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Chapter 27

The Age of Gorbachev


The political and economic problems of the socialist countries of Eastern Europe became increasingly serious after 1981, forcing the Communist leadership in each country to make concessions to its people. While borrowing heavily from Western nations, they desperately began to look for new economic policies. Brezhnev's death on November 10, 1982, and the ensuing crises of succession in the Soviet Union were sure to have repercussions on the satellite countries.

The designation of the ex-KGB chief Yuri Andropov as Soviet Party leader was considered a victory for the reform-minded. During his short term, he attempted to "clean up" the Party bureaucracy and called for greater efforts to decentralize the economy. In his first major address to the central committee as general-secretary, Andropov announced his plans for government reform. Condemning the "old ways," he recommended new steps to mobilize the Soviet economy. Andropov became the first Soviet leader to speak of experimental reform, of more independent and vocal management, and of the possibility of learning from the outside world. In agriculture, he encouraged farmers to use more initiative. He also insisted that state enterprises should better reflect state investment with their output. Andropov revealed no drastic changes in Soviet foreign policy at first, but at a Warsaw Pact meeting in Prague two months after taking office (January 1983), he presented a proposal to ease tension between East and West.

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Andropov's health was failing, and during his prolonged illness he became increasingly dependent on a younger member of the Politburo -- Mikhail Gorbachev. Gorbachev also had the support of Mikhail Suslov, a long-time Politburo member. When Andropov died in February 1984, he was succeeded by his old friend Konstantin Chernenko, a confidante of Brezhnev's. During Chernenko's fourteen months as Party leader, he reverted indirectly to Brezhnev's policies, restoring central planning to the economy, making the Party a haven for bureaucrats, and renewing a critical relationship with the Eastern European nations.

The selection of Gorbachev as general secretary was announced only four hours after Chernenko's death on March 4, 1985. After three physically feeble and ineffective leaders, the majority of the Politburo members were more than ready to vote for Gorbachev, who at fifty-four became the youngest man to ascend to the secretary-general's position since Stalin came to power in 1924. He was also the only Soviet leader besides Lenin to come from an intellectual background. With Gorbachev, not just a new leader, but a new generation moved into the Kremlin.

In the first four months in his new position as general-secretary, Gorbachev showed a great deal of political strength. He undermined his chief rivals, Romanov and Gromyko, and brought to power allies such as Shevernadze, the foreign affairs minister, Nikolai Rizkhov, the prime minister, Viktor Chebrikov, the KGB boss, and Yegor Ligachev, the ideology chief. These changes in the politburo and the secretariat were the most extensive in fourteen years, replacing the old, hard-liners and entrenched bureaucrats with men with reputations for hard work and efficiency.

After Gorbachev had secured his position, his attention turned to the Soviet economy, which had been steadily losing momentum. His new economic and government reforms were guided by a policy called perestroika, literally, the "restructuring." The reforms included changing the planning and pricing systems, establishing a new policy for financing industry and agriculture, initiating a new system for distributing basic industrial materials, reorganizing different specialized government mini- stries and changing the communal system of local government.

Glasnost, the policy encouraging openness and public debate in Soviet society, was the other key to Gorbachev's reforms. Gorbachev realized that an amount of criticism from the rank-and-file Party members would be healthy for the country, and also the only force which would encourage greater involvement of the public in the system. He saw that a society without internal judgment, unable to recognize or voice its own problems, would stagnate. It soon became clear, however, that the new "openness" had its limitations; for example, criticism of the local Party secretary and factory management was permissible, but voicing discontent with the Communist

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party leadership itself was still taboo.

Although Eastern Europeans believed something significant was happening in the Soviet Union, they responded to Gorbachev's reforms with skepticism. From experience, they were more realistic about the promises of his policies. Glasnost, they knew, was still a far cry from the open society the West envisioned, a society with complete freedom of speech and publication. The publication of a few previously forbidden books was met with an enthusiastic response from the West, but as Joseph Brodsky, the 1987 Nobel prize winner in Literature said, "This literature belongs to the people. It was stolen. When the thief returns it, why should I be grateful to him?"

After more than forty years of Soviet domination, the peoples of Eastern Europe realized that the Soviet Union would never grant them complete independence. Gorbachev confirmed their belief in a speech to the Polish Party Congress in June 1986; he repeated that the USSR would not tolerate any Eastern European country rejecting Communist party rule or leaving the Warsaw Pact. On the other hand, he has said that the forcible interference of one country in the affairs of another is unacceptable. While Gorbachev acknowledges the ties of mutual interdependence between the Eastern European countries and the Soviet Union, what he would do in the case of another East Bloc insurrection "endangering socialism, " previously a justification for Soviet military intervention under the Brezhnev Doctrine, is unclear.

Eastern Europeans know too from experience that drastic economic reforms can only be put into effect at tremendous cost to the masses. By the mid-eighties several signs in their own countries already warned them of this possibility: prices rose at extreme rates, especially in food and rent, supposedly guaranteed in Marxist society. A personal income tax was introduced and a new bankruptcy law ratified, ending state subsidies for inefficient factories and eliminating millions of jobs -- violating the Marxist promise of guaranteed employment. Even if Gorbachev succeeded with his new policies in the Soviet Union, Eastern Europeans were aware that the effects of his reforms on their own bureaucratic systems and entrenched leaders would be slow, and perhaps not even beneficial.

The Continuing Economic Crisis in Eastern Europe

Eastern Europe's most serious problem is the state of its economy. Although differing in specifics, the nations all share in the problems wrought by central planning and a failure of the system to take the world market or domestic demands into consideration. East Bloc industry and agriculture are inefficient and suffer from bad management and low worker morale. The countries remain dependent on one another and on the Soviet Union for food, commercial goods, and energy resources, yet as a whole bloc they are

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still not self-sufficient. Under the pressure of run-away inflation and burgeoning foreign debts and trade deficits, the nations of the East Bloc recognize the need to make radical changes in their Marxist-inspired economic systems.

With the exception of Hungary and East Germany, the Eastern European nations suffer from constant food shortages. The shortages are brought on by a lack of modern farm equipment and insufficient chemical fertilizers, and compounded by forced labor practices on the state-owned farms or kolhozes. Governments aggravate food shortages by exporting the best agricultural products to Western countries in exchange for hard currency. In Czechoslovakia and Poland, it is common to see men and women standing in long lines for basic food items such as bread and meat. "Luxury items" like coffee, wine and chocolate are only available in special western currency stores.

In Rumania, food shortages have been particularly severe. Forty years after the Second World War, Rumanians must still buy food with food-stamps. In parts of the country basic food items such as milk and cooking oil, not to mention meat or other sources of protein, are scarce; children and elderly people die regularly of malnutrition. According to official sources, Rumanian President Nicolae Ceausescu declared that "Rumanians are used to eating too much," and in an article published in the Scinteia on July 14, 1982, recommended that Rumanians reduce their caloric intake by 300 to 500 calories a day to alleviate the food shortages.

Hungary was able to meet the demands of its domestic market by giving peasants the permission to farm their own small plots in addition to working on the collective farms. The policy, initiated in 1968, was a success; farmers contributed 35-40 percent of all domestic food from their private plots, and Hungary became the first Eastern European country to export food. Bulgaria soon followed suit, and found that almost 30 percent of its total agricultural output came from the 13 percent of agricultural land lent to the peasants.

Inflation is the second malady afflicting the economies of countries in Eastern Europe. Poland set the East Bloc record for inflation in 1982, when prices for food went up 300 percent and still fell short of real market costs. Yugoslavia's inflation rate in 1986 was 140-150 percent, a rate the government attempted to control with renewed foreign credit; despite their efforts, by 1988 inflation had rocketed to 215 percent while wages failed to keep up.

To add to inflation, East Bloc economies are burdened by growing foreign debts to western creditors. In mid-1988, Poland owed close to $40 billion, followed by Yugoslavia owing $20 billion in debt, Rumania $6 billion, the GDR $13.5 billion, Hungary $18 billion, Bulgaria $5.5 billion, and Czechoslovakia trailing at a mere $4 billion. During the years 1980-81,

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every single Eastern European country had to reschedule their loan repayments. Most are able to fulfill their current payments only by imposing austerity programs on their citizens.

Eastern Europe's trade deficit with the West is also enormous, causing problems with credit worthiness. According to a report by the Organization for Economic Cooperation and Development, the OECD, the deficit was in excess of $3.5 billion in 1986. The East Bloc's trade towards the East is not much better; records from 1986 show that the Soviet Union had a $2 billion surplus of exports to the Eastern European market.

Integral to Eastern Europe's economic crisis is the shortage of energy resources and basic industrial materials. Most Eastern European countries must import the greater part of the gas and petroleum they consume from the USSR. They are required to pay a much higher price to the Soviets than the world market price, despite the fact that they financed the bulk of the Soviet pipe-line construction. Rumania could be much more self-sufficient, as it produces more than 11 million tons of petroleum and 28 billion cubic meters of gas yearly, but it is obligated to export an important part of its production to its neighboring Bloc countries because of COMECON agreements.

Other Bloc countries depend on the Soviets for additional resources. Poland, the GDR and Hungary get much of their electrical power from the Soviet Union. Most of the factories for heavy industry, built during the Stalin era, depend on Soviet iron ore. The biggest Hungarian steel mill in Dunaujvaros, for example, gets its ore from the Ukraine, transported over more than 1 ,500 miles of waterway. In spite of different COMECON agreements, the Soviet Union is not able to service all' the energy needs of its Warsaw Pact allies. To pay for grain and modern technology, it exports much of its energy resources to western countries.

Eastern European countries have no choice but to initiate conservation policies, find alternative energy sources and somehow acquire the technology to make their countries more independent of Soviet energy sources. Such efforts are marked by the hydro-electric dam being constructed between Czechoslovakia and Hungary, the drastic energy restrictions in Rumania, and the development of nuclear energy plants in Bulgaria and East Germany.

Gorbachev's economic reforms in the Soviet Union have run up against great obstacles, obstacles Eastern European leaders also face in attempting to improve their own economic systems. Eastern Europeans remain skeptical that changes in the Soviet Union, even in the unlikely instance of unequivocal success, will favorably affect their own systems. Greater economic freedom without accompanying political freedom and changes in the hegemony of the Communist party will be ineffective and will not enable East Bloc nations to recover from their economic straits.

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The Minority Problem in Eastern Europe

In his last years, Lenin vigorously fought against any nationalist sentiments in the Soviet Union. He was well aware that in a multi-national state, any kind of "nationalism" could lead to civil war. According to his Marxist-Leninist doctrine, all nationalities in a communist state should have the right to live in their own cultural settings, to keep their languages and traditions intact, and to have equal access to all government positions. Unfortunately, theory and practice diverged greatly. Stalin, who was a Georgian, praised the "Russian," people after the war with Germany but at the same time cruelly forced the Tartars and the Volga-Germans along with some tribes in the Caucasus to relocate to different parts of the Soviet Union -- accusing them of collaborating with the Germans during the war. There are 1.2 million Poles, 170,000 Hungarians and 2.9 million "Moldavians" (formerly Rumanians) presently living under Soviet rule, but little is heard of them; no East European government would dare to confront the Soviet Union about its minorities.

After the Second World War, the victorious powers reinstated the old boundaries of the 1918-1920 treaties in Eastern Europe, again cutting off millions of people from their homelands and creating new minorities in foreign countries. Since then, the problem of the national minorities has become progressively more apparent in the region.

--The Hungarian Minorities

Hungary, which lost two-thirds of its territory after the First World War, has minorities in all of its surrounding countries, especially in Rumania, Czechoslovakia and Yugoslavia. Until 1982, the issue of the Hungarian minorities in neighboring countries was rarely spoken of in Budapest's official circles, and then only with caution.

The more than two million ethnic Hungarians living in Transylvania (Erdely) has been a source of ongoing tension between Rumania and Hungary. For many years, Hungarians were aware of Ceausescu's Rumanization policies and the extreme economic hardships to which the Hungarian minority was being subjected. In Transylvania the use of the Hungarian language was abolished for education or any official use even in the areas where Hungarians formed a majority. Hungarian history was eliminated from school curriculum, and the established Hungarian grammar schools and universities such as the famous university in Cluj (Kolozsvar), were closed. Finally, the Rumanian government instated a policy forcing Transylvanian Hungarians to move to different parts of Rumania, thereby dividing families and dispersing the Hungarian population. The arrest of several well-known Hungarian leaders in Rumania in November, 1982 (the author Geza Szöcs, the philosopher Ara-Kovacs, and

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Professor Karoly Toth), provoked a reaction in Hungary. At the initiative of the author Gyula Illyes, a letter signed by 70 members of the literature and arts community in Hungary was sent to Prime Minister Gyorgy Lazar, asking for his intervention. For the first time, the Hungarian government dared to express openly its dispute with Rumania over the situation of the Hungarian minorities in Transylvania, and furthermore allowed the press and radio to cover it. Two leading members of the Hungarian Communist party, Gyorgy Aczel and Peter Varhonyi, traveled to Bucharest to meet Rumanian authorities. Nothing came of the meeting or from similar talks held in Debrecen. Ceausescu, in a speech in December, 1984, declared that the minority issue had been "solved," adding that questioning post-war frontier settlements was tantamount to siding with "vengeful and irredentist forces," threatening the "peace and security of Europe."

During the years 1985-1988, the situation became increasingly volatile as accusations of misconduct came more frequently from both sides of the Hungarian-Rumanian border. The Soviet glasnosf policy gave the Hungarian government the freedom to act more openly against the Rumanian regime. In 1987, over 2,000 ethnic Hungarian refugees escaped Rumania by crossing the border into Hungary. The Hungarian government granted them permission to stay, and the number of refugees fleeing Rumanian persecution increased steadily. In the first six months of 1988, an estimated 1O,000 refugees fled Rumania into Hungary, and in spite of drastic measures by the Rumanian government to close the borders between the two countries that summer, Transylvanian Hungarians continued to arrive in Hungary in great numbers.

In 1988, the differences between the two Warsaw Pact allies reached a high point with the disclosure of Ceausescu's plan to destroy 7000 Hungarian and German villages in Transylvania. The plan entails "bulldozing" entire villages -- leveling to the ground historic churches, cemeteries, and traditional Erdely buildings -- in order to clear new land for agriculture and modernize the peasantry. Village populations will be forced to evacuate their homes and move to newly-built government tower blocks where several families share a common kitchen and bathroom. Torn from their traditional societies, they are to work in large "agro-industrial complexes".

Ceausescu,s "village extermination" plan was greeted with cries of outrage in Europe. The Hungarian Parliament in June 1988, condemned the destruction of the Hungarian villages in Rumania and the resettlement of ethnic Hungarians, accusing the Rumanian government of attempting to wipe out the Hungarian population. In Budapest on June 27, 1988, for the first time in the history of Communist rule in Eastern Europe, over 100,000 people demonstrated against Rumanian policy, calling it "genocide." In retaliation, the Rumanians accused the Hungarians of "chauvinistic,

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nationalistic, anti-Rumanian and anti-socialist" action, and closed the Hungarian Consulate in Cluj. They also evacuated a building in Bucharest which was rented by a Hungarian Cultural Center, and accused the Hungarians of interfering in Rumanian internal affairs.

Protests were held against Ceausescu in other European countries, and the European Parliament called on the Rumanian leader to end his village destruction policy. Hungarian Prime Minister Grosz said in an interview with a western journalist that he wanted to talk with the Rumanian leader, warning against drawing conclusions about the future course of Hungarian-Rumanian relations. He traveled to Moscow to obtain support from Gorbachev, but at the July 1988 Warsaw Pact/COMECON meeting, the issue was never raised; not only is the Soviet Union too absorbed in domestic problems to concern itself with external squabbles, but it has less influence in Rumania than most of the other East Bloc countries.

The Hungarians in Rumania are not the only Hungarian minorities to be victimized by the renewal of nationalism. The situation of 650,000 Hungarians living in southern Slovakia has become increasingly difficult since 1970. In 1982, the arrest and interrogation by police of several members of the Hungarian intelligentsia in Slovakia demonstrated lingering persecution of minorities in the region. The fate of the 450,000 Hungarians in the autonomous Vojvodina region of Yugoslavia may become a matter of controversy; Tito's constitution secured the right of all nationalities to use their languages and keep their cultures with autonomy, but the Serbian Republic wants to annex the small province where the Magyar live.

--Minority Problems in the Balkan States

Of all the East Bloc countries, the issue of divided nationalities is nowhere so problematic as in Yugoslavia, a state comprised of seven distinct national groups, often conflicting with one another, and maintaining ethnic ties to other nations.

The most serious problem revolves around the Albanian minority living in the autonomous province of Kosovo in the Yugoslav Republic of Serbia. By 1987, the Albanians in Kosovo numbered about 1.7 million, still comprising over three-quarters of the population there. Disgruntled with their status in Yugoslavia, they had erupted in protest regularly since the federation was established. The demonstrating renewed in 1980 had not abated by 1988. Numerous protests, terrorist attacks and attempts to destroy public buildings continued throughout the eighties. Incidents like the three bombings in Pristina in November of 1982 were common, and resulted in the imprisonment of many hundreds of Kosovo Albanians charged with connections to terrorism. Government repression in Kosovo was directed at not only the separatists accused of collusion with Albania, but the

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"culturalists" who want to protect the Albanian language and culture in Kosovo. The disturbances occasioned the exodus of numerous Serbs living among a majority of Albanians.

Yugoslavia has watched neighboring Albania's reactions to the situation in the Kosovo region with trepidation, but Hoxha and now Alia have done little move for the Albanians in Yugoslavia than issue verbal attacks against the government in Belgrade. However, new agitation of the Yugoslavs, especially the Serbs, in the late eighties to abolish the autonomous status of Albanian Kosovo and make the province part of Serbia, could lead to active differences between the two countries.

In Bulgaria, the government began a campaign to assimilate the Turkish minority of over 800,000 people. The government ordered Turkish schools to merge with Bulgarian, the elimination of instruction in Turkish, and in 1984-85, forced the Turkish population to "Bulgarize" their surnames. According to Amnesty International reports, during a forced resettlement in 1985, more than 100 Turks died in the villages, although the causes were never made known. The Bulgarian authorities insisted that there had been no Turkish minority in Bulgaria, and that the Bulgarian citizens who changed their names did so voluntarily, "rediscovering" their true Slavic identities.

There is no Eastern European country without a nationality problem either within or outside of its borders. The Gorbachev policy of glasnost has opened one of the most dangerous doors to conflict between these nations -- the door of nationalism responsible for starting both world wars.


In the era of radical transformation in the power structure of the Soviet Union, the solid leadership of Mikhail Gorbachev, and the successful meetings between the leaders of the two superpowers, Eastern Europeans knew that some reform in their own countries was inevitable. Each nation, depending on its leadership and economic and political history under Communist rule, reacted differently to the example of "liberalization" coming from the guardian to the East.

Albania: Opening to the World

Albania under the leadership of secretary general Enver Hoxha pursued a policy of ultra-isolationism unparalleled in the Communist world. With Hoxha's death on April 11, 1985, an era spanning 41 years came to an end. No other communist leader had ever attempted to affect such comprehensive changes on the social, political, religious and economic structures of a nation. Under Hoxha, Albania was transformed from a feudalistic society

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into a "Marxist" state where all citizens were considered equal and became faithful members of the Communist party. Everyone worked for the state and all private property, including the Church's, was confiscated. Hoxha dissolved all religious institutions, and in 1967 he launched a purge of religious leaders, both mullahs and priests, and sent them to labor camps. That same year, he proclaimed Albania the first truly atheist state.

Hoxha made Albania a bastion of Stalinist orthodoxy. Considering Albania the only authentic socialist state, he pursued a policy of national self-reliance, cutting off virtually all ties with other nations. In 1948, he quarreled with Tito and broke off diplomatic relations with Yugoslavia; in 1961, he ended relations with the Soviets in protest over Khrushchev's destalinization policies; in 1978, when the Chinese began instituting reforms, Hoxha ended Albania's ties to the Communist regime in Beijing.

Hoxha came to believe that all political and economic troubles in Albania were caused by outside powers desiring to overthrow his regime. He accused the Yugoslavs of sending Albanian immigrants to invade the country. In November of 1982, Hoxha revealed that Albania's former prime minister Mehmet Shehu -- who had served the Party loyally for twenty-seven years -- had been a spy for the CIA up until his "suicide" in December of 1981. Friends and acquaintances of the ex-prime minister who regarded the suicide with suspicion were expelled from the Party and some were then arrested, indicating that Shehu probably died at the hands of Hoxha's secret police.

It was not until after Hoxha's death, in 1985, that Albania began to show slight deviations from its policies of extreme isolationism and orthodox Stalinism. Mr. Ramiz Alia, Hoxha's successor as general secretary of the Albanian Communist party, was regarded at first as a Hoxha man who would continue his policies faithfully. However, under Alia the economy has moved away from strict centralization, and concepts like initiative, self-motivation, and pay incentives for increased production -- unthinkable several years ago -- have been introduced. Alia has openly criticized poor management, inefficient methods, and low working morale; he is concerned about the large technical gap with the rest of the industrialized world that he knows Albania must close. Fortunately, Albania has no foreign debt because its constitution outlaws acceptance of foreign credits.

The Albanians began building huge hydro-electric plants around the 1960s. The biggest plant is at Koman, and was begun with Chinese assistance and completed by Albanian technology when the Chinese withdrew all economic aid. Before 1945, only one-third of the population had electric light; by 1970, not only did all of Albania have electric power, but it exported energy to neighboring countries. Albania became the world's third largest chrome producer, and mined copper, nickel and petroleum for

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export. But Albania lags behind in technological development, and Alia is aware of the industry's desperate need for outside stimulus. He has felt the necessity of discarding Hoxha's unequivocal stand of absolute self- sufficiency; under Alia during 1987-88, Albania expanded economic and cultural links with Italy and France, signed a friendship treaty with Greece, and extended diplomatic relations to Canada and West Germany. In February of 1988, Albania took part in a multi-lateral Balkan conference in Belgrade with the other Balkan states, namely Greece, Turkey, Rumania and Yugoslavia. The aims of the conference were to begin the denuclearization of the Balkans, and to increase trade and cooperation. The Albanians maintained that they were the only nation involved independent of Bloc ties and pressures from the superpowers.

By the late eighties, the Soviet reforms of perestroika and glasnost had affected little change on the political life in Albania. The reforms are regarded as dangerous and unwise departures from orthodox ideology. Albania's "opening to the world" consists of limited trade and transportation agreements with its neighbors and several West European countries, and a slight easing of border and tourism restrictions, not a democratization of the system or any concessions to the absolute authority of the Communist party leadership.

Yugoslavia: A Fragile Federation

In neighboring Yugoslavia, the Communist party leadership faces difficult problems with both the Yugoslav economy and with escalating tensions between its constituent republics. In 1988, Yugoslavia was in its worst economic crisis of four decades. The national debt by official accounts totaled $20 billion, but experts suggested a figure closer to $25 billion would be more accurate. More than 11 1/2 percent of the national budget repays the interest on the debt alone. The yearly inflation rate for the 1980s was between 150-200 percent, and in 1988 reached 215 percent. Unemployment hit 15 percent, a number which will double if the government pushes through a "dissolvement program" which went into effect in July of 1988. The law refers to an estimated 7000 firms and factories which must be shut down because of maintained losses over the last few years -- industries which employ over one and a half million workers. The state-controlled union agreed to the "dissolvement program" but requested that new jobs be provided for the workers. The union accused the government of heavily taxing the factories while simultaneously supporting an enormous bureaucratic apparatus administering the economy.

A massive scandal in the Republic of Bosnia-Herzegovina dealt one of the country's biggest economic enterprises a major blow. Mr. Jamdija Pozderac, Bosnia's representative to the Yugoslav state presidency (in line to

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become president in 1988), resigned and several high-ranking managers were arrested for their connection to corruption involving bribes and money transfers. The event was a sign for the news media, which for years had demanded that the Party should be answerable for the failure of the country's economic system.

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