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RFE/RL Newsline, Vol. 2, No. 211, 98-11-03Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next ArticleFrom: Radio Free Europe/Radio Liberty <http://www.rferl.org>RFE/RL NEWSLINEVol. 2, No. 211, 3 November 1998CONTENTS[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA[01] GEORGIAN MUTINY LEADER DEMANDS PRESIDENT'S RESIGNATIONLieutenant Akaki Eliava, who led the abortive insurrection in western Georgia on 19-20 October, has demanded the release of all his supporters arrested for their participation in the revolt, the resignation of President Eduard Shevardnadze, and official condemnation of the removal from power of former President Zviad Gamsakhurdia in 1991-1992, Interfax reported on 2 November. Eliava threatened a new military campaign against the Georgian authorities if those demands are not met by 15 November. Thirty- four people have been arrested to date for their role in the uprising, ITAR-TASS reported on 2 November, quoting Military Prosecutor Badri Bitsadze. LF[02] ARMENIAN PARLIAMENT DELEGATION VISITS GEORGIAA delegation headed by deputy parliamentary speaker Yurii Bakhshian has concluded a three-day visit to Tbilisi, where it held talks with Georgian parliamentary speaker Zurab Zhvania and Minister of State Vazha Lortkipanidze, Noyan Tapan reported. Zhvania stressed that the dissatisfaction of the predominantly Armenian population of the south Georgian region of Djavakheti must not be exploited to undermine bilateral relations. The talks also focused on ongoing cooperation in the energy and transport sectors, including the Eurasian Transport and Energy Corridors, and on drafting bilateral programs for national security and cooperation with international organizations. LF[03] ARMENIAN PARTY THREATENED WITH LIBEL SUITSeveral prominent Armenian political figures have said they intend to sue the Armenian Revolutionary Federation (HHD) for libel, RFE/RL's Yerevan bureau reported on 2 November. The politicians, who include former national security chief Davit Shahnazarian and Eduard Yegorian, who heads the Hayrenik parliamentary group, are among several associates of former President Levon Ter-Petrossian whom the HHD has accused of corruption and embezzlement (see "RFE/RL Newsline, 2 November 1998). Senior HHD member Gegham Manukian said on 2 November that his party has evidence to support its allegations of malpractice. LF[04] AZERBAIJAN OPPOSITION PLANS NEW UMBRELLA MOVEMENTRepresentatives of more than 20 Azerbaijani political parties and defeated presidential candidate Ashraf Mehtiyev met on 2 November to discuss setting up a Movement for Democracy, Turan and RFE/RL's Baku bureau reported. The movement will campaign for new parliamentary, presidential. and municipal elections. Membership will be open to all those who do not recognize the legitimacy of the present leadership. LF[05] AZERBAIJAN, TURKMENISTAN SEEK CASPIAN ACCORDAzerbaijani President Heidar Aliev will travel to Ashgabat shortly with a government delegation for talks with Turkmen officials on ownership of several Caspian offshore oil fields to which both countries lay claim, "Nezavisimaya gazeta" reported on 3 November. But Turkmen Foreign Minister Boris Shikhmuradov has made clear that Ashgabat will not compromise on the Kyapaz field and will raise the possibility of becoming a member of the international consortium currently developing the Azeri and Chirag fields, according to Turan on 2 November. LF[06] ALIEV SETS DEADLINE FOR MEP DECISIONAliev on 1 November ordered the Azerbaijan State Oil Company SOCAR and the Azerbaijan International Operating Company (AIOC) to draw up by 12 November their recommendation on the optimum route for the so-called Main Export Pipeline for Caspian oil. Aliev again rejected claims that the proposed Baku-Ceyhan route will cost up to $1 billion more than the alternatives. In a 2 November interview with Reuters, U.S. envoy for Caspian energy issues Richard Morningstar similarly cast doubts on the estimated cost of the Baku- Ceyhan route but made clear that the U.S. government will not provide funds for that project. Morningstar also said he does not consider it "critical at this point" for the AIOC to make a firm commitment to the Baku- Ceyhan route. He predicted intensive negotiations between Azerbaijan, Turkey, and the AIOC on how to fund the Baku-Ceyhan route. LF[07] TURKMEN OIL PRODUCTION REACHES RECORD LEVELSTurkmenistan's Oil and Gas Ministry on 2 November announced that daily oil extraction has reached 20,000 tons, Interfax reported on 2 October. The ministry said that improved extraction methods will "guarantee" a total output of 7 million tons in 1998. That figure will grow to 10 million tons by the year 2000, the ministry said, adding that half of the total output will be exported. BP[08] BOMB EXPLOSIONS IN TAJIK CITYSeveral bombs exploded in the southwestern city of Kurgan-Tyube on 3 November, ITAR-TASS and Reuters reported. One bomb went off outside the city's Interior Ministry building, killing one person who was in a parked car nearby. Bombs also exploded near other administrative buildings in the city at intervals of 20 minutes, but no other casualties are reported. Law enforcement officials describe the explosions as acts of terrorism. BP[09] KYRGYZ NATIONAL CURRENCY LOSES VALUE AGAINChairman of the Kyrgyz National Bank Marat Sultanov told a news conference on 2 November that the som is continuing to lose value because foreign investors are withdrawing money from the country, RFE/RL correspondents reported. Sultanov said the Russian financial crisis is also partly to blame for the decrease. Since July, the som has dropped from 17 to $1 to 24- 25. Sultanov said that the National Bank has spent 12 percent of its hard currency reserves since August. He added that the state budget for 1999 will have to be revised. BP[B] SOUTHEASTERN EUROPE[10] GEORGIEVSKI VOWS CHANGES IN MACEDONIALjubco Georgievski, whose coalition won both rounds of the recent Macedonian parliamentary elections, said in Skopje on 2 November that his main goal as prime minister will be to promote "serious changes" in the domestic economy by ending corruption, encouraging private enterprise, and attracting foreign investment (see "RFE/RL Newsline," 2 November 1998). Georgievski added that he plans "no radical changes" in foreign policy. Vasil Tupurkovski, his coalition partner, said that the government will include ethnic Albanians and will therefore have a broad base for governing. He added that the government will work to improve inter-ethnic relations and that there will be "equal rights for all." It is unclear which ethnic Albanians he intends to include in the cabinet. Some 23 percent of Macedonia's population is ethnic Albanian. There are also sizable communities of Turks, Roma, and Serbs. PM[11] HILL BEGINS TALKS WITH KOSOVARSU.S. Ambassador to Macedonia Christopher Hill, who is Washington's chief envoy in the Kosova crisis, arrived in Prishtina on 3 November for talks with the Kosovar leadership. The previous day, he discussed a draft political settlement for Kosova with Serbian President Milan Milutinovic in Belgrade. Hill told reporters that the 2 November date mentioned in the agreement between Yugoslav President Slobodan Milosevic and U.S. special envoy Richard Holbrooke is not a "deadline" for obtaining a settlement, adding that he hopes to have a cut-off date "within weeks." Western diplomats believe that the first step toward that goal will be for diplomats to assist the various Kosovar groups in formulating a common policy among themselves, the "Financial Times" wrote on 3 November. Observers noted, however, that the plans that U.S. and Yugoslav officials have discussed fall far short of the minimum that most Kosovars are willing to accept (see "RFE/RL Bosnia Report," 21 October 1998). PM[12] DID FRENCH NATO OFFICER SPY FOR SERBIA?French police arrested on suspicion of espionage Major Pierre Bunel, who worked at NATO headquarters in Brussels as a liaison officer between the alliance's Military Committee and the civilian authorities to whom the military report. The arrest took place in Paris on 1 November. The French authorities believe he provided Serbian agents with information about likely NATO targets in Serbia in the event that the Atlantic alliance launched air strikes against that country. It is unclear how Bunel's superiors came to suspect him of espionage, the "International Herald Tribune" wrote. He reportedly told French investigators that he spied out of sympathy for Serbia and not for money, according to "The Guardian." The incident is the latest in a series in which French military and diplomatic personnel have been suspected of abusing their positions to help the Serbs, the London-based daily added. PM[13] MONTENEGRO APPEALS TO PERISICDeputy parliamentary speaker Rifat Rastoder appealed on 2 November in Podgorica to General Momcilo Perisic, who heads the Yugoslav army's general staff, to stop taking legal measures against young Montenegrins who ignored their induction notices during the recent conflict in Kosova. Rastoder also called on Perisic to issue an amnesty for those youths, RFE/RL's South Slavic Service reported (see "RFE/RL Newsline," 30 October 1998). Meanwhile in Ulcinj, U.S. Assistant Secretary of State for Population, Refugees, and Migration Julia Taft visited a refugee camp for refugees from Kosova. She had earlier observed the conditions facing displaced persons in the Serbian province. PM[14] WORLD BANK WARNS BOSNIARory O'Sullivan, who heads the World Bank's mission to Bosnia, said on 2 November in Sarajevo that smuggling and customs evasion remain a "serious issue" in that country. He noted that officials in the mainly Croatian and Muslim federation as well as in the Republika Srpska have recently taken unspecified moves to crack down on smugglers, but he added that much smuggling still goes unpunished. O'Sullivan argued that international aid donors are unlikely to offer additional funds to Bosnia as long as corruption and smuggling remain rampant. Much of the illegal activity is carried out by mafia-like structures linked to the political and military establishments of the two entities. PM[15] SARAJEVO LAUNCHES ZOO PROJECTSFOR peacekeepers completed work on restoring the grounds of the Sarajevo zoo and clearing the area of mines on 2 November. Bosnian officials will finish rebuilding the zoo by next spring and have received offers of animals from several European zoos. Director Safet Harbinja told Reuters that the zoo will contain only animals indigenous to the Balkans. All pre- war animals died or were killed during the three year-long Serbian siege of the capital, and a sniper killed one keeper in a well-publicized incident. PM[16] ALBANIAN CUSTOMS SEIZE KOSOVA-BOUND ARMSCustoms officials in the port of Durres on 1 November found sophisticated sniper rifles, communications equipment, and ammunition in two containers that arrived from Switzerland aboard a Croatian ship, dpa reported. The containers were bound for northern Albania and also contained clothes, blankets, and mattresses for Kosovar refugees. Customs officials discovered the arms when, after one week, nobody had arrived to collect the goods. Albanian and Swiss authorities have started joint investigations. FS[17] WORK ON DURRES FERRY PORT BEGINSThe Italian company Cosmar has begun work on upgrading the Durres ferry terminal, ATSH reported on 1 November. The World Bank is financing the project to the tune of $11 million. World Bank Deputy President Johannes Linn said in Tirana the following day that the World Bank plans to grant Albania a total of $150 million over the next three years. It has already provided $300 million since 1992. FS[18] ITALIAN CUSTOMS START PATROLLING ALBANIA'S COASTItalian customs speed boats arrived at the southern Albanian island of Sazan on 1 November as part of an 80-strong Italian police force that will patrol the southern Albanian coast(see "RFE/RL Newsline," 29 October 1998). Last month, the Italian and Albanian interior ministers signed an agreement providing for such a force. The patrols aim at stemming illegal migration and smuggling across the Otranto straits, ATSH reported. Elsewhere, Albanian authorities have expelled 62 illegal immigrants including 32 Iraqi and 25 Turkish citizens as well as five Palestinians. They had entered Albania last week from Greece and were arrested in a village near Fier, dpa reported. Albanian police, meanwhile, have increased road controls around the port of Vlora to catch illegal immigrants before they have a chance to embark. FS[19] FRANCE INTERESTED IN ROMANIAN AIRCRAFT COMPANYPrime Minister Radu Vasile, who is on a three-day visit to France, said on 2 November that France's Eurocopter company is interested in acquiring a stake in the Ghimbav IAR aircraft company in Brasov. He said the French company, under whose license the PUMA helicopter was produced in Brasov between 1974 and 1996, wants to modernize and resume production of the PUMA military aircraft as well as produce helicopters for civilian purposes. Vasile said France's interest gives "a new dimension" to the talks now under way with Bell Textron Helicopters on the privatization of Gimbav- IAR, which must be concluded by 31 December. Also on 2 November, the government announced that final offers have been received from Italy' STET and Greece's OTE companies for stakes in RomTelcom. MS[20] DEMOCRATS DENY ISSUING 'ULTIMATUM' TO COALITIONDemocratic Party chairman Petre Roman on 2 November said that his party has not "issued an ultimatum" to the ruling coalition but added that the coalition pledged to implement "concrete reforms" within six months of Radu Vasile's cabinet taking office. Roman said this was "the last chance" for the coalition to fulfill its mandate. The government on 2 November announced that the law on the restitution of nationalized housing and the protection of tenants will be debated in the parliament under regular procedure rather than under the "emergency procedure," to which the Democrats object. In turn, the Democrats said their draft on setting up a state company for the management of state-owned land will be withdrawn from the Senate's agenda "for two weeks." MS[21] SHARP FALL IN MOLDOVAN CURRENCY'S VALUEThe Moldovan national currency has dropped from 6.4 lei to 10 lei to the U.S. dollar, Infotag reported on 2 November. The devaluation came after National Bank chairman Leonid Talmaci announced at a meeting of a newly created government commission that the bank will no longer intervene to support the leu. Talmaci said that intervention by the National Bank since early September has resulted in the country's hard currency reserves dropping from $300 million to $200 million. He also said the decision to stop intervention is a "temporary measure." AP reported that the National Bank also decided to require commercial banks to sell 25 percent of their U.S. dollars to the central bank, up from 8 percent, as previously required. MS[22] BULGARIA PROTESTS MACEDONIAN TREATMENT OF JOURNALISTSForeign Minister Nadezhda Mihailova on 2 November summoned Macedonian ambassador to Sofia Nikola Todorchevsky to protest against Macedonia's refusal to allow the entry of two Bulgarian journalists who intended to cover the 1 November elections, an RFE/RL correspondent in the Bulgarian capital reported. Mihailova said Macedonia was duty-bound to allow observers and journalists to monitor the democratic course of the ballot. BTA reported that the Macedonian authorities also barred former Bulgarian consul to Skopje Rumen Elenski from entering Macedonia on 31 October. MS[23] TURKEY BACKS PLODVIV AS BASE FOR BALKAN PEACEKEEPING FORCENational Assembly Chairman Yordan Sokolov, returning from Turkey on 31 October, said Prime Minister Mesut Yilmaz now backs Plodviv, southern Bulgaria, as the base for the Balkan peace keeping force. Sokolov said Turkey is insisting only that the command of the force be rotated among participants, BTA reported. Speaking before a visit to Turkey scheduled for 4-6 November, Prime Minister Ivan Kostov expressed concern over the illegal immigration of Bulgarian Turks to Turkey, which he said was prompted by economic reasons, the Turkish Anatolia agency reported. He added that the influx into Turkey will stop in the near future if Bulgaria's economic situation continues to improve and if the country gains EU membership. MS[C] END NOTE[24] CROATIAN ECONOMIC GROWTH SLOWSby Michael WyzanThe growth of Croatia's GDP has slowed markedly this year, after soaring by about 6 percent annually during the previous three years. In the first half of 1998, GDP grew by 3.4 percent, compared with 6.5 percent in 1997 as a whole. Forecasters are predicting that economic growth for the entire year will be at about the same rate as in the first half. However, the growth of industrial production has accelerated this year, with such production increasing at an annual rate of 6.9 percent during January- August, compared with 3.9 percent last year. The slowdown reflects a conscious tightening of monetary and fiscal policy in an attempt to reduce the current account deficit, which rose from 4.5 percent of GDP in 1996 to a very high 12.5 percent last year. It is also a result of the turbulence on world markets, which will limit the growth of exports and make capital flows more volatile. While GDP growth has slowed, retail price inflation is higher: the twelve- month rate to September was 5.8 percent, compared with 3.6 percent at the end of 1997. This increase does not reflect a rise in underlying inflationary trends, since it is due largely to the 2.4 percent inflation in January that resulted from the introduction of a 22 percent value-added tax (VAT) that month. In a statement on the Croatian economy issued in July, the IMF identified rapid growth of wages and bank credit as well as an easing of fiscal policy as contributing to the surge in the current account imbalance in 1997. The fund is especially concerned about a lack of discipline among public enterprises, which have borrowed heavily at home and abroad, increased wages rapidly, and accumulated large overdue payables and receivables. The authorities have had varied success in dealing with such matters this year. In terms of the local currency (the kuna), gross monthly wages in August were 14.5 percent higher than a year earlier. Although gross dollar wages are up only slightly over a year ago, at about $620 they remain the second highest among transition economies (after Slovenia). The unemployment rate remains very high at around 16 percent. A broad measure of the money supply grew by less than 17 percent in the year to August, compared with almost 38 percent from December 1996 to December 1997. Tightened monetary policy early this year failed to slow banks' lending activities. And the Central Bank in April mandated that banks taking out foreign loans (or making loan guarantees for foreign loans) deposit with it a percentage of the loan (or guarantee) in kuna. These developments resulted in a slowdown in credit growth. In response to more difficult borrowing conditions on international markets, these measures were abolished on 14 October for loans with maturities of more than one year. A strong revenue performance by the new VAT and growth in privatization revenues have contributed to an increase in central government budget revenues by 42 percent during January-July over the same period in 1997. During the same period, budget expenditures rose by only 25 percent. As a result, last year's deficit of about 1 percent of GDP has turned into a small surplus. The motivation behind these fiscal and monetary measures was to rein in domestic demand and reduce the current account deficit. Those goals appeared to have been achieved: the deficit is currently projected to be 7- 8 percent of GDP, after falling in the first half of the year by 8.9 percent, compared with January- June 1997. During the first half of 1998, exports were $3.8 billion, virtually identical to the level from January-June 1997, while imports totaled $5.4 billion, down from $5.6 billion. While the trade deficit fell by 4 percent during the first seven months, it is expected to be down by 14 percent for 1998 as a whole. December 1997 saw a large surge in imports as part of a consumption boom that occurred immediately before the introduction of VAT in January. So far, the authorities have not contemplated dealing with external imbalances by letting the kuna weaken. Between September 1997 and September 1998, it fell only from 3.55 to 1 German mark to 3.68. With a small foreign debt and little foreign portfolio investment, Croatia is seen by observers as not being particularly vulnerable to attacks on its currency. Achieving sustainable rapid growth will depend on progress in various areas of structural reform, including improving bank supervision, privatizing large banks and enterprises, and completing trade reform in line with Croatia's application to join the World Trade Organization. An exercise in voucher privatization has just been completed, with seven investment funds and 11,500 individuals identified as "victims of war" bidding for shares in 471 companies. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria. 03-11-98 Reprinted with permission of Radio Free Europe/Radio Liberty
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