No. 157, 18 August 1992

SUCCESSOR STATES TO THE USSR

GEORGIA REASSERTS CONTROL IN ABKHAZIA. Georgian State Council
Chairman Eduard Shevardnadze told Georgian Radio on 17 August
that Georgian authority had been restored throughout the republic,
although sporadic shooting and looting were reported in Sukhumi.
The State Council issued a statement guaranteeing Abkhazia's
right to self-determination within Georgia, according to ITAR-TASS.
Abkhaz Interior Minister Aleksandr Ankvab gave the death toll
in the recent fighting as more than fifty. Meanwhile, Georgian
Defense Minister Tengiz Kitovani put the peace process in jeopardy
by threatening to invade Sukhumi and forcibly disband the Abkhaz
parliament if its chairman, Vladislav Ardzinba, refuses to resign,
Western agencies reported. (Liz Fuller)

ARMENIAN PARLIAMENT DECIDES AGAINST VOTE OF NO CONFIDENCE. The
emergency session of the Armenian parliament on 17 August closed
without reaching a decision on whether to hold a referendum on
whether president Levon Ter-Petrossyan should resign, ITAR-TASS
reported. (Liz Fuller)

YELTSIN: TROOPS CAN BE WITHDRAWN FROM KURILES. Boris Yeltsin
said in a 17 August interview broadcast by Japanese TV that Russia
is prepared to withdraw its military forces from the southern
Kurile Islands by the middle of 1995, ITAR-TASS reported. Yeltsin
also said that Moscow was prepared to sign a withdrawal agreement
to that effect during his upcoming visit to Japan in mid-September.
Yeltsin reportedly added that the withdrawal of Russian troops
from the southern Kuriles would constitute fulfillment of the
third stage of a five-stage plan that he had put forth in 1990
to resolve the long dispute over ownership of the islands. He
said that the next stage would involve signing a bilateral peace
treaty, and that Moscow had already worked out more than ten
variants for concluding the fifth stage of negotiationsnamely,
a final resolution of the territorial problem. He warned, however,
that pressure for a settlement from the Japanese side would undermine
chances for concluding a treaty, and said that success could
only come through mutual trust and economic cooperation. (Stephen
Foye)

UKRAINE TO BEGIN DESTROYING CONVENTIONAL ARMS. Ukrainian TV,
quoting Ukrinform-TASS, reported on 15 August that the Ukrainian
Defense Ministry intends to begin CFE mandated weapons reductions
between 18 August and 18 September. The report quoted Lt. Gen.
Ivan Oleinyk, deputy defense minister for armaments, who said
that some 2,450 tanks, 2,220 armored combat vehicles, and large
caliber artillery pieces are scheduled to be destroyed at factories
in Zhytomyr, Kiev, Lviv, Mykolaiv, and Kharkiv. CFE signatory
states have been notified of Ukraine's plans, he said, and the
destruction of the weapons is to be carried out under strict
international control. Oleinyk also said that the destruction
process was costly, and recommended that at least some of these
weapons be converted to civilian uses rather than be destroyed.
(Stephen Foye)

PROBLEMS WITH UKRAINIAN CONVERSION. Viktor Antonov, the Ukrainian
minister of machine-building, the military-industrial complex,
and conversion, told Delovaya Ukraina that impediments to military
conversion in Ukraine persisted, Interfax reported on 14 August.
Antonov complained that the Ukrainian Defense Ministry had not
yet worked out a military doctrine or submitted to his ministry
any guidelines for implementing conversion. He added that the
conversion effort was not receiving sufficient funding. Antonov
also said that Ukraine will cease producing aircraft carriers,
cruisers, and strategic missiles. (Stephen Foye)

RUSSIAN MILITARY IN KAZAKHSTAN FOR NUCLEAR TALKS. The chief of
Russia's General Staff, Viktor Dubynin, is leading a high-ranking
military delegation conducting talks with defense officials in
Kazakhstan on strategic nuclear weapons stationed there, ITAR-TASS
reported on 17 August. In earlier discussions, Dubynin told a
correspondent accompanying the delegation, drafts of a number
of agreements between the two states have been prepared. Among
the topics that are expected to be covered in these talks is
the status of the testing sites in Kazakhstan. The former nuclear
test site at Semipalatinsk is supposed to be transformed into
a scientific center, but funding is lacking. (Bess Brown)

RUSSIAN BORDER GUARDS FACE SERIOUS PROBLEMS. The Russian Border
Guards are currently responsible for maintaining borders with
16 countries; of these, only the borders with Norway, Finland,
Poland, Mongolia and North Korea have legally agreed to status,
while the status of parts of the borders with the US, Japan,
and China is unclear, according to the chief of the Russian Border
Guards, Maj. Gen. Aleksandr Tymko. He also told Rossiiskaya gazeta
on 14 August that more acute problems exist on Russia's borders
with other CIS statesespecially with Azerbaijan. Although the
border guards have already set up 133 check points, large sections
of the border are exposed to "human and technological intelligence,"
and illegal weapon and drug trafficking, Tymko said. (Victor
Yasmann)

GORBACHEV ADVOCATES NEW UNION. At a press conference in Moscow
on 17 August on the lessons of the August 1991 putsch, Mikhail
Gorbachev said that he supported Kazakhstan President Nursultan
Nazarbaev's proposal for the creation of new union based on the
principle of confederation, Russian and Western media reported.
Gorbachev noted that he was making this proposal at a time when
work was underway to change the structure of the CIS. He warned
that, without a new union, a long drawn-out conflict over territorial
borders could begin. Nazarbaev's proposal, to create a new Union
of Independent States with strong coordinating structures and
a single bank, was also supported by Industrial Lobby leader
Arkadii Volsky at the recent all-Russian conference of Manufacturers,
DR-Press reported on 13 August. (Ann Sheehy)

GORBACHEV SAYS HE'S SYMPATHETIC TO CIVIC UNION. Former Soviet
President Mikhail Gorbachev spent an hour and 20 minutes on 14
August answering questions phoned in by listeners to Radio Liberty;
the program was broadcast by RL's Russian Service on 15 and 16
August. Asked which of today's political parties has his sympathy,
Gorbachev said his views are close to those of Civic Union, the
centrist block led by Vice-president Aleksandr Rutskoi and industrialist
Arkadii Volsky. Gorbachev added that he does not aspire at present
to any high office but remains active in politics and is concentrating
on building up his Gorbachev Foundation. (Savik Shuster and Volik
Rahr)

KRAVCHUK ANNOUNCES AMNESTY. In connection with the first anniversary
of the declaration of Ukraine's independence (24 August), the
country's president, Leonid Kravchuk, has announced a broad amnesty
for those serving sentences for non-serious crimes, Ukrinform-TASS
reported on 17 August. To mark the anniversary, the Ukrainian
authorities have organized elaborate celebrations, the highlight
of which will be a World Forum of Ukrainians, which will be held
in Kiev from 21-24 August. (Bohdan Nahaylo)

REFORM IN NIZHNII NOVGOROD. Economist Grigorii Yavlinsky has
developed a concept of regional economic policy based on the
example of Nizhnii Novgorod, Komsomolskaya pravda reported on
14 August. Inhabitants of that region do not face the same level
of economic hardship as other regions. Yavlinsky received 7 billion
rubles from the Central Bank to conduct his "experiment" and
today other regions are turning to him for advice. The experiment
is regarded as a direct challenge to the Russian government which
lacks a regional economic program. President Yeltsin and parliamentary
chairman, Ruslan Khasbulatov, are expected to pay a visit to
Nizhnii Novgorod soon. (Alexander Rahr, Moscow)

ANOTHER RUSSIAN HARVEST DECREE? Russian Vice-president Aleksandr
Rutskoi discussed the draft of a presidential decree on the grain
harvest with government officials on 16 August, ITAR-TASS reported.
The draft decree is said to exempt farmers from value-added tax
during the harvest and exempts those recruited to help with the
harvest from income tax. It is also reported to forbid farmers
from selling their grain on the free market until they have met
their state delivery quotas. Officials were quoted as saying
that the pace of the grain harvest has picked up considerably
since the government raised the state purchase price for grain:
they now project a grain harvest of about 98 million tons. (Keith
Bush)

DRAFT SHORTFALL IN TATARSTAN. According to the vice chairman
of Tatarstan's parliament, Aleksandr Lozovoi, Tatarstan has,
for the first time, failed to fulfill its military conscription
plan, Interfax reported on 13 August. Although the induction
period has been extended until August, he said, only 88.5% of
the expected number of draftees have been sent to military units,
a shortfall of some 1,400 young men. He claimed that draft evasion
grew after appeals by several public organizations in Tatarstan
that urged soldiers to leave their units and serve only in their
home republic. Meanwhile, Radio Rossii reported on 12 August
that, according to ITAR-TASS, 11 sailors from Tatarstan have
threatened to commit suicide or flee from service unless they
are sent back to their home republic. (Stephen Foye)

LEBED ADDRESSES COSSACK ASSEMBLY. Maj. Gen. Aleksandr Lebed,
commander of Russia's 14th Army based in Moldova, was acclaimed
by the Council of Atamans of Russian Cossack Hosts which convened
in Tiraspol, DR Press reported on 14 August. Lebed called for
"the revival of the Russian great-power state" and for mass media
coverage of military issues to be "objective in the necessary
direction." The council called on Yeltsin to recognize the "Dniester
republic" and give it multifaceted assistance, "including military."
(Vladimir Socor)

"DNIESTER REPUBLIC" TO HOST ALL-USSR CONGRESS. As previously
announced at the "all-USSR" conference in May in Tiraspol, the
communist Joint Council of Work Collectives (OSTK), the dominant
political force in the "Dniester republic," intends to host a
"Congress of Workers' Councils" from the entire former Soviet
Union. The congress agenda includes the preservation of the USSR,
the dismissal of the Gaidar government, and protests against
privatization, DR Press reported on 14 August. The congress is
scheduled for 10-13 September in Bendery. (Vladimir Socor)

MOLDOVA NEGOTIATES OIL AND GAS DEAL WITH IRAN. Moldova's Ministry
of Foreign Economic Relations and Iran's doubly-accredited ambassador
to Romania and Moldova, earlier this month, reached an understanding
of principle on Iranian oil and gas deliveries to Moldova, Moldovapres
reported on 14 August. Moldova would pay for the gas by contributing
to the construction of a pipeline from Iran to Ukraine, and would
have the option to pay for the oil through barter. Deliveries
would commence before the end of this year. Moldova seeks to
reduce its dependence on Russian oil and gas. Talks held earlier
this year with Kuwait were fruitless because Kuwait insisted
on hard-currency payments for its oil, Moldovan officials told
the RFE/RL Research Institute. (Vladimir Socor)

TURKMENISTAN RECEIVES TURKISH CREDITS. According to an ITAR-TASS
report of 14 August, Turkey has promised credits worth $75 million
to Turkmenistan in an agreement signed by the president of Turkey's
Eximbank, Ahmet Ertugrul, and the director of Turkmenistan's
Foreign Economic Bank, Khudaiberdy Orazov. The credits, the first
provided by any foreign government, will be used to purchase
food products and fertilizers, and also to finance industrial
construction projects. A Financial Times report of 8 July noted
that interested foreign investors have found that Turkmen economic
officials are able and willing only to arrange barter deals because
of a lack of cash. The Turkish credits will lessen this difficulty
for Turkish firms. (Cassandra Cavanaugh)

KYRGYZ-UZBEK MILITARY AGREEMENT SIGNED. On 17 August, in the
Kyrgyz city of Osh, Uzbekistan's Defense Minister, Lt. Gen. Rustam
Akhmedov and the chairman of Kyrgyzstan's State Defense Committee,
Maj. Gen. Janybek Umetaliev, signed a protocol on cooperation
in military affairs, Kyrgyztag-TASS reported. The protocol includes
cooperation on questions of day-to-day military affairs, and
on the development of closer ties between the two armed forces.
According to the report, this protocol in no way contradicts
any CIS military agreements. (Cassandra Cavanaugh)

INDEPENDENT ALMA-ATA NEWSPAPER TO BE PROSECUTED. The independent
Alma-Ata information agency Birlesu, (as cited by DR-Press on
14 August), reported that the editorial board of the newspaper
Birlesu, published by the independent trade union movement in
Kazakhstan, must appear in court on 27 August. The newspaper
has been charged with insulting Jews after the publication of
humorous poems by Igor Guberman, now an Israeli citizen. The
charges also allege that Birlesu insulted the prime minister
of Kazakhstan and the mayor of Alma-Ata, incited mass disturbances
and the overthrow of the system. Birlesu's chief editor traces
these accusations to an article in a competing publication that
quoted material out of context. (Bess Brown)

CENTRAL AND EASTERN EUROPE

BOSNIAN FIGHTING FLARES ANEW. Sarajevo suffered another day of
mortar and sniper fire on 17 August, with at least six people
reported killed. Mortar shells struck the Europa Hotel in the
city, home to 800 refugees, and firefighters were still battling
the blaze well into the night. The BBC and Tanjug said that the
mortar shells came from Serbian positions in revenge for a Muslim
attack on a Serbian town, but Bosnian Serbian leader Radovan
Karadzic denied responsibility. Approximately 1000 Sarajevo women
and children are to be evacuated to Belgrade on 18 August. Meanwhile,
the Bosnian city of Jajce, about 100 km. northwest of Sarajevo,
is reported to be under Serbian attack. UN Colonel Richard Gray
reported that an agreement is to be signed on 18 August with
the Bosnian Serb leader, Radovan Karadzic, placing all Serbian
heavy weapons around Sarajevo under UN supervision. Gray said
that negotiations for the same purposes were continuing with
the Bosnian Muslims. In Croatia, a Canadian soldier assigned
to the UN peacekeeping forces was killed when his truck ran over
a land mine, the first Canadian to die in the conflict. International
media carried the reports. (Gordon Bardos)

BOSNIAN AND CROATIAN SERBS MOVE TOWARD UNITY. Belgrade's Politika
reported on 13 August that the governments of the "Serbian Republic"
in Bosnia-Herzegovina and the "Serbian Republic of Krajina" announced
several moves toward unification with each other on 12 August.
According to Momchilo Krajishnik and Mile Paspalja, the leaders
of the two parliaments, work is already in progress on creating
a new joint parliament, the goal of which is to build a "unified
Serbian state [of the two respective regions ] where there would
be one monetary system, a common defense, economy, and everything
that goes with that." Rebel Serbs in Croatia control a third
of that republic, while the Bosnian Serbs have conquered over
60% of the territory of Bosnia-Herzegovina. (Gordon Bardos).


BOSNIA ISSUES NEW CURRENCY. Radio Bosnia-Herzegovina reported
on 17 August that the government issued a new currency to counter
what the national bank governor called the Serbian "monetary
aggression." The new Bosnian money will be tied to the German
mark at one mark to 350 Bosnian dinars. The currency will only
be used in Sarajevo, Tuzla, Zenica and parts of Bihac, areas
controlled by Bosnian forces. The new currency will not be valid
in Serb and Croat-controlled areas where the dinars issued by
Belgrade and Zagreb are legal tender. Some 70% of Bosnia-Herzegovina
are now under Serb or Croat control. Radio Croatia raised the
question "is the new dinar an indication of the beginnings of
a third state in Bosnia?" (Milan Andrejevich)

BULGARIA REMODELS PRIVATIZATION AGENCY. Bulgaria's Agency on
Privatization, which is currently being reorganized by the newly
appointed Supervising Council, will employ some 265 officials
and have a network comprising eleven regional offices, BTA reported
on 17 August. This was revealed by the chairman of the Supervising
Council, Nikola Katsarski, who also told reporters that several
top officials would retain their posts. In an interview in yesterday's
issue of Pari daily, the agency's acting Deputy Chairman Dimitar
Stefanov said the most important achievement so far lay in the
training of personnel. (Kjell Engelbrekt)

KLAUSON REGIONAL COOPERATION. Czech Prime Minister Vaclav Klaus
ended his one-day official visit to Hungary on 17 August; he
said that his trip "was most successful." According to various
news agencies, Klaus and his Hungarian counterpart, Jozsef Antall
agreed to create a free trade zone between the two republics
well ahead of the year 2001 as initially scheduled by the "Visegrad
Troika." As to the future of the Troika itself, Klaus, who has
in the past indicated that he was not very fond of overly close
cooperation between Czechoslovakia, Poland, and Hungary, said
that the grouping would never become an institution and made
it clear that he understood it as "an instrument of regional
solidarity." (Jan Obrman)

FINANCIAL EFFECTS OF UN SANCTIONS. The Hungarian Ministry of
International Economic Relations estimates that Hungary will
suffer losses of $300 million by the end of the year as a result
of UN sanctions against former Yugoslavia, MTI reported on 18
August. Additional costs to Hungary from the loss of traffic
transit fees and rerouting of traffic are expected to amount
to some $100-120 million and gas and railway transit fees and
unpaid Serbian and Montenegrian debts are to cost another $50-60
million. The rest of the losses are expected to come from the
standstill in bilateral trade, estimated to represent $15-20
million each month. (Edith Oltay)

HUNGARIAN PERSONAL SAVINGS GROW. According to the Hungarian National
Bank, preliminary figures for July indicate that personal savings
are increasing at an even faster pace than in previous months,
MTI reported on 18 August. Personal savings at financial institutions
totalled 948.8 billion forint, an increase of 34.6 billion forint
in one month. A growth was registered for both forint and foreign
currency savings accounts, which stood at 512.2 and 146.3 billion
forint respectively, an increase of 118.9 and 4.2 billion forint
since June. The increase in securities and cash holdings at financial
institutions was more moderate, amounting at the end of July
to 205,4 and 231 billion forint respectively. (Edith Oltay)

ABOUT1,000 EX-SOVIET SOLDIERS STILL IN HUNGARY. The Hungarian
daily Nepszadadsag on 17 August reported that some 1,000 former
Soviet soliders were still living in Hungary one year after the
withdrawal of the Southern Group of Forces. The paper said the
soldiers had deserted from their units and were living in the
country with forged documents, with many involved in criminal
activities. Recently, police broke up a gang of ex-Soviet soldiers
in the city of Kiskunhalas who were "exporting" stolen vehicles
to Poland, Romania, and the republics of the former Yugoslavia.
(Doug Clarke)

NORDIC COUNCIL: TROOP WITHDRAWAL WOULD CONTRIBUTE TO REGIONAL
STABILITY. The prime ministers of the five Nordic states on 17
August urged Russia to withdraw its troops from the Baltic states,
saying that "a rapid and positive solution" to the problem of
Russian troop presence would "contribute to the stability of
the whole region." The nordic leaders, meeting for two days on
the Danish island of Bornholm, also urged an immediate withdrawal
from the Baltic capitals. The three Baltic prime minsters are
due to join the Nordic Council today (18 August). (Riina Kionka)


GORBACHEV: TROOP PRESENCE = REGIONAL STABILITY. In an interview
with the RFE/RL Russian Service on 17 August, former Soviet President
Mikhail Gorbachev said he saw the presence of former Soviet troops
in the Baltic states as a stabilizing factor, adding that he
was therefore opposed to a speedy withdrawal. Gorbachev said
his views on the issue are close to those of Russia's Civic Union,
a coalition of three political parties calling for slowed reforms.
(Riina Kionka)

LATVIA AGREES TO IMF CONDITIONS. The Latvian government's refusal
to hand over millions of rubles to Russia has become a stumbling
block for the allocation of western credits ot Latvia, AFP reports.
The IMF, whose director Michel Camdessus is visiting Riga today
(18 August), says that in order to get western credits, Latvia
must return the Russian rubles withdrawn from circulation after
Latvia began issuing its own ruble in May. Latvia's Minister
of State Affairs Janis Dinevics is against returning the money.
The return of the rubles is one of the few unresolved issues
standing in the way of an $80 million aid package. Latvia has
already agreed to a number of other IMF requirements, including
raising taxes and cutting its budget deficit. (Riina Kionka)


US BUSINESSES: GETTING TO KNOW YOU. Representatives of some 20
American companies are getting acquainted with investment possibilities
in the Baltic states on a tour sponsored by the Overseas Private
Investments Corporation (OPIC). Managers from such firms as Eli
Lilly, Dow and Caterpillar began their four-day Baltic tour on
17 August in Estonia, where they are holding discussions on investment
courtesy of the government guarantee agency (OPIC). (Riina Kionka)


SIX UNIONS TEST STRENGTH IN PROTEST CALL. Scattered new strikes
broke out in Poland on 17 and 18 August, as the day arrived for
the national protest organized by six radical and postcommunist
trade unions. Attempting to replicate the experience of Solidarity
in 1980, the six-union strike committee had sought initially
to force the government to open talks by threatening a general
strike. The government failed to budge, however, apparently leading
the six unions to adopt a less ambitious protest formula. So
far, larger or smaller parts of the work force at four coal mines
(Czeczott, Piast, Rozbark, and Chwalowice) have responded to
a strike call by Solidarity '80. The farmers' union Self-Defense
has threatened to erect roadblocks, while the OPZZ plans mass
meetings. Should the six-union committee fail to rouse a convincing
response among the nation's industrial workers, the government
could regain the upper hand in dealing with the strikes. (Louisa
Vinton)

WALESA: "THERE ARE LIMITS." Presidential spokesman Andrzej Drzycimski
warned on 17 August that labor conflicts cannot drag on indefinitely.
In the case of a threat to national security President Walesa
will take action. This danger is not imminent, Drzycimski stressed.
Walesa is still prepared to mediate in the conflict at the Polska
Miedz copper combine, but only if the strike there ends. "The
president does not deny that demands are just, but there are
limits to [our] ability to meet them." Rapid privatization is
the long-term remedy for strikes, in the president's view. Appearing
on the television program "Panorama" on 15 August, the president's
economic adviser, Andrzej Olechowski, described the current strikes
as "an attempt to leap the fence in the other direction" (a reference
to Walesa's leap over the fence in 1980 to take charge of the
strike at the Gdansk shipyard) and said that fulfilling the 21
demands of the six-union strike committee would mean a return
to a centrally-planned economy. (Louisa Vinton)

SOLIDARITY SKEPTICAL ABOUT STRIKES. In an appeal to the Solidarity
organization in the copper region, Solidarity leader Marian Krzaklewski
asked unionists to consider withdrawing from the Polska Miedz
strike and accepting the wage package negotiated by Solidarity
before the strike began. That package, Krzaklewski said, was
the only realistic option. Moreover, it "respected the principle
of solidarity with other members of our union and workers at
other plants . . . where wage levels are often lower than the
amount of the pay increase demanded" by the copper combine strike
committee. Krzaklewski explained that Solidarity had not joined
the six-union strike committee because of its "unambiguously
political" ambitions and its domination by "ex- and crypto-communist
structures." (Louisa Vinton)

ROMANIAN PREMIER CALLS FOR FURTHER CUTS IN SUBSIDIES. In an interview
with Radio Bucharest on 17 August, Romania's Prime Minister Theodor
Stolojan said that his country should go ahead with plans to
cut food-price subsidies by a further 25% on 1 September. Earlier
subsidy cuts led in May to a sharp increase in prices for staples
and services. Stolojan acknowledged that the move could have
a negative impact on voters ahead of general elections scheduled
for 27 September. But he said that the country's economic reform
policy should not be linked to the electoral campaign. (Dan Ionescu)


ROMANIAN FOREIGN MINISTER WARNS HUNGARY OVER TRANSYLVANIA. Romania's
foreign minister Adrian Nastase warned Hungary that a forthcoming
pan-Hungarian congress in Budapest might damage bilateral relations
by fostering separatist tendencies among ethnic Hungarians in
Transylvania. In a letter to his Hungarian counterpart that was
broadcast by Radio Bucharest on 17 August, Nastase expressed
"deep concern" over statements made in advance of that conference,
which, he claimed, had an "inciting and slanderous character."
(Dan Ionescu)

ILIESCU DENIES ASSAULTING NEWSPAPER REPORTER. A spokesman for
Romanian president Ion Iliescu denied on 17 August allegations
by journalists that he had jostled a newsman in Constanta two
days before. Radio Bucharest quoted the spokesman as saying that
the president had only "conducted a dialogue" with the reporter,
who had joined a group heckling Iliescu. Journalists who witnessed
the incident insisted that the president grabbed the newsman
by his arms and neck, leaving some bruises. The Romanian Journalists'
Association offered legal assistance to those journalists who
wanted to take the case to the courts. (Dan Ionescu)