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RFE/RL Newsline, Vol. 1, No. 74, 97-07-16Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next ArticleFrom: Radio Free Europe/Radio Liberty <http://www.rferl.org>RFE/RL NEWSLINEVol. 1, No. 74, 16 July 1997CONTENTS[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA[01] ARMENIAN DEFENSE MINISTER ON YEREVANGATE ALLEGATIONSCommenting on the proposal to set up a trilateral inter-government commission to investigate alleged Russian arms shipments to Armenia and Azerbaijan, Vazgen Sargsian said "Let them come and convince themselves that Armenia got less arms from Russia than Azerbaijan did," according to Noyan Tapan on 15 July. That statement is further implicit confirmation on Sargsian's part that Armenia received weapons from Moscow. Addressing students in Yerevan four months ago, Sargsian had boasted that over the past two years Armenia had doubled its military strength at no cost to the national budget. Greeting Greek Defense Minister Apostolos Tsohatzopoulos, who arrived in Yerevan on 15 July, Sargsian said that military-technical cooperation between Armenia, Greece, and Russia was "beneficial". This is the second Greek military delegation to visit Armenia within two months.[02] LEBED ON KARABAKHFormer Russian Security Council Secretary Lebed has addressed an open letter to the three co-chairmen of the Organization for Security and Europe's Minsk Group warning that the attempt to resolve the Karabakh conflict by observing the inviolability of Azerbaijan's territorial integrity will inevitably lead to new bloodshed, Noyan Tapan reported on 15 July. Lebed said that if hostilities resumed, there would be a real danger of Russia or Turkey becoming involved. He advocated "seeking mutually acceptable decisions on the basis of international law," citing the example of Chechnya. Meanwhile, Turkish Deputy Prime Minister Bulent Ecevit has proposed in a radio broadcast that Armenia cede its southern Zangezour region to Azerbaijan to create a land bridge uniting Azerbaijan with its exclave of Nakhichevan. In return, he said, Armenia would receive unspecified compensation, according to the Istanbul-based Armenian newspaper "Marmara," cited by Asbarez on 15 July.[03] TAJIK PRISONER EXCHANGE DELAYEDThe exchange of 100 prisoners, which is part of an agreement reached shortly before the 27 June signing of the Tajik National Reconciliation Accord, failed to take place on 15 July, as scheduled, according to RFE/RL correspondents in Dushanbe. The Tajik government cited "technical reasons" for the deal, saying the exchange of 50 prisoners each by the government and United Tajik Opposition would have to take place on 18 or 19 July. UTO leader Said Abdullo Nuri on 13 July sent a letter to UN special envoy to Tajikistan Gerd Merrem and the foreign ministers of Russia and Iran asking them to use their influence as guarantors of the peace process to ensure the government honors its commitments. Nuri said failure to adhere to agreements would call into question the future work of the government-UTO reconciliation commission.[04] KYRGYZ PRESIDENT WRAPS UP U.S. VISITAskar Akayev met with U.S. Vice President Al Gore on 15 July, according to RFE/RL correspondents in Washington. Gore expressed the U.S.'s approval of Kyrgyz economic and political reforms and discussed aid programs to Kyrgyzstan and regional security in Central Asia. Akayev also met with World Bank President James Wolfensohn to discuss Kyrgyzstan's use of a $264 million loan for domestic projects. The previous day, Akayev had held talks with members of the U.S. State Department, including Undersecretary of State Thomas Pickering, who urged him to continue on the path toward democracy and protect human rights. They also said the U.S. hopes to further strengthen bilateral ties, especially military ones, through NATO's Partnership for Peace program. Akayev attended a ceremony at the U.S. Export-Import Bank marking the signing of an agreement that provides for the financing of U.S. exports to Kyrgyzstan.[05] LABOR UNREST CONTINUES IN KAZAKHSTANWorkers at the Stepanogorsk Uranium Producing Plant in Akmola Oblast staged a strike on 15 July to protest the fact they have not received wages in five months, RFE/RL corespondents reported. They also demanded to see detailed records of sales. In Kokshetau, some 1,000 citizens took to the streets to demand the payment of overdue wages and pensions and a cut in housing utility costs. They also want the government to rescind a decree issued earlier this year merging Kokshetau Oblast with neighboring Akmola Oblast. Meanwhile, ITAR-TASS reported on 16 July that pensioners in the city of Saran are requesting coffins instead of their pension arrears.[06] NEW LANGUAGES LAW IN KAZAKHSTANThe new law on languages, which was published on 16 July, states that Kazakh remains the state language but that Russian has "equal status" with Kazakh at "state-owned organizations and bodies of local government," ITAR- TASS reported. Instruction at secondary and vocational schools as well as at institutes of higher education will be provided in both Kazakh and Russian, but at least half of television programming must be in Kazakh. Learning the Kazakh language remains the "duty of every Kazakh citizen," the law states.[B] SOUTHEASTERN EUROPE[07] FOREIGN ASSISTANCE FOR ALBANIA?Italian officials said in Rome on 15 July that an international conference on Albania will take place on 31 July in the Italian capital. Representatives of individual countries and international organizations will participate in the gathering, which will prepare the agenda for an aid donors' conference in October. In Tirana, foreign diplomats and economists said that the IMF is in contact with those Albanian officials who are expected to form a new government shortly. The IMF is ready to send a delegation to Albania as soon as the security situation permits. It insists that all remaining pyramid schemes be closed down before it approves new loans. The Albanian authorities have been trying to convert the remaining pyramids into legitimate businesses to allow the companies to generate income that could be used to repay pyramid investors.[08] ANOTHER EXPLOSION IN REPUBLIKA SRPSKAA grenade exploded on 16 July near the offices of international police monitors in Prijedor. It was the third such explosion in as many days following the funeral of Simo Drljaca, a former police chief of Prijedor and concentration camp commander killed by NATO troops on 10 July. Also on 16 June, a U.S. soldier was stabbed by a civilian in Kladanj. U.S. President Bill Clinton the previous day had warned the Bosnian Serbs that "it would be a grave mistake" for them to seek revenge for Drljaca's death and for the arrest and removal to The Hague of Milan Kovacevic, another indicted war criminal. In The Hague, spokesmen for the war crimes tribunal said that Kovacevic is undergoing medical observation to see if he is fit to stand trial. The spokesmen said Kovacevic is suffering from what they called "pathological problems."[09] MILOSEVIC ELECTED FEDERAL YUGOSLAV PRESIDENTBoth houses of the federal parliament voted overwhelmingly on 15 July to elect Slobodan Milosevic as president of Yugoslavia for a four-year term (see "RFE/RL Newsline," 15 July 1997). The Belgrade opposition said the vote was a sham because Milosevic, who is currently Serbian president, was unopposed. In Novi Pazar, Muslim opposition leader Rasim Ljajic commented that the vote means the political and economic crises will continue. Observers note that Milosevic will now have to rewrite legislation if he wants to transform the hitherto ceremonial federal presidency into a real locus of political power at the expense of the Serbian presidency. It is unclear whether his enemies could seriously hope to win the powerful Serbian presidency in the September elections.[10] KOSOVAR ELECTION BOYCOTT ANGERS SERBIAN OPPOSITIONKosovo's ethnic Albanian political parties have decided not to participate in the Serbian elections scheduled for September, an RFE/RL correspondent reported from Pristina on 14 July. The decision could seriously hurt the presidential candidacy of former Yugoslav Prime Minister Milan Panic, who hoped to put together an election coalition that would include the Albanians. In Belgrade, the opposition Serbian Renewal Movement said the Albanians' boycott plays into the hands of the governing Socialists, "Danas" reported on 16 July. The previous day, the same Belgrade daily cited a new poll suggesting that 99% of the Kosovo Albanians want only independence from Serbia.[11] ETHNIC TENSIONS CONTINUE IN MACEDONIAMacedonian police on 15 July hauled down an Albanian flag flying over the Debar town council office building and replaced it with a Macedonian one. Mayor Kemal Xhafa then removed the Macedonian flag in line with a council decision. BETA reported later that day that the situation in Debar was peaceful and that the council remained in session. Elsewhere, Arben Xhaferi of the Democratic Party of Albanians said recent ethnic tensions in Macedonia suggest there will be no peace until the Albanians receive territorial autonomy (see "End Note," "RFE/RL Newsline," 15 July 1997). He charged that the Macedonian government has received help from Serbia in preparing for what Xhaferi called the current clamp down on the Albanians. His charges have not been independently substantiated.[12] MONTENEGRIN REFORMISTS ON THE RISEThe Montenegrin Ministry of Justice on 15 July confirmed the recent move by the anti-Milosevic wing of the governing Democratic Socialist Party to oust President Momir Bulatovic as party leader. The ministry added that Milica Pejanovic-Djurisic of the anti-Milosevic faction is now the party's legal chairman. Some observers wrote that Bulatovic, who is Milosevic's main ally in the tiny mountainous republic, has now completely lost the power struggle. On 16 July, security guards prevented him from entering the building where the Socialists' steering committee was meeting. The building also houses government offices.[13] NEWS FROM FORMER YUGOSLAVIAThe Sandzak-based Muslim National Council on 16 July sent a letter to all foreign diplomatic missions in Belgrade urging them to use their influence to persuade the Serbian authorities to end repression of the Sandzak Muslims. "The New York Times" reported on 16 July that France has balked at a proposed new mission to arrest indicted war criminals. The previous day, some 2,000 UN peacekeepers began their withdrawal from eastern Slavonia.[14] PROTEST AGAINST ROMANIAN AMENDED EDUCATION LAWSeveral hundred people on 15 July demonstrated in Bucharest against the amended Education Law. The protest was organized by the main opposition formation, the Party of Social Democracy in Romania (PDSR). RFE/RL's Bucharest bureau reported that PDSR First Deputy Chairman Adrian Nastase said Romanians may soon be forced study their own history and geography in the Hungarian language. A PDSR delegation handed over a written protest, signed by PDSR chairman Ion Iliescu, to Education Minister Virgil Petrescu. Efforts by the PDSR to have the Senate debate the amendments the same day failed because the chamber's commission has not formulated its position on the issue. The amended law is to be enforced by government order and will be debated in the parliament in the fall.[15] ROMANIAN JUDGES CHALLENGE TREATY WITH UKRAINEHalf of the judges serving on Romania's Supreme Court have challenged the treaty signed with Ukraine in an appeal to the Constitutional Court. RFE/RL's Bucharest bureau reported on 15 July that the 17 judges say the treaty violates the country's constitution, which stipulates its territory is "indivisible." A spokesman for the Constitutional Court told Reuters the challenge is likely to be rejected by the court because it was submitted after President Emil Constantinescu promulgated the treaty following ratification by the parliament.[16] MOLDOVAN PRESIDENT ON NATOPetru Lucinschi says "allegations about debates in Moldova on whether to join NATO or not are inventions," as the issue is not on any one's agenda. Summing up his visits to Madrid and Salzburg at a press conference in Chisinau on 15 July, Lucinschi said Moldova intends to remain a neutral country and all the states that recognized its sovereignty also recognized its "permanent neutrality." Lucinschi said "a kind of Marshal plan" was necessary to overcome discrepancies between the economically strong Western Europe and an Eastern Europe "still dominated by the chaos of transition, where people are losing confidence in a better life," BASA-press reported.[17] PROTEST AGAINST SLAVIC UNIVERSITY IN MOLDOVAThe Socialist Agrarian faction in the parliament, as well as leaders of the Russian, Ukrainian, Belarusian, and Bulgarian national minorities, have criticized the foundation of a private Slavic university in Chisinau (see "RFE/RL Newsline" 14 July 1997). They said the move aims at making university education in the Russian language dependent on students' ability to pay for it. In a message to President Lucinschi, they said he should "use his authority" to persuade Russia to finance the setting up of a state Slavic University in the academic year 1997-1998. The rector of the private university, Oleg Babenko, told BASA-press that the institution has been founded legally by "a group of persons who have nothing to do with political parties or ethnic organizations."[18] BULGARIAN POLICE PROTECT FARMERSAgriculture Minister Ventseslav Varbanov says roads in Bulgaria are under police control in an effort to stop criminal groups from forcing peasants to sell grain below the market price. Prime Minister Ivan Kostov said he will not allow a repeat of the bread shortage that occurred last year and in early 1997. Bulgarian farmers told RFE/RL that they prefer to leave the fields fallow rather than have their profits siphoned by firms run by the former communist nomenklatura, as was the case in the past. Former Prime Minister Zhan Videnov and several of his ministers are under investigation for granting special export rights to their associates in 1995 and 1996.[19] TODOR ZHIVKOV'S " WORST MISTAKE"In an autobiography published on 15 July, Bulgaria's former communist leader says the "worst mistake" of his political career was his failure to resist the reforms imposed by Mikhail Gorbachev and to prevent "Bulgaria's withdrawal from the socialist path," Reuters reported . He says he was opposed to "Gorbachev's theory and to its Bulgarian admirers, who introduced in Bulgaria the same chaos [as elsewhere in the former communist bloc] in order to keep their posts and benefits." Zhivkov was sentenced in September 1992 to seven years for mismanaging state funds, but he never served the sentence on medical grounds and was kept under house arrest. In 1996, the Supreme Court overturned the sentence. He remains under house arrest because he has since been indicted on other charges.[C] END NOTE[20] Bulgaria's Currency Board Gets Off to a Good Startby Michael WyzanOn 1 July, Bulgaria became the third country in transition- -after Estonia and Lithuania--to adopt a currency board. For an indefinite period, the lev will trade at 1,000 to the German mark and be fully backed by the Bulgarian National Bank's (BNB) foreign reserves. Those reserves consist of foreign currency, precious metals, and securities denominated in foreign currency. Under a currency board, the exchange rate of the domestic currency against a specified world currency (the German mark or U.S. dollar) is fixed. The only increases in the domestic money supply that are allowed are those resulting from converting foreign-currency inflows into domestic currency. In principle, the monetary authorities may no longer finance government budget deficits. In the fall of 1996, as Bulgaria's economy plunged into the deepest economic crisis faced by any European member of the former Soviet bloc, the IMF made renewed lending conditional on introducing a currency board. Gross domestic product declined by almost 11 percent in 1996, after rising modestly in the two previous years. Consumer prices rose by 243 percent in February 1997 alone, after increasing by only 33 percent in 1995 as a whole. The lev fell from 79 per $1 in April 1996 to almost 3,000 in mid-February 1997, and the monthly wage plunged from $126 in April 1996 to about $35 in February 1997. The deterioration in macroeconomic performance that began in spring 1996 was triggered by a decline in the BNB's foreign reserves, which left the central bank unable to defend the lev against speculative attacks. Such attacks were inevitable in an economy where the currency unit's nominal value remained unchanged for long periods, in the face of inflation much higher than in the country's main trading partners. Behind this instability lay unreformed enterprises and banks, whose interaction generated bad debt. When budget subsidies to enterprises fell to low levels, firms kept operating by borrowing from banks. Firms often had no intention of repaying the loans, and most of the larger banks apparently did not object. The banks were expecting refinancing--that is, lending from the BNB, increasingly without collateral--and government programs to convert bad debt into government bonds. In December 1995, fewer than 26 percent of commercial bank loans were likely to be serviced in a timely manner, and losses state by enterprises totaled 4 percent of GDP in 1993 (down from 30 percent in 1993). Moreover, aggregate banking losses stood at 2-3 percent of GDP. The currency board is aimed at addressing such fundamental problems. Neither direct subsidies from the budget--which may now run only a small deficit--nor BNB refinancing of commercial banks will be possible. Does adopting a currency board imply a loss of sovereignty? States have adopted all manner of monetary regimes. Those include use of a common currency, as in the case of the 12 CFA countries in West Africa, or of another country's. Some observers, however, do not believe that the currency boards established by transition countries are "true" ones. The national bank continues to exist and operates "windows" where citizens can exchange foreign currency. It can still influence the money supply via reserve requirements. And there is also a banking department at the BNB that is to act as a lender as a last resort. For now, all macroeconomic indicators are favorable, with inflation at 0.8 percent in June and the BNB's foreign reserves at record levels. The credibility of government policy is high, with people rushing to turn German marks into leva during the board's first days. Interest rates on the government security market have fallen to under 7 percent a level that neither Estonia nor Lithuania reached until two or three years after the introduction of their currency boards. Currency market players now seem excessively optimistic, after having experienced the opposite for a long period. In the medium term, however, problems are bound to emerge. The Baltic experience suggests that inflation will remain rather high (20-30 percent) for several years. Other factors remain indeterminate. Who will provide credit to viable enterprises? And will banks concentrate on buying government securities and eschew lending to firms? Moreover, it is uncertain what the political consequences of the inevitable shutdown of enterprises and rising unemployment will be. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria. Reprinted with permission of Radio Free Europe/Radio Liberty
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