No. 145, 31 July 1992

SUCCESSOR STATES TO THE USSR

POPOV SUGGESTS SETTING UP CONSTITUTIONAL ASSEMBLY. Russia's new
Constitution should be adopted by a constitutional assembly,
not by the Congress of People's Deputies, according to Gavriil
Popov, chairman of the Russian Movement for Democratic Reform.
He was quoted on Radio Rossii on 31 July as saying that one third
of the members of such a constitutional assembly should be members
of the Supreme Soviet, one third should be individuals appointed
by the president and one third should be representatives of all
public organizations and parties in Russia. Popov added that
he does not believe the Congress of People's Deputies will approve
the existing draft constitution because to do so would be to
end the existence of the Congress, which is not included in the
draft. (Alexander Rahr)

ARBATOV ATTACKS GOVERNMENT. The director of the US and Canada
Institute, Georgii Arbatov, was quoted in the Munich daily Sueddeutsche
Zeitung on 30 July as saying that Egor Gaidar's government has
reintroduced "War Communism" in Russia. Arbatov criticized the
present Russian government for attempting to introduce capitalism
too quickly, and also attacked the IMF for treating Russia as
a Third World country. Arbatov argued that Russia should not
follow the Polish model of "shock therapy" but rather should
learn from Japan. He also asserted that if Mikhail Gorbachev
had given "some autonomy" to the republics and proposed a union
treaty in 1989, rather than shortly before the putsch, the Soviet
Union would still exist as a federation. (Alexander Rahr)

PROGRESS OF RUSSIAN PRIVATIZATION. Anatolii Chubais, Russia's
first deputy premier in charge of privatization, told Reuters
on 30 July about progress to date. Privatization vouchers for
the entire population of Russia will be distributed by 31 December.
Eventually, state-owned enterprises should account for only 5-7%
of the economy. Chubais said that privatization will replace
price policies as the centerpiece of the reform program from
now on, and he restated his belief that privatization will make
reform irreversible. He estimated that the military sector now
probably accounts for about 40% of the economy. (Keith Bush)


RUBLE STABILIZES? The ruble held its ground against the dollar
on 30 July trading at the Moscow Interbank Currency Exchange.
The exchange rate is 161 rubles to the dollar. At the same time,
a dealer at the International Moscow Bank told Reuters that it
is more reasonable to expect the ruble to stabilize at the rate
of 170 to 180 to the dollar. Russian economist Ivan Korolev is
more pessimistic. Korolev, deputy director of the Institute of
World Economy and International Relations, suggested in an article
in July/August's Delovye lyudi that a more realistic dollar rate
for the ruble may be over 200. (Erik Whitlock)

NEW RUBLE COINS CIRCULATED. Ruble coins will now circulate alongside
paper money, Russian television reported on 30 July. The coinsissued
in values of one, five, ten, twenty, fifty and 100 rublesare
eventually intended to replace their paper counterparts. Meanwhile
almost all production of kopeck coins, whose value evaporated
with the onset of hyperinflation, has ended. Russia will continue
to mint only a 10-kopeck coin. (Erik Whitlock)

BUNICH CITES GROWING DISTORTIONS. Well-known Russian economist
Pavel Bunich said in an interview published in the current issue
of Rossiiskie Vesti and summarized by ITAR-TASS on 30 July that
the government's current economic policy ignores significant
inequities in incomes. Bunich noted that while inflation had
cut real wages in half on average, certain income groups were
suffering disproportionately. Wages at enterprises and organizations
financed from the state budget, for example, are two to three
times lower than those of self-financing enterprises. He also
suggested that divergence of agricultural and industrial prices
is threatening peasant living standards. (Erik Whitlock)

GENERAL WARNS OF WESTERN INTERFERENCE. The First Deputy Chief
of the Russian General Staff, Colonel General Mikhail Kolesnikov,
charged on 30 July that the breakup of the USSR had rallied the
NATO alliance and encouraged it to build closer ties with former
Warsaw Pact members and with several former Soviet republics.
Kolesnikov warned that growing instability could lead to direct
intervention by Western powers in the former USSR under the pretext
of establishing international control over nuclear weapons located
there. He also argued that the long-term interests of the US
and NATO were not served by the re-establishment of Russia as
a new center of power in place of the USSR. His remarks were
made at a meeting of the Council on Foreign and Defense Policies,
identified by ITAR-TASS as a non-governmental association of
leading military and civilian defense experts. (Stephen Foye)


GRACHEV ON POLITICAL STATEMENT, SHOOTING TO KILL. Interfax reported
on 30 July that Russian Defense Minister Pavel Grachev has ordered
Russian officers, including the high command, to cease making
political statements. Henceforth, he said, only the Defense Minister
and his deputies will be permitted to make political statements.
Grachev also reportedly said that Russian officers are entitled
to shoot to kill in cases of arbitrary actions against themselves
or army installations. According to Interfax, a high-ranking
officer explained that Grachev had eliminated the requirement
that warning shots to be fired first in clear-cut assault cases.
(Stephen Foye)

BLACK SEA FLEET UPDATE. The Russian Foreign Ministry has sent
a protest note to Sevastopol demanding the return of a ship that
fled on 21 July without authorization to Odessa, where it has
been kept by the Ukrainian naval authorities. The protest note
criticized the "illegal" acts of the crew and charged that they
had "destabilized" relations between the two countries. Meanwhile,
a coordinating council claiming to represent Black Sea Fleet
officers proposed on 30 July that the fleet be split into separate
Ukrainian and Russian fleets with equal rights and under joint
operational and strategic command. The latter condition is unlikely
to be acceptable to Kiev. Both items were reported by AFP on
30 July. The latest jousting comes as Presidents Kravchuk and
Yeltsin prepare for a 3 August meeting in Yalta to discuss the
fleet. (Stephen Foye)

RUSSIA, US SIGN CHEMICAL ARMS ACCORD. The US and Russia signed
an agreement on 30 July by which Washington will provide up to
twenty-five million dollars for the destruction of Russian chemical
weapons, Western agencies reported. The funds will also go toward
providing safe transportation for the weapons and for the training
of Russian experts in the US.(Stephen Foye)

RUSSIAN ARMS TO PAKISTAN? Although an unnamed official of Pakistan's
Ministry of External Affairs made a statement on July 29 describing
recent press reports that Pakistan planned to place a large order
for Russian arms as "purely speculative," ITAR-TASS reported
the following day that many Pakistani newspapers had indicated
that an agreement to purchase MiG-29 and Su-27 jets, T-72 tanks,
and 130mm artillery pieces would soon be signed. The newspapers
indicated that $400 million had been earmarked for the arms deal.
(Doug Clarke)

HIGHER PAY FOR RUSSIAN PEACEKEEPERS. A battalion of Russian paratrooper
volunteers joined the peacekeeping forces in the conflict zone
in Moldova on 29 July and another battalion was scheduled to
leave for Moldova the following day. ITAR-TASS indicated that
these troops were under contracts that would pay them over 8,000
rubles per month plus a lump-sum bonus of one month's pay. They
were also promised a thirty-day leave after serving six months
in the conflict zone. Should one of the volunteers be killed
in action, his family will receive 100,000 rubles plus a life-long
pension 2.5 times greater than the minimum pension in the Russian
Federation. (Doug Clarke)

OFFICERS TAKE UP THE PLOW. Some 50,000 discharged Russian officers
will soon become farmers, according to Aleksandr Temerko, chairman
of the Russian Defense Ministry committee responsible for the
social welfare of servicemen. Temerko said that the new agricultural
ventures would be realized through the use of freed-up military
property. His remarks, reported by ITAR-TASS, were broadcast
by Radio Rossii on 29 July. (Stephen Foye)

CRIME RATE UP IN RUSSIAN MILITARY. The Russian State Prosecutor's
office reported on 28 July that the number of crimes in the Russian
armed forces had grown by 12.4% in the first six months of 1992.
As reported by ITAR-TASS, the officials revealed that during
the same period what were referred to as "common crimes" jumped
41%. The most dramatic rise was in attempts to seize weapons
and ammunition, up by a factor of 2.5. The incidence of burglary
and assaults rose by 89% while there were only 3% more murders.
(Doug Clarke)

GROUP CALLS FOR CHAPLAINS IN RUSSIAN ARMY. The movement called
"Soldiers for the Spiritual Rebirth of the Army" has drafted
a bill for the Russian parliament calling for chaplains to replace
the former political officers. Colonel Mikhail Kuznetsov, a spokesman
for the movement, explained to ITAR-TASS on 28 July that chaplains
would first be assigned to military districts and armies as well
as the central headquarters of the defense, interior, and security
ministries. All religious beliefs would be accepted. (Doug Clarke)


US ACADEMY CRITICIZES RUSSIAN MATHEMATICIAN FOR ANTI-SEMITISM.
The US Academy of Sciences has criticized anti-Semitism in the
writings of the well-known Russian mathematician and former dissident,
Igor Shafarevich. Academy President Frank Press and its foreign
secretary James Wyngaarden wrote a letter to Shafarevich, saying
the academy would be pleased if Shafarevich resigned, The New
York Times reported on 29 July. The academy has no mechanism
for expelling members. As an example of Shafarevich's antiSemitism,
the letter cited his book Russophobia, which alleged that Jews
have been plotting for centuries to destroy Russia. The letter
also mentioned that Shafarevich is currently part of the management
of the Steklov Institute for mathematics in Moscow. The institute
has been notorious for an employment policy which discriminates
against Jews. (Vera Tolz)

DEMIREL IN GEORGIA. Turkish Prime Minister Suleyman Demirel flew
to Georgia on 30 July for a one-day official visit during which
he pledged Turkish support for Georgia's economic and political
reforms and signed seven agreements on friendship and cooperation
in the spheres of economy, science and technology, culture and
ecology, ITAR-TASS reported. Turkey also airlifted 15 tons of
humanitarian aid to Georgia. (Liz Fuller)

NEW PRIME MINISTER APPOINTED IN ARMENIA. Khosrov Arutyunyan,
a 44-year old engineer and chairman of the Armenian parliament's
permanent commission on local self-government, has been appointed
Armenian prime minister, ITAR-TASS reported on 30 July. He replaces
Gagik Arutyunyan, the Armenian vice-president who was named acting
prime minister last November. (Liz Fuller)

UZBEK PARLIAMENT VOTES TO FILE SUIT AGAINST GDLYAN/IVANOV. During
its tenth session on 2-4 July, the Uzbek Supreme Soviet voted
that criminal charges be brought against former USSR Special
Prosecutors Tel'man Gdlyan and Nikolai Ivanov for the "illegal"
arrest of former Chairman of the Uzbek Council of Ministers Narmakhonmadi
Khudaiberdiev, Moskovskii komsomolets reported on 30 July. Khudaiberdiev
was sentenced in September, 1989, to nine years' imprisonment
for corruption as part of the "Cotton Affair" of the mid-1980s.
This year the Uzbek Supreme Soviet has also voted to celebrate
the anniversary of the birth of former Uzbek Communist Party
chief Sharaf Rashidov, one of the main figures in the "Cotton
Affair," but now lionized as a national hero in Uzbekistan. (Cassandra
Cavanaugh)

US AID TO TAJIK EARTHQUAKE VICTIMS. The US charge d'affaires
in Tajikistan has announced that $70,000 have been set aside
to help victims of the April-May earthquakes in Tajikistan's
Kulyab Oblast, ITAR-TASS reported on 30 July. Thousands were
left homeless in a region also torn in recent months by political
fighting. The US embassy in Dushanbe intends to open a number
of soup kitchens in cooperation with the Tajik Red Crescent organization.
In the past three months, the US has also sent six cargo planes
and 14 railway cars filled with medical and food aid to Tajikistan.(Cassandra
Cavanaugh)

CENTRAL AND EASTERN EUROPE

FIGHTING CONTINUES IN BOSNIA. UN peacekeeping forces came under
attack the night of 29-30 July as artillery and gunfire barrages
continued to rage in Sarajevo. A radar-monitoring unit staffed
by a Ukrainian contingent of UN forces, the UN headquarters in
Sarajevo, and Sarajevo airport were all hit during the fighting.
No injuries were reported among the UN troops. Witnesses said
it was impossible to tell who was responsible for the shelling.
More fighting was reported in the eastern Bosnian towns of Foca
and Zvornik. Radio Serbia reported on 29 July that a major Croatian
offensive on the Trebinje-Dubrovnik front, apparently aimed at
conquering Serbian strongholds in eastern Herzegovina, was beaten
back. Reuters reports that Iranian newspapers are calling for
the formation of a volunteer Islamic force to rescue the Bosnian
Muslims and to provide heavy artillery, small arms, and ammunitionthis,
the Iranians said, in light of the apparent indifference of European
powers to the Muslims' plight. (Gordon Bardos)

GENEVA REFUGEE CONFERENCE UPDATE. The Washington Post reports
on 31 July that the European delegates discussing the Balkan
refugee crisis agreed on 30 July to set aside visa requirements
and give "temporary shelter" to refugees arriving on their borders.
This still leaves the differences unresolved between Germany
and other countries near the former Yugoslavia on the one hand,
and Britain, France, and the Scandinavian countries on the other.
The former want refugee quotas for all European countries, while
the latter want the refugees to stay as close to their former
homes as possible, albeit with increased funding made available
for their care. The BBC and the Frankfurter Allgemeine Zeitung
note that international attention is increasingly drawn to the
idea of setting up "safe havens" for refugees within Bosnia itself
on the Kurdish model. Critics of the concept suggest, however,
that the havens might not be completely secure from attack, and
that establishing such zones might only encourage the Serbs to
chase Muslims and Croats into them. (Patrick Moore)

PANIC IN HUNGARY. Milan Panic, prime minister of the rump Yugoslavia,
told reporters following talks on 30 July in Budapest with Hungarian
prime minister Jozsef Antall that he wished to open a new chapter
in the two countries' relations, MTI reports. Panic said that
his major goal is restoring peace, and he attributes great importance
to cooperation with Hungary. Panic called for a revival of Hungarian-Serbian
economic relations and pledged to treat minorities in the spirit
of tolerance. Panic proposed Budapest as the venue for an international
conference to be attended by all republics of former Yugoslavia.
(Edith Oltay)

POLITICS ENGULF POLITIKA. On 30 July Serbia's Socialist-dominated
parliament approved a bill nationalizing Belgrade's oldest publishing
group, Politika. According to Radio Serbia, the measure is planned
to take effect on 1 August, but parliament must first debate
some 300 amendments proposed by the opposition. The entire staff
of more than 4,000 employees went on strike on 31 July in protest.
In addition to its influential daily, Politika publishes 15 other
newspapers and magazines and operates a radio and TV station.
For the first time since World War II, none of Politika's three
dailies will appear on 31 July. Zivorad Minovic, Politika's director,
said on Politika TV on 30 July that the Socialist Party and government
"have thoroughly plundered and now confiscated Politika because
they are trying to save themselves through dictatorship."

CZECHOSLOVAK PARLIAMENT AGAIN FAILS TO ELECT PRESIDENT. All three
candidates who competed for the post of president in the third
round of Czechoslovak elections on 30 July failed to be elected,
CSTK reports. Marie Kristkova of the Liberal and Social Union
was top vote-getter but still came up far short of the required
number of votes. Her opponents were Zdenek Pinta of Movement
90 and Zdenek Viktor Prochazka of the extreme-right Republican
Party. At a press conference in Prague, Czech Prime Minister
Vaclav Klaus called the Czechoslovak presidential elections,
repeated every fortnight, "ridiculous." Responding to the mounting
criticism, the parliament decided to hold the fourth election
on 6 August but to delay the fifth round by eight weeks in case
the fourth round fails to produce a president. (Jiri Pehe)

NEW LITHUANIAN MINISTERS APPOINTED. On 30 July parliament approved
as a group the appointments of Audrius Misevicius as finance
minister, Teodoras Medaiskis as social security minister, and
Gediminas Serksnys as minister without portfolio with responsibilities
for negotiations with Russia, the RFE/RL Lithuanian Service reports.
Two deputy ministers were designated as acting ministers; Zenonas
Juknevicius for the Ministry of Justice and Romualdas Ramoska
for the Ministry of Trade and Material Resources. Prime Minister
Aleksandras Abisala has suggested that the latter ministry be
changed to the Ministry of Industry and Trade. (Saulius Girnius)


LITHUANIAN PARLIAMENT UNABLE TO FINISH WORK. On 30 July parliament
officially declared the ending of its fifth session, Radio Lithuania
reports, although an extraordinary meeting will be held on 4
August to debate a measure on the building of an oil terminal
near Klaipeda that was not passed due to the lack of a quorum
and discuss possible leadership changes in the Bank of Lithuania.
(Saulius Girnius)

EDU DELEGATION ENDS ROMANIAN VISIT. A delegation of the European
Democratic Union, headed by Jan Carnogursky, the former Slovak
premier, has ended a visit to Romania, local media reported on
30 July. EDU president, Austrian foreign minister Alois Mock,
had sent the delegation to prepare a report on the preelectoral
situation. They met President Ion Iliescu, Premier Theodor Stolojan,
Foreign Affairs Minister Adrian Nastase, and members of the opposition.
At a press conference on 30 July Carnogursky said the number
of international observers for the 27 September elections is
too small and found discriminatory policies in allotment of radio
and TV time to various parties. (Michael Shafir).

ROMANIAN GOVERNMENT ON 1991 STATE BUDGET. At its weekly meeting
on 29 July, the Romanian government endorsed a bill on the annual
general account of the 1991 state budget, local media report.
The 1991 deficit is smaller than originally projected. Revenues
were 496.8 billion lei and expenditures amounted to 537.9 billion
lei. Public debt on 31 December 1991 was 396 billion lei, of
which foreign debt was 199.1 billion lei and domestic debt 196.9
billion lei. (Michael Shafir).

HUNGARIAN ECONOMIC INDICATORS. A report published by the Ministry
of Finance found that economic development during the past six
months proceeded along the lines forecast by the government.
The current balance of payments showed $530 million in creditsconsiderably
more than expectedwhile foreign currency reserves amounted to
$5.1 billion. The value of exports was $5.1 billion, or 16.5%
more than in the same period last year, while imports amounted
to $5.2 billion. Industrial production fell by 18.4% in the first
five months of the year as loss-making enterprises closed down.
The number of registered unemployed at the end of June stood
at 547,000 or 10.1% of the work force. Rises in prices were held
to 20.6% in the past 12 months compared to 38.6% for the same
period last year. (Edith Oltay)

BULGARIA SPECIFIES PRIVATIZATION PROCEDURE. On 30 July the government
adopted a set of instructions that outline the rules for public
auctions of state and municipal property, BTA reports. Each offer
must comprise the suggested price, payment terms, and a detailed
business plan, including proposed policies on financial, organizational,
social and environmental matters. Only the government, the Agency
for Privatization, the ministries concerned and Municipal Councils
are authorized to organize privatization auctions and they are
not obliged to provide any explanations for their decisions.
(Kjell Engelbrekt)

BULGARIA: ECONOMIC BRIEFS. In an effort to stimulate production,
on 30 July Bulgaria's central bank announced it will lower the
base lending rate from 49% to 45% effective 3 August, BTA reports.
Last month the base rate was reduced from 54%. Meanwhile, an
RFE/RL correspondent in Sofia says the government has made a
preliminary decision to discontinue uranium production by 1994;
the industry employs 3,000 Bulgarians. Reuters reports Bulgaria
is inviting bids from Western firms to update its telecommunications
system, a deal worth some $230 million. (Kjell Engelbrekt)

WALESA PREPARES DEFENSE DOCTRINE. At the first meeting of the
National Defense Committee (KOK) since the formation of the new
government, on 30 July President Lech Walesa proposed the outlines
of Poland's defense doctrine and security policy. The president
has primary responsibility for the country's sovereignty and
security, Walesa said. Emphasizing that presidential preparation
of security guidelines was "no coup or quest for power," he listed
the basic principles: Poland has no declared enemy, respects
the inviolability of borders and the sovereignty of other nations,
rejects the use of force in bilateral relations, and makes no
territorial demands against its neighbors. NATO membership is
a long-term goal. Poland's peacetime army need not exceed 0.5%
of the population, but must be mobile and effective. The special
troops of the internal affairs ministry should be replaced by
a national guard. The next KOK meeting, to be held within two
months, is to adopt the defense doctrine in its final form. (Louisa
Vinton)

POLAND'S MILITARY REFORM OUTLINED. Defense Minister Janusz Onyszkiewicz
announced on 30 July that 10,000 personnel changes, constituting
a "generational change among officers," will take place during
the reform of the armed forces. The number of generals' slots
will fall from 448 (only 86 of which are now filled) to 150.
Generals over 60 and colonels and lieutenant colonels over 58
will face forced retirement. Careful delineation of civilian
control of the defense ministry from the military hierarchy will
insulate the armed forces from political influence. Onyszkiewicz
warned that sweeping lustration plans could destroy the army;
no more than two or three generals would survive, he said. Meanwhile,
the Sejm voted on 30 July to make 15 August (the date of the
"miracle on the Vistula" in 1920 when the Poles defeated the
Soviet Army outside Warsaw) the official army holiday. (Louisa
Vinton)

MAYOROV MEETS WITH BALTS. At a meeting with Latvian prime minister
Ivars Godmanis in Riga on 29 July, Col. Gen. Leonid Mayorov,
the new commander in chief of the Northwest Group of Forces,
said that he is "well aware that we have to withdraw from the
Baltics, and my task is to accomplish the removal of troops in
a civilized manner." He promised to try to speed up the turnover
of military facilities to Latvian authorities and noted that
several installations could be sold to Latvia in order to gain
funds to provide accommodations for the troops to be withdrawn.
The following day Mayorov held talks with chairman of the Estonian
Supreme Council, Arnold Ruutel, and the two sides presented their
differing views on recent armed incidents. ITAR-TASS cited the
press office of the CIS Navy in reporting two more instances
of Estonians beating up or firing on Russian sailors in Tallinn
on 30 July. Late on the 30th Mayorov's group also visited Lithuanian
Supreme Council Chairman Vytautas Landsbergis, who told him that
Lithuania's main concerns are the Russian military's introduction
of new recruits and its refusal to abide by local laws, noting
that every day military airports allow 10 or more planes violating
Lithuania's air space. Local media featured the story. (Dzintra
Bungs, Riina Kionka & Saulius Girnius)

NATO BODY DISCUSSES BALTICS. The political committee of the North
Atlantic Consultative Council devoted part of its 29 July session
in Brussels to discussion of troop withdrawals from the Baltic
States, BNS reports. Several Western delegations proposed that
Russia draw on the negotiating experience of other member states
and make use of unofficial contact groups for mediation. The
Russian representative agreed to the proposal only in limited
and indirect form, such as in resolving the economic problems
associated with withdrawals. (Riina Kionka)

ESTONIA HALTS ARMS SHIPMENT. Estonian Defense Forces seized 21
Soviet-built armored vehicles in Tallinn on 30 July, BNS reports.
The BTR-80 vehicles, which were listed as normal trucks in documents,
were taken over after Estonian authorities learned they were
slated for sale and shipment to an undisclosed party in Europe.
An Estonian Defense Forces official told BNS the vehicles are
worth about $20,000 each. (Riina Kionka)

LATVIANS REGAIN OLD DEFENSE MINISTRY BUILDING. Following a decision
of Latvia's Economic Court the day before, on 30 July the authorities
took over a building in Riga from the NWGF that until the Soviet
occupation in 1940 had housed Latvia's Ministry of Defense, Diena
reports. The staff of the NWGF newspaper Za rodinu and employees
of a private firm had to vacate the building. According to an
RFE/RL correspondent, the takeover was peaceful, although some
Russian soldiers guarding the building had to be disarmed. (Dzintra
Bungs)