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News Briefs I

Strong U.S. Economic Reports Raise Fears of Interest Rate Hikes

Los Angeles Times

A batch of strong business reports Thursday jarred investors already worried about rising interest rates, and they provided evidence that manufacturing long the only weak link in a sparkling U.S. economy is reviving.

While many analysts said Thursday's reports probably overstated the current vigor of the economy, others fretted that the scenario could lead to higher inflation and further increases in lending costs. That, in turn, could put a damper on consumers' spending for houses, cars and other goods.

"A somewhat slower growth rate would be a welcome relief for the financial markets," said Stan Shipley, an economist with Merrill Lynch & Co. in New York.

But on balance, the latest reports added to fears that the U.S. economy is maintaining its torrid expansion of last year, and thus might give the Federal Reserve cause to push interest rates higher, analysts said.

Russians Consider Primakov's Plan to Curtail Democracy

Los Angeles Times

Frustrated by disorder and hardship, Russians are asking whether the time has come to rein in democracy and effectively reinstate the Soviet system of strict, centralized state control.

Prime Minister Yevgeny M. Primakov opened the debate this week by proposing that the constitution be amended to end the free election of governors and suggesting that they instead be appointed by the president.

Primakov's proposal would significantly curtail democracy in Russia. But so far, few are speaking out against it.

"I am deeply convinced that until there is a solid and reliable vertical' power structure in Russia, the country will keep eking out a miserable existence," said Dmitry F. Ayatskov, the governor of the Saratov region, who is generally considered liberal and pro-Western and whose power would b e curtailed under the proposal.

"There's significant concern here that the center is collapsing and the regions are becoming more self-interested," said Alan Rousso, director of the Carnegie Moscow Center think tank.

U.N. Report Shows Guatemala Committed Most Rights Abuses

Los Angeles Times

The Guatemalan government allowed the army to carry out a policy of genocide against Mayan Indians during the bloodiest era of Guatemala's 35-year civil war, a U.N. truth commission declared Thursday.

As a standing-room-only crowd wept and cheered, the Commission for Historical Clarification presented a report that found the government responsible for a stunning 93 percent of the 42,275 human rights violations that the panel investigated in 18 months of interviews and other research.

The country's Marxist guerrillas committed 3 percent of the violations, and responsibility for 4 percent could not be determined, according to the 3,600-page report, "Memory of Silence."

More than 200,000 people, mostly civilians, died during the conflict that ended with a peace agreement in December 1996. The United States, U.S. companies in Guatemala and Cuba also played direct roles in prolonging the fighting, the commission found.