No. 128, 09 July 1991

BALTIC STATES



SPECIAL BORDER FORCE FOR ESTONIA. Estonia will create a special
armed police force to protect its borders, Baltfax reported on
July 6. The border force will be subordinated to the Police Department
and will work in cooperation with the Border Protection Department.
Until October 1, when the new force will begin working, Estonia's
border guards will continue use "passive resistance" against
attacks. The new force was created after a series of OMON attacks
on Baltic borders. Baltfax quotes Prime Minister Edgar Savisaar
as saying that "sooner or later we will fight the OMON." (Riina
Kionka)

OMON BEHIND RECENT ATTACK ON LATVIAN CUSTOMS POST. RSFSR TV's
Vesti of July 8 identified the attackers of the customs post
at the Riga airport as members of the OMON based in the Latvian
capital. This latest assault on a Latvian customs post took place
on July 8 at 9:50 a.m. It appears that OMON units have been behind
all of the attacks on Latvian customs posts. (Dzintra Bungs)


US NOW HOSTING LITHUANIA AT GENEVA CONFERENCE. In an interview
with RFE/RL's Lithuanian Service on July 9, Lithuanian Deputy
Foreign Minister Valdemaras Katkus said that as of July 8, the
US delegation had taken over from Denmark the role of hosting
the Lithuanian delegation at the Geneva Minorities Conference
for the upcoming week. At the July 8 session, US delegation head
Max Kampelman said that Lithuania and the other Baltic republics
could serve as an example of how countries, even under extreme
circumstances, could pursue a positive policy of solving the
problems of their minorities. (Saulius Girnius)

RIGA COMMERCIAL BANK SUSPENDS SOME HARD CURRENCY PURCHASES. According
to Baltfax of July 5, the Riga Commercial Bank has suspended
the purchase of hard currency, except US dollars, until July
15. The reason for this decision is not clear, but the Baltfax
correspondent noted that people in Latvia were now more inclined
to sell foreign currency than to purchase it. The Baltfax dispatch
did not mention if a similar decision had been made by other
money exchange offices operating in Riga and purchasing hard
currency at commercial rates. (Dzintra Bungs)

TALLINN-FRANKFURT FLIGHT BEGINS. The Soviet airline
Aeroflot is inaugurating a new weekly non-stop service to Frankfurt
from Tallinn, Western agencies reported on July 7. Estonia's
Minister of Transportation Tiit Vahi called the move "a big step
in the direction of Europe." (Riina Kionka)

BALTIC PARTICIPATION IN OLYMPICS. On July 8 Director-General of
the International Olympic Committee Francois Carrard met representatives
of the unofficial Olympic committees of the Baltic republics
at the IOC headquarters in Lausanne, Western agencies reported
that day. Carrard advised the Balts to "get together with the
Soviet National Olympic Committee to find a solution which can
be agreeable to both sides." He said that although the IOC would
not recognize the Baltic Olympic Committees until their republics
achieved political independence, the IOC would "certainly do
our best to help" assure that Baltic athletes participate in
the games. Lithuanian Olympic Committee President Arturas Poviliunas
told reporters that Lithuanian athletes unable to represent their
own republic might seek to participate under the flag of the
IOC. (Saulius Girnius)

ELTA-PAP AGREEMENT SIGNED. The Lithuanian news agency ELTA signed
an agreement with its Polish counterpart PAP on July 8, Radio
Independent Lithuania reported that day. The agreement will facilitate
cooperation between the two agencies through a regular exchange
of correspondents in Vilnius and Warsaw. ELTA depended on PAP
information during the economic blockade imposed on Lithuania
by the USSR last year, and the agreement formalizes ties that
have been steadily expanding since 1988. (Gytis Liulevicius)


SWEDISH GROUP PROTESTS TO UN. In a letter to UN Secretary General
Javier Perez de Cuellar, the Committee on Cooperation with the
Baltic States protested the UN's unwillingness to discuss the
Baltic question, as if it were an internal affair of the USSR.
According to ELTA July 8, the Sweden-based group's letter pointed
to plebiscites carried out in the Baltic States as evidence of
popular support for independence, and reminded the UN of treaties
signed by the USSR with the Baltic States in 1920 in which the
USSR recognized Baltic independence for all time. Since then,
the group says, the USSR has consistently violated its obligations
under the treaties, resulting in a situation which the UN cannot
afford to ignore. (Gytis Liulevicius)



USSR--ALL-UNION TOPICS



SOVIET G-7 UPDATE. Soviet President Mikhail Gorbachev won backing
on his approach to the G-7 summit from the nine republics which
intend to sign the new Union treaty, according to TASS and Western
reports July 8. Although details on the agreement between Gorbachev
and the republics are sketchy, a theme of independent republics
cooperating within the context of the new Union treaty is key.
The agreement will allow Gorbachev to show that the USSR is not
disintegrating to a degree that would make aid to the center
ill-advised. Gorbachev intends to talk in terms of reform concepts
in London, not specific, concrete reform plans. (John Tedstrom)


YELTSIN ON GORBACHEV'S TRIP TO LONDON. RSFSR President Boris
Yeltsin told Vremya on July8 that the leaders of the nine republics
willing to join the union provided Gorbachev at the latest follow-up
meeting in Novo-Ogarevo with their own option for the G-7 talks
in London. Yeltsin dismissed concerns that Gorbachev would simply
ask for handouts from the West. He stated that Gorbachev will
first of all explain to Western leaders the new political arrangement
between the center and the republics, and then discuss some general
programs which could be carried out with the G-7 countries. (Alexander
Rahr)

JAPAN HAS DOUBTS ABOUT SOVIET REFORM. On July 8, Japanese officials
in Tokyo and Washington expressed doubts about the USSR's reform
efforts and the advisability of extending large amounts of aid
to the USSR, TASS and Western agencies reported yesterday. In
Tokyo, Prime Minister Toshiki Kaifu said that there is confusion
over which reform plan (Pavlov's, Yavlinski's, Gorbachev's) is
the one that will drive reform in the future. Kaifu seemed to
play down the importance of the dispute over the Kurile islands,
but other Japanese officials said that the islands were still
a major stumbling block. Japanese officials also cited their
belief that while Soviet foreign policy towards Europe and the
West has improved, the USSR has strengthened its military capabilities
in Asia. For the time being, Japan will continue to provide technical
assistance to the USSR, but is not expected to help with large
financial aid programs. (John Tedstrom)

MUSCOVITES UNSURE ABOUT G-7 TRIP. A recent opinion survey of
300 Muscovites indicated that 22% of them viewed Gorbachev's
trip to London positively, while 17% were opposed to it, Novosti
reported July 4. Some 19% of the Muscovites polled were neutral
and 42% could not decide whether the trip was a good idea or
not. One-sixth of the respondents admitted that the poll question
was the first time they had heard about the trip. (JohnTedstrom)


SOVIET FACTORIES FACE BANKRUPTCY. The USSR Supreme Soviet on
July 8 passed in the first reading a draft law on bankruptcy,
and in doing so moved the Soviet economic system another step
closer to the market. TASS reported July 8 that the draft law
was passed 343 to 5, with 9 abstentions. Soviet Deputy Prime
Minister Vladimir Shcherbakov spoke out strongly in favor of
the draft. The law should take effect in the fourth quarter of
1991. Bankruptcy will be defined as the failure to meet debt
payments for three consecutive months, and Soviet enterprises
could start claiming bankruptcy in early 1992. (John Tedstrom)


SOME LIKELY RESULTS. Until now, Soviet enterprises that were
not able to make ends meet were bailed out by the state. That
will likely remain the case once the new law is passed for most
enterprises which sell their goods with fixed prices and subject
to state orders. Still, Soviet experts expect that in 1992 alone
some 13% of Soviet enterprises will go bankrupt. That could reduce
industrial output by 3-5%. Once a court declares an enterprise
bankrupt, its assets will be sold with the revenues going to
creditors to pay off debt. Any remaining revenues will be distributed
to the enterprise's employees. (John Tedstrom)

LATEST DATA ON BUDGET DEFICIT. The deficit in the union budget
for the first five months of 1991 has reached 39.1 billion rubles,
according to preliminary data released by the USSR Ministry of
Finance and reported by Interfax July 5. The annual deficit is
now projected at about 140 billion rubles. This confirms the
figure given by Prime Minister Valentin Pavlov to the USSR Supreme
Soviet last month (CTV, June 19) and Shcherbakov's statement
of July 5 (given to Radio Mayak), although official projections
of the anticipated annual deficit have varied widely, with some
estimates going as high as 300 billion rubles. Nobody knows for
sure, as the deficit will depend, inter alia, on the depth of
the recession and on the degree of revenue withholding by republics.
(Keith Bush)

CONSTITUTIONAL COMMITTEE APPROVES DRAFT UNION TREATY. The USSR
Committee for Constitutional Oversight on July 8 released to
USSR Supreme Soviet deputies its conclusion that the draft Union
treaty does not contain any violations of the USSR constitution
or of republic constitutions. TASS July 8 quoted the Committee's
ruling as saying that the draft as a whole merits approval. However,
TASS added, the Committee stressed the necessity of clarifying
certain legal aspects of the draft treaty, particularly contradictions
with regard to Union and republic sovereignty. It also recommended
that the USSR constitution of 1977 and republic constitutions
remain in force, to the extent that they do not contradict the
Union treaty, until a new constitution is adopted. (Sallie Wise)


MEMBERS OF "KISHINEV FORUM" MEET. Representatives of political
parties and popular fronts of the six republics that do not want
to sign the Union treaty met in Tbilisi last week, Novosti reported
July 7. Earlier this year, the six set up an umbrella organization
called the "Kishinev forum." At the Tbilisi meeting, the forum
adopted several documents, the most important of which stated
that the six republics should not use the USSR to represent their
interests in the international arena, especially at the UN. As
long as the six republics lack their own representation in international
organizations, they should act through other countries, but not
the Soviet Union, the document stated. The forum also appealed
to Gorbachev not to use force against those republics that want
to be independent of the Union. (Vera Tolz)

SUPREME SOVIET ADVANCES REHABILITATION LAW. The USSR Supreme
Soviet approved July 8 in the first reading a bill aimed at rehabilitating
victims of political repression and at restoring their rights,
TASS reported. The bill establishes a simplified procedure for
rehabilitation of those repressed without guilt in the period
between 1920 and 1988. (In 1989 articles under which dissidents
had been charged were dropped from the USSR's republican criminal
codes.) According to the bill, those rehabilitated or their relatives
will be issued an official certificate that will serve as legal
tender for the restoration of their rights and possible material
compensation. TASS said the government is expected to spend up
to 1.5 billion rubles a year on compensation to victims of repression.
(Vera Tolz)

BONNER CRITICIZES NEW MOVEMENT. Elena Bonner, human rights activist
and widow of Andrei Sakharov, has criticized the new Movement
forDemocratic Reforms. In an interview with RFE/RL July 8, Bonner
said the new movement is merely an attempt to save Gorbachev
and is mainly aimed at impressing the West. She said none of
the founders of the new organization has taken part in the USSR's
democratic movement, but instead constitute an elite group close
to Gorbachev and Yeltsin. (In fact, at least two founding members
of the Movement for Democratic Reforms, Popov and Sobchak, have
been active members of democratic organizations set up in the
course of perestroika.) (Vera Tolz)

CPSU CONSERVATIVES WANT SHENIN TO REPLACE GORBACHEV. The ultra-conservative
movement "Communist Initiative" has demanded the convening of
an extraordinary CPSU Congress in order to remove Gorbachev as
General Secretary and oust him from the CPSU, according to Infonovosti
on July 8, quoting Kommersant. The newspaper reported in its
latest issue that conservative Communists want to replace Gorbachev
with Politburo member and CC CPSU secretary for cadres Oleg Shenin.
Another candidate is Novosibirsk Party chief Vladimir Mindolin.
The issue could be brought up at the forthcoming CPSU CC plenum
at which Gorbachev will give an account of his trip to the G-7
meeting in London. (Alexander Rahr)

KHASBULATOV: YELTSIN WAS RIGHT TO CALL FOR GORBACHEV TO QUIT.
RSFSR Supreme Soviet First Deputy Chairman Ruslan Khasbulatov
said in an interview on Radio Rossii July 8 that he first objected
to Yeltsin's call for Gorbachev's resignation as USSR President
last February, but later realized that Yeltsin's strategy was
right. Khasbulatov stressed that only after that blunt attack
on Gorbachev, the population understood how seriously the central
administrative structures had blocked decisions of the RSFSR
government. He also stated that he had favored the creation of
a democratic Communist party, which would act parallel to the
CPSU, long before Rutskoi formed his "Communists for Democracy"
group. (Alexander Rahr)

ROY MEDVEDEV CALLS FOR GORBACHEV'S RESIGNATION. Interviewed in
La Stampa on July3, the former dissident historian Roy Medvedev
said Gorbachev is now so unpopular that it is time he left office.
"Nobody defends him any more," Medvedev said, "not even in the
Politburo. They want him to go. I think it would be best for
him to resign. He could remain President, albeit not for long.
At most until the end of the year, that is, until the Union treaty
is signed." Medvedev predicted that Gorbachev would return from
London empty-handed and "humiliated" and that there would be
a move to replace him, as a purely interim measure, by the present
deputy general secretary, Vladimir Ivashko. (Elizabeth Teague)


"THERE WILL BE NO PARTY SPLIT." Medvedev dismissed rumors of
an impending split in the CPSU. "There will be no split, for
one simple reason. The Party ceased some time ago to be a party
in an ideological sense. It is a machine that distributes privileges
and pure power. The membership understands that, if they Party
splits, they will lose this power... A few million members may
leave, but the majority will remain." The Party has been losing
members steadily over the past two years and at present claims
16 million members. (Elizabeth Teague)

SHAKHNAZAROV ON FUTURE OF CPSU. Interviewed in Corriere della
Sera on June 29, Gorbachev's aide Georgii Shakhnazarov downplayed
the importance to the future development of the CPSU of the new
Movement for Democratic Reforms, saying the trump cards remain
in Gorbachev's hands. The CPSU, Shakhnazarov said, consists of
a conservative wing, supported by about 15% of the members; this
is cancelled out by the liberal wing with the support of 15-20%.
"The vast majority of the members have not yet decided," Shakhnazarov
said. "The tradition in our country is such that the role of
Party leader is very important." The majority of Party members
would take their cue from Gorbachev, he predicted. (Elizabeth
Teague)

CPSU CONGRESS IN THE FALL? Shakhnazarov predicted a Party Congress
in the fall. This may not necessarily be an extraordinary congress
for, Shakhnazarov revealed, the Party leadership is seriously
considering a return to the practice of Lenin's time, when Party
Congresses were held annually. Repeating his conviction that
the CPSU will eventually abandon the name "Communist" and return
to its old name of "Social Democratic," Shakhnazarov acknowledged
that such a step would be very controversial among members; he
said it will probably be necessary to hold a Party-wide referendum
on the subject. (Elizabeth Teague)

CHURKIN DENIES SHIFT ON POLISH TREATY. Soviet Foreign Ministry
spokesman Vitalii Churkin said on July 8 that Polish and Western
press reports that the Soviet Union had dropped its insistence
on including a security clause in the Soviet-Polish treaty currently
being negotiated were false (see Daily Report, July 5.) "No message
from Mikhail Gorbachev to Lech Walesa was conveyed in Prague,"
Churkin said. "Such types of provisions related to bilateral
treaties are also absent from the message to Czechoslovak President
Vaclav Havel," TASS reported July 8. (Suzanne Crow)

SOVIET-SPANISH TREATY. As part of the trip of Spanish Prime Minister
Felipe Gonzalez to the Soviet Union, the USSR and Spain will
sign today (July 9) a treaty of friendship and cooperation --
the first treaty of its kind between the two countries. Gorbachev
described the document as "a reliable link in the common European
area" during his dinner speech of July 8. Churkin said the treaty
"will place Spain in the first line of the Soviet Union's main
partners in Europe," TASS reported July 8. (Suzanne Crow)

SOVIET START TEAM TO WASHINGTON. The Soviet Union is sending
a high-level delegation headed by Foreign Minister Aleksandr
Bessmertnykh to Washington for talks on July 11 and 12. Bessmertnykh
will be accompanied by Chief of the General Staff Mikhail Moiseev
and Deputy Foreign Minister Alexei Obukhov, Churkin said July
8, TASS reported that day. Meanwhile, US President George Bush
has indicated that he is prepared to hold a US-Soviet summit
at the end of July should work on the treaty be completed. (Suzanne
Crow)

NORTH KOREA TREATY HAILED. In observance of the 30th anniversary
of the treaty of friendship, cooperation and mutual assistance
with North Korea, TASS observer Sergei Afonin said on July 5
the treaty "answers the basic interests of both countries and
serves the cause of peace and security on the Korean peninsula
and in the Asia-Pacific region." A Radio Moscow commentary in
Korean (July 5) also hailed the treaty saying, "this treaty is
of great significance to Soviet history." Despite the establishment
of relations with South Korea, the commentary said, "one of the
priority tasks in Soviet foreign policy is to maintain and develop
friendly relations with North Korea." (Suzanne Crow)

JAPAN PROTESTS OVERFLIGHT. The Japanese Foreign Ministry lodged
a strong protest on July 6 against a Soviet intrusion into Japanese
airspace early on July 6. An AN-30 commercial craft overflew
Japanese territorial waters some 18kilometers southeast of Nemuro
(the eastern edge of Hokkaido). This is the first violation of
Japan's airspace by the Soviet Union since April 21, 1989. (Suzanne
Crow)

IRAN TO BUY AIRCRAFT? Iran's air force commander, Brig. General
Mansour Sattari, began a one-week visit in Moscow on July 7.
Sattari is reportedly leading a high-ranking military delegation
which will discuss with Soviet officials bilateral cooperation
in aviation and aerospace projects, the Islamic Republic News
Agency reported July 7. (Suzanne Crow)

SERVICEMEN KILLED; SUICIDE IN GERMANY. Eight Soviet soldiers
were killed and another five were wounded by two servicemen who
had stolen submachineguns from a barracks in the RSFSR, Interfax
reported on July 8. According to a Western wire service account,
the two had attacked an Interior Ministry guard on July 6 in
Yakutia, Siberia, and stolen the weapons. They reportedly escaped
and have not been found. Meanwhile, police in Leipzig, Germany,
said on July 8 that a twenty-year-old Soviet soldier named Saidula
Rashapov committed suicide last week, apparently after having
been mistreated by other soldiers. The police said that Rashapov
left his barracks and set himself on fire in a Leipzig suburb.
(Stephen Foye)

MILITARY PROSECUTOR DEFENDS DEPART-MENT. The Main Military Prosecutor
complained in Trud on June 19 that a presidential commission
report on crime and violence in the army had unfairly maligned
his office. Lieutenant General Aleksandr Katusev denied allegations
that the Military Prosecutor's office has a poor record investigating
and prosecuting crimes, and that it protects the interests of
the officer corps. Instead, Katusev blamed shortcomings on incompetent
officers, on the failure of local authorities to support his
office, and on republican governments that he says encourage
desertion and draft dodging. He called for passage of legislation
to more clearly regulate military life. (Stephen Foye)

"DEMOCRATIC UNION" LEADER WILL NOT REJECT KGB ACCUSATION. Valeria
Novodvorskaya, arrested by the KGB on May 16 and accused of appealing
for the "violent overthrow of the existing state regime," has
stated through her lawyer that she will support the official
imputation, RSFSR TV reported July 8. Her lawyer explained Novodvorskaya's
position as her desire to prove the punative nature of the Soviet
regime. The calls for violence attributed to Novodvorskaya appeared
in a collective letter signed by twelve persons. RSFSR TV did
not report the date of her court hearing. (Victor Yasmann)

CHARISMATIC YOUTH MOVEMENT IN SOVIET UNION. Radio Rossii reported
on July 7 about a meeting of the "Christian Youth International"
in Moscow. This international youth movement is headed by American
pastor Bob Veiner and is charismatic: they refute the division
of Christianity into various faiths and also oppose any form
of cult. (Oxana Antic)



USSR--IN THE REPUBLICS



POLOZKOV FACES COUP. Several regional Party secretaries have
rebelled against RSFSR Party chief Ivan Polozkov, Kommersant
(no. 26) reported. Led by Novosibirsk Party chief Mindolin, the
regional Party secretaries accused Polozkov of being "too dependent"
on the Kremlin. They also criticized him for failures in the
RSFSR presi-dential campaign. Mindolin and others reportedly
plan to oust Polozkov at the forthcoming plenum of the Russian
CP on July 19. Possible successors to Polozkov are, according
to Kommersant, the chairman of the Central Control Committee
of the RSFSR CP Nikolai Stolyarov, member of the RSFSR CP CC
Politburo Gennadii Zyuganov, and CPSU CC secretary Valentin Kuptsov.
(Alexander Rahr)

KRAVCHUK ON DRAFT UNION TREATY: NO GO. Ukrainian Supreme Soviet
Chairman Leonid Kravchuk, according to Western agency reports
July 8, said yesterday that his republic will not sign the Union
treaty in its present draft form, stating that "we . . . would
like a treaty that provides for a real union of sovereign states--not
only in words." In even sharper terms, Ihor Yukhnovsky, leader
of the radical Narodna rada faction in parliament, said that
if Ukraine signs the current version of the treaty, the opposition
will "mobilize the people." Yukhnovsky continued that disintegration
of the Soviet state will take place with or without a Union treaty.
(Natalie Melnyczuk)

MORE TESTS AT SEMIPALATINSK BEFORE CLOSING IN 1992. Novosti reported
July 4 that Kazakh President Nursltan Nazarbaev told journalists
in Moscow that the Soviet government has promised to close the
Semipalatinsk nuclear weapons test site on January 1, 1992, one
year earlier than originally planned. However, he said, two more
nuclear tests will likely be conducted at the site by the end
of this year, but these will be the last tests to be held there.
Nazarbaev claimed that the military leadership had insisted on
the tests, despite the fact that the Kazakh Supreme Soviet has
called for a halt to all further testing at Semipalatinsk, a
position that he supports. The Defense Ministry has offered to
pay Kazakhstan compensation for the two tests, but Nazarbaev
characterized the offer as an insult to the Kazakh people. The
issue of the test site is highly sensitive in the republic, and
groups across the political spectrum have threatened to stage
a massive sit-in to prevent a test scheduled for August. (Bess
Brown and Stephen Foye)

WESTERN CREDIT SHOULD GO DIRECT TO REPUBLICS. According to the
July 8 issue of the German financial newspaper Handelsblatt,
Nazarbaev told its Moscow correspondent that in his opinion Western
financial credit should go directly to individual republics.
The governments of the republics should assume responsibility
for specific financial projects, said Nazarbaev. (Bess Brown)