Bulgaria: Bulgarian agriculture reported a very substantial wheat harvest, due to favourable weather conditions during the summer. The wheat output was the highest since 1991, estimated at 3.7 million tonnes. The country went into a deep economic crisis last year, following a devastatingly low crop and the manipulation of illegal exports by some trading companies. Bulgaria will introduce land reform, already approved by parliament, which will boost investment in the agricultural sector by designating part of agrarian land for leasing, and also by allowing foreign investors to buy land for the purpose of joint ventures with Bulgarian partners. The 'leasing land' will help to enlarge the average private farm, which is very small, representing 2.5 hectares of land. Ventislav Vurbanov, the Bulgarian Agriculture Minister, stated that the new reform will guarantee the right to a permanent holding of land, which in turn will speed up the process of consolidation of holdings.

Hungary: On 3 November Hungarian farmers protested in Budapest against the proposed land reform that the government intends to introduce in the near future. If the reform is introduced it will clear the way for foreign companies with a good track record in farming to own arable land.

Poland: Korean car maker Daewoo is expanding its production to Central and Eastern Europe. The President of the Centrum Daewoo sales arm, Choi Jung-Ho, said that the company's strategy is to develop the production in many countries of Central and Eastern Europe. Since 1990, Daewoo has started car production plants in Romania, Uzbekistan and Poland. However, Poland is the priority country for Daewoo production plans. The company's output in Poland is expected to reach 750,000 units by 2000 and is planned as the biggest foreign operation for the company. Daewoo took control of the Warsaw based car making company, FSO, last year, introducing the assembly of the new small model Lanos, and the medium-sized models, Nubira and Leganza. Daewoo is planning to expand its Polish operations to produce its latest model, D'Art. FSO output for this year is projected at 170,000 units, almost double last year's 90,000 units. The Korean owner of FSO agreed to invest US$22 million to upgrade the Polish Polonez model.

New laws, to take effect on 1 January 1998, will adopt duties on new cars imported from the European Union (EU) and will have a strong effect on the Polish car market. The duties will be lowered from 25 to 20 per cent, with five per cent reductions to follow each year until the year 2002. The age limit on used cars imported from the EU, currently set at ten years, will be abolished. Also, the duty-free import quota will be increased by 1,750 cars to 40,500 cars.

Russia: The First Deputy Prime Minister of Russia and the Minister of Fuel and Energy, Boris Nemtsov, stated on 5 November that foreign businesses will be able to participate in all the operations of Russian oil companies. The Russian Government decided to lift restrictions on foreign ownership of the country's oil potential to encourage international strategic investors to participate in the forthcoming privatisations, including auctions of Eastern Oil Company, Tyumen Oil Company, Rosneft and Lukoil.

Uzbekistan: The government of Uzbekistan refused to make any comment on the issue of an unpaid bill of US$11 million it owes to the Geneva-based international grain trading company, Romak, for wheat delivered last year. Uzbekistan ignored the ruling of the Grain and Feed Trade Association (GAFTA) in London, according to the 1958 New York convention on international arbitration awards, by refusing to honour the award of $10.8 million in Romak's favour. In the summer of 1996, Romak agreed to deliver 40,600 tonnes of wheat to a company called Odil, with payment guaranteed by the Uzbekistan Government. Odil went bankrupt prior to taking delivery, and the shipment was taken by the state-owned trading company, Uzdon, which refused to pay for the contract arranged by Odil.

Bosnia: Madeleine Allbright, the US Secretary of State, confirmed on 5 November that talks between President Clinton and congressional leaders had yielded an agreement that "some forms of US military presence" will be required after the current mandate expires in June 1998.

Poland: The confusion about the date for Poland to join the European Union (EU) again raised its head on 5 November, when President Aleksander Kwasniewski said that he expects Poland's membership talks to be completed by 2000. This statement followed an earlier projection by the Polish Minister for European Affairs, Ryszard Czarnecki, who said that the date for Polish entry could be as late as 2005. Some western European analysts do not expect Poland to be ready for the EU before 2010 (News 27 October - 2 November). Mr Kwasniewski said that the momentum for Poland's entry can only be maintained "if the time horizon for entry is a relatively short one".

Russia: On 5 November, President Boris Yeltsin sacked Boris Berezovsky, one of the most powerful Russian industrialists, from the Kremlin Security Council, where he served as the Deputy Head. The move followed a meeting between President Yeltsin and two Russian First Deputy Prime Ministers, Anatoly Chubais and Boris Nemtsov. They accused Mr Berezovsky of using his state post to pursue his business interests. Mr Nemtsov said: "This is an important step in Russia's effort to move away as far as possible from oligarchical capialism." The decision to sack Mr Berezovsky is seen as a further step towards strengthening the reformers' camp and as a political victory for Nemtsov and Chubais, who want to separate power from money.

On 5 November, the Upper House of the Russian Parliament, The Federation Council, backed an international chemical weapons treaty. According to the convention of 1993, Russia will be obliged to destroy its chemical weapons arsenal within the next ten years. It is expected that President Boris Yeltsin will sign this treaty, which was also welcomed by Russia's Foreign Minister, Yevgeny Primakov, in the near future. Russia will need to spend US$250 million to fulfil this obligation once it becomes law.

Russia: Gazprom, Russia's biggest company signed a US$3 billion loan, secured against revenues from its gas supply contracts with Gaz de France. The deal incorporates an earlier $1.2 billion bridging loan signed during the summer, and was arranged by Credit Lyonnais and Dresdner Kleinwort Benson. Gazprom Chair, Rem Vyakhirev, said that the company is also going to issue a $1 billion convertible bond, underwritten by the US investment bank Goldman Sachs. The funds raised by Gazprom will be used to build up its export capacity. Mr Vyakhirev also stated that the company would like to take an active part in the forthcoming privatisations of Russian oil companies, including Rosneft, one of the biggest oil producers.

Uzbekistan: One of the biggest gold producers in Central Asia, the Almatyk Mining and Metallurgical Complex (AMMC) of Uzbekistan was awarded 'good delivery status' by the London Bullion Market Association. The AMMC produces copper, silver and gold, and gained a similar status in October 1996 for its silver output. The company currently produces about ten tonnes of gold. To get a good delivery status from the London Bullion Market Association, a producer must present a proven size of gold production (minimum: ten tonnes annually), demonstrate a net worth of £10 million and have a minimum refining record of five years.

CAPITAL MARKETS

Croatia: The government of Croatia made a decision to delay an international second offering of 14 per cent of shares, estimated to be valued at up to US$280 million, in the pharmaceutical company Pliva. Indications at the time of the issue - intended for this week - were given before the recent turmoil in the stock markets. The government has postponed the offering until the situation on the world markets has stabilised. Some bankers close to the issue said that the issue could be delayed until next year. Due to the global volatility of the markets, the value of Pliva's shares, traded on the Zagreb and London Stock Exchanges, depreciated.

Russia: The Board of the Russian Exchange said that the total turnover of the Russian Exchange in October was 30,560 billion roubles (US$5 billion) for 13,726 contracts, which represents the highest monthly volume in 1997.

A new joint investment fund in Russian securities will open in December and will be managed by the Rossiisky Kredit Bank. The fund will allow legal entities and also private individuals to subscribe, but does not specify a minimum amount of investment.