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RFE/RL Daily Report

No. 1, 02 January 1992


MEETING OF CIS LEADERS IN MINSK. On December 30 the leaders of
the 11 CIS states met in Minsk and signed a total of nine agreements;
the heads of government signed a further six agreements, Soviet
media reported on December 30. In addition to agreements on military
matters (see below), these included a temporary accord on establishing
the Council of Heads of State and the Council of Heads of Government
of the CIS, and agreements on the space program, the Aral Sea,
Chernobyl, earthquake damage in Armenia, transport and tariffs,
the distribution of food bought with foreign credits, and aviation.
The CIS foreign ministers will meet in Moscow on January 10 to
discuss the sharing out of Soviet assets abroad, and the heads
of govern-ment will meet on January 25 in Moscow to examine how
price liberalization is going. (Ann Sheehy)

of December 30 and the December 31 Central TV reportage on the
Minsk news conference, no agreement appears to have been reached
on crucial economic issues such as the coordination of economic
reform programs, the freeing of prices, and the formation of
a banking union to replace the USSR Gosbank. (Keith Bush)

MINSK AGREEMENT ON STRATEGIC FORCES. The leaders of all 11 Commonwealth
republics signed an agreement on strategic forces. According
to the text released by TASS on December 31, this agreement deals
with far more than just nuclear weapons and applies to virtually
all the former Soviet armed forces except for ground forces.
A decision to use nuclear weapons may be made by the president
of Russia in "agreement" with the leaders of the other three
republics where strategic nuclear weapons are based-Belarus,
Kazakhstan, and Ukraine-and in "consultation" with the leaders
of the other republics. In an interview published by TASS on
December 31, Ukrainian President Leonid Kravchuk said that he
would have "special technical control" to prevent anyone using
nuclear weapons from Ukrainian soil. Like the earlier nuclear
agreement signed in Alma-Ata, the Minsk accord spoke of the eventual
removal of all nuclear weapons from Belarus and Ukraine, but
was silent about those in Kazakhstan. (Doug Clarke)

control over the armed forces proved to be the most contentious
issue at the Minsk meeting. In the end, republican leaders confirmed
the right of each member state to create its own army and established
a Council of Defense Ministers to oversee security issues. This
formulation was clearly a concession to Ukraine, Moldavia, and
Azerbaijan on the issue of control over general- purpose forces;
each of these states is determined to create its own national
army. Apparently, the ground forces of the remaining republics
will remain unified under a single command. Yeltsin proposed
that the next three years be viewed as a transitional period
during which the massive Soviet armed forces can be gradually
reduced and redeployed. (Stephen Foye)

SHAPOSHNIKOV RETAINED? Former Soviet Defense Minister Evgenii
Shaposhnikov, who apparently threatened to resign during stormy
negotiations in Minsk, was retained as CIS commander in chief,
although reports out of Minsk differed on whether the appointment
was permanent or temporary. The final disposition of general
purpose forces will be discussed once again in two months time.
Meanwhile, a CinC for border forces-Ilya Kalinichenko-was named
and ordered to submit a plan, also in two months time, for the
coordination of border troops throughout the commonwealth. (Stephen

leaders appear to have come away from the CIS summit in Minsk
reasonably satisfied. Ukrainian President Leonid Kravchuk told
a news conference in Minsk on December 30 that "no decisions
interfering in the domestic and foreign policy" of the states
that have formed the CIS were made, TASS reported the same day.
On their return to Kiev both Kravchuk and Ukrainian Foreign Minister
Anatolii Zlenko stressed that Ukraine had received the go-ahead
to create its own armed forces as of January 3, 1992, Radio Kiev
reported on December 30 and 31. Kravchuk, who acknowledged that
the negotiations in Minsk "had not been easy," also emphasized
that Ukraine could not agree that only the Russian tricolour
be raised over the embassies of the former USSR and that he had
successfully insisted on the recognition that each of the members
of the CIS has a right to a portion "of the former Soviet Union's
property in other countries." (Bohdan Nahaylo)

DEREGULATION OF PRICES. Starting today, most retail and wholesale
prices in at least three Commonwealth states are deregulated.
According to Western agency and Soviet media reports of January-1
and 2, most retail prices have been deregulated in Russia, Ukraine,
and Kirgiziya effective January 2, with administrative controls
remaining on certain staple goods and services, albeit at higher
levels. In Moldavia, the prices of staple foods were due to be
doubled and those of other goods to be quadrupled today, but
all prices remain controlled. Most retail prices are scheduled
to be deregulated in Belarus starting on January 3, although
a form of scrip or coupons was introduced on January 1. Most
wholesale prices were due to be deregulated starting January
2, but no reports of this have been monitored. (Keith Bush)

PRIVATIZATION IN RUSSIA. On December 30, Egor Gaidar and Anatolii
Chubais outlined the Russian privatization program which was
scheduled to begin on January 2, The Financial Times reported
December 31. Gaidar referred to a 30-page document which had
been approved by Parliament. This describes the two planned phases
of privatization: the first covers the period until the third
quarter of 1992, while the second deals with the bulk of privatization
from mid-1992 through 1994. Revenue from the sale of state property
is expected to amount to up to one trillion rubles. However,
Izvestia of January 2 declared that the package of normative
documents disseminated in Moscow and other cities is "nothing
more than rough drafts having no juridical force." The "official
documents on privatization in Russia" will be published in a
special edition of Zakon (a supplement to Izvestia). (Keith Bush)

MONEY MATTERS. Russian Central Bank Chairman Georgii Matyukhin
told the Presidium of the Russian Parliament on December 28 that
his bank was short 12 billion rubles in December and had only
enough currency reserves to last two more days, according to
Interfax of that date. To relieve the shortage of banknotes,
Matyukhin recommended the issuance of checks and the printing
of larger denomination banknotes. The New York Times of December
29 quotes Russian officials to the effect that 500-, 1,000-,
10,000-, and 20,000-ruble notes are to be printed. And The Financial
Times of December 21 cited Yeltsin as setting the end of 1992
for ruble convertibility. [Until now, this measure was set for
January, 1992.] (Keith Bush)

RUSSIAN FOREIGN POLICY. Russia "has a unique position and is
the successor of the USSR as a state," Interfax quoted a "prominent
diplomat" as saying on December 28. The same diplomat said that
while agreements with North Korea, Iraq, and Cuba do not conform
"to the criteria of expediency" by which Russia is guided, Russia,
as the successor to the USSR, is nonetheless bound to existing
agreements and treaties with these and other countries. (Suzanne

Boris Yeltsin rejected a statement from US Defense Secretary
Richard Cheney that Russia is still producing strategic missiles
for use against the United States, TASS reported on December
30. Yeltsin stressed that Russia will abide by the START agreement
and that by 1994 Ukraine and Belarus will destroy all the nuclear
weapons now on their soil with the assistance of the United States
and Russia. (Alexander Rahr)

RUTSKOI IN OPPOSITION. Russian Vice Presi-dent Aleksandr Rutskoi,
according to Moscow News on December 25, took part in a secret
meeting with former CPSU leaders to discuss alternatives to Yeltsin's
reform program, including the latter's resignation. Another Yeltsin
opponent, Vladimir Isakov, has called for a halt of the "antipeople
experiment"-a phrase first used by Rutskoi. Yeltsin issued a
decree depriving Rutskoi of most of his executive functions in
the Russian government structure, TV-Inform reported on December
27. The Russian parliament cancelled Yeltsin's decree on financing
government expenditures in the first quarter of 1992, demanding
to see a full budget proposal by January 15, Radio Rossiya reported
on December 27. (Alexander Rahr)

Sergei Stankevich suggested in an interview with the Japanese
newspaper Tokio Shimbun, which was quoted by TASS on December
30, that a post of general secretary should be introduced in
the CIS and that Mikhail Gorbachev should get this job. Stankevich
stated that the functions of the CIS's general secretary could
include presiding over the sessions of the Council of States
and representing the CIS abroad. He added that if Gorbachev rejects
the job, it should go to Eduard Shevardnadze. In other statements,
Stankevich rejected the idea of national parliamentary elections
in Russia before 1993 because that would lead to further destabil-ization
of society. (Alexander Rahr)

MOSCOW MAYOR GRANTED EXTRA POWERS. Russian President Boris Yeltsin
has reportedly signed a decree which gives Moscow Mayor Gavriil
Popov extra powers to carry out reforms in Moscow, Radio Moscow
reported on January 1. The decree has not yet been published,
but it appears to satisfy Popov's demands for more power to carry
out his privatization program. During the last week in December,
Yeltsin persuaded Popov not to resign and assured him of the
Russian government's support for his economic reform plan. (Carla

THE FATE OF GORBACHEV'S TEAM. Gorbachev's fifty-man team moved
from the Kremlin to offices in Varkavka street in Moscow, TASS
reported on December 30. According to an unnamed member of the
team, the Russian leadership has pledged to assign all competent
members of the team to posts in the Russian government. (Suzanne

the former KGB and MVD services is in high gear despite the decision
of the Russian Constitutional Court and the Supreme Soviet to
suspend Yeltsin's decree, TV Inform reported on December 29.-Yeltsin's
decree was published after the Russian Supreme Soviet adopted
a draft law on security of the RSFSR on December-18. The law
was adopted after a first reading during a closed sitting of
the Supreme Soviet; it was not published in the mass media. The
text of the law contains many obscure notions such as "defense
of spiritual sources of the society's vitality", according to
TASS of December 18. (Victor Yasmann)

intelligence will develop contacts with Western counterparts
in areas of common interest such as non-proliferation of nuclear
weapons and dangerous technologies, Evgenii Primakov, chief of
the Central Intelligence Service, told Pravitel'stvennyi Vestnik,
No. 50. Primakov confirmed that some Soviet intelligence officers
are involved in business and claimed their profits go solely
to the benefits of the state, he added. (Victor Yasmann)

continued in Tbilisi December 30-January 1. On December 30 Georgian
President Gamsakhurdia arrested Deputy Defence Minister Nodar
Georgadze after the latter insisted he should negotiate with
the opposition; an uncon-firmed Interfax report of December 31
claimed that Georgadze and a second MP were subsequently executed.
Opposition militia leaders have made contradictory statements
on whether they will launch an all-out attack on the government
building. On January 1 representatives of several moderate and
radical opposition groups met to discuss forming-a temporary
coalition government, Western news agencies reported that day.
(Liz Fuller)

UKRAINE APPLIES FOR MEMBERSHIP IN IMF. Ukraine has formally applied
to join the IMF, TASS reported on December 31. The news agency
pointed out that Ukraine is the first of the new independent
states that have formed the CIS to apply for membership in the
IMF. (Bohdan Nahaylo)

Postfactum of December 30, Belarus Defense Minister Petr Chaus
believes that the strength of the republic's armed forces "should
be about 90,000." In his opinion, they should be "small by their
strength, mobile by their use, and should possess a high combat
preparedness." (Bohdan Nahaylo)

OFFICERS' DEMANDS IN CENTRAL ASIA. Radio Mayak reported on December
31 that officers of military units stationed in Central Asia
have threatened to remove their units and equipment from the
region if their demands are not met. Their grievances, addressed
to the heads of state of the Central Asian republics, included
social problems and the fear that decisions concerning Soviet
Army units would be taken without the participation of the officers.
(Bess Brown)

Mircea Snegur's press office briefed the Moldavian media on December
31 about Moldavia's terms for adhering to the CIS. As expected,
Moldavia insisted on having a fully independent military under
its own command and refused to participate in any joint command
structure of the conventional forces or the border guards. (See
Daily Report, December 30.) Demanding full authority over all
conventional forces, including border troops currently based
on its territory, Moldavia considered those troops no longer
USSR or CIS troops starting December 30, 1991. Concerning strategic
forces, Moldavia subscribed to all the commitments entered into
by other republics "except the financing" of strategic force
programs. Moldavia declined to sign the agreement on joint space
research, but did sign the other agreements and protocols. (Vladimir

SNEGUR ON OTHER OPTIONS. Addressing the people of Moldavia on
New Year's Eve, Snegur said that Moldavia "will cooperate [with
CIS] only in those areas where it is advantageous to do so and
will participate only in those structures that do not impair
Moldavia's sovereignty," Moldovapres reported on January 1. Snegur
also renewed his insistence that Moldavia reserves the right
to seek "to join other communities of states" (read: the EC).
(Vladimir Socor)


LITHUANIA SUPPORTS CIS. Lithuania has praised the formation of
the Commonwealth of Independent States from the rubble of the
USSR, according to BALTFAX on December-31. Government spokesman
Audrius Azubalis told reporters that the Baltic States wish to
have good relations both with the CIS as a whole and with its
constituent states. Azubalis, however, quoted Chairman of the
Lithuanian Supreme Council Vytautas Landsbergis as saying that
Lithuania "gravitates towards central and northern Europe rather
than towards Eurasia." (Riina Kionka)

RUSSIA RATIFIES AGREEMENT. After nearly a year's delay, the Russian
Supreme Soviet has ratified the interstate treaty concluded last
January-12 with Estonia, BNS reported on December-27. In its
decision the parliament called on the government to begin talks
with Estonia to resolve remaining questions of borders, citizens'
rights, and other questions not addressed in the treaty. The
Estonian Supreme Council ratified the treaty with Russia last
spring. (Riina Kionka)

concluded a trade and economic agreement on December-29, BNS
reported the following day. The agreement foresees trade of about
100 million rubles in goods over 1992. Prices will be set at
world standards. Should either side introduce its own currency
during the year, the parties will renegotiate the agreement.
(Riina Kionka)

UNEMPLOYMENT GROWS IN ESTONIA. Some 900-workers in Estonia-up
from 300 in November-were drawing unemployment compensation by
year's end, Rahva haal reported on December-31. At the same time
8000 jobs were available for skilled workers. According to Unemployment
Office director Mati Karu, Estonia has a shortage of attorneys,
economists, and bookkeepers. (Riina Kionka)


FIGHTING CONTINUES IN CROATIA. Western and Yugoslav media reported
over the New Year holiday period that fighting went on throughout
Croatia with only brief interruptions. Shortly after midnight
on New Year's Eve, air-raid sirens sounded in Zagreb, but the
center of the fighting was in Karlovac to the southwest. Vinkovci
and Karlovac were also hit. In Osijek, however, Croats and Serbs
agreed that a local hospital would be used as a place of refuge
for civilian and military casualties from both sides. In Belgrade
UN special envoy Cyrus Vance spent New Year's Eve with peace
demonstrators and announced on January 1 in Zagreb that Serbia,
the Serbian-dominated army, and Croatia had all agreed to his
peace plan. Finally, on December-30 Slovenia's ruling coalition
formally split up. The move had long been expected, and new elections
may take place in the spring. (Patrick Moore)

German media reported on December 31 and January 1 that Foreign
Minister Hans-Dietrich Genscher had asked the Security Council
to meet urgently to consider sending forces to protect the Perucko
Dam near Split. Serbian-dominated forces are holding the structure
and have reportedly planted explosives and are preventing the
natural draining of the reservoir. Germany fears the Serbs will
blow up the dam, causing "an ecological catastrophe," and has
urged the UN to send in a contingent independent of its peacekeeping
efforts elsewhere in Yugoslavia. (Patrick Moore)

PRICE HIKES IN POLAND. The new Polish government bent over backward
to dissociate itself from energy price hikes announced on December
30 and introduced on January 1. Electricity prices went up 20%,
gas-70%, and home heating and hot water-83-100%. The increases
are part of an ongoing program to eliminate energy subsidies;
further increases will be necessary in 1992 to bring prices to
the level of production costs. Finance Minister Karol Lutkowski
nonetheless blamed his predecessor, Leszek Balcerowicz, and insisted
that the new government bore no responsibility for the decision.
An official statement carried by PAP on December 31 complained
that "this is not the only painful part of the legacy inherited
by the new government." While warning that living standards would
not soon improve, the statement pledged better protection for
the worst off. (Louisa Vinton)

30, the new Polish cabinet accepted "without enthusiasm" the
provisional first-quarter budget prepared by the outgoing government,
but opted to revise the "outline economic program" on which it
was based. In an attempt to calm labor discontent, Prime Minister
Jan Olszewski met on December 31 with the leaders of Solidarity
and the OPZZ federation. The new labor minister, Jerzy Kropiwnicki,
reportedly apologized for the outgoing government's "arrogance"
toward unionists. Solidarity Chairman Marian Krzaklewski said
his union would support the new government on the condition that
it accept a "stabilization agreement" to limit unemployment,
eliminate wage controls, and pursue "state intervention" in the
economy. (Louisa Vinton)

civilian defense minister, Jan Parys, announced on December 31
that his predecessor, Admiral Piotr Kolodziejcyzk, was being
pensioned off. Kolodziejczyk told Gazeta Wyborcza that this came
as a complete surprise to him and that, at 52, he was too young
to retire. He claimed that the government had not informed Walesa
of the decision and that the president was "irritated." A government
spokesman said that General Staff chief General Zdzislaw Stelmaszuk
was now in command of the armed forces. (Louisa Vinton)

HAVEL'S NEW YEAR ADDRESS. In a TV address on New Year's Day Czechoslovak
President Vaclav Havel said that the country's major task is
to find itself anew. He said that while unemployment has grown,
the worst is yet to come but that his country-men must persevere
with reforms. He was most worried by the continued inability
of the Czechs and Slovaks to settle the future setup of the federation.
Havel also expressed concern about the danger of conflicts in
the "explosive transformation of the postcommunist world". He
described the signing in Brussels in December of the association
agreements with the EC as the most important treaty in Czechoslovakia's
postwar history. (Barbara Kroulik)

CZECHOSLOVAK WEAPONS TO SYRIA. Czechoslovakia has been shipping
tanks to Syria via Polish ports, the Warsaw daily Gazeta wyborcza
said on December-30. It said 16-Czechoslovak-made T-72 tanks
and other weapons arrived on December-27 in the port of Szczecin.
They will leave for the Syrian port of Latakia aboard a German
freighter in early January. Future shipments will include more
than 150-Czechoslovak armored personnel carriers. Despite US
pressure to stop arms sales to Syria, Czechoslovakia is continuing
shipments, arguing that the exports are an important source of
hard currency. Czechoslovakia agreed in September to deliver
some 300-tanks to Syria, but the contract was suspended when
the Middle East conference began. (Barbara Kroulik)

several agitated sessions often extending into the night, the
Hungarian parliament adopted the state budget for 1992 by a vote
of 215 to 120 with 3-abstentions. As reported by MTI, the budget
provides for 1,051-billion forint in expenditures and 981-billion
in revenues. It is based on an anticipated growth in GNP of at
least 1%, a slowdown in price rises from 35% to a maximum of
15%, an 8-10% drop in production, and a similar decline in domestic
investment and consumption in 1992. The planned budget deficit
is just under the margin stipulated by the International Monetary
Fund. Opposition parties demanded more spending on education
and welfare and accused the government of excessively burdening
the taxpayer. (Edith Oltay)

signed a long-term trade accord in Moscow on December-30. In
an interview with Radio Bucharest, Romanian Trade Minister Constantin
Fota said that the agreement "sets out the legal framework to
foster trade with Russia, which accounted for over 80% of Romania's
trade with the former Soviet Union" and which provided Romania
with gas, electricity, oil and other items. (Crisula Stefanescu)

ROMANIAN BUDGET DEFICIT. Romania's budget deficit grew to 65.5-billion
lei this year, nearly double the 37.3-billion that parliament
had approved for 1991, said Aurel Bercea, secretary of state
in the National Public Budget Department. Rompres quotes Bercea
as blaming the deficit on a "drastic decrease" in material production.
He said that plans to help boost production should be combined
with austerity targets for 1992. National Bank governor Mugur
Isarescu expressed the opinion that only external funding could
reestablish the country's economic stability and said that Romanians
have "reached the end of their patience" and many are "living
at the very edge of material subsistence." (Crisula Stefanescu)

BULGARIA'S ECONOMY IN 1991. Some pre-liminary figures were reported
by Dimitar Fratev of the National Statistical Institute on Bulgarian
Radio December-30. Gross domestic product decreased by 23% as
compared with 1990, and national income by 30%, with the largest
drop-60%-in construction and an increase only in communications.
Industrial production decreased by 27% but agricultural production
by only 5%, owing to a 30% increase in output of private farms.
The private sector rep-resented only 0.5% of the national income
in industry and somewhat more in trade but as much as 40% in
agriculture. Industrial production showed a welcome trend in
November, when it increased by 5-6% over October. (Rada Nikolaev)

BULGARIAN INFLATION ASSESSED. In radio broadcasts on December-30
and 31 both Minister of Finance Ivan Kostov and Director General
of Bulgarian National Bank Todor Valchev sought to put into the
proper context Western reports that Bulgaria's inflation in 1991
was as high as 550%. They pointed out that, while this figure
may be valid for the year as a whole, the drastic rise was the
result of the price liberalization in February and, for the period
March-December, inflation was only 50%. They argued that some
inflation will be necessary in 1992 as well but took issue with
predictions by Western institutes, which they did not name directly,
that the rate would reach 250%. This would occur, Valchev said,
only if control were lost on all fronts. (Rada Nikolaev)

BULGARIA GETS THE LEAD OUT. The government decided on December 29
to stop production at the lead plant near Plovdiv effective January 1,
1992, until operations can be made to conform with ecologically
acceptable norms. The two Bulgarian lead plants, at Plovdiv and
Kardzhali, have been targets of ecological protests. This has
been the case especially with the Plovdiv plant, which heavily
pollutes a rich agricultural area. Western agencies reported
that the Plovdiv plant had already cut its annual output from
96,000 to 35,000-tons. BTA said the government's decision includes
plans to stop lead production on Bulgarian territory completely
within two years. (Rada Nikolaev) [As of 1130 CET] Compiled by
Suzanne Crow & Charles Trumbull

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