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RFE/RL Newsline, Vol. 3, No. 188, 99-09-27Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next ArticleFrom: Radio Free Europe/Radio Liberty <http://www.rferl.org>RFE/RL NEWSLINEVol. 3, No. 188, 27 September 1999CONTENTS[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA[01] ARMENIAN MINISTER UPBEAT ON CHANCES OF WTO MEMBERSHIPTheprospects that Armenia will be admitted to the World Trade Organization by the end of 1999 are "pretty bright," Trade and Energy Minister Hayk Gevorgian told RFE/RL's Yerevan bureau on 24 September. He said bilateral talks in Geneva between an Armenian government delegation and the WTO are nearing completion and will be followed by multilateral discussions with WTO member states. Last month, a senior US trade official mentioned Armenia, along with Estonia, Georgia, Lithuania, and Moldova, as likely to win admission to the WTO when the next round of global trade talks takes place in Seattle in November. Gevorgian said WTO membership would be good for both foreign investors and domestic businesses. Armenia's trade and investment legislation is seen as among the most liberal in the former Soviet Union. LF [02] EU TO FUND SAFETY PROGRAM FOR ARMENIAN NUCLEAR POWER STATIONUnder the terms of a recent protocol, the EU will grantArmenia 10 million euros ($10.04 million) annually from 2000- 2006 to ensure the safe operating of the Medzamor nuclear power plant, Noyan Tapan reported on 24 September, quoting Armenian Energy Minister David Zadoyan. Zadoyan added that Armenia will abide by an earlier agreement with the EU to close down Medzamor by 2004 only if new generating capacities totaling 600 megawatts are available by that date (see "RFE/RL Newsline," 18 December 1998). Zadoyan said that a decision is likely to be made at talks with the EU in October on whether a new nuclear power plant should be built to replace Medzamor. LF [03] AZERBAIJAN OPPOSITION CALLS OFF PLANNED DEMONSTRATIONRepresentatives of nine Azerbaijani opposition partiesdecided late on 24 September to cancel a mass demonstration planned for the following day, Turan reported. The opposition had picketed the Baku City Mayor's Office for days to demand permission to hold the rally. Participants in that meeting had intended to adopt a resolution condemning the Azerbaijani leadership's inability to resolve the Karabakh conflict and outlining its proposals for trying to do so (see "RFE/RL Newsline," 21 and 23 September 1999). Baku Mayor Rafael Allakhverdiev had refused permission to hold the rally in central Baku; on 24 September, he offered instead to make available a stadium on the city outskirts. Musavat Party chairman Isa Gambar told Turan on 25 September that the opposition decided to cancel the demonstration rather than risk a confrontation with the authorities by convening an unsanctioned rally in the city center. LF [04] SUSPECT IN GEORGIAN PRESIDENTIAL ASSASSINATION BID DETAINEDRussian police in the North Ossetian capital, Vladikavkaz,have detained Nugzar Chukhua, a 44-year-old Georgian citizen, on suspicion of involvement in the unsuccessful bid to assassinate Georgian President Eduard Shevardnadze in February 1998, Caucasus Press reported on 24 September, citing a Georgian television report that was subsequently confirmed by the Georgian National Security Ministry. It is unclear whether Chukhua will be extradited to Georgia. Russian police are investigating the possibility that he may also have participated in the March 1999 terrorist bomb attack in Vladikavkaz, which killed dozens of people. If those suspicions prove correct, Chukhua will stand trial in Russia on terrorism charges. LF [05] GEORGIA WANTS COUNCIL OF EUROPE TO HELP CLOSE RUSSIAN BASESIn an address to the Parliamentary Assembly of the Council ofEurope Mikhail Saakashvili, who heads the parliamentary faction of the Union of Citizens of Georgia, appealed for help from the Council of Europe in securing the closure of Russia's four military bases in Georgia, Caucasus Press reported on 24 September. Saakashvili claimed that those bases serve to destabilize the internal situation in Georgia and that the use of the Russian ruble at those facilities negatively impacts on the stability of the Georgian currency (see "RFE/RL Newsline," 20 September 1999). He also said that personnel at those bases "sell arms to the hot spots in the Caucasus." That statement is at odds with Georgian Foreign Ministry denials that any arms are entering Chechnya or Daghestan from Georgian territory (see "RFE/RL Caucasus Report," Vol. 2, No. 38, 24 September 1999). LF [06] SOUTH OSSETIA ACCUSES GEORGIAN LEADERSHIP OF SABOTAGINGTALKSIn a statement issued on 24 September, Merab Chigoev, who heads the government of Georgia's breakaway Republic of South Ossetia, accused the central Georgian government of reneging on a previous agreement on providing economic aid and electricity to South Ossetia, Caucasus Press reported. Georgia cut off power supplies to South Ossetia on 1 September because the local government had failed to pay its debt for previous energy supplies. Chigoev said that move risks jeopardizing the ongoing talks on defining relations between the central authorities in Tbilisi and the former autonomous region. LF [07] KAZAKHSTAN'S PARLIAMENT REJECTS DRAFT BUDGET...Asanticipated, both chambers of Kazakhstan's parliament rejected the government's proposed draft budget for 2000 at a joint session on 25 September, Interfax reported (see "RFE/RL Newsline," 24 September 1999). That draft cuts social spending in a bid to reduce the budget deficit from 3.6 percent to 3 percent of GDP in 1999, according to Reuters. But the draft also allocated about 570 million tenges ($4.1 million) for the needs of the Kazakh parliament, a sum that lower chamber speaker Marat Ospanov said is exorbitant, RFE/RL's Kazakh Service reported. LF [08] ...PROMPTING PREMIER TO CALL FOR NO-CONFIDENCE VOTEPrimeMinister Nurlan Balghymbaev responded to the rejection of the budget by calling for a vote of confidence in his cabinet, the second time he has done so within just over three months (see "RFE/RL Newsline," 22 and 24 June 1999). If the required two-thirds of deputies in both chambers fail to vote no confidence in the cabinet, the budget is automatically passed. Balghymbaev explained to deputies that the budget must be passed within the next week in order to secure a new IMF loan on which the government is counting in order to pay off external loans as well as wage and pension arrears, Reuters reported. Kazakhstan failed last month to reach agreement with the IMF on a new loan (see "RFE/RL Newsline," 11 and 12 August 1999). Meanwhile, on 27 September, the tenge was trading in Almaty at 143 to $1, down from 137.5 last week, RFE/RL's bureau in the former capital reported. LF [09] KAZAKH, RUSSIAN PREMIERS MEETBalghymbaev and Vladimir Putinexpressed satisfaction at the present state of bilateral relations following talks in Astana on 24 September. Putin told journalists later that agreement was reached on settling mutual debts, including the rent Russia pays for the Baikonur cosmodrome, Interfax reported. He added that Russia will increase the quota for oil that Kazakhstan may export via Russian pipelines. In return, Kazakhstan acceded to a Russian request to open more consulates in the northern, predominantly Russian-populated oblasts of Kazakhstan, "Nezavisimaya gazeta" reported on 25 September. The two premiers also signed an agreement on cooperation in guarding Kazakhstan's borders. Under that accord, Moscow will provide two coast-guard vessels to patrol Kazakhstan's sea border. LF [10] SITUATION STABILIZING IN SOUTHERN KYRGYZSTANKyrgyzstan'sPrime Minister Amangeldy Muraliev told journalists in Astana on 24 September that the situation in the south of the country has stabilized and that all approaches to the guerrillas' bases are blocked, ITAR-TASS reported. Meeting with Muraliev on the sidelines of the CIS Customs Union session (see above), Russian Prime Minister Putin assured him that Moscow fully supports Bishkek's actions against the guerrillas. Uzbekistan's President Islam Karimov conveyed similar assurances in a letter to his Kyrgyz counterpart, Askar Akaev. Also on 24 September, Akaev telephoned with Japanese Premier Keizo Obuchi to promise him that Kyrgyzstan is continuing to do everything in its power to secure the release of four Japanese geologists taken hostage by the guerrillas five weeks ago, Interfax reported. LF [11] TAJIK PRESIDENT PARDONS OPPOSITION PRISONERSImomaliRakhmonov on 24 September issued a decree pardoning 22 members of the United Tajik Opposition who were serving prison sentences ranging from eight to 14 years. Presidential press secretary Zafar Saidov told ITAR-TASS that the pardon is intended to promote trust and the process of national reconciliation. Also on 24 September, Tajikistan's Communist Party voiced its support for Rakhmonov's bid for re-election in the 6 November presidential poll, AP reported. LF [B] SOUTHEASTERN EUROPE[12] ANTI-MILOSEVIC DEMONSTRATIONS PICK UP STEAMTens ofthousands of Serbs took part in opposition protests on 26 September calling for the resignation of Yugoslav President Slobodan Milosevic, Reuters reported. A crowd estimated at 50,000 marched through the streets of Belgrade on the sixth consecutive day of protests, which are organized by the Alliance for Change. The previous day, 55,000 marchers were reported. Vladan Batic, the alliance's coordinator, said the protest movement has "clearly gained momentum." Momcilo Persic, a former Yugoslav army general sacked by Milosevic, said on 24 September that he will mobilize the "70 percent of the population [that] is angry but doesn't want to join the opposition." Demonstrations attended by several thousand people were also reported in other Serbian towns and cities. Observers point out that the nearly three months of mass demonstrations in Belgrade in 1996-1997 also began with small crowds. PB [13] YUGOSLAV MINISTER SAYS OPPOSITION WORKING FOR WESTYugoslavInformation Minister Goran Matic said on Yugoslav television on 26 September that the opposition Alliance for Change's aim is to "destroy Yugoslavia and take from it whatever they like," Belgrade's B2-92 reported. Matic said the problem is that "our citizens are being discreetly talked into acting...in someone else's interests." He added that opposition leader Zoran Djinjdjic is a NATO ally. The state news agency Tanjug said on 26 September that the opposition are "traitors" and "NATO lackeys," and it labeled the street protests a "fiasco." PB [14] DRASKOVIC MEETS WITH BOSNIAN SERB LEADERSSerbian oppositionleader Vuk Draskovic met with Bosnian Serb Premier Milorad Dodik in Banja Luka on 24 September, AP reported. Draskovic said there is only hope for Serbia if President "Milosevic and his regime is removed." Dodik said he shares Draskovic's views, noting that the democratization of Serbia would be in the best interest of Bosnian Serbs. Draskovic said he has the same goal as the Alliance for Change but disagrees "on how to achieve it." Draskovic has refused to take part in the alliance's nationwide street protests. PB [15] SERBS ARRESTED BY NATO FOR SUSPECTED INVOLVEMENT INATTROCITIESThe NATO peacekeeping force in Kosova (KFOR) has detained four Serbs suspected of committing crimes against ethnic Albanians, AP reported on 26 September. The four were in a convoy of Serbs driving toward the town of Rahovec. The same day, a member of the new Kosova Protection Corps was shot and killed in front of the corps' headquarters in Prishtina. In the U.S. sector two days earlier, one person was killed and four injured when a tractor carrying 12 Serbs was ambushed near Kamenice. And three other Serbs were injured by a bomb in Gracanice, just outside Prishtina. PB [16] SOLANA URGES RECONCILIATION, ENDORSES CORPSNATO Secretary-General Javier Solana said on 27 September that political leaders in Kosova must rebuild ethnic relations and will be held responsible unless they "stop the violence and hatred." Solana, on a visit to Prishtina, said he approves of the controversial Kosova Protection Corps, saying "it will not be a political force and it certainly will not be an army." He held talks on 26 September with Kosovar Serb official Momcilo Trajkovic and Oliver Ivanovic, the self-proclaimed mayor of the divided town of Mitrovice, who are demanding the formation of Serbian cantons and a similar protection force for Serbs. In the Serbian town of Obrenovac, Yugoslav army General Nebojsa Pavkovic said the multiethnic Kosova collapsed with the formation of the corps. He remarked that he believes Yugoslav forces will return to the province when the UN Security Council mandate expires. PB [17] CROATIAN FOREIGN MINISTER CRITICIZES WAR CRIMES TRIBUNALMate Granic said in an address to the 54th UN GeneralAssembly on 26 September that the war crimes tribunal in The Hague is "ignoring" atrocities committed against Croats during the wars of Yugoslav succession, AP reported. Granic said the indictments do not "reflect the true nature and scope of war crimes committed by different sides in the conflict." He said some 14,000 Croats died in the conflicts between 1991 and 1995. Granic added that Croatia has taken numerous steps to aid the tribunal in its work. Zagreb has been criticized for not fully cooperating with the tribunal in the handing over of indicted suspects. PB [18] IZETBEGOVIC IN MID-EASTThe Muslim member of the Bosnianpresidency, Alija Izetbegovic, arrived in Tehran on 26 September on a state visit, the Iranian news agency IRNA reported. Izetbegovic, who is to meet with Iranian President Mohammad Khatami, said he appreciated Iran's diplomatic and humanitarian support for Bosnia-Herzegovina. Izetbegovic, who also visited Kuwait, Turkey, and Saudi Arabia, has been sharply criticized by Ante Jelavic and Zivko Radisic, the Croatian and Serbian members of the Bosnian presidency, for not informing them that he was to make the trip. The Sarajevo weekly "Slobodna Bosna" reported that Izetbegovic is in bad health and that the real purpose of his visit is to receive secret medical treatment in Saudi Arabia. Izetbegovic suffered a heart attack in 1996. PB [19] DJINDJIC SEEKS SUPPORT IN MACEDONIASerbian oppositionleader Zoran Djindjic met with Macedonian President Kiro Gligorov in Skopje on 24 September, AP reported. Djindjic said the two discussed a "new Balkans policy concept" that would focus on democratization, economic development, and demilitarization as a means of reducing the chance of further conflicts. He said "our generation can halt the process of Balkan suffering." In other news, Greece's state airlines Olympic announced it has resumed twice-weekly flights from Athens to Skopje owing to increased bilateral ties. The two countries are locked in a dispute over the official name of Macedonia, which is the same as that of a neighboring region in Greece. PB [20] MONTENEGRINS SPLIT ON INDEPENDENCEA poll released in theMontenegrin capital of Podgorica on 24 September showed that 44 percent of the respondents would vote for independence while 39 percent would back remaining part of Yugoslavia, ITAR-TASS reported. The survey polled 1,000 people throughout Montenegro and was taken by the Damar polling center. Sixty percent said there is a need to revise relations with Serbia. Only 8 percent supported Yugoslav President Milosevic. In other news, Serbian Trade Minister Zoran Krasic said on 24 September that "Montenegro has just made another step toward secession," in reference to Podgorica's declaration the previous day that it is setting up its own customs and trade regime (see "RFE/RL Newsline," 24 September 1999). PB [21] ALBANIA AGREES WITH OSCE ON CORRUPTION BATTLEThe Albaniangovernment and the OSCE agreed on 24 September to wage a joint campaign against widespread corruption in the country, dpa reported. Albanian Deputy Premier Ilir Meta said "corruption poses a great danger to the future development of Albania." The OSCE commented that foreign experts will be involved in organizing and monitoring the Albanian government's progress in the fight against corruption. It added that the project is "indispensable for Albania to participate fully in and benefit from the evolving aspects of the stability pact for southeastern Europe." PB [22] ROMANIAN MINERS CALL OFF HUNGER STRIKEA group of 162 minersfrom the town of Lupeni called off their hunger strike on 24 September after the government promised them jobs, an RFE/RL correspondent reported. The miners had been fasting for three weeks and were threatening to commit collective suicide. Two years ago, they quit their jobs when the government promised them compensation as well as new employment. However, the miners were told recently that they no longer have a right to such payments. VG [23] ROMANIAN CABINET PASSES BILL TO AMEND CRIMINAL CODEThegovernment has passed a bill designed to bring the country's criminal code closer into line with EU norms, according to a 24 September Rompres report cited by the BBC. Among other things, the bill scraps provisions in the current criminal code that outlaw homosexual relations. Justice Ministry State Secretary Gheorghe Mocuta added that the new bill also makes sexual harassment illegal. VG [24] HUNGARIAN-ROMANIAN MEMORIAL PLANNEDHungarian JusticeMinister Ibolya David said on 25 September that Bucharest has agreed to create a memorial park in the western Romanian city of Arad to mark Hungary and Romania's "historical reconciliation," Hungarian media reported. The two countries will split the cost of setting up the park, which will include an obelisk honoring the executed generals of the 1848-1849 War of Independence. The Hungarian and Romanian prime ministers are to lay the foundation stone for the obelisk on 6 October. VG [25] NEW GOVERNOR OF GAGAUZ-YERI INAUGURATEDDumitru Croitoru,the newly elected governor of the Gagauz-Yeri Autonomous Republic in Moldova, was sworn into office on 24 September, Infotag reported. Croitoru took the oath of office in three languages--Gagauz, Romanian, and Russian. The new governor promised to support market-oriented reforms. Croitoru won 61 percent of the vote in the 5 September gubernatorial elections (see "RFE/RL Newsline," 7 September 1999). VG [26] BULGARIA, U.S. AGREE ON MILITARY COOPERATIONBulgaria andthe U.S. are preparing a draft agreement to increase military cooperation, Reuters reported on 24 September. Bulgarian government spokesman Nikolai Stoyanov said the agreement will create a framework for providing U.S. troops with supplies in exchange for payment. U.S. officials denied Bulgarian media reports that the draft agreement is a plan for the creation of U.S. military bases in Bulgaria. Both Bulgarian and U.S. officials also denied Russian media reports that they are discussing the establishment of a satellite facility for spying on Russia. Nevertheless, Bulgarian Prime Minister Ivan Kostov on 24 September said his government is studying the possibility of setting up NATO bases within the country, according to a BTA report cited by the BBC. VG [C] END NOTE[27] THE LONG SHADOW OF THE SECOND ECONOMYby Paul GobleRussia's second or shadow economy is now so large and pervasive that it is likely to define whatever kind of legal economic arrangements do emerge in that country in the future. That is the unsettling conclusion of a recently published study prepared by the Russian Academy of Sciences' Institute of Socioeconomic Problems of the Population. According to the authors of the study, the earlier conviction in both Moscow and the West that "the scale of the shadow economy would diminish and the legal economy would grow as the country moved in the direction of capitalism" has not proved to be true. Instead, they suggest, "just the opposite has taken place." In 1990-1991, 10-11 percent of the country's GDP was produced by the shadow economy, but the illegal or semi-legal second economy accounted for 27 percent of GDP in 1993, 46 percent in 1996, and quite possibly more than 50 percent in more recent years. Because of the size of this sector of the economy and because it is so interwoven with the legal economy, the new study argues that the rules of the game within the shadow economy are far more likely to define behavior within what will emerge as the legal economy rather than be fundamentally transformed by that legalization. And because this is so, the study suggests, it is critical to understand both where the shadow economy came from, what the current rules of the game are, and how these are likely to play a role as Russia moves to legalize many economic activities that are now part of the second economy. According to the study, the second economy was relatively small during most of the Soviet period. Its authors cite a Western study that found that the shadow economy produced only 3-4 percent of Soviet GDP in 1973--a percentage far smaller, the study notes, than in many developed market economies. Until nearly the end of the Soviet period, the shadow economy performed two fundamental functions: it compensated for shortcomings in the functioning of the official legal economy, and it provided a field of activity for entrepreneurs who could not easily fit into Soviet institutions. With the collapse of communism, these two functions fused, particularly under conditions of what many have described as "incomplete" marketization, a system in which the role of the state or at least of its agents remained large and hence the social space for illegal activities actually grew. The Moscow study suggests that the shadow economic system now has six defining features: close ties between bureaucrats and entrepreneurs, continuing interference by the state in the economy, preservation of many old monopolies and the growth of new ones, high and repressive taxes that are easy to avoid, the impoverishment of much of the population, and the absence of a legal framework for the economic transformations that have occurred. The study continues by observing that even though "approximately two-thirds of all enterprises are almost unaffected by the shadow economy in their activities, those firms that are involved are heavily so." Moreover, the behavior of these firms casts a long shadow on all the others, in many cases because the shadow economy produces higher incomes for those who are involved it. And the report draws three conclusions: First, until legal economic activity produces more wealth than the semi- legal or illegal activities of the shadow economy, many people will continue to turn to the shadow economy to seek their livelihood. Second, the percentage of the country's GDP produced by the shadow economy will begin to fall only when the country enters a long period of stable economy growth, during which enterprises will be able to renew their technologies and thus generate real wealth on their own. And third, even when this change takes place in Russia-- and the authors are optimistic that it will--many of the values and patterns of the shadow economy will help to define the values and patterns of the future legalized market economy there for many years to come. 27-09-99 Reprinted with permission of Radio Free Europe/Radio Liberty
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