RFE/RL Newsline, Vol. 3, No. 158, 99-08-16

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RFE/RL NEWSLINE

Vol. 3, No. 158, 16 August 1999

CONTENTS

[A] TRANSCAUCASUS AND CENTRAL ASIA

[01] AZERBAIJANI AUTHORITIES RULE OUT CHANGES TO MUNICIPAL

[02] AZERBAIJANI CONNECTION CLAIMED IN UZBEK BOMBINGS

[03] DEADLINE SET FOR RUSSIAN BORDER GUARDS TO LEAVE GEORGIA

[04] RUSSIAN EXPERTS CONCLUDE INSPECTION OF BOMBED GEORGIAN

[05] POPE TO VISIT GEORGIA THIS FALL

[06] THREE GEORGIAN POLICE SHOT DEAD

[07] KAZAKHSTAN WANTS NORTH KOREA TO RETURN MIGS

[08] FORMER KAZAKH PREMIER MAY RUN IN PARLIAMENTARY ELECTIONS

[09] HOSTAGES RELEASED IN KYRGYZSTAN

[10] TAJIK PRESIDENT IN CHINA

[11] UN WELCOMES LIFTING OF BAN ON TAJIK OPPOSITION PARTIES

[12] CORRECTION:

[B] SOUTHEASTERN EUROPE

[13] SERBIAN PREMIER CALLS OPPOSITION 'TERRORIST'

[14] OPPOSITION LEADER SAYS REGIME BELONGS IN THE HAGUE

[15] REGIME ATTACKS PERISIC

[16] WHAT DOES 19 AUGUST MEAN FOR SERBIA?

[17] VEDRINE: NO AID FOR MILOSEVIC

[18] GENERAL WANTS SERBIAN FORCES BACK IN KOSOVA

[19] SERBIAN RESERVIST CONTINUES HUNGER STRIKE

[20] SERBIAN OPPOSITION LEADER OPPOSED TO HUNGARIAN AUTONOMY IN

[21] MONTENEGRIN POLICE CHIEF PROMISES VIGILANCE

[22] UNHCR SEEKS MORE AID FOR SERBIAN REFUGEES

[23] DINI URGES KFOR TO BE 'MORE VIGOROUS'

[24] ALBANIAN PREMIER VISITS KOSOVA, RECOGNIZES RUGOVA AS

[25] THACI VISITS ALBANIA

[26] ALBANIAN POLICE SMASHES INTERNATIONAL PROSTITUTION NETWORK

[27] ROMANIAN FINANCE MINISTER EXPLAINS TERMS OF AGREEMENT WITH

[28] MOLDOVAN RADIO GOES OFF AIR DUE TO UNPAID ELECTRICITY BILLS

[29] CZECH COURT ORDERS EXTRADITION OF SUSPECT IN BULGARIAN EX-

[C] END NOTE

[30] LATVIA'S NEW GOVERNMENT INHERITS DEPRESSED ECONOMY

[A] TRANSCAUCASUS AND CENTRAL ASIA

[01] AZERBAIJANI AUTHORITIES RULE OUT CHANGES TO MUNICIPAL

Senior Azerbaijani presidential administration

official Ali Hasanov told Turan on 14 August that the

amendments to the law on municipal elections proposed by the

U.S. National Democratic Institute and the Azerbaijani

opposition Movement for Electoral Reform and Democratic

Elections are "belated" and counter-productive. Hasanov

argued that the present version of the law gives local

councils a greater degree of independence than they would

have if the amendments were adopted. He added that the

proposal that half the seats on local councils should be

allocated under the proportional system is inappropriate

since not all political parties have branches in all

localities. Therefore, Hasanov concluded, there is no need to

convene the emergency session of the parliament demanded by

the opposition to debate the proposed amendments. The

previous day, President Heidar Aliev chaired a meeting to

discuss preparations for the elections, "Azerbaycan" reported

on 14 August. LF

[02] AZERBAIJANI CONNECTION CLAIMED IN UZBEK BOMBINGS

gazeti" reported on 13 August that Azerbaijan's National

Security Ministry has confirmed that the organizers of the 16

February bombings in Tashkent held secret consultations in

Baku several days prior to that attack. Uzbek officials have

claimed that the organizers of the attack include former

Uzbek dissidents currently living in Turkey. LF

[03] DEADLINE SET FOR RUSSIAN BORDER GUARDS TO LEAVE GEORGIA

border troops Lieutenant-General Valerii Chkheidze and

Russian deputy border guard commander Aleksandr Manilov

agreed that the remaining Russian border guards deployed in

Abkhazia and Adjaria will leave Georgian territory by 1

November, AP and ITAR-TASS reported. They also agreed that

the Russian border troops' weapons and facilities will be

divided on a 50:50 basis between Russia and Georgia. The

following day, Manilov traveled to Abkhazia for talks with

the breakaway republic's President Vladislav Ardzinba, who

opposes the withdrawal of the Russian border troops, Caucasus

Press reported. The Abkhaz authorities refused admission to

Chkheidze's deputy, Gela Khutsishvili, and to Georgian

journalists accompanying Manilov, Caucasus Press reported. LF

[04] RUSSIAN EXPERTS CONCLUDE INSPECTION OF BOMBED GEORGIAN

A Russian military delegation confirmed on 14 August

that the cluster bombs dropped on the village of Zemo Omalo

in northeastern Georgia's Akhmeta Raion were Soviet-

manufactured and of a type banned by international

conventions, AP and Caucasus Press reported (see "RFE/RL

Newsline," 10 August 1999). It failed to confirm, however,

that the two aircraft that dropped the mines belonged to the

Russian air force. LF

[05] POPE TO VISIT GEORGIA THIS FALL

Georgia this fall, Vatican envoy Giovanni Battista Re

announced in Tbilisi on 15 August, following talks with

Georgian Foreign Minister Irakli Menagharishvili and the head

of the Georgian Orthodox church, Catholicos Ilia II, Reuters

and AP reported. The date of the visit has still to be

determined. The pontiff postponed a planned visit to Armenia

last month because of the terminal illness of Catholicos

Garegin II. LF

[06] THREE GEORGIAN POLICE SHOT DEAD

officers, including the heads of the Zugdidi anti-drug

trafficking department and the local special purpose troops,

were shot dead "while fulfilling their duties" on 13 August,

Caucasus Press reported, citing the Georgian Interior

Ministry. LF

[07] KAZAKHSTAN WANTS NORTH KOREA TO RETURN MIGS

ambassador to Japan, Tleubek Kabdrakhmanov, told the Japanese

Foreign Ministry on 13 August that Astana has asked North

Korea to return some of the MiG-21 fighter jets that it

purchased from Kazakhstan at a cost of $40 million, Reuters

reported. It is unclear whether North Korea has agreed to

that request. On 12 August, South Korea officially complained

to the Kazakh embassy in Seoul over the sale (see "RFE/RL

Newsline," 13 August 1999). In Astana, Kazakhstan's Foreign

Minister Kasymzhomart Tokaev said on 13 August that his

country will issue an official statement on the sale of the

MiGs to North Korea once the criminal investigation into that

transaction is completed, Interfax reported. Under an

international convention that Kazakhstan has signed, it has

pledged not to sell arms to North Korea. LF

[08] FORMER KAZAKH PREMIER MAY RUN IN PARLIAMENTARY ELECTIONS

summarized on 13 August that he may soon return to Kazakhstan

and participate in the 10 October elections to the lower

house of the Kazakh parliament. But Kazhegeldin added that he

does not anticipate any letup in the official campaign to

compromise him. The Prosecutor-General's Office has charged

him with tax evasion. Kazhegeldin rejects those charges. Also

on 13 August, Interior Minister Kairbek Suleimanov claimed to

have information that some opposition leaders plan to provoke

mass disturbances on the eve of the polls, according to ITAR-

TASS. He said that police will be placed on alert a few days

before the 10 October election to the lower chamber of the

parliament. LF

[09] HOSTAGES RELEASED IN KYRGYZSTAN

service on 14 August announced that the four hostages being

held by a group of 21 guerrillas from neighboring Tajikistan

in southern Kyrgyzstan's Batken district were released

unharmed the previous evening, RFE/RL's Bishkek bureau

reported. Kyrgyz government officials declined to release any

information on the whereabouts of the kidnappers or the

circumstances of the hostages' release. But Interfax on 14

August quoted "unofficial sources" as saying that the Kyrgyz

leadership had complied with the kidnappers' demand for a

ransom. And a police official from Batken told RFE/RL's

Bishkek bureau that Kyrgyz authorities are continuing talks

with the guerrillas in the hope of persuading them either to

surrender their weapons or to leave Kyrgyz territory. The

country's top law enforcement officers remain in Batken. LF

[10] TAJIK PRESIDENT IN CHINA

China, Tajikistan's President Imomali Rakhmonov met on 12

August with Premier Zhu Rongji for talks that focused on

bilateral trade and economic relations. The following day,

Rakhmonov and Chinese President Jiang Zemin signed an

agreement on the demarcation of one section of their disputed

common border but failed to resolve Chinese territorial

claims on parts of Tajikistan's Gorno-Badashkhan Autonomous

Oblast, ITAR-TASS reported. They also signed a joint

declaration on combating drug trafficking and an inter-

governmental agreement on automobile travel between the two

countries. The joint declaration affirmed the two presidents'

concern at the deteriorating situation in Afghanistan and

their rejection of "national separatism, religious extremism,

and international terrorism." Tajik Foreign Minister Talbak

Nazarov told ITAR-TASS that China is worried by Islamic

extremism, which it views as a "global problem," according to

ITAR-TASS. LF

[11] UN WELCOMES LIFTING OF BAN ON TAJIK OPPOSITION PARTIES

statement released on 13 August, UN Secretary-General Kofi

Annan termed the lifting by the Tajik Supreme Court of its

1993 ban on four Tajik opposition parties and movements a

"significant step" toward implementation of the 1997 peace

accord, Reuters and AP reported. ITAR-TASS on 13 August

quoted Tajik Justice Minister Shavkat Ismoilov as promising

that there will be no delay in reregistering those parties.

LF

[12] CORRECTION:

"Frankfurter Allgemeine Zeitung" as reporting that the U.S.

Defense Ministry experts currently inspecting the Nukus

chemical plant in northwest Uzbekistan will also survey an

island in the Aral Sea where germ warfare cultures are

believed to be buried. The FAZ report is incorrect. The

bilateral agreement under which the U.S. team operates covers

only the Nukus facility.

[B] SOUTHEASTERN EUROPE

[13] SERBIAN PREMIER CALLS OPPOSITION 'TERRORIST'

Marjanovic told the state-run daily "Politika" of 15 August

that the members of the opposition Alliance for Change are

"representatives of the aggressive policy of NATO" and "paid

killers." He charged that the alliance seeks the violent

overthrow of the government of Yugoslav President Slobodan

Milosevic. Marjanovic added that the government therefore

considers the alliance to be a "terrorist" one. As proof of

his assertion, he cited recent remarks by opposition leader

Vesna Pesic that the Serbian people might get rid of

Milosevic by using the "Romanian method" unless he goes

voluntarily. Her remarks were an allusion to the violent

overthrow of Romanian dictator Nicolae Ceausescu in December

1989. PM

[14] OPPOSITION LEADER SAYS REGIME BELONGS IN THE HAGUE

leader Vladan Batic said at a demonstration in Trstenik that

the Milosevic regime has committed the "most monstrous

terrorist acts" against the Serbian people during Milosevic's

10 years in office. Batic added that the only place for the

regime's leaders is the international war crimes tribunal in

The Hague. He noted that "the alliance has no armed forces,

paramilitary troops, or criminal gangs--all of which the

regime has." Several thousand people attended anti-Milosevic

protests in Trstenik and Krusevac on 15 August. Elsewhere,

opposition politician and former General Momcilo Perisic told

Belgrade's Studio-B Television the previous day that the army

will not support Milosevic if he tries to crack down

violently on the opposition. PM

[15] REGIME ATTACKS PERISIC

slammed Perisic on 16 August as a weak commander who was

sacked in November 1998 for incompetence. "It's no wonder why

this tiny-statured, weak, and treacherous general was not

able to resist strains of possible NATO intervention against

Yugoslavia... He is now trying to compensate for his loser

personality and become [U.S. President Bill] Clinton's

lieutenant and a Serbian Pinochet," AP reported. PM

[16] WHAT DOES 19 AUGUST MEAN FOR SERBIA?

heads the state-run daily "Borba," said on 15 August that the

opposition has chosen 19 August as the date for its big rally

in Belgrade because that is Clinton's birthday (see "RFE/RL

Newsline," 11 August 1999). Serbian Renewal Movement leader

Vuk Draskovic dismissed the charge, pointing out that 19

August is the Serbian Orthodox Feast of the Holy

Transfiguration. He added that "the Communists [in the

regime] do not know that because they are atheists. We hope

that 19 August will mark the beginning of a transfiguration

of Serbia into a democratic society," AP reported. PM

[17] VEDRINE: NO AID FOR MILOSEVIC

Vedrine told Belgrade's "Vecernje novosti" of 15 August that

the international community will give no reconstruction aid

to Serbia so long as Milosevic remains in power. Any such

assistance would only help prop up the regime, Vedrine added.

He stressed that the time has come to break the "cycle of

violence in the Balkans" by ousting Milosevic. PM

[18] GENERAL WANTS SERBIAN FORCES BACK IN KOSOVA

Pavkovic, whose Third Army's zone of operations includes

Kosova, said that KFOR troops have not fulfilled their

obligations under the June peace agreement, RFE/RL's South

Slavic Service reported on 16 August. He demanded that NATO

troops leave the province and that the UN allow his forces to

return. PM

[19] SERBIAN RESERVIST CONTINUES HUNGER STRIKE

said on 15 August in Nis that he has decided to continue his

hunger strike for back pay, which has entered its fourth

week. He added that he will move his protest from the city

center to the Sveti Jovan monastery, where a local monk

blessed him. Stankovic said that the government claims it

cannot pay him or his fellow soldiers, but he noted that it

provides General Pavkovic with a large apartment and luxury

cars. Several other reservists recently stopped their hunger

strike for back pay at the urging of doctors and Serbian

Orthodox priests. PM

[20] SERBIAN OPPOSITION LEADER OPPOSED TO HUNGARIAN AUTONOMY IN

Nenad Canak, who heads the League of Social

Democrats of Vojvodina, said in an interview with Hungarian

Radio on 15 August that he opposes granting territorial

autonomy to Vojvodina's ethnic Hungarians. He charged that

providing autonomy "would only facilitate the spread of

Serbian nationalism in Vojvodina and lead to new disputes."

Canak added that he opposes the concept of "personal

autonomy" because it would involve a "redistribution of

budget funds" based on the numerical strength of ethnic

communities, meaning that "the small Ruthenian and Ukrainian

minorities would get practically nothing." In an interview

with the Belgrade weekly "NIN" on 15 August, Alliance of

Vojvodina Hungarians chairman Joszef Kasza said that as long

as the Yugoslav authorities "struggle for their own

survival," they will have "neither the strength nor the means

to deal with minority issues." MS

[21] MONTENEGRIN POLICE CHIEF PROMISES VIGILANCE

Minister Vukasin Maras said in Podgorica on 15 August that

Yugoslav Prime Minister Momir Bulatovic and his Socialist

People's Party seek "at any cost to destabilize" the

Montenegrin government of President Milo Djukanovic. Maras

rejected a recent charge by Bulatovic's supporters that the

government plans to discredit the Yugoslav army by staging a

fake coup attempt involving men dressed in Yugoslav army

uniforms. The interior minister said that Bulatovic himself

is behind the accusation. Magas pledged that the police will

firmly resist anyone who tries to start a civil war in

Montenegro, RFE/RL's South Slavic Service reported. PM

[22] UNHCR SEEKS MORE AID FOR SERBIAN REFUGEES

who is the UNHCR's special envoy for the Balkans, said in

Prishtina on 15 August that he will seek an additional $20

million for his office's 1999 budget. This will bring the

total to $60 million. He said that the continuing exodus of

Serbs and Roma from Kosova prompted him to seek the increase.

In Kraljevo, refugees told Reuters that Serbian police

"stopped us in each town and did not want to let us through."

On 14 August, the private Beta news agency reported that a

Serbian convoy of more than 100 vehicles left Gjilan for

Serbia proper the previous day. PM

[23] DINI URGES KFOR TO BE 'MORE VIGOROUS'

Minister Lamberto Dini told "La Repubblica" of 14 August that

"the Serbian population [of Kosova] is suffering a repression

that is much smaller but just as brutal and repugnant as that

suffered previously by Albanians," Reuters reported. He

stressed that "KFOR [must take] more vigorous action.

Violence against the Serbian population must be prevented."

He urged the Kosova Liberation Army (UCK) to show a

"responsible attitude." Dini stressed that the international

community must give "no aid for reconstruction if we don't

see a commitment to combat crime and drug trafficking" on the

part of the Albanians. He noted that the international

community did not launch its bombing campaign against Serbia

in order to put the UCK in power, adding that independence

for Kosova could destabilize the Balkans. The following day,

the UCK's General Agim Ceku stressed that an independent

Kosova will be a "factor of stability in the Balkans,"

RFE/RL's South Slavic Service reported. FS

[24] ALBANIAN PREMIER VISITS KOSOVA, RECOGNIZES RUGOVA AS

Pandeli Majko arrived in Prishtina on 13

August for a two-day visit--the first ever by an

Albanian head of government to Kosova. Majko condemned

ethnic Albanians who are harassing Serbs, saying that

"if the Albanians do that, then they will play a part in

Milosevic's survival. Albanians must know how to work in

calm and peace," AFP reported. Majko also met with

moderate Kosovar leader Ibrahim Rugova, whom he

addressed as "president." During his meeting with

Rugova, Majko proposed the construction of a highway

linking Durres with Prishtina and announced plans for

opening a diplomatic representation in Kosova. Majko

also met with UCK leader Hashim Thaci, OSCE Ambassador

Daan Everts, UN Special Representative Bernard Kouchner,

and U.S. diplomats. FS

[25] THACI VISITS ALBANIA

Meidani in Durres on 15 August. Meidani's spokesman

Mentor Nazarko told RFE/RL's South Slavic Service that

Meidani pledged to provide university teachers and other

experts for Kosova. Both sides urged the international

community to establish international control over the

divided town of Mitrovica. Thaci warned that there is a

"heavy presence of Serbian paramilitaries and agents" in

the north of the city, who are trying to partition the

town, dpa reported. FS

[26] ALBANIAN POLICE SMASHES INTERNATIONAL PROSTITUTION NETWORK

from Russia, Moldavia, Ukraine, and Romania via Albania to

Italy, dpa reported on 15 August. Police detained 13

prostitutes and three men in a motel near Shkodra on 15

August. The detainees had apparently entered Albania from

Montenegro. Several days earlier, police detained 12

prostitutes in Shkodra. Also on 15 August, Prosecutor-General

Arben Rakipi said that Italian Mafia bosses are active in

Albania. Three weeks ago, he said, Albanian police arrested

Giuseppe Muolo of Sacra Corona Unita, a Mafia group from

Puglia. In other news, police found three members of the

notorious gang of the Gerdhuqi brothers killed in their car

near Vlora on 13 August, AP reported. The three had been

released from jail in July for lack of evidence. They had

been charged with various crimes ranging from robbery to

murder. FS

[27] ROMANIAN FINANCE MINISTER EXPLAINS TERMS OF AGREEMENT WITH

Decebal Traian Remes on 13 August said the IMF will not

disburse any more tranches of its $547 million stand-by loan

to Romania until Bucharest meets the terms of agreement it

signed with the fund earlier this month. Remes added that the

IMF will not agree to the 2000 budget being an "election-

oriented" one, adding that in accordance with the April

agreement, the IMF will review its implementation in

September and December 1999 and in February 2000. The

agreement does not allow the government to make any interest-

rate or tax cuts without the fund's prior permission and

without measures being taken to compensate losses in budget

revenues. Remes said macroeconomic policy will concentrate on

fiscal consolidation and wage restrictions in order to reduce

domestic demand, RFE/RL's Bucharest bureau reported. MS

[28] MOLDOVAN RADIO GOES OFF AIR DUE TO UNPAID ELECTRICITY BILLS

when its electricity supplies were cut off, RFE/RL's Chisinau

bureau reported. Supplies were restored after the management

promised that the company's 600,000 lei (some $55,000) debt

to the government will be paid this week. Ion Verbenciuc,

deputy chairman of Teleradio-Moldova, said that "what

happened is quite normal in a market economy." The same day,

the independent Flux agency reported that electricity

supplies to prisons in Balti and Rezina were also cut off

owing to the nonpayment of bills. MS

[29] CZECH COURT ORDERS EXTRADITION OF SUSPECT IN BULGARIAN EX-

A Prague court has ordered the extradition

of Angel Vasiliev, who is suspected of having murdered former

Bulgarian Prime Minister Andrei Lukanov in October 1996, BTA

reported on 13 August, citing Bulgarian Radio. Vasiliev,

chief executive of the Prague-based Colonel construction

company, was arrested on 4 June. Vasiliev's wife told

Bulgarian Radio that the extradition order will be appealed

because her husband will not have "a fair trial in Bulgaria."

MS

[C] END NOTE

[30] LATVIA'S NEW GOVERNMENT INHERITS DEPRESSED ECONOMY

Recent weeks have been eventful on the Latvian political

scene. Vaira Vike-Freiburga, a politically independent former

emigre to Canada, was elected by the parliament to the post

of president on 17 June. One month later, on 16 July, Andris

Skele of the former opposition People's Party (who was prime

minister from December 1995 to July 1997) formed a new

government.

With regard to the economic sector, Skele's government

has its work cut out for it. Hit hard by the Russian economic

crisis that broke out in August 1998, Latvia's economy is

beset by declining GDP, rising unemployment, and falling

foreign trade volumes (especially exports to Russia).

Latvia's GDP contracted by 2.3 percent in the first

quarter of 1999, following a 1.9 percent decline in the final

quarter of 1998, which demonstrates that the economy is

technically in recession. Latvia has been dealing with the

effects of a collapse in Russian trade for longer than has

Estonia or Lithuania. Trade with Russia began to decline in

spring 1998, when relations between the countries worsened

following events surrounding the March demonstration by

mostly Russian-speaking pensioners in Riga.

Industrial production was down by 15.8 percent during

the first five months of 1999, compared with the same period

in 1998. Latvia's official unemployment rate was 10 percent

in June, just shy of the record 10.2 percent registered the

previous month and up from 7.2 percent a year earlier.

Unofficial estimates put that rate as high as 16-17 percent.

Inflation is low, with consumer prices rising by 2.8

percent on a December-to-December basis in 1998 and by only

1.9 percent in the 12 months to June. The average monthly

gross wage in the public sector was $257 in May, up from $235

a year earlier. The wage in lats was up by 9 percent over

this period, while GDP fell, employment declined slightly,

and inflation was minimal. Thus, wage growth seems high,

given the depressed state of the economy

Latvia's fiscal position deteriorated this year, and

expenditure cutbacks may have to be made in the fall. The

1999 budget, passed in February, foresaw a deficit of about 3

percent of GDP. On 5 August, the parliament approved

amendments to the 1999 budget that cut spending by 64.4

million lats ($109 million) to take into account a shortfall

in expected revenues of 93.1 million lats.

There has been one positive consequence of the declining

economy: the current account deficit fell from a very high

11.5 percent of GDP in 1998 to 8.7 percent of GDP in the

first quarter of 1999. The poor external sector results in

1998 show that Latvia was not particularly successful

(compared with Estonia, for example) in compensating for lost

trade with Russia by boosting commercial ties with the EU.

Total exports rose from $1.673 billion in 1997 to just $1.812

billion last year, while total imports rose from $2.724

billion to $3.189 billion over the same period. As a result,

the trade deficit increased.

This year, while the trade volume has declined, the fall

in imports has exceeded that of exports. This means that the

trade deficit has contracted from $383 million in January-

April 1998 to $318 million over the same period this year.

Behind the slow growth of total exports has been the

collapse of the Russian market. Exports to that country

decreased from 21 percent of the total in 1997 to 12.1

percent in 1998. Imports fared better, declining by 10.4

percent and accounting for 11.8 percent of the total,

compared with 13.3 percent the previous year. The decline in

trade with Russia has continued this year: exports to that

country constituted 7.1 percent of the total in January-April

1999 and imports from there were 9.3 percent of the total

over the same period.

The share of exports to the EU has risen from 48.9

percent of the total in 1997 to 64.3 percent in January-April

1999, while for imports the EU share has increased from 45.4

percent to 56.1 percent over this period.

Despite all the gloomy statistics, Latvia may be over

the worst effects of the Russian crisis, with some observers

forecasting a strengthening of the economy in the second half

of 1999. However, there are still too many banks in Latvia

(24, compared with only five in Estonia), many of which are

exposed to developments in Russia. A wave of bank failures

and consolidations seems likely, which would prolong and

deepen the economic downturn. Another key policy issue is the

fixed exchange rate of the lats. Maintaining that rate

necessitates a particularly stringent fiscal policy, another

factor that would keep the economy from turning around

quickly.

The author is a research scholar at the International

Institute for Applied Systems Analysis in Laxenburg, Austria.

16-08-99

Reprinted with permission of Radio Free Europe/Radio Liberty
URL: http://www.rferl.org

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