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No. 146, 03 August 1993
RUSSIA PROTECTION FOR FOREIGN INVESTMENT. The first formal step has been taken to protect foreign investment against political risk, Izvestiya reported on 2-August. The head of the State Investment Corporation and the head of the European Agency for Export Guarantees signed an agreement on 31 July to set up an insurance fund to serve as a guarantee against any changes in Russian legislation or political upheaval that could threaten foreign investment. The fund's founding capital will consist initially of gold and precious metals to the value of about $100 million and will be deposited in a West European country. -Keith Bush MINISTERS TO NORTH OSSETIA FOLLOWING MURDER OF HEAD OF INTERIM ADMINISTRATION. Defense Minister Pavel Grachev, Deputy Prime Minister responsible for nationalities affairs Sergei Shakhrai, and a high powered investigation team from the Ministry of Internal Affairs flew to North Ossetia on 2-August in the wake of the killing in an ambush on 1-August of Viktor Polyanichko, the head of the interim administration in the area of the North Ossetian-Ingush conflict, Russian media reported. Ingush President Ruslan Aushev attributed the killing to forces that wanted to prevent the return of Ingush refugees to the Prigorodnyi raion of North Ossetia, on which a formal start was to be made at the beginning of August, while North Ossetian spokesmen put the blame on the Ingush. In Moscow there was an emergency meeting of the cabinet to discuss the situation. Colonel-General Yurii Shatalin, who has been appointed acting head of the interim administration, told ITAR-TASS that Polyanichko had showed his courage by accepting a job that 20 people had already refused. -Ann Sheehy SHUMEIKO ON NEW CONSTITUTION. In a speech to the Congress of Young Compatriots (Russian emigres) which opened in Moscow on 2 August, Russian First Deputy Prime Minister Vladimir Shumeiko assessed the ongoing debate over the new Russian Constitution, ITAR-TASS reported. He claimed that Russia could not progress without a new constitution. He also declared that the only feasible state structure for Russia was a federation, since the country's constituent republics had already established their sovereignty and "therefore the creation of a unitary state on Russian territory is impossible." -Wendy Slater IS YELTSIN SERIOUSLY ILL? ON 2 AUGUST, THE FRANKFURTER ALLGEMEINE ZEITUNG CARRIED A REPORT ON CURRENT RUMORS IN MOSCOW THAT PRESIDENT BORIS YELTSIN IS SERIOUSLY ILL AND ABLE ONLY TO A LIMITED EXTENT TO FUNCTION AND TO TAKE DECISIONS. A similar item was reportedly published in Rossiiskaya gazeta during the weekend. The performance of the president prior to and during the banknote withdrawal affair was cited as a prime sign that he may be incapacitated, in addition to the fact that he has hardly appeared in public during the past three weeks. Presidential spokesmen denied the reports in interviews with an RFE/RL correspondent and Reuters. -Keith Bush MALAYSIA CLOSER TO BUYING RUSSIAN MIG'S. AFP reported on 1 August that Russia had moved a step closer to selling Malaysia 18 MiG-29 fighter jets after satisfying the demands of Malaysian military officials that the engine and body frames of the jets be improved to lower operational costs and ensure simpler maintenance. Malaysian Air Forces commander Abdul Ghani, who had just returned from an inspection tour to Russia, nevertheless suggested that the deal had not yet been finalized. On 30 July, meanwhile, the Russian newspaper Segodnya reported on Moscow's increasing willingness to sell weapons at "dumping" prices, or to barter weapons for commodities, as an important part of its strategy for breaking into the lucrative Southeast Asian arms market. It noted that Russia plans to accept shipments of palm oil from Malaysia as partial repayment for the MiG's and that negotiations were also taking place with the Philippines and Thailand on arms' deals that would be paid for in part by bananas and rice, respectively. -Stephen Foye TRANSCAUCASIA AND CENTRAL ASIA SHEVARDNADZE ON SITUATION IN GEORGIA, ABKHAZIA. In his weekly radio address on 2 August, Georgian Parliament Chairman Eduard Shevardnadze labeled UN participation in the regulation of the Abkhaz conflict a "significant factor" and suggested that the experience might serve as a model for calming other hot spots in the former Soviet Union, ITAR-TASS reported. Fifty UN military observers are expected to arrive in Abkhazia soon to join trilateral control groups already monitoring scattered ceasefire violations. In the same broadcast, Shevardnadze called for the establishment of a stricter law and order regime in Georgia, Russian TV "Novosti" reported. The same program included the announcement by Loti Kobalia, commander of troops loyal to ex-president Zviad Gamsakhurdia, that Georgia as such would cease to exist if Shevardnadze did not resign. -Catherine Dale RUSSIAN DIPLOMATIC OFFENSIVE ON TAJIKISTAN. Russian presidential envoys have visited Afghanistan, Iran, and Pakistan to seek support for a solution to the fighting on the Tajik-Afghan border, while Russian First Deputy Minister of Foreign Affairs Anatolii Adamishin has met with the presidents of Kazakhstan, Uzbekistan, and Kyrgyzstan to pass on invitations from Russian President Boris Yeltsin to meet in Moscow on 7 August to discuss the Tajikistan situation, Western and Russian agencies reported on 31 July and 1 and 2-August. Kazakhstan's President Nursultan Nazarbaev told a journalist on 31 July that proposals for stopping the fighting in Tajikistan had included the use of UN observers and an appeal to the leaders of Pakistan, Iran, Afghanistan, Turkey, and Saudi Arabia to find a formula to stabilize the region. -Bess Brown IRAN, RUSSIA DISCUSS BORDER CRISIS. Evgenii Primakov, acting as special envoy for President Yeltsin, met with Iranian leaders in Tehran on 1 August to discuss the ongoing crisis on the border between Afghanistan and Tajikistan. Few details of their discussion were made public, however; Reuters reported only that the two had agreed that the crisis should be resolved by negotiations between the government and the opposition in Tajikistan. According to Iran's IRNA agency, Primakov had emphasized the significance of Iran's role in the region. On 31 July Primakov visited Kabul and met with Afghan President Burhanuddin Rabbani and former Defense Minister Ahmad Shah Masood, AFP reported. -Stephen Foye KAZAKHSTAN TIGHTENS CIS PAYMENTS, NEW CURRENCY PLANS. Kazakh President Nursultan Nazarbaev has issued a decree increasing the state's control over trade transactions with other nations of the former Soviet Union, Ekonomika i zhizn (no. 31, 1993) reported. The decree calls on all Kazakh enterprises to close their accounts with banks in other countries of region and henceforth to conduct business with these nations only through Kazakh commercial banks. Also in the sphere of national finance, the Chairman of the Supreme Soviet of Kazakhstan, Serikbolsyn Abdildin, announced at a press conference that the nation's new currency, the tenge, would be introduced before the end of the year. -Erik Whitlock UZBEKISTAN DELAYS EXCHANGE OF OLD RUBLES FOR NEW. The Uzbek government has decided to delay indefinitely the exchange of pre-1992 rubles for new 1993 Russian rubles, ITAR-TASS reported on 2 August. A previous government resolution, adopted in the wake of Russia's unexpected currency reform, had envisaged the exchange of old rubles for new in August, but the Uzbek Central Bank has now announced that this is impossible due to shortages of the new-style ruble. Meanwhile the Russian Central Bank, under fire from the finance minister for unauthorized transfers of new rubles to Uzbekistan, has claimed that the transfers were consistent with the policy-approved by the Russian government-of sending rubles conditional on the Uzbek leadership's adherence to monetary policy coordinated with Russia. Russian Radio reported a statement by the First Deputy Chairman of the Russian Central Bank, Aleksandr Khandruev, on 31 July, claiming that only 5% of Uzbekistan's overall currency requirements will be covered by the delivery of new rubles, and that these will be given to Uzbeks making business or personal trips to Russia. -Sheila Marnie and Yalcin Tokgozoglu CENTRAL AND EASTERN EUROPE BOSNIAN UPDATE. Bosnian President Alija Izetbegovic refused to participate in the resumption of the Geneva peace talks on Bosnia-Herzegovina on 2 August as long as the Serbs continue their offensive at Mt. Bjelasnica. According to international media he said: "If they don't withdraw, we will again postpone the negotiations." Bosnian government sources said that the Serbs launched a major offensive with hundreds of men and helicopters while Muslim troops are losing ground. Izetbegovic nonetheless said he will remain in Geneva rather than completely leave the talks, which are scheduled to continue on 3 August. According to a negotiations spokesman, Bosnian Serb leader Radovan Karadzic has agreed to let UN troops take over his forces' positions on the mountain. The spokesman said that Lord Owen and Thorwald Stoltenberg are "disappointed" that the session on 2-August was so short. Meanwhile fighting between Muslims and Serbs continued around Brcko, while in central Bosnia Muslims successfully overran Gornji Vakuf. On 3 August NATO discussed possible air strikes against the Serbs if they continue their stranglehold on Sarajevo and other areas. After a meeting in Brussels from 2 to 3 August officials said that NATO will prepare immediately for air strikes if the Serbs continue their actions. -Fabian Schmidt SERBS SINK MASLENICA BRIDGE. Croatian TV ran footage in its 2 August evening newscast showing the pontoon bridge linking Dalmatia with the rest of Croatia blasted into sections and submerged in the water. The broadcast said that shells fired that afternoon were responsible, while news agencies quoted local Serb rebels as saying that they wanted to give the Croats "a sort of warning" to evacuate their troops from the area. Croatian military units were to have left last weekend according to a UN-sponsored agreement, but Zagreb then demanded that Serb artillery be placed under UN control at the same time. That would be in keeping with the 1992 Vance plan but was not specified in the July document. Croatian President Franjo Tudjman launched an offensive in January to recapture Maslenica and has placed great political emphasis on the bridge and keeping it open. He nonetheless has not yet responded directly to the Serb challenge, and the BBC's Croatian Service on 3 August quotes him as instead blaming the UN for not protecting the bridge. Elsewhere, news agencies on 2-August quoted UN human rights investigator Tadeusz Mazowiecki as protesting Croatia's recent repatriation of some Bosnian refugees, saying that such moves are banned because Bosnia is a war zone. Hina, however, cites Croatian officials as saying that undocumented aliens will be dealt with in keeping with Croatian law. -Patrick Moore SUCHOCKA REPRIMANDS LOCAL OFFICIALS. One day after admonishing police officials for undermining the apolitical nature of their service by running for office on the job, Prime Minister Hanna Suchocka delivered a similar message to state administrative officials in Poland's 49 voivodships. Meeting with voivodship chiefs in Warsaw on 2 August, Suchocka said that the state administration must preserve political neutrality. Administrative posts to which officials are appointed and not elected "may not serve as a trampoline from which to leap into elective office," she stressed. Suchocka expressed outrage that many administrative officials had chosen to run for office without resigning or requesting leaves of absence. Polish TV reports that 12 of 98 voivodship chiefs and deputy chiefs are now running for the Sejm or the Senate. Suchocka gave them three days to decide between the election campaign and their jobs. Already on 2 August, Suchocka fired the deputy voivodship chief in Plock for "disloyalty to the state." The official in question, a candidate to the Sejm for the opposition Polish Peasant Party, had criticized government policy in interviews with the local press. -Louisa Vinton 667 CANDIDATES REGISTER FOR SENATE ELECTIONS. The state election commission reported on 2-August that 667 candidates have registered to run for the 100 seats in the Senate. The registration deadline passed on 26 July, but the process has not yet concluded; court challenges by some rejected candidates are still pending. The candidates represent 145-different election committees, including 19 parties, 14 social organizations, 5 coalitions, and 107-voters' committees. Unlike the proportional Sejm elections, the Senate elections work on the "first-past-the-post" system, with 2 seats available in each voivodship (3 seats in Warsaw and Katowice). The most candidates-28-are registered in Katowice, the fewest-8-in Przemysl, PAP reports. Candidates had to collect 3,000 supporting signatures to register. Election commissioner Andrzej Zoll noted that undue pressure had been applied to collect signatures in some areas and reminded candidates of their legal obligation to refrain from such practices. Gazeta Wyborcza has reported cases in which candidates collected signatures among subordinates in military installations and prisons. A candidate for the Liberal Democratic Congress in Cracow was disqualified when some of the signatures on his petition were found to use the names of people long deceased. -Louisa Vinton CZECH INTELLIGENCE CHIEF DENIES SPYING ON POLITICIANS. On 2 August, Stanislav Devaty, the acting director of the Czech Bureau of Intelligence and Security and former deputy director of the Federal Bureau of Intelligence and Security, sent a letter to CTK in which he rejects media allegations that the FBIS spied on leading Czech politicians. Devaty argues that charges made against the FBIS are a result of a misunderstanding. In a related development, Vladimir Suman, chairman of the parliament's security and military committee told CTK on 2 August that at its extraordinary session in August the committee will examine whether intelligence services have broken the law. In yet another development the director of the Center for Democracy and Free Enterprise, Ladislav Venys, who was accused in the media of running a private intelligence network for the ruling Civic Democratic Party, said that the charges against him and the Prime Minister Vaclav Klaus's CDP, as well as attempts to discredit Viktor Kozeny, the president of the largest investment fund in the Czech Republic, should above all be seen as an attack on the voucher privatization scheme. -Jiri Pehe ILIESCU'S SOUTH AMERICAN TOUR. On 1 August Romanian President Ion Iliescu ended a two-day visit to Uruguay and left for Santiago de Chile, the third stop on his South American tour. In an interview with Radio Bucharest on 31 July Iliescu spoke of the economic aspects of his just concluded visit to Argentina and Uruguay. -Michael Shafir STRIKING MINERS EYE BUCHAREST AGAIN. On 2-August striking miners from Romania's Jiu Valley demanded that Prime Minister Nicolae Vacaroiu come to the region and lead the government's negotiations in person, Radio Bucharest reports. Vacaroiu rejected the demand. Miron Cosma, the miners' union leader, said the strike will continue until the government meets their demands for pay increases. Cosma hinted that the miners might descend on Bucharest; they did so several times in the past and precipitated major political crises. He also called on leaders of other unions to back the miners' demands and attacked those union leaders who oppose their strike. Some leaders of other trade unions, including the powerful railway workers' union, arrived in the valley on 2-August, and the Bucharest subway union warned it might take action supporting the miners. But other union leaders, including Victor Ciorbea, who heads the largest trade union confederation, criticized the action. The crisis is viewed as the biggest labor challenge yet to Vacaroiu's nine-month-old cabinet. -Michael Shafir YELTSIN SENDS MESSAGE TO SNEGUR. In a message handed to Moldovan President Mircea Snegur by the Russian ambassador in Chisinau on 30 July, Yeltsin assured Snegur that Russia was abiding by the 21 July 1992 agreement on the peaceful regulation of the armed conflict in Transdniestria. Moldovapres-TASS reports. Yeltsin said he is concerned about the political instability on the left bank of the Dniester, and the "excessive activity of certain individuals whose actions in no way reflect Russia's policy"-a reference to the provocative statements made recently by extreme nationalist Russian deputies visiting Transdniestria. The version of Yeltsin's message circulating in Moldova omits the final paragraph, which expressed the hope that "the sides" in the conflict in eastern Moldova will negotiate a solution "through Russia's mediation." Chisinau finds this unacceptable because it puts Moldova and Transdniestria on an equal footing and claims a role for Russia in arbitrating Moldova's constitutional arrangements. Snegur told the Russian ambassador that he thinks it was time for the two presidents to renew direct contacts to solve the conflict. -Ann Sheehy and Vladimir Socor "DNIESTER REPUBLIC" PAPER BLASTS NATO DELEGATION. Dnestrovskaya pravda, the main newspaper of the "Dniester republic," informed its readers on 20 July that the NATO delegation visiting Moldova-including the left bank of the Dniester-has arrived on "an ordinary intelligence mission" to spy on Russia's 14th Army, which "sits like a bone in the throat not only of Moldova, but of Moldova's Western string-pullers." In receiving the delegation, the article continued, President Snegur "showed a marionette-like readiness to serve the possible new masters." "With the USSR and the Warsaw Pact gone, NATO controls the behavior of their successors both in Eastern Europe and in the CIS." -Vladimir Socor BULGARIANS ADOPT MASS PRIVATIZATION. On 2-August the cabinet approved a general plan for mass privatization of 500 large and medium-sized companies, BTA reports. Representing a compromise version of two previous government drafts, the present scheme envisages the privatization of state property worth 180 billion leva ($6.5 billion). The mining and power industry, as well as companies involved in oil processing, rail transport, and military production, will not be affected. According to the plan, each adult Bulgarian is to receive a nontransferable option on shares worth 30,000 leva ($1,000), for which he or she can purchase shares either in an enterprise or in a holding company. Each option, plus 5% interest, must be paid off in six installments between the years 1999 and 2005. To date Bulgaria has only privatized three large-scale companies, but half of all retail trade is now considered to be in private hands. -Kjell Engelbrekt HUNGARIAN PRIVATIZATION PLAN ON TRACK. The State Property Agency said on 30 July that the mass privatization program can start early 1994, Hungarian Radio reports. The government will decide on the plan in two weeks. The plan was first revealed in March 1993 but was not well received. It was seen as the ruling coalition's desperate attempt to "buy" votes in next spring's general elections. The program would give 100,000 forint (about $1000) worth of interest-free credit to every Hungarian citizen over the age of 18 to participate in privatization. Estimates put the number of participants as high as half a million. -Karoly Okolicsanyi NEW EC LIMITS ON POLISH EXPORTS. The European Community imposed minimum prices on Polish exports of black currants on 2 August, PAP reports. The EC commission charged that Polish exports undercut prices prevailing on EC markets. The restriction applies only to Poland. The foreign trade ministry issued a statement arguing that the price limits are "a further measure aimed at impeding access to EC markets by Polish soft fruit exporters." In a similar decision, the EC imposed minimum prices on imported Polish cherries on 19 July. -Louisa Vinton POLAND TO EXPORT $40 MILLION IN CARS TO CHINA. Poland's FSO automaker concluded a deal on 2 August to sell 4,000 Polonez cars to a Chinese company representing the Shenzhen special economic district, PAP reports. The deal will earn Poland $40-million. Attending the signing ceremony in Warsaw, Deputy Prime Minister Henryk Goryszewski commented that "our foreign trade cannot be oriented exclusively toward cooperation with the EC. We need a foundation in the East in order to be strong in the West, so that we do not have to take part in European integration in the role of a poor cousin." The director of the FSO plant said the contract would help keep his company afloat financially. -Louisa Vinton THE GM-VW EXECUTIVE DISPUTE: THE CENTRAL EUROPEAN CONNECTION. The European edition of The Wall Street Journal reported on 2 August that J.-Ignacio Lopez decided to join Volkswagen A.G. only after General Motors corporate officials surprised him on 9-March 1993 with a decision to set up "Plateau Six," an innovative production facility Lopez had hoped to win for his native Basque region of Spain, in either Hungary or Poland. There is already a GM plant in Hungary, where Opel car engines are assembled. GM negotiations with Poland have been going on for years, but there is apparently no other public information about the fate of this project. -Karoly Okolicsanyi BELARUS STIFFENS MONETARY POLICY. Speaking at a press conference in Minsk on 28-July, the head of the National Bank of Belarus, Stanislau Bogdankevich, said that the bank and government had come to an agreement on a much stricter monetary policy, according to various Belarusian news reports. The bank pledged to cut low-interest loans to enterprises and end credit to firms producing unmarketable products. Bogdankevich said the practice of augmenting enterprises' working capital with central credits will be stopped as well. The shift in policy was among conditions needed to qualify for the $98 million dollars in credits from the IMF announced that same day. On 2-August an RFE/RL correspondent reported that the World Bank has approved a contribution to a $18-million fund to support Belarusian economic reforms. The World Bank's contribution, totaling $8.3 million, will be combined with $7.6 million from other foreign institutions and $2.1 million from the Belarusian government itself. -Erik Whitlock and Robert Lyle LITHUANIA'S CURRENCY SLOW TO CATCH ON. Since 1 August there has been a government ban on using or accepting foreign currency as payment for goods and services in Lithuania. Such payments must be made in the national currency, the litas. The ban is intended to stabilize the litas, which was introduced in June. Initial Baltic media reports of 2-August suggest that Lithuanians have been slow to comply with the government policy and continue to use a mixture of currencies, as long as a policeman is not in sight. -Dzintra Bungs TROUBLES IN UKRAINE'S DEFENSE INDUSTRIES. The Russian newspaper Segodnya on 30 July published an article describing the many problems that Ukraine's defense enterprises face today. Arguing that the defense complex lies in ruins, the article quotes former Minister of Defense Industries Viktor Antonov, who claims that defense production from 1991 to 1992 fell by some 65%. The article also quotes other Ukrainian officials who argue that conversion must be financed by arms sales abroad. In an effort to reverse the sector's decline, a Military-Industrial Commission has been created in Ukraine to oversee policy within the defense industrial sector, including arms sales, the article says. Further, Valerii Shmarov has been appointed to what was described as a new government position, and will serve as deputy prime minister on questions concerning the defense industrial complex. The problems that Ukraine faces and the solutions that have been proposed appear to parallel very closely developments in Russia's defense sector. -Stephen Foye UKRAINIAN DEFENSE MINISTER ON US VISIT. Konstantin Morozov, just back from an official visit to the United States, said on 2 August that US attitudes toward Ukraine are changing for the better and that the two states have become military partners. According to Kiev UNIAR Radio, Morozov suggested, however, that the $175 million granted by the US for dismantling Ukrainian nuclear weapons is insufficient. Morozov was less positive about relations with Russia, saying that an absence of consensus on issues concerning strategic forces in Ukraine and the division of the Black Sea Fleet preclude Kiev's establishing a defense relationship with Moscow similar to that with the US. According to Reuters, Morozov also said that he expects 10 of the country's SS-19 strategic nuclear missiles to be dismantled by the end of September. -Stephen Foye DELAY IN PULLOUT OF RUSSIAN TROOPS FROM LITHUANIA? BALTIC MEDIA REPORTED ON 1-2 AUGUST ON DISAGREEMENT OVER CERTAIN POINTS IN THE OVERALL TREATY ON THE PULLOUT OF RUSSIAN TROOPS FROM LITHUANIA AND, IN PARTICULAR, ABOUT THE AMOUNT OF COMPENSATION THAT LITHUANIA IS DEMANDING FOR THE DAMAGES RESULTING FROM THE PRESENCE OF THOSE TROOPS. If differences can be ironed out, the treaty might be signed by the two presidents when they meet in Moscow. No date for that meeting has been announced, but it could take place even as early as this week. Russian authorities have indicated that, lacking agreement on the amount of compensation, the withdrawal process might be frozen. -Dzintra Bungs MUTINOUS ESTONIAN INFANTRY OFFICER ARRESTED. On 2 August Estonian authorities arrested Jaak Mosin, deputy commander of a rebellious infantry unit at Pullapaa. Mosin is accused of having provoked mutinous actions in his company last week and similar actions last summer at the Kuperjanov battalion. The men at Pullapaa, dissatisfied with the conditions of military service, have been told by the government that their company has been dissolved and that they must surrender their weapons and equipment, which they have refused to do. Baltic media reported the story on 1-2 August. -Dzintra Bungs [As of 1200 CET] Compiled by Wendy Slater and Charles Trumbull THE RFE/RL DAILY REPORT IS PRODUCED BY THE RFE/RL RESEARCH INSTITUTE (A DIVISION OF RADIO FREE EUROPE/RADIO LIBERTY, INC.) with the assistance of the RFE/RL News and Current Affairs Division (NCA). The report is available by electronic mail via LISTSERV (RFERL-L@UBVM.CC.BUFFALO.EDU), on the Sovset' computer bulletin board, by fax, and by postal mail. For inquiries about specific news items, subscriptions, or additional copies, please contact: in North America: Mr. Brian Reed, RFE/RL, Inc., 1201 Connecticut Avenue NW, Washington, DC-20036 Telephone: (202) 457-6912 or -6907; Fax: (202) 457-6992 or 828-8783; Internet: RIDC@RFERL.ORG or Elsewhere: Ms. Helga Hofer, Publications Department, RFE/RL Research Institute, Oettingenstrasse 67, 80538 Munich, Germany;.Telephone: (+49 89) 2102-2631 or -2624; Fax: (+49 89) 2102-2648, Internet: PD@RFERL.ORG 1993, RFE/RL, Inc. All rights reserved.
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