You see things and you say 'Why?' But I dream thing that never were; and I say, 'Why not?'. - Geroge Bernard Shaw
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 3, No. 74, Part II, 16 April 1999


________________________________________________________
RFE/RL NEWSLINE Vol 3, No. 74, Part II, 16 April 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

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Headlines, Part II

* LITHUANIAN, POLISH, UKRAINIAN PRESIDENTS IN VILNIUS

* CLINTON: DEMOCRATIZATION OF SERBIA IS THE KEY

* GLIGOROV SAYS SERBIA DESTABILIZING MACEDONIA

END NOTE: Avoiding a Minefield in Estonia's Northeast
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EAST-CENTRAL EUROPE

FORMER BELARUSIAN PREMIER CONSIDERED PRISONER OF
CONSCIENCE. Amnesty International said on 15 April that
former Belarusian Premier Mikhail Chyhir is a prisoner
of conscience who has been imprisoned by the government
of Belarusian President Alyaksandr Lukashenka for
running in the opposition presidential elections
scheduled for 16 May. "He appears to have been targeted
by the authorities solely because of his political
beliefs and peaceful opposition activities," Amnesty
International said in a statement. Chyhir is to stay in
jail for three months under official charges of "abuse
of office" and "grand larceny" in connection with a $1
million non-repaid credit he issued to a Canadian firm
as head of Belagroprombank. Chyhir's wife told RFE/RL on
14 April that the Canadian firm has already supplied
evidence that the former Belarusian premier cannot be
blamed for non-repayment of the credit. JM

UKRAINE PROPOSES PEACE PLAN FOR KOSOVA... In an
interview with the 15 April "Uryadovyy kuryer,"
Ukrainian President Leonid Kuchma revealed a three-stage
plan to end the conflict in Kosova. The first stage
involves a simultaneous cease-fire by Yugoslav,
Albanian, and NATO forces and a withdrawal of Yugoslav
troops from Kosova. The second stage calls for the
return and resettlement of Kosova refugees under the
protection of peacekeeping forces controlled by the UN
or the OSCE. The third stage envisions a peace
conference in a neutral capital. "Ukraine does not
consider itself to have a monopoly on peacemaking. But
the fact that our thoughts are now shared by many
parties demonstrates that they were realistic from the
very beginning," Kuchma said. JM

...CONDEMNS BELARUS-RUSSIA-YUGOSLAVIA UNION. Foreign
Minister Borys Tarasyuk told journalists on 16 April
that the creation of a union between Belarus, Russia,
and Yugoslavia will not provide stability and security
to Europe and will not end the crisis in Kosova. "It
would threaten European stability, especially when one
of these states has nuclear weapons," Reuters quoted him
as saying minutes before Russia's State Duma voted in
favor of letting Yugoslavia join the Union of Belarus
and Russia. JM

UKRAINE'S ECONOMY STILL FALLING. Ukraine's GDP decreased
by 4.2 percent in the first quarter of 1999 compared to
the same period last year, AP reported on 15 April,
citing Ukrainian Economy Minister Vasyl Rohovyy. Rohovyy
added that Ukraine's positive achievement in January-
March was a low inflation rate of 3.5 percent.
Meanwhile, the State Gas and Oil Committee has reported
that Ukraine's gas and oil production dropped by 1.5
percent and 5 percent, respectively, in the first
quarter of 1999. JM

SWITZERLAND WANTS LAZARENKO EXTRADITED FROM U.S. Swiss
judge Laurent Kasper-Ansermet said on 15 April that he
is asking the U.S. to extradite former Ukrainian Prime
Minister Pavlo Lazarenko to Switzerland for a money-
laundering investigation. Lazarenko, who is currently
seeking political asylum in the U.S., was arrested on
money laundering charges in Switzerland last December,
but subsequently released on bail of $3 million. Kasper-
Ansermat said he had issued an international arrest
warrant for Lazarenko after the latter failed to honor a
summons to appear in a Geneva court on 1 and 2 March. JM

SCANDAL OVER ESTONIAN POLITICIANS' SEYCHELLES JUNKET
BREWING. A scandal involving a training course in the
Seychelles for high-ranking Finance Ministry officials
two years ago is under investigation, the daily "Eesti
Paevaleht" reported. Though the trip was officially
reported to have been to Sweden, 13 officials instead
went to an exotic resort on the Seychelles--paid for by
the Swedish software company Malstyrning. Upon the
group's return, the ministry reportedly began using
accounting software made by Malstyrning. Malstyrning was
given a contract to implement a Swedish state grant in
Estonia, but all payments to the company have been
halted pending the outcome of the investigation. MH

LATVIA OFFICIALLY ABOLISHES DEATH PENALTY. The Latvian
Saeima voted on 15 April to ratify the 6th Protocol of
the European Human Rights Convention, which effectively
abolishes capital punishment. The vote was 64 to 15,
with members from several parties voting against the
measure, according to BNS and LETA. Several members of
the opposition Social Democratic Alliance stated that
public opinion should be considered when passing such a
bill. Polls have indicated that a majority of Latvians
support capital punishment, particularly following a
killing spree in a nursery school in February that left
four dead. However, President Guntis Ulmanis applauded
the move, stressing the need for conformity with
European norms. MH

LITHUANIAN, POLISH, UKRAINIAN PRESIDENTS IN VILNIUS.
Lithuanian President Valdas Adamkus hosted his Ukrainian
and Polish counterparts, Leonid Kuchma and Aleksander
Kwasniewski, for talks on 15 April at the seaside resort
of Palanga. The three leaders discussed various issues
of regional cooperation and the crisis in Kosova.
Adamkus reaffirmed Lithuania's goal of joining NATO,
saying the alliance is an inseparable element of
European security, BNS reported. During the visit,
Kuchma unveiled a proposed peace plan which has been
circulated throughout the international community (see
story above). The three presidents also hosted the
conference "Regional Integration of Transportation" in
Klaipeda the same day. Kwasniewski called for further
development of the Baltic and Black Seas' transport
systems as well as the "Via Baltica" project linking the
Baltic states and Poland via a modern highway. MH

POLISH PRESIDENTIAL AIDE ADMITS COLLABORATION WITH
SECRET POLICE. The name of Aleksander Majkowski, an
international affairs adviser to President Aleksander
Kwasniewski, was published in the government mouthpiece
"Monitor Polski" on 15 April in a list of confessed
collaborators with the Communist-era secret services. It
was the fourth list of collaborators published under
Poland's lustration law. Jerzy Wierchowicz from the
coalition Freedom Union said Majkowski should resign.
Kwasniewki's lawyer, Ryszard Kalisz, said the president
had known about Majkowski's positive lustration
statement, adding that the lustration law does not call
for any consequences for the person who admits
collaboration. Meanwhile, Tomasz Karwowski, deputy head
of the right-wing Confederation for an Independent
Poland-Homeland, has said there is "serious
circumstantial evidence" that Prime Minister Jerzy Buzek
had contacts with the Communist security services in the
past. JM

POLAND'S LEFT-WING COALITION FOUNDS POLITICAL PARTY.
Politicians from the opposition Democratic Left Alliance
(SLD)--a leftist electoral coalition of 32 political and
trade union organizations--has signed a document
founding a new political party under the same name. The
SLD has decided to transform itself into a party since
Poland's new constitution allows only political parties
and party coalitions to run in parliamentary elections.
The strongest participants in the new party are the
Social Democracy of the Polish Republic (SdRP) and the
National Trade Union Alliance. SdRP leader Leszek Miller
does not rule out that the SdRP will be disbanded after
the SLD party is fully established. JM

WORLD BANK TO GIVE $300 MILLION FOR POLAND'S MINING
REFORM. Deputy Finance Minister Rafal Zagorny said on 15
April that Poland will receive $300 million from the
World Bank to finance coal mining reforms. The bank will
lend Poland $70 million this year and $230 million next
year to help cover the costs of closing mines, laying
off workers, and cleaning up environmental damage. Coal
mining was the most heavily subsidized industry during
communist rule. According to official sources, the coal
mining sector lost 3.4 billion zlotys ($850 million)
last year. JM

CZECH FOREIGN MINISTER LAUDS GERMAN KOSOVA INITIATIVE.
Jan Kavan on 15 April welcomed the 14 April peace
initiative of German Foreign Minister Joschka Fischer,
calling it a "welcome contribution to the discussion on
finding the most suitable solution" for ending the
conflict. He told CTK that it is important not to let
Yugoslav President Slobodan Milosevic "freeze the
results of ethnic cleansing" and added that it is
important to involve Russia in the search for a
solution. In other news, Miroslav Grebenicek, leader of
the Communist Party of Bohemia and Moravia (KSCM), on 15
April said the KSCM will file a suit with the
International Criminal Tribunal for the Former
Yugoslavia against U.S. President Bill Clinton, U.S.
Secretary of State Madeleine Albright, President Vaclav
Havel, Premier Milos Zeman, and Kavan for committing war
atrocities in connection with the air strikes against
Yugoslavia, CTK reported. MS

CZECH ROMA AGREE TO BEING FENCED OFF. The Romany Rainbow
organization, which represents rent defaulters in a Usti
nad Labem town district, on 15 April agreed with the
local council on the construction of a fence to separate
Roma from houses opposite their apartments, CTK
reported. The fence will be 1.8 meters high and made out
of ceramics. In 1998, the town council announced plans
to build the fence, ostensibly to protect residents from
the noise and the rubbish produced by the Romanies. The
district's mayor hailed the decision as a breakthrough
reached without "any special mediators or human rights
activists from outside Usti nad Labem"--a hint obviously
aimed at Czech Human Rights Commissioner Petr Uhl, who
said he will block any attempt to build the wall, a
statement he repeated after hearing of Romany Rainbow's
decision. MS

LEXA TAKEN INTO CUSTODY. Former Slovak Counter-
Intelligence Service chief Ivan Lexa was taken into
custody on 15 April after the parliament approved a
request by the Interior Ministry to detain Lexa in order
to prevent him from interfering with the investigation
on the abduction of former President Michal Kovac's son
and other crimes of which he is suspected, TASR
reported. Also on 15 April, the government unanimously
backed Foreign Minister Eduard Kukan against demands by
the opposition Movement for a Democratic Slovakia (HZDS)
that he resign for not having sufficiently informed
legislators and the public on Slovak policy towards the
NATO strikes. Premier Mikulas Dzurinda said that the
HZDS "exploits the plight of Yugoslavia for its own
political games," CTK reported. MS

MECIAR 'EXPLAINS' CANDIDACY... "Sometimes you do not do
what you want to, but what you have to," Vladimir Meciar
told journalists on 15 April, explaining why he decided
to accept the request of his HZDS to run in the 15 May
presidential elections, CTK reported. Meciar said that
without him, the HZDS "loses any political space." He
also said the party has become the target of attacks,
including the murder of former Economics Minister Jan
Ducky and physical assaults on its representatives. He
said that his own flat has been robbed three times. The
former premier said that by running he wants to force
the current government into a "dialogue" with the HZDS
and that he wanted to seek out "among all political
parties those forces that will be able to reverse"
Slovakia's present economic and political development
which, he said, will otherwise "only worsen." MS

...AND DEFENDS MILOSEVIC. Yugoslav President Milosevic
is a man who does not want any more bloodshed in his
country, Meciar said, adding that the NATO airstrikes in
Yugoslavia are tantamount to an invasion and that the
Serbs are now undergoing the "same thing as we did in
1968," when Czechoslovakia was invaded by Warsaw Pact
countries. MS

HUNGARIAN PREMIER RULES OUT NATO GROUND FORCES STRIKE.
Viktor Orban, on a one-day official visit to the UK,
told Premier Tony Blair and former Premier Margaret
Thatcher that Budapest agreed with the need to step up
the air strikes on Yugoslavia. Orban later told
journalists that Budapest will not approve a NATO ground
forces intervention. He said that Hungary faces a "hard
decision" because it cannot assume "obligations that
would further endanger" ethnic Hungarians in Vojvodina.
Defense Minister Janos Szabo said after meeting his
British counterpart, George Robertson, that there is "no
chance" for NATO ground forces to enter Yugoslavia from
Hungary, Hungarian media reported. MS

HUNGARIAN SMALLHOLDERS AGREE TO DIRECT PRESIDENTIAL
ELECTIONS. Smallholders' Party chairman Joszef Torgyan
said on 15 April that his party will support the direct
election of the state president, despite the fact that
the coalition agreement gives the party the prerogative
to nominate the presidential candidate, Hungarian media
reported. Former Free Democratic Party chairman Janos
Kis on the same day asked the Constitutional Court to
rule whether the decision of the National Election
Committee on a possible referendum on the presidential
election was not unconstitutional, since it would entail
changes to the country's basic document (see "RFE/RL
Newsline," 15 April 1999). MS

SOUTHEASTERN EUROPE

CLINTON: DEMOCRATIZATION OF SERBIA IS THE KEY... U.S.
President Bill Clinton told the American Society of
Newspaper Editors in San Francisco on 15 April that
peace and stability in the Balkans "will require a
democratic transition in Serbia, for the region's
democracies will never be safe with a belligerent
tyranny in their midst." Clinton said that he does not
think that an independent Kosova would be economically
viable or contribute to regional stability. He added
that "the last thing we need in the Balkans is greater
balkanization. The best solution for [Kosova], for
Serbia, for Bosnia, Croatia, Macedonia, and all the
countries of southeast Europe, is not the endless
rejiggering of their borders, but greater integration
into a Europe in which sovereignty matters but in which
borders are becoming more and more open and less
important in a negative sense." PM

...AS IS LONG-TERM WESTERN COMMITTMENT. President
Clinton added that "we must follow the example of the
World War II generation by standing up to aggression and
hate and then by following through with a post-conflict
strategy for reconstruction and renewal...[A peaceful
future] "will take constant, steady American engagement
together with our European allies, old and new...It will
take money in the form of investment and aid," he added.
Clinton also urged the U.S. and Western Europe to keep
the doors of NATO and the EU open for new members. PM

CLINTON WARNS SERBIA ON CHEMICAL WEAPONS. Several U.S.
government agencies believe that Serbia has stocks of
lethal and non-lethal chemical weapons, and that some
forms of tear gas may have been issued to paramilitary
forces carrying out the ethnic cleansing of Kosova, "The
New York Times" wrote on 16 April. The U.S. agencies do
not believe that the Serbian military have used such
weapons or plan to do so. Clinton added in San Francisco
that any use of chemical weapons on Belgrade's part will
meet with a "swift and overwhelming" response. PM

GLIGOROV SAYS SERBIA DESTABILIZING MACEDONIA.
Representatives of the United Nations High Commissioner
for Refugees said in Skopje on 15 April that they are
expecting an additional 20,000 expellees from Ferizaj to
arrive soon, RFE/RL's South Slavic Service reported (see
"RFE/RL Newsline," 15 April 1999). President Kiro
Gligorov told parliament that "we are again faced with a
new huge wave of refugees...The fact remains that the
state has a limited ability to accept more refugees." He
accused the Serbian authorities of trying to destabilize
Macedonia. Gligorov told the "Sueddeutsche Zeitung" that
neither NATO nor the Macedonian authorities had expected
so many refugees. He added, however, that he was not
surprised by the brutality and violence used in the
deportations. "Those are the methods that the Serbs used
in Bosnia and Croatia, too," Gligorov concluded. PM

NATO APOLOGIZES FOR HITTING REFUGEE CONVOY. NATO
spokesman Jamie Shea said in Brussels on 15 April that
the pilot of an F-16 aircraft mistakenly hit a tractor
at the head of a column of refugees: "The pilot reported
what he believed to be military vehicles in a convoy.
The pilot reported at the time he was attacking a
military convoy." Shea added: "Let us not allow one
accident, no matter how tragic, to obscure the real
stakes in this crisis, which is sometimes one has to
risk lives of the few in order to save lives of the
many." PM

CONVOY MYSTERY CONTINUES. Observers noted that an attack
on one vehicle would not account for the extensive
carnage shown on Serbian state-run television (RTS) on
15 April (see "RFE/RL Newsline," 15 April 1999). RTS
said that NATO deliberately bombed the column to prevent
the refugees from going home and in order to justify
continuing air strikes. Some observers suggested that
Serbian forces may have attacked the refugees after the
F-16 struck and blamed the carnage on NATO. Several
refugees later said in Albania that Serbian MiGs
attacked them. Some observers suggested that several of
the dead and wounded shown on RTS appeared to have been
machine gunned. The question also remains open as to how
many columns of civilians and Serbian forces were on the
Gjakova-Prizren road at the time. PM

YUGOSLAV FORCES SHELL ANOTHER NORTHERN ALBANIAN VILLAGE.
Residents of Kolsh near Kukes told Reuters that Serbian
forces fired four artillery shells into their village on
15 April. One person was wounded in the attack. OSCE
representatives in Tirana confirmed the reports. ATSH
added that Serbian soldiers fired with machine guns at
the border village of Dobruna nearby. Elsewhere, another
three shells fired from inside Kosova exploded in the
Tropoja region, as did one near the border crossing of
Morina linking Kukes with Prizren. The same day, some
3,000 refugees crossed the border at Morina into
Albania. A local government spokesman in Kukes told ATSH
that the Albanian authorities have evacuated many people
living close to the border and reinforced border
security with additional military units. FS

OSCE AMBASSADOR PRAISES ALBANIA'S RESTRAINT. OSCE
Ambassador Daan Everts told Reuters on 15 April that the
border skirmishing is only the latest in "a long series
of border incidents." He added that the fighting has
"always been contained by the Albanian military
restraint...There is also considerable restraint...on
the other side." Everts said the shelling included
sophisticated cluster bombs and was aimed largely at
presumed positions of the Kosova Liberation Army (UCK).
He added that the Serbian attacks are "limited in scope
and distance." Everts acknowledged that Serbian troops
in hot pursuit of UCK fighters are unlikely to stop at
the unmarked border line. Everts stressed that "the
vehemence with which Belgrade denied the Kamenica
incident (see "RFE/RL Newsline 14 April 1999) shows you
that they are aware of the international repercussions
...if they really attacked another state rather than
attacking presumed guerrilla nests." FS

FRENCH MINISTER PROPOSES FREEZE ON MACEDONIAN AND
ALBANIAN DEBTS. Finance Minister Dominique Strauss-Kahn
on 15 April proposed a two-year freeze on debt service
charges for Macedonia and Albania, AP reported from
Paris. Strauss-Kahn said the debt service charges for
both countries amount to less than $600 million for the
Paris Club of creditors and around $1.2 billion to
global creditors. Strauss-Kahn said the proposal will be
discussed at upcoming meetings of EU Finance Ministers
and the International Monetary Fund. FS

MONTENEGRO SLAMS ARMY FOR PROVOKING NATO. Deputy Prime
Minister Dragisa Burzan said in Podgorica on 15 April
that no civilians were injured in the attack by NATO
aircraft against Yugoslav army anti-aircraft
installations. He also accused the military of provoking
what was the biggest single NATO strike against targets
in Montenegro to date, Reuters reported. "I can confirm
there were absolutely no civilian casualties. My main
concern is that the army is shooting like mad at the
[NATO] planes," he added. Other Montenegrin officials
noted that the anti-aircraft batteries have no chance of
hitting high-flying Western aircraft. The officials
added that the military's sole aim is to drag Montenegro
into Serbia's war with the Atlantic alliance. On 16
April, NATO jets and missiles hit a military airfield
and airport just outside Podgorica, AP reported. PM

WESTENDORP SHUTS DOWN BOSNIAN SERB TV STATION. A
spokesman for the international community's Carlos
Westendorp said on 15 April that Westendorp endorses the
decision of the Independent Media Commission, which
controls broadcasting licensing, to take Pale-based
Kanal S off the air. The spokesman argued that the
broadcasts of what some call "Karadzic TV" are
"inflammatory," the daily "Oslobodjenje" wrote. PM

EU WARNS CROATIA OVER TIES TO U.S. Per Vinther, who is
the EU's representative to Croatia, told an audience in
Zagreb on 15 April that the question is not whether
Croatia wants to join the EU but when it will do so. He
said that a bilateral agreement is "inevitable,"
"Jutarnji list" reported. He stressed that the EU--and
not the U.S.--is Croatia's "natural economic partner,"
even though Zagreb and Washington have recently forged
closer links. Vinther noted that many Croats have high
expectations regarding their country's relationship with
the U.S. The diplomat warned that Croatia will need EU
support in order to join NATO or the WTO. He was
attending the formal presentation of the Croatian
edition of the pamphlet "The EU in Ten Lessons." PM

NATO PLANE FUEL TANKS FALL ON ROMANIAN TERRITORY. Two
fuel tanks with English inscriptions were found on
Romanian territory near Timisoara on 15 April. The fuel
tanks apparently belonged to an F-15 fighter and
Romanian defense officials cited by RFE/RL's Bucharest
bureau said the plane might have jettisoned the tanks
after being hit by Yugoslav ground fire. No one was
hurt. The opposition Party of Social Democracy in
Romania (PDSR) on 16 April demanded that the Defense
Ministry report to the parliament on the incident. MS

FRENCH FOREIGN MINISTER ENDS ROMANIAN VISIT. Ending his
visit to Romania on 15 April, French Foreign Minister
Hubert Vedrine said it was "paradoxical" that the
countries admitted to NATO are from a region without
strategic problems, and promised that at the Washington
summit later this month Romania's membership will be
"considered with priority." In other news, Premier Radu
Vasile will undergo a medical check up in Israel "in the
next days," a government spokesman announced on 15
April. MS

ROMANIAN DEMOCRATIC CONVENTION MAKES PROGRESS ON
PROTOCOL. A commission charged with working out a new
protocol for the Democratic Convention of Romania (CDR)
on 15 April reached an agreement on most points,
including the participation of civic organizations in
selecting candidates for the CDR lists of parliamentary
candidates proposed by the parties' members of the CDR
and in proposing their own candidates for those lists.
The commission said that "additional efforts" must be
made to secure the return of the Civic Alliance to the
CDR. The commission failed to reach agreement on the
proposal by the National Liberal party to allow the
participation of parties' members in the CDR on separate
lists in local elections. MS

MOLDOVA NOT APPROACHED ABOUT TRANSITING RUSSIAN AID TO
YUGOSLAVIA. The Moldovan Foreign Ministry's Department
for Relations with the CIS States on 15 April told the
Flux agency that Moldova has not yet been "officially or
unofficially" approached about Russia's intention to
transit aid to Yugoslavia through its territory. The
question was posed after ITAR-TASS cited Russia's
Emergency Minister Sergei Shoigu as saying that Russia
is "examining the possibility of transiting the aid
through Romania," which would only be possible if the
convoys were to transit Moldovan territory as well. In
other news, Flux reported that the joint Ukrainian-
Moldovan Elektroalians has taken over the January-March
$12.5 million Moldovan debt to Ukraine for electricity
deliveries, following which Ukraine, which supplies 60
percent of Moldova's electricity, will resume deliveries
through 1 May. MS

BULGARIA, GREECE, CALL FOR EU-SPONSORED BALKAN PEACE
CONFERENCE. Visiting Greek Premier Costas Simitis on 15
April told journalists after talks with his Bulgarian
counterpart, Ivan Kostov, that Greece has proposed
holding a Balkan peace conference sponsored by the
European Union to strengthen stability in the region
after a Kosova peace settlement has been negotiated,
Reuters reported. He said that "21 days of air strikes"
produced no results and have brought about "unforeseen
dimensions, with hundreds of thousands of refugees
displaced from their homes." Kostov backed the Greek
proposal, saying that a "protracted conflict...will
cause not only huge economic losses, but also lead to
the further political and social destabilization of the
Balkans." He said Bulgaria would welcome a peace
initiative with the participation of the EU, the U.S.,
and Russia. MS

END NOTE

Avoiding a Minefield in Estonia's Northeast

By Mel Huang

	Estonia's new government, led by Mart Laar, faces a
potential political minefield in the country's
northeastern quadrant. This predominantly Russian-
speaking area has suffered more than any other part of
the country from the recent economic crisis in Russia.
And its economic position is worsening with each passing
month. Some observers in Tallinn and elsewhere fear that
these declines could trigger a new round of social and
political instability.
	In recognition of this potential danger, the Laar
government has already indicated that it will focus on
problems in that region. Three ministers--Economics
Minister Mihkel Parnoja, Social Minister Eiki Nestor,
and Minister without portfolio (for population affairs)
Katrin Saks--visited the region to assess the situation
and speak about initiatives during their first week in
office. Local officials complained about unemployment,
and lack of job training or access to the government.
The visiting ministers emphasized that the new three-
party coalition in government will do more than its
predecessor to help.
	What coverage this region has received has focused
either on ethnic issues or comparisons between the
standard of living in towns on either side of the
Estonian-Russian border. Relatively little attention has
been devoted to underlying economic difficulties, except
in the local Russian-language press, which in almost
every case treats these as a reflection of ethnic
difficulties. But the new Laar government recognizes
that it cannot afford to ignore the structural
economical problems there.
	Though the restructuring of many large industries
in the region was painful and created significant social
tension, it initially brought some stability and the
region began to grow once more. The foreign press, such
as the "Christian Science Monitor," featured success
stories such as Kreenholm Textiles, as a testament to
the success of the restructuring process. Though
struggling, the rare-earth metals plant Silmet knows
full well it has a near-monopoly on its industry in the
entire world. Solid foreign investment stabilized many
other industries and the region for awhile looked quite
solid.
	But the August 1998 Russian economic crisis
destabilized the region. Many analysts, both foreign and
domestic, applauded the fact that the Russian crisis did
not hurt Estonia as much as it did other countries in
the region. The Russian downturn, however, has affected
one part of the country profoundly: the northeast. The
chemical giant Kiviter was declared bankrupt and 2,000
people were laid off. Though most of those workers were
immediately placed in successor companies, a significant
number remained unemployed. Successful fish processor
Viru Rand went bankrupt and 800 people lost their jobs.
Such was the trend, not the exception.
	The Estonian Labor Market Board announced that the
March unemployment rate nationally was 5.3 percent,
while the northeast Ida-Viru county's jobless rate was
9.5 percent. With an unemployment rate nearly double the
national total, any further growth in the jobless rate
could send the region into social chaos. This is why
plans to close several oil shale mines and reducing the
workforce of Eesti Polevkivi (Estonian Oil Shale) plans
have been carefully scrutinized in consultations with
the World Bank. Several hundred workers have already
been let go in 1999 due to operational mergers, the
closure of mines, and the company plans to pension off
another 400 in the near future.
	As the Laar government appears to recognize, these
economic problems could pose a serious challenge to
Estonia unless Tallinn focuses more on the northeast.
The previous government worked on the issues of
integration and language teaching, but that was during
the quietly prospering years. The situation is different
now, and Laar must tread carefully--especially with
local elections slated for the fall. After all, it was
during his watch on Toompea years ago that the region
voted for autonomy.

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