsible for the failed 9 February attempt to assassinate Georgian President Eduard Shevardnadze, Interfax reported. Georgian Interior Minister Kakha Targamadze and two senior Chechen officials have expressed skepticism about Raduev's claim. But Russian Security Council Secretary Ivan Rybkin told an RFE/RL correspondent in Moscow on 13 February that it cannot be ruled out that Raduev is speaking the truth. Georgian investigators on 12 February located the Tbilisi apartment used by the attackers. That apartment had been rented by a Chechen woman, according to Caucasus Press. LF
 THREE MORE CONTENDERS FOR ARMENIAN PRESIDENCY...Congresses of the Union for Self-Determination and the Democratic Party of Armenia have proposed their chairmen, Paruir Hairikian and Aram Sargsian, as candidates for the 16 March presidential elections. Both men registered as candidates in the September 1996 presidential ballot but withdrew their candidacies in support of Vazgen Manukyan. Hairikyan said he is confident that, if elected, he could solve Armenia's most pressing problems within a year. Sargsian said he would hold the Armenian Pan-National Movement responsible for its policies, according to Noyan Tapan. Meanwhile, former presidential adviser Davit Shahnazarian has announced that he will contend the election as an independent candidate, RFE/RL's Yerevan bureau reported on 12 February. LF
 ...BUT DEFENSE MINISTER DECLINES TO RUNVazgen Sargsian has rejected a request by the majority Yerkrapah parliamentary group to run as its presidential candidate, Caucasus Press reported on 13 February, citing Noyan Tapan. Yerkrapah leader Albert Bazeyan said Sargsian considers his primary responsibility to be strengthening the army and that his candidacy would substantiate Western assertions that the "party of war" has come to power in Armenia. LF
 MANUKYAN CALLS FOR NEW CONSTITUTION, PARLIAMENTARY ELECTIONSAddressing a rally of some 20,000 people in Yerevan on 12 February, presidential candidate Vazgen Manukyan said the upcoming presidential poll must be free and fair to ensure that the former leadership is prevented from returning to power, Noyan Tapan reported. Manukyan affirmed that, if elected, he would hold pre-term parliamentary elections and amend the country's constitution. Manukyan said the Karabakh conflict should be resolved through "peace talks and compromises" rather than unilateral concessions, according to Interfax. LF
 OSKANIAN HOPES FOR NEW KARABAKH PROPOSALSActing Foreign Minister Vartan Oskanian says he hopes that when the three co- chairmen of the Organization for Security and Cooperation in Europe's Minsk Group meet in Paris on 17 February, they will try to come up with a revised peace plan for Nagorno-Karabakh acceptable to both Yerevan and Stepanakert. But he added that it will be difficult for the co-chairmen to modify the existing proposals without retreating too far from their original position. In an interview published in "Hayastani Hanrapetutyun" on 11 February, Oskanian said the current proposals contain both positive and negative points but that the negative points relate to issues of principle. He said that to accept those points as a basis for negotiations would be to predetermine the outcome of the talks and would therefore be unacceptable to Nagorno-Karabakh. LF
 ARMENIA REJECTS AZERBAIJANI REPORT OF FRONTIER SHOOTINGThe Armenian Defense Ministry on 12 February denied a report by its Azerbaijani counterpart claiming an Azerbaijani soldier was wounded when Armenian forces opened fire on Azerbaijani territory two days earlier, Russian and Armenian agencies reported. Noyan Tapan pointed out that the distance between the Armenian and Azerbaijani locations named in the Azerbaijani report is more than 6 kilometers. Such a distance is far greater than the range of the sub-machine guns reportedly used by the Armenian attackers, the agency pointed out. LF
 AZERBAIJAN, LEBANON SIGN COOPERATION AGREEMENTSAzerbaijani and Lebanese government ministers signed agreements on encouraging and protecting investments, trade and economic cooperation, customs cooperation, and air travel during the 11-12 February visit to Baku of Lebanese Prime Minister Rafik Hariri, Turan and ITAR-TASS reported. Hariri met with his Azerbaijani counterpart, Artur Rasi-zade, parliamentary speaker Murtuz Alesqerov, and President Heidar Aliev to discuss the prospects for Lebanese investments in Azerbaijan and for purchasing Azerbaijani oil exported via the planned Baku-Ceyhan pipeline. LF
 IRAN ENDORSES AZERBAIJANI-TURKMEN STAND ON CASPIANIranian President Mohammad Khatami has written to his Turkmen counterpart, Saparmurad Niyazov, to express his support for the 5 February agreement signed by the Azerbaijani and Turkmen foreign ministers on dividing the Caspian Sea into national sectors, Turkmen Foreign Minister Boris Shikhmuradov told Interfax on 12 February. Khatami said that the agreement does not contravene Tehran's principles for Caspian cooperation, but he added that general decisions must be endorsed by all five littoral states. Iranian Foreign Minister Kamil Kharrazi is expected to discuss the status of the Caspian during his visit to Moscow later this month. Russian President Boris Yeltsin told "Corriere della Sera" on 9 February that a new agreement is needed on the Caspian's legal status before its resources can be developed. Yeltsin complained that some European countries engaged in developing Caspian hydrocarbons are infringing on Russia's national interests. LF
[B] SOUTHEASTERN EUROPE
 PLAVSIC SAYS NEW GOVERNMENT HAS INTERNATIONAL SUPPORTOn returning to Banja Luka from visits to France and Austria, Bosnian Serb President Biljana Plavsic said that international support for the new Bosnian Serb government is "guaranteed," AFP reported on 12 February. Plavsic, whose warm reception in Paris caused anger in Sarajevo (see "RFE/RL Newsline," 11 February 1998), said European leaders told her they are pleased the Republika Srpska has decided to "find its place" in Europe. Earlier the same day, Plavsic warned that the peace process in Bosnia would fall apart if the strategic town of Brcko is not allowed to remain a part of the Republika Srpska. PB
 SOLANA SAYS TROOP WITHDRAWAL FROM BOSNIA POSSIBLE THIS YEARNATO Secretary-General Javier Solana said that Bosnia-Herzegovina's improved political situation could lead NATO to make substantial cuts in the number of troops stationed there, AFP reported on 12 February. Solana, speaking in Washington, said the apparent acceptance of the new Bosnian Serb government and the presidential elections scheduled for September could pave the way to a small reduction in NATO-led Stabilization Forces immediately and a significant cut back by the end of the year. PB
 BOSNIAN SERBS INJURED BY MUSLIM CROWDTwo Bosnian Serbs were injured, one seriously, when a Muslim crowd stoned three relief agency vehicles, a UN spokesman said on 13 February. Representatives of the Swedish aid agency Crossroads International were traveling with several local Bosnian Serb officials when the crowd stopped the two cars near Jablanica and began stoning them. The crowd accused one of the Serbs of involvement in the deaths of Muslims during the wars of the Yugoslav succession. Members of Crossroads International and Danish SFOR troops were driving the cars. One of the injured remains in hospital, while the other passengers were taken back to Republika Srpska by SFOR troops. PB
 WAR TRIBUNAL NEEDS MORE RESOURCES TO AVOID LENGTHY DELAYSJudge Gabrielle McDonald, the president of the UN War Crimes Tribunal for former Yugoslavia, has appealed to the UN Security Council for additional resources, Reuters reported on 13 February. McDonald, a U.S. citizen, said in New York that the tribunal urgently needs to implement a witness protection program, acquire additional jail cells, appoint another judge, and set up a court with room for three judges. She said that if additional resources are not forthcoming, it will take years to bring to trial the 20 suspects currently in custody. PB
 MONTENEGRO APPROVES FOREIGNER OWNERSHIP OF MEDIA OUTLETSThe Montenegrin parliament has adopted a law permitting foreigners to own media enterprises in the Yugoslav republic, AFP reported on 12 February. The Organization for Security and Cooperation in Europe aided deputies in drafting the law. The legislature also passed a law on voter registration providing for a data bank of registered voters to be created 20 days before an election. Changes to the list can be made only by the Montenegrin Supreme Court. PB
 CROATIAN GOVERNMENT REVOKES CONTROVERSIAL HOUSING DECREEThe cabinet on 12 February annulled a January 1998 decree that would have permitted the eviction of thousands of Serbs from state-owned apartments in Eastern Slavonia that had been formerly occupied by Croats. Those former occupants would have then been entitled to return to their former homes. A spokesman for the OSCE, which criticized the decree, welcomed the government's decision and pledged to try to expedite the two-way return of refugees. Eastern Slavonia reverted to Croatian control on 15 January after being administered by the UN for two years (see "RFE/RL Newsline," 16 January 1998). LF
 ALBANIAN OPPOSITION REJECTS PARLIAMENT COMMISSION'S REPORT"Rilindja Demokratike," the mouthpiece of the opposition Democratic Party, published a statement by the party's leadership on 12 February rejecting the findings of the parliamentary commission on what prompted the violent unrest that swept Albania last spring. The commission, which had submitted its report to the parliament the previous day, concluded that the Democratic Party had armed its supporters in order to provoke a civil war and that the crisis could have been averted if then Prime Minister Alexander Meksi had resigned earlier. The Democratic Party leadership described the unrest as a "Communist-led armed rebellion" aimed at destroying democracy in Albania and bringing the Socialist Party to power. More than 1,500 people were killed during the unrest. LF
 ALBANIA, TURKEY SIGN COOPERATION AGREEMENTSAlbanian President Rexhep Meidani and his Turkish counterpart, Suleyman Demirel, signed several cooperation agreements in Ankara on 12 February, dpa reported. The two presidents favorably evaluated the state of bilateral relations and pledged closer cooperation in the political, economic, and cultural spheres. Meidani, for his part, pointed out the importance of military cooperation, adding that the two sides agree that stability in Kosovo is essential to security in the Balkans, according to the "Turkish Daily News" on 13 February. The two presidents also discussed the planned transport corridor from the Adriatic coast to the Bulgarian port of Varna. LF
 ROMANIAN PRESIDENT ON 'TRANSITION AND MORALITY'Addressing an international colloquium in Bucharest on "Morality and government in the transition period," Emil Constantinescu on 12 February said Western investors have no right to talk about Romanian corruption as long as they do not dare to officially complain about it. He claimed that those investors in fact engage in "tacit collaboration" with those who are corrupt. Constantinescu said that totalitarian structures have been replaced by "democratic hybrids" rather than genuine democratic structures and that the "pillars" of the former system work hand in hand with organized crime to take over the new "fragile structures." He added that attempts to set up "facades of democracy" may lead to either anarchy or a dictatorship that exploits and exacerbates the "national communist" version of nationalism. MS
 ROMANIAN PARAMEDICALS ON STRIKESome 150,000 members of the Sanitas federation of nurses and other medical staff went on strike on 12 February following the failure of talks with Premier Victor Ciorbea the previous day. Sanitas is demanding a 100 percent increase in wages, while the government says it cannot approve more than 25 percent. MS
 LUCINSCHI-SMIRNOV MEETING CANCELEDA meeting between Moldovan President Petru Lucinschi and separatist leader Igor Smirnov that was scheduled to take place on 12 February has been canceled, ITAR-TASS reported. The two leaders were to have discussed economic cooperation. Moldovan presidential adviser Anatol Taranu said the "Transdniester authorities and far-right [pro-Romanian] nationalist forces in Moldova are compromising the proposals for a settlement [made by] the Russian Federation [and] trying to force Moldova out of the CIS." Relations between the sides have deteriorated since Chisinau imposed a tax on Transdniester goods as of 1 February and the Transdniester authorities retaliated by levying a similar tax on Moldovan goods. MS
 U.S. COMPANY SUES MOLDOVA OVER SALE OF MIGSVirtual Defense Development International Inc. (VDI) is suing the Moldovan government for not paying a $9 million commission in connection with the sale of 21 MiG-29 planes to the U.S. last October, BASA-press reported on 12 February, citing CNN. VDI says the sale was facilitated after a contract was signed between the Moldovan government and itself. The government in Chisinau refused to comment. MS
 BULGARIA, RUSSIA REMAIN DEADLOCKED OVER GAS SUPPLIESGazprom chief Rem Vyakhirev says Bulgaria has "too many claims" in the dispute with Moscow over Russian gas deliveries and the transit of gas through Bulgarian pipelines to third countries. Vyakhirev told journalists it was "difficult" to envisage how and when the problems between the two sides will be solved, ITAR-TASS reported. He added that Bulgaria "is the only European state that no one can understand." MS
[C] END NOTE
 TER-PETROSSYAN LEAVES A MIXED ECONOMIC PICTUREby Michael Wyzan
When Armenian President Levon Ter-Petrossyan resigned on 3 February, local and world attention focused on the implications of his action for attempts to resolve the conflict over Nagorno-Karabakh. But there has been little discussion, at least outside the country, of the economic implications of his resignation.
One reason for optimism is that the government of Prime Minister Robert Kocharyan has scored a number of successes in economic policy- making and enjoyed satisfactory relations with the IMF and World Bank.
The government's achievements include a shift toward market privatization from a variant based on vouchers, which failed to inject new capital into enterprises or change the way they are managed. That change in approach is already paying off. Ninety percent of Armentel, the national telecommunications company, was sold to a Greek consortium in December, and the prospects for large-scale investment in mining are improving (a Canadian company has agreed to invest $200 million in gold mining). Russian investment is set to flow into the energy sector, and the famous Yerevan cognac factory is up for tender.
The regime's other achievements include liberalizing the banking system, making the country the first CIS state to allow only courts access to information on bank accounts, improving tax collection, and passing legislation on tax reform (for example, broadening the base of the value- added tax).
At the same time, however, most economic indicators deteriorated in 1997, following three years in which Armenia registered one of the best performances within the CIS. GDP growth for the first 11 months of 1997 was 2.7 percent, compared with a projected 6 percent for the year as a whole (and with 5.4-6.9 percent over the previous three years). Growth was fueled by trade and services, while industrial output stagnated.
Although the growth figures are respectable by CIS standards, Armenia is no longer the most dynamic member; the economies of Azerbaijan, Georgia, and Kyrgyzstan are all growing faster. Another disappointment is consumer price inflation, which was 21.1 percent for the first 11 months, compared with a projected 10 percent for the year (and 5.7 percent in 1996).
The trade deficit for the first 11 months was $608 million, meaning that the figure for the whole year almost certainly exceeded the 1996 level of $571 million. Both those figures and the current account deficits of about $500 million are large for an economy the size of Armenia's. However, inflows from the Diaspora, international financial institutions, and foreign countries, especially the U.S., have prevented the imbalances from destabilizing the economy. Virtually the same could be said for the budget deficit; while it remained high at 6.8 percent of GDP in 1997, it is nonetheless declining.
Last November, the World Bank announced it would provide $200 million in 1997-1998 to finance the budget deficit and infrastructural investment. The IMF has been a bit more standoffish, delaying the release of the first of two annual tranches of a three-year loan agreed in February 1996 until the second half of 1997 out of concern over tax collection and public debt. The fund, concerned about the worsening macroeconomic indicators, energy pricing policy, and the management of privatization, did not approve release of the second tranche until early February of this year.
In late 1997, the government acknowledged that the year had been a disappointment but nonetheless projected major improvements for 1998: 5.2 percent GDP growth, 9 percent inflation, a stable exchange rate, and a budget deficit of 5.5 percent of GDP.
In the wake of Ter-Petrossyan's resignation, the most important factor for the fate of the economy is the identity of the next set of policy-makers. Vazgen Manukyan, who narrowly lost the disputed president elections in September 1996, announced on 5 February that he would campaign for the presidency on a ticket favoring democracy and industrial development.
Based on Manukyan's campaign pledges from 1996, industrial development may mean protectionism in foreign trade, activist industrial policy (including subsidization of failing enterprises), and closer economic ties with Moscow. At the more extreme end of the political spectrum, the communist party claimed last September to have collected 1 million signatures for a petition demanding that Armenia join the Russia-Belarus union. The Communists have urged a halt to privatization and a large increase in social welfare payments.
Armenia, along with other transition nations such as Moldova, is experiencing "reform fatigue." Generally good economic policy and, at least until last year, satisfactory macroeconomic statistics have failed to assuage popular frustration with high levels of poverty and socio-economic inequality. Despite encouraging signs, total foreign investment remains tiny and interest among private investors is growing only slowly.
Kocharyan differs from Ter-Petrossyan in that he argues good economic policy and reforms aimed at wiping out corruption will suffice to ensure satisfactory economic performance even without progress on Nagorno- Karabakh. Armenia's economic results in 1997 leave some doubt about that argument. If the next government lacks Kocharyan's commitment to fundamental reform, the country's economic future will look rather cloudy.
The author is an economist based in Austria.
Reprinted with permission of Radio Free Europe/Radio Liberty