RFE/RL Newsline, Vol. 3, No. 159, 99-08-17

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RFE/RL NEWSLINE

Vol. 3, No. 159, 17 August 1999

CONTENTS

[A] TRANSCAUCASUS AND CENTRAL ASIA

[01] ROW OVER AZERBAIJAN'S MUNICIPAL ELECTION LAW CONTINUES

[02] TYPHOID OUTBREAK IN AZERBAIJANI ARMY

[03] GEORGIAN OFFICIAL SAYS DAGHESTAN FIGHTING COULD DELAY POPE'S

[04] KAZAKH ELECTION OFFICIAL CASTS DOUBT ON FORMER PREMIER'S

[05] ...AS DEADLINE PASSES FOR REGISTRATION OF CANDIDATES TO

[06] KAZAKH JOURNALIST FOUND DEAD

[07] BP REVERSES DECISION TO QUIT KAZAKH OIL PROJECT

[08] KAZAKHSTAN MAY SOON DECIDE ON SECOND OIL EXPORT PIPELINE

[09] KYRGYZSTAN ADMITS RANSOMING HOSTAGES

[10] DATE SET FOR KYRGYZSTAN'S LOCAL ELECTIONS

[11] UZBEKISTAN DENIES ITS PLANES BOMBED TAJIK TERRITORY

[B] SOUTHEASTERN EUROPE

[12] TWO SERBS KILLED IN MORTAR ATTACK

[13] PLIGHT OF KOSOVAR SERBS WORSENS

[14] MILOSEVIC DEMANDS RETURN OF SERBIAN TROOPS TO KOSOVA

[15] SERBIAN RAILWAY MEN RETURN TO WORK

[16] KOUCHNER SUSPENDS 'APARTHEID' LAWS...

[17] ...AFTER CRITICISM FROM KOSOVAR JUDGES

[18] SERBS, ALBANIANS NEGOTIATE COMPROMISE IN MITROVICA...

[19] ...BUT QUESTIONS REMAIN OVER IMPLEMENTATION

[20] SHPAK SAYS UCK DEMILITARIZATION BEHIND SCHEDULE

[21] SERBIA'S DINKIC CALLS DEMO 'LAST CHANCE FOR PEACEFUL

[22] ...OUTLINES PROGRAM FOR SERBIA'S FUTURE

[23] CONFUSION PERSISTS OVER BELGRADE RALLY'S LIST OF

[24] LEADING BUSINESSMAN LEAVES MILOSEVIC GOVERNMENT

[25] UP TO $1 BILLION LOST IN BOSNIAN FRAUD

[26] CROATIAN OPPOSTION COALITION TOTTERS

[27] ROMANIAN DEMOCRATIC PARTY SENDS 'MESSAGE TO TRANSYLVANIA'

[28] ROMANIAN OPPOSITION LEADER PROTESTS FRENCH-SWISS TV

[29] MENINGITIS EPIDEMIC SPREADS TO MOLDOVAN CAPITAL

[30] BULGARIA TO DEMOLISH DIMITROV MAUSOLEUM

[31] BULGARIAN EURO-LEFT NOMINATES CANDIDATE IN SOFIA MAYOR

[C] END NOTE

[32] ONE YEAR AFTER THE MELTDOWN: FEARS WANE, SHADOW LINGERS

[A] TRANSCAUCASUS AND CENTRAL ASIA

[01] ROW OVER AZERBAIJAN'S MUNICIPAL ELECTION LAW CONTINUES

meeting in Baku on 16 August, members of Azerbaijan's Central

Electoral Commission said that the amendments to the law on

municipal elections proposed by the U.S. National Democratic

Institute and the Azerbaijani opposition Movement for

Electoral Reform and Democratic Elections (MERDE) constitute

"a premeditated insult" and interference into the country's

internal affairs, Turan reported. They also condemned

accusations that commission chairman Djafar Veliev is ready

to falsify the results of the poll. Veliev presided over the

parliamentary elections in November 1995 and the October 1998

presidential poll, both of which were described by

international observers as undemocratic and marred by

widespread fraud. Meanwhile, two opposition representatives

of MERDE told Turan on 16 August that they do not regard

presidential administration official Ali Hasanov's criticism

of the proposed amendments as valid (see "RFE/RL Newsline,"

16 August 1999). LF

[02] TYPHOID OUTBREAK IN AZERBAIJANI ARMY

Ministry reported on 16 August that two servicemen died of

typhoid on 4 August and another 100 are suffering from the

disease, Interfax reported. Turan on 16 August cited "Yeni

Musavat" as reporting that the victims were serving at the

Geranboy and Gilazi military camps and that a quarantine has

been imposed. LF

[03] GEORGIAN OFFICIAL SAYS DAGHESTAN FIGHTING COULD DELAY POPE'S

A spokeswoman for the Georgian Orthodox Church told

Reuters in Tbilisi on 16 August that it may be appropriate to

delay Pope John Paul II's trip to Georgia until 2001 because

of the unstable situation resulting from the fighting in

Daghestan. Vatican envoy Giovanni Battista Re announced in

Tbilisi on 15 August after talks with Georgian Foreign

Minister Irakli Menagharishvili and the head of the Georgian

Orthodox church, Catholicos Ilia II, that the pontiff will

visit Georgia at an unspecified date this fall (see "RFE/RL

Newsline," 16 August 1999). Caucasus Press on 13 August cited

"Dilis gazeti" as reporting that members of the Islamic Shura

of Daghestan, which last week proclaimed an independent

Islamic republic, have sent an e-mail to Georgian President

Eduard Shevardnadze assuring him of their desire to establish

friendly relations with Georgia once they take power in

Daghestan. LF

[04] KAZAKH ELECTION OFFICIAL CASTS DOUBT ON FORMER PREMIER'S

Zaghipa Balieva told journalists in Almaty on

16 August that former Prime Minister Akezhan Kazhegeldin may

not, after all, be eligible to contend the 10 October

elections to Kazakhstan's lower chamber of parliament,

Interfax reported. Balieva had said at a press conference

last week that the administrative offense Kazhegeldin

committed in 1998 by participating in an unregistered public

movement does not constitute an impediment to him taking part

in the October ballot (see "RFE/RL Newsline," 13 August

1999). But on 16 August Balieva said that she was unaware

that Kazhegeldin had also been found guilty of contempt of

court. LF

[05] ...AS DEADLINE PASSES FOR REGISTRATION OF CANDIDATES TO

Balieva also said on 16 August that a total of 33

candidates have registered to contend the 16 seats in the

upper chamber of parliament, RFE/RL's Almaty bureau reported.

She said that the OSCE has prepared special television

programming to inform the electorate about the ballot. Also

on 16 August, Petr Svoik, one of the leaders of the

opposition Azamat Party, was refused registration in an

Almaty district as a candidate for a lower house seat. The

next day, "Nezavisimaya gazeta" reported that for the first

time in Kazakhstan, new computer technology will be used to

record the identity of every citizen who casts a vote and

thus preclude multiple voting during the upcoming

parliamentary elections. LF

[06] KAZAKH JOURNALIST FOUND DEAD

dead in his apartment in Almaty last weekend, his relatives

told RFE/RL's bureau in the former capital on 17 August. No

further details of the circumstances of his death are

available. Tasymbekov was briefly incarcerated in a

psychiatric hospital earlier this year on suspicion of

involvement in daubing slogans on buildings in Astana that

denigrated President Nursultan Nazarbaev and extolled former

Prime Minister Kazhegeldin (see "RFE/RL Newsline," 3 and 6

May 1999). LF

[07] BP REVERSES DECISION TO QUIT KAZAKH OIL PROJECT

gone back on its decision to sell its 9.5 percent stake in

the Offshore Kazakhstan International Operating Company

(OKIOC) for an asking price of $440 million, Interfax

reported on 16 August, quoting an unnamed OKIOC official. BP

had announced in July that it planned to sell its share in

the consortium, regardless of whether the first test well

yielded hydrocarbons (see "RFE/RL Newsline," 30 July 1999).

On 13 August, ITAR-TASS reported that Kazakhstan's Prime

Minister Nurlan Balghymbaev had set in motion the drilling

machine to bore OKIOC's first offshore test well. LF

[08] KAZAKHSTAN MAY SOON DECIDE ON SECOND OIL EXPORT PIPELINE

ceremony, Balghymbaev said the choice of a second Caspian

export pipeline (in addition to the one from Tengiz to

Novorossiisk, which is scheduled to go into operation in mid-

2001) will be contingent on the results of the test well,

which, he said, should be available in three to four months,

Interfax reported. Balghymbaev hinted that the route via

Turkmenistan to Iran is the most likely option, noting that

the feasibility study for the alternative pipeline to China

will not be completed for another two months. LF

[09] KYRGYZSTAN ADMITS RANSOMING HOSTAGES

Security spokesman Talant Razzakov told an RFE/RL

correspondent in Bishkek on 16 August that the Kyrgyz

authorities paid $50,000 in cash to obtain the 13 August

release of four local guerrillas from Uzbekistan took hostage

one week earlier in the southern district of Batken (see

"RFE/RL Newsline," 10 and 16 August 1999). The kidnappers had

originally demanded a $1 million payment. Razzakov also said

that Defense Ministry forces have begun a military operation

with the aim of neutralizing the guerrillas. Razzakov

confirmed that Uzbek planes bombed some mountainous areas in

Batken on 15 August as well as Tajikistan's neighboring

Djirgatal district in an attempt to hit the guerillas. He did

not elaborate. According to "Vechernii Bishkek" of 16 August,

the Uzbek bombing raid was coordinated with the Kyrgyz

leadership. LF

[10] DATE SET FOR KYRGYZSTAN'S LOCAL ELECTIONS

Commission chairman Sulaiman Imanbaev announced in Bishkek on

16 August that President Askar Akayev has signed a decree

scheduling local elections for 17 October, RFE/RL's Bishkek

bureau reported. LF

[11] UZBEKISTAN DENIES ITS PLANES BOMBED TAJIK TERRITORY

lodged an official complaint with Uzbekistan's ambassador in

Dushanbe, Bakhtiar Urdashev, following an incident the

previous day in which four jets approaching from Kyrgyz

airspace dropped eight bombs on Tajikistan's Djirgatal

district, Russian agencies reported. Buildings were destroyed

and some 100 sheep and cattle killed, but there were no human

casualties. Djirgatal is close to the border with

Kyrgyzstan's Osh Oblast, where guerrillas from Tajikistan,

some of them reportedly ethnic Uzbeks, took four Kyrgyz

officials hostage last week (see above). The Uzbek Foreign

Ministry denied any knowledge of the bombing. LF

[B] SOUTHEASTERN EUROPE

[12] TWO SERBS KILLED IN MORTAR ATTACK

mortar shells at the village of Klokot in the U.S. sector of

Kosova on 16 August. Two Serbian teenagers were killed and

five other Serbs wounded. It was one of the most serious

incidents of apparently ethnically motivated violence since

the fighting ended in June, AP reported. In a separate

incident, unknown persons shot and wounded an ethnic Albanian

boy in Petrovce, which is also in the U.S. sector. PM

[13] PLIGHT OF KOSOVAR SERBS WORSENS

McNamara told BBC Television on 16 August that the UNHCR

recently helped an unspecified number of Serbs to leave

Kosova. He added that Serbs are increasingly faced with the

danger of revenge attacks by ethnic Albanians and that the

"pressures [on Serbs] seem to be mounting on a daily basis."

His agency may evacuate more Serbs soon, McNamara noted,

pointing out that it is not the policy of the UNHCR to

encourage people to leave but rather to assist them if they

choose to do so. He said that some people who had wanted to

be evacuated but whom his agency did not evacuate

subsequently lost their lives. On 17 August, Reuters reported

that in Prishtina, armed ethnic Albanians locked an elderly

Serbian woman in her kitchen and robbed, beat, and attempted

to rape her daughter-in-law. The women and their Serbian

neighbors later fled for safety. British peacekeepers said it

was the third such incident in 24 hours. PM

[14] MILOSEVIC DEMANDS RETURN OF SERBIAN TROOPS TO KOSOVA

16 August that KFOR has "tolerated the rampage of bandit

groups" in Kosova. He added that "the gravest crimes against

Serbs have been committed [as well as] the ethnic cleansing

of non-Albanians" since Serbian forces left under the terms

of the June peace agreement. Milosevic demanded that KFOR

speed up the disarmament of Kosova Liberation Army (UCK)

fighters and expel "hordes of criminals and robbers" who have

recently arrived from Albania. He also repeated the recent

call by several other top Serbian officials that the UN allow

Serbian forces to return to the province (see "RFE/RL

Newsline," 16 August 1999). PM

[15] SERBIAN RAILWAY MEN RETURN TO WORK

railway workers in Fushe Kosova returned to work on 16

August. A UN spokesman told BBC Television that the men's

experience will be a big help in arranging for the efficient

transportation of supplies for the coming winter. The men

will not work with their ethnic Albanian former colleagues.

PM

[16] KOUCHNER SUSPENDS 'APARTHEID' LAWS...

Nadia Younes told an RFE/RL South Slavic Service

correspondent in Prishtina on 16 August that UN Special

Representative Bernard Kouchner has suspended

"apartheid" legislation discriminating against

individuals on ethnic or religious grounds. Kouchner

issued the ruling at a 15 August meeting with some 50

judges and prosecutors from throughout Kosova. He also

appointed a 19-member working group, co-chaired by the

ethnic Albanian Professor of Law Blerim Reka and UN

legal experts, to review the existing laws. One of those

laws likely to be abolished is that prohibiting

Albanians from buying real estate from Serbs. FS

[17] ...AFTER CRITICISM FROM KOSOVAR JUDGES

RFE/RL South Slavic Service correspondent on 16 August

that Kouchner suspended the discriminatory laws after

several ethnic Albanian judges had criticized them. The

professor noted that "there is confusion about which

laws will be applied in Kosova," pointing out that "the

first decree that Bernard Kouchner signed says

explicitly that those laws will be used in Kosova that

were in force until 24 March of this year. These were

the laws of the Yugoslav occupiers." Reka added that

most ethnic Albanians believe that "one cannot apply the

laws of a regime that committed genocide on the

territory of and toward the people who were the victims

of that genocide." FS

[18] SERBS, ALBANIANS NEGOTIATE COMPROMISE IN MITROVICA...

Mitrovica, asked a group of ethnic Albanian protesters

there on 16 August to disperse peacefully. He told them

that Serbian and Albanian representatives found a

compromise earlier that day--under UN mediation--to

allow the return of ethnic Albanian displaced persons to

the northern, Serb-dominated part of town. Rexhepi told

an RFE/RL South Slavic Service correspondent that

"according to the agreement, 25 families will return to

their homes in the north every day. It also provides for

free access by students to the metallurgic faculty in

the north.... We also agreed on the creation of a joint

board of directors for the Trepca mines." FS

[19] ...BUT QUESTIONS REMAIN OVER IMPLEMENTATION

that "we will try to implement that agreement in the coming

days. If it brings concrete results it is fine, but if not

the population will try to find other ways to end the

[partition] of the city." An unidentified Western official,

however, told Reuters that neither side has signed any

agreement. He suggested that Rexhepi is misrepresenting the

state of affairs by presenting his side's bargaining points

as a done deal. FS

[20] SHPAK SAYS UCK DEMILITARIZATION BEHIND SCHEDULE

General Georgii Shpak, who is commander of the Russian

paratrooper units, told Interfax on 16 August that the UCK is

behind schedule with its demilitarization plan. He added that

unidentified attackers have "often" fired shots near Russian

checkpoints, but he added that there have been no direct

attacks on the paratroopers. FS

[21] SERBIA'S DINKIC CALLS DEMO 'LAST CHANCE FOR PEACEFUL

Mladjan Dinkic of the G-17 group of independent

economists told Vienna's "Die Presse" of 16 August that the

opposition demonstration slated for 19 August in Belgrade

will prove decisive for Serbia's political future. He called

it "the last chance for a peaceful transition of power and

the last chance for the opposition to unite." He stressed

that Milosevic must leave office before winter sets in. The

alternative could be a violent revolution on the model of

Romania in 1989, Dinkic warned. He expressed understanding

that Serbian Orthodox Patriarch Pavle will not take part in

the demonstration. Dinkic noted that Pavle must represent all

Serbs, "including those on the other side." The opposition

leader added, however, that many clerics will march in the

protest and that the Orthodox Church has called for Milosevic

to go. PM

[22] ...OUTLINES PROGRAM FOR SERBIA'S FUTURE

"Die Presse" of 16 August that the G-17's "Stability Pact for

Serbia" calls for a one-year transitional government to

organize free and fair elections and to draft plans for

economic reform (see "RFE/RL Newsline," 28 July 1999). Dinkic

stressed that Serbia must quickly reach a "reasonable

understanding" with Montenegro over the future of their

relationship. He noted that Serbia also must join the

international stabilization project for southeastern Europe

and make its markets attractive for foreign investors. If

Milosevic does not step down or is not overthrown soon,

Serbia is likely to "remain a black hole in Europe for the

next 10 years," Dinkic warned. PM

[23] CONFUSION PERSISTS OVER BELGRADE RALLY'S LIST OF

Dinkic did not mention that generals-turned-

politicians Vuk Obradovic and Momcilo Perisic do not plan to

attend the demonstration. Kosovar Serb leader Momcilo

Trajkovic, moreover, said that no one from the opposition has

invited him or anyone from his Serbian Resistance Movement,

"Danas" reported on 16 August. Alliance for Change leader

Vladan Batic told Reuters that his group will attend the

rally, but "we don't know who else will turn up." The main

problem involves the sequence and number of speakers. The

clash of egos among opposition leaders has long been the

major obstacle to unity within the opposition. PM

[24] LEADING BUSINESSMAN LEAVES MILOSEVIC GOVERNMENT

Karic has resigned his position as minister-without-portfolio

in the Serbian government, AP reported on 16 August. Karic

said that his "government obligations have inflicted severe

damage to my business." He is one of 308 top Yugoslav

officials whom Western countries have withheld visas. PM

[25] UP TO $1 BILLION LOST IN BOSNIAN FRAUD

of 17 August reported that U.S.-led anti-fraud investigators

have found that Muslim, Serbian, and Croatian nationalist

leaders have stolen up to $1 billion from public funds or

international aid projects since the Dayton peace agreement

was signed in 1995. The report, which exceeds 400 pages and

was compiled for the office of the international community's

high representative, details widespread corruption. In one

incident, a Bosnian bank "lost" $20 million belonging to 10

foreign embassies or aid agencies. In Tuzla, $200 million

"disappeared" from the 1999 budget. Tuzla officials had the

local schools painted four times in 1998, at a cost several

times the going-rate, even though international aid

organizations also had them rebuilt and painted. The schools

have no heating. Few corrupt officials have ever been brought

to justice, the report added. Observers note that Bosnia

requires massive investments and a vigorous expansion of the

private sector to combat rampant unemployment and poverty. PM

[26] CROATIAN OPPOSTION COALITION TOTTERS

opposition Istrian Democratic League and the Liberal Party

said in Rovinj on 16 August that their parties do not approve

of the recent "strategic alliance" struck between the Social

Democrats and Social Liberals. In Zagreb, an official of the

People's Party said that the emergence of the two-member

alliance threatens to destroy the six-party electoral

coalition that seeks to win a majority in the parliamentary

elections due by the end of 1999. The Social Democrats and

Social Liberals are the two largest parties within the six-

member coalition. Opinion polls suggest that the coalition

seems likely to defeat the governing Croatian Democratic

Community. PM

[27] ROMANIAN DEMOCRATIC PARTY SENDS 'MESSAGE TO TRANSYLVANIA'

on 16 August his party's "Message to Transylvania," RFE/RL's

Bucharest bureau reported. Roman said that his party does not

want the Romanian majority to "merely coexist" with the

Hungarian minority because "coexistence [means] separate

development." The Democrats, Roman said, want the region to

build on its historical traditions and spearhead cooperation

among all Romanians on the country's progress toward

integration into European structures. Addressing the region's

Hungarian ethnic minority, Roman said "we respect and back

your fidelity toward your national cultural values and we

expect to receive from you a political pledge of fidelity

toward the Romanian national unitary state." MS

[28] ROMANIAN OPPOSITION LEADER PROTESTS FRENCH-SWISS TV

Party of Social Democracy in Romania leader Ion

Iliescu, in an open letter addressed to Romanian political

leaders and journalists, demanded that a protest be launched

against the French television channel TV 5's showing of what

he called "a profoundly anti-Romanian" movie, Romanian media

report. The movie, which was aired on 12-13 August, depicts

the ordeals of an ethnic Hungarian who returns to Romania

after 1989 and finds out that his brother has been killed by

the Ceausescu secret police. Iliescu said that the film is

based on "falsehood and myth, ignorance of historical reality

[and] fabricated lies." A spokesman for the channel told AFP

that the movie was "fiction, which by definition cannot be

guided by the same criteria of objectivity as a report." MS

[29] MENINGITIS EPIDEMIC SPREADS TO MOLDOVAN CAPITAL

meningitis epidemic has spread from Romania--where more

than 2,000 cases have been recorded so far--to Chisinau,

Infotag reported on 16 August, citing an official from the

National Center of Preventive Medicine. The official told

the agency that 67 cases were registered in July and

another 67 in the first 10 days of this month. He said no

information is available on the spread of the disease to

other parts of Moldova. MS

[30] BULGARIA TO DEMOLISH DIMITROV MAUSOLEUM

the Ministry of Construction said on 16 August that the

Georgi Dimitrov mausoleum will be demolished by 8 September

because "experts agree that it does not match Sofia's

overall architectural image," Reuters reported. Dimitrov's

body was removed from the mausoleum and cremated in 1990.

The opposition Socialist Party said that the decision is

"politically motivated" and linked to the October local

elections. It added that it wants the building to be turned

into a memorial for Bulgarian soldiers. MS

[31] BULGARIAN EURO-LEFT NOMINATES CANDIDATE IN SOFIA MAYOR

Nikolai Kamov of the Euro-Left Party will run for

the Sofia mayoralty in the fall local elections. Kamov's

candidacy has also been endorsed by the Bulgarian Social

Democratic Party (BSDP) and the United Labor Bloc, BSDP

honorary chairman Petar Dertliev told BTA on 13 August. Kamov

was originally expected to be the candidate of the entire

leftist opposition, but the Bulgarian Socialist Party has

nominated former minister Rumen Ovcharov to run for the post.

MS

[C] END NOTE

[32] ONE YEAR AFTER THE MELTDOWN: FEARS WANE, SHADOW LINGERS

Many analysts assessing the state of the Russian economy

one year after the August 1998 financial meltdown note that

their worst fears have not come true. Some even feel that it

was a healthy development for Russia.

Former Economics Minister Yevgenii Yasin, for example,

recently told RFE/RL that last August's meltdown was a

"moment of truth" for Russia. "We found out that it is

impossible to live on debts and impossible to live with an

inflated ruble exchange rate," he said. "The market has

brought everything back to normal. Now we stand on a more

realistic footing. We can like it or not, but it is better to

dance to this music than to live on illusions."

A year ago today, the government of then Prime Minister

Sergei Kirienko in effect devalued the ruble and defaulted on

some domestic debt. Within three weeks, the ruble plummeted

from six to 16 to the dollar, banks refused to return clients

their savings, most business activities suffered huge losses,

and foreign investment dried up. As a result, many people

lost their jobs, and most of those who managed to keep them

saw their salaries reduced or delayed.

When the crisis peaked last summer, Russians emptied

shop shelves and started stocking up on goods, preparing for

the worst. They once again showed their endless capacity for

enduring cataclysms. And, significantly, there was no major

social unrest.

A new left-leaning government led by Yevgenii Primakov

talked much about implementing measures that could have led

to hyperinflation. But in the end it avoided a full economic

crash by enforcing a policy that some observers called

"positive inaction." As a result, the ruble continued its

fall, but finally found firmer ground at a rate of about 24

to the dollar.

Following the ruble devaluation, imports fell

drastically--by 46 percent in the first half of this year--

helping boost domestic production. Demand has increased for a

wide range of domestically produced goods, which now are

cheaper owing to the devaluation. Those goods range from food

products to construction materials.

Another reason for Russia's improving trade balance is

the upward trend of world prices for oil and other raw

materials. A barrel of Russian oil was worth only 8.58

dollars in February, but the price had risen to 19.34 dollars

by July.

Yasin, however, notes that the current positive trend

had a high price and that currently Russians are poorer than

a year ago. "The positive trends we notice now in industry

and in several other sectors--the increase in exports, the

[domestic] production growth to replace imports, the improved

budget situation--has been paid for by the people. The

population's standard of living has decreased by 25 to 30

percent."

Official figures released in July say that the number of

Russians living in poverty increased from 33 million last

year to 55 million this year. This means that nearly four out

of every 10 people live below the official subsistence level,

defined as a monthly income not exceeding 829 rubles (some

$34).

The average monthly wage now equals about $50, having

fallen from some $200 before last August. The average pension

now equals only about $17 a month.

Some economic analysts argue that government policies

have contributed little to the current positive trends. Denis

Rodionov, an analyst with Brunswick Warburg, told RFE/RL that

"deeper reforms--structural and institutional--are still not

there." He said that the main policy needs continue to be the

reform of monopolies, the introduction of bankruptcy

legislation, the reduction of barter practices, the

improvement of tax collection, and the restructuring of the

banking system.

Others argue that another huge problem is persisting

corruption and the inefficiency of both the authorities and

state and private businesses.

The government and central bank program outlining

economic policy for this year states that the Russian

authorities are committed to further structural reform. The

program was submitted to the IMF ahead of the fund's long-

awaited decision late last month to issue $4.5 billion in new

loans over the next 18 months. The money is intended to help

refinance previous loans that are coming due.

The IMF decision has been of critical importance for

Russia. Not only has it unlocked additional funds from the

World Bank and Japan's Eximbank. It has also made possible an

agreement with the Paris Club of foreign debtors on

postponing payment of some Soviet-era debts.

But the IMF's new loan was accompanied by unusually

strong words from fund officials. Citing an audit that found

Russia's central bank had falsified the size of its reserves

in 1996 by secretly channeling funds through the offshore

company FIMACO, the IMF's first deputy managing director,

Stanley Fischer, said the fund has "made clear to the highest

levels of Russian government" that what happened was

"unacceptable".

Peter Westin, an economist at the Moscow-based European

Center for Economic Policy, wrote recently in the English-

language "Moscow Times" that the IMF decision "was mainly

political." He said it "reconfirms the suspicion that

creditors view Russia as too big to fail."

One year after the meltdown, most analysts seem to agree

that the shadow of August 1998 lingers.

The author is an RFE/RL correspondent based in Moscow.

17-08-99

Reprinted with permission of Radio Free Europe/Radio Liberty
URL: http://www.rferl.org

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