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RFE/RL Newsline, 05-02-04Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next ArticleFrom: Radio Free Europe/Radio Liberty <http://www.rferl.org>CONTENTS
[01] PUTIN BLAMES FEDERAL AND REGIONAL GOVERNMENTS FOR BENEFITS CRISISPresident Vladimir Putin met on 3 February with Federation Council members and said both the federal government and regional administrations are to blame for shortcomings in the implementation of the law on social benefits, Interfax reported. "There have been obvious shortcomings both in the center and in the regions," Putin told lawmakers. "We need to establish order not only in the sphere of public-transportation use, but also in the sensitive sphere of medicine and in other areas." RC[02] MINISTER SAYS IMPLEMENTATION OF REFORM TO BE 'SUBSTANTIALLY' REVISED...Health and Social Development Minister Mikhail Zurabov on 3 February said the government should send each recipient of benefits-compensation payments an annual statement of exactly how the state has fulfilled its social obligations, RIA-Novosti reported. Speaking to Duma deputies, Zurabov said this is necessary "so that each recipient can choose whether he wants compensation payments or a benefits package." Zurabov added that the implementation of the benefits reform will be "substantially revised so that it starts working as it should," strana.ru reported. He reported that the government has completed work on a unified list of those who qualify for social benefits and that 14.342 million have already received their compensation payments. RC[03] ...AND THAT REFORM HAS INCREASED AVAILABILITY OF MEDICINESHealth and Social Development Minister Zurabov told Duma deputies on 3 February that the social-benefits reform has been largely successful in the area of subsidized medicine, strana.ru reported. "For many citizens, medicines have finally become available, have begun to be for sale," Zurabov said. He said that as soon as people realize the new system is working, the widespread demonstrations will subside. He also said 70,000-75,000 qualified beneficiaries have applied for subsidized automobiles and that this backlog will be cleared within 2 1/2 years. The 2005 budget includes 373 million rubles ($1.24 million) for this purpose. Duma Labor and Social Policy Committee Chairman Andrei Isaev (Unified Russia) told the website he believes the Duma will pass in all three readings on 9 February a bill to increase pensions by 36.5 percent as of 1 March. The Duma also intends to consider raising compensation payments to military personnel and indexing the pensions of veterans to account for inflation, Isaev said. Deputies will also check to make sure rates being charged for public transportation and utilities are justified. He said opposition proposals to suspend implementation of the reforms would "only lead to social chaos," strana.ru reported. RC[04] HARD-CURRENCY RESERVES JUMP, FUELING SPECULATION ABOUT FINANCING OF YUGANSK TAKEOVER...The Central Bank reported a record $9.6 billion surge in its hard-currency reserves for the week ending 28 January, fueling the controversy over reports that a consortium of Chinese banks has helped finance the state's takeover of Yuganskneftegaz, formerly the main production subsidiary of embattled oil giant Yukos, "The Moscow Times" reported on 4 February. The bank reported that reserves stand at $128.3 billion, and HSBC group analyst Philip Poole told the daily that "this is a very high figure and is certainly much higher than anyone in the market anticipated." The government sold Yuganskneftegaz at auction on 19 December for $9.3 billion in partial payment of Yukos's tax arrears, although it has remained unclear whether the government was actually paid for the company. RC[05] ...AS CHINESE ROLE REMAINS A MYSTERYChinese Foreign Ministry spokesman Kong Quan was quoted by Reuters on 3 February as saying "China has not provided any loans to a Russian oil company to purchase any stake in Yuganskneftegaz." However, Finance Minister Aleksei Kudrin said this week that the consortium lent the money to state-owned Vneshekonombank, which then lent the money to Rosneft (see "RFE/RL Newsline," 2 and 3 February 2005). Analysts have speculated the Russian government paid for the takeover of Yuganskneftegaz from hard-currency reserves, which fell by $6 billion in a two-week period ending on 21 January. "As soon as the Chinese transfer the money," analyst Stanislav Belkovskii told "The Moscow Times" on 2 February, "the reserves will go back up." RC[06] FUGITIVE YUKOS SHAREHOLDERS ATTEND BREAKFAST WITH U.S. PRESIDENT...Two major Yukos shareholders, Mikhail Brudno and Vladimir Dubov, on 3 February attended a prayer breakfast in Washington with President George W. Bush and senior U.S. officials, "The Moscow Times" reported on 4 February. Both men were recently put on an Interpol wanted list by the Russian authorities on charges of embezzlement (see "RFE/RL Newsline," 2 February 2005). The visit of the two men was arranged by U.S. Representative Tom Lantos (Democrat, California), a longtime Kremlin critic, and comes just weeks before a summit between Bush and President Putin in Bratislava. A source at Menatep, which controls Yukos, told the daily that the two men "were assured that the U.S. government would not act on the Russian Interpol notice." An unnamed spokesman for the Prosecutor-General's Office declined to comment on the U.S. refusal to act on the Russian warrant, the daily reported. RC[07] ...AS COMPANY PREPARES TO LAUNCH NEW INTERNATIONAL CASES TO WIN BACK YUGANSKYukos deputy CEO Aleksandr Temerko told the Oil Information Agency on 3 February that the company has prepared documentation to launch court cases aimed at restoring the company's ownership of Yuganskneftegaz. The subsidiary was sold off by the government on 19 December in partial payment of Yukos's tax arrears. "[Company legal] experts believe that many of the [government's] tax claims are inflated and some of them are illegal," Temerko said. "One possibility is that Yuganskneftegaz will be returned to us. Maybe that is a fantastic possibility, but it is based on the documents now being studied by our experts." Temerko told Interfax that the company will seek to freeze Russian government assets abroad, including "the assets of companies that cooperated in the confiscation of our property," apparently referring to Gazprom and Rosneft. RC[08] MINISTER SAYS GAZPROM TAKEOVER OF ROSNEFT TO BE SETTLED SOONEconomic Development and Trade Minister German Gref said on 3 February that the mechanism for merging Gazprom and Rosneft will be finalized by the end of this month, Interfax reported. He reconfirmed that the government intends to take over a majority stake of Gazprom in exchange for Rosneft and that the sale of Gazprom shares to foreigners will then be allowed. "We are not moving away from the idea of acquiring a controlling interest in Gazprom and liberalizing the share market, and this idea will be implemented. The question is how," Gref said. On 1 February, Federal Energy Agency Director Sergei Oganesyan told journalists he believes Rosneft should retain ownership of Yuganskneftegaz and that Rosneft should not be taken over by Gazprom (see "RFE/RL Newsline," 3 February 2005). RC[09] PREMIER SAYS GOVERNMENT CREATING GOOD CONDITIONS FOR RUSSIAN BUSINESSPrime Minister Mikhail Fradkov told a Moscow conference on 4 February that the government is concentrating on improving the climate for business in Russia, strana.ru reported. He said the economy can only develop if there is "financial and macroeconomic stability." He said the government is constantly consulting with businesspeople regarding the effects of ongoing reforms and uses these consultations to modify its policies. He said the experience of the social-benefits reform showed that "novel and complex reforms that are insufficiently thought through in the early stage lead to complicated outcomes." He added that further complex reforms in the areas of education and health care are coming soon. RC[10] FAR EAST GOVERNOR TAKES OFFICE UNDER NEW SELECTION SYSTEMPrimorskii Krai Governor Sergei Darkin was confirmed by the krai legislature on 4 February for a five-year term following his nomination to the post by President Putin earlier this month, newsru.com reported (see "RFE/RL Newsline," 2 February 2005). Darkin, who was sworn in immediately following the legislature's vote, has headed the region since 2001. He is now the first regional leader to be appointed under a political reform that eliminated the direct election of regional executive-branch heads. On 3 February, Putin nominated Tyumen Oblast Governor Sergei Sobyanin to be reconfirmed in that post, RIA-Novosti and other Russian media reported. Sobyanin was elected governor in 2001, having served previously as deputy presidential envoy to the Urals Federal District. RC[11] SIBERIAN ELECTRICITY CHIEF DETAINED OVER SCHOOL BLACKOUTOmskenergosbyt acting Director Sergei Ptitsyn was taken into custody on 3 February on suspicion that he ordered midday power cuts that affected more than 70 schools in Omsk, ORT reported. According to the report, the cuts were unexpected and disabled fire and security systems. ORT reported that Omskenergosbyt implemented the blackout in order to compel school authorities to pay their energy-bill arrears. RC[12] U.S. PRESSURES RUSSIA OVER BORDER MONITORING WITH GEORGIASpeaking on 3 February in Vienna at the weekly session of the OSCE Permanent Council, U.S. diplomat Paul Jones condemned Russia's ongoing veto of requests for the resumption of monitoring of Georgia's borders with Ingushetia, Chechnya and Daghestan, an RFE/RL correspondent reported. The mission's mandate expired in December 2004, and Moscow is blocking its renewal, arguing it is no longer needed. Jones said Washington may consider unspecified alternatives to the deployment of OSCE monitors. Tbilisi has asked both the European Union and NATO to consider sending observers to monitor its northern border with the Russian Federation. On 1 February, Russian Foreign Minister Sergei Lavrov said the OSCE monitoring was not discussed during his talks the previous day with OSCE Chairman-in-Office Dmitrij Rupel, Interfax reported (see "RFE/RL Newsline," 2 February 2005). LF[13] CHECHEN, RUSSIAN OFFICIALS DISMISS CEASE-FIRE OFFERTaus Djabrailov, chairman of the interim pro-Russian Chechen legislature, told Interfax on 3 February that the unilateral cease-fire reportedly declared by resistance leader Aslan Maskhadov with the aim of embarking on peace negotiations is nothing more than "a bluff and a provocation" (see "RFE/RL Newsline," 3 February 2005). He added that radical Chechen field commander Shamil Basaev, who has similarly announced that he has issued orders to his fighters to desist from offensive operations, does not abide by Maskhadov's orders. Pro-Moscow Chechen administration head Alu Alkhanov dubbed Maskhadov's cease-fire announcement a publicity stunt, adding that "the Chechen administration is open to dialogue with anyone who wants peace... but neither Maskhadov nor Basaev has ever shown any such inclination." Chechen First Deputy Prime Minister Ramzan Kadyrov said the pro-Moscow leadership will not under any circumstances hold peace talks with Maskhadov and Basaev, Interfax reported. Dmitrii Kozak, who is presidential envoy to the Southern Federal District, termed the proposal irrelevant on the grounds that Maskhadov "lost control over the situation in Chechnya long ago," Interfax reported. LF[14] NEW CHARGES BROUGHT AGAINST CHECHEN RESISTANCE LEADERSDeputy Prosecutor-General Nikolai Shepel told Interfax on 3 February that additional criminal charges have been brought against both Maskhadov and Basaev in connection with armed raids in Ingushetia in June 2004 and the deadly hostage taking last September at a school in Beslan, North Ossetia. Basaev has claimed responsibility for both attacks, while Maskhadov not only disclaimed responsibility for them but publicly condemned them (see "RFE/RL Newsline," 2 and 7 September 2004). LF[15] RUSSIA PROTESTS SCREENING OF BASAEV INTERVIEW BY BRITISH TV STATION...The independent British television Channel 4 screened an interview with Basaev on 3 February, ignoring a request from the Russian Embassy in London not to do so, Reuters and AFP reported. The Russian Foreign Ministry released a statement on 3 February before the interview was broadcast warning that screening it was tantamount to "supporting terrorists" and that it would have "negative consequences" for bilateral relations. As in his extensive replies to questions submitted last fall by a Canadian newspaper (see "RFE/RL Caucasus Report," 12 November 2004), Basaev laid the blame for the high death toll in Beslan on federal forces and warned that he will perpetrate further such acts in retaliation for Russia's ongoing operations in Chechnya. Basaev also said he considers Russian civilians whose taxes fund the war in Chechnya as legitimate targets. He estimated the number of resistance fighters in Chechnya at several thousand, including a suicide battalion whose strength he did not specify. LF[16] ...AS ABKHAZ OFFICIAL CITES RUMORS OF HIS DEATHAccording to dpa on 3 February, the televised interview with Basaev was conducted at some point last month following lengthy negotiations through an intermediary. Also on 3 February, Interfax quoted Abkhaz State Security Service Deputy Chairman Yurii Ashuba as saying it is rumored among Basaev's relatives in Abkhazia, including one of his wives who is an Abkhaz, that he is dead. Ashuba said Basaev may have died of kidney trouble or in an accidental shootout with Arab mercenaries. Ashuba said the rumored date of Basaev's death was some time in the second half of January. On 3 February, chechenpress.info posted what appears to be a statement from Basaev ordering his men to desist from offensive actions in February in compliance with Maskhadov's 14 January declaration of a cease-fire. LFTranscaucasia And Central Asia [17] ARMENIAN OPPOSITION VOWS TO CONTINUE PARLIAMENT BOYCOTTViktor Dallakian, secretary of the opposition Artaruriun parliament faction, told journalists on 3 February that the parliamentary opposition will continue the boycott it began one year ago (see "RFE/RL Newsline," 3 and 4 February 2004) but will suspend that boycott to participate in debates on issues of crucial importance, including compensating the population for the loss of deposits in Soviet-era savings accounts, Noyan Tapan reported. Dallakian further described as "a polite rejection" the response by the ruling three-party coalition government to the opposition's proposals for compromise over the package of constitutional amendments drafted by President Robert Kocharian (see "RFE/RL Newsline," 24 January and 3 February 2005). Earlier on 3 February, the three parties issued a statement welcoming the opposition's proposals. At the same time, the statement said the opposition should not make its participation in discussions on constitutional reform contingent on acceptance of its proposals, RFE/RL's Armenian Service reported. LF[18] WATCHDOG DECRIES PRESSURE ON AZERBAIJANI JOURNALISTThe Paris-based organization Reporters Without Borders issued a statement on 3 February criticizing the detention by Azerbaijani Defense Ministry officials the previous day of Akper Hasanov, a journalist for the independent weekly "Monitor," Turan reported. Hasanov says he was taken against his will to Defense Ministry headquarters, where he was held for five hours and forced to write a rebuttal of a 29 January article in "Monitor" in which he highlighted the appalling conditions in a military unit in Geranboy Raion. Aflatun Amashev, chairman of Azerbaijan's independent Press Council, has asked Prosecutor-General Zakir Garalov to open a formal investigation into Hasanov's detention, Turan reported on 3 February. LF[19] GEORGIAN PRESIDENT ASSUMES PRIME MINISTER'S DUTIESMikheil Saakashvili announced in Tbilisi on 3 February that he will head the Georgian government temporarily following the sudden death earlier that day, apparently from carbon-monoxide poisoning, of Prime Minister Zurab Zhvania, Georgian and Western agencies reported ( see "RFE/RL Newsline," 3 February 2005). Deputy Prime Minister Giorgi Baramidze will be responsible for the day-to-day work of the cabinet. Georgia's Constitutional Court ruled on 4 February that Saakashvili's decision to assume responsibility for the government does not violate the constitution, Caucasus Press reported. In line with the Georgian Constitution, Saakashvili must propose a new prime minister to parliament within seven days. Within three days of that candidate's confirmation, s/he and the president must submit to parliament the proposed new composition of the government. Economy Minister Kakha Bendukidze, Defense Minister Irakli Okruashvili, and Interior Minister Vano Merabishvili all said on 3 February that Zhvania's death will not impact the government's policies or effectiveness. LF[20] GEORGIAN OPPOSITION QUESTIONS CIRCUMSTANCES OF PRIME MINISTER'S DEATHVeteran opposition politician Irina Sarishvili-Chanturia told Interfax on 3 February that she doubts Zhvania's death was accidental. She suggested the gas heater that reportedly caused a fatal buildup of carbon monoxide in the apartment where Zhvania and a friend were found dead may have been tampered with. She added that independent Georgian forensic expert Maya Nikoleishvili should not have been barred from examining the two bodies. Labor Party leader Shalva Natelashvili suggested to Caucasus Press on 3 February that Zhavania's death may have been the consequence of infighting between rival factions within the top leadership headed respectively by Saakashvili, Zhvania, and parliament Speaker Nino Burdjanadze. Burdjanadze broke off a vacation with her family in Italy to return to Tbilisi on 3 February. Even some members of the cabinet appeared not wholly convinced that Zhvania's death was an accident. Deputy Prime Minister Baramidze, a close ally of Zhvania's, was quoted by "Nezavisimaya gazeta" on 4 February as noting that Zhvania "had numerous enemies," while Interfax quoted Minister for Conflict Resolution Giorgi Khaindrava as arguing the two men would have smelled a gas leak before succumbing to its effects. In Moscow, Foreign Minister Lavrov categorically rejected speculation that Moscow may have had a hand not only in Zhvania's death but in a car-bomb explosion in Gori two days earlier that killed three police officers, Russian media reported. LF[21] FBI TO CONDUCT INDEPENDENT INVESTIGATION INTO GEORGIAN PRIME MINISTER'S DEATHEven though Georgian forensic experts announced on 3 February that the concentration of carbon monoxide in Zhvania's blood was more than twice the lethal amount, the Georgian Prosecutor-General's Office announced on 3 February that the U.S. Federal Bureau of Investigation (FBI) will conduct an independent analysis of a blood sample, either in the United States or at its regional office in Turkey, Caucasus Press reported. Such an investigation would serve to pre-empt further speculation about Russian involvement in Zhvania's death. LF[22] U.S. HEALTH-CARE INITIATIVE STARTS IN CENTRAL ASIAKent Hill, USAID assistant administrator for Europe and Eurasia, told a news conference in Almaty on 3 February that the United States has launched a five-year, $30.5 million program to improve health care in Central Asia, Interfax-Kazakhstan reported. Hill said, "The program is aimed at assisting the Kazakh government and other Central Asian states in improving, above all, the quality of first aid provided to the population." In Kazakhstan, which will receive 25 percent of the funds, the program will work to reform health-care financing and management. In Kyrgyzstan and Tajikistan, the program's aim is to improve sanitary and epidemiological services. DK[23] KYRGYZ PRESIDENT ADDRESSES YOUTH IN RUNUP TO ELECTIONSPresident Askar Akaev addressed participants in a youth-oriented patriotic event called "I Am Kyrgyzstan" in Bishkek on 3 February, telling them that the 27 February parliamentary elections are a "test" and warning them against the dangers of revolution, RFE/RL's Kyrgyz Service reported. The president said, "February's parliamentary elections and October's presidential elections will be a test of the country's democratic development in which I hope for the support of young people." In a reference to Georgia's so-called Rose Revolution, Ukraine's Orange Revolution, and recent demonstrations in Bishkek (see "RFE/RL Newsline," 10 and 20 January 2005), Akaev stressed that Kyrgyzstan's young people "have already demonstrated their immunity to the sickly foreign rose, orange, and yellow viruses that some homegrown opposition figures are trying to implant in our soil." More than 3,000 young people were present at the event, Kabar news agency reported. DK[24] TAJIK GOVERNMENT RESHUFFLE CONTINUESPresident Imomali Rakhmonov has signed a number of decrees removing and appointing high-ranking officials, RFE/RL's Tajik Service reported on 3 February. Zokir Vazirov was dismissed as deputy prime minister and appointed minister of labor and social services. Mamadshoh Ilolov was removed as minister of labor and social services and appointed head of the Academy of Sciences. Abdusattor Rajabov was removed as deputy interior minister. Also removed were Viktor Boltov, first deputy minister of trade and economy, and Rajabali Turanov, deputy minister of trade and economy. Mahmadamin Mahmadaminov was appointed chairman of Amonatbonk, the state savings bank, Tajik Television reported. Additionally, a presidential decree cut 878 positions from the traffic police. President Rakhmonov has replaced a number of high-ranking officials since he criticized law-enforcement bodies at a 24 December meeting (see "RFE/RL Newsline," 6, 11, and 31 January 2005). DK[25] HIZB UT-TAHRIR DENIES INVOLVEMENT IN TAJIK BLASTThe Islamist group Hizb ut-Tahrir issued a statement on 3 February denying any involvement in an explosion in Dushanbe on 31 January that killed one person (see "RFE/RL Newsline," 1 February 2005), RFE/RL's Tajik Service reported. The statement stressed that Hizb ut-Tahrir does not engage in terrorism or violence, Avesta reported. It also noted that hundreds of Hizb ut-Tahrir members "have been illegally arrested and jailed in Tajikistan." As Tajikistan's security services continue to investigate the explosion, ITAR-TASS cited an anonymous law-enforcement source on 3 February as saying that several individuals have been detained. The report provided no further details, although it claimed the explosion was not connected to the 27 February parliamentary elections. DK[26] TAJIK ELECTION COMMISSION RECEIVES COMPLAINTSTajikistan's Central Election Commission (CEC) has received 17 complaints of violations from would-be candidates in the 27 February parliamentary elections, RFE/RL's Tajik Service reported on 3 February. Muhibullo Dodojonov, head of the CEC secretariat, told RFE/RL that most of the complaints come from individuals who were denied registration because of election-law violations relating to signatures they collected to support their candidacies. In Sughd Province, Ubaydulloh Fayzulloev, a local leader in the Islamic Renaissance Party, told Asia Plus-Blitz on 2 February that "every reason is being used to deny our candidates registration" to elections for local assemblies. Fayzulloev charged that "this kind of malpractice by election commissions is politically motivated." DKEastern Europe [27] OSCE WANTS TO RESTART DIALOGUE BETWEEN BELARUSIAN AUTHORITIES, OPPOSITIONA delegation of the Organization for Security and Cooperation in Europe (OSCE) Parliamentary Assembly led by Bundestag deputy Uta Zapf visited Minsk from 1-3 February to study the political situation in Belarus, RFE/RL's Belarus Service and Belapan reported. Zapf told journalists in Minsk on 3 February that the OSCE wants to renew a dialogue between the Belarusian authorities and the opposition. An attempt in this direction will be made in late May and early June when the OSCE Parliamentary Assembly is planning to organize a "workshop" in Minsk on Belarus's prospects under the EU's European Neighborhood Policy. JM[28] BELARUS REPORTS 40 PERCENT RISE IN FOREIGN TRADE IN 2004Foreign Ministry spokesman Andrey Savinykh said on 3 February that Belarus's foreign trade rose by 40 percent year-on-year in 2004 to $30.1 billion, including $19.1 billion with CIS countries, Belapan reported. Belarus's exports in 2004 increased by 38.3 percent and amounted to $13.8 billion. Exports to Russia accounted for 46.6 percent of Belarus's total volume of exports in 2004. Belarus had a foreign-trade deficit of $2.6 billion in 2004, comprising a $4.5 billion deficit in trade with CIS countries and a $1.9 billion trade surplus with other countries. Belarus's deficit in trade with Russia stood at $4.7 billion in 2004. JM[29] UKRAINIAN PARLIAMENT CONFIRMS TYMOSHENKO AS PRIME MINISTER...The 450-seat Verkhovna Rada on 4 February approved Yuliya Tymoshenko as Ukraine's new prime minister with 373 votes in favor, Channel 5 reported. To comply with the constitution, Tymoshenko immediately gave up her parliamentary mandate to assume her new job. JM[30] ...AND PRESIDENT APPOINTS NEW CABINETShortly after the confirmation of Tymoshenko as prime minister in the Verkhovna Rada hall, President Viktor Yushchenko signed decrees appointing a new cabinet of ministers, Channel 5 reported. The cabinet includes Anatoliy Kinakh as first deputy prime minister; Oleh Rybachuk and Mykola Tomenko as deputy prime ministers; Yuriy Lutsenko as interior minister; Serhiy Teryokhin as economy minister; Borys Tarasyuk as foreign minister; and Anatoliy Hrytsenko as defense minister. JM[31] UKRAINIAN PREMIER-DESIGNATE PRESENTS GOVERNMENT PROGRAM IN PARLIAMENTPrior to the vote approving her as prime minister, Yuliya Tymoshenko addressed the Verkhovna Rada on 4 February, presenting the "Toward the People" program that she wants to implement with her new cabinet, Channel 5 reported. The program includes no economic indicators or operational time frames but outlines a general vision of reforms to boost the welfare of Ukrainians, meet European standards in state institutions, and create a civil society. Tymoshenko appealed to the lawmakers to vote on the program shortly after her anticipated approval as prime minister and the announcement of the composition of a new cabinet of ministers by President Viktor Yushchenko. The approval of a cabinet's program protects the prime minister from being dismissed by a parliamentary vote of no confidence during the following year. JM[32] UKRAINIAN PRESIDENT PLEDGES TO RUN HONEST GOVERNMENTAhead of a parliamentary debate on the approval of Tymoshenko as prime minister on 4 February, President Yushchenko told the Verkhovna Rada that the country's new government will neither "steal" nor give or accept bribes, Channel 5 reported. "We will conduct a transparent, honest, and responsible policy," Yushchenko said, stressing that there will be "nationwide monitoring" of governmental officials on a monthly basis. He also promised to conduct honest privatization. "Those properties that were stolen will be returned to the state, starting with the Kryvorizhstal [metallurgical giant]," Yushchenko said. He called on the lawmakers to endorse his nomination of Tymoshenko as the new prime minister. "I trust her and I believe that she will be able to organize the work of a national government. I trust her as millions of people [in Ukraine] trust her," Yushchenko said. JM[33] UKRAINIAN LAWMAKERS CONTINUE TO REGROUPParliamentary speaker Volodymyr Lytvyn announced on 4 February that one deputy left the Social Democratic Party-united (SDPU-o) parliamentary caucus while two others joined the Socialist Party caucus, Interfax reported. Lawmakers in the Verkhovna Rada have been regrouping for the past several weeks, eroding the caucuses that supported former Prime Minister Viktor Yanukovych's cabinet, most notably the SDPU-o faction led by Viktor Medvedchuk and the Ukraine's Regions faction representing the Party of Regions headed by Yanukovych. The biggest beneficiary of these moves is the People's Agrarian Party led by Lytvyn, whose caucus has almost doubled in the past two months. On the morning of 4 February the array of forces in the Verkhovna Rada was as follows: Our Ukraine -- 101 deputies; the Communist Party -- 59; Ukraine's Regions -- 54; the People's Agrarian Party -- 33; SDPU-o -- 23; the Socialist Party -- 24; United Ukraine -- 22; the Yuliya Tymoshenko Bloc -- 19; Democratic Ukraine -- 16; Soyuz -- 15; Industrialists and Entrepreneurs/People's Will -- 15; Democratic Initiatives -- 14; Center -- 12; and People's Democratic Party-Republic -- 10 deputies. JMSoutheastern Europe [34] PEACE IMPLEMENTATION COUNCIL FOR BOSNIA MEETS IN BRUSSELSThe political directors of the steering board of the Peace Implementation Council (PIC) for Bosnia-Herzegovina met in Brussels on 3 February, according to a press release of the Office of the High Representative in Sarajevo. Under the chairmanship of High Representative Paddy Ashdown, the board told the Bosnian delegation -- which included Prime Minister Adnan Terzic and Republika Srpska President Dragan Cavic -- that "inadequate cooperation with the [war crimes tribunal in The Hague] is now the major obstacle standing in the way of [Bosnia's] progress towards the European Union and NATO." The board also identified "fundamental systemic weaknesses built into the law-enforcement and security structures in Bosnia and Herzegovina, and in particular the Republika Srpska." At the same time, it welcomed the reforms in the taxation system in Bosnia as important steps to reach a Stabilization and Association Agreement with the EU. The PIC is the top body charged with overseeing the 1995 Dayton peace agreements. It is made up of 55 countries and international organizations. UB[35] EUROPEAN PARLIAMENT ADOPTS RESOLUTION ON WESTERN BALKANS...The European Parliament's Foreign Affairs Committee unanimously adopted a resolution on the western Balkans on 2 February that calls on the EU to develop a clearer strategy for the Balkans and provide a step-by-step agenda, according to a European Parliament press release. The parliamentarians called on the western Balkan countries to improve the coordination of the regional infrastructure. They also underscored that these countries "could facilitate EU integration more by fulfilling certain conditions, such as cooperating with the International Criminal Tribunal on Yugoslavia in The Hague, favoring the return of refugees, actively fighting corruption and organized crime, and respecting human and minority rights." UB[36] ...OUTLINING PRIORITIES FOR BOSNIA, SERBIA AND MONTENEGRO, AND ALBANIA...The Foreign Affairs Committee expressed its concern over Bosnia's continuing political problems and its precarious stability, according to the press release. It also called for a quick handover to the war crimes tribunal of former Bosnian Serb leaders Ratko Mladic and Radovan Karadzic (see "RFE/RL Newsline," 2 February 2005). The committee members said that within the next two years, a viable and "mutually satisfactory" solution for the problems of the state union between Serbia and Montenegro must be found (see "RFE/RL Newsline," 30 December 2004 and 21 and 31 January 2005). Recognizing that future decisions on Kosova will have "political implications for Serbia," they called on Belgrade and Prishtina to engage in a cooperative dialogue (see "RFE/RL Newsline," 3 February 2005). The parliamentarians also expressed concern over the political climate, the administrative capacity, organized crime and corruption, as well as the treatment of minorities, in particular the Greek community, in Albania. UB[37] ...AND CAREFULLY SUPPORTIVE OF CROATIA AND MACEDONIAN EFFORTS TO JOIN EUThe Foreign Affairs Committee resolution said the European Parliament members are looking forward to negotiations on Croatia's EU membership, warning, however, that Croatia, too, must cooperate with the Hague-based war crimes tribunal, guarantee fair domestic war-crimes trials, settle its border dispute with EU-member Slovenia, and make greater efforts for the return of refugees (see "RFE/RL Newsline," 1, 2, and 3 February 2005). The parliamentarians acknowledged that interethnic relations in Macedonia have stabilized since the failed referendum against the government's redistricting plans. They called on the EU to support the decentralization of the Macedonian state administration with special programs (see "RFE/RL Balkan Report," 4 February 2005). UB[38] INDICTED FORMER SERBIAN GENERAL ARRIVES IN THE HAGUEFormer army General Vladimir Lazarevic, who had voluntarily surrendered to the Serbian authorities, arrived at the prison of the international war crimes tribunal in Scheveningen near The Hague on 3 February, RFE/RL's South Slavic and Albanian Languages Service reported. Lazarevic is charged with war crimes committed during the Kosova war in 1999 (see "RFE/RL Newsline," 28 January 2005). Zoran Loncar, a member of Serbia's national council for cooperation with the tribunal, told the BBC's Serbian Service on 3 February that he hopes that two other indicted former generals, Sreten Lukic and Nebojsa Pavkovic, will follow Lazarevic's example and surrender voluntarily. UB[39] KOSOVAR SERBS CALL ON BELGRADE TO FIND COMMON POSITIONOliver Ivanovic, who heads the Serbian List for Kosovo and Metohija, told RFE/RL's South Slavic and Albanian Languages Service in Prishtina on 3 February that he expects Serbian President Boris Tadic, Prime Minister Vojislav Kostunica, and Kosovo Coordination Center head Nebojsa Covic to come forward with a common position over the question whether the Kosovar Serbs should participate in the Kosovar institutions or not. Ivanovic said a lot of damage has been done by the different positions and recommendations coming from Belgrade. Unnamed members of the Serbian List said their participation in the Kosovar institutions depends on the support of the authorities in Belgrade. Dragisa Krstovic, however, who is also a member of the list, said that nothing can be achieved by boycotting the Kosovar institutions, adding that the list will lose its credibility before the international community. In a 2 February statement, the international Contact Group on Kosova called on the Kosovar Serbs to give up their boycott of the Kosovar institutions (see "RFE/RL Newsline," 25 and 26 January and 3 February 2005). UB[40] ROMANIAN PRESIDENT DENIES ATTEMPTS TO REPLACE TELEVISION HEAD...President Traian Basescu denied on 3 February that he is in any way involved in alleged attempts to bring about the dismissal of Romanian Television (TVR) President Valentin Nicolau, Romanian dailies reported the next day. Basescu ordered direct phone lines to TVR from his office and from the government to be cut in reaction to repeated broadcasts the day before of Nicolau protesting the alleged attempt. Basescu called the protest a "denigration campaign" aimed at "eroding my credibility." He said Nicolau, who is known to have close links to the opposition Social Democratic Party (PSD), has suddenly "become a great champion of press freedom" but forgot his "obligation to check the veracity of the story," AP reported. MS[41] ...AS DO SENDER, RECIPIENT OF MESSAGEJournalist Radu Calin Cristea said on 3 February he was "dismayed" to realize that a private e-mail sent by him to presidential adviser Claudiu Saftoiu reached the AM Press news agency and was distributed by that agency to Romanian newspapers the previous day, Mediafax and Romanian dailies reported. Cristea, a former RFE/RL employee, wrote in the message to Saftoiu that after serious consideration, he decided he lacks the managerial skills needed to be TVR president. Cristea denied on 3 February that Saftoiu had offered him the job, Mediafax reported. He said the possibility was only raised in theory, in case parliament rejects the TVR president's annual report, which would automatically lead to Nicolau's dismissal. Saftoiu also denied the allegation. The opposition PSD called the alleged offer "an inadmissible encroachment" on the law and on "the democratic division of powers" between the executive and the legislature. The Greater Romania Party called on President Basescu to dismiss Saftoiu. MS[42] ROMANIAN PRESIDENT CALLS FORMER PARTY TO ORDER...President Basescu on 3 February criticized a letter signed by 17 members of the Democratic Party calling on parliamentary deputy Cosmin Gusa to run for the post of party chairman, Mediafax reported. Basescu said the Democratic Party has survived in opposition because it never allowed "cliques" to exist in the party. He reminded party members that on his resignation as chairman after his December election as president, he backed Emil Boc as his successor. Gusa said in reaction that Basescu is following the "highly noxious" example of intervening in party affairs set by former President Ion Iliescu. Also on 3 February, the Democratic Party's caucus in the lower house replaced Gusa with Cristian Radulescu as caucus leader. Gusa was forced to step down because, according to party statutes, he has not been a member of the party long enough to serve in that position. He joined the party in January 2004 after leaving the PSD, where he had served as secretary-general. MS[43] ...AS LIBERALS TORN BY CONFLICTFormer National Liberal Party (PNL) Deputy Chairman Viorel Catarama announced on 3 February that he is considering challenging PNL interim Chairman and Prime Minister Calin Popescu-Tariceanu for the post of party head, Mediafax reported. A PNL congress to elect the party's leadership takes place on 4-6 February. Catarama said he will run for the post if the congress endorses his proposal for merging the PNL with the extraparliamentary National Peasant Party Christian Democratic (PNTCD) and for electing the leadership individually, rather than as a chairman-proposed team. Catarama also accused Popescu-Tariceanu of having personally profited from the collapse of the National Investment Fund (SAFI) in 1996. He said the prime minister made a $54,000 profit from speculating with SAFI investments. Catarama was dropped from the PNL lists for parliament in 2004 because his image suffered as a result of SAFI's collapse. PNL spokesman Eugen Nicolaescu said that unlike Catarama, the prime minister was not a member of the SAFI executive board. Moreover, Nicolaescu added, Popescu-Tariceanu was among those investors who lost money as a result of the collapse. MS[44] TIRASPOL REJECTS MOLDOVAN ACCUSATIONS OF MILITARY BUILDUP...Oleg Gudamo, the Transdniestrian representative on the Joint Control Commission that oversees the truce in the security zone separating the region from Moldova, denied on 3 February that Tiraspol is concentrating military forces on the Dniester River, Flux reported, citing Tiraspol's official Olivia Press. Gudamo said the Moldovan government's statement of 1 February is unfounded and added that it is Chisinau rather than Tiraspol that is building up forces in the security zone (see "Moldovan Government Issues Factually Correct Exaggeration," rferl.org, 3 February 2005). Gudamo also called on Russia to increase the number of its observers in the security zone in response to the Moldovan government's statement. MS[45] ...AS RUSSIA ACCUSES MOLDOVA OF DELIBERATELY BLOCKING NEGOTIATIONSIn a statement issued on 3 February, the Russian Foreign Ministry said Chisinau "is persistently continuing its artificial blockade of the international mediators' effort to bring about a resumption of the dialogue [between Moldova and Transdniester] and the negotiation process," Infotag reported. The statement said the Moldovan government's 6 January decision to allow diplomats to cross into Transdniester only if they carry a permit from the Moldovan Foreign Ministry is "fraught with the danger of [bringing about] destabilization." It also called the Moldovan assurances that such permits will be issued hassle-free as "empty, unsubstantiated promises" (see "RFE/RL Newsline," 3 February 2005). MSSouthwestern Asia And The Middle East [46] AFGHAN WASHINGTON ENVOY HAILS BUSH'S MESSAGEIn a 3 February press release, Afghan Ambassador to the United States Sayyed Tayeb Jawad hailed U.S. President George W. Bush's expression of support for liberty in his State of the Union address. "I appreciate President George Bush's words of praise for liberty, elections, and democracy in Afghanistan," Jawad said. The Afghan envoy added that Afghanistan's October elections were a clear testament to Bush's stand to uphold freedom and replace hatred with hope. "Today, Afghanistan is emerging as a model of success of international cooperation. We appreciate the United States' commitment to stand with us to see the freedom journey through," Jawad added. AT[47] CANADA SUPPORTS AFGHAN HUMAN RIGHTS REPORTIn a 3 February press release, the Canadian Embassy in Kabul supported the Afghan Independent Human Rights Commission's (AIHRC) report calling for a special court to prosecute those who perpetrated rights abuses in Afghanistan in recent decades (see "RFE/RL Newsline," 1 and 3 February 2005), Radio Afghanistan reported. Ottawa stands ready to assist the Afghan people to achieve social justice and hails the report as a very significant step in that direction, the statement added. Canada urged the international community and the Afghan government to pay attention to the recommendations of AIHRC. When asked by the Bakhtar News Agency whether Canada would hand over any Afghan residing in Canada charged with crimes against humanity, an unidentified spokesman for the embassy said that while Afghanistan and Canada do not have an extradition agreement, Ottawa would "act in accordance with international conventions," Radio Afghanistan added. AT[48] ISLAMABAD REJECTS U.S. MILITARY CLAIMS ON DIRECTING FIRE FROM AFGHANISTANPakistan on 2 February rejected claims made by a U.S. military official that the country is helping U.S. forces stationed in Afghanistan to aim artillery fire against militants across the border in Pakistan, the Karachi daily "Dawn" reported on 3 February. Pakistani military spokesman Major General Shaukat Sultan said that remarks made by U.S. Colonel Cardon Crawford, director of operations for the U.S. military command in Afghanistan, were "baseless" and had "no truth," AFP reported on 2 February. Earlier, Crawford told reporters in Washington that Islamabad took a "huge step forward" in its cooperation with U.S. forces when "the Pakistanis have adjusted our artillery fire into the Pakistani side of the border to go after any coalition militias." According to Sultan, U.S.-Pakistani cooperation is "in terms of intelligence sharing." AT[49] ALLEGED ISRAELI SPY SENTENCED IN IRANRevolutionary Court chief Ali Mobasheri said on 3 February that an Israeli spy has received a 10-year prison sentence, ILNA reported. Mobasheri said this case is distinct from that of the nuclear spies. Intelligence and Security Minister Hojatoleslam Ali Yunesi announced in December that Iran has arrested more than 10 "nuclear spies" -- some employed by the Atomic Energy Organization and others were military officers -- who were allegedly working for the U.S. Central Intelligence Agency and Israel's Mossad (see "RFE/RL Iran Report," 27 December 2004). BS[50] SUPREME LEADER MEETS WITH IRANIAN HAJJ OFFICIALSSupreme Leader Ayatollah Ali Khamenei met on 3 February with Hojatoleslam Mohammad Mohammadi-Reyshahri, the supreme leader's representative to the hajj pilgrimage, and other officials, IRNA reported. Reyshahri said Muslims' knowledge about and interest in Iran's Islamic revolution was increasingly evident at the pilgrimage. BS[51] GENERAL ELECTRIC RENOUNCES FUTURE IRAN ORDERSGeneral Electric (GE), which makes machinery that can be used in the petrochemical sector, as well as medical equipment, announced on 2 February that it will not accept new orders from Iran, Reuters reported. GE public affairs chief Gary Sheffer said, "Senior management and the board decided in mid-December to discontinue taking new orders because of uncertain conditions relating to Iran." GE cited pressure from the U.S. government, Radio Farda reported. GE's decision comes on the heels of announcements from BP and Halliburton that they are pulling out of future business with Iran. Dan Katz, chief counsel to U.S. Senator Frank Lautenberg (Democrat-New Jersey), said, "We're seeing a turnaround by a number of U.S. companies operating in Iran," AP reported. Lautenberg has objected to U.S. companies exploiting legal loopholes to work in Iran. He also said, "When American companies do business with Iran they are helping the Iranians create revenue that is funneled to terrorists." BS[52] IRANIAN CLERIC OPPOSES THEOCRACY FOR IRAQDissident cleric Hojatoleslam Mohsen Kadivar said in a 2 February interview that the Iraqi people should not recreate the system of Islamic government (Vilayat-i Faqih) that exists in Iran, Reuters reported. "I think the Iraqis can make what we wanted to create but were unsuccessful: a real Islamic Republic," Kadivar said. "By that I mean a republic with Islamic values, democracy with Islamic values...[where] the clergy has no special rights." Kadivar continued, "If they have a good government with Islamic democracy and without any special or divine rights for the clergy, the Iranian government won't be able to justify its situation to the Iranian citizens." Radio Farda noted that Kadivar is not alone in his views; Ayatollah Hussein Ali Montazeri-Najafabadi expressed similar views in an earlier interview with Reuters. Kadivar said adopting the Vilayat-i Faqih system after the revolution was a mistake, because "we replaced a kingdom with an Islamic kingdom." Kadivar said that Supreme Leader Ayatollah Ali Khamenei does not have the religious credentials of his predecessor, Ayatollah Ruhollah Khomeini, so he "relies on the judiciary, the security forces, to fill that gap." BS[53] IS IRANIAN INTELLIGENCE MINISTRY REFORM PERMANENT?President Hojatoleslam Mohammad Khatami met with senior Intelligence and Security Ministry officials on 1 February and expressed his pride and happiness with their performance, IRNA reported. He noted that the ministry contributes to the public's sense of security, and only spies and traitors need to fear it. Former Iranian parliamentarian Ahmad Salamatian, who now lives in Paris, told Radio Farda that Khatami is contrasting the ministry's lawful behavior now with its excesses in the past, such the serial killings of dissidents and economic corruption. This also contrasts the current leadership of Hojatoleslam Ali Yunesi with that of Ali-Akbar Fallahian-Khuzestani, Salamatian told Radio Farda. The big question, Salamatian said, is if the ministry will resume its old ways when the Khatami presidency ends? Will the reforms that Khatami and Yunesi brought about in the ministry remain? BS[54] EARLY IRAQI ELECTION RETURNS GIVE SHI'ITES STRONG LEAD...The first partial returns from Iraq's 30 January national elections have given a commanding lead to the United Iraqi Alliance, a candidate list endorsed by Shi'a Grand Ayatollah Ali al-Sistani, international news agencies reported on 3 February. Election officials cautioned, however, that the results -- which came from Baghdad and five predominantly Shi'ite provinces in southern Iraq -- were neither large nor representative enough to indicate a national trend. Of the 1.6 million votes counted and certified so far, the United Iraqi Alliance won 1.1 million, AP reported on 3 February. In second place was the Iraqi List, headed by Prime Minister Iyad Allawi, a secular Shi'ite, which won more than 360,500 votes. The partial results came from 10 percent of Iraq's 5,200 polling centers, AP reported. BW[55] ...AS OFFICIALS PROBE WHETHER SECURITY HARMED SUNNI TURNOUT...Election officials are investigating whether strict security measures may have deprived Iraqis in Mosul and the surrounding Ninevah Governorate of their right to vote, AP reported on 3 February. The Iraqi Independent Election Commission sent a team to Mosul on 3 February to investigate allegations that some polling stations never opened or ran out of ballots (see "RFE/RL Newsline," 3 February 2005). According to Safwat Rashid, an official with the election commission, U.S. and Iraqi forces initially allowed the Ninevah Governorate to open just 90 of its 330 polling stations, AP reported. Over the course of election day, with security exceeding expectations, more polling places were opened, but officials were not able to get supplies to them. "We tried to send the boxes and ballot papers to those places," AP quoted Rashid as saying. "In some places we succeeded, and unfortunately in some other places due to transportation and other things, we failed," Rashid added. BW[56] ...AND KURDS ANNOUNCE CHOICE FOR TOP GOVERNMENT POSTSJalal Talabani will be the Kurdish candidate for prime minister or president if a Kurd is chosen to hold either position, Reuters reported on 3 February. Talabani's main rival, Mas'ud Barzani, announced the decision. "We have agreed that Talabani is going to be the Kurds' candidate for one of the key posts in Baghdad, either the presidency or the prime minister," Kurdistan Democratic Party leader Barzani said. "We will not accept other than that." Talabani leads the Patriotic Union of Kurdistan, the other main Kurdish political party. The two parties, which fought each other in the 1990s, formed an alliance for the Iraqi elections. Together they represent about 90 percent of people in the Kurdish northern regions of Iraq. Turnout in the 30 January election was high among Kurds, who represent about 20 percent of Iraq's 27 million people. They are widely expected to be key power brokers when the new Iraqi government is formed. BW[57] INTERIOR MINISTER SAYS AL-ZARQAWI WAS NEARLY CAPTURED...Interior Minister Falah al-Naqib said that U.S. and Iraqi forces have come close to capturing Jordanian-born terrorist Abu Mus'ab al-Zarqawi in the past two weeks, international news agencies reported on 3 February. "We are following him," Reuters quoted al-Naqib as saying, referring to al-Zarqawi, Al-Qaeda's self-declared representative in Iraq. "I think we missed him twice or three times, but hopefully next time we will be able to capture him, al-Naqib added. "I think we arrived a bit late. Maybe we missed him by one hour.... You know, he is not staying in one place. He is moving from one area to another. So, we will get him -- very soon, hopefully," Naqib added, but declined to provide further details. BW[58] ...AND INSURGENT VIOLENCE FLARES UP AGAINInsurgent violence surged following comments by U.S. President George W. Bush that the United States will give Iraqi forces greater responsibility for fighting rebels, international news agencies reported on 4 February. After a brief lull after the 30 January elections, at least 27 people were killed in attacks and fighting since Bush made the comments in his 2 February State of the Union address, international news agencies reported on 4 February. Since the speech, rebels have killed a total of 16 Iraqi soldiers in separate attacks, including 12 killed in a 2 February attack in Kirkuk (see "RFE/RL Newsline," 3 February 2005). Insurgents also killed at least five Iraqi civilians and one Iraqi police officer. In the town of Al-Mudhiryah, south of Baghdad, villagers killed five insurgents who had attacked them for voting in the elections, AFP reported on 4 February, citing police sources. BWEnd Note [59] WHAT HAS YUSHCHENKO PROMISED UKRAINIANS?By Jan MaksymiukThere had been four or five "serious" candidates for the post of the Ukrainian prime minister and at least as many "potential" ones mentioned in the Ukrainian media before President Viktor Yushchenko designated Yuliya Tymoshenko for the job on 24 January, shortly before his trip to meet Russian President Vladimir Putin in Moscow. Many have seen this nomination as Yushchenko's gesture of defiance in the face of Moscow's apparent dislike of Tymoshenko (she is still on Russian prosecutors' list of wanted people). However, there were also analysts who argued that Tymoshenko is the best person to run a new Ukrainian cabinet because of her immense working energy and political optimism. Indeed, judging by the massive load of Yushchenko's election promises, the new government will have to possess first and foremost extraordinary vigor and self-confidence in order to begin delivering on what Yushchenko promised his compatriots in last year's presidential campaign. To make his election manifesto -- "Ten Steps Toward the People" -- more comprehensible and digestible for ordinary Ukrainians, in November Yushchenko publicized a dozen draft decrees that he pledged to sign immediately after his inauguration. Propagandistically, it proved to be a very good move, which was subsequently emulated by his main presidential rival, then Prime Minister Viktor Yanukovych. The texts of these decrees are still available at Yushchenko's personal website (http://www.yuschenko.com.ua). They have also been recently republished or summarized by many Ukrainian media outlets, primarily those unsympathetic to or critical of Yushchenko, with ironic comments suggesting that he now may not be so eager to remember them. True or not, Ukraine's new president indeed seems to be presently concerned more with decrees appointing and sacking state officials than those shaping a new socioeconomic system in the country. What has Yushchenko pledged to change in the socioeconomic sphere in order to make people feel that his presidency will contribute to a palpable and fast improvement of their lives? First of all, Yushchenko pledged to maintain the lavish increase in pensions made in September 2004 by then Prime Minister Yanukovych. The move, which was clearly intended to win over pensioners, doubled the minimum monthly pension from 137 hryvnyas to 284.6 hryvnyas ($53.6) and appropriately increased all other pensions for more than 11 million people. At that time, the pension jump increased the pension fund's monthly expenses by 1.1 billion hryvnyas ($207 million) to 4.1 billion hryvnyas. Yushchenko promised that his first presidential decree will establish the subsistence minimum for 2005 at 423 hryvnyas ($80) per month, additionally stipulating that the minimum monthly wage and pension should not be lower than the subsistence minimum. In fact, this promise was already endorsed by the Verkhovna Rada in October, when 250 lawmakers voted to pass a bill increasing the average monthly subsistence minimum from 362 hryvnyas to 432 hryvnyas as of 2005. The bill will put an additional burden on the 2005 budget, comparable to that connected with the pension hike in September. Moreover, Yushchenko pledged to compensate Ukrainians for their Soviet-era savings that were lost or devalued after the breakup of the Soviet Union. According to one of Yushchenko's draft decrees, the state is to immediately recognize those savings as its internal debt and begin repaying it with "additional budget revenues" and money obtained after a review of some dishonest privatizations. The list of dishonest privatizations is unknown but this review is sure to include the notorious privatization of the Kryvorizhstal metallurgical giant; the state is expected to obtain an additional $500 million either from the current owners of Kryvorizhstal -- oligarchs Viktor Pinchuk and Rynat Akhmetov -- or from new investors if the previous privatization deal is canceled altogether. Last but not least, Yushchenko promised to increase the onetime social payment to the parents of a newborn child, from the current 725 hryvnyas to 8,460 hryvnyas (that is, almost 12-fold). If Ukraine's Orange Revolution is followed by a baby boom -- as some Ukrainian commentators have already predicted -- the parents are likely to remain sympathetic to Yushchenko for more than one political season. Where is Yushchenko going to get the money to finance his generous social payments? An exact economic plan of the new government has not yet been revealed but there are some clues in his election manifesto. According to Yushchenko, some 55 percent of the country's economy remains in the shadow sector. Therefore, Yushchenko intends to stimulate the process of reducing this sector as much as possible. The stimulation may include extensive tax amnesties and tax-burden reductions. Second, Yushchenko intends to cancel preferences in paying value-added tax by investors in the so-called free economic zones. Yushchenko expects that this move will bring an additional 5 billion hryvnyas ($940 million) into the state coffers annually. Yushchenko and Tymoshenko have already proven that their cooperation in the government can be fruitful and appreciated by ordinary voters. When Yushchenko was prime minister and Tymoshenko his deputy for energy issues in 2000, they managed to divert some "additional revenues" from the shadow economy by skillful fiscal and administrative management -- the results of this were immediately felt by millions of Ukrainians. They will now have to use their skills, as well as their enhanced political prerogatives, to a much greater extent. The stakes -- which include not only the political fate of a new cabinet, but also the geopolitical destiny of the country as a whole -- are now incomparably higher. Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next Article |
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