И хорошие доводы должны уступать лучшим. - У. Шекспир
RFE/RL Daily Report

No. 123, 30 June 1994


YELTSIN UPBEAT ON ECONOMY. Exuding optimism, President Boris
Yeltsin predicted on 29 June that the worst is over for the
Russian economy, Western and Russian media reported. During a
visit to a defense research center outside Moscow, Yeltsin claimed
that inflation had dropped from 8.1% in May to only 5.5% in June;
that the industrial recession had leveled off and would bottom out
in June; and that the political situation is stable. These three
factors, the president argued, give grounds for optimism.
Government officials have cited widely different figures on
inflation rates in recent weeks, however, so it is not clear if
Yeltsin's optimism is grounded in hard statistics.  Louisa Vinton,
RFE/RL, Inc.

VOUCHER PRIVATIZATION ENDS. The deadline for Russians to exchange
privatization vouchers for shares in state firms expires on 30
June. Rossiiskaya gazeta reported that 136 million of the total
148 million vouchers had been traded for shares as of 20 June.
Interest picked up as the deadline grew closer; an average of 9
million vouchers were traded in each of the final weeks. Editorial
comment on the occasion reflected a full range of views. Pravda
charged that the program produced only spectacular scandals and
cheated millions of people. The economist Stanislav Shatalin told
Nezavisimaya gazeta that only a small elite had benefited.
Rossiiskie vesti stressed that the time has come to move from
commerce in vouchers to "real" money; only then will privatization
be effective. The cabinet is scheduled to debate the second stage
of privatization on 30 June, Interfax reported. As the voucher
program drew to a close, Moscow mayor Yurii Luzhkov persisted in
his challenge to Privatization Minister Anatolii Chubais,
asserting once again his right to control privatization in the
capital. (President Yeltsin instructed Chubais on 10 June to
"leave Moscow alone," and was seconded by the prime minister.)
City authorities announced on 29 June that Moscow residents can
deposit unused vouchers at the Moscow Savings Bank, although
Chubais has stressed that they cannot be used after the 30 June
deadline. RFE/RL's Moscow correspondent reported that Yeltsin on
29 June extended by one month the validity of vouchers held by
workers at firms undergoing privatization.  Louisa Vinton, RFE/RL,

announced on 29 June that it will lend Russia a further $500
million to upgrade production in the oil industry, Western
agencies reported. This loan, granted as the World Bank closes its
fiscal year, brings to $1.5 billion the bank's total lending for
Russia in 1993-94. The funds are earmarked for pipeline
improvements and environmental protection measures that officials
hope will halt the decline in oil production attributed mainly to
the neglect of existing facilities. Oil extraction dropped 12% in
1993, officials said. Russia received a similar loan of $610
million for the oil sector in June 1993.  Louisa Vinton, RFE/RL,

Minister Pavel Grachev told Interfax on 29 June that Russia
intended to establish what was described as a "huge" military
district in the North Caucasus that would boast mobile and other
forces as well as powerful weaponry. Grachev said that Moscow had
been working diligently over the past two years to transform the
district into an army group capable of waging either small or
large conflicts. He also said that the district's regular military
forces would, in accordance with Russia's military doctrine, be
available to help Interior Ministry troops with domestic security
operations. Grachev's remarks came at the start of an inspection
tour of troops deployed in the Northern Caucasus. Although the
report of his comments was too vague to assess with certainty, it
suggested that Russia's continued force build-up in the region
could eventually test constraints imposed by the Conventional
Forces in Europe (CFE) Treaty.  Stephen Foye, RFE/RL, Inc.

spokesman Grigorii Karasin has dismissed charges leveled by
Washington that allege that Russia is concealing information about
the development and testing of chemical weapons, The New York
Times reported on 30 June. A week earlier the US State Department
had accused Moscow of breaking a joint agreement to exchange
information on chemical weapons stockpiles by failing to provide
data on binary weapons. Karasin called the charges groundless and
said that Moscow would seek clarification of data provided by the
US. The newspaper also quoted a spokesman from the Russian Defense
Ministry who said that no binary chemical weapons had been
produced; he reportedly did not categorically deny the charge that
research continued. Concern in the US over Russia's activities in
this area have been heightened by the well-publicized arrest and
subsequent release of Vil Mirzayanov, a Russian chemist who
charged that Russia continued development of a binary chemical
weapon.  Stephen Foye, RFE/RL, Inc.

DEFENSE INDUSTRY UPDATE. In a 29 June interview with Interfax,
Russian First Deputy Defense Minister Andrei Kokoshin said that
the development of dual use technology constitutes one of the main
priorities in Russia's defense conversion effort. He said that the
Defense Ministry, the State Committee for Defense Industries, and
the Economics Ministry were jointly carrying out research in the
practical application of dual use technology in hopes of
preserving the defense sector's mobilization potential and
developing a national industrial policy. Meanwhile, another
Interfax report quoted Vasilii Yegorov, identified as a spokesman
for a government technical commission, as saying that the Russian
government owes various defense suppliers some 441 billion rubles
for orders filled in 1993. Yegorov, whose remarks came during an
international seminar on Western investment in the Russian defense
sector, also claimed that defense orders in 1994 had shrunk by
some 80% and that spending on conversion has also been reduced
radically.  Stephen Foye, RFE/RL, Inc.

Federal Counterintelligence Service, Sergei Stepashin said that he
has no information about access of the Russia mafia to nuclear
materials or about proliferation of nuclear technologies by
Russian criminal networks, ITAR-TASS reported on 29 June.
Commenting on earlier statements made by US Federal Bureau of
Investigation Director Louis Freeh, who is now visiting Central
European and former Soviet states, Stepashin said the FBI's
concern about mafia access to nuclear technologies must be
substantiated by facts. Stepashin added that he will ask Freeh to
provide facts on proliferation of nuclear materials from Russia
during his meeting with the FBI Director during the first week of
July in Moscow. Stepashin, however, admitted that Russian
scientists working on nuclear matters and missile-technology are
subject to recruitment by rogue countries striving to obtain
nuclear technologies.  Victor Yasmann, RFE/RL, Inc.

conference in Moscow on 29 June, Sergei Shakhrai, leader of the
Party of Russian Unity and Concord, said that many political
forces in Russia could benefit from the postponement of the
parliamentary and presidential elections, but that such a
postponement would aggravate social tension in society. Recently
the speaker of the parliament's upper chamber, Vladimir Shumeiko,
proposed the postponement of the elections for two years.
Meanwhile, on 29 June Shumeiko's proposal was also criticized as
counterproductive by St. Petersburg mayor Anatolii Sobchak and the
Civic Union leader Arkadii Volsky, Ostankino TV reported.  Vera
Tolz, RFE/RL, Inc.

. . Ramazan Abdulatipov, a deputy chairman of the Russian
parliament's Federation Council who was in North Ossetia for the
recent signing of an agreement between the presidents of North
Ossetia and Ingushetia on the return of Ingush refugees to North
Ossetia, told journalists on 28 June that any improvement in the
local situation had taken place not thanks to but rather in spite
of the policy of the federal authorities, Russian Television
reported. Abdulatipov criticized the Russian MVD for not
overseeing the handing in of weapons organized by the North
Ossetian and Ingush authorities and said that Ingushetia had
received from Moscow only 800 million of the 93 billion rubles
promised. Moreover, those engaged in reconstructing the houses
destroyed in the conflict have still not been paid, although the
refugees cannot return unless housing is available.  Ann Sheehy,
RFE/RL, Inc.

. . . AND CHECHNYA. Abdulatipov added that the North
Ossetian-Ingush conflict could not be settled without taking into
account the South Ossetian and particularly the Chechen factor. In
an interview with Interfax reported on 29 June, he accused certain
politicians of speculating on the Chechen and Ossetian-Ingush
issues. He described as pure misinformation reports that Yeltsin
had designated Shmidt Dzoblaev, general secretary of the Assembly
of Democratic Forces of the North Caucasus, as an intermediary
with Chechen President Dzhokhar Dudaev and asserted that
Dzoblaev's claim to have met Dudaev was untrue. In Abdulatipov's
view, Yeltsin should appoint a special envoy, acceptable to both
sides, for talks with Chechnya.  Ann Sheehy, RFE/RL, Inc.

CHECHNYA AND HOSTAGE DRAMA. Chechnya has described the attempt by
Russian helicopters to pursue terrorists over Chechen territory as
a violation of the air space of a sovereign state. The Chechen
Foreign Ministry told Interfax on 29 June that only Chechnya's
obligations to confront terrorism as an international phenomenon
prevented it from taking tougher measures against the helicopters.
The Chechen State Security Department said that the detention and
neutralization of the terrorists was carried by Chechen special
purpose units. In the third recent incident of its kind, the
terrorists had captured a bus with civilians near Mineralnye vody
and flown to Chechnya after having been given a ransom of several
million dollars. The Russian authorities are negotiating for the
extradition of the three terrorists, of whom two are Chechen and
one a Kumyk.  Ann Sheehy, RFE/RL, Inc.


food, escorted by CIS troops, arrived in the capital of autonomous
Gorno-Badakhshan in the Pamirs on 29 June, but opposition forces
in the region objected to the military escort and warned that
armored troop carriers should stay out of Badakhshan, Russian news
agencies reported. Representatives of the Badakhshan
administration, which has been sympathetic to the Islamic
opposition in the ongoing struggles in Tajikistan, and members of
the Coordinating Council of the Democratic Opposition met with
representatives of the CIS command to try to persuade the CIS
forces not to bring armored transport into the region.  Bess
Brown, RFE/RL, Inc.

                    CENTRAL AND EASTERN EUROPE

NEGOTIATORS AGREE ON BOSNIA MAP. Negotiators from the European
Union, Russia, and the US agreed on a Bosnia peace plan at a Paris
meeting on 29 June. The plan is based on earlier proposals
involving a 51-49% territorial demarcation, with the Bosnian Serb
side set to acquire the smaller share. The plan will include
positive and negative incentives, such as the possibility of
sanctions being applied against any parties that reject it. The
proposal, which has yet to be presented to the warring parties,
will be discussed by the foreign ministers representing the
international "contact group" prior to being presented at the G-7
meeting to be held 8-10 July. Meanwhile, media throughout the
former Yugoslavia also concentrate on the course of the fighting
in Bosnia. On 30 June Borba, for example, chronicles the "great
offensive of the Bosnian Muslim army in central Bosnia." Finally,
on 29 June an RFE/RL correspondent reported that Russian diplomat
Alexei Nikiforov traveled to Belgrade in order to speak with
Serbian President Slobodan Milosevic about international efforts
to hammer out a peace plan for Bosnia.  Stan Markotich, RFE/RL,

statement quoted by the Croatian daily Vjesnik on 29 June,
Macedonian President Kiro Gligorov said that tensions between the
rump Yugoslavia and Macedonia would not escalate to the point
where armed conflict would be the outcome. What appears to be the
most recent rump Yugoslav transgression against Macedonia's
borders involves twelve Serbian soldiers who have ensconced
themselves some 250 meters across the border on the Macedonian
side. In other news, on 29 June AFP reported that Greek Prime
Minister Andreas Papandreou hailed a European Court of Justice
ruling which failed to order Greece to end its embargo against
Macedonia. In its decision not to grant an interim ruling
compelling Greece to lift the embargo, the Court said that the
EU's Executive Commission had not proved its contention that the
embargo was adversely affecting any EU members and it needed more
time to review the facts in the case. Papandreou, however, said
the court decision lends backing to Athens's contention that the
embargo is a lawful act.  Stan Markotich, RFE/RL, Inc.

BULGARIA'S COMMERCIAL DEBT CUT. On 29 June Western agencies and
BTA reported that Bulgaria signed an agreement that could slash
its debt to foreign commercial banks by roughly 47%, to an
estimated $5 billion. The deal, concluded in Sofia, was signed by
Finance Minister Stoian Alexandrov and representatives from the US
Citibank Corporation as well as Deutsche Bank. In order to become
binding, the deal will have to secure the Bulgarian parliament's
ratification as well as the approval of the 300 creditor banks.
Successful ratification would permit Bulgaria to spread repayment
over a thirty-year period.  Stan Markotich, RFE/RL, Inc.

BELARUS RUNOFF SCHEDULED. Belarus's central election commission
announced on 29 June that the second round of presidential
elections will be held on 10 July (the same day that Ukraine's
presidential contest is also likely to be decided). The two
candidates--Alyaksandr Lukashenka, former head of the parliament's
anticorruption commission, and Prime Minister Vyachaslau
Kebich--settled jointly on the date. Lukashenka received 44,82% of
the vote in the first round; Kebich had 17.33%. In a bizarre
incident on 28 June, Lukashenka was reportedly assaulted by
uniformed policemen as he attempted, with the escort of a second
group of policemen, to enter the anticorruption commission's
headquarters. In the final days of the campaign, Lukashenka had
claimed that someone had fired shots at him, but the Belarusian
secret police dismissed this charge as fabricated for publicity.
In an editorial on 28 June, Nezavisimaya gazeta compared
Lukashenka to Zhirinovsky and argued that his victory would
bolster forces in Russia favoring dictatorship. Louisa Vinton,
RFE/RL, Inc.

Minister Leonid Kuchma charged on 29 June that the presidential
elections on 26 June were marred by "serious irregularities," PAP
reports from Kiev. Kuchma finished a close second to President
Leonid Kravchuk; Kuchma had 31.3% of the vote to Kravchuk's 37.7%.
Kuchma expressed astonishment that the election commission took 48
hours to release official results. He claimed that the delay was
used to "correct" the results in Kravchuk's favor in several
regions, including Lviv, Rovno, Odessa, and Kiev. Kuchma also
criticized the media for bias; the press "sees only a single
candidate, Kravchuk," he charged. Louisa Vinton, RFE/RL, Inc.

commission overseeing the activities of the Romanian Intelligence
Service released on 29 June a report compiled in March 1994 by the
RIS on the events that led to Nicolae Ceausescu's overthrow in
December 1989. The report says that Soviet, Hungarian, and
Yugoslav agents had been involved in the 1989 events, an RFE/RL
correspondent in Bucharest reported on the same day. The release
of the report follows the resignation in early June of the
chairman of a special commission set up by the Senate to
investigate the 1989 events in protest against the non-cooperative
attitude of the authorities. Also on 29 June, the Senate decided
to extend the deadline to 5 December for its own commission to
submit its report. The RIS report says that although there was
clearly foreign involvement in the overthrow, the moving force of
the revolution was the Romanian army acting in alliance with
anti-communist protesters. The report says the KGB tried to oust
Ceausescu without destroying the communist system. It names two
Soviet correspondents in Bucharest as intelligence agents and says
Soviet media criticized Ceausescu in an attempt to enhance the
population's feelings of frustration. According to the report,
numerous male Soviet tourists were in Romania at the time of the
revolution, and some were armed. Although few of the Soviet
tourists were involved in the pre-revolutionary events, "the
majority behaved as if they were expecting an order that failed to
come." The report also says Hungarian intelligence prepared for
the Romanian revolution by training Romanian defectors as its
agents, and names a man alleged to have been a Hungarian
intelligence agent, who incited to disorder in Timisoara. Finally,
it is claimed that a Yugoslav diplomat in Timisoara, where the
revolution began, acted as a courier for the revolutionaries.
Michael Shafir, RFE/RL, Inc.

reversal, deputies from the postcommunist Democratic Left Alliance
(SLD) voted 64 to 34 on 29 June not to block a first reading of
Poland's concordat with the Vatican. The reading, scheduled for 30
June, is likely to prompt the year's most contentious Sejm debate.
SLD leader Aleksander Kwasniewski argued that the decision does
not signal his party's future acceptance of the concordat, and
that revisions are still necessary. A final vote on the concordat
need not take place until the new constitution is adopted, roughly
in a year's time, he said. But he argued that debate should begin,
"to voice all of our reservations." Led by Labor Minister Leszek
Miller, the party's ideological traditionalists objected
strenuously to Kwasniewski's stance. Miller argued that SLD voters
will see the move as a two-faced betrayal of the party's
insistence on the strict separation of Church and state.
Kwasniewski prevailed in the end. The dispute suggests that the
SLD has backed itself into a corner on the issue. It criticized
the concordat to win support from anticlerical voters but failed
to present specific objections to the text. If it now chooses to
impede ratification, it risks an all-out war with the Church.
Louisa Vinton, RFE/RL, Inc.

Czech government approved a draft constitutional amendment
providing for the creation of 17 regions in the Czech Republic.
The document will be submitted to the parliament on 1 July, where
it requires a three-fifths majority to pass. The government's
decision came after a period of intensifying disputes within the
ruling coalition about the regional administration reform. Prime
Minister Vaclav Klaus's Civic Democratic Party was accused of
stonewalling on the issue by its coalition partners after it
repeatedly delayed addressing the issue, despite the fact that the
Czech Constitution requires the creation of regions. President
Vaclav Havel sent letters to the chairmen of the four coalition
parties on 26 June, warning of political instability should a
solution not be found quickly. Following the adoption of the
government compromise on 29 June, some opposition politicians said
that they were opposed to such a large number of regions.  Jiri
Pehe, RFE/RL, Inc.

the Czech Republic's Board for Television and Radio Broadcasting
had licensed three companies to launch satellite TV broadcasting.
The companies are Art Production K., CET 21, and FTV Premiera. The
last of the three stations already broadcasts locally in Prague
and southern Bohemia, while CET 21 operates the only private
nationwide TV channel under the name Nova. Art Production K. owns
a private radio station and is active in the entertainment
industry; its president, Michal Kocab, is one of the best-known
entertainers in the Czech Republic.  Jiri Pehe, RFE/RL, Inc.

HAVEL MEETS FBI CHIEF. On 29 June Czech President Vaclav Havel met
with the director of the US Federal Bureau of Investigation (FBI),
Louis Freeh. CTK reports that the two officials discussed
cooperation between security and police forces of the two states
as well as new forms of crime appearing in the Czech Republic.
They agreed on the possibility of setting up an FBI office in
Prague.  Jiri Pehe, RFE/RL, Inc.

SLOVAKIA SIGNS PACT WITH FBI. On 29 June an FBI delegation led by
Freeh, arrived in Slovakia for a one-day working visit aimed at
expanding cooperation in the fight against international organized
crime, TASR reports. Slovak officials, including Interior Minister
Ladislav Pittner, Justice Minister Milan Hanzel and Deputy Premier
for Legislation Ivan Simko, briefed the US delegation on
legislative steps taken by the government in the fight against
organized crime and the education of experts. A cooperation pact
was signed between the FBI and the Slovak Interior Ministry to
cooperate on a strategy to combat organized crime, which Freeh
said is the FBI's top concern in Slovakia. The FBI delegation is
traveling to various European countries to intensify cooperation
in the fight against drugs and the spread of violence, as well as
threats posed by stolen nuclear weapons. The delegation continued
on to the Czech Republic in the afternoon.  Sharon Fisher, RFE/RL,

the Slovak parliament, held on 28 and 29 June, focused mainly on
economic legislation. On 29 June the parliament endorsed a bill on
the sale of 23 billion koruny in state bonds to be issued on
domestic and foreign capital markets, necessitated by the large
1993 state budget deficit. Finance Minister Rudolf Filkus said
that 12.8 billion koruny in taxes were not paid in 1993, mainly
because of the insolvency of firms and illegal imports of
cigarettes, spirits, and petroleum. Serious problems in the
education, health, and social spheres led to increases in planned
expenses by 6.6 billion koruny, while debt payments, which had not
been taken into consideration when planning the budget, reached
5.6 billion koruny in 1993. The state debt rose by 27 billion
koruny in 1993, reaching a total of 123 billion koruny. The
parliament also passed a law to raise consumer taxes on wine,
beer, alcohol, tobacco products and fuels. An amendment to raise
the VAT on certain items was also passed, which is expected to
increase Slovakia's budget income by 3 billion koruny, TASR
reports. In another development, parliament chairman Ivan
Gasparovic announced that local elections will take place on 18
and 19 November of this year.  Sharon Fisher, RFE/RL, Inc.

Movement for a Democratic Slovakia released a statement
criticizing President Michal Kovac's remarks during his press
conference upon his return from the US on 27 June. The statement
said that Kovac had "violated diplomatic protocol" when he
expressed himself "in the name of another sovereign state." (Kovac
had said that the attitude of US President Bill Clinton towards
Slovakia had changed since the new government was installed in
March and that certain US representatives had expressed fear that
MDS leader and former Premier Meciar might return to power
following the fall elections.) The statement said that under the
Meciar government US and Slovak officials had "declared
unambiguous bilateral cooperation and understanding, which can be
proven by a range of documents" and that Meciar had addressed US
Ambassador to Slovakia Theodore Russell in an official letter.
Also on 29 June, the opposition Movement for a Democratic Slovakia
and the Slovak National Party put forward proposals to dismiss
Privatization Minister Milan Janicina and deputy parliament
chairman Ludovit Cernak. Party of the Democratic Left member Milan
Ftacnik called the vote on Janicina "a children's game" of the
opposition and said that the coalition cabinet had agreed to stand
behind the minister.  Sharon Fisher, RFE/RL, Inc.

committee of the new parliament approved a legislative proposal to
eliminate the Ministry of Foreign Economic Relations and merge
it's functions with the Ministry of Trade and Industry, MTI
reported on 29 June. The cultural committee approved a proposal by
the care-taker prime minister, Peter Boross, to dismiss the
controversial acting presidents of Hungarian Radio and Hungarian
Television, effective 5 July 1994. The two officials were accused
of political bias before and during the general elections. The
committee for self-government affairs endorsed a draft law that
would lift a previous regulation barring city mayors from holding
parliamentary seats at the same time. The move became necessary
because about 18 city mayors were elected to the parliament.
Karoly Okolicsanyi, RFE/RL, Inc.

Estonian: Isamaa) political party--formed by several smaller
political parties and groups with similar platforms--has been
beset by internal discord which has led several groups within the
party to leave its ranks, Baltic media have reported, starting on
27 June. The first group to leave Pro Patria was the Conservative
Party (chairman: Enn Tarto), followed by the Republican Party
(spokesman: Indrek Kannik). Baltic media estimated on 29 June that
Pro Patria would keep only 11 of the 22 seats that it had in the
101-member parliament and would no longer be the leading force in
the parliament.  Dzintra Bungs, RFE/RL, Inc.

a statement by Russia's Northwestern Group of Forces, more than
half of the 177 units that were stationed in Latvia on 30 April
have been withdrawn. The last Russian ships are to sail away on 1
July, Baltic and Russian media reported on 29 June. One problem
facing the Russian officers leaving Latvia is the cost of housing
in Russia: recent estimates indicate that for the price of a
three-room apartment in Latvia, it is possible to purchase only a
garage in Russia. In the period from 1 July 1992 to 1 March 1994
some 2,176 military families (4,999 individuals) have moved back
to Russia.  Dzintra Bungs, RFE/RL, Inc.

MORE WORLD BANK CREDITS FOR LATVIA. The World Bank has drafted an
agreement for the extension of a loan of $35 million in order to
help develop the private sector in Latvia. The credits are
expected to be provided late this year or early in 1995. Most of
the money will be channeled through commercial banks in Latvia
that meet World Bank requirements regarding assets and security,
BNS reported on 29 June.  Dzintra Bungs, RFE/RL, Inc.

80,000 Ukrainians in Latvia, of whom about 70% were born in
Ukraine, will be taking out Russian citizenship (which they can do
until February 1995) because it is impossible for them to receive
Ukrainian citizenship unless they take up residence in Ukraine,
Kievskie vedomosti reported on 29 June. Only 3,914 Ukrainians in
Latvia have Latvian citizenship. Unlike the Russians in Latvia,
the report stated, the Ukrainians are more ready to understand why
Latvia is reluctant to grant Latvian citizenship to non-Latvians,
and their criticism is directed rather at Ukraine for failing to
allow them to be Ukrainian citizens. The Ukrainian Minister for
Nationality Affairs and Migration Aleksandr Emets told the
newspaper that his ministry had been trying to get the Ukrainian
law on citizenship amended but so far without success.  Ann
Sheehy, RFE/RL, Inc.

  [As of 1200 CET]

  Compiled by Suzanne Crow and Louisa Vinton
The RFE/RL DAILY REPORT, produced by the RFE/RL Research
Institute (a division of Radio Free Europe/Radio Liberty, Inc.)
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