No. 143, 29 July 1993

RUSSIA



FEDOROV ATTACKS GERASHCHENKO. At his first news conference after
his return from Washington, Finance Minister Boris Fedorov launched
an outspoken attack on the currency reform of 24 July and on
its instigator, Russian Central Bank Chairman Viktor Gerashchenko,
Western agencies reported on 28 July. Fedorov called the recall
of old banknotes "a scandalous, stupid, and senseless action"
that did not help reduce inflation, damaged Russia's relations
with other former Soviet republics and with international financial
organizations, and caused panic and mistrust in the population.
"There is one culprit: Viktor Vladimirovich Gerashchenko," Fedorov
asserted. The finance minister could not define President Yeltsin's
position on the currency reform, stating merely "I don't think
that the president supports this action." -Keith Bush

GERASHCHENKO STANDS FIRM. In an interview with ITAR-TASS on 28
July, Gerashchenko rejected the parliamentary presidium's declared
intention, announced earlier that day, to rescind all limits
on the amount of old banknotes to be exchanged. He declared that
the parliament, state authorities, and individuals have the right
to propose changes in the Russian Central Bank's decision, but
that the Bank has the right to approve or reject these proposals.
According to The Boston Globe of 29 July, Gerashchenko has repeated
his earlier claim that Yeltsin, Chernomyrdin, and top parliamentary
officials had prior knowledge of the monetary reform measure
and had not objected. Meanwhile, according to Deputy Prime Minister
Oleg Lobov on 27 July, the RCB continues to support the ruble
on currency exchanges: this appears to run counter to the provisions
of the 21 May agreement between the government and the RCB. -Keith
Bush

IMF DISTANCES ITSELF FROM CURRENCY REFORM. In a statement carried
by Reuters on 28 July, an unnamed official of the International
Monetary Fund claimed that the Fund had not been consulted about
the currency reform of 24 July. "The lack of consultation, at
a time when the IMF is supporting a . . . reform program in Russia
. . . is regrettable," said the official. He also criticized
the Russian action for causing "an unnecessary degree of uncertainty
" in other former Soviet republics that are still using the ruble.
-Keith Bush

YELTSIN APPOINTS NEW STATE SECURITY CHIEF, PARLIAMENT BACKS BARANNIKOV.
Boris Yeltsin has named Nikolai Golushko Acting Minister of Security,
Russian Television reported on 28 July. Golushko, who worked
for the KGB for over 25 years, was appointed chairman of the
Ukrainian KGB in 1987. In 1992 he joined the Russian Ministry
of Security as one of Minister Viktor Barannikov's deputies.
Meanwhile, an emergency session of the Presidium of the Russian
parliament declared the removal of Barannikov illegal, an RFE/RL
correspondent reported on 28 July. According to parliament speaker
Ruslan Khasbulatov, a law adopted this year requires parliamentary
approval of nominees to head the law enforcement ministries.
Both the removal of Barannikov and the appointment of Golushko
must be confirmed by a session of parliament, Khasbulatov said.
-Victor Yasmann

INGUSHETIA TO DECLARE INDEPENDENCE? INGUSH PRESIDENT RUSLAN AUSHEV
TOLD A PRESS CONFERENCE IN MOSCOW ON 28 JULY THAT THE INACTION
OF THE RUSSIAN FEDERAL AUTHORITIES IN SOLVING THE NORTH OSSETIAN-INGUSH
CONFLICT WAS FORCING THE INGUSH TO SEEK THEIR OWN WAY OUT OF
THE SITUATION, THE RUSSIAN MEDIA REPORTED. Aushev said that decrees
of the Russian president, parliament, and government had not
been implemented. In these circumstances, Aushev said that it
was very likely that the Congress of the Peoples of Ingushetia,
due to meet on 31 July, would decide not to sign the federal
treaty or endorse the new Russian constitution, and could even
call for a referendum on the question of Ingushetia remaining
part of the Russian Federation. Up to now the Ingush have felt
they had a better chance of regaining the Prigorodnyi raion of
North Ossetia by remaining part of Russia. -Ann Sheehy

YELTSIN EXTENDS STATE OF EMERGENCY IN NORTH OSSETIA, INGUSHETIA.
"In connection with the continuing exacerbation of the situation"
Yeltsin signed a decree on 27-July extending the state of emergency
in parts of North Ossetia and Ingushetia until 30-September,
ITAR-TASS and Ekho Moskvy reported on 28 July. At the request
of North Ossetia, four further settlements have been included
in the area covered by the state of emergency. Yeltsin said that
5,000 internal troops were to be stationed in the area, and military
units were to be reinforced with more helicopters. He instructed
the Security Council to hold a special session to give a political
evaluation of the armed clash between Ossetians and Ingush in
October-November 1992 and to draw up proposals to regulate the
conflict in the light of today's circumstances. -Ann Sheehy

ENERGY PRICES RISE SHARPLY. The prices of oil products increased
60% in the first half of July alone, a government research institute
reported in Izvestiya on 23 July. The jump follows the issue
of a presidential decree the first week of July which frees oil
prices from direct government regulation. Coal and natural gas
prices have also been subject to varying degrees of deregulation
this year. Since the beginning of the year, the price of crude
oil has increased 2.7 times, natural gas 4.1 times, and coal
2.6 times. The recent increases have yet to push up the rate
of consumer price inflation which has remained (officially) below
20% since the February. The price increases may also have an
appreciable negative effect on production, the decline of which
had been slowing recently. -Erik Whitlock

VORKUTA MINERS THREATEN ACTION OVER PROPOSED PIT CLOSURES. A
conference in the northern coal-mining center of Vorkuta on 27
July demanded that the Russian government and other central authorities
draw up and adopt a special program on proposed pit closures
and the giving of real social guarantees to those who lose their
jobs, ITAR-TASS reported on 28-July. Until the program was adopted,
they added, no workers should be dismissed. The agency said that
up to now the Vorkutans have received no proper answers from
the Russian leadership. They are prepared to wait until 5 August,
but if no real progress in solving the problems in the mines
is made by then, the miners could take more decisive actions.
-Ann Sheehy

TRANSCAUCASIA AND CENTRAL ASIA



ABKHAZ CEASEFIRE IMMEDIATELY VIOLATED? WITHIN AN HOUR AFTER A
RUSSIAN-BROKERED CEASEFIRE WENT INTO EFFECT ON 28 JULY, GEORGIA
AND ABKHAZIA ACCUSED EACH OTHER OF VIOLATING THAT AGREEMENT,
REUTERS REPORTED. The Abkhaz parliament accused Georgia of opening
fire on the village of Nizhnaya Eshera, while a Georgian Defense
Ministry spokesman said that Abkhaz forces had resumed shelling
of Sukhumi. Georgian Parliament Chairman Eduard Shevardnadze
left for Sukhumi on 28 July to investigate the allegations that
Georgian troops had violated the agreement. -Catherine Dale

AZERBAIJAN, KARABAKH OFFICIALS DISCUSS SETTLEMENT. On 28 July,
the final day of the 3-day ceasefire, foreign and defense ministry
officials from Azerbaijan and Nagorno-Karabakh met in Mardakert
to discuss possibilities for a permanent solution to the Karabakh
conflict; no details have been divulged, according to ITAR-TASS.
Also on 28 July, the UN Security Council continued to discuss
the Turkish request for a resolution condemning the Armenian
occupation of Agdam. -Liz Fuller

KOZYREV APPOINTED SPECIAL RUSSIAN REPRESENTATIVE ON TAJIKISTAN.
As a measure of his concern at the ongoing fighting on the Tajik-Afghan
border in which Russian troops are taking a major role, President
Boris Yeltsin has appointed Foreign Minister Andrei Kozyrev his
Special Representative on Tajikistan, ITAR-TASS reported on 28
July. Kozyrev is to coordinate the work of the Russian Ministries
of Security, Defense and Foreign Affairs in coping with the crisis
and induce the leaderships of the other four Central Asian states
to take a more active role in resolving the Tajikistan situation.
At the top of the list of Kozyrev's new responsibilities is persuading
the government of Tajikistan to establish a dialog with the Tajik
opposition, who are the intended beneficiaries, if not the initiators,
of the armed penetrations of Tajik territory from Afghanistan
that the Russian and other troops on the Tajik side of the border
are trying to stop. The Tajik government has so far flatly refused
to meet with the opposition. -Bess Brown

AKAEV OPENS BORDER CROSSING TO CHINA. On 28 July Kyrgzystan's
President Askar Akaev formally opened his country's first frontier-crossing
station on the Chinese border, ITAR-TASS reported. Opening of
the crossing point, on the Torugart Pass, is another step in
the improving economic relations between Kyrgyzstan and China.
Kyrgyzstan is reported to have the third-highest volume of trade
with China among states of the former USSR, exporting fertilizer,
glass and metal pipes and importing consumer goods and sugar.
-Bess Brown

WESTERN CRITICISM OF CENTRAL ASIAN HUMAN RIGHTS VIOLATIONS INCREASES.
Sen. Dennis DeConcini, Chairman of the Congressional Commission
on Security and Cooperation in Europe, in a letter to President
Karimov of Uzbekistan criticized recent human rights violations
in Uzbekistan, RFE/RL learned on 28 July. DeConcini expressed
concern about the trial of six men in the "Milli Majlis" case.
These men are on trial for organizing a round table of political
parties in order to discuss the political situation in Uzbekistan.
The Senator pointed out that "[Uzbek] government's decision to
try them . . . is a serious violation of their right to freedom
of speech as enshrined in the Helsinki Final Act" which the Uzbek
government signed in 1992. He called on Uzbekistan to cease the
repression of its citizens. DeConcini, also, according to the
Congressional Record of 26 July, speaking in the US Senate, asked
the Congress to withhold most-favored nation status from Uzbekistan
until its government ceases its repressive policies. Also, Turkmenistan
has been criticized in a new Helsinki Watch report of being "complacent"
about fulfilling its obligations to protect the rights of its
citizens. -Yalcin Tokgozoglu

COMMONWEALTH OF INDEPENDENT STATES



KAZAKHSTAN, UZBEKISTAN CALL FOR EMERGENCY CIS SUMMIT. Kazakhstan
President Nursultan Nazarbaev and Uzbekistan President Islam
Karimov issued a joint appeal in Almaty on 28 July to the other
CIS heads of state to hold an emergency summit at the beginning
of August, ITAR-TASS reported. The two presidents complained
that "regional separatism, the isolationism of individual states
and their desire to get out of the crisis on their own or at
the expense of the economic interests of neighboring states"
were taking the place of economic integration, and suggested
the summit should discuss the realization of the decision on
creating an economic union, the immediate implementation of the
agreement on an interstate bank and the creation of a CIS payments
union, and the effective realization of the CIS collective security
pact. The next routine CIS summit, which was to have taken place
in mid-July, was put off until later in the year. In the meantime
the Central Asian states have been put out not only by Russia's
ruble exchange but also the intention of the three Slav republics
to form an economic union. -Ann Sheehy

CENTRAL AND EASTERN EUROPE



POLAND, VATICAN SIGN CONCORDAT. Polish Foreign Affairs Minister
Krzysztof Skubiszewski and Papal Nuncio Archbishop Jozef Kowalczyk
signed a concordat between Poland and the Holy See on 28 July
in Warsaw, PAP reports. President Lech Walesa and Prime Minister
Hanna Suchocka attended the ceremonies. With the weight of a
bilateral agreement between two states, the concordat is designed
to regulate Polish-Vatican relations, on the one hand, and Church-state
relations in Poland, on the other. Skubiszewski said that the
concordat is based on the principle that Church and state are
"independent and autonomous" entities that can also cooperate
for the common good. The agreement affirms the status quo with
respect to religious education in schools: "the state guarantees"
the provision of religious education "in accordance with the
will" of parents and students. Gazeta Wyborcza reports that the
government was divided on this issue and that the voluntary nature
of religious education was confirmed only when several ministers
insisted on it. The concordat puts Church weddings on par with
civil ceremonies, provided they are registered. The civil right
to divorce remains unaffected. Skubiszewski expressed confidence
that the new Sejm will ratify the concordat. Some parties criticized
the agreement, however, on the grounds that the government had
signed the concordat before the adoption of a new constitution.
Gazeta Wyborcza reports that Pope John Paul II considers the
agreement with Poland to be a model for other countries in Central
Europe. Italy and Portugal are now the only other European states
with concordats. -Louisa Vinton

POLISH-RUSSIAN TRADE AGREEMENT COMPLETED. Polish and Russian
officials initialed a new bilateral treaty on trade and economic
cooperation in Warsaw on 28 July, PAP reports. The treaty, which
is to be signed during Russian President Boris Yeltsin's visit
to Poland later this year, replaces the communist-era trade agreement
dating from 1945. An official communique issued on 28 July said
that the new treaty restores "sovereign equality" to trade relations.
These are to be based on free-market principles, hard-currency
accounting, and international norms. A Polish-Russian agreement
on the construction of a pipeline to convey Russian natural gas
through Poland to Western Europe was also initialed on 28 July.
Deputy Prime Minister Henryk Goryszewski hailed this agreement
as a boost to Poland's "energy sovereignty." The pipeline, which
is to cross Belarus as well, will supply Poland's gas needs for
several decades. The Western European customers at the other
end of the line will guarantee uninterrupted deliveries. As Polish
TV noted, "you can either turn off the tap for all customers,
or for none." The cost of the Polish segment is estimated at
$3.2 billion. Polish firms will do the building; Western banks
will provide the financing. Construction is to begin in 1994.
-Louisa Vinton

POLAND ANNOUNCES HIGHWAY CONSTRUCTION PLAN. The government adopted
a "priority program" on 27 July to build 2,000 kilometers of
toll highways in Poland over the coming 15 years, Polish TV reports.
Three major new highways are planned. The first is to run north
to south from Gdansk via Czestochowa to the Czech border. The
other two are to run west to east, the first from Poznan via
Warsaw to Terespol, and the second from Wroclaw via Katowice
and Cracow to Medyka. The construction program is expected to
create 170,000 new jobs. The government will provide 15% of the
financing, with the remainder to come from the European Bank
for Reconstruction and Development. The new highways are expected
to pay for themselves in 30 years' time. -Louisa Vinton

SILAJDZIC SEES LITTLE SUCCESS IN PEACE TALKS. Face-to-face peace
talks between the Bosnian government, Bosnian Serb and Croat
leaders, and the presidents of Croatia, Montenegro, and Serbia
continued in Geneva on 28 July. No details emerged after the
two-hour meeting of the three warring sides, international media
report. Sources said that the discussions were to focus on maps
showing the outlines of three proposed ethnic ministates. Bosnian
President Alija Izetbegovic is reported as again rejecting any
"confederal solution." A spokesman for the conference said that
the talks were "progressing steadily." Bosnian Serb leader Radovan
Karadzic warned that there are two ways to end the war: "one
way would be through talks, the other would be total defeat of
one side-and it would be the Muslim side". Bosnian Foreign Minister
Haris Silajdzic said that the negotiations are based on "the
situation on the ground created by the use of brutal force and
genocide" against Muslims. "I hope I will be proved wrong, but
I don't think there is any progress," he said. Mediator Lord
Owen told reporters he would be surprised if any deal were struck
before the weekend. Meanwhile, fighting continues around Mount
Zuc, north of Sarajevo. News agencies say Serb forces gained
ground overlooking the city, which is reported quiet, while Bosnian
Radio said Muslim lines are intact. Elsewhere Serb attacks continue
around Brcko in the northeast. -Fabian Schmidt

ST0RMY SESSION IN CROATIAN PARLIAMENT. Vjesnik of 29 July and
the BBC's Croatian Service on 28-July said that a lively discussion
ensued in the lower house when Istrian deputies introduced proposals
aimed at expanding regional autonomy. They charged the ruling
Croatian Democratic Community (HDZ) with promoting a high degree
of centralized control and with viewing local and regional government
as little more than a transmission belt for the Zagreb authorities.
In the heat of the debate one deputy demanded the resignation
of house speaker Stipe Mesic. Elsewhere, Hina on 29 July quoted
Serbian Krajina rebel authorities as saying the previous day
that they will not place their heavy weapons under UNPROFOR control.
The Croatian military may now find themselves tempted not to
live up to an agreement to withdraw from the Maslenica bridge
and Zemunik airport areas at the end of the month. Finally, Vecernji
list of 28 July and Hina the following day report on the flight
of Croats in central Bosnia from Bugojno in the wake of the town's
fall to the Muslims. Hina quoted a BBC reporter as saying it
was the worst case of ethnic cleansing he has seen all year.
-Patrick Moore

SLOVAKIA, SLOVENIA SIGN ACCORDS. Slovak Premier Vladimir Meciar
and his Slovene counterpart, Janes Drnovsek, signed four agreements
during Drnovsek's one-day visit to Slovakia on 28 July, Slovak
media report. The accords cover issues such as the liberalization
of bilateral trade, payments in bilateral trade, mutual protection
of investment, and abolition of visa requirements for travel
between the two countries. Both premiers said that they hope
the agreements will help increase bilateral trade and tourism.
-Jiri Pehe

MORAVCIK DENIES THAT HE SHOULD REPLACE MECIAR. Slovak Foreign
Minister Jozef Moravcik told CTK on 28 July that reports that
he had been asked to replace Vladimir Meciar as prime minister
are "false." CTK says it obtained the information from "a very
well informed source" close to the leadership of the ruling Movement
for a Democratic Slovakia. Parliament Chairman Ivan Gasparovic
said on 26 July that he was asked by the Slovak National Party,
which is engaged in coalition talks with the MDS, to replace
Meciar and that an MDS deputy approached him with a similar offer.
However, he denied a CTK report that the MDS parliamentary caucus
discussed such a proposal and accused those who spread such information
as trying to disrupt political life in Slovakia. On 22 July Meciar
told Slovak Radio that there had been attempts in the parliament
to find someone who could replace him in the post of Prime Minister.
Meciar, however, ascribed these efforts solely to the opposition.
-Jiri Pehe

HUNGARIAN EXPORTS DECLINE DRASTICALLY. Minister for International
Economic Relations Bela Kadar told a press conference that exports,
calculated in dollars, decreased by 27% in the first half of
1993 compared with the same period last year, Hungarian Radio
reports. Imports grew by 6%, giving a trade deficit of $1.4-billion.
Kadar said some of the decline came because of the German mark's
fall against the dollar in the exchange markets, but West European
recession, the Yugoslav UN embargo, drought, and lack of adequate
export financing were also cited as reasons. In the first half
of 1993, $700 million in direct foreign investment came to Hungary,
Kadar said. -Karoly Okolicsanyi

WORLD BANK HOLDS UP ROMANIA LOAN. A spokesman for the World Bank
in Washington says it is withholding a final loan totaling about
$150 million because of the Romania's poor economic performance,
an RFE/RL correspondent reported on 28 July. Earlier the IMF
blocked a $75-million final payment to Romania under a standby
arrangement. A World Bank representative in Bucharest for talks
with Romanian officials told reporters on 28 July that some broad
economic reform measures must be taken before Romania may draw
on the loans. Arntraud Hartmann said the bank is not going to
"inject money into an unstable economic environment hit by inflation."
He added that Romania must reduce its budget deficit, adjust
interest rates, and stabilize the external balance of payments.
-Michael Shafir

UDF IN SEARCH OF POLITICAL ALLIES. According to a memorandum
published in Demokratsiya on 28 July, the Union of Democratic
Forces is considering allowing other staunchly anticommunist
parties and organizations join the coalition. The UDF declares
itself ready to enter negotiations and subsequently to cooperate
with any organized political group that shares the coalition's
chief aims and broad principles, as well as guarantees never
to collaborate with the excommunist Bulgarian Socialist Party.
Among the key political goals outlined in the memorandum is the
demand for general elections in the immediate future, declassification
of secret police files, prosecution of former top-ranking communists,
and "decommunization" of the church. Opinion polls indicate that
the UDF has steadily been losing supporters over the last couple
of months. -Kjell Engelbrekt

BULGARIAN RADIO TO LAUNCH TURKISH-LANGUAGE PROGRAMMING. On 28
July 24-Chasa reported that Ivan Obretenov, head of Bulgarian
National Radio, announced that domestic Turkish-language radio
broadcasts over medium wave will begin on 1-August. Three 30-minute
broadcasts are scheduled daily. As of 1 October, Turkish-language
programming will be expanded to three daily one-hour broadcasts.
-Stan Markotich

NANO LOSES PARLIAMENTARY IMMUNITY. In a vote held on 27 July
deputies of the Albanian parliament voted to remove the immunity
of Socialist Party leader Fatos Nano. Deputies from the ruling
Democratic Party, the Democratic Alliance, the Republican Party,
plus three deputies of the Social Democratic Party took part
in the vote, but the Socialists boycotted it. Proceedings can
now begin against Nano for alleged abuse of funds during his
brief tenure as prime minister in 1991. Reuters reports on 28
July that Namik Dokle, the head of the Socialists' parliamentary
group, read a statement to parliament calling the move against
Nano a "witch hunt." The Socialist daily Zeri i Popullit carried
a statement on 29 July charging that the Democratic Party has
been usurped by a bloc of "ballist-fascists" (referring to the
wartime Balli Kombetar Party, the opposition to the communists)
and that "their thirst for retaliation does not have limits."
While the Socialists interpret the move against Nano as a politically
motivated attempt to destroy or at least cripple their party,
other deputies not aligned with the ruling Democrats consider
the charges against Nano quite serious and would like see justice
done. The Socialists have declared a complete boycott of the
parliament and will undoubtedly seek other avenues to battle
the ruling party as well. -Robert Austin

UKRAINE DISMANTLING SOME LONG-RANGE MISSILES. Following a three-hour
meeting between visiting Foreign Minister Konstantin Morozov
and US Secretary of Defense Les Aspin on 27 July, Pentagon officials
announced that Ukraine has begun dismantling some of its 10-warhead
SS-19 long-range nuclear missiles, Western agencies report. Morozov
reportedly promised that Ukraine will eventually dismantle all
130-of its SS-19's; US officials in response will begin providing
some $175 million in aid that has already been approved by Congress.
While American officials described Kiev's actions as an important
first step, they noted that Ukraine declines to discuss a schedule
for dismantling its more modern SS-24 missiles, the New York
Times reports. Earlier in the day on the 27th, Kiev and Washington
also signed a defense cooperation agreement that provides for
exchanges between high-level military officials and the provision
of US military expertise. -Stephen Foye

US COMPANY TO DISPOSE OF UKRAINIAN WEAPONS. The New York Times
also reported on 28-July that Morozov has concluded a deal with
US munitions maker Alliant Techsystems, Inc., to begin cutting
up more than 200,000 tons of surplus Ukrainian ammunition. Alliant
and Ukrainian officials reportedly estimate that the resulting
sales of scrap copper, steel, brass, and aluminum could generate
more than $100-million in revenue over the next five years. Alliant
and the Ukrainian government would divide the proceeds. -Stephen
Foye

RUSSIA BLAMES LITHUANIA FOR TROOP WITHDRAWAL DELAY. Viktor Isakov,
the head of the Russian delegation negotiating troop withdrawal
from Lithuania, said that Lithuania is responsible for the failure
to sign a formal agreement on the withdrawal, Radio Lithuania
reported on 28 July. Because Lithuania is primarily concerned
with internal political affairs, only one meeting (in May) of
the negotiating delegations has been held since October 1992.
Lithuanian President Algirdas Brazauskas has stated that since
the withdrawal is proceeding successfully according to the timetable
signed by the countries' defense ministers on 8-September 1992,
such an agreement might be signed after the troop withdrawal
is completed on 31 August. Isakov asserted that President Yeltsin
will not agree to meet Brazauskas in Moscow unless the agreement
is signed. -Saulius Girnius

TALKS CONTINUE ON LITHUANIAN-RUSSIAN GAS JOINT VENTURE. On 27
July Petr Rodionov, the director general of the St. Petersburg
firm Lentransgaz, held talks in Vilnius with Lithuanian Energy
Minister Algimantas Stasiukynas on the formation of a joint-venture
gas company, Radio Lithuania reports. In an earlier visit to
Vilnius on 9 July Rodionov agreed to restore the shipment of
gas to Lithuania that was stopped on 27 June and said that Lithuania
should agree to form a joint venture with Lentransgaz, similar
to the one that Estonia has. Stasiukynas met a 7-member Russian
working group that is drawing up the documents for the joint
venture. Rodionov had earlier also expressed Lentransgaz's interest
in buying a 20% share in the oil refinery at Mazeikiai and a
controlling share in Lithuania's largest gas user, the Azotas
fertilizer plant in Jonava. -Saulius Girnius

AN END TO LATVIA'S PROMISSORY NOTE SCANDAL? RITA AKSENOKA, SENIOR
ASSISTANT TO THE PROSECUTOR-GENERAL, SAID THAT HER OFFICE HAS
EXAMINED THE MATERIALS CONCERNING THE $400-MILLION IN PROMISSORY
NOTES ISSUED BY THE LATVIAN INVESTMENT BANK LAST YEAR AND CONCLUDED
THAT THE LETTER OF FORMER FINANCE MINISTER ELMARS SILINS OF 4
DECEMBER 1992 CAN BE UNDERSTOOD AS A FORMAL STATE GUARANTEE TO
REPAY THE DEBT. She added that since there have been no negative
consequences for the country from this affair-the promissory
notes were retrieved and annulled in Belgium 19 July-the Prosecutor's
Office decided on 22 July not to take the case to court. Aksenoka
told Diena on 28 July that she considers it abnormal that negligent
officials should not be called to account for themselves simply
on the grounds that potentially harmful consequences of their
actions did not occur. Latvia could have suffered bankruptcy
if it had to repay the $400 million. -Dzintra Bungs

ESTONIA HAS NEGATIVE TRADE BALANCE. The Customs Department announced
that in the first half of 1993 goods worth 4.42 billion kroons
($321 million) were exported while imports totaled 4.63 billion
kroons ($338 million), BNS reported on 28 July. The figures do
not include gas imports, electricity exports, and payments for
services or capital transfers. Finland, Russia, and Sweden were
the leading importers and exporters together accounting for a
little less than 60% of both totals. Agricultural products were
the leading exports (19.2%) and imports (13.3%). Since exports
of nonferrous metals (12.0% of total) were three times greater
than imports, their smuggling into Estonia continues unabated.
Estonia trades with 90-countries, having a favorable trade balance
with 55 of them. -Saulius Girnius

[As of 1200 CET]

Compiled by Bess Brown and Charles Trumbull







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