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RFE/RL Newsline, Vol. 5, No. 208, 01-11-01Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next ArticleFrom: Radio Free Europe/Radio Liberty <http://www.rferl.org>RFE/RL NEWSLINEVol. 5, No. 208, 1 November 2001CONTENTS[A] TRANSCAUCASUS AND CENTRAL ASIA
[B] SOUTHEASTERN EUROPE
[C] END NOTE
[A] TRANSCAUCASUS AND CENTRAL ASIA[01] MOSCOW SEEKS BILATERAL SOLUTIONS TO CASPIAN SEA DISPUTESViktor Kalyuzhnii, the Russian deputy foreign minister and special presidential representative for Caspian Sea status issues, said on 31 October that disputes about the sea should be solved by a series of bilateral accords rather than a single overarching agreement, Turan reported. Kalyuzhnii suggested that this approach will allow the resolution of almost all questions without violating the interests of any of the littoral states. At the same time, he suggested that all of the countries must take common interests into account when they try to reach bilateral agreements. PG[02] U.S., ARMENIAN PRESIDENTS DISCUSS ANTITERRORISM EFFORTU.S. President George W. Bush and his Armenian counterpart Robert Kocharian on 31 October discussed by telephone the counterterrorism effort and also regional issues, including the Nagorno-Karabakh dispute, Armenian and Russian news services reported. Bush thanked Armenia for its support of the antiterrorist operation in Afghanistan, the services said. PG[03] ARMENIAN PRESIDENT RECEIVES ROMANIAN COUNTERPARTPresident Robert Kocharian on 31 October held talks with visiting Romanian President Ion Iliescu, RFE/RL's Armenian Service reported. The two agreed to expand economic cooperation between their countries by simplifying customs procedures and improving transit arrangements. PG[04] NETHERLANDS TO DEFEND ARMENIAN INTERESTS IN WORLD FINANCIAL BODIESDutch Finance Minister Herit Salm told Armenian Prime Minister Andranik Markarian on 30 October that The Hague will continue to defend the interests of Armenia at the International Monetary Fund and the World Bank, Noyan Tapan reported. PG[05] AZERBAIJANI PRESIDENT 'INDEFINITELY' POSTPONES TRIP TO TURKEYTurkish diplomatic sources told the Trend news agency on 31 October that Azerbaijani President Heidar Aliev's visit to Turkey, which had been scheduled for this week, has been "indefinitely" postponed. Aliev did not take part in the celebration of the Turkish national day in Baku on 29 October. PG[06] AZERBAIJANI OPPOSITION FIGURE CALLED UP FOR MILITARY SERVICEFazil Gazanfaroglu, the deputy chairman of the traditionalist wing of the People's Front of Azerbaijan Party, has been called up for military service as an officer, Turan reported on 31 October. Gazanfaroglu said that "if something happens to me in the army, Heidar Aliev will be responsible." PG[07] PRO-MOSCOW CHECHENS SEEK TO OPEN OFFICE IN BAKUMukhtar Ismailov, a representative of the pro-Moscow administration of Akhmed-hadji Kadyrov, is seeking to open an office in the Azerbaijani capital and has the support of the Russian government, Baku's "Ekho" newspaper reported on 30 October. PG[08] BAKU TO SEE EXTRADITION OF COUP PLOTTER FROM IRANAzerbaijani National Security Minister Namiq Abbasov said on 30 October that Baku will demand that Tehran extradite Mahir Cavadov, who is accused of plotting to kill President Aliev and to seize power, Baku's "Bisim Asr" reported on 31 October. PG[09] SHEVARDNADZE FIRES CABINET, SAYS HE WILL RESIGN IF HIS TERMS ARE IGNOREDPresident Eduard Shevardnadze said on 1 November that he has dismissed his entire cabinet and that he is ready to remain president but only on his terms, Russian and Western news agencies reported. Shevardnadze said he is "not a stubborn person clinging to his post," and that he will "not sacrifice his country for [personal] interests." Parliament speaker Zurab Zhvania said that "our task now is to ease tension in the city and prompt the demonstrators to disperse." PG[10] DEMANDS GROW IN GEORGIA FOR MORE MINISTERS TO RESIGN...Participants in street demonstrations and independent journalists as well as deputies such as parliament speaker Zhvania called on 31 October for more government ministers and the country's prosecutor-general to resign, Caucasus Press reported. The calls increased after the resignation of Security Minister Vakhtang Kutateladze on 30 October. President Shevardnadze attempted to calm the situation by saying that Interior Minister Targamadze had not been involved in the recent events around Rustavi-2 television, the news service reported. Moreover, Shevardnadze said he plans to reform the security ministries. PG[11] ...AS DEPUTY SAYS COUP POSSIBLE IN TBILISIElena Tevdoradze, the chairman of the Georgian parliament's Human Rights Committee, told Interfax-AVN on 31 October that a military coup may take place sometime in the next few days. Tevdoradze added that the increasingly vocal public demonstrations against the Georgian authorities are frightening the force ministries and that they may organize a military coup and impose martial law to restore order. PG[12] OSCE TO MONITOR INGUSH SECTION OF GEORGIAN-RUSSIAN BORDEROfficials at the Vienna headquarters of the Organization for Security and Cooperation in Europe (OSCE) said on 31 October that the OSCE will conduct monitoring on the Ingush section of the Georgian-Russian border, Interfax reported. The OSCE has been monitoring the Chechen section of the Georgian- Russian border since February 2000. PG[13] RUSSIAN GENERAL LASHES OUT AT GEORGIANS, BUT DUMA DOESN'TMajor General Nikolai Sidorichev, who heads the peacekeeping forces in Abkhazia, said in an interview published in "Trud" on 31 October that Georgian accusations that Sidorichev's forces had failed to take necessary actions to keep the peace were baseless. (Meanwhile, Georgian officials said they intend to check for radiation at the former Russian base in Gudauta in Abkhazia, Interfax reported.) But the same day, the Russian Duma voted not to discuss a resolution offered by the LDPR criticizing Georgian President Shevardnadze, the Russian news service reported. And also on 31 October, "Nezavisimaya gazeta" carried an interview with Avtandil Ioseliani, a senior Georgian intelligence official, who said that he expects a rapid resolution of the Georgian-Abkhaz conflict. PG[14] GEORGIA SAID TO HAVE CEDED STRATEGIC GAS PIPELINES TO RUSSIAAn article in "Rezonansi" on 31 October said that a deal on the establishment of a Georgian-Russian joint stock company will effectively give Moscow control over Georgia's strategic gas pipelines even though the accord gives Tbilisi 51 percent of the new company's shares, Caucasus Press reported. PG[15] ABKHAZ PRIME MINISTER SURVIVES CONFIDENCE VOTEThe Abkhaz parliament on 31 October failed to pass a no-confidence motion on Anri Jergeniz, the prime minister of the self-declared Abkhaz republic, Prime News reported. Meanwhile, Abkhaz officials said the same day that they will not participate in talks with Tbilisi until Georgia withdraws its forces from the Kodori gorge, the news service said. PG[16] FORMER COMMUNIST LEADER BARRED FROM PRESIDENTIAL POLL IN SOUTH OSSETIAFeliks Sanakoev, who was the Communist Party chief in South Ossetia from 1972-88, has been denied registration as a candidate for the presidency of that self-declared republic, Prime News reported on 31 October. A court in Tskhinvali said Sanakoev failed to meet the 10-year residency requirement because he left the republic in 1988 and then lived in Tbilisi and Moscow. PG[17] U.S. PROVIDES FUNDS TO KAZAKHSTAN TO STEP UP SECURITY AT BACTERIOLOGICAL RESEARCH CENTERAccording to a report by RFE/RL's Kazakh Service on 31 October, the United States has allocated funds for increasing security at Almaty's Center for Bacteriological Research in order to prevent any anthrax or other organisms from falling into the hands of terrorists. The same day, Interfax- Kazakhstan reported, the opposition Republican People's Party of Kazakhstan called on the Kazakh government to appeal to the United States for help in cleaning up the consequences of the testing and production of biological weapons that took place there during the Soviet era. Meanwhile, Kazakh police seized 786 firearms during the last week, Kazakhstan Today's website reported on 31 October. Kazakhstan is also taking measures to tighten control over migrants: the same website reported that the country has deported more than 5,000 foreigners since 20 September. PG[18] KAZAKHSTAN POSTPONES ASIAN SUMMITThe Kazakh Foreign Ministry has postponed a summit of the heads of Asian countries that had been scheduled to take place in Almaty on 8-10 November, "Izvestiya" reported on 31 October. The ministry said the meeting had to be postponed because the situation in the Central Asian region has deteriorated. PG[19] EUROPEAN OIL COMPANIES IN KAZAKHSTAN AGAIN CONSIDERING PIPELINE VIA IRANEuropean oil companies are again considering the possibility of exporting oil from Kazakhstan via Iran, Kazakh commercial television reported on 31 October. They are doing so, the station said, even though the United States continues to press Kazakhstan to use the Baku-Tbilisi-Ceyhan pipeline instead. Meanwhile, an article in Moscow's "Izvestiya" on 31 October said the Tengiz-Novorossiisk pipeline is already working and thus making other routes less attractive or necessary. PG[20] ILLEGAL ACQUISITION OF RUSSIAN CITIZENSHIP BY KAZAKHS ANGERS ASTANABolat Baykadamov, the secretary of Kazakhstan's Human Rights Commission, said in Astana on 30 October that the Kazakh government is concerned at numerous instances where Kazakhs have illegally acquired Russian citizenship with the help of the republic's Slav Movement, Kazakhstan's Russian community, and some tourist agencies, Interfax-Kazakhstan reported. The two countries do not have a dual citizenship agreement, Baykadamov noted. PG[21] AFGHAN SITUATION NOT PROMPTING MORE ETHNIC RUSSIANS TO LEAVE KYRGYZSTANGeorgii Rudov, Russia's ambassador to Kyrgyzstan, said on 31 October that the situation in Afghanistan has not prompted more ethnic Russians to leave Kyrgyzstan, RFE/RL's Kyrgyz Service reported. Indeed, the ambassador said, there has been a steady decline in the number of Russians leaving or seeking to leave Kyrgyzstan in recent years. Meanwhile, the Kyrgyz Defense Ministry the same day requested that Moscow provide $2.5 million in military-technical assistance to Bishkek, Interfax reported. PG[22] LEAFLETS OF BANNED ISLAMIST PARTY FOUND IN TAJIK UNIVERSITYTajikistan Interior Ministry officers have found leaflets distributed by the banned Hezb-e Tahrir Islamic party at Khujand State University and elsewhere in the republic, Asia-Plus reported on 31 October. PG[23] NIYAZOV ORDERS SECURITY ORGANS TO CHECK TURKMENISTAN'S EMBASSIES ABROADTurkmenistan's president, Saparmurat Niyazov, on 31 October ordered his country's security agencies to check the finances of Turkmenistan's embassies abroad to determine whether all the funds taken in from the sale of visas are being sent back to Ashgabat, Interfax-Central Asia reported. PG[24] RUSSIAN AGENCY SAYS UZBEKISTAN REFUSING TO ALLOW U.S. TROOP DEPLOYMENTAccording to ITAR-TASS on 31 October, Uzbekistan has rejected a request from the United States to allow the basing of additional American soldiers to be deployed on Uzbek territory. Meanwhile, Belgian Deputy Prime Minister and Foreign Minister Louis Michel said in Tashkent the same day that the EU appreciates the position of the Uzbek government on the antiterrorist operation, Interfax reported. PG[B] SOUTHEASTERN EUROPE[25] OSCE ELECTIONS CHIEF CRITICIZED IN KOSOVADaan Everts, the top international official overseeing the 17 November general elections in Kosova, has encountered widespread criticism for appearing at a recent rally of Ibrahim Rugova's Democratic League of Kosova (LDK), praising Rugova, and wearing a scarf with the LDK logo, Reuters reported from Prishtina on 1 November. Everts told the rally that "the LDK is a party with a proud history, with a leader like Dr. Rugova, who symbolizes what Kosovo needs. He has tolerance, peace, patience, dignity, and orientation toward Euro-Atlantic structures." Everts replied to critics with a statement saying: "Yes, I did attend an LDK rally; and I have attended and will attend other rallies of other parties. As a guest at a political rally, I pay respect to any leader who espouses the ideals that I hope everyone who wants a better future for Kosovo shares -- peace, dignity, and, above all, tolerance." The international community has also encountered criticism in Bosnia for allegedly manipulating election rules to favor non-nationalist candidates who have cultivated foreign backing. PM[26] OSCE FINES KOSOVAR DAILYAn OSCE committee that handles election-related complaints has fined the Prishtina daily "Bota Sot" nearly $2,500 for biased election coverage in favor of the LDK, to which it has close ties, RFE/RL's South Slavic Service reported on 31 October. PM[27] NATO TROOPS CATCH ILLEGAL BORDER CROSSERS IN KOSOVAWithin the past two days, KFOR troops arrested and turned over to international police some 17 individuals who illegally crossed the border from Macedonia, RFE/RL's South Slavic Service reported on 31 October. PM[28] MACEDONIAN PARLIAMENT ADJOURNS AFTER BOMB THREATThe legislature interrupted an important session on 31 October after receiving a bomb threat, dpa reported. The debate on constitutional amendments is scheduled to resume on 1 November (see "RFE/RL Newsline," 31 October 2001). Before the adjournment, speaker Stojan Andov said he expects the vote on the amendments to take place by 8 November and for the changes to take effect on 12 November, AP reported. Ethnic Albanian leader Arben Xhaferi told Reuters in Tetovo, however, that the reform package must include an amnesty for the guerrillas if peace is to succeed. PM[29] CROATIAN PRESIDENT ADDRESSES KNESSETStipe Mesic told the Israeli legislature on 31 October: "As the president of the Republic of Croatia, I sincerely condemn with all my heart the crimes that were carried out against Jews during World War II by the government that collaborated [with the Nazis] and unfortunately carried the name Croatia... I take every opportunity to ask forgiveness from all those who were hurt by Croatians anytime, first of all the Jews," AP reported (see "RFE/RL Newsline," 30 October 2001). He added that Croatia is "aware of its responsibility to investigate, bring to trial, and convict war criminals." For his part, Israeli Prime Minister Ariel Sharon told Mesic: "Your policy paves the way to a new chapter between our two countries." Earlier that day, Mesic visited the Yad Vashem Holocaust Memorial. PM[30] NGO CHARGES MONTENEGRIN PLOT AGAINST CROATIAN EDITORThe Vienna-based South East Europe Media Organization (SEEMO), which includes editors, managers, and journalists, said in a statement on 31 October that it is concerned for the safety of Ivo Pukanic, the director of the Croatian magazine "Nacional," dpa reported from Belgrade. Earlier this year, the weekly charged that President Milo Djukanovic and other top Montenegrin officials are involved in a huge cigarette-smuggling racket. SEEMO's statement added that "two groups close to the state secret service in Montenegro are preparing Pukanic's assassination." Djukanovic has denied the smuggling charges and has opened legal proceedings against the pro- Belgrade daily "Dan," which published the reports from "Nacional." PM[31] MONTENEGRIN OPPOSITION BOYCOTTS STATE MEDIA BOARDSThe government has appointed oversight committees for the state-run media, namely Radio-Television Montenegro and the daily "Pobjeda," RFE/RL's South Slavic Service reported on 31 October 2001. The opposition Socialist People's Party (SNP) said it will not take part in the committees' work because it does not consider the state-run media to be objective. PM[32] BOSNIAN PRESIDENCY NAMES TWO NEW INTELLIGENCE CHIEFSThe joint presidency has named Munir Alibabic to head the Muslim intelligence service (AID) and Ivica Vuksic to head the Croatian service (SNS), AP reported from Sarajevo on 1 November. The move comes just two months before the expiration of a deadline set by the international community for the two services to merge. Supporters of the appointments say that the two men will work quickly to unite their services. Critics charge that only one director should have been named to do the job, not two. On 1 November, UN mission spokesman Stefo Lehmann said in Mostar that the time has come for the two services to work together, Deutsche Welle's Bosnian Service reported. PM[33] HAGUE TRIBUNAL OPENS BOSNIAN 'SEALED' INDICTMENTThe Hague-based war crimes tribunal has made public a hitherto "sealed" indictment against Bosnian Croat police official Pasko Ljubicic for atrocities against Muslims in the Lasva valley in 1992 and 1993, RFE/RL's South Slavic Service reported. He is charged with four counts of crimes against humanity and seven counts of violations of the laws or customs of war in the murder of more than 100 civilians in the central Bosnian village of Ahmici. Chief prosecutor Carla Del Ponte is expected to soon make public a further six sealed indictments. PM[34] CAMERA TO REMAIN IN SERBIAN EX-LEADER'S JAIL CELLA spokesman for The Hague tribunal said there is a camera in former Yugoslav President Slobodan Milosevic's cell and that he and visits by his relatives are monitored, RFE/RL's South Slavic Service reported on 31 October. The spokesman added that this is the same treatment accorded to other prisoners there. Milosevic had demanded that the camera be removed in the interest of privacy. PM[35] SERBIAN POLICE EXHUME MASS GRAVE OF KOSOVARSDragan Karleusa, a senior Serbian police officer, told AP in Belgrade on 31 October that police have found more than 400 bodies in a mass grave in Batajnica and expect to find an additional 400. Karleusa said the bodies are those of victims of Milosevic's 1998-1999 crackdown in Kosova and "most probably, they are Albanians." The police official added: "Most probably, they were not killed in battle, but by criminal means. That's why they were brought here. That is discouraging, terrible." PM[36] ROMANIAN PREMIER CONTINUES U.S. VISITAdrian Nastase met on 31 October in Washington with Deputy Defense Minister Paul Wolfowitz and Attorney General John Ashcroft, an RFE/RL correspondent reported. Nastase told Wolfowitz that Romania and Bulgaria can provide a necessary link between NATO and Central and Southeastern Europe. He discussed with Ashcroft measures aimed at combating international terrorism. Also on 31 October, an agreement was signed by Communications and Technology Minister Dan Nica, who is accompanying Nastase on the visit, with Harris Corporation for a $100 million modernization of Romanian radio's transmitting and relay equipment. Nastase also met with Senators Trent Lott and Chuck Hagel, who back the expansion of NATO, and with congressman Tom Lantos, who told the Romanian premier that Hungary's Status Law "is not helpful for the process of building a new Europe." The premier also met with executives of large U.S. corporations, including General Motors Corp., Boeing Co., and Lockheed Martin Aeronautics Co. MS[37] IMF BOARD APPROVES STANDBY AGREEMENT WITH ROMANIAThe executive board of the IMF on 31 October approved an 18-month, $380 million, standby loan for Romania, an RFE/RL correspondent reported. Welcoming the board's approval, Nastase said it demonstrates "the credibility that we have managed to restore in the eyes of international financial organizations." Foreign Minister Mircea Geoana, who is accompanying Nastase, said U.S. companies are now showing a renewed interest in investing in Romania. MS[38] ROMANIAN FOREIGN MINISTRY SAYS ORBAN IS 'ARROGANT AND SOMEWHAT OUT OF DATE'Foreign Ministry spokesman Victor Micula told journalists on 31 October that Hungarian Premier Viktor Orban's recent declaration that, "while Romania has 2 million Hungarians more than it needs, Hungary has 2 million less," shows that the premier is "arrogant" and that he is "out of date" with European developments on minority issues. Micula also said Orban's handling of the Status Law "reflects a strange manner of electoral campaigning," RFE/RL's Bucharest bureau reported. Also on 31 October, Interior Minister Ioan Rus said he is "surprised" that the Hungarian Foreign Ministry has interpreted his recent speech in Cluj as a call for a halt in Hungarian economic investment in Transylvania, and said such an interpretation is "tendentious." Meanwhile, Hungarian Democratic Federation of Romania (UDMR) Chairman Bela Marko said the same day that the position displayed by the Romanian opposition parties in criticizing the Status Law (see "RFE/RL Newsline," 31 October 2001) is "an incoherent and callous attack" on the formation he heads. Marko reminded those parties that until recently they themselves were coalition partners of the UDMR and had a joint program on minority issues. "I cannot but wonder," Marko said, "when were these parties sincere?" MS[39] ROMANIAN DIPLOMATS END ROUND OF NEGOTIATIONS IN MOSCOWOn 31 October in Moscow, a delegation headed by Foreign Ministry State Secretary Cristian Diaconescu ended a two-day negotiation round on the pending basic treaty with Russia. Upon his return to Romania, Diaconescu said "serious progress" has been made and that he has found a "political will" on the Russian side to find ways of coping with the treaty's "sensitive aspects," among which he mentioned the denunciation of the Ribbentrop-Molotov pact and the issue of returning the Romanian state treasury, RFE/RL's Bucharest bureau reported. In his press conference, Micula said the signing of the treaty "may create the premises" for dealing with the state treasury issue after an agreement is reached on the treaty itself. He also said the Ribbentrop-Molotov pact is less important for this treaty's purpose than it was for the treaty signed with Ukraine. Micula added that, "according to information thus far received," Russia does not intend to block Romania's bid to join NATO. MS[40] ROMANIA DENIES ALLEGATIONS OF CHILD TRAFFICKINGSerban Mihailescu, the minister in charge of coordinating the activities of the government's secretariat, on 1 October denied allegations printed in "The Guardian" the day before, Romanian Radio reported. The British daily said a Romanian governmental commission has uncovered numerous cases of illegal trafficking of children adopted through international agencies, and that some 500 Romanian children have disappeared. It said profits from the sale of those children most likely end up in the pockets of international terrorist organizations. Mihailescu said no such governmental commission exists and that, "with a six-month regularity," hoax information is being disseminated on the alleged fate of Romanian children who disappear. He said this action is most likely due to the fact that nongovernmental institutions "are angry about the government's decision to freeze international adoptions for one year." He said the decision was taken "in order to refute the allegations and to introduce full transparency" in the process of international adoptions. MS[41] TRANSDNIESTER HALTS ALL TRAINS BOUND TO MOLDOVAExtending the blockade instituted earlier this week in Bendery-Tighina, the Transdniester separatists have halted all trains bound for Moldova transiting the province's territory from Ukraine, RFE/RL's Chisinau bureau reported. Infotag cited Deputy Premier Andrei Cucu as saying the separatists have "impounded" the 400 freight cars in Bendery-Tighina, and are illegally interfering with international commerce. MS[42] SMIRNOV CONTINUES HARASSMENT OF 'PRESIDENTIAL' RIVALSThe authorities in Tiraspol on 31 October suspended the publication "Golos naroda" (People's Voice), whose editor in chief is Aleksandr Radchenko, Flux reported. "Information and Telecommunications Minister" Boris Aculov motivated the decision on the publication's "undermining of Transdniester's constitutional provisions." One day earlier, separatist leader Igor Smirnov dismissed another rival in the "presidential" race from his administrative post (see "RFE/RL Newsline," 31 October 2001). MS[43] BULGARIAN GOVERNMENT APPROVES 2002 DRAFT BUDGETThe government on 31 October approved the draft for the 2002 budget and several draft laws amending laws on corporate income tax, local taxes and fees, VAT, personal income tax, and excise duties, BTA reported. The budget envisages a 4 percent growth in GDP, and an inflation rate of 4.2 percent. The projected deficit is zero. The amendment on corporate tax stipulates that companies will pay a tax of 15 percent -- 5 percent less than in 2001. MS[44] BULGARIAN CHIEF MUFTI SAYS 'THE GUARDIAN,' BULGARIAN MEDIA MUST APOLOGIZEChief Mufti Selim Mehmed on 31 October urged "The Guardian" and Bulgarian newspapers that reprinted an article by that British daily to apologize for reporting that Muslim fundamentalists are being trained in the village of Surnitsa, southern Bulgaria, BTA reported. The call was voiced in the local mosque and in the presence of diplomats from the United States, Russia, Turkey, and several Arab countries. The mufti's office organized a tour of the village and of its school, which offers Koran classes to trainees from all over Bulgaria, in an effort to counter the allegations. MS[45] BULGARIAN NGO CRITICIZES OFFICIAL REACTION TO U.S. REPORT ON RELIGIOUS FREEDOMThe Tolerance Foundation said in a fax received on 30 October by "RFE/RL Newsline" that the official Bulgarian reaction to a recently published State Department report on religious freedom in the world "again demonstrates the depth of attitudes [shared by] a large part of Bulgarian [political] elites" who oppose "the enlargement of religious freedom in Bulgaria." The foundation said that although the report was "mild" and "the situation is in fact much worse," the officials sought to present it as being "biased" and "groundless." The foundation said that claims made by the head of the government's Religious Affairs Directorate, Lubomir Mladenov, who said that "only a few religious communities that applied for registration have not yet received approval," are inaccurate. The foundation said Mladenov's list left out several such communities, and that he failed to mention that a complaint by the Unification Church has reached the European Court of Human Rights in Strasbourg. MS[C] END NOTE[46] WTO ENTRY A POISON PILL OR NECESSARY MEDICINE FOR RUSSIA?By Jeremy BranstenParticipants at this year's World Economic Forum in Moscow -- both foreign and local -- have been singing the praises of Russia's recent economic performance. The figures appear impressive: an estimated annualized GDP growth rate of over 6 percent for the past three years, $39 billion in foreign exchange reserves, and stabilized inflation. President Vladimir Putin, in his keynote address on 30 October, promised far-reaching reforms to attract foreign investment and prepare the country for induction into the World Trade Organization. Russia hopes its membership in the WTO will mean the removal of tariffs for its export goods and open access to Western markets and financial services. "Under no circumstances will we agree to join the WTO according to nonstandard conditions," Putin said. "We are looking at the whole issue with optimism, but we resolutely want standard conditions to be applied to us. We don't want demands imposed on us that other candidate countries would never accept." Even if Moscow is accorded the fair treatment Putin has demanded, Russia remains some distance from meeting WTO membership criteria. To a great degree, Russia owes its recent positive economic performance to high oil prices. But as several participants noted at the Moscow forum, reliance on oil exports will not bring Russia the long-term wealth and development it seeks. Natural resource wealth more often than not translates into corruption and poverty -- as seen in much of the developing world -- rather than stability and democracy. "Everybody knows that the most prosperous countries -- in terms of natural resources -- are the poorest countries," said Vladimir Mau, the director of the Moscow-based Working Center for Economic Reform. "Rich natural resources are a great temptation and a great danger. Moreover, I would say that only very developed countries, with stable democracies, can afford rich natural resources, since they have the institutions and the experience to use them properly," he said. Cash and oil reserves, it is clear, will not suffice for Moscow to make it into the WTO. Among the greatest reforms the government has yet to undertake -- as required by WTO statutes -- is an overhaul of the country's moribund banking sector, which continues to act merely as a conduit for channeling public funds to favored firms. Forum participants said an overdue and crucial reform is needed to allow Russian banks to stand up to foreign competition while acting as true engines of domestic growth. "If we don't have a more or less decent bank system in the next two years - - let's not take into account what the oil price will be -- we won't have any growth in Russia, since the capital will be transferred abroad," said Yevgenii Yasin of Russia's Higher School of Economics. "We don't have in our country a mechanism that helps transform savings into investments. Without a mechanism of this kind, the situation will be catastrophic since sooner or later we'll have to collect more taxes and control capital investments from the center. We can wait, if we want. But, in my view, we don't have the time," he said. Andrei Kostin, who heads Russia's Vneshekonombank, said he believes "most Russian banks will not be able to survive when these reforms are introduced." Such a scenario would be no great loss, according to Kakha Bendukidze, the general director of United Heavy Machinery, one of the country's largest enterprises. "We have no banks. What does 'bank' mean?" he queried. "A bank is some fiduciary institution. How many fiduciary institutions do we have in Russia? How many institutions do we have that you can trust? How many institutions can you trust? Five? Three?" Some experts say the cost to other sectors of the Russian economy after WTO admission could be equally dire. They point to the indirect subsidies many businesses enjoy and the import tariffs that favor domestic goods over foreign ones. But here again, Bendukidze disavowed conventional wisdom. He noted that in fact, few Russian companies ever pay import tariffs on foreign goods, preferring to bribe their way around the law. In his view, most Russian companies are already exposed to foreign competition with little or no protection. WTO membership could make it easier for Russian exporters on foreign markets, and the introduction of transparent corporate governance, he said, would help local companies rather than hinder them. The months ahead will show how serious the Russian government is in its reform intentions, and how prepared the other WTO members are to take its membership bid seriously. Finance Minister Alexei Kudrin predicted at the Moscow Forum that Russia will be finished with its negotiations by the end of 2002. Jeremy Bransten is an RFE/RL correspondent. 01-11-01 Reprinted with permission of Radio Free Europe/Radio Liberty
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