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RFE/RL Newsline, Vol. 2, No. 246, 98-12-23Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next ArticleFrom: Radio Free Europe/Radio Liberty <http://www.rferl.org>RFE/RL NEWSLINEVol. 2, No. 246, 23 December 1998CONTENTS[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA[01] KYRGYZ PRESIDENT CALLS FOR GOVERNMENT'S RESIGNATIONAt a Security Council session on 23 December, Askar Akayev expressed his disappointment in the work of the government and called for it to resign, RFE/RL correspondents in Bishkek reported. Akayev had just heard reports on the economy from Finance Minister Taalaibek Koichumanov and chairman of the National Bank Marat Sultanov. After asking several questions, he said it is clear that no one has any answers and that the government has no real program. Akayev's press secretary, Kanybek Imanaliev, told journalists that since Kubanychbek Jumaliev was named prime minister in April, "the government has not fulfilled one task given it by Askar Akayev," ITAR- TASS reported. He added that "during this time, the Kyrgyz som has fallen in value, industry is in decline, and the standard of living has dropped as a result." Imanaliev laid the blame on the government and the National Bank. To date, there are no reports that the government has resigned. BP[02] PRIMAKOV MEETS WITH KAZAKH PREMIER...Russian Prime Minister Yevgenii Primakov met with his Kazakh counterpart, Nurlan Balgimbayev in Astana on 22 December, ITAR-TASS reported. The two signed documents on cooperation in the fields of information, border security, fuel and energy, and education. Primakov also met with President Nursultan Nazarbayev. After their meeting, Primakov told journalists that the two countries "are progressing along the path of joint action that is based on the common interests of the two countries." He also stressed that Russia and Kazakhstan are working together to solve the economic crisis affecting both countries. Nazarbayev said "there are no problems in Russian-Kazakh relations. We will enter the 21st century as partners and allies." BP[03] ...COMMENTS ON UPCOMING ELECTIONSResponding to questions about the 10 January presidential elections in Kazakhstan, Primakov said, "We support the [incumbent] president of Kazakhstan." ITAR-TASS reported. He added that "Russia is not one of those governments that is trying to pry into the internal affairs of Kazakhstan." This is likely an allusion to U.S. criticism of both the decision by the Kazakh parliament to hold early elections and a later decision by the Kazakh Supreme Court to bar two candidates from participating because of minor legal infractions. BP[04] NAZARBAYEV CALLS FOR LAW ON LAND OWNERSHIPKazakh President Nursultan Nazarbayev on 22 December ordered the country's legislators to draft a law on private land ownership within two weeks. Nazarbayev said he wants the law to be in effect by spring 1999, Interfax reported. BP[05] RUSSIAN PEACEKEEPERS DENY RESPONSIBILITY FOR DEATH OF GEORGIAN SOLDIERAn officer with the Russian peacekeeping force deployed under CIS auspices along the border between Abkhazia and the rest of Georgia has denied that his troops opened fire on Georgian positions during the night of 21-22 December, Caucasus Press reported. He said that his men had responded in self-defense to shots from those positions. One member of the Georgian Interior Ministry forces stationed in the region was killed during the exchange of fire. LF[06] ARMENIAN PARLIAMENT SUSPENDS ELECTION LAW DEBATEThe Yerkrapah majority group postponed the debate on the draft election law shortly after it began on 22 December, RFE/RL's Yerevan bureau reported. The law had been passed in the first reading in November, after which Yerkrapah bowed to opposition pressure and proposed minor amendments that would increase the number of seats in the 131-member legislature to be allocated under the proportional system from 51 to 56. Most opposition parties want the majority of seats allocated on that basis, and for that reason several opposition parties boycotted the 22 December debate. Yerkrapah chairman Albert Bazeyan said that his group wants more time for "political consultations" with the opposition before the debate resumes on 25 January. LF[07] ARMENIA RECEIVES NEW LOANS FROM IMF, WORLD BANKArmenia has received approval for loans from the World Bank and the IMF totaling some $124 million, an RFE/RL correspondent in Washington reported on 23 December. The IMF third-year credit of approximately $59 million is intended to boost privatization and banking banking as well as to revive the energy sector. The $65 million structural adjustment loan from the World Bank will be used to help Armenia ease the social costs of adjustment and to accelerate the development of the private sector and increase domestic savings. The loans include an additional $26 million to compensate for the spillover effect from the financial crisis in Russia. LF[08] GEORGIA FINALIZES SECURITY ARRANGEMENTS FOR OIL EXPORT PIPELINEThe Georgian Governmental Guard Service signed an agreement on 22 December with the Georgian Pipeline Company on guarding the Georgian sector of the Baku-Supsa oil export pipeline, which is to begin operation shortly, Caucasus Press and Interfax reported. Azerbaijani officials have held talks with NATO on deploying a NATO force to guard the Azerbaijan stretch of that pipeline (see "RFE/RL Newsline," 30 January 1998). LF.[B] SOUTHEASTERN EUROPE[09] UCK WANTS POLICE OUT OF CENTRAL KOSOVAAdem Demaci, who is the political spokesman for the Kosova Liberation Army (UCK), said in Prishtina on 22 December that the guerrillas will attack the Serbian paramilitary police "everywhere" unless the police leave mainly ethnic Albanian areas of central Kosova. He added that the police are not welcome in areas where no Serbs live. In a statement, the UCK added that the Serbs must dismantle all checkpoints that they have set up since the crackdown began at the end of February or risk attacks by the UCK. The guerrillas also called for freedom of movement for all citizens, RFE/RL's South Slavic Service reported. PM[10] U.S. DIPLOMATS TALK WITH UCKLawrence Rossin, who is director of the State Department's Office for South and Central Europe, and other U.S. diplomats met with representatives of the UCK in a remote Kosovar village on 22 December in an effort to end the spiral of violence in the province. A UCK spokesman said later that the guerrillas had nothing to do with the recent slayings of Serbian civilians and that the UCK targets only military and police personnel. Meanwhile in the Peja area, Serbian forces killed one Kosovar and arrested six others in a raid on a suspected guerrilla stronghold. Serbian spokesmen in Prishtina said the police killed the man after Kosovars opened fire on the police. The Kosovar news agency KIC said in a statement that the man was killed "in cold blood" in front of his home. PM[11] WALKER CALLS BELGRADE 'UNCOOPERATIVE'The head of the international monitors in Kosova, U.S. diplomat William Walker, told independent Belgrade Radio B-92 on 22 December that the Serbian "authorities are generally uncooperative with the [monitoring] mission." Walker added that most of his requests to those officials "have drawn a negative response." He also criticized the Serbian authorities for preventing the Prishtina Albanian-language daily "Bujku" from publishing (see "RFE/RL Balkan Report," 23 December 1998). The envoy blasted the UCK for "irresponsiblycarrying out provocative missions" against Serbian targets. PM[12] OGATA CALLS FOR 'CONFIDENCE-BUILDING MEASURES'UN High Commissioner for Refugees Sadako Ogata completed a three-day trip On 22 December that took her to Kosova and Belgrade (see "RFE/RL Newsline," 21 December 1998). In the Serbian capital, she called for "further confidence-building measures" in Kosova and appealed, in particular, to Yugoslav President Slobodan Milosevic to implement the amnesty he agreed to in his October agreement with U.S. special envoy Richard Holbrooke. She noted that "people are arrested [by Serbian police] on the way to their villages or once they return homeand this does not contribute to rebuilding confidence in the province." Ogata also praised the cooperation of the Serbian authorities in enabling displaced persons to return to their homes. PM[13] KADARE WANTS KOSOVARS TO FOLLOW ALBANIAN EXAMPLEParis-based Ismail Kadare, who is the most prominent living Albanian writer, told the VOA's Albanian service on 23 December that the recent opening of a dialogue between Albania's government and opposition is "the most encouraging news" he has heard from Albania this year (see below). He stressed that the Kosovars also need to find a common platform among themselves in order to negotiate a political settlement with the Serbs. Albanian Prime Minister Pandeli Majko said in Tirana the previous day that he and opposition leader Sali Berisha found much "agreement" and "[common] orientation regarding Kosova and the national issue in general" at their recent meeting. Since the Socialists took office in 1997, the opposition has repeatedly charged them with abandoning the Kosovars in their fight for independence. FS[14] LEADING MONTENEGRIN PARTY REAFFIRMS SUPPORT FOR YUGOSLAVIAMisko Vukovic, who is a top aide to President Milo Djukanovic, told RFE/RL correspondents in Podgorica on 22 December that his Democratic Socialist Party does not support a proposal by a junior member of the governing coalition aimed at considerably weakening Montenegro's links to Serbia (see "RFE/RL Newsline," 22 December 1998). Vukovic added that Montenegro will observe the terms of its 1992 federation agreement with Serbia "as long as there remains a real chance of defeating the totalitarian regime of Slobodan Milosevic." PM[15] PANGALOS STRESSES POSITIVE TRENDS IN SKOPJEGreek Foreign Minister Theodoros Pangalos said in Skopje on 22 December that the new Macedonian government consists of "people who mean business." He stressed that the two neighboring countries should stress their common Orthodox bonds and "make love, not war." He nonetheless added that Greece "will never recognize a Slavic minority" in the part of the historic region of Macedonia that belongs to Greece. Pangalos and his hosts stressed the importance of cooperation in transportation, energy and telecommunications. Greece imposed a crippling trade embargo on Macedonia from 1994 to 1995 but has since sought to expand its economic presence there. Greece is now Macedonia's third largest trading partner and the largest source of foreign investments. PM[16] SFOR OUSTS CROATIAN POLICE FROM BOSNIAN TOWNCroatian police peacefully left the Bosnian border town of Martin Brod on 23 December after Canadian peacekeepers told them to do so on the orders of the international community's Carlos Westendorp. Police from the Bosnian federation then took up posts in the town, which belongs to Bosnia but which Croatian forces occupied in 1995 (see "RFE/RL Newsline," 17 December 1998). In Sarajevo, a spokesman for Alija Izetbegovic, who is the Muslim member of the joint presidency, praised SFOR's action. The previous day, Croatian President Franjo Tudjman and Bosnian leaders opened a bridge linking Zupanja in eastern Croatia and Orasje across the Sava River in Bosnia. PM[17] HAGUE COURT INDICTS TWO BOSNIAN CROATSThe Hague-based war crimes tribunal on 22 December indicted Mladen Naletilic, also known as "Tuta," and Vinko Martinovic, also known as "Stela, " for numerous war crimes against Muslims in the Mostar area in 1993. The two could face life imprisonment if convicted. AP reported that Croatian police have arrested the men in Zagreb but added that it is not clear when they will be transferred to The Hague. PM[18] UN POLICE SACK TWO BOSNIAN SERBSThe Sarajevo-based International Police Task Force fired Momir Vukovic and Spasoje Camur from high-ranking jobs in the Republika Srpska police for their involvement in the forced detention and torture of 14 persons in connection with the August slaying of leading Bosnian Serb police official Srdjan Knezevic. Knezevic supported the moderate leadership based in Banja Luka. Many observers suggested he was killed by hard-liners loyal to Radovan Karadzic. PM[19] ALBANIAN STUDENTS END HUNGER STRIKEStudent leader Besnik Jaku and Education Minister Ethem Ruka on 22 December signed an agreement on ending the 13-day student hunger strike (see "RFE/RL Newsline," 22 December 1998). Ruka agreed to increase student scholarships by 17.5 percent after 1 April 1999, "Albanian Daily News" reported. He also pledged to improve living conditions in dormitories within a mutually agreed timeframe. The accord also provides for increased university autonomy and a special legal status for the university campus. The negotiations took place at the dean's office under the mediation of OSCE Ambassador to Albania Daan Everts. Everts praised the accord as the result of the Albanians' attempts to try "to find a common language," adding that "a new wind is blowing for the ruling [Socialists] and the opposition." FS[20] POSITIVE REACTIONS TO ALBANIAN RIVALS' MEETINGAlbanian and international observers have praised a 21 December meeting between opposition leader Sali Berisha and Prime Minister Pandeli Majko as an important step toward overcoming Albania's political polarization (see "RFE/RL Newsline," 22 December 1998). Majko told public television that it was "Albanian citizens...who benefited from the newly begun dialogue" rather than any politicians. Senior Democratic Party legislator Ylli Vejsiu said the meeting opened "a new chapter in defusing the political tensions," adding that "dialogue, tolerance, and compromise triumphed in the end." The U.S. State Department issued a statement calling the meeting "an extremely positive first step in healing the political cleavages that have stymied Albania's reform process." It also urged "all parties to maintain the positive momentum from this encounter" and the Democratic Party to end its boycott of the parliament. FS[21] FORMER ROMANIAN PRESIDENT ON 1989 UPRISINGFormer President Ion Iliescu told a 22 December joint session of the parliament marking the ninth anniversary of the anti-communist uprising that those who "watched television" in 1989 are now accusing those who led the uprising of having "stolen the revolution." In an obvious allusion to the country's present leaders, Iliescu added that a "campaign is under way to tarnish the revolution's heroes, including its leaders and the army." MS[22] FRENCH OIL COMPANY INVESTS IN ROMANIAN BLACK SEA DRILLINGFrance's oil giant Elf Aquitaine has signed an agreement in Bucharest with the national oil company Petrom to explore 10,000 square kilometers of the Black Sea over the next 30 years, AP reported on 22 December. The company will pay $10 million initially, and if oil is found, it will pay up to $500 million on development projects. Also on 22 December, the Turkish Akmaya Sanayi Ve Ticaret holding company bought a 65 percent majority stake in the Petromida oil refinery for $725 million. And Petrom director-general Ioan Popa announced that 30,000 employees will be laid off next year. MS[23] ZHIRINOVSKY VISITS TIRASPOLVladimir Zhirinovsky, arriving in Tiraspol on 22 December, said that the Transdniester is "part of the Russian Federation" and that his Liberal Democratic Party of Russia "will be happy if it officially becomes one of Russia's provinces," Infotag reported. Zhirinovsky is scheduled to meet with Igor Smirnov and other Transdniester officials. Russia's ambassador to Chisinau, Alexander Papkin, told journalists that the visit is "unofficial." Zhirinovsky said the Russian Constitution obliges Moscow to "defend and protect our compatriots" and that he will demand that President Boris Yeltsin "undertake resolute action to recognize the Transdniester and establish direct economic ties with it." In an interview with Tiraspol Television the same day, Zhirinovsky said he does not rule out the possibility that the Transdniester will become a third member of the Russian-Belarus union. At the same time, he called on Transdniestrians to take up Russian citizenship in order to make it "easier for us to protect you." MS[24] NEW ELECTORAL ALLIANCE IN BULGARIAThe recently-formed Social Democracy Union and the Euroleft Party on 21 December signed an agreement to cooperate and run joint lists in the fall 1999 local elections, BTA reported. Euroleft leader Alexander Tomov said the agreement "forms the nucleus of an essentially new opposition" and is "a model to be followed in the next general elections." MS[25] FORMER KING SPENDS CHRISTMAS IN BULGARIASimeon II arrived in Bulgaria on 22 December and will spend the Christmas holidays there for the first time since he was forced to leave the country in 1946, AP reported. The former monarch will stay at the Czarska Bistritsa palace, which is part of his former estate. He will pay for his stay at the palace, because legal procedures for returning him both the palace and other properties, as approved by a court earlier this year, are still under way. MS[C] END NOTE[26] GEORGIA'S FINANCIAL CRISIS REFLECTS DOMESTIC ECONOMIC PROBLEMSby Michael WyzanGeorgia's economy recently entered a period of financial instability. The lari, introduced in October 1995 at 1.25 to the dollar, had weakened only to 1.30 at the end of last year. But the exchange rate was 1.62 lari to the dollar on 3 December and 2.21 on 7 December (although it has strengthened to below 2 to $1 since then). Meanwhile, the National Bank has decided to stop using its rapidly depleting international reserves to prop up the currency. While the prices of most consumer goods are reported to have risen recently by 30-80 percent, it is too early to know the magnitude of the effects of the currency crisis on the macroeconomy. Nonetheless, it seems certain that the crisis has brought at least a temporary halt to a period in which Georgia had combined the fastest-growing economy in the CIS with low and declining inflation. GDP rose by 8.6 percent in 1996, 11.3 percent in 1997, and 7.3 percent in January- September 1998. Consumer prices grew by 7.9 percent in 1997 and only 3.6 percent during January-September 1998. Although the immediate cause of the country's problems is the Russian financial crisis, there are also significant domestic causes, in particular poor fiscal performance. Other domestic factors cited in the Georgian press include the recent uprising in western Georgia and the need to import fuel before the onset of winter. Financial crises triggered by speculative attacks on currencies often occur in countries with large fiscal and external imbalances (generally associated with a currency that is appreciating in real terms) and that have received substantial inflows of short-term capital. Although Georgia's budget deficit has not been enormous in recent years (it was only 2.5 percent of GDP on a cash basis in 1997), tax collections as a share of GDP remain among the lowest in the world. In 1997, the central government managed to collect only 10.3 percent of GDP in budget revenue, compared with 25.9 percent in Russia and 16.5 percent in Kyrgyzstan. That trend has continued this year: as early as April, it was clear that collections from value-added taxes and excise duties were beginning to fall well short of targets. Georgia's foreign trade has been highly unbalanced (in 1997, imports were 3.7 times exports). This has resulted in current account deficits of more than 10 percent of GDP in recent years. However, those deficits have been financed by loans from international financial institutions, workers' remittances from abroad, and, increasingly, foreign direct investment (which totaled $242 million in 1997). There have been only minor short-term inflows. The IMF recently changed its tune on how well the Georgian authorities are doing in reforming the economy. In July, when its executive board approved the release of the third annual loan under a facility awarded in February 1996, it praised Georgia's accomplishments in the second half of 1997. Those accomplishments included acceleration of the privatization of medium- sized and large enterprises, enactment of a law aimed at establishing a competitive market in electricity generation and distribution, further progress on land privatization, and improved control over budget expenditures through a treasury system. However, earlier this month an IMF official said that Georgia will receive the support of international financial institutions only if the government adopts a stronger economic policy. As a result of the fiscal crisis, targets have not been reached for government borrowing from the Central Bank, health spending, expenditure arrears, and sales of treasury bills. The government has not met other fiscal targets because of failings of an administrative nature. It is hard to say how severe and prolonged a downturn Georgia will suffer. Economy Minister Vladimer Papava argued in mid-October that the absence of securities markets precluded the spread of the world economic crisis to the country. Tacis experts argued at that time that Georgia's diversified exports, large value-added tax in transit trade, and small budget deficits made a Russia-type crisis unlikely. In reality, it is very difficult to predict the timing and severity of currency crises, especially in such small, fragile economies as Georgia's. The absence of significant short-term capital inflows means there is little protection against such crises, as demonstrated by Bulgaria's experience in 1996 and 1997, when Bulgarians dumped leva for foreign currencies. The key question is whether the Georgian state will be able to restore the credibility of its macroeconomic policies; in Bulgaria, this required both a change of government and policy regime under a currency board. On the other hand, the IMF's decision last week to offer $200 million to bolster the foreign reserves of Georgia and five other countries (which the fund described as the "poorest countries neighboring Russia which have been hardest hit by the Russian crisis") should help stabilize the situation. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria. 23-12-98 Reprinted with permission of Radio Free Europe/Radio Liberty
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