Much unhappiness has come into the world because of bewilderment and things left unsaid. - Dostoevsky
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 3, No. 26, Part II, 8 February 1999


________________________________________________________
RFE/RL NEWSLINE Vol 3, No. 26, Part II, 8 February 1999

A daily report of developments in Eastern and
Southeastern Europe, Russia, the Caucasus and Central
Asia prepared by the staff of Radio Free Europe/Radio
Liberty.

This is Part II, a compilation of news concerning
Central, Eastern, and Southeastern Europe.  Part I
covers Russia, Transcaucasia and Central Asia and is
distributed simultaneously as a second document.  Back
issues of RFE/RL NewsLine and the OMRI Daily Digest are
online at RFE/RL's Web site:
http://www.rferl.org/newsline

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Headlines, Part II

* POLISH FARMERS, GOVERNMENT SIGN PRELIMINARY AGREEMENT

* ALBRIGHT WARNS BOTH SIDES ON KOSOVA

* ROMANIAN DEFENSE MINISTER WARNS NATO OVER LOSING
CREDIBILITY

End Note: MOLDOVAN GOVERNMENT'S RESIGNATION UNDERLINES
ECONOMIC WOES
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EAST-CENTRAL EUROPE

KUCHMA CRITICIZES PARLIAMENT'S REJECTION OF
PRIVATIZATION BILL. Ukrainian President Leonid Kuchma
sharply criticized the parliament on 5 February after it
voted overwhelmingly to reject a privatization plan, AP
reported. Despite that rejection, Kuchma had earlier
decreed the legislation, which is due to take effect on
16 February. The legislature voted 227 to 48 against the
plan, which would privatize 455 large and medium-sized
enterprises and some 5,500 smaller firms. Many deputies
are against the use of domestic state bonds as
privatization payments and others want the parliament
rather than the government to handle the privatization
of strategic companies. Kuchma said "everything proposed
by the president or cabinet is adamantly opposed." He
said the parliament does not understand the urgency in
"giving economic laws top priority." PB

UKRAINIAN FOREIGN MINISTER AGAIN PRAISES NATO, REBUKES
MOSCOW. Boris Tarasyuk on 7 February again endorsed NATO
expansion and argued that Moscow should not speak for
Soviet successor states on matters related to the
alliance, an RFE/RL correspondent reported. Tarasyuk,
speaking at a security conference in Munich, made his
comments after Russian Deputy Foreign Minister Yevgenii
Gusarov criticized NATO enlargement. Tarasyuk said Kyiv
rejects Moscow's attempt to draw a "red line" around the
former Soviet Union by speaking for the successor
states. Gusarov said later that Russia has no veto over
the opinions of other countries. Tarasyuk said the
alliance is an "essential instrument" for maintaining
peace and stability. He added that closer political and
military ties between Kyiv and Brussels will not damage
Russian-Ukrainian relations. PB

GERMANY WANTS UKRAINE TO CLOSE CHORNOBYL.
German Foreign Minister Joschka Fischer urged
Ukraine on 6 February to close down the Chornobyl
nuclear power plant, ITAR-TASS reported. Fischer made
his plea at a ceremony in Bonn creating the German-
Ukrainian Forum, which was also attended by his
Ukrainian counterpart, Tarasyuk. Fischer said Germany
will assist Kyiv in integrating into Western European
structures. The previous day in Kyiv, Chornobyl
officials said the last operational reactor at the plant
will remain idle at least until 2 March owing to a delay
in repairs. Ukrainian energy officials are holding talks
in Kyiv with the European Bank for Reconstruction and
Development about financing construction of two new
reactors at the Khmelnytsky and Rovno plants so that it
can permanently close down Chornobyl. PB

BELARUSIAN OPPOSITION LEADERS CLAIM ATTACK BY RUSSIAN
NATIONALISTS. Three leading Belarusian human rights
activists on 6 February said that they were beaten by
members of the Russian Nationalist Unity group, Reuters
reported. Ondrihj Sannykov, a member of the Khartiya-97
human rights group, received concussion and a broken
nose in the incident, in which some 20 people attacked
the three men after a heated argument. Many of the
attackers were wearing Russian Nationalist Unity
armbands, Sannykov said, adding that "the Belarusian
regime is closing its eyes to Russian fascists, who are
growing more active in Belarus." PB

MINSK REPORTS INCREASE IN GDP. The Belarusian Ministry
of Statistics and Analysis on 6 February reported that
GDP rose by 8.3 percent in 1998, Belapan reported. It
said GDP totaled 662 trillion rubles  at current
prices. The following day, it said that in adjusted
prices, industrial output increased by 11 percent last
year. The greatest increases were in light industry
(22.2 percent) and the timber industry (21.2 percent).
PB

BALTIC PREMIERS MEET IN VILNIUS. Meeting in Vilnius City
Hall on 5 February, the prime ministers of Estonia,
Latvia, and Lithuania signed a consular cooperation
agreement whereby all citizens of the Baltic States are
guaranteed diplomatic aid and representation in
countries where not all of those states have consular
facilities, ETA and LETA reported. The three leaders
also discussed, among other things, drawing up an
agreement on the free movement of services. Premiers
Vilis Kristopans (Latvia) and Mart Siimann (Estonia)
protested Lithuania's decision to impose minimum prices
on Latvian and Estonian imports of agricultural goods
(see "RFE/RL Newsline," 1 February 1999). Lithuania has
said it will revoke the measure on 1 January 2000, but
both Tallinn and Riga are pressing for its speedy
removal, arguing that it violates both the Baltic free
trade agreement and the norms of the World Trade
Organization. JC

EVEA PANK DECLARED BANKRUPT. The Tallinn City Court on 5
February declared Evea Pank bankrupt, ETA reported.
Founded in 1989, Evea Pank is the country's oldest
commercial bank. Bank officials have already announced
that they will appeal the decision. Evea Pank's license
was revoked last October. Two U.S. financial
institutions, Swiss Credit & Saving Union Inc. and
Morgan Nationwide Depository Inc., have said they are
ready to buy a 67.8 percent stake in the bank for 5
million kroons (some $385,000). JC

LATVIA'S RIEKSTINS SAYS TALKS IN MOSCOW WERE 'POSITIVE.'
Returning from a two-day visit to Moscow on 4-5
February, Latvian Foreign Ministry State Secretary Maris
Riekstins said that his talks with Russian Deputy
Foreign Minister Aleksandr Avdeev were "positive" but
did not mark a "turning point" in Latvian-Russian
relations, BNS and "Diena" reported on 6 February.
Riekstins welcomed Avdeev's promise to submit to the
Russian government in the near future a list of
candidates for the post of co-chairman of the Russian-
Latvian intergovernmental committee. That committee has
not convened for more than year because of the failure
to appoint a new Russian co-chairman following the
dismissal of Viktor Chernomyrdin's cabinet. After the
meeting, the Russian Foreign Ministry issued a statement
repeating its position that an improvement in bilateral
relations depends on Riga's taking "practical steps" to
improve the situation of its national minorities, ITAR-
TASS reported. JC

LITHUANIAN PREMIER WELCOMES AGREEMENT ON CRUDE OIL
SUPPLIES. Gediminas Vagnorius on 5 February welcomed the
agreement reached in Moscow earlier that day whereby
crude oil supplies were to be resumed to the Mazeikiai
Nafta refinery, LETA reported. Vagnorius commented that
the ability of the two sides to quickly come to
agreement testifies to the "business-like bonds forged
by the Lithuanian and Russian governments." According to
AP, the refinery issued a statement on 5 February saying
it had reached a deal with unnamed Russian sources to
receive an additional 300,000 tons of crude, with
deliveries to start later that day and full operations
at the refinery expected to restart within three to
four days. Meanwhile, BNS's "Baltic Business Weekly"
reports that Russia's LUKoil may soon sign a letter of
intent on participating in the construction of a new oil
pipeline to the Latvian port of Ventspils. LUKoil head
Vagit Alekperov is scheduled to visit Ventspils this
week to discuss the pipeline project. JC

POLISH FARMERS, GOVERNMENT SIGN PRELIMINARY AGREEMENT.
The leaders of several Polish farmers' unions signed a
protocol with the government on 8 February, AP reported.
Under the agreement, a committee is to be set up
composed of farmer leaders and government officials to
propose reforms in the agricultural sector by mid-March.
The committee will address alleviating farmers' debts
and subsidizing meat, grain, and dairy products. The
protocol also acknowledged that the 11 days of protests
by farmers were justified, thereby freeing from
prosecution the farmers that had blocked roads. Premier
Jerzy Buzek said that "the times when agriculture was
underestimated are over." Andrzej Lepper, head of the
radical Self Defense farmers group, tore up the
agreement at a press conference. He had walked out of
the talks two days earlier. PB

POLAND MARKS 10TH ANNIVERSARY OF COMMUNIST-SOLIDARITY
TALKS. Top Polish politicians in Warsaw on 6 February
marked the anniversary of talks between Communist
officials and the Solidarity-led opposition in 1989 that
eventually led to the end of communist rule, AP
reported. Absent from the meeting, which was organized
by President Aleksander Kwasniewski, a former Communist,
were former President Lech Walesa and former dissidents
Adam Michnik and Jacek Kuron. Kwasniewski said the
round-table talks were "a time of breakthrough, a time
that changed Poland and a turning point in the history
of this part of Europe." The talks led to elections in
June 1989 and the formation of a Solidarity-led
government. Former President General Wojciech Jaruzelski
participated in the meeting. PB

KLAUS READY FOR COALITION WITH CHRISTIAN DEMOCRATS.
Civic Democratic Party (ODS) Chairman Vaclav Klaus has
said the ODS is prepared to participate in a new
majority cabinet together with the Christian Democratic
Party (KDU-CSL), CTK reported on 7 February. He told
Nova Television that a "reasonable compromise" could be
reached between the two parties' programs, adding that
the "radical steps" taken by the Social Democratic
Party's (CSSD) government are bringing the ODS and the
KDU-CSL closer together. Klaus added that talks between
the ODS, the KDU-CSL, and the Freedom Union on forming a
new coalition cannot be expected in the near future and
the ODS will "not be the first" to initiate them. Prime
Minister Milos Zeman said that he recently talked with
Klaus and received "no indication" that the agreement
between the CSSD and the ODS on the CSSD minority
government might be revoked. MS.

U.S. COMMISSION CHIDES CZECH PARLIAMENT OVER
RESTITUTION. The U. S. Congress's Commission on Security
and Cooperation in Europe on 5 February expressed
"profound regret" at the Czech parliament's rejection
last week of a proposed amendment to a law that would
have abolished the stipulation that Czech citizenship is
a condition for property restitution claims (see "RFE/RL
Newsline," 4 February 1999). The commission said the
parliament has "missed an opportunity to resolve a long-
standing and contentious issue" between the Czech
Republic and the U.S. It also said it is "alarmed" over
recent statements by Premier Zeman and Deputy Premier
Pavel Rychetsky questioning the legitimacy of property
returns to the Catholic Church. On 5 February Rychetsky
accused Cardinal Miroslav Vlk of a "lack of loyalty" to
the state for having complained about the return of
property to the EU. MS

SLOVAK TELEVISION APOLOGIZES TO FORMER PRESIDENT. Slovak
Television on 5 February apologized to former President
Michal Kovac for having accused him in 1996 of
complicity to fraud. The state-run television claimed at
that time that President Kovac abused his power to
hinder the investigation into the so-called "Technopol
affair," in which his son was alleged to have been
involved. It had also reported that the abduction of
Michal Kovac Jr. in August 1995 was orchestrated by the
president to divert attention from the investigation. It
now acknowledges that the allegations were "untrue" and
"aimed at discrediting the then president in the eyes of
the public." MS

SOUTHEASTERN EUROPE

ALBRIGHT WARNS BOTH SIDES ON KOSOVA. U.S. Secretary of
State Madeleine Albright said in Washington on 7
February that NATO will not limit possible air strikes
against Serbian targets to those in Kosova if the
Atlantic alliance deems Serbia responsible for any
breakdown in the peace talks, which began in
Rambouillet, France, the previous day. She added that
the Kosovars "will lose the support of the international
community" if they prevent the talks from succeeding.
She stressed that the Kosovars cannot "operate without
the international community." U.S. ground troops will go
to Kosova only if fighting has stopped, she noted (see
"RFE/RL Newsline," 5 February 1999). Albright added that
the Bosnian experience in setting withdrawal dates for
peacekeepers shows that it is better to identify a
series of "benchmarks" to be achieved than to set firm
deadlines that often cannot be met. PM

CHIRAC OPENS RAMBOUILLET TALKS. French President Jacques
Chirac told the Serbian and Kosovar delegations on 5
February that "the world is watching and waiting" for a
settlement of the Kosova dispute. He stressed that
"peace is in your hands. I call on your sense of
responsibility and your courage. Not the courage that
leads to war, to revenge and an endless cycle of
violence, but to true courage...the courage to accept
negotiations and make peace." The French leader stressed
that "there are rare moments when history is in the
hands of only a few men. This is the case today as you
take your places at the negotiating table." PM

BOTH SIDES ACCEPT 10 PRINCIPLES. The two delegations
agreed on 7 February to accept 10 basic principles on
the future of the province. An unnamed Western mediator
told AP, however, that "the devil is in the details."
French Foreign Minister Hubert Vedrine and his British
counterpart, Robin Cook, are co-chairs of the
conference. U.S. mediator Chris Hill, the EU's Wolfgang
Petritsch, and Russian envoy Boris Mayorskii will play
key roles. Reuters quoted Hill as saying that "there is
not going to be any free time." Cook remarked that
posturing by both sides could lead to "daily dramas."
The Serbs prevented the Kosova Liberation Army (UCK)
representatives from leaving Prishtina airport on 5
February until last-minute telephone calls from Chirac
ensured that they would arrive in Rambouillet on time.
Once the talks began, the UCK refused to place its arms
under NATO control and demanded the same legal status as
the Bosnian Serb army. PM

THOUSANDS ATTEND FUNERAL IN KOSOVA. In Rambouillet on 7
February, both delegations endorsed a statement
condemning a bomb attack in Prishtina the previous day.
Deutsche Welle reported from the Kosovar capital that
unidentified "extremists" may try to disrupt the talks
through further acts of violence in the province. In the
village of Rogova, near the Albanian border, some 5,000
Kosovars attended the funeral of nine men killed by
Serbian security forces (see "RFE/RL Newsline," 1
February 1999). PM

GEORGIEVSKI FIRM ON TIES WITH TAIWAN. Macedonian Prime
Minister Ljubco Georgievski said in Washington on 5
February that his discussions with Albright and
Secretary of Defense William Cohen centered on Kosova
and on Macedonia's role in the crisis. He noted that
Albright was concerned that Macedonia's recent decision
to recognize Taiwan could prompt China to attempt to
link that recognition with extending the mandate of the
UN peace-keeping force in Macedonia (see "RFE/RL
Newsline," 4 February 1999). Georgievski stressed that
recognition of Taiwan is likely to greatly benefit the
Macedonian economy. PM

BRCKO HEARINGS OPEN. Talks lasting up to 10 days on the
future of the disputed northeastern Bosnian town of
Brcko are slated to open on 8 February in Vienna. U.S.
mediator Roberts Owen has the option of postponing a
decision for a third time, declaring Brcko neutral
district, or assigning Brcko to the Republika Srpska or
to the mainly Croatian and Muslim federation. Reuters
quoted unnamed Western diplomats in Sarajevo as saying
that Owen is likely either to postpone the decision or
to opt for the neutral district model. Control of Brcko
is vitally important to the Serbs, since it and the
surrounding "corridor" link the two halves of the
Republika Srpska. The Muslims and Croats argue that they
together constituted the majority in the town before the
war and that to deny them Brcko would be to endorse the
results of "ethnic cleansing." Brcko was the one
territorial issue so thorny that it was not settled in
the 1995 Dayton agreement. PM

CROATIAN NEWS AGENCY CHIEF QUITS. Branko Salaj resigned
on 5 February as director of the state news agency Hina.
He charged that the government forced him to appoint a
chief editor who has no journalistic experience and that
the parliament failed to pass a law making Hina a public
agency rather than a state institution. Also in Zagreb,
AP obtained a copy of the latest OSCE report on
democratization in Croatia. The document concluded that
"conditions for the independent press have
deteriorated..., no effective efforts have been
made...[to remove] the flaws in the administration of
justice..., no progress in improving human rights,
minority rights and the rule of law." Elsewhere, the
parliament appointed Milan Vukovic to one of the 11
seats on the Constitutional Court. Some five of the 11
judges protested the appointment of Vukovic, whom they
regard as too close to the governing Croatian Democratic
Community. PM

CLAIMANT TO ALBANIAN THRONE ARRESTED. Police arrested
Leka Zogu and at least three other Albanian nationals
near Johannesburg, South Africa, on 5 February for
illegal possession of weapons. Police confiscated more
than 70 fire arms and 14,000 rounds of ammunition.
Reuters reported that Leka came to South Africa in the
1970s and received diplomatic status and immunity from
the Apartheid-era National Party government. A police
spokesman said the authorities recently lifted Leka's
diplomatic immunity but did not indicate why. In Tirana,
monarchist Legality Party spokesman Murat Basha told
"Gazeta Shqiptare" of 6 February that Leka bought the
weapons in 1979 in Spain in the hope of launching an
attack against the regime of communist dictator Enver
Hoxha. Leka never staged the assault but added the
weapons to his collection, Basha noted. Leka faces
prison in Albania for allegedly having organized a coup
attempt in July 1997. FS

MORE THAN $1 MILLION 'LOST' AT ALBANIAN MOBILE PHONE
COMPANY. A spokesman for the government's anti-
corruption agency said on 5 February that preliminary
results of an investigation into the state-owned company
Albanian Mobile Communications (AMC) suggest that the
firm is short of some $1.3 million because of unpaid
bills from individual customers. The collapsed Vefa
pyramid scheme accounts for the largest portion of the
debt. Agency officials added that AMC did not conduct
all its business in a transparent fashion, which makes
auditing difficult. Elsewhere, Pirro Xhixho, who heads
the government's privatization agency, told "Koha Jone"
that AMC will be privatized by the end of April. FS

ROMANIAN PARLIAMENT DEBATES 1999 BUDGET. Prime Minister
Radu Vasile, addressing a joint session of the two
chambers of the parliament on 7 February, expressed the
hope that the IMF delegation expected to arrive in
Bucharest on 8 February will approve his cabinet's
"austerity budget" and resume lending in order to avoid
defaulting on the country's nearly $3 billion external
debt. Vasile said that if this does not happen, the
opposition, which negotiated the loans now due for
repayment, must "share responsibility." The budget
envisages a deficit of 2.4 percent of GDP, but Vasile
said this may be reduced to 2 percent following the
debate in the parliament. It also envisages a 25 percent
inflation rate, compared with 40 percent in 1998. The
premier said that unemployment is expected to grow from
1 million to 1.2 million. MS

ROMANIAN DEFENSE MINISTER WARNS NATO OVER LOSING
CREDIBILITY. Victor Babiuc, addressing an international
security conference in Munich on 7 February, warned that
NATO might "lose credibility" if no new countries are
invited to join the organization, an RFE/RL
correspondent reported. He suggested that as a first
step, Romania and Slovenia be granted a "special
position" at the April NATO Washington summit and that
specific conditions and a timetable for their
fulfillment be agreed on in order to distinguish those
two countries from other candidates. President Emil
Constantinescu, in an interview with the "Frankfurter
Rundschau" on 6 February, deplored the fact that "the
iron curtain has been replaced by a velvet one"
discriminating among former communist states over the
integration of those states into Euro-Atlantic
structures. He said Romania has "never asked for Western
gifts" but expects the West to support the reform
process in its own interest, because "the only
alternative to reform is national communism." MS

MOLDOVAN PREMIER-DESIGNATE OUTLINES CABINET FORMATION
PLANS... Premier-designate Serafim Urecheanu told
reporters in Chisinau on 5 February that he wants to
head a cabinet of experts that will not be proportional
to parliamentary representation, RFE/RL's Chisinau
bureau reported. He said that he intends to ask the
parliament to grant the government the right to rule by
decree for at least two years. Urecheanu also said that
currently, the possible participation of the Party of
Moldovan Communists in his cabinet is "being examined"
just to ensure "the best solution for the country's most
pressing problems." MS

...WHILE COALITION LEADERS DISTANCE THEMSELVES FROM HIM.
The leaders of the three political formations that make
up the ruling coalition said on 7 February that they do
not support the idea of a government of technocrats and
that "extra-parliamentary solutions" that do not reflect
the composition of the parliament are unlikely to
provide a solution to the problems Moldova is facing.
Taking part in a round-table discussion broadcast by
RFE/RL, Dumitru Diacov, parliamentary chairman and For a
Democratic and Prosperous Moldova Bloc leader, Mircea
Snegur, who heads the Party of Revival and Conciliation,
and Iurie Rosca, leader of the Christian Democratic
Popular Front, said Urecheanu's demand to allow the
government to rule by decree for two years is
unconstitutional. They said the parliament could approve
legislation allowing the government to rule by
"emergency regulations" but that the legislature's
necessary approval would be a long and cumbersome
process. MS

END NOTE

MOLDOVAN GOVERNMENT'S RESIGNATION UNDERLINES ECONOMIC
WOES

by Michael Wyzan

	Moldovan Prime Minister Ion Ciubuc blamed his
resignation last week on the difficulty of consolidating
his cabinet owing to its diverse composition. Some local
observers, for their part, pointed to his
"incompetence." But regardless of the Ciubuc
government's internal structure and competence, Moldova
is beset by severe economic problems that would daunt
any cabinet.
	In 1998, for the second time in three years,
positive economic growth was forecast but failed to
materialize, largely because of factors beyond the
government's control. GDP fell by 7.8 percent in 1996,
after observers had predicted positive growth that year.
The decline was generally attributed to the poor
harvest.
	Last year, the most visible problem was the Russian
financial crisis, which began in August. While the
government originally forecast GDP growth of 6 percent
for 1998 (revised to 3 percent in June), it announced in
December that it expected a GDP decline of fully 10
percent. That would make it the only one of the nine
smaller CIS countries (that is, excluding Kazakhstan,
Russia, and Ukraine) where GDP declined last year.
	However, the Russian crisis was not the only factor
that negatively affected Moldova's economic growth. GDP
fell by 5.3 percent during January-June 1998. Pre-crisis
Western forecasts for GDP growth ranged between -2 and
+2 percent.
	Moldova's economic problems reflect both its
geopolitical environment and a period of retreat from
reformist economic policy that began in 1997, after a
solid start in the earlier post-independence years.
Early achievements included relatively low inflation and
a stable currency. Consumer prices increased by 23.8
percent in 1995 (December-to-December), the lowest
inflation among the former Soviet republics, while the
leu fell only slightly against the U.S. dollar, from
4.06 in April 1994 to 4.75 in July 1998.
	That stability has been undermined by the Russian
crisis. While consumer prices fell by 2 percent from
January through August 1998, they rose by 8.6 percent in
November alone and increased by about 10 percent for the
year. Exchange rate movements have been particularly
alarming, with the leu falling to 6.2 to the dollar on
30 October and 8.55 on 1 February. In a losing battle to
prop up the currency unit, the national bank saw its
international reserves fall from almost $365 million at
the end of 1997 to about $150 million at the close of
1998.
	The leu's nosedive has resulted in the collapse of
the monthly wage from its June 1998 peak of $52. Even
those low wages are often not paid: state sector wage
arrears reached a record 638.2 million lei ($76.9
million) in December. While the official unemployment
rate is only about 2.5 percent, the numbers on unpaid
leave and working part-time are five times the number of
unemployed.
	Moldova is also behind on its payments to Russia's
Gazprom, to which it owed $439 million at the end of
1998. Attempts to ameliorate this problem--for example,
by giving Gazprom a controlling stake in Molodovagaz in
October 1998 or paying off debt by transferring state-
guaranteed bonds to the company (against the IMF's
wishes) in September--have improved matters only
temporarily.
	The country had a trade deficit of $366.3 million
during January-November 1998, compared with $284.8
million in the same period of the previous year.
Especially worrisome is Moldova's continued trade
dependence on Russia and the CIS, the former accounting
for 60 percent and the latter 74 percent of its exports.
Total exports were 22.5 percent lower in January-
November 1998 than in the same period in 1997, with big
declines in the export of food, beverages, and tobacco.
	The current account imbalance was $176 million
(about 16 percent of GDP) during January-June 1998,
compared with $149 million during the same period in
1997. Moldova attracts little foreign direct investment
($265 million cumulatively through 1997), and attempts
to sell large firms to international investors proceeded
fitfully in 1998, although enterprises producing cement,
pharmaceuticals, and leather were sold. It is thus no
wonder that Moldova has the second-largest foreign debt
as a share of GDP in the CIS (after Tajikistan).
	But there is one important positive indicator:
relations with the IMF and World Bank are back on track.
In mid-1997, the IMF had halted disbursements under a
$190 million loan approved in May 1996 owing to concern
over a growing budget deficit, slow privatization, and
the failure to raise energy prices.
	But on 11 January, the IMF announced the resumption
of lending to Moldova, agreeing to disburse that month a
$35 million tranche, and the World Bank is providing the
same amount in support of privatization and structural
reform. The IMF was pleased by both the passage of an
austere 1999 budget and with the parliament's approval
in December of the privatization of Moldtelcom and
energy sector companies.

The author is a research scholar at the International
Institute for Applied Systems Analysis in Laxenburg,
Austria.

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