What you can become, you are already. - Friedrich Hebbel
RFE/RL Daily Report

No. 144, 1 August 1994


investment company slashed redemption prices from 115,000 to 950
rubles per share on 29 July, effectively wiping out the
"investments" of those who had bought into the pyramid scheme
late in the game. Scores of shareholders attempted to storm MMM's
Moscow headquarters late on 29 July in a vain attempt to redeem
their shares before the bottom dropped out. Riot police repulsed
the attack; calm was quickly restored. Despite the crash, on 30
July thousands of customers lined up to buy new MMM shares issued
at a selling-price of 1,065 rubles with promises to redeem them
at 1,515 rubles in just a week. Agency reports suggested that
losing investors were directing much of their ire at the
government rather than MMM. The MMM advertising blitz continued,
with MMM officials insisting that the firm had "no problems" and
blaming government harassment for the dramatic fall in share
prices (which are set by MMM itself).  Louisa Vinton, RFE/RL,

Chernomyrdin ruled out any government rescue plan to compensate
MMM investors for their losses, as any bailout would have to come
at the expense of more prudent taxpayers. Speaking in
Petrozavodsk on 31 July, Chernomyrdin conceded that the
government had been remiss in failing to warn investors of
potential hazards. He pledged to draw administrative
consequences, but noted that those who had succumbed to MMM's
promises of instant riches had been "aware they were investing
money in a risky undertaking." Finance ministry officials echoed
the prime minister's line, chiding investors for spending their
money on "securities" that were little more than pieces of paper.
A deputy finance minister reminded TV viewers on 30 July that
"market economics means above all the personal responsibility of
each individual," according to an Interfax report. A finance
ministry statement released the same day said that "one must
never trust ads promising dividends more than the average ones on
the market or promising that the quotation of shares will be
constantly rising." Louisa Vinton, RFE/RL, Inc.

JULY INFLATION REMAINS LOW. Prices in Russia rose 5.1% in July,
according to a state statistical committee report carried by
Interfax on 29 July. This figure reflected a slight rise over the
record low of 4.8% registered in June. Officials said that food
prices had risen more slowly than anticipated. Prices rose 90%
overall in the first seven months of 1994. Many economists
predicted that monthly inflation will surge again and remain at
about 10% for the final months of 1994. In other statistical
news, the labor ministry reported on 28 July that 24 million
Russians, or 16.4% of the population, live below the poverty line
of 90,000 rubles ($44) per month. Income disparities are
widening, the report said. The richest 10% of the population now
control 23% of all money incomes, while the poorest 10% control a
mere 3%.  Louisa Vinton, RFE/RL, Inc.

WAGE ARREARS SPARK LABOR TENSION. Unpaid wages are the leading
cause of labor unrest in Russia, according to recent reports from
the state statistical committee and the finance ministry. Wage
arrears now amount to a total of 3.5 trillion rubles ($1.75
billion) and are increasing by 15% per month, ITAR-TASS reported
on 27 July. In the worst-hit regions, workers have not been paid
since last August; a delay of one to two months appears now to be
standard. The major cause of wage arrears is the chain of unpaid
debt and overdue taxes snaking its way through the economy.
Finance ministry officials reported on 26 July that only 45
trillion in taxes were collected in the first six months of 1994,
although the target for the year is 176 trillion.  Louisa Vinton,
RFE/RL, Inc.

VODKA PRICES TO TRIPLE? The head of Russia's distilling industry
told Interfax on 28 July that the price of a bottle of vodka
could more than triple by the end of 1994. Vladimir Yarmosh said
that sharply higher grain prices this year may cause vodka prices
to jump from 4,000 rubles ($2) to 14,000 rubles ($7). Competition
from a "flood" of cheap alcohol from neighboring countries has
cut into domestic vodka sales, and production for the first half
of 1994 amounted to only 61% of the total for the analogous
period of 1993. In an effort to counteract smuggling and tax
evasion, customs authorities announced on 28 July that excise
stamps will be required on all imported tobacco and liquor as of
1 January 1995.  Louisa Vinton, RFE/RL, Inc.

Russian government issued a statement, saying that the situation
in Chechnya was out of control, ITAR-TASS reports. (Chechnya
announced independence from Russia in 1991, but Moscow has not
recognized the move.) The statement said that the leadership of
President Dzhokhar Dudaev was the main destabilizing factor in
the North Caucasus, allowing organized criminal groups to commit
crimes across the republic's borders. The statement was issued
after Russian troops ended a kidnapping incident in Mineralnye
Vody and arrested the kidnappers, identified as Chechen
residents. The Russian government said Russia would be obliged to
protect Russians and ethnic Chechens "in full accordance with
Russian laws." On 30 July the Chechen leadership rejected the
Russian government's statement; on 31 July Dudaev said that his
republic would not hold any negotiations with the present Russian
government. This spring, representatives of the Russian and
Chechen governments reportedly reached a tentative agreement on
holding negotiations on the division of powers similar to the one
reached between Moscow and Tatarstan. Vera Tolz, RFE/RL, Inc.

Minister Andrei Kozyrev on 31 July urged the leadership of the
Bosnian Serbs to "heed the voice of the world community and the
recommendations of both Serbia and Russia" and to accept the
latest international Bosnian peace plan, Reuters reported on 1
August. Kozyrev, who had lobbied Western governments to refrain
from implementing stricter sanctions against the Bosnian Serbs,
also suggested that Bosnian Serb intransigence had left Russia
"practically alone" in the international deliberations devoted to
the crisis. He said that if the Bosnian Serbs accepted the plan
the world community would guarantee equal rights to both sides in
the conflict, and that Russia would also be ready to deploy
additional peacekeeping forces in those areas of Bosnia where
Serbs were most vulnerable.  Stephen Foye, RFE/RL, Inc.

Komsomolskaya pravda reported in its 22, 26, and 27 July issues
that Aleksei Sadykov, an 18-year-old journalist employed by the
Vladivostok private radio station VBC, was kidnapped and tortured
for having criticized the city's mayor, Konstantin Tolstoshein,
who was appointed in March by regional Governor Evgenii
Nazdratenko to replace the democratically-elected Viktor
Cherepkov. Sadykov had asserted in a broadcast that in the April
1993 elections Tolstoshein had obtained only 1.5% of the vote.
Two days after the broadcast, Sadykov was kidnapped by unknown
persons, who tortured him to confess that Cherepkov had paid him
$100 for the broadcast. According to Komsomolskaya pravda,
Sadykov's fingers were crushed in an industrial clamp and burned
with a lighter, and he sustained burns from a cigarette and a
blowtorch. He was later suffocated with a rope and plastic bag
and beaten with iron pipes. This incident, the newspaper says,
has terrorized local journalists, who now fear to criticize the
local authorities and are reluctant to cooperate with colleagues
who visit Vladivostok to investigate the Sadykov case. Julia
Wishnevsky, RFE/RL, Inc.

July Sergei Kovalev, the respected chairman of the Russian Human
Rights Commission attached to the Russian President, addressed
the Public Chamber with a report on human rights violations in
Russia. Kovalev criticized Yeltsin's decree on combating
organized crime, saying that it contained illegal and
anti-constitution provisions, demonstrating that the country's
law-enforcement bodies were incapable of combating crime by
regular methods. Later that day, "Vesti" quoted Kovalev as having
warned that "a nomenklatura-bureaucratic regime with elements of
the police state" could emerge in Russia, if human rights
violations, evident in Russia today, continue.  Julia Wishnevsky,
RFE/RL, Inc.

the 29 July issue of Neza-visimaya gazeta, its editor, Vitalii
Tretyakov, attacked the Russian leadership for its reluctance to
react to publications containing overt incitements to assassinate
former USSR president Mikhail Gorbachev. The articles, Tretyakov
wrote, had appeared in two newspapers from opposite sides of
Russian political spectrum--the radically pro-Yeltsin Kuranty and
the hard-line opposition Yuridicheckaya gazeta. The latter claims
that the easiest way to get access to the secret Swiss bank
account, accumulating enormous funds of the Soviet communist
party, would be to kidnap and torture Gorbachev, or, in case of
his death, Gorbachev's wife and daughter--the allegation viewed
by Tretyakov to have been an overt incitement to murder.  Julia
Wishnevsky, RFE/RL, Inc.

Indian delegation, led by Air Force chief Swaroop Krishan Kaul,
completed a one-week tour of Russia on 30 July and returned to
New Delhi for consultations on the purchase of Russian military
aircraft. According to ITAR-TASS of 30 July, no deals were
finalized during the visit, at least in part because some members
of the Indian delegation favored purchasing Western rather than
Russian military technology. During a visit to Russia at the end
of June, Indian Prime Minister P.V. Narasimha Rao met with
Russian President Boris Yeltsin and Prime Minister Viktor
Chernomyrdin; among the accords that they reached were agreements
calling for increased cooperation in defense production and the
joint production of military aircraft.  Stephen Foye, RFE/RL,


Korotchenya, identified as the executive secretary of the CIS,
was quoted by Interfax on 29 July as saying that he intended to
propose to UN Secretary General Boutros Boutros-Ghali that a fund
be established to support peacekeeping operations in the CIS and
to provide humanitarian aid and assistance in the repatriation of
refugees. Korotchenya, who left for New York on 29 July to attend
a conference of heads of regional UN bodies and international
organizations, said that the world community should assume part
of the expenditure for CIS peacekeeping activities "because all
states are vitally interested in peace and security in this
region." He was also quoted as saying that regional security
structures, including the CIS, should use "preventative
diplomacy" to resolve local conflicts in a non-violent way; such
actions, he said, would be comprised primarily of peacekeeping
operations carried out with the consent of the conflicting
parties.  Stephen Foye, RFE/RL, Inc.


is part of the reaction of the 1 August Washington Post to the
Geneva meeting on 30 July. The best that that session could come
up with in the face of Bosnian Serb intransigence over the peace
plan was to say that the UN could soon consider tightening
sanctions if the Serbs persist in rejecting the proposal. This is
a "lowest common denominator" approach. The Post quotes an
unnamed US official as saying that the meeting opted for a
"wishy-washy communique" over "threats no one took seriously [or
to] break up in disarray." US Ambassador to the UN Madeleine
Albright said of the Serbs "we have told them to go back and look
at the plan again," Reuters noted, and media reports suggest that
official Washington is more preoccupied with Rwanda and Haiti at
the moment. The Muslims said that the Contact Group's communique
lacks teeth. The Post ran an editorial asking rhetorically "why
are NATO planes not in the sky over Bosnia," and called the
response "woefully deficient, verging on shameful." Patrick
Moore, RFE/RL, Inc.

MILOSEVIC AS ANGEL OF PEACE? Serbian dailies on 31 July ran a
statement by President Slobodan Milosevic calling on the Bosnian
Serbs to accept the peace plan in the interest of getting
sanctions lifted against Serbia. Today's Belgrade papers print
accounts by his political party and loyal supporters echoing this
appeal. While there may or may not be political problems between
the man most responsible for the Wars of the Yugoslav Succession
and his lieutenants in Bosnia, it should be recalled that he
could cut them off from food and supplies in an instant if he so
wanted. It might also be pointed out that the sanctions have
proven leaky at best, and that many powerful people in Serbia
have profited handsomely from sanctions-busting. Milosevic's
party now declares that "Serbian interests should be defended
today through peace and not war," Politika reports, but AFP
quotes Bosnian Serb parliament spokesman Momcilo Krajisnik as
saying that "we cannot commit national suicide by handing back
territories which are vital to the [Bosnian] Serb republic."
Elsewhere, the 1 August New York Times quotes a Serb former guard
at the Susica concentration camp as saying that "in all, about
3,000 [Muslims] were killed" there and that "there is no question
the orders came from the highest level. Our army had a strict
chain of command from the outset, and [the local rump Yugoslav
army major] received orders from above." Patrick Moore, RFE/RL,

July and Vjesnik the following day report that the hard-hitting
satirical weekly Feral Tribune will not appear today. The staff
is calling attention to the government's imposition of a punitive
pornography tax on the paper in what many view as an attempt to
run an opposition weekly out of business. The staff's statement
said that the tax "is an announcement of a total cleansing of
Croatian media and is a slap in the face of democratic
processes." The authorities have previously used legal and
financial pressure to destroy or take over critical periodicals,
and they succeeded with Danas and Slobodna Dalmacija. They have
failed, however, to silence Feral Tribune and Globus, at least so
far. The culture ministry said the tax would be lifted as soon as
"Feral restores the concept under which it first registered--to
publish satire, politics, economy, culture and sport." It is
probably fair to say that Feral frequently transgresses the
boundaries of good taste, but, as the editors pointed out in the
paper's last issue, other publications do that as well but
without being victimized by the pornography tax. Patrick Moore,
RFE/RL, Inc.

reports that ultra-nationalist leader of the Serbian Radical
Party (SRS) Vojislav Seselj has been thrown out of Montenegro and
barred entry into that rump Yugoslav republic. The order barring
Seselj was issued by Montenegro's interior ministry, and is
reportedly a direct response to offensive remarks made by Seselj
during an SRS meeting on 30 July. Borba notes that Seselj will be
banned from entering Montenegro until the federal parliament is
able to indict the SRS leader. Stan Markotich, RFE/RL, Inc.

Speaking to Warsaw Uprising veterans at the Royal Castle in
Warsaw on 29 July, President Lech Walesa set the official tone
for the 50th anniversary commemorations by urging reconciliation
with Germany and Russia. "You are our conscience, our ideal, our
pride," Walesa told the veterans. Walesa stressed that Poles will
never forget the heroism of the uprising or the brutality with
which it was suppressed. "But we cannot live by revenge and
hatred alone," the president continued. Explaining his invitation
of the German and Russian presidents to attend the ceremonies,
Walesa said that "we need reconciliation and friendly cooperation
with our neighbors." The anniversary ceremonies opened on 30 July
with the military burial of Gen. Tadeusz Bor-Komorowski, the Home
Army commander who gave the order to start the uprising on 1
August 1944 and surrendered to the Nazis 63 days later.
Bor-Komorowski's remains were repatriated from London on 29 July.
Some veterans' groups and right-wing politicians inaugurated
"independent" ceremonies to mark the occasion on 31 July, as a
protest against the presence of German and Russian officials.
Louisa Vinton, RFE/RL, Inc.

POLISH WAGE CONTROLS TAKE FORCE. A new version of the tax on
excess wages--the neopopiwek--took effect on 1 August, as debate
continued as to its usefulness in preventing inflationary wage
increases. The new tax imposes a 150% penalty on firms that raise
wages above a stipulated level; it affects only firms that are at
least 80% state-owned, PAP reports. The Sejm's premature
abolition of the old tax and the president's veto of an earlier
replacement left Poland without wage controls for four months.
Government officials disagree over whether this lack prompted the
10.7% surge in wages noted in the second-quarter of 1994. The
Main Statistical Office (GUS) argued in a report issued on 28
July that wages rose primarily in firms in poor financial
condition, where salaries were very low. GUS failed to see any
direct link between this growth and higher than anticipated
inflation. In contrast, the Central Planning Office (CUP) on 25
July attributed higher inflation directly to the lack of wage
controls. Opposition economist Janusz Lewandowski argued on 27
July that the real problem is the high rate of wage growth in
monopolistic sectors such as mining, tobacco, and
telecommunications. He charged that this growth reflects an
official policy of protecting state industries at the cost of the
more vibrant private sector, where employment declined by 20,000
in the first half of 1994. This was the first drop in private
sector employment since the economic transformation began in
1989.  Louisa Vinton, RFE/RL, Inc.

members of the far-right Assembly for the Republic/Czechoslovak
Republican Party prevented Germans and Czechs from holding a
memorial ceremony at the former Nazi concentration camp at
Terezin in northern Bohemia. The ceremony, organized by German
and Czech groups, was to be held at the local national cemetery
and had been officially approved. CTK reports that members of the
extreme-right party blocked the entrance to the cemetery, threw
eggs at people gathered for the ceremony and destroyed wreaths
that were to be placed at a cross. The rightists shouted demands
for the Germans to go home. Several policemen were present during
the incident but did not interfere. One policeman was quoted as
saying that he and his colleagues did not act because they were
outnumbered. Another memorial ceremony aimed at reconciliation
between Czechs and Germans, held in Usti nad Labem, was not
disrupted. At least two major Czech political parties have
already expressed their dismay over the incident in Terezin. A
spokesman for the Civic Democratic Alliance, a member of the
ruling coalition, said that the incident was "a manifestation of
hateful intolerance." Jiri Pehe, RFE/RL, Inc.

gathered in Surany on 31 July to protest against various demands
of the Hungarian minority in southern Slovakia. Slovak media
report that the meeting was organized by the Slovak Heritage
Foundation (Matica Slovenska); no government officials were
present but Ivan Gasparovic, chairman of the Slovak Parliament
and a member of Vladimir Meciar's Movement for a Democratic
Slovakia, addressed the crowd. Jan Slota, chairman of the Slovak
National Party (SNP), told the audience that the Slovak
parliament is "not a Slovak one" because it recently adopted a
law allowing the use of bilingual signs in municipalities where
an ethnic minority constitutes at least 20% of the municipality's
inhabitants. On 29 July Slota attempted to distance himself and
his party from a special supplement to the pro-Meciar daily
Republika published in the name of his party several days
earlier, which contained racist and anti-semitic articles. The
headline of one of the articles read: "Only Jews Live Well in
Slovakia." Jiri Pehe, RFE/RL, Inc.

Romanian counterpart Gheorghe Tinca met on 29 July in Gyula,
Hungary to review bilateral military relations and ways to expand
military cooperation, MTI reported. Tinca brought with him ten
proposals fitting into the Partnership for Peace program with
NATO and which include joint maneuvers, and exchanges of officers
at military academies. Tinca stressed the need to strengthen
mutual confidence, while Keleti said the Romanian proposals would
benefit the Hungarian army training program and invited Tinca to
visit Budapest in the fall.  Alfred Reisch, RFE/RL, Inc.

Industry and Trade Laszlo Pal, Hungary's foreign trade registered
a $1.7 billion deficit in the first half of 1994 compared to the
same period of last year, MTI announced on 29 July. Exports rose
in value by 7.8% to $4.6 billion and imports by 5.4% to $6.3
billion. Industrial goods accounted for 78.4% and foodstuffs for
21.6% of all exports while agricultural products made up 23.6% of
all imports. In the first five months of this year, industrial
production rose by 8.3% compared to the same period of 1993 and
$486 million in foreign capital entered Hungary; the total number
of joint enterprises passed the 21,000 mark, an increase of 2,073
during the January-June 1994 period.  Alfred Reisch, RFE/RL, Inc.

conference broadcast over Radio Bucharest on 29 July, Prime
Minister Nicolae Vacaroiu said about 28% of the central
government posts will be eliminated in the next few weeks, in an
effort to cut bureaucracy. Among other things, the government
will abolish 21 state-secretary (the equivalent of deputy
minister) jobs. In addition, nearly 2,500 employees, mostly in
economic ministries, are to loose their jobs. The Interior and
the Defense Ministries will not be affected by the move, which,
Vacaroiu said, aimed at "cutting red tape, boosting work
efficiency" and bringing the administrative apparatus in line
with "the development of market mechanisms in the country." The
Industry Ministry will be the most affected, with seven state
secretaries loosing their jobs. Staff in that ministry, as well
as in the ministries of Agriculture, Transport, Tourism, Trade
and Environment, would be cut by up to 54%.  Michael Shafir,
RFE/RL, Inc.

ILIESCU DENIES CANCER RUMORS. Speaking on television on 29 July,
Romanian President Ion Iliescu told the nation he was recovering
well from gallstone surgery and denied reports he had cancer. He
thanked people who had sent him letters wishing a speed recovery.
Michael Shafir, RFE/RL, Inc.

MINERS STRIKE CONTINUES IN ROMANIA. Talks between management and
the leaders of the striking miners in the Jiu valley failed to
produce an agreement and the strike at three pits (Rovinari,
Pinoasa and Rosia), which began on 29 July, is continuing, Radio
Bucharest reported. The demonstration of strikers in front of the
company's headquarters in Targu Jiu is also continuing and 28
leaders of the miners' union are on a hunger strike. An official
of the miners' union told Radio Bucharest that about 25,000 union
members from the oil fields of Ploiesti and from the copper mines
in Deva will join the strike on 1 August.  Michael Shafir,
RFE/RL, Inc.

Directorate for the Maintenance of the Navigation Routes, which
is responsible, among other things, with keeping records on
Danube sailing routes--say Bulgarian and Romanian representatives
will meet in early August to try and determine the principles for
revising the 1908 border convention. Georgi Georgiev, who heads
the directorate, told BTA on 31 July that since the beginning of
the century at least five new large islands have been formed in
the river, and several others have disappeared. Over the past 10
years, Georgiev said 10 hectares of land have gone lost on the
Bulgarian side. The last revision was made in 1986.  Kjell
Engelbrekt, RFE/RL, Inc.

announced on 29 July that it is leaving the Confederation of
Bulgarian Industrialists, the so-called G-13, in protest over
recent activities of the influential Multigroup. In a statement
distributed by the bank's board of directors, Multigroup and its
affiliated companies were accused of resorting to "aggressive and
unfair" business methods while pursuing their expansionist
strategy. No specific clarification was offered, but
Turistsportbank said Multigroup had been taking advantage of its
chairmanship in the G-13 to pursue its own ends. Another bank,
meanwhile, was celebrating its fourth anniversary. In the
January-June period the Parva Chastna Banka [First Private Bank]
registered a 625 billion leva ($12 billion) turnover. BTA carried
the reports.  Kjell Engelbrekt, RFE/RL, Inc.

Deputy Chancellor of the Estonian Foreign Ministry Raul Malk and
Russian First Deputy Foreign Minister Igor Ivanov signed an
agreement requiring Russia to complete the removal of two nuclear
reactors from the submarine base at Padilski by 30 September,
1995, Western agencies report. Estonia had desired removal in ten
months while Russia claimed it needed seventeen months and a
compromise of fourteen months was reached. The agreement allows
up to 210 Russian specialists to remain at the base that will be
considered to be under civil and not military control. The
employees and their families, moreover, will be granted residence
permits for an additional six months if they have no housing in
Russia or have family members undergoing medical treatment. It
should be noted that the parliaments still have to ratify this
and other agreements signed by the presidents on 26 July and no
progress was made in settling differences on the borders. Saulius
Girnius, RFE/RL, Inc.

decision by Prime Minister Adolfas Slezevicius on 27 July to
earmark 4.5 million litai ($4.1 million) to pay for the economic
referendum on 27 August was criticized by World Bank
representatives in Lithuania, Barbara Lee and Ulrich Zachau,
Interfax reported on 30 July. They said that World Bank loans can
only be used for imports and investments. Slezevicius justified
his decision by stating that no other national funds were
available. His decision, however, is probably politically
motivated. The campaign for the referendum will officially begin
on 1 August. He and the ruling Lithuanian Democratic Labor Party
oppose the referendum, proposed by the right-wing opposition,
asserting that its provisions for compensations for savings and
revoking privatizations deemed illegal would result in massive
inflation. Saulius Girnius, RFE/RL, Inc.

Ukrainian Parliament voted 180-62 to suspend until 1 October the
process of privatization in the country. The resolution adopted
by the parliament says the State Property Fund, which oversees
privatization, should "stop the conclusion of agreements as to
buying and selling...until parliament approves the industries and
objects which are not to be privatized." The Parliament ordered
the government to submit a list for parliament's approval in
September of enterprises in the transport, energy and
communication industries which should not be privatized "because
of their national significance." It also ordered a review of the
mechanism by which foreign investors participate in
privatization.  Jiri Pehe, RFE/RL, Inc.

UNEMPLOYMENT IN MINSK. Of the 10,459 officially registered
unemployed in Minsk 78% are women, Belarusian radio reported on
28 July. In an attempt to combat the unemployment issue, it was
announced that those who fail to qualify for entrance into
university or other institutes of education, and are officially
registered as unemployed, will have the right to receive training
as secretaries, tailors, mechanics, in languages and other
skills.  Ustina Markus, RFE/RL, Inc.

  [As of 1200 CET]
  Compiled by Saulius Girnius and Dan Ionescu
The RFE/RL DAILY REPORT, produced by the RFE/RL Research
Institute (a division of Radio Free Europe/Radio Liberty, Inc.)
with the assistance of the RFE/RL News and Current Affairs
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