RFE/RL NEWSLINE Vol. 3, No. 157, Part II, 13 August 1999

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RFE/RL NEWSLINE Vol. 3, No. 157, Part II, 13 August 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

* POLISH CABINET DIVIDED OVER COAL MINING REFORM

* THACI PROPOSES APPOINTING PROVISIONAL LEGISLATURE

* MILOSEVIC RESHUFFLES YUGOSLAV CABINET

End Note: DEPENDING ON FOREIGN INVESTMENT
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EAST-CENTRAL EUROPE

WORLD BANK SAYS BELARUS LOSING TIME ON REFORM. Serhiy
Kulyk, the World Bank's permanent representative in
Minsk, told journalists on 12 August that the "time
credit" for implementing necessary market reforms in
Belarus is shrinking, Belapan reported. Commenting on
his meeting with Belarusian Premier Syarhey Linh this
week, Kulyk said he informed Linh about the World Bank's
stance on cooperation with Belarus. According to Kulyk,
the bank will finance various projects only after the
government has liberalized its monetary and pricing
policies. Kulyk also noted that Belarus's social policy
needs to be reoriented toward a "targeted support"
approach since many of the state's social expenditures
seem unjustified. He added, however, that the bank does
not intend to dictate what economic course Belarus must
adopt. JM

LUKASHENKA SAYS STEPASHIN'S OUSTER NOT AFFECTING
INTEGRATION. Belarusian President Alyaksandr Lukashenka
told journalists on 12 July that the dismissal of Sergei
Stepashin's cabinet will not change the pace of
Belarusian-Russian integration. "The departure of
Stepashin and the arrival of Putin does not mean that we
have come to a halt in this process. It is being
continued, let us say, as sluggishly as it has been
continued so far," Lukashenka commented. He also noted
that Russia rejected the "radical" Belarusian proposal
for a Belarusian-Russian state and suggested its own,
more moderate version. "Therefore I said: 'Let it be
what Russia proposes,'" Belarusian Television quoted
Lukashenka as saying. JM

UKRAINE'S FOREIGN TRADE DECREASES. The State Statistics
Committee on 12 July reported that Ukraine's foreign
trade from January-June fell to $10.8 billion, down 24.6
percent compared with the same period last year. Foreign
investment in the first six months of 1999 totaled $265
million, down 48.8 percent on the same period in 1998.
The committee also said that Ukraine's population had
declined from 52.04 million at the end of 1991 to 49.89
million as of 1 July 1999. JM

YET ANOTHER HOPEFUL TO JOIN UKRAINIAN PRESIDENTIAL POLL.
The Supreme Court on 12 August ordered that Vitaliy
Kononov, leader of the Green Party, be registered as a
presidential candidate, UNIAN reported. The Central
Electoral Commission had refused to register Kononov,
saying that only 974,527 signatures on the lists
supporting his candidacy were genuine. If the commission
complies with the order, Kononov will become the 14th
presidential hopeful. JM

RUSSIAN CITIZEN IN ESTONIA ENDS HUNGER STRIKE. Eduard
Shaumyan ended his hunger strike on 12 August following
a three-day protest outside the Russian Embassy in
Tallinn (see "RFE/RL Newsline," 10 August 1999).
Shaumyan said that the Russian Citizens Union had asked
him to stop and that he himself had realized he "could
no longer continue" fasting, BNS reported. On 11 August,
Shaumyan and three fellow protestors were taken into
police custody for several hours after the Russian
Embassy telephoned with the authorities, according to
Shaumyan. Oleg Morozov, meanwhile, is continuing his
hunger strike, after a medical check revealed him to be
in satisfactory health. He is due to fast until 18
August, when his 20-day prison sentence for violating
immigration laws ends. MH

ESTONIAN MINISTRIES DISAGREE OVER DUTY-FREE. According
to press reports. the Foreign and Transport Ministries
disagree over whether to request a transition period for
the abolition of duty-free shopping when Estonia joins
the EU. The Foreign Ministry on 12 August stressed that
Estonia will not seek a transition period and suggested
it would be "difficult to expect such a concession"
since EU members had acrimoniously fought over its
abolition, BNS reported. However, Transport Minister
Toivo Jurgenson said Estonia should seek a transition
period for duty-free shopping, otherwise Estonian
shipping lines would be threatened. MH

POLISH CABINET DIVIDED OVER COAL MINING REFORM. The
Council of Ministers Economics Committee (KERM) on 12
August rejected the Economics Ministry's changes to the
coal mining restructuring plan adopted by the Polish
government last year. The ministry proposes delaying the
payment of coal industry debts and giving the sector
more time to become profitable again. The KERM, however,
wants to speed up laying off miners and reducing coal
production. "This means firing 50,000 people by 2000,
while there is no money for social cushions," Deputy
Economics Minister Janusz Szlazak commented. He pledged
to submit his own proposal for changes to the plan while
bypassing the KERM. Solidarity said the same day that it
will demand the dismissal of the cabinet if the KERM's
proposal is implemented. JM

POLISH POLICE CLASH WITH PROTESTING FARMERS. Police on
12 August used force and rubber bullets to remove 400
farmers from the governor's office in Olsztyn,
northeastern Poland. The farmers, mainly from the
radical Self-Defense farmers union, blocked the office
and demanded that the government start intervention
procurement of wheat, "Gazeta Wyborcza" reported.
Thirteen policemen and six farmers were injured in the
clash. JM

WITNESS REFUSES TO TESTIFY IN CZECH INVESTIGATION OF
1968 TREASON. Vasil Bilak, former secretary-general of
the Slovak Communist Party, has refused to testify in
the investigation into Karel Hoffman's role in the
August 1968 events, CTK reported on 12 August. That
investigation was launched by the Czech Office for the
Investigation of the Crimes of Communism. Hoffman, who
at the time of the Warsaw Pact invasion of
Czechoslovakia was a member of the Czechoslovak
Communist Party Central Committee, is suspected of high
treason in collusion with a foreign power for having
ordered television and radio broadcasts to be switched
off on the night of 20-21 August 1968. Bilak's lawyer in
Bratislava told CTK that his client has "exercised his
constitutional right not to testify," adding that Bilak
knows Hoffman to be "an honest person who would have
never damaged the interests of the former
Czechoslovakia." MS

SLOVAK PRESIDENT APPOINTS NEW TRANSPORT MINISTER.
Rudolf Schuster on 12 August appointed Josef Macejko
to succeed Gabriel Palacka as transportation minister,
SITA reported. The same day, Deputy Transportation
Minister Frantisek Kurej resigned. The Prime
Minister's Office had earlier established that Kurej
was responsible for irregularities in the
privatization tender of Slovak Telcom. That tender was
one of the factors that led to Palacka's resignation
(see "RFE/RL Newsline," 10 and 11 August 1999).
Meanwhile, Christian Democratic Party (KDH) chairman
Jan Carnogursky, who was one of Palacka's harshest
critics, said that although Macejko is a KDH member,
the party was not consulted about the appointment and
will take no responsibility for it. MS

SLOVAK PARTY RUSHES TO CHAIRMAN MECIAR'S DEFENSE. The
Movement for a Democratic Slovakia (HZDS) on 12 August
said it is "outraged" by chief investigator Jaroslav
Ivor's statement that HZDS chairman Vladimir Meciar
might be asked to testify in the investigation into
the 1995 abduction of former President Michal Kovac's
son. HZDS spokesman Marian Kardos said Meciar has
already said he had nothing to do with the abduction.
MS

SLOVAK FOREIGN MINISTER OPTIMISTIC ON JOINING EU
'FAST-TRACK' GROUP. Eduard Kukan on 12 August said he
is optimistic about Slovakia's chances of soon joining
the "fast track" group of EU candidates. Kukan said
the recent law on the use of minority languages in
contacts with the authorities has improved the
country's prospects, SITA reported. He pointed out
that EU member countries differ on their view of EU
enlargement. Some are of the opinion that Slovakia,
Latvia, and Lithuania must join the "fast track"
group, while others argue this would create a
"dividing line" that leaves out Romania and Bulgaria.
A way out of this dilemma, he argued, might be to
"lift the status" of all candidates and let economic
performance decide which countries join. MS

HUNGARIAN OFFICIAL PRESENTS VOJVODINA AUTONOMY PLAN.
Tibor Szabo, chairman of the Office for Hungarians
Beyond Borders, told MTI on 12 August that during his
current visit to Washington, he presented a plan for
Vojvodina's autonomy to Steve Flanagan, special
assistant to the president and senior adviser on
Central and East European affairs on the National
Security Council. Szabo said the government in
Budapest "fully supports" the plan, which was worked
out by six Hungarian organizations from the region,
but acknowledged that Washington "has not made any
decision to support the idea of autonomy for
Vojvodina." He said that Flanagan promised the plan
will be "carefully scrutinized." Later the same day,
Szabo told a forum of U.S. citizens of Hungarian
origin in Washington that the U.S. has "shown
interest" in the idea of autonomy. MS

HUNGARY LEADS FIELD IN CAPITAL INFLOW. Hungary is
leading the field in per capita inflow of foreign
capital, "Vilaggazdasag" reported on 12 August, citing
figures recently published by the OECD. Between 1990
and 1998, capital worth some $17.193 billion flowed
into the country, putting Hungary ahead of the Czech
Republic, South Korea, Ireland, and Japan. Poland is
ahead in terms of total volume with $23 billion, but
on a per capita basis Hungary, which has a population
of 10 million, ranks higher, MTI reported. MS

U.S. SURVEY SAYS TOO MANY COMMANDERS IN HUNGARIAN
ARMY. According to a U.S. survey commissioned by the
Defense Ministry, the Hungarian army has too many
colonels and lieutenant-colonels and too few non-
commissioned officers, MTI reported on 12 August,
citing the daily "Magyar Nemzet." The survey said that
under the current system, there is no guarantee that
promotion is based on performance or educational
achievement. MS

SOUTHEASTERN EUROPE

THACI PROPOSES APPOINTING PROVISIONAL LEGISLATURE.
Kosova Liberation Army (UCK) leader Hashim Thaci told
Vienna's "Die Presse" of 13 August that Kosova must have
laws that meet international standards before elections
can take place. He argued that a "consultative and
executive" body for all Kosovars could function as a
provisional legislature to pass the laws, but he did not
elaborate. Thaci added that a future elected parliament
will have to approve legislation passed by that body for
those laws to remain valid. He again criticized the UN
civil courts for using the Yugoslav and Serbian penal
and civil codes, which he had earlier called
"undemocratic laws." FS

KOSOVAR ALBANIANS HOLD MORE PROTESTS AGAINST
RUSSIAN PEACEKEEPERS. About 2,000 ethnic Albanians
demonstrated against Russian peacekeepers in
Kamenica on 12 August. The protesters jeered at and
beat on vehicles of Russian KFOR soldiers. No other
incidents were reported. A Russian soldier told
Reuters that "we just try to endure it, turn our
head away sometimes. We've got used to this. It
happens every day. It's mostly kids, not many
adults." Organizers denied they were from the UCK
and identified themselves as members of a local
"council of civic-minded Albanians." FS

BRITISH KFOR INJURE TWO ALBANIAN CRIMINALS AFTER
CAR CHASE. British soldiers arrested four ethnic
Albanians and injured two of them in a shoot-out
following a car chase near Vernica on 12 August. A
fifth escaped. The four are suspected of having
intimidated local Serbs. The soldiers said that
they had advance warning that ethnic Albanians
would launch an attack on local Serbs that day. FS

KOSOVAR STUDENT LEADER HELD IN SERBIAN PRISON. The
Serbian authorities continue to hold some 2,270 ethnic
Albanians in several prisons in Serbia, the Institute
for War and Peace Reporting's "Balkan Crisis Report"
noted on 10 August. Another 1,500 Kosovars are missing
and presumed imprisoned. Among the imprisoned are Albin
Kurti, a well-known Prishtina University student leader
and pacifist. He became radicalized during the Serbian
crackdown of 1998 and served as press spokesman for
senior nationalist politician Adem Demaci, who was the
UCK's political representative. Also imprisoned is human
rights activist Flora Brovina. Her son told "Balkan
Crisis Report" that she has become partly paralyzed
while in detention. Officials of the International
Committee of the Red Cross have frequently expressed
regret that the June peace agreement did not oblige
Serbian authorities to release or provide information
about Kosovars held in Serbian jails. PM

MILOSEVIC RESHUFFLES YUGOSLAV CABINET. Prime Minister
Momir Bulatovic on 12 August removed Deputy Prime
Minister Zoran Lilic and seven ministers from the
cabinet. Bulatovic announced the appointment of two new
deputy prime ministers and 11 ministers. Vojislav
Seselj's xenophobic Serbian Radical Party has five of
the new posts. Yugoslav President Slobodan Milosevic's
Socialists received three, as did his wife's hard-line
United Yugoslav Left (JUL). The small Serbian People's
Party of Montenegro was given one of the new posts.
Cedomir Mirkovic, who is a minister without portfolio,
belongs to a small party called New Democracy (ND). A
party spokesman said that the ND has called for
Milosevic to resign and that Mirkovic has "excluded
himself" from the party by accepting a cabinet post,
"Danas" reported. PM

HARD-LINERS CONSOLIDATE POSITION IN BELGRADE. All
members of the incoming and outgoing Yugoslav
governments are on a Western list of 308 top officials
barred from receiving Western visas, Reuters reported on
12 August. Ever since Milosevic lost Kosova in June,
observers have expected a cabinet reshuffle aimed at
reinforcing the position of the hard-liners. This is the
first time that the Radicals have served in the Yugoslav
cabinet. Goran Matic, who is the new information
secretary, belongs to JUL and is known for his outspoken
criticism of the non-state media. The ousted Lilic
recently called for Serbia to learn to "speak the
language" of the international community (see "RFE/RL
Balkan Report," 10 August 1999). He now becomes an
adviser to Milosevic on foreign economic relations. PM

DEMOCRATIC PARTY SLAMS YUGOSLAV CABINET. The opposition
Democrats said in a statement in Belgrade on 12 August
that the new cabinet represents "nothing new and nothing
good.... With this move, the regime has sent several
messages. To the world it is saying 'forget about any
cooperation with Yugoslavia,' and to its citizens it is
saying that they will face a difficult winter and
further impoverishment, without heating and
electricity," Reuters reported. Milosevic, for his part,
told the new government that "our aim is to continue
successfully with the process of current reforms,
contribute to an accelerated pace of economic
development and increase productivity and living
standards." PM

GENERAL PERISIC SAYS MILOSEVIC MUST GO. Former General
Momcilo Perisic told a Belgrade press conference on 12
August that the first goal of his new Movement for a
Democratic Serbia is to oust Milosevic (see "RFE/RL
Balkan Report," 10 August 1999). He stressed that
Milosevic "has made Serbia's territory shrink and its
people die." The current leadership has "no more right
whatsoever to represent us and lead us," Perisic added.
He argued that the opposition has "not done much to
change things." For that reason, he continued, he
founded his own "political movement" instead of joining
an existing one. When a reporter asked the former
general about his role in the shelling of the Croatian
port of Zadar in 1991, Perisic responded that he was
"defending a still existing country against rebels." A
Croatian court has sentenced him to 20 years in prison
in conjunction with the shelling. Many Bosnians regard
him as a war criminal for his role in the shelling of
Mostar in the 1992-1995 war. PM

SERBIAN PENSIONERS STAGE PROTEST. Some 1,000 retired
persons demonstrated in Belgrade on 12 August to protest
their low living standards and to demand Milosevic's
resignation. A spokesman for the group called on
pensioners to join the opposition's anti-Milosevic
gathering in Belgrade on 19 August, RFE/RL's South
Slavic Service reported. PM

VOJVODINA'S HUNGARIANS TO SET UP PROVISIONAL COUNCIL. A
Provisional Council of Hungarians in Vojvodina will be
formed on 20 August, Hungarian media reported on 13
August. The council is to be set up on the basis of the
three-pronged autonomy concept drawn up by six of the
region's Hungarian organizations, according to Laszlo
Jozsa, deputy chairman of the Vojvodina Hungarian
Federation (VMSZ). It will have 54 members representing
the federal, republican, and provincial parliaments and
one-fifth of its members will be local council
representatives. The VMSZ has informed Hungarian Foreign
Minister Janos Martonyi of its intentions, but the
Hungarian cabinet has not responded to the announcement,
Jozsa said. MS

CROATIAN SERBIAN LEADER BLASTS 'LYNCHING.' Milorad
Pupovac, who is a key leader of Croatia's Serbian
minority, said in Zagreb on 12 August that the recent
killing of Djuro Mutic was deliberate and ethnically
motivated, "Novi List" reported (see "RFE/RL Newsline,"
12 August 1999). Pupovac noted that no Croatian
authority ever accused Mutic of crimes against Croats
during the 1991-1995 conflict. The Serbian leader
stressed that "everyone in Croatia should be concerned"
if Mutic's "lynching" was part of a campaign to expel
Serbs from Croatia. He did not elaborate, except to say
that the killing was probably the work of more than a
few people. PM

UNHCR PAYS MACEDONIA $4.4 MILLION FOR REFUGEE
ACCOMMODATION. UNHCR and Macedonian government officials
signed an agreement on 12 August whereby the UNHCR will
pay Macedonia $4.4 million for expenses the country
incurred during this year's refugee crisis. The
Macedonian government will receive $1.2 million
immediately and the rest in installments. Additional
UNHCR assistance to Macedonia includes 13 jeeps and
unspecified quantities of radio and fire-fighting
equipment. A UNHCR spokesman stressed that the UNHCR
usually does not compensate host countries but makes
exceptions in some cases. Macedonia took in a total of
360,000 refugees from Kosova. FS

FIRST MODERN MOVIE HOUSE OPENS IN ALBANIA. Culture
Minister Edi Rama opened the first modern movie house in
Albania on 12 August, dpa reported. Rama stressed that
the opening of the movie house, jointly financed by a
private investor and the government, "is a very
important event in the cultural and social life of the
country." An unclear privatization policy and the
absence of government support led to the closure of more
than 300 communist-era movie houses throughout Albania
since 1991. Many became bingo halls, and only one cinema
remained in the capital, showing primarily pornography.
FS

ALBANIAN LEGISLATIVE REFORM MINISTER RESIGNS. Arben
Imami resigned on 12 August "for personal reasons,"
dpa reported. According to earlier press reports,
Imami plans to study law in the U.S. He played a
leading role in drafting Albania's post-communist
constitution. FS

MOLDOVAN PRISONER IN TRANSDNIESTER ACCUSES PRESIDENT
LUCINSCHI. Andrei Ivantoc, a member of the "Ilascu
group" imprisoned in the Transdniester since 1992, has
accused President Petru Lucinschi and Ion Sturza's
cabinet of neglecting the fate of the group. In a 29
July letter that only recently reached Chisinau,
Ivantoc said he has been on a hunger strike for 77
days, has lost half of his body weight, and is
convinced he will die, RFE/RL's Chisinau bureau
reported. He explained that he went on a hunger strike
to protest the Tiraspol authorities' "systematic
mistreatment" of the group. Ivantoc added that
Lucinschi "cynically used" the Ilascu group's ordeals
in his 1996 electoral campaign and later wrote to
Ilascu saying he hopes to see him in Chisinau "by
Christmas 2001." Ivantoc argued that Lucinschi "would
probably like to use [the group] once more in his 2000
presidential campaign." MS

BULGARIAN DEPUTY PREMIER ROBBED BY BODYGUARD.
Bulgarian police on 12 August said they have arrested
Chief Sergeant Kiril Alexandrov of the National
Bodyguard Service for theft, AP reported. Alexandrov
admitted stealing the equivalent of $120 from the
apartment of Deputy Premier Evgeni Bakardzhiev, to
whom he had been assigned. That amount equals the
average monthly salary in Bulgaria. MS

END NOTE

DEPENDING ON FOREIGN INVESTMENT

By Paul Goble

	Post-communist countries that have relied on
foreign investment to power their economic recovery
frequently find themselves in difficulty when investors
turn away. More serious, those that have been able to
show relatively high rates of growth in the past as a
result of such investment sometimes have allowed that
achievement to justify avoiding the hard choices
necessary to make growth self-sustaining on the basis of
domestic production.
	That is what appears to be happening in Estonia, a
country whose economic performance over the last eight
years has been among the best of the post-communist
world but one that now faces declining rates of growth
and rising unemployment.
	Last week, Kersti Kaljulaid, economics adviser to
the country's prime minister, said Estonia needs
dramatically higher rates of foreign investment if it is
to escape from a mounting economic crisis. That is
because its domestic economy is still too weak to power
a recovery, she said. But more important, as Kaljulaid
herself acknowledged, "foreign investment has been this
economy's main motor for years.... Even though the
economy went into a standstill last year, we still saw
record levels" of outside investment.
	Now, however, outside investment may be about to
fall as well. The IMF recently refused to back
additional investment there and other investors may
follow suit. If that happens, Estonia, which has been on
the fast track toward EU membership, could find itself
in both economic and political difficulties.
	Because of Estonia's favorable geographic location
and its business-friendly government, foreign investment
earlier flowed into the country at impressive rates. A
few years ago, for example, foreign investment in
Estonia was equal to or even greater than that in the
Russian Federation, a country that has a population 100
times larger.
	That pattern allowed Estonia to post economic
figures far better than most post-Soviet states. But it
also lulled some in the Estonian government to conclude
that the good times, powered by outside investment,
would continue without interruption.
	Some Estonian leaders, however, had called
attention to such overreliance on foreign investment. In
a speech earlier this year, for example, President
Lennart Meri pointedly asked "Where is Estonia's Nokia?"
in a reference to the Finnish electronics firm that has
contributed so much to Estonia's economic expansion.
Meri's speech sparked a debate in Estonia's media over
whether and when Estonia could develop an industrial
base that would drive its economy forward even when
foreign investment slowed.
	Some participants in that discussion suggested that
Estonia should rely on its geographic position to become
a bridge between Russia and the West and earn its way as
a trading center. But other Estonians objected that such
a strategy would leave Tallinn at the mercy of the
vagaries of Moscow politics.
	Others suggested that Estonia should develop its
traditional industries, including fishing and food
processing. But their arguments brought the response
that such industries would not be sufficient to support
high rates of growth for long.
	And still others said that Estonia should exploit
its remarkably extensive computer network to become an
information center for northern Europe. But again there
were replies that such a strategy would not be
sufficient, given the lead that West Europeans now have
in that area.
	As a result, this debate petered out with no answer
to Meri's question or a broader discussion on the needs
for domestic entrepreneurism. However, the current
economic crisis, which was brought on by levels of
foreign investment that are no longer sufficient to
power growth, seems certain to reopen these discussions.
	Whether Estonia can find an answer--its own Nokia,
in other words--remains very much an open question. But
unless it does, Estonia and Estonians are likely to find
themselves far more dependent on the international
economy than they would like and thus far less
independent as a state than they clearly want.

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