Category: News

Distinguished by History Balcerowicz Speaks on the Record of Poland’s Economic Transformation
Polish News Bulletin
November 9, 2004 Tuesday
5 November issue of Rzeczpospolita p. A6-A7
The following is a summary of an interview with Leszek Balcerowicz,
central bank governor, former deputy prime minister (1989-1991,
1997-2000), co-author of Poland’s economic reforms, published in
Rzeczpospolita.
Fifteen years is a round anniversary. Was it really worth starting
in 1989 to see Poland as it is today ? with a strong economy but with
an irritating, idle political scene and great unsolved social problems?
“Where would Poland be today if it was still mired in the swamp of
socialism? We don’t have to look far for an example, it’s just beyond
our eastern border, in Belarus,” says Balcerowicz. “Whoever knows at
least a little of Polish history can have no doubts that it was worth
doing away with the socialist dictatorship. In terms of possibilities,
the post-1989 period has been better than any other during the last
300 years. The problem is now that we started the reforms, but that we
haven’t finished them in several key areas. My satisfaction isn’t full
because I see, for instance, how sharply lower unemployment would be if
faulty solutions weren’t adopted and welfare reforms weren’t blocked. I
know, however, that I had the opportunity to participate in a unique
experience. When, in the 80s, I studied the successes of countries
like Germany or South Korea, I never imagined my studies could ever
be useful otherwise than intellectually. So I feel distinguished by
history. Because I studied the history of economic reforms, I was
aware of the obscurantism and cynicism you have to be prepared for
when reforming your country. So opinion polls or personal attacks
never had any impact on my decisions. I’ve learned to look at politics
through the eye of a naturalist, and you find all kinds of species
in nature. Moreover, the bleak propaganda I find myself subject to
is more than offset by the words of appreciation I keep receiving
in Poland and abroad. The cynicism and obscurantism demonstrated by
some of the participants of Poland’s political life are personally
not a great problem for me, but they worry me for another reason. I’m
afraid people in Poland will allow themselves to be deceived, only
to regret it later. Lukashenka’s new clones keep turning up.”
Poland, Czech Republic, Hungary
What has Poland achieved during the last 15 years? Where is it in
comparison with, for instance, Hungary and the Czech Republic?
“Poland’s GDP grew by 30 percent between 1989 and 2002, compared
with, for instance, an increase of 21 percent in Slovenia, or just 12
percent in Hungary. So in GDP terms, Poland is clearly in the lead.
The same applies to inflation, especially that our starting position
was far more difficult than Hungary’s or the then Czechoslovakia’s.
We’ve made immense progress in healthcare, environmental protection,
tertiary education, and so on.”
Unemployment, on the other hand, is nothing to boast about.
“That’s true, but Poland’s high unemployment is not a result of
reforms, but of their lack, or, worse still, of anti-reforms: a
rigid labour market, high labour charges, an underdeveloped housing
market, and so on. It also needs to be remembered that during the
transformation period Poland saw stronger growth in the working age
population than other countries.”
Poland has also lagged behind Czech Republic and Hungary in terms of
inward foreign investment.
“What counts the most is direct foreign investment. Its cumulated
levels range from $3,700 per capita in the Czech Republic, which is
more than in Chile, through $2,100 in Hungary, to $1,100 in Poland,
which is less than in Slovakia, Estonia, and Slovenia, and roughly
in line with Lithuania.”
That proportion has not been changing. Why?
“I think it’s Poland’s sluggish privatisation. Czech Republic,
for instance, is far more advanced than Poland in the privatisation
of its power industry, where most of the assets have been sold to
foreign investors. Actually, privatisation advanced the most in
the Czech Republic under a socialist cabinet, not when Vaclav Klaus
headed the government. Poland saw a marked slowdown in the pace of
privatisation in the last couple of years, and it’s good that has
now been changing. It’s also worth looking at how our privatisation
policy affects the way Poland is perceived by potential foreign
investors. Another barrier hindering the inflow of direct foreign
investment is the condition of Poland’s road network. The Lithuanians
and the Slovaks made far greater progress in improving their roads than
we did because they weren’t spending as much on welfare as we were.”
Are these differences due to the fact that Polish politicians haven’t
been bold enough?
“Reforms are made by large-format politicians who think ahead and
aren’t afraid to oppose various vested interests. One such politician
was, for instance, Jose Maria Aznar in Spain who speeded up the
reforms by mobilising the public with the prospect of eurozone
accession. Today Spain stands out favourably from, say, Germany in
terms of budget discipline.”
There doesn’t seem to be many such large-format politicians.
“That depends on how the people vote. Today, for instance, Slovakia
is a country to be admired. From a country that was a laggard in
reforms it has transformed into a leader thanks to prime minister
Dzurinda and deputy premier Miklos. Before that, the Slovaks had
Meciar. Their national character hasn’t changed, it’s their political
choices that have. Also those who carried out the reforms in the
Baltic states, first in Estonia and Latvia, and then in Lithuania,
were radical reformers. These were young people who read the right
authors: Hayek, the classic, liberal economists. A good, drastic,
but necessary work was done in Hungary by Lajos Bokros, the finance
minister in the socialist cabinet. He was vilified for that.”
False Comparisons
Overall, Poland compares quite favourably with Hungary or Czech
Republic. How does it compare with the region’s other countries?
“In terms of the improvement in living conditions, Poland is the
post-socialist world’s absolute leader. At the same time, it’s worth
noting that some of the post-Soviet countries have in the recent
years been developing more rapidly than Central Europe. Among these
is Armenia which carried out sweeping reforms thanks to which it has
a very pro-growth system.”
But there’s still a lot of poverty in Armenia. So in what terms is
its system superior?
“The level of poverty is a legacy; it depends on the system’s quality
whether at all and how soon it is going to be curbed. Armenia’s
relation of public spending to GDP is half of Poland’s. As a result,
they have low taxes, and an almost balanced budget. Inflation is also
low; the scope of economic liberty has been greatly extended. I know
no country that’d be an economic tiger and have public finances as
unsound as Poland’s. Lithuania is the country that probably made the
greatest progress in Central Europe in the recent years in terms of
cutting its taxes. And that happened under the ?socialist’ cabinet
of Algirdas Brazauskas.”
What kind of spending cuts did Lithuania make?
“They cut virtually all their expenses. If something like that were
to be done in Poland, probably nine in 10 economists would say that
it might be good in the short-term but over the long-term would cause
demand, and thus the GDP, to collapse. Yet in Lithuania, and earlier
in Estonia and Latvia, it turned out that the drastic spending cuts
had such a favourable impact on consumer and investor confidence and
expectations that private demand grew sharply, and so did the GDP.
Other non-Keynesian mechanisms worked as well, as the NBP’s recent
research shows. In the populist language: the cooling proved to have
been a heating.”
Has Poland made a lot of progress compared with the other countries
in the last 15 years?
“Colossal, especially if you think where we’d be if the system hadn’t
been changed. The economy’s external relations have undergone an
immense transformation. Poland is exporting so many new products
that even the best central planner would never invent. Hayek was
right when he said that the market was a discovery mechanism. Who
is making the discoveries? Millions of free people, entrepreneurs,
and creative employees are discovering their capabilities today. That
is the superiority of a free market economy over an enslaved one.”
But there are still a lot of myths in the perception of the Polish
economy.
“Poland has undergone an immense technological transformation. But
because no government program was ever announced for the purchase of
foreign licences, many haven’t noticed that. You can’t look solely
at the R&D spending indicators and worry that we’re spending less
than the US. Such comparisons are fundamentally flawed because they
ignore differentials in countries’ development levels. The US is a
global leader which can’t learn much from the others, so it has to
be spending more on R&D. The less developed countries, however, can
absorb external knowledge and that’s their great opportunity. It was
used by all countries that modernised their economies ? from post-war
Japan to Ireland in the 90s.”
It is often stressed that Poland’s economic transformation has widened
income differentials.
“More difference isn’t always worse than less difference. Are equal
incomes across the board the best solution? Besides, many differences
were kept away from the public eye in the previous system. As far as
official income differentiation is concerned, the Gini factor shows
that the post-socialist countries that grew more rapidly than others
saw less increase in differentiation. For instance, the Gini factor
rose from 0.28 in Poland in 1987-1990 to 0.33 in 1996-1998, which is
a slight increase. These are the latest available figures. In Ukraine,
for comparison, the factor rose from 0.24 to 0.47 in the same period,
with growth actually receding. So the daily propaganda that income
differentials are growing rapidly in Poland has little to do with
reality. And saying that it’s better to have weaker growth in order
to have less differentiation is complete nonsense. The main factors
that hinder economic growth will also petrify poverty and morally
unjustified differentiation.”
Building Capitalism without Your Own Capital
What role has foreign capital played in the modernisation of the
Polish economy?
“Every developing country, and even the most developed countries, are
striving to attract direct foreign investment. Moreover, communism
in Poland destroyed capitalism and the capitalists. In some areas,
such as banking, you need a lot of capital and some specific know-how.”
Has foreign investment helped the Polish banks?
“The system would have been much weaker without it. In some respects,
Poland’s banking system is today more advanced than the US one. In
the US, for instance, they still rely a lot on cheques. There were
two models of banking sector privatisation. Due to a scarcity of
domestic capital, Central Europe was privatising its banks chiefly
with foreign capital. The alternative was to delay privatisation,
i.e. cement state ownership in an area where politicisation would be
particularly dangerous for the whole economy. The first model was
embraced not only by Poland but also by Czech Republic, Slovakia,
Hungary. The result? These countries’ banks are majority owned by
foreign investors. The same is the case in Mexico, Chile, or New
Zealand.”
“An opposite case is Russia where, for various reasons, the inflow of
foreign capital was blocked. As a result, Russia has a very specific
banking system dominated by a single state bank. In China, the banking
system is also dominated by the government and represents the greatest
risk factor for the whole economy.”
Yet privatisation continues to arouse of a lot negative sentiment
in Poland.
“But what would have happened if privatisation hadn’t been carried
out? If state domination had been retained? We’re hearing a lot of
criticism and assurances that it’s all about the national interests.
Yet the prosaic truth is that some politicians simply don’t want to
relinquish control over the economy. Privatisation cuts the politicians
off from companies. Without privatisation, in a state-dominated
economy, there is no moving away from socialism. It’s also worth
remembering that orderly privatisation replaced wild privatisation,
which often takes place under the guise of state ownership. Orderly
privatisation prevents the appropriation of public sector assets. When
we hear protests against privatisation, we should always look at
who’s shouting and what they are proposing instead.”
Tax Systems and Eurozone Accession
Wasn’t the prospect of EU accession a crucial growth impulse for the
Polish economy?
“Simplifying things, you can say that when the reformers were in power,
that prospect played a relatively small role, because they wanted to
make reforms anyway. But because not all cabinets were reformist,
the prospect of EU accession played a very favourable role in some
periods,” says Balcerowicz.
Can the prospect of eurozone accession become a pro-growth factor
again?
“Whether the road towards the eurozone is long or short depends on us,
or more precisely, on the pace at which Poland’s public finances are
going to be improved. The euro is a good prospect for Poland. You can
expect its adoption to boost direct foreign investment, export, and
economic growth levels. Provided, of course, that you enter with sound
public finances and flexible markets. But you won’t make the public
finances healthy by delaying the reforms. The best scenario would be
to do it in a single thrust, like they did in Slovakia or Lithuania.”
How does Poland’s tax system compare with those present in other
countries?
“In some respects,” says Balcerowicz, “it is better than the US
one, but far worse than the world’s leading tax systems. The US is
extremely complicated, but the taxes lower. In Poland, the share
of taxes in the GDP is far too high, and that’s because Poland
has excessive public spending. Any sensible debate on tax cuts
has to start with spending cuts. Otherwise it’s just flight from
reality. In some respects, Central and Eastern Europe’s tax system
is better than those in France or Germany because it has a higher
share of indirect taxes and a lower one of direct taxes. And the
former are less harmful for growth than the latter. That’s why the
pressure from some of the EU member states for us to raise our direct
taxes was completely absurd from the economic point of view. The
benefit is that today even a greatest populist will not dare to
propose raising the corporate income tax. I only wish France and
Germany also called us to raise the personal income tax, as that
might have had a mitigating effect on the politicians. Instead,
the parliament has recently passed a new, 50-percent PIT rate. What
can you say: the economic calculation is completely unconvincing,
and the motivation cited morally dubious. Let alone the intellectual
quality of the explanations why the rise was necessary. One professor
politician made me laugh recently when he wrote that the 50-percent
rate had been introduced to save capitalism. He probably doesn’t even
know that he’s using western socialist arguments from 50 years ago.
Anthony de Jasay ridiculed them a long time ago.”
Farming: Lone Fight for More Market
Failure to reform and restructure the farming sector is one of the
main objections raised against the early Polish transformation. The
situation in the sector is starting to improve only now, following
EU accession.
“Poland’s farming sector before transformation was private, but in a
sense socialistic, so it required sweeping reforms. Farming supplies
were distributed by the government, and rarely available without
bribes, and the supply of farming products was usually insufficient.
That was the starting point. Moreover, the farmers received a huge
premium in the summer of 1989 when farming produce prices were
freed, which resulted in hyperinflation, while the prices of farming
supplies remained regulated. The situation was unsustainable. For
basic equilibrium to be restored, it was necessary to cut the heavy
subsidies to farming supply products. It was also necessary to do
away with the habit of taking loans and not repaying them. All that
was perceived as injustice, and systematically publicised by parties
that purported to be representing the farmers.”
“What were we supposed to do? Continue subsidising the sector or
fight for more market? I fought for the latter, but I didn’t have
too many allies. Besides, there is little appreciation of the massive
change that has occurred in the farming sector since 1989. Many farms
have modernised themselves, a process that has been stimulated by the
modernisation of the food industry, which is one of the most important
industries in Poland today. Just look at how many good dairy or meat
plants we have, and how sharply have Poland’s food exports to the EU
been growing since accession. It’d be worth holding a serious debate
on the former state farms, or PGRs, whose reforms have been one of
the most vilified areas of the Polish transformation. And yet the
PGRs have been successfully privatised, and that amid a constant
populist cannonade. It also needs to be remembered that as far as
the countryside as a whole is concerned, we’re talking about decades,
if not centuries, of neglect and underdevelopment.”
The cannonade may have resulted from the fact that the PGRs employees
hadn’t received the kind of social cover that, for instance, the laid
off miners were getting.
“Would you like to have even higher taxes in Poland? Even higher
unemployment? The social cover program for the mining industry was
a result of a tough compromise. I wasn’t on the side of those who
wanted to increase these benefits.”
Which is perhaps why the problem remains unsolved to this day.
“That’s a half-truth. Employment in the mining industry was very
sharply reduced, from 400,000 in 1989 to some 136,000 today.”
Moods and Arguments
Let’s return to the sense of disilusionment and frustration that is
present not only in the countryside. Where does it come from?
“To see the problem of discontent in a proper context it’s necessary
to look at how things are in countries where there’s been no reforms:
Belarus, Uzbekistan, Turkmenistan? There people are discontent,
or confused, or frightened. The lack of free market reforms usually
goes hand in hand with a dictatorship.”
“Is it really so surprising that reforms cause frustration? When the
system changes, so does the ranking of wages and the most prestigious
professions. Those that enjoyed the highest prestige in the former
system may not necessarily do so in the new one. That applies to,
for instance, the miners. The former system needed a lot of energy, so
the labour of those extracting coal was in high demand. And how were
the accountants or IT engineers treated in the former system? With
contempt. As were white collar workers in general. Since that
time, the miners have gone down in the prestige ranking, and the
accountants or IT specialists have gone up, though the miners are
still in a batter situation than their peers in Ukraine or Romania.
People whose relative situation worsens don’t have to be enthusiastic
about reforms. Does that mean we shouldn’t be reforming?”
Can these arguments convince the unemployed?
“Above all it’s necessary to remove the causes of unemployment. Where
did unemployment come from? From the free market? No. The free market
has been blocked by excessive labour regulation and a pathological
welfare system. It’s not only unemployment benefits but also spending
on early retirement, on disability benefits, the KRUS, and so on.
These expenses keep taxes high, and high taxes destroy jobs.”
“Poland also experienced various external shocks that reduced demand
for unskilled labour; some 70 percent of the increment in unemployed
numbers in 1999-2001 were unskilled workers. Such people are the
first to be affected by labour market rigidity, i.e. an excessive
minimum wage.”
Perhaps the reformers spent too little time explaining the reforms to
the people? Perhaps there wasn’t enough social dialogue, especially
in the beginning?
“You can always say that more could have been done. The initial
Polish reforms were successful because they were implemented swiftly.
If we had gotten stuck in long discussions, the reforms would have
been cast into doubt.”
But is it really obvious that the Poles wanted to have the kind of
a free market that they have gotten?
“Our market is in many areas distorted by state interventionism, but
the interventionists blame the free market for everything. Besides,
most people aren’t aware of the choices we’re facing. There isn’t
enough economic education in the media. Instead, people are shown
the politicians, usually arguing ones.”
No one promotes reforms better than those who have benefited from
them. Why didn’t a middle class, that all over the world is the
greatest supporter of reforms, emerge in Poland?
“But it did! Only it’s very busy, making money, building capitalism.
And who’s protesting? People who for various reasons have more time
or are strongly organised. At the same time, it’d be an illusion to
believe that every entrepreneur is a liberal who loves competition.
What is good for the individual entrepreneur doesn’t have to be good
for the economy, and vice versa.”
Is it so that the Polish politicians don’t understand the reforms,
or that they don’t want to understand them?
“There are different politicians, just as there are different
journalists, but it’s true that many participants of political life
are motivated by cynical or opportunistic calculations, or false
knowledge that is worse than ignorance. If someone wants to learn to
swim the crawl, it’s better they don’t swim at all than if they swim
doggie style.”

NEWS IN BRIEF.
Petroleum Economist
November 9, 2004
The government is discussing co-operating with Gazprom over building
the 140-km gas pipeline from Iran. Construction of the Armenian
section was due to begin before the end of October.

Bush adds countries eligible for US aid
Agence France Presse — English
November 9, 2004 Tuesday 6:40 PM GMT
WASHINGTON Nov 9 — President George W. Bush has expanded a list of
countries eligible for US aid in 2005 under his Millennium Challenge
Account program, White House spokesman Scott McClellan said in a
statement Tuesday.
Bush added Morocco to MCA-eligible nations Armenia, Benin, Bolivia,
Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia,
Mozambique, Nicaragua, Senegal, Sri Lanka and Vanuatu, said McClellan.
Six other countries — Burkina Faso, Guyana, Malawi, Paraguay,
Philippines and Zambia — were declared eligible in 2005 for Threshold
Program grants designed to help them qualify for MCA monies, the
spokesman said.
They will join Timor-Leste, Kenya, Sao Tome, Tanzania, Uganda and
Yemen.
To be eligible for money from the so-called Millennium Challenge
Account — expected to total five billion dollars by 2006 —
countries must demonstrate commitment to three standards: ruling
justly, investing in their people and encouraging economic freedom.

CSTO to hold ministerial-level conference in Moscow on Nov 12
By Eduard Gushchin
ITAR-TASS News Agency
November 10, 2004 Wednesday 8:34 AM Eastern Time
MOSCOW, November 10 — Counteraction to terrorism is featuring ever
more prominently in the activity of the Collective Security Treaty
Organization (CSTO), according to Russian Foreign Affairs Spokesman
Alexander Yakovenko, who was speaking ahead of the meeting of the
foreign ministers of the CSTO member countries that will take place
in Moscow on Friday, November 12.
Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan are
members of the Collective Security Treaty Organization.
According to Yakovenko, the CSTO Collective Rapid Deployment
Forces “have played an important role in suppressing the activity
of terrorist groups of Islamic extremists in Central Asia and have
become a stability factor.”
A Russian military base opened in Kant, Kyrgyzstan, in November 2003.
The aviation wing of the CSTO Rapid Deployment Forces is based there.
The Collective Security Treaty Organization pays much attention
to the suppression of illicit drug trafficking. The first phase of
Operation Kanal-2004 aiming to curb drug trafficking from Afghanistan
took place in October. More than 2.5 thousand joint operational units
were engaged in the operation. As a result, they seized over 2,700
kg of narcotic substances, including 131 kilogram of heroin.
They also “located the drug trafficking channels and the routes along
which narcotic drugs are taken to Western Europe across the territory
of the CSTO member countries,” Yakovenko said.
The second phase of Operation Kanal-2004 is being planned; competent
agencies of Iran, Turkmenistan and Uzbekistan will take part in it.
The CSTO “is open to cooperation and interaction with the United
Nations and other international organizations, including NATO,”
Yakovenko said. According to him, “The leadership of the Alliance
is now considering a number of proposals concerning dialogue and
interaction” with a number of international organizations.
The Russian diplomat believes that the creation of a common information
field intended to facilitate the efficient functioning of the
Collective Security System is also a very important direction of work.
“The first step in this direction was taken in April 2004 when an
international anti-terrorist media forum was held,” Yakovenko said.

CSTO CONTINUES TO DEVELOP AS MILITARY-POLITICAL ORGANIZATION
RIA Novosti, Russia
November 10, 2004
MOSCOW, November 10 (RIA Novosti) – “After the Collective Security
Session in Astana in June 2004, the CSTO has continued to dynamically
develop as a military-political organization,” Foreign Ministry
spokesman Alexander Yakovenko said in an interview with RIA Novosti.
“The unanimous approval of a draft resolution granting the CSTO
observer status at the UN General Assembly during the UN General
Assembly 6th committee session is evidence of the CSTO’s growing
prestige as an international regional organization.”
In the run-up to the regular CSTO Council of Foreign Ministers meeting,
Mr. Yakovenko said the CSTO was a multifunctional military-political
integration structure that included Armenia, Belarus, Kazakhstan,
Kyrgyzstan, Russia and Tajikistan. The purpose of the CSTO is to
develop a system of collective security capable of effectively reacting
to any possible threats to national security of the organization’s
members.
“The questions of responding to new threats and challenges – terrorism
and other violent manifestations of extremism, drugs trafficking,
illegal migration, organized crime, etc. – take an increasingly
prominent position within the CSTO,” he said. “The CSTO Committee of
Security Council Secretaries coordinates the CSTO’s work in this area.”
“The Central Asian Collective Rapid Deployment Forces, which was
created in 2001 and comprises troops from Russia, Kazakhstan,
Kyrgyzstan and Tajikistan, played an important role in curtailing
Islamic extremist terrorist groups’ activity in Central Asia,” he
said. “Since it was founded, the forces have become an important, or
even decisive, factor in ensuring peace and stability in Central Asia.”

Moscow News (Russia)
November 10, 2004
NINOO BURDZHANADZE CAUTIOUSLY OPTIMISTIC ON PROSPECTS FOR
GEORGIAN-RUSSIAN RELATIONS
By Yury Vasilyev The Moscow News
On an official visit to Moscow, Georgian Parliament Speaker Nino
Burdzhanadze offered Russia friendship – but only on certain terms
Russian-Georgian relations have seen a breakthrough – of sorts. Nino
Burdzhanadze, speaker of the Georgian parliament, finally made it to
Moscow. The on again, off again dialogue between Moscow and Tbilisi
has been dragging on for many months; according to the Georgian side,
this is through no fault of its own. Talks have oficially resumed,
but this does not make either side particularly happy.
“What is going on in Russian-Georgian relations oftentimes does not
fit into the bounds of international law,” says Nino Burdzhanadze,
who holds a degree in international law from the Moscow State
University. “But I believe that sooner or later we will manage to
bring these relations back to normal. It would be preferable if this
happened sooner rather than later, of course.”
Why has the relationship not worked out?
I dare say that I have more complaints to make against Russia than
against Georgia. Although of course I can also see shortfalls on our
side. Over the past 10 years our relations have been steadily
deteriorating to the point where it is very difficult to turn the
situation around even if we try. Yet if there is no will…
Not so long ago our relations were discussed at the PACE. On the
Georgian side there was Speaker Burdzhanadze, while the Russian side
was represented by Konstantin Kosachev, head of the RF State Duma
Foreign Relations Committee. Were you not irked by this disparity in
status?
Not at all. I am quite happy dealing with Mr. Kosachev. He is an
intelligent person who has a good understanding of this set of
problems. My main purpose at the time was not to challenge our
Russian counterparts to a duel, to stir debate, but only to inform
our European colleagues about the outstanding problems in
Russian-Georgian relations.
Did Russia pointedly refuse to participate in a two-way discussion?
Not exactly. It was simply that in response to all of our proposals
for a meeting we received discreet indications to the effect that “it
would be better to put off your visit.” But then after Strasbourg, as
you can see, I got an opportunity to come to Moscow, and I very much
hope that Mr. Gryzlov (speaker of the RF State Duma. – Ed.) will soon
visit Tbilisi. In Moscow we had a productive discussion on all
issues, and not only with him.
Specifically what issues?
The most sensitive ones, at least as far as we are concerned. Very
often, despite all of President Putin’s statements about Russia’s
respect for Georgia’s territorial integrity, this is not what we are
seeing in reality. For example, a railway link has been reopened
between Sukhumi (the capital of Abkhazia. – Ed.) and Moscow, but the
Russian side did not bother to coordinate the move with Tbilisi. They
did not even deign to inform us.
In other words, it would have been enough if Moscow duly notified
you?
It would certainly not have been enough, but at least that would have
been civil. But when you are not even asked whether trains may cross
your state borders – moreover, they tried to pull a fast one on us
(the rail link was purportedly reopened by some commercial
structures) – it is very difficult to talk. I realize that each side
has its own interests to look after. But when I am told here that
“the residents of Abkhazia and South Ossetia are socially
disadvantaged and so we granted them RF citizenship,” I think of the
300,000 Georgian refugees from Abkhazia whose situation is just as
bad, yet they cannot even go to their motherland to visit the graves
of their parents or children.
Do you realize that the citizenship situation is practically
irreversible?
But it was granted unlawfully.
The procedure falls within the jurisdiction of the Russian
authorities. They may grant or refuse citizenship at their
discretion.
That’s just how it was done…
A new generation is growing up in Russia that does not see Georgia as
a friend but, rather, as an enemy. We are witnessing a similar
pattern among the Georgian youth with regard to Russia. After the
horrible tragedy in Beslan – when we empathized with you- Georgia
received yet another slap on the face from Moscow: Foreign Minister
Lavrov all but put the blame for Beslan on Georgia. True, later the
situation was rectified, but it hurts all the same. And that was the
time when the railway line to Sukhumi was reopened. The victims of
Beslan had not as yet been buried, but a brass band was playing in
the Abkhaz capital with people celebrating the departure of the first
train to Moscow. Over the past 10 years, more than 1,500 civilians
have been killed and some 6,000 houses burned in Abkhazia’s
ethnic-Georgian district of Gali. Against this backdrop, I am told in
the course of negotiations in Moscow: “Admit that the Chechens are
terrorists but the Abkhaz are not.” Well, yes, if you think of bomb
attacks on residential buildings and the seizure of a school, you
might agree with this. But then the relatives of those killed in the
Gali district have their own vision of such things.
I feel extremely uncomfortable with the fact that I have to assure
some people in Moscow that we really sympathized with Russia and that
I even have to provide evidence of this sympathy. But look at our
relations with the United States: America always stood by us, coming
through whenever Georgia needed support and even direct assistance,
and it demanded nothing in return for that.
Here is just one example. The return of the Meskhetian Turks to their
native land in Georgia was one precondition for Georgia’s
participation in Coun-cil of Europe (CE) structures. The Americans,
however, made an unprecedented move by relocating thousands of ethnic
Turks living in Krasnodar Krai to the United States and granting them
residence permits. Thus the “CE problem” was taken care of. How is
the Kremlin supposed to react to this?
You oversimplify the situation. But even if everything is the way you
say it is, is this bad? Yes, we have obligations to the Meskhetian
Turks. But, first, the deadline is 2014. Second, we have never
refused to help the repatriation of these people. Yet today ethnic
Armenians live in this area. Returning the Turks there means
provoking a massacre. Third, if Russia wants to be on friendly terms
with us, it should realize that with 300,000 refugees from Abkhazia,
Georgia is not in a position to admit thousands of Meskhetian Turks
in addition to this. So what’s wrong about America’s desire to help
our people?
Nothing’s wrong. The only question is how America’s political
interest in Georgia – which comes through not only in the Meskhetian
problem – is going to turn out for Russia.
Let’s face it: This is not a case of getting something for nothing.
But the United States is helping us build a normal democratic state,
not creating more problems for us. What stops you, for instance, from
facilitating the course of democracy in Georgia? But no, many people
in Russia want to see it as a divided country, easily controlled by
Moscow. So who would you make friends with if you were in our shoes?
Nonetheless, I would like to stress once again: We still want to be
friendly with Russia.
Do you see a way out of the Abkhaz conundrum?
Believe me, the Abkhaz people will realize sooner or later that it is
better to live in peace with Georgia – just as we had lived for
hundreds of years until the Russian empire moved into Abkhazia. What
happened in the presidential election (a pro-Russian candidate,
Khadzhimba, failed to win. – Ed.) is a slap in the face for the
Russian authorities. They were sure that they could control
everything in this land, but the people of Abkhazia showed that this
is not quite so. Thank God for this: At last, they understood what is
good for the Abkhaz people. At times the situation becomes simply
ridiculous: On the one hand, the Abkhaz authorities show us that they
are fighting for independence and international recognition. On the
other, they ask the State Duma to admit Abkhazia to the Russian
Federation. This also holds true for South Ossetia: Separatist
leaders talk about sovereignty, but a point of entry to Tskhinvali
(the capital of South Ossetia. – Ed.) is adorned with a huge picture
of V.V. Putin bearing the inscription “Putin – Our President.” I
greatly respect him, but independence and “Putin Our President” are
things that do not go very well together.
Nevertheless, Georgia declares its readiness to open its
privatization market to Russian business. What are you going to give
and what do you demand in return?
We are not giving anything just like that – this is a matter of
negotiations. We invited Russian businessmen, indicating that we
would be happy to see investment capital. Georgia is ready to open
itself up to economic cooperation, but on a mutually beneficial
basis. We must be sure that Russia’s presence in the Georgian economy
will not work against our national interests.
Are you happy with the RAO UES Unified Energy System’s presence in
the energy sector?
Mr. Chubais keeps his promises, in particular the promise to supply
power to Georgia. If the relations between our two countries are
built on such a pragmatic and constructive foundation, I am confident
that we will be able to avoid many problems.MN
FACT BOX
Burdzhanadze, Nino Anzorovna, was born on July 16, 1964; in 1981,
finished A. Tsereteli Secondary School #2 in the city of Kutaisi with
a gold medal, entering the Tbilisi I. Dzhavakhishvili University
School of Law in the same year; in 1986, she was admitted to the
graduate school at the Moscow State University (MGU) International
Law Department, in 1990 defending a Cand.Sc. dissertation, titled
Problems of International Organizations and International Maritime
Law; from 1991, associate professor at the Tbilisi University
International Law and International Relations Department; author of
approximately 20 academic papers, published in Georgian, Russian, and
English; since 1995, an elected member of the Georgian parliament;
from 1998, chairperson of the parliamentary Committee on
Constitutional and Legal Affairs and Law Enforcement; from 2000, head
of the parliamentary Foreign Relations Committee.
In November 2001, Nino Burdzhanadze was elected speaker of the
Georgian parliament. On November 22, 2003, following Eduard
Shevardnadze’s resignation, she was acting president, running the
country until a new head of state was elected (January 26, 2004),
thereupon resuming her functions as speaker of parliament.
From: Emil Lazarian | Ararat NewsPress

ASIAN CHILDREN’S FILM FESTIVAL FROM NOVEMBER 14
The Hindu, India
November 10, 2004
Our Staff Reporter
The second annual Asian Children’s Film Festival will get underway
in the twin cities here on November 14, featuring about 80 children’s
films from more than 10 countries in the continent.
The week-long festival being organised by the Children’s Film Society,
Andhra Pradesh (CFSAP) in association with the Andhra Pradesh State
Film, Television and Theatre Development Corporation (APFTTDC) has
entries from Iran, China, Japan, South Korea, Bangladesh, Sri Lanka,
Armenia, Israel, Syria apart from the host nation, according to the
festival director, M. Veda Kumar, in a statement here on Tuesday.
While the main venue for the festival is the Hari Hara Kala Bhavan
in Secunderabad, there would be screenings at the Jawaharlal
Nehru Technological University, Masab Tank, Potti Sriramulu Telugu
University, Nampally, and the Ravindra Bharathi mini-theatre from
November 16 to 19.
Morning show

In addition to these, there would be a special morning show at 9 a.m.
in nine theatres in the twin cities and eight in the neighbouring
Ranga Reddy district for the convenience of schoolchildren.
He said interested school managements could contact the CFS office
at Street no. 11, Himayatnagar, the APFTTDC office at A.C. Guards
or the respective Deputy Educational officers of their zones for
delegate cards and participation. Further details can be had on
27635669 or 9246579395.

The Hindu, India
November 9, 2004
CONFLICTING REPORTS ABOUT CAUSE OF ELEPHANT’S DEATH
Our Staff Correspondent
There have been conflicting reports over the death of the
eight-year-old elephant Komala that was to fly out to Armenia as a
Gift of Goodwill.’ The animal died on October 22 barely a few days
before it was to be gifted to Yerevan Zoo in Armenia.
It is learnt that the Forensic Science Laboratory (FSL) report
received by the Police Department rules out poisoning, while the
member-secretary of the Karnataka Zoo Authority, R.S. Suresh, today
claimed that the report that they received from Institute of Animal
Health and Biologicals suggested poisoning as the cause of death.
In the light of conflicting reports, the governing council of the zoo
decided to meet the Police Commissioner, Praveen Sood, to find out
the contents of the report submitted by the FSL.
Even as the reports were received by these two agencies, the
governing council of the zoo met here. The meeting was attended by
the Principal Chief Conservator of Forests, R.M. Ray; the executive
director the zoo; Manoj Kumar; the Mayor, Dakshinamurthy; and the zoo
authority chairperson, Susheela Keshavamurthy. While taking stock of
the situation, the meeting took the versions of the employees, who
all along have been demanding action against veterinary doctors for
alleged dereliction of duty. The closed-door meeting discussed steps
to be initiated to protect the animals and other measures to be taken
to improve the situation in the zoo.
Complaints

Mr. Suresh told presspersons after the meeting that they had received
complaints from the employees against the veterinarians, and that
some had complained even against the zoo Deputy Director,
Chandrashekar. Measures, both administrative and security, had been
taken to strengthen the security at the zoo, and the security officer
of the zoo, Govindaraju’s services had been discontinued already, he
said.
Mr. Suresh said that of the three doctors, one had been transferred
already, and measures were being taken to appoint another
veterinarian on contract. Meanwhile, the employees of Sri
Chamarajendra Zoological Gardens demanded action against the doctors
in the light of the FSL report.

Reaping and Writing
By EDWARD WYATT; Compiled by Lawrence Van Gelder
The New York Times
November 10, 2004 Wednesday
Late Edition – Final
Four novelists, two poets and two writers of nonfiction have been
chosen by the Lannan Foundation of Santa Fe, N.M., to receive $925,000
in literary awards and fellowships for their work. The poet W.S. Merwin
will receive the foundation’s lifetime achievement award, carrying
a $200,000 prize. Three literary awards of $125,000 each will go to
Rikki Ducornet, a novelist in residence at the University of Denver
and author of ”Gazelle,” a novel set in Cairo in the 1950’s (Alfred
A. Knopf, 2003); Peter Reading, a British poet; and Luis Alberto Urrea,
for his nonfiction work, including ”The Devil’s Highway” (Little,
Brown, 2004), an account of a group of Mexican men who died in the
desert while crossing illegally from Mexico into the United States
in 2001. The Lannan Foundation also awarded literary fellowships to
Edwidge Danticat, above, a novelist and author of ”The Dew Breaker”
(Knopf, 2004); Thomas Frank, a social critic and author of ”What’s the
Matter With Kansas?” (Metropolitan, 2004); Mavis Gallant, the Canadian
novelist and short-story writer; Micheline Aharonian Marcom, born in
Saudi Arabia and author of ”The Daydreaming Boy” (Riverhead, 2004),
a novel about a survivor of Turkey’s Armenian massacres; and Rebecca
Seiferle, the author of three books of poetry, including ”Bitters”
(Copper Canyon Press, 2001). EDWARD WYATT
From: Baghdasarian

Murder, they wrote; profit, they hope
by LAUREN BAYNE ANDERSONTimes Staff Writer
St. Petersburg Times (Florida)
November 10, 2004 Wednesday
Murder, they wrote; profit, they hope. But even if the book flops,
their marriage has prospered.
INDIAN SHORES – For 20 years as an emergency doctor, George Kamajian’s
daily routine often included abuse, murder and death.
“Once I was even threatened by this huge criminal I was treating,”
he said. “I threatened him back. To survive, sometimes you have to
act crazier than the patients.”
Wanting to forget his long, harrowing days at work, Kamajian, 53,
found an outlet for his stress in writing. But he didn’t put the
white coat out of his mind entirely.
Instead, his stories wove together his medical knowledge with his
interest in Egyptology. His wife, Debra, 45, often hovered behind him,
reading over his shoulder.
“I’d get little notes the next day left on napkins, saying, take this
out, put this in,” he said. Soon after, she began adding passages of
her own.
The couple, who moved to Indian Shores this year, never planned to
become authors, but years after they began writing as a hobby, they
published their second book, The Eyes of Horus, in June.
Horus is the story of Derek, a detective, and Kelly, a medical
examiner and emergency room doctor, who solve a murder mystery through
medical research.
The characters find clues that lead them from New England to Florida
and finally to Egypt, where they discover the double crown of Egypt,
an ancient artifact.
The pair incorporated themselves into the book. His medical experience,
their Armenian background and their dry sense of humor all factor in.
“As writers, you put yourself into it a little, so I could be Kelly
and George could be the detective,” Debra Kamajian said. “When you
get that intensely into any subject, you don’t exist in a vacuum;
you’re writing with own experiences.”
Although the authors are on their second book, George Kamajian
remains an emergency room doctor. But he practices far from his
Pinellas beachfront condo. To avoid paying Florida’s higher medical
malpractice premiums, he commutes twice a month to Massachusetts for
work. The couple lived in nearby Rhode Island for almost 10 years
before moving to Florida in August.
They started writing Horus in 1999 after their daughters,
6 and 7, were born. To break up the monotony, they began a book of
humorous short stories with unconventional, ironic twists, titled
And That Was That. The book was picked up quickly in 2003 by a
small Canadian publisher.
But after years of working on the 400-page novel Horus, they
had a pile of rejection letters from publishers after more than
100 queries.
Debra Kamajian said they thought about self-publishing but opted not
to because of the stigma attached to it.
“With all the money we spent on postage, sending manuscripts to
publishers, we could have published ourselves,” she said. “But when
you say “self-published,’ a lot of people poo-poo it.”
After a year of letdowns, the Kamajians received a call from Barbara
Turner, owner of Briarwood Publications, a small publisher in Virginia,
who was interested in the book. Briarwood publishes about six books
a year, many by professors working toward tenure.
“I was so excited; I thought, a publisher believes in us,” she said.
“We kept the telephone message for a year and a half.”
Turner said she immediately loved Horus, but alerted the
authors that once the book was published, they would have to work
even harder to publicize it.
“I told them, I’m small press and you’re unknown, so we really need
to work here,” Turner said.
Debra Kamajian – with the personality more of a cheerleader than
the co-author of a medical murder mystery – energetically took on
marketing.
The homemaker canvassed neighborhoods, placed fliers on car windows
and talked up the book.
Slowly, her drive is paying off. Horus is available at
Amazon.com and at some local libraries, and will soon be available at
Waldenbooks in Clearwater. She has set up a book signing at Westfield
Shoppingtown Countryside for early December.
But publicity isn’t cheap. Already, they have spent more than $1,000
on poster boards, fliers and banners.
“It does come out of our pocket, but it’s okay, because the whole
point is for people to read it,” she said.
They make about $1 on each book, which retails for $9.95. Thousands
of copies have been shipped to distributors across the country,
but Turner said that because Horus was recently printed,
she couldn’t estimate how many had sold.
“Books are unique in that what I might think is going to be a great
seller might not be,” Turner said. “It’s like throwing mud up against
a wall: Some will stick. Some won’t.”
Her goal is to be able to walk into a bookstore and find Horus
readily stocked on the shelves.
George Kamajian said whether or not the book becomes a hit, writing
it was worth the time.
“Am I optimistic about Oprah? No,” he said. “But this book has
brought me so much closer to my wife, and for me, that’s the strength
of it.”
The couple continue to write, weaving their life experiences –
sometimes odd – into their stories.
Walking along the beach recently, George Kamajian spotted an
out-of-place object that had washed in. He recognized it as a human
bone.
Examining it with puzzlement, he looked up and said, “This is the
start of the next book.”