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RFE/RL NEWSLINE Vol 3, No. 48, Part II, 10 March 1999
________________________________________________________ RFE/RL NEWSLINE Vol 3, No. 48, Part II, 10 March 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 * SLOVAK NATIONALIST LEADER FACES INVESTIGATION * BEFORE TALKS WITH MILOSEVIC, HOLBROOKE WARNS OF TRAGEDY * SERBIAN OFFICIALS ISSUE MORE ARREST WARRANTS, STEP UP FIGHTING ALONG BORDER End Note: BOSNIA'S TWO-ENTITY ECONOMY GROWING BUT STILL WEAK xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx EAST-CENTRAL EUROPE BELARUSIAN OPPOSITION ACCUSES OSCE MINSK MISSION OF 'INACTIVITY'÷ Members of the opposition Central Electoral Commission have sent a letter to OSCE Chairman in Office Knut Vollebaek accusing the OSCE Minsk mission and its head, Hans Georg Wieck, of "inactivity," RFE/RL's Belarusian Service reported on 9 March. The oppositionists said Wieck "expresses opinions that contradict the OSCE official position on Belarus." In particular, they said that Wieck expresses "the need" to recognize the constitution adopted in the 1996 controversial referendum. "We have already ceased to count on Mr. Wieck's help and are forced to [directly] address the OSCE leadership," the oppositionists said. JM ÷WARNS AGAINST MOSCOW 'POLITICAL PROJECT' IN BELARUS. Zyanon Paznyak, exiled leader of the Belarusian Popular Front (BNF), has issued a statement saying that the participation of former Prime Minister Mikhail Chyhir in the opposition election campaign this year is a "political project" stage-managed by Russia's special services. According to Paznyak, the project aims at creating a pro-Moscow opposition to President Alyaksandr Lukashenka in Belarus and at moving the BNF and the "Belarusian national liberation movement" to the "sidelines of politics." Paznyak and Chyhir are two candidates who have announced their intent to run in the 16 May presidential elections scheduled by the opposition Supreme Soviet in accordance with the 1994 constitution. Mikhail Chyhir resigned from the post of prime minister before the 1996 referendum, which abolished the 1994 constitution and considerably expanded Lukashenka's powers. JM BELARUSIAN COMMUNISTS URGE RESTORATION OF 'PEOPLE'S DEMOCRACY.' At its 6-8 March congress, the Belarusian Party of Communists criticized policies pursued by the president and the government as "oriented toward pauperizing the working people," Belapan reported on 9 March. The party's main goal, as stated in an appeal to the Belarusian people, is to restore a "people's democracy in the form of soviets of deputies of the working people." The party sees Belarus's future in a voluntary union state of "brotherly nations" based on "equality, people's democracy, and socialism." JM UKRAINIAN COURT LIFTS BAN ON PRICE HIKES FOR UTILITIES, TRANSPORTATION. The Constitutional Court on 9 March overturned a law that temporarily banned increases in the price of utilities and public transportation. The Supreme Council passed the law in July 1998, stating that it would remain in effect until the government has repaid all wage and pension arrears. The court ruling said the law is unconstitutional and allowed the government to raise utilities and transportation rates. So far, Ukrainians have paid only 80 percent of the cost of water, heating, and electricity supplies. The abolition of utilities subsidies was an IMF requirement to resume releasing tranches of a $2.2 billion loan, which was frozen last fall. JM UKRAINE DISMISSES EU DEMAND TO CLOSE CHORNOBYL. Deputy Energy Minister Hennadiy Yaroslavtsev has shrugged off a demand by the European Commission to close the Chornobyl nuclear power plant as soon as possible, Reuters reported on 9 March. Energy Commissioner Christos Papoutsis urged Ukraine to reconsider last week's decision to restart the only operational reactor at Chornobyl and to expedite the plant's closure, pointing to safety considerations. Yaroslavtsev said the commission's demand is "an attempt to exert political pressure on Ukraine." The Chornobyl plant "is the safest of all similar nuclear power plants in the former Soviet Union," he argued. Ukraine has pledged to shut down Chornobyl by 2000 in exchange for Western assistance to complete the construction of another two nuclear reactors. JM ESTONIAN INSPECTORATE SAYS NO LEAK IN TELEKOM TENDER. The Securities Inspectorate has announced it will not launch an investigation into an alleged leak about the distribution terms of Eesti Telekom shares during last month's tender, ETA reported on 9 March 1999. Uhispank was accused by "several sources" of having leaked information among its clients about the distribution terms of Eesti Telekom shares. The inspectorate said it has investigated all bids ranging from 300,000 kroons to 1 million kroons and found them to have been divided equally. There is no evidence that Uhispank clients were given preferential treatment, it concluded. JC RIGA WANTS RUSSIAN-LATVIAN COMMITTEE TO RESUME FULL DIALOGUE. Latvian President Guntis Ulmanis told journalists in Riga on 9 March that Russia continues to pursue "incorrect diplomacy practices" toward Latvia by proposing to resume a dialogue with that country only on socio-humanitarian issues, "Diena" reported on 9 February. The previous day, Riga rejected a proposal to hold a meeting of experts of the Latvian-Russian intergovernmental committee's working group on socio- humanitarian issues in Moscow next week. Instead, it is proposing that the committee resume all its activities, not just those focusing on certain issues. Also on 9 March, Latvian Foreign Minister Valdas Adamkus commented on national radio that the proposal to discuss only socio-humanitarian issues casts doubt on Russia's declared wish to resume a dialogue with Latvia. JC LITHUANIAN PRESIDENT SAYS 'NOTHING CLARIFIED' WITH PREMIER. Valdas Adamkus told journalists on 9 March that Prime Minister Gediminas Vagnorius failed to provide answers to questions that "cause concern" at an unofficial meeting between the two leaders the previous day, according to BNS and ELTA. "Almost nothing was clarified" at that meeting, the president commented, adding that he quizzed Vagnorius about transparency in the privatization process, problems in the energy sector, failure to meet budget revenue targets, and growing unemployment. Vagnorius responded that Adamkus's interpretation of the meeting was not only strange and incomprehensible, but also misleading." JC POWER BRIDGE GROUP INTRODUCES STRATEGIC INVESTOR AT ELEVENTH HOUR. Representatives of the U.S. Power Bridge Group have officially informed Lithuanian Economy Minister Vincas Babilius that the U.K. company National Power will be a strategic investor in the project to link Lithuania's power grid to that of Poland, ELTA reported on 9 March. The Power Bridge Group won a tender for that project last year but owing to "financial difficulties" had failed to launch the project. It was required to find a strategic investor and to set up an energy company to carry out the project by 10 March. A government commission recently asked the Finance Ministry to determine whether the U.S. consortium is financially capable of realising the project. JC POLAND WORRIED ABOUT SITUATION IN BELARUS. Polish Defense Minister Janusz Onyszkiewicz said on 9 March that the situation in Belarus raises "serious concerns," Reuters reported. He stressed the need to restore "democratic values" in Belarus, adding that the Belarusian leadership's policies "do not lead to conditions which benefit its neighbors." Onyszkiewicz also accused Belarus of trying to renegotiate the Conventional Forces in Europe Treaty in order to increase by 20 percent the deployment ceiling of Belarusian troops. Marek Siwiec, head of the presidential National Security Bureau, told Polish Radio the same day that one of the conditions for limiting conventional arms in Poland is that Russia and Belarus do the same. In Siwiec's opinion, Belarus has to make arms cuts because owing to its relations with Russia, "transferring a sizable number of troops from one country to another [takes] a matter of hours." JM CZECH SENATOR TO LOSE PARLIAMENTARY IMMUNITY? The Prosecutor-General's Office has asked the Senate to lift the parliamentary immunity of Vaclav Benda, who represents the opposition Civic Democratic Party, CTK reported on 10 March, citing the daily "Pravo." The office wants to launch legal proceedings against Benda, the former director of the Office for the Documentation and Investigation of Communist Crimes, for "unauthorized handling of personal data" in connection with Benda's claim that former Vienna Mayor Helmut Zilk had been a communist-era secret police informer. According to the daily, he could face a two-year prison sentence. Benda told "Pravo" that he is convinced he will not lose his immunity and that he is "not obliged to reveal the sources of information I received as a Senator." MS SLOVAK GOVERNMENT REACHES DECISION ON RUSSIAN ANTI- MISSILE SYSTEM. The government on 9 March reached a decision on whether to proceed with the agreement, signed by its predecessor, on receiving a Russian S-300 anti-missile system. However, it will not release details on that decision before informing the Russian government, government spokesman Ladislav Lengyel told CTK. Under the agreement, the system was intended as part payment for Russia's debt to Slovakia. Sources close to governmental circles earlier said the transaction might harm Slovakia's efforts to join NATO. MS SLOVAK NATIONALIST LEADER FACES INVESTIGATION. The Prosecutor-General's office has opened an investigation into the statements recently made by Slovak National Party leader Jan Slota on Hungarians and Roma (see "RFE/RL Newsline," 9 March 1999), CTK reported. If the parliament agrees to lifting his immunity, he could be charged with instigating racial and national hatred and with promoting the suppression of individual rights and freedoms. In the case of a guilty verdict, he could face up to eight years in prison. Slota, who is also chairman of the legislature's committee that monitors the secret services, told Radio Twist on 9 March that he refuses to apologize for his statements and is not afraid of losing his immunity. MS FORMER HUNGARIAN DEFENSE MINISTER ACCUSED OVER MISSING FILES. A group of veterans of the 1956 Hungarian uprising suspects Gyorgy Keleti, former defense minister in Gyula Horn's cabinet, of involvement in the disappearance of the files of the former premier, Hungarian media reported on 9 March. The group claims that Horn was involved in the shooting of civilians following the crushing of the Budapest uprising. They have informed the Military Prosecutor's Office that they suspect Keleti of having ordered Jozsef Csaradi, head of the Defense Ministry Archives, to hide Horn's file. The veterans say Keleti later promoted Csaradi to the rank of colonel. Keleti dismissed the accusations, saying a court has already concluded that those files were removed from the archives before 1994, under a Democratic Forum government. MSZ SOUTHEASTERN EUROPE BEFORE TALKS WITH MILOSEVIC, HOLBROOKE WARNS OF TRAGEDY. U.S. diplomat Richard Holbrooke, speaking before his meeting with Yugoslav President Slobodan Milosevic on 10 March, said that Belgrade is on a "collision course" with the West if it does not agree to the Kosova autonomy deal, AFP reported. Holbrooke, who was accompanied to the meeting by U.S. envoy Chris Hill, said "we are only a few days away from a tragedy of even greater dimensions," referring to NATO threats to bomb Yugoslavia if the latter fails to agree to the Kosova peace plan, which was forged at Rambouillet, France. Talks are due to resume there on 15 March. Holbrooke added that the "threat of greater war is ever present." Holbrooke met with other Western envoys and ambassadors of the six-country Contact Group before leaving for Milosevic's presidential palace. PB WEST STILL BETTING ON KOSOVAR ALBANIAN ACCEPTANCE... EU envoy Wolfgang Petritsch reassured Holbrooke on 10 March that Kosova's ethnic Albanians will soon agree to the peace accord, AP reported. Petritsch said they are "very, very close to signing..., up to 95 percent is a done deal and they want to make sure that their last commander is on board." Albanian Foreign Minister Paskal Milo said the previous day in Tirana that it is "very important that the leaders of the Kosova Liberation Army (UCK) sign the agreement as soon as possible...today or tomorrow." Milo was speaking after meeting with his German counterpart, Joschka Fischer, and EU Human Rights Commissioner Hans van den Broek. Fischer said the ethnic Albanians committed a "big" mistake by not signing the accord at Rambouillet. Fischer said it will be "impossible to put pressure" on Belgrade if the Kosovar Albanians do not sign the agreement. PB ...ALTHOUGH UCK STILL LEAVES ROOM FOR DOUBT. Jakup Krasniqi, the UCK spokesman, told the Albanian-language newspaper "Kosova Sot" that the chances of the UCK leadership signing the peace agreement are "50-50," AP reported. He said the details of the agreement are still being discussed. Krasniqi also said that only the head of the ethnic Albanian delegation at the Rambouillet talks, Hashim Thaqi, can sign the accord. Thaqi was last seen in Albania (see "RFE/RL Newsline," 8 March 1999), and his current whereabouts are unknown. Serbian officials have issued an arrest warrant for him. Thaqi is also the prime minister-designate of the Kosova interim government. PB SERBIAN OFFICIALS ISSUE MORE ARREST WARRANTS... Serbian police have issued arrest warrants for eight UCK members, including three who are on the Kosovar Albanian peace negotiating team, AFP reported on 9 March. The three--Thaqi, Krasniqi, and Ram Buja--are described as "terrorists" and are said to be "armed and inclined to use arms," the Serbian Interior Ministry said in a statement. Six of the eight have already been sentenced to prison terms of up to 20 years after being tried in absentia. In other news, the Serbian Prosecutor- General's Office said on 10 March that no charges will be filed against police officers involved in an alleged massacre of 45 Kosovar Albanians at Recak. The office said the Albanians were killed in combat. PB ...STEP UP FIGHTING ALONG BORDER. Tank-backed Yugoslav forces continued to battle UCK fighters in both the north and south of the province on 9 March, according to AP. Reporters said the village of Ivaja, near the Macedonian border, was in ruins after sustaining artillery attacks. Dead animals littered the streets, houses had been torched, and a mosque destroyed. The 400 or so citizens of the town were rounded up and the men separated from the women and children. On the morning of 10 March, aid workers said about 35 men are still being held. Fighting is also reported in Trpeza and near Vucitrn, north of Prishtina, as well as in several other villages nearby. Hundreds of people have fled the fighting. PB REPUBLIKA SRPSKA PRESIDENT REMAINS DEFIANT. Nikola Poplasen said on 9 March in Banja Luka that the decision to sack him was a "senseless and unfounded" move and that he will remain in office, Reuters reported. Poplasen said that "not only do I feel like the president, I act like one." Poplasen was dismissed from his post last week by Carlos Westendorp, the international community's high representative (see "RFE/RL Newsline," 8 March 1999). Westendorp's spokesman said Poplasen "is finished" and that the "international community does not recognize him [as president]." Westendorp has said that Poplasen will be removed from office by force if necessary. Poplasen also lashed out at Milorad Dodik, the Bosnian Serb premier, saying he is working for "the destruction of the Serb Republic." PB TUDJMAN, ACCUSED WAR CRIMES SUSPECT REPORTED ON THE MEND. The weekly "Nacional" reported on 9 March that President Franjo Tudjman was recovering well following the removal of a cancerous brain tumor, AP reported. "Nacional" has close ties to the government and said sources within the ruling party disclosed the information. Tudjman and his doctors have denied that he has ever had cancer. Meanwhile, the prison doctor of Dinko Sakic, who has been accused of war crimes, reported on 10 March that Sakic is feeling better and may be able to attend his trial, which was postponed last week (see "RFE/RL Newsline," 4 March 1999) and rescheduled for 15 March. PB SLOVENE FOREIGN MINISTER DENIES STALEMATE IN TALKS WITH CROATIA. Boris Frlec denied on 9 March that talks with Croatian officials on border issues have broken down, Slovene radio reported. Frlec said the talks have been ongoing for more than two years and that great progress has been made. He said the sides are working on four "difficult" issues, the most difficult one being the status of Piran Bay. PB ROMANIAN INTERIOR MINISTER SAYS JANUARY CLASHES CONSITUTE FAILED COUP D'ETAT. Constantin Dudu Ionescu on 9 March said he can "more or less" confirm that the clashes between the police and striking miners in January constituted part of a failed coup d'»tat. Ionescu said the conclusion was reached by an investigation carried out by the ministry and was based on "informative briefs" of the Romanian Intelligence Service (SRI), RFE/RL's Bucharest bureau reported. The daily "Evenimentul zilei," citing those "briefs," reported on 9 March that the miners aimed at overthrowing both the government and President Emil Constantinescu and at replacing them with administration led by the Greater Romania Party, which was promised the support of the Chinese Communist Party if the attempt succeeded. The Chinese Embassy in Bucharest denied the allegation. The SRI said that the "briefs" were cited "out of context" and that the daily's report is "exaggerated in places." MS VATICAN DENIES PAPAL ITINERARY ESTABLISHED. A spokesman for the Vatican said the itinerary of Pope John Paul II's visit to Romania has not been finalized and that a special papal envoy will travel to Bucharest for this purpose next week, AFP reported on 9 March. The same day, the Romanian Catholic Bishops' Conference called on the Orthodox Church to enable "Catholic clergy and believers" to "rejoice in seeing the pope all over the country," Mediafax reported. MS LUCINSCHI RE-NAMES STURDZA AS PREMIER. President Petru Lucinschi on 9 March re-named Ion Sturdza as premier- designate, RFE/RL's Chisinau bureau reported. Sturdza has 15 days in which to form a government. Lucinschi urged the parliament to approve the new government by the end of the week, warning that if the legislature again fails to vote confidence in the cabinet, he will have to dissolve the parliament. Lucinschi also noted that early elections would plunge Moldova into a situation where it will have "neither a parliament nor a government" for three months. MS BULGARIA TO SEEK REVISION OF KOZLODUY AGREEMENT. Deputy Premier Evgeni Bakardzhiev told journalists on 9 March that Bulgaria will seek to have its 1993 agreement with the EU revised. Under that agreement, Sofia was to close down by 1998 four old reactors at the Kozloduy nuclear plant. Bulgaria wants the reactors to continue operating until the end of their operational life: 2005-2006 for two reactors and 2010 for the other two. Bakardzhiev said the negotiations must aim at meeting "both the European requirements and standards, as well as Bulgaria's national interest," Reuters reported. MS END NOTE BOSNIA'S TWO-ENTITY ECONOMY GROWING BUT STILL WEAK by Michael Wyzan The economy of Bosnia-Herzegovina is a unique case among transition countries, its most striking feature being its division into the economy of the Croatian and Muslim-dominated Federation of Bosnia-Herzegovina and that of the Republika Srpska. There has been slow progress on trying to integrate the economies of the two entities. The Central Bank of Bosnia-Herzegovina, which functions as a currency board and is headed by IMF-appointed Peter Nicholl, put the convertible mark (KM) into circulation on 22 June 1998, supposedly for use in both entities. However, in mid-January, Nicholl observed that "four currencies [the KM, the Deutsche mark, the Yugoslav dinar, and the Croatian kuna] are still in use here. The KM is developing well and is used all over all the country, but its use is still uneven and we have a long way to go in Herzegovina and the Republika Srpska before the KM can be described as the dominant currency of the whole country." The economies of the two entities display different trends, with the Republika Srpska generally performing worse. However, the two entities share the feature that economic growth has slowed from the rapid rates displayed beginning in 1995, as the immediate reconstruction tasks have been completed. Industrial production in the federation rose by 25.6 percent during January-September 1998, compared with the same period in 1997. This figure is less impressive when one takes into consideration the extent of the country's economic collapse in the early 1990s and the fact that such production grew by 341 percent in 1995 and 30 percent in 1997. Industrial production in the Republika Srpska grew by 26.3 percent during January-September compared with the same period in 1997, down from 34 percent in all 1997. However, Republika Srpska has not experienced as rapid an industrial recovery as the federation. In 1994, the monetary authorities in both entities agreed to avoid using central bank credit to finance budget imbalances. This policy, along with the successful pegging of the federation's former currency, the Bosnia-Herzegovina dinar (since replaced by the KM), to the Deutsche mark and increased imports of consumer goods financed by foreign credits, have brought inflation down, especially in the Federation. Inflation is running faster in the Republika Srpska than in the Federation. Retail prices in January- September 1998 were 5.9 percent higher in the Federation than on average in 1997, compared with 13.4 percent in 1997 (December-to-December). The equivalent figures for the Republika Srpska were 26.1 percent for January- September 1998 and 12.8 for 1997, so inflation is accelerating there, in keeping with developments in the Federal Yugoslavia, whose currency is still used heavily in the Republika Srpska. The labor market is more depressed in the Republika Srpska than in the Federation, where employment has risen from 244,488 in December 1996 to 289,922 in September 1998. The numbers "waiting," that is, workers who are not working but for whom social contributions are made, have fallen over this period from 94,168 to 71,598. Fully 246,341 individuals were seeking work in September, although the IMF estimates that the unemployment rate has fallen from 70-80 percent to 30-40 percent since the end of hostilities. The unemployment rate is higher in Republika Srpska. Net monthly wages are larger in the Federation, although they are rising faster in the Republika Srpska. Those wages came to DM 339 ($200) in the Federation in September 1998, compared with DM 206 a year earlier and DM 14 in November 1994. The equivalent figures for the Republika Srpska are DM 180 in September 1998, DM 64 in September 1997 and DM 49 in November 1994. Foreign trade has been highly unbalanced, with trade and current account deficits financed by multilateral and bilateral inflows. Inflows have been large enough that the Central Bank's foreign reserves have been growing, reaching DM 280 million on 15 January, up from DM 144 million at the end of 1997. During January-September 1998, the Federation exported goods worth just $73 million (up from $63 million in the same period of 1997), while its imports came to $674 million (down from $1.1 billion). Thus, the trade deficit last year was likely far smaller than the $1.2 billion racked up in both 1996 and 1997, but this is hardly good news, since it results almost entirely from an import collapse. Imports and exports were down by about the same amount in the Republika Srpska during January-September 1998 compared with a year earlier, yielding deficits of about $280 million during each period. This suggests that the entity's international borrowing ability is constrained to a relatively small fixed amount each year. While economic growth rates may remain impressive by the usual standards in both entities, genuine recovery must await economic reintegration between the two entities and with at least some other parts of the former Yugoslavia as well. The author is a research scholar at the International Institute for Applied Systems Analysis in Laxenburg, Austria. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Copyright (c) 1999 RFE/RL, Inc. 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