No. 177, 15 September 1992

SUCCESSOR STATES TO THE USSR

WARNINGS OF HYPERINFLATION IN RUSSIA. Somewhat belatedly, top
Russian officials have been warning of the very real possibility
of hyperinflation. President Yeltsin told regional officials
in Cheboksary on 11 September that supporters of cheap credits
and unrealistic social programs are pushing Russia into the abysss
of hyperinflation, according to Reuter. Evgenii Yasin warned
on the same day that hyperinflation had not yet arrived but that
it was closer than ever before, Biznes-TASS reported. And Sergei
Vasiliev, in an interview with The New York Times of 15 September,
laid the blame for looming hyperinflation squarely on the acting
chairman of the Russian Central Bank, Viktor Gerashchenko. (Keith
Bush)

PLAUSIBILITY OF WARNINGS. The generally accepted definition of
hyperinflation is a rise in prices of 50% or more a month. This
can well happen in October, in the opinion of Anders Aslund,quoted
in the same New York Times article, "and once you hit hyperinflation,
it destroys most economic institutions." Indeed,the imminent
increase in the controlled wholesale prices of energy-carriers
will cause a substantial leap in the overall price index. But,
as the article suggests, these warnings are probably aimed primarily
at creating a sense of emergency and at organizing public pressure
on the parliament, the Congress of People's Deputies, and the
Russian Central Bank to act more responsibly. (Keith Bush)

ABKHAZ UPDATE. On 14 September ITAR-TASS summarized a statement
by Russian Deputy Prime Minister Georgii Khizhaexpressing concern
at ongoing clashes in Abkhazia. Khizha particularly condemned
the use of aircraft and heavy artillery against the civilian
population and instances of widespread looting and roery. A session
of the Abkhaz parliament convened by Georgian deputies and planned
for 14 September failed to take place. Speaking on Georgian Radio,
State Council chairman Eduard Shevardnadze said that hisdecision
to send troops to Abkhazia in August was precipitated by an unspecified
"conspiracy" against the Georgian people, details of which he
undertook to make public at a UN session in New York on 2425
September. (Liz Fuller)

RUSSIA TO RECEIVE MORE US FOOD AID. The Department of Agriculture
announced in Washington that the US is makinganother $1.15 billion
in loans available to Russia for foodimports this winter, according
to Western news agencies. Most of the aid, $900 million, is in
the form of loan guarantees for creditors providing import financing.
The Los Angeles Times on 15 September said that the Yeltsin government
had lobbiedWashington to approve the food aid early, before winter
got underway. Last year Russia began urgently appealing for Western
assistance only after the winter's food supply crisis hadalready
developed. Since the beginning of 1991, the US has reportedly
provided Russia with $5.75 billion in food credit. (Erik Whitlock)


KHASBULATOV ON POSSIBILITY OF CONFEDERATION. Russian parliamentary
speaker Ruslan Khasbulatov said during his trip to Kyrgyzstan
that he believes the establishment of an interparliamentary assembly
of CIS states, which will become official at the summit of CIS
state leaders in Bishtek on 25 September, is the beginning of
the creation of a new confederation of former Soviet republics.
The assembly is scheduled to become an independently operating
organization with the right to dispute decisions made by the
leaders of CIS states. Interfax quoted Khasbulatov as saying
that Ukraine's absence in no way affects the work of the interparliamentary
assembly because Ukraine will join the assembly at a later stage.
(Alexander Rahr)

"DEMOCRATIC RUSSIA" PREPARED TO FIGHT. The Coordinating Council
of the "Democratic Russia" movement has issued an appeal to the
Russian people to fight attempts by the old nomenklatura forces
to halt privatization and reform, DR-Press reported on 11 September.
The St. Petersburg regional section of the Democratic Party of
Russia decided to support "Democratic Russia" and to distance
itself from the central leadership of the Democratic Party of
Russia, headed by Nikolai Travkin, which had formed a coalition
with the Civic Union. Meanwhile, the leadership of the Civic
Union decided to join a nationwide campaign for the organization
of a referendum on private ownership of land. (Alexander Rahr)


RUSSIA ASSURES US ON BIOLOGICAL WEAPONS. U.S. State Department
spokesman Richard Boucher on 14 September said that Russia had
given assurances that it would end "all aspects" of its biological
warfare program. Western press accounts of his statement indicated
that the pledge had been given during talks between American
and Russian representatives in Moscow on 1011 September. Boucher
said that on-site inspections were among the measures agreed
by both sides. Last month American and British government sources
expressed doubts that the Russian program had been terminated
despite President Yeltsin's earlier order banning the production
of biological weapons. (Doug Clarke)

RUSSIANS BALK AT SOME CONVENTIONAL ARMS INSPECTIONS. Richard
Boucher said on 11 September that Russia had refused allied arms
inspectors access to parts of some military facilities inspected
during August and September under the terms of the Conventional
Forces in Europe (CFE) treaty. That treaty became legally binding
on the signatories on 17 July 1992. According to Western agency
reports, Boucher acknowledged that the treaty was a complex one
and that problems during its implementation were "probably inevitable."
He indicated that the Russians had barred inspectors from entering
some storage, administrative, and other facilities in garrisons
said to be housing military equipment limited by the treaty.
(Doug Clarke)

GORBACHEV TO ATTEND SOCIALIST INTERNATIONAL CONGRESS. Mikhail
Gorbachev will attend the next Socialist International as a guest
of honor, "Vesti" reported on September 14. (The Congress is
scheduled to open today in Berlin.) About 70 parties from various
states of the world have applied for membership and are waiting
for their application to be reviewed at the Congress, "Vesti"
noted. The list includes a number of Russian political parties,
among them the Social Democratic Party of Russia, which includes
a number of prominent politicians, such as Oleg Rumyantsev, the
author of the official draft of the new Russian Constitution
and an ardent Gorbachev critic. (Julia Wishnevsky)

SUPREME SOVIET TO RECONSIDER DEFENSE LAW. The chairman of the
Russian Supreme Soviet Committee on Legislation, Mikhail Mityukov,
told ITAR-TASS on 14 September that the "law on defense" will
be considered once again by the parliament at its upcoming session.
On 10 August, Yeltsin refused to sign the law, which had been
approved by the Supreme Soviet on 26 June, because, among other
reasons, it limited his authority to appoint the defense minister.
Mityukov said that members of his committee supported Yeltsin's
proposal that the President be granted sole authority to name
the defense minister, the chief of the General Staff, and the
commanders of all service brancheswithout the approval of the
Supreme Sovietand that the President himself should submit for
approval to the Supreme Soviet plans for the composition, structure,
and strength of the Russian armed forces and its leadership.
(Stephen Foye).

KOBETS NAMED TO NEW POST. Army General Konstantin Kobets has
been named chief military inspector of the Russian armed forces
by Boris Yeltsin, Interfax reported on 14 September. Kobets,
53, was a deputy chief of the USSR General Staff (for communications),
and his role in organizing the defense of the Russian government
building during the failed August coup catapulted him into a
leading role in the post-coup Soviet and Russian armed forces.
He subsequently served as chief (and then chairman) of the RSFSR
State Committee for Defense and Security, as a military advisor
to Yeltsin, and as a Deputy Chairman of the Russian State Commission
for the Creation of a Russian Defense Ministry. It is unclear
what powers he will exercise as chief military inspector. (Stephen
Foye)

STATE OF RUSSIAN TANK FORCES. The chief of Russian armored forces,
Col. Gen. Aleksandr Galkin, said in Krasnaya zvezda on 12 September
that the most modern machinesT-726's and T-80'sconstituted only
25% of the current total Russian tank fleet. He nevertheless
expressed optimism that design work in tank production was moving
ahead at an acceptable pace, and that the value of the tank forces
would not be underestimated during the creation of a new, highly
mobile and professional Russian army. Galkin's remarks were summarized
by ITAR-TASS on 12 September. (Stephen Foye)

"SOVIET PEOPLE"A REALITY? Researchers at the Institute of General
Genetics of the Russian Academy of Sciences claim that the "Soviet
people," long the mainstay of the Brezhnev-Suslov nationalities
policy, really exist. The researchers say that their studies
show that "the Soviet people"a concept despised by many former
Soviet citizens and seen by many as a cover for Russification
policiesis not an artificial ploy and that there is a single
genetic code for the "Soviet people." Consequently, they argue,
today's "dispersion in national apartments," that is, the independence
of the former republics, is "only a temporary historical-geographical
fluctuation." The report was cited by Arkadii Volsky, President
of the Russian Union of Industrialists and Entrepreneurs, interviewed
in Pravda of 9 September, in support of his argument that empires
like the Russian and the Soviet ones do not disappear "without
leaving a trace." Volsky stressed, however, his realization of
the fact that "the restoration of the Soviet Union at present
is excluded." (Roman Solchanyk)

KRAVCHUK MEETS WITH OPPOSITION. Ukrainian President Leonid Kravchuk
met with leaders of the Ukrainian Republican Party and other
parties grouped around "Rukh" and the "New Ukraine" coalition,
Ukrainian television reported on 11 September. The participants
discussed topics such as the formation of a transition reform
government, cadres policy, and shortcomings of the new draft
constitution. According to the report, inspite of differences
of opinion, those taking part were satisfied with the open and
constructive nature of the discussion. (Roman Solchanyk)

UKRAINIAN "CIVIC FRONT" A conference of the social and political
organization "Civic Front of Ukraine" was held in Zhytomir on
12 September, DR-Press reported on 13 September. The purpose
of the conference was to form an "anti-communist bloc in Ukraine."
Three main issues were discussed: the economic situation, resignation
of the government, and the fate of President Leonid Kravchuk.
Among the participants were opposition leaders Vyacheslav Chornovil
and Stepan Khmara. (Roman Solchanyk)

TAJIKISTAN REPORTED QUIET. ITAR-TASS reported on 14 September
that fighting had stopped in Kurgan-Tyube Oblast the previous
day, and the country appeared to be returning to normal. The
joint delegation of government officials which was credited with
stopping the fighting in Kurgan-Tyube had reportedly gone on
to Kulyab Oblast, from which armed groups supporting President
Rakhmon Nabiev had attacked the town of Kurgan-Tyube. Nabiev
was forced out of office last week, but his supporters had continued
to fight. According to Acting Prime Minister Djamshed Karimov,
the commission was offering to end a blockade of Kulyab to allow
the import of food if the armed groups in the region would stop
fighting. (Bess Brown)

MORE ON TAJIKISTAN. In an interview with ITAR-TASS on 14 September,
Acting Premier Djamshed Karimov denied that Nabiev's resignation
was causing a government crisis in Tajikistan, because no structure
of government had been affected. Apparently an opposition proposal
to abolish the presidency and create a state council has been
rejected by the government, which prefers to stick with the current
constitutional structure for the present. Karimov would like
to see a revised agreement with Russia signedthis was the issue
that led to Nabiev's downfall, as the opposition believed the
agreement would license Russian interference in Tajik affairs.
(Bess Brown)

CSCE DELEGATION IN MOLDOVA. A fact-finding team sent by the Chairman
of the CSCE Committee of Senior Officials, and comprised of three
Polish diplomats, completed on 11 September a week-long visit
to Moldova. The team's leader, Daniel Adam Rotfeld, currently
the Director of the Stockholm International Peace Research Institute
(SIPRI), told journalists that, in the team's assessment, the
Dniester conflict was "a political, not an interethnic conflict,"
Moldovapres reported. That assessment coincides with that of
Chisinau and contradicts the position of Tiraspol and its Russian
nationalist supporters, who maintain that the conflict results
from ethnic discrimination by Moldova against left-bank Russians.
The fact-finding team will report its conclusions within a week
to the Committee of Senior Officials, which will then devise
a mechanism for CSCE assistance in settling the conflict. (Vladimir
Socor)

ROMANIAN FOREIGN MINISTER ON "LACK OF SIGNALS" FROM MOLDOVA.
Interviewed in the Bucharest daily Meridian of 13 September,
as cited by TASS, Romanian Foreign Minister Adrian Nastase told
domestic critics that the question of Romanian-Moldovan unification
should be resolved by and in Moldova, but nevertheless regretted
that "we do not receive any signals from there." He added that
Romania must strive for "including Moldova in its sphere of influence,"
preventing it from "falling under the influence of other countries"
if unification does not take place. (Vladimir Socor)

CENTRAL AND EASTERN EUROPE

COURT RULES PRUNSKIENE COLLABORATED WITH KGB. On 14 September
after three months of hearings, the Lithuanian Supreme Court
ruled that former Prime Minister Kazimiera Prunskiene had consciously
cooperated with the KGB, the RFE/RL Lithuanian Service reports.
The ruling was based on information supplied by the parliament
commission investigating KGB activities, including her pledge
to cooperate signed on 8 June 1980. The court noted that Prunskiene
did not present evidence disproving the commission's documents.
The parliament is empowered to suspend her as a deputy and schedule
a vote of confidence in her district, but is unlikely to do so
since new Seimas elections will he held on 25 October and Prunskiene
had announced several months ago that she will not run again.
(Saulius Girnius)

HEAVY SHELLING OF SARAJEVO. On 14 September the BBC said that
Serbian artillery subjected the Bosnian capital to some of the
worst shelling of the war. The 15 September Washington Post quoted
UN personnel as saying that this showed that the Serbs had not
revealed all their big guns to UN monitors and that both sides
seem to be fighting a conventional war for strategic advantage
before winter arrived in October. Serbian aircraft apparently
based at Banja Luka dropped cluster bombs on Bihac, and fired
air-to-ground missiles as well on 14 September. Western news
agencies also quoted UN sources as saying that the Serbs heavily
shelled Gradacac, Brcko, and Bosanski Brod. Meanwhile in Croatia,
the 13 September Novi vjesnik gave extensive coverage to the
second anniversary of Croatian antiterrorist units. (Patrick
Moore)

UN TO INCREASE ROLE IN BOSNIA-HERZEGOVINA. On 14 September the
Security Council voted to send up to 6,000 more troops to protect
humanitarian efforts in the troubled republic in addition to
the 1,500 UN forces already there. The BBC on 15 September said
that the vote was 120-3, with China, India, and Zimbabwe abstaining.
Canada, Britain, and France will contribute and pay for the bulk
of the new land forces, while the US will offer air and sea support.
Washington, London, and Paris failed to agree in time on the
modalities of a no-fly zone for Bosnia, so no decision was reached
on that issue. UN spokesmen have sa&id that Serbian aircraft
shadow UN relief flights to Sarajevo to minimize chances of being
shot at by Bosnian or Croatian forces. (Patrick Moore)

PANIC IN MOSCOW AND BEIJING. On 13 September Milan Panic, the
prime minister of the rump Yugoslavia, began a three-day visit
to Moscow and Beijing. Panic is seeking support from both countries
in order to prevent a possible vote on expulsion by the UN Security
Council later this month. In Moscow Panic met with Deputy Foreign
Minister Boris Kolokolov, who told ITAR-TASS that Panic gave
him the impression that his government "really is trying to resolve
the conflict." In Beijing Premier Li Peng said that all former
Yugoslav republics and the rump Yugoslavia "should have their
own place within the United Nations and other international organizations,"
stressing that "Yugoslavia's expulsion would have serious consequences
for all." But the Chinese leader did not explicitly say whether
China will support the rump Yugoslavia's claim to a UN seat.
Li Peng also said China is concerned over the worsening situation
in Bosnia-Herzegovina and expressed deep sympathy with the people
there. Panic also requested from the Chinese "humanitarian aid
with oil." Xinhua and Radio Serbia carried the report. (Milan
Andrejevich)

CRISIS CONTINUES IN REPUBLIC OF MACEDONIA. A team of CSCE experts
arrived in Skopje on 11 September to determine whether monitors
ought to be posted to the Macedonian-Serbian border in an effort
to check the possible expansion of the wars of Yugoslav succession.
It is not clear whether the observers would be military or civilian,
but the head of the mission, Robert Frowick, an American, noted
that posting observers would "demonstrate the support of the
international community for the territorial integrity of . .
. Macedonia," Reuters and BTA report. The border between the
Republic of Macedonia and the predominantly Albanian Kosovo region
of Serbia is especially volatile. In a related story, other Western
agencies report that the Republic of Macedonia's only oil refinery
was shut down on 12 September because 70,000 tons of crude oil
were blocked at the port of Thessaloniki, apparently as part
of ongoing Greek pressure to force the new republic to drop the
word "Macedonia" from its official name. (Duncan Perry)

BULGARIA'S EXILED KING SEEKS A COMEBACK. Simeon II, who departed
Bulgaria at the age of 6 following the onset of communism, said
in a Madrid interview on 14 September that a return of the monarchy
is in Bulgaria's best interest. He noted that the legislature
could create a grand national assembly and restore himwithout
the need of a popular referendum. The former king is a businessman
in Spain, where he lives with his family. He has been low-key
about pressing for his return to Bulgaria in order to give the
legislature and the population time to consider the prospect.
Simeon has a following in Bulgaria and a monarchist political
party exists; however, he does not seem to have majority popular
support and certainly does not have the support of a majority
in the parliament. Simeon is married to a wealthy Spaniard and
has five children, none of whom speaks Bulgarian. (Duncan Perry)


GANEV ASSUMES UNGA PRESIDENCY. Bulgarian Foreign Minister Stoyan
Ganev was elected president of the UN General Assembly and takes
over that post officially on 15 September, Bulgarian and Western
sources note. Ganev has energetically pursued a policy of integrating
Bulgaria with Western countries and has succeeded in drawing
Bulgaria closer to Europe; it joined the Council of Europe during
his tenure in the Foreign Ministry. Ganev is 37 years old, a
lawyer by training, and speaks Russian and English. (Duncan Perry)


CZECH PREMIER LEAVES FOR UNITED STATES. Czech Prime Minister
Vaclav Klaus left on 14 September for a five-day visit to the
United States. Klaus is scheduled to speak at a conference of
the American Association of Economists in Dallas and at the World
Congress of Economic Development in Washington organized by the
CNN TV network. Before his departure, Klaus told CSTK that he
is scheduled to meet with White House Chief of Staff James Baker,
National Security Adviser Brent Scowcroft, and Acting Secretary
of State Lawrence Eagleburger. He will also hold talks with officials
of the World Bank and the International Monetary Fund. (Jiri
Pehe)

ILIESCU MEETS POPE. Romanian President Ion Iliescu was received
on 14 September by Pope John Paul II at his summer residence
Castel Gandolfo. Radio Bucharest, which described the private
interview as a "tete-a-tete," noted that Iliescu is the first
foreign official to see the pope after his surgery in mid-July.
John Paul expressed hopes that Romania will completely restore
democracy and religious freedom and that relations between the
Vatican and Romania will further develop. Iliescu later met in
Rome with Italian president Oscar Luigi Scalfaro, with whom he
discussed mutual ties and prospects for Romania's association
with the EC. Rome was the last leg on Iliescu's three-day visit
to Spain and Italy. (Dan Ionescu)

ROMANIA'S RUMP COMMUNIST PARTY BACKS ILIESCU. A spokesman for
Romania's reborn communist party, the Socialist Labor Party,
announced at a press conference on 14 September that his party
has decided to support incumbent president Ion Iliescu in the
27 September presidential race. Reuters quoted the spokesman
as saying that his party "will not field its own presidential
candidate in order to preserve the unity of the left wing." In
a press statement the SLP praised Iliescu for alleged "tolerance
and transparency" during his term in office, saying he tried
"to defuse tension and conflicts and strengthen the role of democratic
bodies." Iliescu, a former communist, was a high-ranking party
official before falling out of favor with late dictator Nicolae
Ceausescu in 1971. (Dan Ionescu)

ROMANIAN ASSOCIATION WITH THE EC. On 14 September a Romanian
delegation began a new round of negotiations in Brussels on association
with the European Community. In an interview with Radio Bucharest,
delegation leader Napoleon Pop said that the two-day talks will
focus on the text of some 10 articles (out of a 124-points association
agreement) dealing with Romanian exports of agricultural products,
iron and steel, and textiles to EC countries. (Dan Ionescu)

FSM STRIKE ENDS. After 55 days, the strike at the FSM auto plant
in Tychy appears to have ended. Strikers announced an "indefinite
pause" at 4:00 a.m. on 15 September, and a final decision is
expected later in the day. Agreement was reached through the
mediation of Katowice archbishop Damian Zimon, who stepped in
at the strikers' request but only after securing the consent
of the FSM management. Zimon said he told the exhausted strikers
that they had to reach agreement because "this strike is different
from those in past years." After further talks on 15 September,
the archbishop is to hold a mass dedicated to reconciliation
at FSM. Citing unofficial sources, Polish TV reported that the
strikers abandoned all wage demands in return for management's
reversal of its firing of some 400 strike activists. FSM's weakened
financial condition may impede the startup of new production.
(Louisa Vinton)

WARSAW SOLIDARITY HOLDS PROTEST MARCH. Several thousand members
of Solidarity's radical Mazowsze region marched through Warsaw
on 14 September. The protesters said their aim was to pressure
the government and the parliament into providing an economic
program satisfactory to workers. The Mazowsze region's firebrand
leader, Maciej Jankowski, threatened a general strike as a last
resort that would determine whether "the elites will send us
packing or we will send the elites packing." Other demonstrators
claimed that this would be the "last peaceful demonstration"
by unionists in Warsaw and shouted, "We want facts, not pacts"
and "No more thieving privatization." (Louisa Vinton)

HUNGARIANS GET COMPENSATION FOR COMMUNIST SEIZURES. The head
of the national compensation office, Tamas Sepsey, told MTI that
his agency has ruled on 202,340 claims for compensation for property
seized by the communist regime and has paid out some 9.5 billion
forint. He reported that only 130,000 of the 830,000 applicants
for compensation wish to use the compensation vouchers to buy
land; during the first two weeks of land auctions 86 people received
land. Sepsey said that Hungarians living abroad are also eligible
for compensation but most of them do not know about the opportunity.
He promised to provide more information about compensation through
Hungarian embassies. (Edith Oltay)

ESTONIAN SUPREME COUNCIL HOLDS LAST SESSION. The body met for
the last time on 14 September. According to an RFE/RL Estonian
Service report, the final session featured speeches by Speaker
Ulo Nugis and Chairman Arnold Ruutel, and lasted a total of 20
minutes. The Supreme Council (formerly Supreme Soviet) has been
in existence since Soviet annexation in 1940. The new State Assembly
will be elected on 20 September. (Riina Kionka)

LANDSBERGIS NOT TO RUN IN SINGLE DISTRICT. On 13 September, during
his weekly television speech, Lithuanian Parliament Chairman
Vytautas Landsbergis said that he will not be a candidate for
the Seimas in a single voting district, but rather will head
the general list of candidates of the Sajudis coalition, Radio
Lithuania reports. He also noted that he will be a candidate
for president. Democratic Labor Party Chairman Algirdas Brazauskas,
who is probably the most significant challenger to Landsbergis,
will head his party's general list and run again as a candidate
from the Kaisiadorys voting district. (Saulius Girnius)

USSR PASSPORTS STILL ISSUED IN LATVIA. At a time when Latvians
are exchanging their Soviet passports for the new Latvian passports,
USSR passports for travel abroad are still being issued by a
department of Latvia's Ministry of Internal Affairs. Antons Baltacis,
head of the ministry's Department for Visas and Registration
of Foreigners, told Diena on 11 September that his department
would continue to issue and extend the validity of the red USSR
passports until the Russian government revokes them. He added
that when Latvia adopts a law on citizenship non-ethnic-Latvian
residents will have to obtain new passports from whatever country
provided the old ones. (Dzintra Bungs)

UNEMPLOYMENT UP IN ESTONIA . . . Estonia's unemployment rate
crept up to about 0.5% as of 1 September. Some 7,500 people in
Estonia are currently jobless, up about 16% from last month,
BNS reports. Northeastern Estonia and Tartu had the highest unemployment
rates, but only 56 people are officially seeking employment in
Tallinn. (Riina Kionka)

. . . AND IN HUNGARY. According to preliminary figures just released
by the Ministry of Labor, the number of unemployed at the end
of August was 601,000, or 11.1% of the work force, MTI reports.
This is a slight increase over July, when 10.9% of the work force
was unemployed. The growth rate slowed, however: in August some
14,000 new unemployed were registered, compared to 40,000 in
July. The ministry is particularly concerned about the high number
of unemployed among young people starting their careers52,000and
the 20% unemployment rate in Szabolcs-Szatmar-Bereg County. (Edith
Oltay)