Some things have to be believed to be seen. - Ralph Hodgson
OMRI DAILY DIGEST

No. 24, Part I, 2 February 1995

We welcome you to Part I of the Open Media Research Institute's Daily
Digest. The Digest is distriubed in two sections. This part focuses on
Russia, Transcaucasia and Central Asia, and the CIS. Part II,
distributed simultaneously as a second document, covers East-Central and
Southeastern Europe.

The Daily Digest picks up where the RFE/RL Daily Report, which recently
ceased publication, left off. Contributors include OMRI's 30-member
staff of analysts, plus selected freelance specialists. OMRI is a unique
public-private venture between the Open Society Institute and the U.S.
Board for International Broadcasting.

RUSSIA

WARRANT ISSUED FOR DUDAEV'S ARREST. Russian acting Prosecutor-General
Aleksei Ilyushenko's office issued a warrant for the arrest of Chechen
President Dzhokhar Dudaev on charges of high treason (which carries a
possible death sentence), incitement to terrorism, violation of ethnic
and racial equality, and violation of the law on referendums, Interfax
and ITAR-TASS reported on 1 February. ITAR-TASS noted that one of the
charges was based on an alleged intercepted telephone conversation
between Dudaev and the leadership of an unspecified Azerbaijani
opposition party in which Dudaev called for terrorist actions against
Russia. Laying the ground for additional criminal charges against
Dudaev, Russian Federation Council Chairman Vladimir Shumeiko claimed
that Dudaev's regime had amassed 11 trillion rubles in illegal income
through trading in oil and drugs and issuing illegitimate advice notes
of payment, according to Interfax quoting Komsomolskaya pravda. The head
of the pro-Moscow Chechen administration, Salambek Khadzhiev, said
Dudaev is supported by the Russian mafia and was until recently supplied
with inside information on troop movements from Russian military
headquarters in Mozdok, Interfax reported. -- Liz Fuller, OMRI, Inc.

FIGHTING IN AND AROUND GROZNY CONTINUES. Russian artillery bombardment
of Grozny continued on 1 February. A Chechen military spokesman denied
claims that Russian forces had succeeded in crossing the Sundzha river
and had established a bridgehead in the southeast of the city, Interfax
reported. During the night of 31 January-1 February, Russian forces also
launched an intensive artillery attack on the village of Samashki, east
of Grozny, on grounds that it was harboring Dudaev supporters, Western
agencies reported. -- Liz Fuller, OMRI, Inc.

INTERIOR OFFICER PUT IN COMMAND IN CHECHNYA. The commander of Russia's
Interior Troops, General Aleksandr Kulikov, has been appointed to head
the joint command of federal forces in Chechnya, Interfax reported  1
February. A senior Defense Ministry official said the military is
starting to turn over facilities under its control to Interior Ministry
troops. He added that the North Caucasus military district would
continue to give artillery and air support to the Interior Ministry
forces. -- Doug Clarke, OMRI, Inc.

GRACHEV REPORTED HOSPITALIZED. Defense Minister Pavel Grachev had been
in the hospital for two days as of 1 February, Postfactum reported. NTV
said a ministry spokesman refused to comment on the report. The
television station noted that "the number of military leaders on sick
leave is growing steadily as the operation in Chechnya goes on." -- Doug
Clarke, OMRI, Inc.

INGUSH DENOUNCES SHAKHRAI. Ingushetia's Vice President Boris Agapov
denounced recent comments by Deputy Prime Minister Sergei Shakhrai,
charging that he and the "power ministers"--military, intelligence, and
police--had "blacklisted the Ingush as a disloyal nation which has
strong separatist feelings," Interfax reported on 1 February. Agapov
warned that some Russian politicians are "looking for a pretext to
influence Ingushetia." Such moves, he claimed, would lead to a spread of
the conflict from Chechnya into Ingushetia. He expressed concern about
the fact that all of the power ministries were directly subordinate to
the president. "At one time [they] were directly subordinate to Stalin.
The result is well known," he said. -- Robert Orttung, OMRI, Inc.

CHECHEN CONFLICT CHANGES BALANCE OF POWER IN PARLIAMENT. The main
winners of the Chechen conflict are the Communist Party and their
allies, according to an analysis in Nezavisimaya gazeta on 2 February.
The Communists will benefit because, first, they opposed the war, along
with a majority of the population. Second, fighting on Russian soil
helps them discredit the president. Third, the Chechen crisis threatens
a quick economic recovery, which in turn strengthens the position of the
opposition in the upcoming elections. The main loser is Russia's Choice,
under Egor Gaidar, because his political competitors will blame him for
arming, or at least tolerating the arming, of Dzhokhar Dudaev. Russia's
Choice will also be blamed for supporting the 1993 constitution, which
strengthened the Presidency, and only asking for amendments after it
went into effect. The president's decision to ignore the Federation
Council, the chamber which is supposed to handle relations between
Moscow and the regions, provoked considerable opposition to the war in
that body. In the Duma, the only party that consistently supports the
president is Deputy Prime Minister Sergei Shakhrai's Party for Russian
Unity and Concord. The support of Vladimir Zhirinovsky's Liberal
Democratic Party and other nationalists is tactical and will not extend
to support for economic reform. If recent events reflect long-term
trends, the article concluded, a major change in the Duma's balance of
power has taken place, which could destabilize the Russian socio-
political situation. -- Robert Orttung, OMRI, Inc.

KHASBULATOV TESTIFIES ON CHECHNYA. Former Chairman of the Supreme Soviet
Ruslan Khasbulatov testified before the special Duma commission
investigating the Chechen crisis, commission head Stanislav Govorukhin
told Interfax on 1 February. The commission is currently meeting behind
closed doors at the Moskva hotel. Khasbulatov, an ethnic Chechen, has
been blamed for failing to find a solution to the crisis after Chechnya
declared independence in 1991. -- Robert Orttung, OMRI, Inc.

RUTSKOI TO RUN FOR PRESIDENT. Former Vice President Aleksandr Rutskoi is
planning to hold the founding congress for his Great Power movement in
the near future, Interfax reported on 1 February. When asked if he would
take part in the upcoming presidential elections, he replied, "yes, of
course." -- Robert Orttung, OMRI, Inc.

LUKIN AGREES THAT RUSSIAN APPLICATION TO COUNCIL OF EUROPE MAY BE
DELAYED. The head of the Russian delegation to the Council of Europe,
Vladimir Lukin, conceded on 1 February that his country may put off its
application to join the body, Reuters reported. "We are in favor of a
delay for a precise period, which will end when negotiations on the
basis of the Russian constitution replace the military initiative [in
Chechnya]," Lukin said. A CE parliamentary committee had recommended on
30 January that consideration of Russia's application be delayed until
the Chechen situation is resolved. On 2 February, the CE parliamentary
assembly was scheduled to debate a harsh condemnation of Russian actions
in Chechnya. -- Michael Mihalka, OMRI, Inc.

PRESIDENTIAL ADMINISTRATION TO BE FINANCED BY OIL EXPORTS? The Foreign
Economic Relations Ministry has granted a company named Rostoplivo oil
export privileges in order to "finance the programs of the
administrative department of the Presidency," Izvestiya reported on 1
February. The authorities "are secretly creating their own shadow
economy," the article charged. Russian Deputy Prime Minister Oleg
Davydov denied the allegations, saying no new companies had been added
to the list of "special exporters," who handle all Russia's oil exports,
according to ITAR-TASS. The presidential administration also rejected
the claims, saying it had never heard of Rostoplivo, Reuters reported.
In December, Izvestiya caused an uproar by publishing a letter from
presidential security chief Maj.-Gen. Aleksandr Korzhakov to the prime
minister opposing plans to abolish oil export quotas. -- Penny Morvant,
OMRI, Inc.

CHERNOMYRDIN PRIORITIZES FINANCIAL STABILIZATION. Financial
stabilization is a priority for the Russian government in 1995, said
Prime Minister Viktor Chernomyrdin at a 1 February meeting with the
Ministry of Communications, Interfax reported. Chernomyrdin said efforts
must also be made to "lay the groundwork for the creation of a favorable
atmosphere for investment" in the Russian economy. In efforts to
stimulate investment and boost industrial production, the prime minister
said his cabinet intends to draw up a "full-scale tax reform" package
which would be presented to the government by 1 June 1995. Chernomyrdin
also stressed that institutional changes are necessary in key industrial
and economic complexes. Also, steps must be taken to address social
problems--an issue that Chernomyrdin said is "the most complicated
priority of 1995." -- Thomas Sigel, OMRI, Inc.

ABALKIN CRITICIZES RUMORED FIXED RUBLE RATE. Academy of Sciences member
Leonid Abalkin called the proposed introduction of a fixed ruble rate a
"half-baked measure" that would hurt the Russian economy, Interfax
reported on 1 February. Economics Minister Yevgenii Yasin mentioned the
idea of a fixed rate at the recent World Economic Forum in Davos,
Switzerland. Abalkin said such simple methods cannot prevent the ruble's
decline. The economist added he believes the Finance Ministry would
benefit if the ruble fell considerably. With the current budget as it
is--foreign borrowings are stated in dollars, while revenues are
computed in rubles--the government can exploit the exchange rate gap to
considerably increase the revenue side of the budget, Abalkin explained.
Meanwhile, the ruble took a tumble again against the U.S. dollar in
MICEX trading on 1 February, losing 11 points and closing at 4,057
rubles to $1. -- Thomas Sigel, OMRI, Inc.

SUBMARINE WORKERS THREATEN NEW HUNGER STRIKE. Workers at two shipyards
in Severodvinsk have threatened to renew a hunger strike to get their
pay, Interfax reported on 1 February. Vladimir Makivchik, a union
leader, said 11 workers had gone on a hunger strike on 11 January inside
a nuclear-powered submarine currently being modernized at Severodvinsk.
He reported that the Defense Ministry owed the Atomic Shipbuilding
Center 231.2 billion rubles. The workers called off their strike after
five days but plan to renew it unless the government places an order for
this year with the shipyards. Another worker said 19 other men were
ready to join the strike. -- Doug Clarke, OMRI, Inc.

McDONALD'S CELEBRATES 5TH ANNIVERSARY IN MOSCOW. The busiest McDonald's
hamburger restaurant in the world celebrated its 5th anniversary this
week in Moscow, AFP reported. Located on Pushkin Square, the chain has
served more than 17 million Big Mac hamburgers, 33 million orders of
french fries, 19 million milk shakes and 15 million soft drinks to over
73 million customers, AFP reported. George Cohon, vice chairman of the
Moscow McDonald's, said the restaurant's success can be attributed to
the Russian people who "made our dream a reality." In 1990, most of the
raw materials, including beef, had to be imported. Today, more than 90%
of supplies come from 150 suppliers in Russia and other CIS countries.
Cohon also announced that the Ronald McDonald Childrens' Charities of
Russia would open a sports complex for disabled children in mid-1995. --
Thomas Sigel, OMRI, Inc.

CITY BAILS OUT DEFENSE PLANT. The mayor of St. Petersburg has provided
an interest-free credit of 510 million rubles to the former Zhdanov
Shipyard to pay workers' wages, Russian media reported on 31 January.
The reports said the Defense Ministry had not been able to pay for ships
it had ordered. Last month, Interfax reported that two Sovremennyi-class
destroyers ordered by the Navy were lying unfinished at the shipyard. --
Doug Clarke, OMRI, Inc.

CIS

CITIZENSHIP ISSUE STALLS RUSSIAN-UKRAINIAN TREATY. Dmytro Tabachnyk,
chief of the Ukrainian Presidential Staff, said Kiev would not sign the
Russian-Ukrainian friendship treaty if Moscow insisted on a dual-
citizenship clause, dpa reported on 1 February. Earlier, President
Yeltsin had said he would not visit Ukraine to sign the treaty if the
clause was not inserted. Moscow has been insisting that ethnic Russians
in Ukraine have the right to dual citizenship. Kiev has been opposed to
this demand saying this could lead to excessive Russian influence on
national affairs, particularly in Crimea, where some 65% of the
population are ethnic Russians. -- Ustina Markus, OMRI, Inc.

MOSCOW POLICE ARREST FUGITIVE UKRAINE SHIPPING MAGNATE. Moscow police
have arrested Pavlo Kudzhukin, fugitive director of the Ukrainian Black
Sea Shipping Company, BLASCO, and have informed the Ukrainian Security
Service that he will be extradited on 2 February to face prosecution in
Kiev, dpa reported. The state merchant shipping firm was transformed
into a joint-stock company by former President Leonid Kravchuk under
suspicious circumstances. Kudzhukin allegedly leased out about 200
Ukrainian merchant vessels under bad conditions, which cost the country
about $1 million in potential profits. When Ukrainian President Leonid
Kuchma launched a criminal investigation into the affair, Kudzhukin fled
to Moscow. -- Chrystyna Lapychak, OMRI, Inc.

[As of 1200 CET]

Compiled by Victor Gomez

The OMRI Daily Digest offers the latest news from the former Soviet
Union and East-Central and Southeastern Europe. It is published Monday
through Friday by the Open Media Research Institute. The Daily Digest is
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