|Wednesday, 19 February 2020|
RFE/RL Newsline, Vol. 2, No. 34, 98-02-19
From: Radio Free Europe/Radio Liberty <http://www.rferl.org>
Vol. 2, No. 34, 19 February 1998
[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA
 THREE UN OBSERVERS KIDNAPPED IN WESTERN GEORGIAA group of 20 unidentified men on 19 February abducted three members of the UN observer force stationed in western Georgia and their driver. The four men and their abductors have been surrounded in the village of Dzhikhaskari by Georgian Interior Ministry forces who are negotiating with the abductors the release of the hostages. CTK quoted Georgian Interior Minister Kakha Targamadze as saying the abductors wish to exchange the hostages for the seven suspects arrested in connection with the 9 February bid to kill Georgian President Eduard Shevardnadze. LF
 SHEVARDNADZE ASSASSINATION SUSPECT NAMEDOne of the two suspects arrested in Zugdidi on 17 February in connection with the 9 February attempt to kill Georgian President Shevardnadze has been named as Gennadii Kobalia, a distant relative of the former commander of ousted President Zviad Gamsakhurdia's private army, Russian agencies reported. The next day, Russian Prosecutor-General Yuri Skuratov again affirmed Russia's readiness to assist the Georgian investigation into the assassination attempt. But Skuratov disclaimed any knowledge of the whereabouts of former Georgian Security Minister Igor Giorgadze, who fled to Russia following the August 1995 car bomb attack on Shevardnadze. Georgia has demanded the extradition of Giorgadze, who is suspected of involvement in both attempts on Shevardnadze's life. LF
 ARMENIA'S HAIRIKYAN WANTS ELECTORAL LAW CHANGEDSelf-Determination Union chairman and presidential candidate Paruir Hairikyan told supporters on 18 February that unless the electoral law's provisions on the composition of electoral commissions are amended, it will be difficult to ensure that the 16 March presidential poll is free and fair, RFE/RL's Yerevan bureau reported. Representation of various parliamentary factions on the electoral commissions is directly proportional to the number of seats each faction received in the 1995 elections. But numerous deputies from the former majority Hanrapetutyun faction have since defected to other parliamentary groups. Supporters of a second presidential candidate, National Democratic Union chairman Vazgen Manukyan, have complained that the Armenian media are violating the election law by devoting the lion's share of their election coverage to Prime Minister and acting President Robert Kocharyan, according to Interfax on 18 February. LF
 AZERBAIJAN BLASTS LEBED'S TRIP TO KARABAKHPresidential foreign policy adviser Vafa Gulu-zade said on 18 February that former Russian Security Council Secretary Aleksandr Lebed's visit to Nagorno-Karabakh is a "violation of international ethics and international norms," ITAR-TASS reported. Lebed was one of some 30 Russian political figures who flew to Stepanakert via Yerevan on 18 February to participate in the 10th anniversary celebrations of the Nagorno-Karabakh Oblast Soviet's adoption of an appeal to the Soviet leadership to transfer the oblast to Armenian jurisdiction. Also on 18 February, the Azerbaijani Defense Ministry issued a statement blaming Armenia for an incident the previous day in which a car carrying cease-fire monitors from the Organization for Security and Cooperation in Europe were traveling. One Azerbaijani soldier was wounded in the ensuing exchange of fire. LF
 IRAN PROPOSES PRISONER EXCHANGE WITH BAKUIranian Justice Minister Mohammed Montazeri proposed at a meeting with his Azerbaijani counterpart, Sudaba Huseinova, in Baku on 17 February that the two countries take steps to repatriate prisoners, Turan reported on 18 February. There are an estimated 70 Iranian citizens currently serving prison terms in Azerbaijan, mostly for drug-related offenses, while some 20 Azerbaijanis are imprisoned in Iran. LF
 TAJIK GOVERNMENT SAYS OPPOSITION VIOLATED PEACE ACCORDThe Tajik government has sent a letter to United Tajik Opposition leader Said Abdullo Nuri complaining about violations of the peace agreement, Interfax reported on 18 February. The letter alleges that UTO supporters were involved in the killing of two police officers whose bodies were found on 7 February. It also points out that UTO field commander Rahmon Sanginov is demanding the return of UTO deputy leader Ali Akbar Turajonzoda from Tehran and all UTO fighters still in Afghanistan. Sanginov said he is prepared to take hostages if his demands are not met. BP
 TURKMENISTAN, RUSSIA AGREE ON GAS TRANSITInterfax on 18 February quoted an unnamed Turkmen official as saying his government and Russia have agreed on terms for shipping Turkmen natural gas to Ukraine via Russia. For every 1,000 cubic meters of gas shipped by Turkmenistan, Russia will receive $1.75 per 100 kilometers of the 1,050 kilometer pipeline that crosses its territory. BP
[B] SOUTHEASTERN EUROPE
 SERBIAN PRESIDENT ASKS PREMIER TO STAY ONPresident Milan Milutinovic of the Socialist Party of Serbia (SPS) asked Prime Minister Mirko Marjanovic (SPS) to stay on and form a new government. In a statement issued by Tanjug on 19 February, Milutinovic said: "Mirko Marjanovic, who has so far successfully led the national unity government, provides guarantees he will implement a program for social and economic reforms that was supported by all Serbian parliamentary parties during recent consultations." The SPS and its leftist allies have only 110 out of 250 parliamentary seats since the September 1997 elections. Milutinovic has been negotiating with potential coalition partners in recent weeks. It is unclear whether the opposition Serbian Renewal Movement (SPO) of Vuk Draskovic will honor its reported recent agreement to join the government. Draskovic insisted that he be named premier as a condition for SPO participation in the cabinet, the "Frankfurter Allgemeine Zeitung" reported on 18 February. PM
 BELGRADE BLASTS PODGORICA ON WAR CRIMESFederal Yugoslav Justice Minister Zoran Knezevic said in Belgrade on 18 February that the government will not extradite indicted war criminals to The Hague but that it is not opposed to such individuals appearing before the war crimes court voluntarily. Knezevic added that the Montenegrin government is "compromising its own republic and the [Yugoslav] federation" by cooperating with the Hague-based tribunal. PM
 U.S. AID FOR BOSNIAN SERBSBrian Atwood, the director of the U.S. Agency for International Development, said in Washington on 18 February that he and other top U.S. officials are working to unblock a $60 million aid package to the Republika Srpska. That package will enable Washington to increase its assistance to the government of visiting Prime Minister Milorad Dodik from $3 million a month to $5 million. Dodik's hosts made it clear, however, that he must speed up privatization, end all political and economic influence of suspected war criminals, and ensure that elected local officials from other ethnic groups are allowed to take their seats. The U.S. officials stressed that no money will be given to municipalities found to be harboring war criminals. "The New York Times" reported on 16 February that Bosnian Serb hard-liners have regularly been receiving a cut of all international aid money. PM
 NATO EXTENDS PEACEKEEPERS' MANDATEThe NATO Council on 18 February voted to extend SFOR's mandate beyond its June expiration date (see "RFE/RL Newsline," 17 February 1998). SFOR will remain at its present strength of about 35,000 until the Bosnian general elections in September, after which it will be reduced to 20,000- 25,000 troops. SFOR's new mandate will not have a formal cut-off date, but sponsoring countries will review the peacekeepers' role periodically. PM
 CLASH OVER BOSNIAN PASSPORTSThe joint Council of Ministers decided in Sarajevo on 18 February to keep the reference in the new joint passports detailing from which part of the country the bearer comes. A spokesman for the international community's Carlos Westendorp disagreed with the decision. Westendorp's office seeks to promote freedom of movement by issuing passports that do not identify whether the bearer comes from the federation or the Republika Srpska. PM
 SERBS' HOMES TORCHED IN DRVARUN police spokesmen said in Sarajevo on 18 February that 12 homes belonging to Serbs have burned down so far this month in the Croat- held town of Drvar. Serbs formed a majority in Drvar before 1992. PM
 TUDJMAN'S DAUGHTER SUES MAGAZINEPresident Franjo Tudjman's daughter Nevenka filed a $50,000 suit in Zagreb on 18 February against the independent weekly "Globus," an RFE/RL correspondent reported from the Croatian capital. In June 1996, the magazine wrote that she illegally acquired for her business interests a building owned by the Defense Ministry. HDZ and government officials routinely sue independent periodicals that accuse them of wrongdoing. PM
 THIRTY-FOUR BODIES IN CROATIAN MASS GRAVEForensic experts said in the eastern Slavonian village of Marinci on 18 February that they have completed their investigation of a mass grave that contained 34 bodies, apparently those of Croatian civilians killed in the 1991 war. Some bodies showed evidence of systematic execution, the experts said. The Croatian authorities have been combing the region for evidence of mass graves since eastern Slavonia returned to Croatian control one month ago. PM
 CROATIA WANTS CONSULATE IN MONTENEGROForeign Minister Mate Granic told representatives of Montenegro's Croatian minority in Zagreb on 18 February that Croatia wants to open a consulate in Boka Kotorska in order to promote contacts with Montenegro's Croats. He added that his country wants to open the border with Montenegro, which has been closed since the 1991 war. The new Montenegrin government of President Milo Djukanovic also wants an open frontier, but the Serbian authorities in Belgrade have blocked that move. PM
 ALBANIAN PROSECUTOR WANTS LEGISLATOR'S IMMUNITY LIFTEDProsecutor-General Arben Rakipi on 18 February informed the parliament that he has filed charges against Azem Hajdari, a deputy from the opposition Democratic Party. Hajdari is accused of "intimidation and violent interference in the work of the police" in connection with an armed incident near Shkoder last week (see "RFE/RL Newsline," 18 February 1998). Hajdari has already offered to give up his immunity to facilitate the police investigation into the incident. Also on 18 February, Berat prosecutor Sokol Kociu said forensic tests have proven that a shotgun found in Hajdari's possession three months ago was the weapon used in a murder in the village of Ura Vajgurore in June 1997, "Gazeta Shqiptare" reported. FS
 ALBANIAN LAWMAKERS TAKE FIRST STEP TOWARD MEDIA LICENSINGThe parliament on 18 February passed a telecommunications law requiring the government to set up an agency that will issue licenses to radio and television stations, both public and private. That body will be obliged to work closely with the National Council on Radio and Television, which has still to be appointed. FS
 DEMOCRATS UNDERMINE ROMANIAN PREMIER...The Senate's Commission on Local Administration has rejected a 1997 government regulation allowing mayors and local councilors to be members of the government, Romanian reported on 18 February. Democratic Party representatives on the commission voted together with the opposition. The Senate has yet to vote on the regulation, but if it were to respect the commission's decision, Prime Minister Victor Ciorbea would have to resign either the premiership or the position of Bucharest mayor. The capital has had an "acting mayor" since Ciorbea took over the premiership in November 1996. MS
 ...CAUSE ANOTHER COALITION CRISISGovernment Secretary-General Remus Opris said the Democrats' vote is an infringement of the coalition protocol and a "display of duplicity" since the Democrats had supported the regulation last year, Radio Bucharest reported. Democratic Party Chairman Petre Roman responded that the protocol was signed to "promote reforms, not to infringe on the constitution." He added that if Ciorbea does not resign as mayor, his government's mandate will "automatically cease" under the constitution. MS
 MOLDOVAN POLL REVEALS INDECISION AMONG VOTERSA poll conducted by the Bucharest-based CURS and IMAS institutes shows that only 47 percent of Moldovan voters have decided which party to back in the 22 March parliamentary elections. Thirty-four percent are undecided and 19 percent said they will not vote. With less than half of the electorate decided, the results can be considered "preliminary" only, the pollsters said. Another poll will be conducted closer to election day. MS
 MISSING MOLDOVAN PLANE FOUND IN ANGOLAAn aircraft belonging to the Moldovan Renan company that disappeared in Africa last December has been found in Dumve, Angola, BASA-press reported on 18 February, citing "sources requesting anonymity." The agency said that the plane was forced to land by an Angolan fighter jet and that the crew are being detained at a military base in Dumve. The reasons for their detention are unclear. MS
 BULGARIAN GOVERNMENT ON IRAQI CRISISBulgaria supports UN Secretary-General Kofi Annan's plans to go to Baghdad later this week to try to avert a U.S.-led military strike, Reuters reported, citing a Bulgarian government statement on 18 February. The statement said Bulgaria hopes the mission will "make Baghdad back down under decisive international pressure." It also said Iraq must be compelled "by all acceptable means to observe strictly its obligations under the UN Security Council resolutions." During his visit to Washington earlier this month, President Petar Stoyanov said that Iraq owed Bulgaria some $2 billion and that the UN-imposed sanctions prevented Sofia from recovering that debt. MS
 BULGARIAN MINING STRIKE CONTINUESFinance Minister Muravei Radev traveled to the southern mining town of Madan on 18 February for talks with more than 500 miners who are staging a hunger strike, an RFE/RL correspondent in Sofia reported. The miners are demanding a 200 percent wage increase, while the government is willing to offer a raise of about 66 percent. The same day, Prime Minister Ivan Kostov expressed "understanding and sympathy" for the miners but said he disagreed with their methods, in particular not respecting the advance strike warning required by law. MS
[C] END NOTE
 RUSSIA'S MALADY: ASIAN FLU OR NATIVE VIRUS?by Peter J. Stavrakis
The financial crises that swept through Asian economies have had global repercussions. Western markets braced for the worst, and Latin American states feared the debilitating effects of the same contagion. Russia was also hit hard, its formerly booming stock market plunging 49 percent in value since November 1997, followed by a jump in domestic interest rates. Yet while Asian states are surviving their affliction and Western stock markets have recovered, Russia remains unable to shake its economic malaise.
External investors remain wary of Russia. The "Financial Times" reports that foreign money totaling $600 million fled the ruble-denominated bond market last month. Equally telling, the much-vaunted Russian economic boom has failed to materialize. GNP grew at a miserly 0.4 percent in 1997, and leading politicians such as First Deputy Prime Minister Anatolii Chubais--earlier so bold in their predictions for robust growth--revised their estimates and predicted real economic growth only in the next century. Even modestly promising reports of increasing tax revenues failed to calm jittery financial markets.
Russia's fabled reformers also appear unable to respond decisively to the crisis. Brazil, faced with its own Asian economic fallout, acted adroitly by introducing a strong fiscal austerity program. The Kremlin, by contrast, appears mired in its preference for clan politics. Those different responses reflect that while Russia's current problems are the same as those of Asian economies, the causes are fundamentally different and suggest that Russia's time of troubles is far from over.
Asian and Latin American states possess robust and diversified market economies and political institutions skilled at harnessing economic growth for broader socio- economic development. Russia, by contrast, has a kind of oligarchic capitalism controlled by a combination of old political and new economic elites, thriving amid an extralegal "shadow state." Instead of Western-style free- market democracy, Russia's central power structures have derived from a fusion of corrupt government officials and private sector elites. This congeries of elites has survived principally by preying on the resources and productive elements of Russian society--as well as foreign investors.
The 1995 "loans for shares" privatization--arguably one of history's most remarkable shell games that funneled state resources to a select elite-- gave post- Soviet clans the economic base essential for survival, while simultaneously cutting out domestic and foreign competitors. Russian clan leaders--Prime Minister Victor Chernomyrdin, Chubais, Boris Berezovskii, Mikhail Khodorkovskii, Peter Aven, and others--closed ranks and vigorously defended their assets from competitors representing a threat to their control of the economy. Foreign investors such as GE Moscow, Australia's Star Mining, TransWorld Metals soon found how quickly and arbitrarily the law could be reinterpreted or rewritten to deprive them of legitimate investments.
The prevalence of closed bond offerings is a more recent means of preventing fair and open competition. As minority shareholders in Sidanco recently learned, the Russian oil giant intended to use that device to dilute the shareholders' interest in the company. Investment in Russia has a become a high-stakes game in which only the politically well-connected earn the privilege of risking their fortunes.
Oligarchic capitalism in Russia reached a new stage with the merger of Yukos and Sibneft to form Yuksi oil company. Khodorkovskii, president of Yukos and an opponent of open foreign investment in Russia energy markets, viewed that merger as the best means of consolidating a domestic alliance with Berezovskii, head of the LogoVAZ conglomerate, while blocking substantial foreign investment in the Russian oil industry.
Lost in the Russian power struggle, however, are considerations fundamental to a sound economy. There is no evidence that Yuksi's greater size will translate into enhanced global competitiveness. Restrictive conditions on foreign shareholding militate against improvement of corporate governance. The Russian government continues the best of Soviet traditions, producing economic performance data that fail to persuade outsiders that budgetary commitments can be met. Persistent wage non- payment in the government sector is but one indicator that the promising fiscal picture may be merely part of a larger Potemkin village.
Foreign investors have solid grounds for being wary. At present, Russia's state and economic oligarchs appear more inclined to use the lure of vast potential to attract foreign capital and assistance monies that will be used to prop up an economy that has produced nothing of any real value in nearly a decade--and has little prospect of doing so in the future. Yet even that approach cannot endure, and the problem of a stagnant, unstable, even resentful Russia will remain on the international agenda.
Russian ingenuity is sorely lacking here, the only alternative being calls for the strengthening of the Russian state. Such an option should make neighbors nervous, partners wary, and investors protective of their wallets.
The author is an associate professor of political science at the University of Vermont.
Reprinted with permission of Radio Free Europe/Radio Liberty