Issue No. 29O - September 30, 2002
 

Contents:

1. Bosnia and Herzegovina:  NATIONALISTS ON RISE
    by Radenko Udovicic

2. Slovakia:  RESULTS GOOD BUT FUTURE UNCERTAIN
    by Zoltan Mikes

3. Belarus:  RUSSIAN RUBLE WILL BE INTRODUCED IN JANUARY?
    by Paulyuk Bykowski
 

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Bosnia and Herzegovina: NATIONALISTS ON RISE
by Radenko Udovicic

        The last polls before general elections in Bosnia and Herzegovina on October 5th show that support for the so-called hard-line nationalist parties is growing. It is a significant change of voter sentiment compared to earlier polls showing that moderate political forces in the Bosnia and Herzegovina Federation (B-H) could remain in power. However, data of the National Democratic Institute (NDI), the strongest political research organization in Bosnia, as well as other data from numerous media, show that the Bosniak party, Party of Democratic Action (SDA), has reached the same level of support as the ruling Social Democratic Party (SDP). Regarding Croatian voters, analyses claiming that the moderate Work for Progress could endanger the nationalist HDZ's standing are wrong. Polls show that the HDZ and its presidential candidate will win the votes of over 50 per cent of Bosnian Croats.

        In the other entity, the Serb Republic, the Serb Democratic Party (SDS) [formerly led by wartime Serb leader Radovan Karadzic] is still in the lead, although the Party of Independent Social Democrats (SNSD), led by former reformist prime minister Milorad Dodik, has inched closer.

        Although polls aren't always a relevant indicator of popular sentiment in Bosnia, almost nobody is doubting that nationalists in the Bosniak part of the Federation have been infused with a new vigor. The decline in the ruling Alliance for Change's popularity is not so much due to them as to reasons of internal politics and factors out of their control. In fact, the ruling Alliance implemented significant reforms, strengthened state institutions, and helped a bit towards making decentralized Bosnia and Herzegovina a modern state. The Alliance's introduction of many systematic laws allowed Bosnia to become a member of the Council of Europe. Tax income almost doubled, which increased the stability of public institutions and infrastructure in major cities. Even wages were increased and unemployment was lowered. However, all of it proved not to be enough.

        In order to get a better grasp of the current situation, one must understand that the Alliance for Change is a big coalition of nine variegated political parties that, after ten years, were finally able to remove from power the two nationalist and intolerant parties, SDA and HDZ, that were partly responsible for the war in Bosnia. Two strongest Alliance parties are the Social Democratic Party (SDP) and the Party for Bosnia and Herzegovina. The Croatian component in the government is represented by minor Croatian parties that supplanted the HDZ in power, although the latter won as much as 70 per cent of Croatian votes. A myriad of clashing interests within the ruling coalition, however, disturbed the coalition's unity, causing a loss of public
confidence. . . .

        After the September 11 terrorist attacks, Bosnia and Herzegovina joined the coalition fighting terrorism. Considering the fact that a majority of the Bosnian population is made up of Bosniaks, who are Muslims, the American government began to pay greater attention to Bosnia. There was great pressure to arrest naturalized Bosniaks of Arabic origins who sided with Bosniaks during the war, later remaining in the country with Bosnian citizenship. Besides them, Bosnian government also cracked down on various local and foreign Islamic organizations that were accused of links with international terrorist network, some with more and some with less evidence.

        However, the SDA, with its strong nationalist and even religious agenda, made excellent use of the situation. It cried out that the current government, and the leading party, the leftist SDP, was betraying [Bosniak] national interests and has involved in an anti-Muslim campaign. Of course, the SDA states that it is not against cooperation with the U.S. and its fight against terror, but it thinks that reaction of Bosnian government was too fierce. The SDA stressed especially that the authorities, including the international community, are arresting Muslims whose guilt is unproven while true terrorists like Radovan Karadzic and Ratko Mladic, indicted for war crimes, are still hiding in Bosnia. This criticism disregarded the fact that it is not possible for federal institutions to catch these two individuals and that the international community did not feel it had a special stake in arresting them, since it considers them to be a local problem that is not threatening the Western Hemisphere. A recent statement of American president George Bush said that Slobodan Milosevic could not be compared with Saddam Hussein because he represented a danger to his neighbors, but not to the whole world. Bush also added that Milosevic had not caused so much damage to his neighbors as Hussein to his. This makes clear how much western countries, especially the U.S., are frightened of Islamic terrorism and why Bosnian authorities had to quickly deal with all suspicious persons close to fundamentalist Islamic leanings in order to maintain good relations with America.

        The SDA used similar rhetoric when the current government tried to deal with crime and corruption and tried to solve the mystery of why some individuals earned enormous profits during and after the war. The first victims of the government's campaign were former officials of the AID, the secret police. They were arrested six months ago under suspicion that they had trained their members to attack some foreign targets as well as political opposition in Bosnia. Recently, the media got hold of information that an investigation was going to start also against some former politicians who directed money from abroad (mostly from Islamic countries) that was intended for defense and purchase of weapons and put it into their own pockets. All of these suspects are SDA members, which the party then used to base its attacks that the government was acting according to partisan political motives. Both the SDA and the media close to it attacked the SDP, saying that the social democrats wanted to blacken the war defense and the people who fought for the survival of Bosnia.

        SDP coalition partners contributed to this SDA campaign. The Party for B-H and the Liberal Democratic Party (LDS), two Bosniak parties in the ruling coalition, are now insisting that the government let go persons arrested for preparing terrorist activities and that it also drop the investigations against former politicians and soldiers. These parties, which participated in all of the government's decisions on these actions, have now left their partner, the SDP, alone in order to score some political points before the elections. Behind this distancing was Haris Silajdzic, former president of the Party for B-H, who had withdrawn from politics, but suddenly re-appeared recently as a candidate to be the Bosniak member of the tri-partite Bosnian presidency. Silajdzic was once a close associate of Alija Izetbegovic, the long-time Bosniak leader and SDA president. And many believe Silajdzic is a Trojan horse who is destroying the Alliance for Change from within and laying the foundations for future cooperation between the Party for B-H and SDA.

        The rise in the nationalist political option both in the Federation B-H and the Serb Republic was aided by Vojislav Kostunica, the Yugoslav president now running for president of Serbia. At an election rally, he said that the "Serb Republic is only temporarily removed from Serbia." Nationalist Bosniak parties used the statement to launch fierce attacks on Yugoslav authorities, accusing them of being equivalent to Milosevic's regime. The nationalist parties in the Serb Republic used the reaction of Bosniak parties to prove that Bosniaks were striving to eliminate the Serb Republic. Although Kostunica later explained that his statement wasn't directed at changing borders but at strengthening economic and cultural ties between two parts of the Serbian nation, the nationalist rhetoric within Bosnia, muted at the beginning of the election campaign, once again flared up.

        An especially sensitive issue is the Bosnian constitution. Bosnia, which is based on two entities, is joined in a loose federal state. Many Bosniak parties demand that the Serb Republic be gotten rid of, since Bosniaks and Croats are unequal there and cannot compete. The response of the Serbian side is to transfer as little authority as possible to the central government given the Bosniak aim of creating a unitarian state ruled by them. It is clear that this exchange of nationalist rhetoric has caused people to line up behind hard-line national parties. The appeal of Zlatko Lagumdzija, the SDP's leader, that one should strengthen state institutions and show that Bosnia is a strong country that does not fear calls for border changes went unnoticed among the mass of war cries.

        Before the last elections, the international community gave a strong, almost open support to the SDP, which it considered to be a true partner in European integration. This time there is no open support. International organizations in charge of implementing the peace accord in Bosnia mostly stress the importance of voter turnout and voting for "those who will implement reforms." Some think that this general construction means support for the current, allegedly reformist, government, but it is clear that this time the international community is ready to accept a government once again made out of the war trio of the SDA, the SDS, and the HDZ. Still, one cannot conclude anything before election results --- and the sentiments of the international community towards them --- are in. Perhaps, they may even try to solve new problems in the Balkans all at once, putting pressure on countries to behave according to European norms whoever is in power.
 
 

Slovakia:  RESULTS GOOD BUT FUTURE UNCERTAIN
by Zoltan Mikes

        After Slovakia's elections, it is likely that one problem has been solved: it is probable that the country will become a member of NATO and later also of EU.

        But the victory of the right-wing parties likely to form the government --- backed by a 78-member strong coalition from the Slovak Democratic Christian Union (SDKU), led by the former and likely next prime minister [Mikulas CHECK] Dzurinda, the Christian Democratic Movement (KDH), the Alliance of New Citizens (ANO), and the Hungarian Coalition Party (SMK) --- was also a bitter one.

        On the left side, the Slovak parliament's only traditional left-wing party is now the unreformed Communist Party (KSS), which won a surprising 7 percent of the vote. The communists have a large growth potential to become the main protest party by attracting supporters of leftist parties that did not reach the 5 percent threshold in the elections. The total increase in voters of these communist parties signals that there is a growing number of dissatisfied voters opposing the government who do not see answers in a democratic system. In addition, the Communist Party can also become party of choice for young voters who had no experience with socialism and thus do not fear it. . . .

        On the right side, the elections clearly showed that there is absolutely no growth potential for Meciar's Movement for Democratic Slovakia (HZDS). The party lost over 400,000 voters compared to the last elections, "We have to decide whether we will become a party with 15 percent of the vote and a partner in a coalition or whether we will wait until we lose another 400 000 voters," stated one HZDS politician. Many party leaders began to call for the resignation of Vladimir Meciar as party leader. Time will tell which of these two options will be taken. What is certain, however, is that the HZDS in Slovakia, with or without Meciar, will never be as strong as it was.

        The biggest question for many is what will happen to Smer (Direction), led by Mr. Robert Fico. Smer had the most disappointing outcome of these elections, having had ambitions of being the central party of the next government. Mr. Fico wanted to become prime minister and the party had already divided up posts in the new government. It has ended up in the opposition. It seems that Mr. Fico will survive the dissatisfaction of Smer's members. As a great political leader with visions of gaining power in the next elections already being declared, [he says] Smer will became a traditional left wing party, leaving uncertain who occupies the political center. His vision has a perspective--- he can be joined by voters of another unsuccessful party, the Movement for Democracy (HZD, which split from Meciar's HZDS but failed to reach the 5 percent threshold with just 3.5 percent of the vote. Being on the left, Fico will have to compete with the communists, while the party's "normalization" [as a parliamentary party] may alienate his young protest voters, the base of his support, as now being dull and boring (Smer was the most popular party Among first-time voters).

        Slovak citizens voted for their country's entry into NATO and EU. They know nothing about these two organizations and the discussion about them was kept to a minimum, but the leaders of the government coalition parties made entry into NATO and EU sound like the promised land. Everybody in Slovakia expects that after joining NATO and EU, Slovakia will solve its biggest problems --- no more unemployment and people becoming as rich as their Austrian neighbors. It is likely that most Slovak citizens will be disappointed --- and this can end up as a disaster for governmental parties in the next elections, which will be taken advantage of by Slovakia's two populist and nationalist parties.  In this election, they parted ways and neither entered parliament, but they could once again unite and make success in the next elections over disappointment in the EU and NATO. Given the potential of communists, the presence of HZDS and uncertainty of Smer, it is still possible to predict that Slovakia now has much nicer face than it will have in the future.
 
 

Belarus:  RUSSIAN RUBLE WILL BE INTRODUCED IN JANUARY?
by Paulyuk Bykowski

        December is the deadline for proposals for the formation of a single emission center for the Union State and a draft of the agreement on the use of the Russian ruble as the exclusive legal tender in Belarus before the formation of the emission center. This comes after a September 17 session of the Council of Ministers* of the Belarusian-Russian Union State in Moscow.

        The head of the Belarusian administration, Gennady Novitsky, stated in Moscow that "there is no disagreement over the goal of a single currency but, in actual practice, this will be possible only after genuine economic accord."  He went on to say that, if previous plans for the introduction of a single currency by 2005 had been followed, the faster introduction proposed by Russia would have "required additional efforts." Russian Prime Minister Mikhail Kasyanov responded that "that may still be so, due to the large number of issues."

        On the agenda for the next meeting of the Council of Ministers in December will be the presentation by a Russian-Belarusian commission of draft document on the mission, status and functions of the single emission center of the Union State.  The commission will have to find agreement between the diametrically opposed sides.  The Russians want the money to be printed by the Central Bank of the Russian Federation, but the Belarusians insist on taking an active part in the process and have not agreed to the closure of the National Bank of the Republic of Belarus.

        Belarusian National Bank representative Petr Prokopovich has suggested setting up the single emission center as system made up of the national banks of both countries and an Interbank Currency Council within which the banks would develop financial and credit policies.  Then the national banks of both countries would preserve all the functions set forth in their respective national legislation.  Belarus is prepared to refrain from issuing rubles in cash, but insists on retaining the right to make noncash emissions.

        Should that proposal be accepted, decisions on the size of emissions of the single currency could be made "technically," for example, by granting each participant in the Union State the right to set the size of the emission as a percentage of its gross domestic product.  Then each country would be able to decide independently how to direct the emitted funds.

        Kasyanov objected to the Belarusian proposals, stating that they would compromise the independence of the Russian Central Bank.  He did not comment on how the Russian proposal to liquidate the National Bank of Belarus accords with Belarusian law.

        Aleksei Kudrin, Russian Deputy Prime Minister and Minister of Finance whom Belarusian president Alexander Lukashenko had named as an opponent of Russian-Belarusian integration a week earlier, subjected the Belarusian proposals to more logical criticism at the session of the Union State Council of Ministers, saying that provides no real levers to control the economy and encumbers the decision-making process in joint financial policy.

        Kudrin called the Russian proposal to place the Russian Central Bank in the role of emission center for the Union State more expedient in light of economic conditions and the size of the respective economic bases and gross internal product of the two countries as well as the fact that the Russian ruble will become the single currency.

        After the Council session, Kudrin told journalists that, when the single currency is introduced, "a great load will be placed on the Russian side, since the economic development indicators for Russia are several times those of Belarus" and Russia's international currency reserves are 104 time greater than those of Belarus and the introduction of the single currency will be borne up by the Russian economy and Russian currency reserves.

        At the Council session, chairman of the Russian Central Bank Sergei Ignatiev suggested, seemingly as a concession to the Belarusians, that the Belarusian National Bank preserve its basic functions as a national bank (regulation and supervision of banks, keeping state accounts and making state payments) during the transition period.  But the provision of credit by the Belarusian National Bank and operations with foreign currencies and bonds would have to be under the control of the Russian Central Bank. Another concession offered was the opportunity to place one Belarusian member on the boards of directors of the Russian Central Bank and National Banking Council.

        Besides the single ruble and the number of printing presses needed to make it, harmonization of legislation on customs regulations and taxation were discussed by the Council of Ministers.  Customs tariffs differ between the countries on 1190 import items and 563 exports.  Substantial time was spent on coordinating the two countries' positions on admission to the World Trade Organization.  Strengthening the customs borders was also touched on, in particular, completing construction of two customs checkpoints on the borders with Poland and Ukraine.

        Kasyanov said after the session that trade between the two countries may reach US$10 billion this year, up from US$9.2 billion last year.  This optimism was due to the decision last December to speed up the establishment of equal economic conditions in the two countries.  Kasyanov added that Belarus may become Russia's second largest trading partner, after Germany, trade with which currently reaches US$14 billion.

        The budget for the Union State is to be reduced by 5% next year.  According to Novitsky, this is because it is funded by joint programs, on which less was spent this year.  This final budget will be set at the next session in December.

        As mentioned above, the death sentence on the Belarusian ruble may be signed in December as well.  If a consensus can be reached on the single emission center, the Russian ruble will replace the Belarusian ruble in Belarus in January.
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        *The Council of Ministers is the executive organ of the Union State.  It is made up of a chairman (currently Russian Prime Minister Mikhail Kasyanov), the heads of the administrations of the two countries, the Secretary of State of the Union State (Pavel Borodin), ministers of foreign affairs and economics and finance and heads of the administrative branches of the Union State. The Council of Ministers develops the general policy for the development of the Union State.  It introduces draft bills into parliament (currently the Parliamentary Assembly of the Union of Belarus and Russia), including a proposed budget, and passes resolutions.