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Chechen Fighters Seen in Ukraine, Balkan Economies Grow

Plus, Kazakhstan forges a new kind of deal with international lenders and arrests in Montenegro mark a shameful anniversary.

by Ky Krauthamer, Barbara Frye, Ioana Caloianu, and Rebecca Johnson 28 May 2014

1. Fresh claims of Chechen fighters in Ukraine


Reports from the Donetsk area of eastern Ukraine say Chechens are fighting with separatist forces against pro-government forces.


Half a dozen armed men outside a Donetsk regional hospital “confirmed that they were part of a Chechen unit that had traveled to Donetsk one week ago to fight alongside the separatists,” the Financial Times reports.


The men, claiming to part of a unit called the “savage division,” said one of their group was killed and four wounded in a government air strike on the Donetsk airport 26 May.


A Vice News reporter spoke with several armed Chechens in the Donetsk area, apparently including some of the same fighters interviewed by the FT. One said the 34-man volunteer unit arrived a week ago. “Our president [Ramzan Kadyrov] gave the order,” he said.


An unidentified Russian Foreign Ministry official told the FT foreign media “hype” was behind the reports of armed Chechens in the area.


“If they are Chechens, they are citizens of the Russian Federation. We can’t control where our citizens go,” he said.


Ramzan KadyrovRamzan Kadyrov
The Ukrainian Foreign Ministry reiterated its claims Russian-based fighters are helping separatists 27 May. In a statement quoted by the FT, the ministry said, “There are grounds to affirm that Russian terrorists funneled on to the territory of Ukraine are being organized and financed through the direct control of the Kremlin and Russian special forces.”


Chechen President Ramzan Kadyrov said today he has not sent any troops to help separatists in Ukraine, although some may have gone there voluntarily.


“There are 3 million Chechens and two-thirds of them live outside the Chechen Republic, including in the West. We cannot know and are not supposed to know which of them goes where,” he said in a statement. 


2. High hopes for Kazakhstan-EBRD deal


Kazakhstan and the European Bank for Reconstruction and Development are pitching their new partnership as a ground-breaking form of financial cooperation that will transform Kazakhstan’s resource-based economy.


At the signing ceremony 23 May, bank Managing Director Olivier Descamps said EBRD expertise could help push along Kazakhstan’s “industrialization strategy,” the Astana Times reports.


“It may become a way to boost reforms, and to re-energize the transition to a market economy. And it may become a blueprint for other middle income countries,” Descamps said.


The agreement is not a loan. Instead, the EBRD will manage $2.7 billion from the country’s sovereign wealth fund and recruit other international financial institutions to invest in priority economic projects, the Astana website reports.


As the Emerging Markets website describes the arrangement, “Kazakhstan’s government is handing billions of dollars of annual state revenues to a handful of multilaterals, led by the EBRD, as it strives to revolutionize its energy and metals-heavy economy and to generate greater returns from domestic assets.”


Kazakhstan’s Prime Minister Karim Massimov shakes hands with the EBRD’s Olivier Descamps at the signing ceremony in Astana 23 May. Photo: EBRD


Reform and diversification of Kazakhstan’s economy has long been among President Nursultan Nazarbaev’s priorities. However, those aspirations “have been a bit stuck by implementation bottlenecks,” Descamps said, according to Emerging Markets.


“Descamps insisted that investments would be chosen based on the promise of returns and on their ability to diversify the nation’s industrial base, rather than on the premise of political patronage,” Emerging Markets writes.


“Priority areas for Kazakhstan’s government under the new partnership include the financial sector, small and medium-sized enterprises, supporting innovation, skills development, improving the investment climate, and fostering regional development and institutional reforms,” the Astana Times writes.


The EBRD has invested a total of almost $6.5 billion into Kazakhstan.


3. Western Balkan economies on the rise: World Bank


Macedonia’s economy emerged from the 2012 recession stronger than most in southeastern Europe, according to the latest annual report from the World Bank.


Macedonia recorded growth of 3.1 percent of GDP in 2013, compared to the regional average 2.2 percent. Of its neighbors only tiny Montenegro had better growth, 3.5 percent.


The World Bank said Macedonia would need to be careful about spending and debt but that it could expect growth of 3 percent this year and 2.6 percent in 2015, Balkan Insight reports.


“The biggest driver of growth was the recovery of industry and a good agricultural year,” Doherty Demland of the World Bank said.


The six countries covered in the report, Albania, Bosnia, Kosovo, Macedonia, Montenegro, and Serbia, have made a steady recovery from the 2012 recession, but recent record flooding could set back Bosnia and Serbia, the bank predicts.


The bank predicts growth in the region of 1.9 percent this year and 2.6 percent in 2015, slightly better than the overall growth in the EU forecast by the European Commission.


With the region still afflicted by a raft of economic woes, including a “staggering” unemployment rate of 24 percent last year, it will take decades of sustained high growth to reach EU living standards, the bank warns.


4. Hungarian energy exec cleared in Sanader bribery case


A court in Hungary has cleared MOL energy company chairman Zsolt Hernadi of bribery and fraud charges related to the purchase of a stake in Croatian refiner INA, Bloomberg reports.


Hernadi was acquitted of fraud and a bribery charge was dismissed. The allegations were made in a private lawsuit brought by a former MOL executive.


The charges pertain to allegations that MOL paid then-Croatian Prime Minister Ivo Sanader 10 million euros ($13.7 million) to buy more shares in INA in 2009. Sanader is serving a 10-year prison term for bribery.


MOL controls just over 49 percent of INA and Croatia owns about 45 percent. Both companies are among the biggest in their respective countries. The investigation proved costly to each company, Bloomberg notes, as MOL shares have dropped 42 percent and INA shares 21 percent since the corruption probe started in 2011.


The Sanader bribery scandal could still see Hernadi facing justice in Croatia. The Hungarian court’s charge sheet was almost identical to the charges he faces in Croatia, Bloomberg says, a fact that his defense attorney said should protect him from trial there, as it would not be right for him to be tried on the same charge in a second EU country.


“This ruling won’t in itself serve as a precedent in the Croatian proceedings,” Hungarian law professor Adam Bekes told Bloomberg.


“It can be taken into consideration during the Croatian court case but it puts no obligation on the judge there,” he said.

MOL has called the allegations politically motivated and said Hernadi has convinced the company the allegations are unfounded, The Wall Street Journal reports. 


5. On a dismal anniversary, Montenegrin police arrest alleged attackers of journalist


Police in Montenegro have arrested those behind an attack on a journalist in January, Balkan Insight reports.


Lydia Nikcevic, a correspondent in the central city of Niksic for the Dan newspaper, was beaten by masked men as she was leaving her office. She suffered a concussion.


Police said they have detained six men, including those who gave the orders and paid for, organized, and carried out the attack. That is notable in Montenegro, where those arrested in the frequent attacks against journalists tend to be low-level thugs who provide barely credible accounts of their motives – leaving widespread suspicion that those ordering the assaults are untouched.


The front page of Dan newspaper the day after Nikcevic was attacked.


For at least a decade, journalists and media organizations in Montenegro have been the regular victims of bombings, death threats, beatings, arson attacks, financial retribution, court cases, and even murder. Many of the attacks were on critics of the government, which has been in power during the entire post-Yugoslav era, or on journalists investigating corruption.


Dusko Jovanovic
The announcement of the arrests came on 27 May, the 10th anniversary of the murder of Dusko Jovanovic, the editor in chief of Dan who was gunned down in 2004. Only one person has been convicted in connection with the crime, and he is serving 18 years in prison for being an accomplice, Balkan Insight notes.


Police have reopened the investigation and in December the government set up a commission to look into the attacks on journalists. In February that body ordered that a correspondent for the Vijesti newspaper be given police protection. Tufik Softic had been reporting on organized crime and had recently complained that a 2007 assault on him had not been properly investigated. A bomb went off outside his home in August.


Montenegro ranks 114th of 180 countries on Reporters Without Borders’ annual press freedom index. The EU has made press freedom and rule of law priority issues in its ongoing accession negotiations with Montenegro.

Ky Krauthamer is a senior editor at TOL. Barbara Frye is TOL's managing editor. Ioana Caloianu is a TOL editorial assistant. Rebecca Johnson is a TOL editorial intern.
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