No. 53, 17 March 1992

SUCCESSOR STATES TO THE USSR

YELTSIN ESTABLISHES RUSSIAN DEFENSE MINISTRY. On 16 March Russian
President Boris Yeltsin issued a decree creating a Russian Defense
Ministry, and named himself as the temporary Defense Minister.
The text of the decree, published by ITAR-TASS, indicated that
the ministry would deal with personnel policy, budgeting, and
the procurement of arms and provisioning of the Russian armed
forces. These forces, when established, would be part of the
CIS General Purpose Joint Forces and would remain operationally
subordinate to the CIS high command. The decree tasks the government
to prepare a draft law on the Russian armed forces within one
month for submission to the Supreme Soviet. (Doug Clarke)

UKRAINIAN REACTION TO CREATION OF RUSSIAN ARMED FORCES. Ukrainian
Prime Minister Vitold Fokin said on 16 March that he was not
surprised by President Yeltsin's announcement that Russia will
create separate armed forces of its own after all, Western agencies
reported. Speaking in Kiev, he commented: "Russia has finally
cut short the niceties and frankly said that a state is not a
state without armed forces."(Bohdan Nahaylo)

UKRAINE CLARIFIES POSITION ON NUCLEAR ARMS ELIMINATION. Having
triggered of a wave of criticism from both Moscow and the West
by their decision to halt the transfer of tactical nuclear weapons
to Russia for their destruction, Ukrainian leaders have been
busy explaining their action and offering reassurances. Both
Western and CIS agencies have reported statements made in recent
days by President Leonid Kravchuk and Ukrainian Defense Minister
Konstantin Morozov reaffirming Ukraine's commitment to becoming
a nuclear free state and, as part of this process, eliminating
tactical nuclear weapons from Ukraine by 1 July 1992. Ukrainian
representatives have pointed out that the fate of nuclear weapons
transferred from Ukraine to Russia has given rise to great concern
because at this delicate time for both states it seems that the
arms are being stockpiled because of a lack of capacity and are
not being destroyed straight away. The Ukrainian side has said
that it will press for a modification of the arrangements for
the dismantling of the weapons to include a "mechanism of joint
control." (Bohdan Nahaylo)

NEXT CIS HEADS OF GOVERNMENT MEETING SCHEDULED. The next meeting
of the CIS heads of government will be in Tashkent at the end
of April, when eleven military and 14 economic items are expected
to be on the agenda. (Ann Sheehy)

KOZYREV TO THE FAR EAST. Russian Foreign Minister Andrei Kozyrev
left Moscow for China, South Korea and Japan, ITAR-TASS reported
on 16 March. In an interview published in the Japanese newspaper
Yomiuri Shimbun on 15 March, Kozyrev said that Russia will assume
a "mission" for the peaceful development of the Asia-Pacific
region. He stressed that Russia will not target its nuclear missiles
at Japan or China. Kozyrev called recent comments of Japanese
politicians on Russia's willingness of returning the Kurile islands
to Japan as "a bit premature at the present stage." Kozyrev pointed
out that many Russians are against the return of the Kurile islands
and the Russian government has to take this into account. (Alexander
Rahr)

KOZYREV PROPOSES TACTICAL NUKE BAN. During his current visit
to Beijing, Russian Foreign Minister Andrei Kozyrev said that
Russia was ready to negotiate a "global zero variant" for tactical
nuclear weapons. According to ITAR-TASS on 16 March, he also
told his Chinese counterpart, Qian Qichen, that Russia would
be interested in a mutual agreement not to deploy certain types
of tactical nuclear weapons in border areas. (Doug Clarke)

STANKEVICH ON RIGHT AND LEFT CENTERS IN RUSSIA. Russian State
Counsellor Sergei Stankevich told Die Presse on 14 March that
there are two major centers in Russian politics now. First, the
right-wing center, which wants Russia to become a new superpower
with a strong executive, based on Russian national traditions
but, at the same time, committed to market economy. The second
center, which Stankevich described as "left-wing," seeks to revive
social democracy, decentralize power and open Russia to foreign
ideas. According to Stankevich, the right-wing center has more
political chances but added that the left-wing center will dominate
politics in Russia's big industrial cities. (Alexander Rahr)


TATARSTAN PARLIAMENT IGNORES RUSSIAN CONSTITUTIONAL COURT. An
extraordinary session of the Tatarstan parliament on 16 March
decided not to alter the formulation of the question on the status
of Tatarstan to be put to a referendum on 21 March, the Russian
media reported. A resolution was adopted which reiterated that
the referendum was not about state separation from Russia, but
said that relations between Russia and Tatarstan should be based
on an inter-state treaty. The resolution reportedly made no mention
of the ruling of the Russian Constitutional Court on 13 March
that parts of the question were unconstitutional. (Ann Sheehy)


EC FOOD LOAN WITHHELD. At a meeting in Brussels on 16 March,
the finance ministers of the European Community agreed to continue
to withhold Russia's share of a $1.5 billion Community food loan,
Western agencies reported. They maintained that Russia must comply
with the EC's conditions for the loan, including the waiving
of its sovereign immunity if it defaults on its loans--a standard
clause in EC loan contracts. (The waiver enables creditors to
seize the assets of a government that defaults). The ministers
also agreed to maintain the condition that all republics accept
joint responsibility for the debts of the former Soviet Union,
but dropped the eligibility requirement that all republics be
up to date in servicing their current debts. (Keith Bush)

AGRICULTURAL REFORM RESOLUTION. On 12 March, the Russian parliament
adopted a resolution on "the pace of agrarian reform," ITAR-TASS
reported. This gave the Russian government until 20 April to
submit to the parliament a draft program for agrarian reform
for the period 1992-95. It also stipulated a series of measures
like the granting of subsidies for fuel and lubricants used in
agriculture, priority for privatization of agricultural processing
businesses, the provision of incentives for using unclaimed private
plots, investment in agro-industrial facilities, and so on. (Keith
Bush)

INTERVENTION TO SUPPORT RUBLE EXCHANGE RATE. At the last currency
auction, the Russian Central Bank spent more than $15 million
to support an exchange rate of 140 rubles to the US dollar, according
to Izvestiya of 12 March, quoted by ITAR-TASS. The report observed
that the bank does not have adequate reserves to repeat such
support in the future. Meanwhile, another ITAR-TASS dispatch
of 12 March reported that 1000-ruble notes went into circulation
that day. (Keith Bush)

NAGORNO-KARABAKH UPDATE. ITAR-TASS quoted Azerbaijani authorities
as claiming that over 30 people were killed or wounded on 16
March when the town of Fizuli bordering Nagorno-Karabakh came
under heavy artillery fire. Armenian Foreign Minister Raffi Hovanissian
announced on 16 March that Armenian President Levon Ter-Petrossyan
will propose the deployment of a CIS peacekeeping force in Nagorno-Karabakh
at the CIS summit in Kiev on 20 March. Ter-Petrossyan is to meet
with acting Azerbaijani President Yakub Mamedov in Kiev on 19
March, Western agencies reported on 16 March. (Liz Fuller)

GEIDAR ALIEV'S POLITICAL COMEBACK. Following in the footsteps
of his former Politburo colleague Eduard Shevardnadze, ex-Deputy
Chairman of the USSR Council of Ministers and Chairman of the
Nakhichevan Supreme Soviet Geidar Aliev has been appointed to
the State Council created in Azerbaijan on 12 March, together
with the acting Azerbaijani president and premier and two representatives
of the Azerbaijan Popular Front. According to Komsomolskaya pravda
of 14 March, Aliev is the sole Azerbaijani politician whose popularity
has risen over the past six months. (Liz Fuller)

KAZAKH NUCLEAR WEAPONS TO IRAN? Military officials in Russia
and Kazakhstan have denied a story in the German news magazine
Stern claiming that Iran may have obtained two nuclear warheads
and medium-range delivery systems from Kazakhstan, Western and
Russian agencies reported on 16 March. Stern based its story
on information from the German intelligence service, which was
quoted as saying that Iran lacked the necessary codes and facilities
to launch the weapons. A Russian Defense Ministry spokesman insisted
that all nuclear weapons remain under the strictest central control,
and a spokesman for Kazakh President Nursultan Nazarbaev said
that Kazakhstan is adhering to its obligations to prevent proliferation
of nuclear weapons. (Bess Brown)

REPUBLICAN GUARD TO BE SET UP IN KAZAKHSTAN. Kazakh President
Nursultan Nazarbaev issued a decree on 16 March establishing
a Republican Guard in Kazakhstan to safeguard the vital interests
of the country and protect the constitutional rights and freedoms
of its citizens, KazTAG-TASS reported. The Guard will be subordinate
to the president. Plans for creation of a National Guard in Kazakhstan
were described by State Defense Committee chairman Sagadat Nurmagambetov
in December 1991; both Nazarbaev and Nurmagambetov have insisted
that Kazakhstan wanted to remain part of a unified Commonwealth
army. (Bess Brown)

HONDA FACTORY IN KAZAKHSTAN? Construction has begun on a Honda
plant in Ust-Kamenogorsk that is projected to turn out 70,000
passenger cars a year by 1994, according to The Journal of Commerce
of 12 March, citing a Russian radio report. No confirmation was
forthcoming from a Honda spokesman. Local defense plants were
said to be participating in the construction. A Toyota assembly
plant was opened in Tashkent in November 1991. (Keith Bush/Bess
Brown)

UZBEKISTAN OIL DISCOVERY. Citing Russian TV and a telephone call
to Tashkent, The Journal of Commerce on 17 March reported the
discovery of what could turn out to be a major oil deposit in
the Minbulashky oilfield in Uzbekistan. The television broadcast
had spoken of a borehole there producing about 31,000 barrels
or 5,000 cubic meters a day, but the chief engineer of Uzbekneft
cautioned that it was impossible at this stage to measure the
flow. (Keith Bush)

RUSSIAN INSURGENCY IN EASTERN MOLDOVA ESCALATES. On 14 and 15
March, the "Dniester republic guard" and Don Cossacks attacked
Moldovan police units in three villages in Dubasari raion in
an attempt to eliminate the last remaining Moldovan police presence
on the left bank of the Dniester. The police appear to have held
their own, but the villages suffered heavy damage and several
hundred Moldovan peasants took refuge on the right bank. Russian
forces also blew up two highway bridges over the Dniester. According
to sources in Chisinau and Tiraspol, cited by Moldovan, Moscow,
and international media, the death toll for this latest round
of clashes is being put provisionally as 6 "Dniester" guardsmen
and 3 Moldovan policemen, with a score of injured on each side;
but Tiraspol accuses Chisinau of undercounting the Moldovan dead.
(Vladimir Socor)

"DNIESTER" ARSENAL GROWING. The "Dniester" Russians and Cossacks
deployed for the first time in these clashes a substantial force
of armored personnel carriers and 6 "Grad" multiple rocket-launching
systems, one of which was captured by Moldovan police. Raiding
a military depot near Tiraspol, in obvious collusion with military
servicemen who guided them through a minefield protecting the
depot, "Dniester" guardsmen and Cossacks carted away in military
trucks 1,100 Kalashnikov submachine guns along with 1.5 million
cartridges, 1,300 grenade and mortar rounds, and 30 portable
rocket launchers, Russian and Moldovan media reported. (Vladimir
Socor)

UKRAINIAN CONCERN OVER CONFLICT IN MOLDOVA. Radio Ukraine reported
on 15 March that the Ukrainian Foreign Ministry has issued a
statement expressing concern about the involvement of "Cossack"
volunteers from the Don region in southern Russia in the armed
conflict in Moldova. The statement describes the Cossacks fighting
on the side of the "Dniester Republic" as "mercenaries," the
use of which, it also stresses, violates international legal
norms. The following day, the Foreign Ministry called for a cease-fire
in the Moldovan conflict over the "Dniester Republic" and offered
to mediate. It said that refugees from the fighting were crossing
into Ukraine. Warning both sides not to violate its border, it
said that it would take steps to protect its frontier. (Bohdan
Nahaylo)

UKRAINIANS IN MOLDOVA APPEAL TO KIEV. Radio Ukraine reported
on 16 March that representatives from the large indigenous Ukrainian
population living in the self-proclaimed "Dniester Republic"
in Moldova have appealed to the Ukrainian Supreme Council and
to Ukrainian president Leonid Kravchuk to help prevent the conflict
in their region from spreading. "In their struggle for power,"
the appeal states, "the political leaders are not thinking about
the people and are ready to stir up a Dniester Karabakh." According
to Radio Ukraine, some 250,000 Ukrainians live in the Dniester
region.(Bohdan Nahaylo)

EASTERN EUROPE

BALTIC STATES



BALTIC COUNCIL MEETING. Meeting in Jurmala, Latvia, on 16 March,
the Baltic Council renewed appeals for a speedy withdrawal of
ex-Soviet troops from Estonia, Latvia, and Lithuania, and sent
letters to each of the CIS states urging them to seek an immediate
solution to this problem, BNS and Reuters report. The Chairmen
of the Supreme Councils of Estonia, Latvia, and Lithuania also
issued a statement calling for the demilitarization of the Baltic
Sea, specifically noting that the withdrawal of nuclear weapons
would allow it to be a "nuclear-free zone," Radio Lithuania reports.
The Baltic leaders said they would welcome a gradual decrease
in military forces in the Kaliningrad and St. Petersburg regions.
The Baltic Council also renounced responsibility for the USSR's
foreign debt, stressing that the Baltic States are not the successors
of the USSR and cannot be held responsible for the settlement
or repayment of that debt. The council also protested against
the unilateral decision by Russia to block the hard currency
assets of the Baltic depositors in the former USSR Bank for Foreign
Economic Affairs, and criticized the planned 17 March reconvening
of the USSR Congress of Peoples Deputies. (Dzintra Bungs & Saulius
Girnius)

CONCERN OVER TROOP AND VETERANS' ACTIVITIES. BNS reported on
16 March that the police in Latvia has been placed on alert for
possible actions related to the 17 March Congress of Peoples
Deputies meeting in Moscow. Pro-Russian groups, including USSR
veterans' organizations, are planning to picket the Supreme Council
and hold meetings that day in Riga. Unusual activities by ex-Soviet
troops have also been reported in Pskov Oblast along the Latvian-Russian
border. Deputy Minister of Defense Dainis Turlajs said, however,
that there is probably no need for special concern, especially
since the Russian group of experts to discuss the withdrawal
of Soviet troops from Latvia is to arrive in Riga on 17 March.
(Dzintra Bungs)

RUBLES OR LATS? Einars Repse, president of the Bank of Latvia,
told the press on 12 March that final plans have not been completed
for the introduction of Latvian currency, the lats. Still under
consideration, according to Diena of 13 March, is the introduction
of an interim currency, referred to for the purposes of discussion
as the Latvian ruble. Such a step might be necessary if an acute
shortage of CIS rubles occurs. The value of the lats would be
set to equal one ecu, or approximately $1.22. (Dzintra Bungs)


LITHUANIAN REPRESENTATION. On 17 March Radio Lithuania reported
that Prime Minister Gediminas Vagnorius has issued a decree regulating
the financing of Lithuania's missions abroad. Lithuania plans
22 embassies, most of them in Europe, but financial considerations
will limit the size of the staffs to 2-4 persons with larger
numbers in the USA--9 and Russia--28. Consulates are also planned
in Poland, Russia, and Germany, and representatives will be sent
to the UN and the EC. (Saulius Girnius)



CENTRAL AND EASTERN EUROPE

OLECHOWSKI: POLISH GOVERNMENT NEEDS SPECIAL POWERS. On 16 March
Polish Finance Minister Andrzej Olechowski met with US Treasury
Secretary Nicholas Brady in Washington, seeking support for Warsaw's
economic plans for the next year. According to an RFE/RL correspondent
in Washington, he also met top officials at the IMF, where he
presented the proposed Polish budget for 1992 and discussed plans
to cut the deficit. Later Olechowski met with World Bank officials
to discuss modernization loans. Olechowski told Le Figaro on
16 March that the Polish government needs special powers to carry
out its economic reforms. The powers are needed because Poland's
system is dominated by parliament, leaving the government no
executive power. (Wladyslaw Minkiewicz)

PRIVATE RAILWAYS FOR POLAND. A Polish-Danish joint

company, the Lubuska Regional Railway, is planning to create
Poland's first private railway in decades, using surplus rolling
stock bought at bargain prices. The company's director, Zdzislaw
Wolny, told PAP that the first equipment, two diesel locomotives
and eight carriages, was delivered on 16 March. Up to 10 passenger
routes along 366 km of rail lines given up by Polish State Railways
in Zielona Gora are planned. Freight services will also be offered.
(Wladyslaw Minkiewicz)

CZECHOSLOVAKIA REJECTS ISRAELI ARMS SALES REPORT. In

reaction to a report published in Haaretz of 16 March that Czechoslovakia
recently sold Egypt and certain North African countries MiG-23
fighter bombers fitted with Israeli avionics, Czechoslovak Foreign
Trade Ministry official Stefan Glezgo said his country had never
exported MiG-23s. Glezgo rejected as "obviously groundless" the
Israeli daily's assertion that Czechoslovakia "indiscriminately"
sells "weapons of all kinds equipped with Israeli-made components,"
CSTK reports. (Peter Matuska)

US, CZECHOSLOVAKIA SIGN PRESERVATION AGREEMENT. On 17 March US
Deputy Secretary of State Lawrence Eagleburger and Czechoslovak
Ambassador to the US Rita Klimova are to sign an agreement on
preserving sites of cultural and historic importance. The agreement
is the first in a series of pacts with East and West European
nations to preserve monuments, historic buildings, and cultural
sites that have a special meaning for Americans whose ancestors
came from Europe, an RFE/RL correspondent reports. (Peter Matuska)


HAVEL ON EC, DUBCEK'S NEW AFFILIATION. On 16 March Czechoslovak
President Vaclav Havel discussed his country's aspirations to
join the European Community with EC Commission Vice President
Martin Bangemann. Speaking to reporters in Prague, Bangemann
said the country has met the basic condition for membership--establishing
a democratic political system--and suggested that Czechoslovakia,
together with Poland and Hungary, would be able to join the EC
within ten years. On 16 March presidential spokesman Michael
Zantovsky said Havel hopes Alexander Dubcek's decision to join
the Slovak Social Democratic Party will stabilize Slovak politics.
The party advocates more Slovak autonomy but within a federal
Czechoslovakia, an RFE/RL correspondent reports. (Peter Matuska)


HUNGARIAN DEFENSE MINISTER TO THE US. MTI reports that Defense
Minister Lajos Fur left on 16 March for a four-day official visit
to the US at the invitation of US Defense Secretary Dick Cheney,
who visited Hungary in December 1991. Fur will discuss military
policy issues at the Pentagon and visit several US military bases
to become acquainted with American military training and combat
weaponry. (Alfred Reisch)

FAVORABLE BALANCE OF PAYMENTS. According to preliminary reports
supplied by the Hungarian National Bank, Hungary's current payments
account registered a $300 million surplus in January 1992, MTI
reported on 16 March. Due to a growth of exports and drop in
imports, the trade balance showed a $210 million surplus and
the tourism balance a $9-10 million surplus in January. During
the same period, $80-85 million in working capital entered Hungary
and hard currency reserves grew by $100 million and reached $4.1-4.2
billion. (Alfred Reisch)

RISING PRICES. According to the Central Statistical Office, consumer
prices in Hungary rose by 2.7% in February 1992 compared to the
preceding month and 25.8% compared to February 1991, MTI reports.
At the same time last year, these figures stood at 4.9% and 33.2%,
respectively. Over half of the February 1992 price increase was
due to reduced price subsidies, i.e., central measures affecting
the price of milk, butter, and dairy products. Within the 12-month
25.8% price increase, household energy prices rose by 73.5% and
foodstuff prices by 13.7%. In the first two months of the 1992
consumer prices rose 6% compared to December 1991. (Alfred Reisch)


ILIESCU'S BBC INTERVIEW. In a BBC broadcast on 15 March Romanian
President Ion Iliescu replied to questions from listeners worldwide.
Asked if he does not fear trial for his participation in Ceausescu's
crimes and repression of the revolution of December 1989, or
for having masterminded the miners' rampages last year in Bucharest,
Iliescu provided examples of his noncompliance with Ceausescu's
orders, denied any involvement in the 1989 repression, and avowed
that the miners had come to the capital in order to reinstate
order. He warned against attempts to punish former communists,
saying that in so doing there would be a great risk of reviving
communist repression methods. Iliescu also denied that he favors
the old nomenklatura and stated that as a free thinker he respects
all religious beliefs. (Mihai Sturdza)

ROUNDUP OF FINANCIAL ASSISTANCE TO ROMANIA. The biweekly Economistul
writes that in 1990 and 1991 the EC provided some 1.8 billion
ecus (over $2 billion) in assistance to Romania. That represents
about 45% of the amount provided under the G-24 assistance programs,
which include EC loans of about 800 million ecus (of which 370
million ecus are covered by the PHARE assistance program and
need not be repaid). Of the 800 million ecus, some 115 million
ecus will go to emergency financial assistance, and 375 million
ecus to support the convertibility of the leu and the balance
of payments. Outside its general aid to the region, the EC is
providing one billion ecus for specifically Romanian programs,
of which 220 million are nonrepayable. The EBRD has promised
credits worth over 180 million ecus. Prime Minister Stolojan
met a delegation from the World Bank on 10 March to discuss a
proposed $350 million loan. (Mihai Sturdza)

PROPERTY OF BULGARIAN TURKS TO BE RETURNED. A law

providing for the return of property of ethnic Turks is planned,
according to Deputy Chairman of the National Assembly Kadir Kadir,
a member of the Movement for Rights and Freedoms. Speaking in
Razgrad, one of the main areas inhabited by Bulgarian Turks,
Kadir told BTA on 15 March that the law is intended for the relief
of those who sold their houses under pressure in the summer of
1989 because they were leaving for Turkey and who meanwhile have
returned. Kadir said he doubted the law would contribute to social
tension, and he pointed out that those citizens who bought houses
from emigrating Turks fairly would be fully compensated. (Rada
Nikolaev)

LATEST ON BULGARIA'S MONARCHY ISSUE. The Bulgarian Democratic
Center, a group of mainly antimonarchist parties, plans to propose
a referendum on the question of whether Bulgaria should be a
monarchy or a republic, BTA reports. Passions in Bulgaria were
recently stirred by statements by exiled Tsar Simeon II and President
Zhelev's interview in the Madrid daily El País on 9 February,
in which he called Simeon's father, Boris III, a war criminal.
Meanwhile, the media report that Simeon's mother, 84-year old
Queen Ioanna, will visit Bulgaria; Zhelev said on 11 March that
he would welcome her. In a phone interview with Bulgarian Radio
on 13 March, Simeon's sister Maria Luisa said that her mother
would only come after her husband's grave has been found. A commission
headed by National Assembly Chairman Stefan Savov has been searching
for the Tsar's remains, which were exhumed by the communist regime.
(Rada Nikolaev)

TENSIONS REMAIN HIGH IN BOSNIA. Radio Sarajevo reports that the
situation in areas of northern Bosnia and western Herzegovina
have reached dramatic proportions. Heavy fighting between Muslims
and Serbs is reported in Bosanski Brod. Several people were wounded
after Serb gunmen opened fire on a funeral of a Muslim teenager.
A cease-fire was negotiated on the evening of 16 March, but reports
say that the situation is uncertain. In Mostar, Herzegovina,
Muslims and Croats have refused to remove roadblocks on two main
approaches to the city set up in protest against the unruly behavior
of federal army reservists from Serbia and Montenegro. The federal
army commander in Mostar told city government officials that
extremist paramilitary units from Croatia are using the roadblocks
to provoke clashes with the Yugoslav army, and he warned of mass
bloodshed. (Milan Andrejevich)