No. 28, Part I, 8 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

MORE REVELATIONS ABOUT BEGINNING OF CHECHEN WAR. On 7 February Interfax
continued to publish excerpts from the 27-page report on the Chechen war
by presidential advisers Emil Pain and Arkady Popov. The survey says
Dudaev was able to arm his forces by giving large payoffs to "smart
traders clad in military uniform." The authors reject the theses that
weapons were plundered by Dudaev's militants or extorted from Russian
servicemen under duress. The survey calls for further research into the
question of who supplied the Dudaev regime with sophisticated weapons,
such as anti-aircraft weapons and rocket launchers. Investigators must
also examine how Dudaev was able to export oil through Russian pipelines
and use the money to buy weapons, and why the federal authorities
allowed special flights into and out of Grozny for suspicious cargoes
when international agencies warned that illicit drugs were being shipped
through Chechnya. Many in Moscow may have received kickbacks, the
authors conclude. -- Robert Orttung, OMRI, Inc.

NEARLY 5,000 MILITARY CASUALTIES IN CHECHNYA. Russian federal troops
have suffered nearly 5,000 casualties in Chechnya, Interfax reported on
6 and 7 February, quoting "power" ministry sources. Some 907 have been
killed in action, while more than 3,400 troops have been wounded and
another 456 are either missing in action or unidentified dead. The
Ground Forces have suffered the heaviest losses, with 537 servicemen
killed and around 2,000 wounded. At the same time, a group of experts
headed by Russian Human Rights Commissioner Sergei Kovalev estimated
that 25,000 civilians have been killed in Grozny. Ostankino's "Vremya"
estimated that about 195,000 people have fled their homes as a result of
the fighting. -- Doug Clarke and Julia Wishnevsky, OMRI, Inc.

BOROVOI PEACE PROPOSAL. Economic Freedom Party Chairman Konstantin
Borovoi told a news conference in Moscow on 7 February that he had sent
President Boris Yeltsin a proposal for a new Chechen peace plan
comprising a ceasefire, a Russian troop withdrawal, and the
establishment of a demilitarized zone, but had received no response.
Borovoi, who reportedly met with Chechen President Dzhokhar Dudaev near
Grozny on 2 February, predicted that Russian troops in Chechnya would
soon be defeated, and that Chechnya would gain international recognition
"within a few months," Interfax reported. -- Liz Fuller, OMRI, Inc.

RUSSIAN FOREIGN MINISTRY SPOKESMAN CONTENDS COUNCIL OF EUROPE
OVERREACTED. The Council of Europe overreacted to the Chechnya events
when it voted to defer Russia's application, Foreign Ministry spokesman
Grigorii Karasin told Interfax on 7 February. He said Russia's candidacy
should be considered in a broader perspective. In that context, he
mentioned Russia's cooperation with the OSCE mission to Chechnya.
Expressing a contrary view, Irina Khakamada, leader of the 12 December
Liberal Democratic Union faction in parliament, said, "The Russian
parliamentary delegation did an incredible thing in achieving adoption
in Strasbourg of a 'softened' resolution by the Council of Europe on the
situation around Chechnya." She said the speech by Human Rights
Commissioner Sergei Kovalev was instrumental in "changing the sentiments
of European MPs," who "were shocked by the position taken by Vladimir
Zhirinovsky, who spoke like an open adherent of government actions in
Chechnya." -- Michael Mihalka, OMRI, Inc.

YELTSIN TO ADDRESS PARLIAMENT. Yeltsin's annual address to parliament,
which was originally scheduled for January, will take place on 16
February. A "presidential source" told Interfax Yeltsin will discuss
military reform and may return to the idea of giving the Russian Army
General Staff new functions and detaching it from the Defense Ministry.
The Security Council discussed this issue in January. The president will
also criticize those who failed to enact the proposals he advanced in
the previous year's address. In that speech, he stressed the need to
reform local government by fall 1994. -- Robert Orttung, OMRI, Inc.

FEDERATION COUNCIL REJECTS STATE OF EMERGENCY. For the second time, the
Federation Council failed to ratify a state of emergency decree for
Ingushetia and North Ossetia issued by Yeltsin, Interfax reported on 7
February. Only 76 of the necessary 90 deputies supported the motion. The
Council failed to ratify Yeltsin's first decree on 3 February. Without
the Federation Council's approval, the decree becomes invalid in three
days. The prospects for a compromise between the president and the
Federation Council are uncertain, Piotr Shyshov, head of the Council's
Defense Committee, told AFP. "We are asking for an in-depth revision of
the text, as the war situation [in neighboring Chechnya] demands strict
and concrete measures." -- Robert Orttung, OMRI, Inc.

YAVLINSKY VOICES DOUBTS ABOUT THE PRESIDENTIAL ELECTION. Grigorii
Yavlinsky, a liberal economist who is the front-runner in most opinion
polls on the presidential elections, suggested that the results may be
rigged in favor of President Boris Yeltsin, RFE/RL reported on 7
February. Yavlinsky noted that, under the electoral draft law, votes
will be cast by the Central Election Commission appointed by the
president, leaving no room for independent control over its activities.
Asked whether he is going to appeal to European human rights agencies,
Yavlinsky replied that such bodies should hire at least one translator
to enable them to read Russian laws and evaluate them on their own.
Meanwhile, a growing number of Russian public figures have voiced doubts
that the next presidential elections will even take place in June 1996,
as scheduled. -- Julia Wishnevsky, OMRI, Inc.

VORKUTA MINERS STAGE ONE-DAY WARNING STRIKE. As the Komi Republic's new
parliament held its first session on 7 February, miners in Vorkuta
staged a 24-hour warning strike in protest against nonpayment of wages
and poor working conditions, Russian media reported. The privatized
Vorgashurskaya mine, the largest pit in the area, did not participate.
Miners in Rostov have been on strike since 1 February, and the Russian
Coal Industry Workers' Union, which has about 1 million members,
scheduled a nationwide one-day strike for 8 February. Miners' leaders
say if the government does not heed their demands, they will begin an
indefinite strike on 1 March and press for early presidential elections
and the resignation of the government, Nezavisimaya gazeta reported on 7
February. Following a meeting with Prime Minister Viktor Chernomyrdin
and First Deputy Prime Minister Anatolii Chubais on 7 February, the
general director of the state coal association "Rosugol" said the prime
minister had promised to find extra funds for the industry. -- Penny
Morvant, OMRI, Inc.

IMF FAILS TO REACH AGREEMENT ON LOAN WITH RUSSIA. The IMF failed to
reach an agreement with Russia in the latest round of talks on a $6.4
billion standby loan, but both Russian and IMF officials remain
optimistic, international agencies reported. IMF head Michel Camdessus
stressed that Russia badly needs a "strong, coherent, and credible"
economic program, but gave no schedule for a possible completion of the
talks. Russia hopes to close an important gap in its proposed 1995
budget with over $10 billion in funds from international agencies. The
State Duma's decision to raise the minimum wage from $5 to $13 a month
erected a major roadblock to the talks, according to Russian
presidential aide Aleksandr Livshits. However, the Federation Council is
expected to reject the increase. The Duma would then need a three-
quarter majority to pass the bill again. Other obstacles include the
failure of Russia to liberalize oil exports, expenses associated with
the Chechnya war, a threatened miners' strike, flawed macroeconomic
assumptions for the budget bill, and the fact that budget decisions
sometimes emanate from the president's private office and catch the
government unawares. The IMF talks are scheduled to resume again within
two weeks. -- Michael Mihalka, OMRI, Inc.

COMMITTEE FINALIZES KEY INDICES OF DRAFT BUDGET. The budget committee of
the Russian State Duma has finalized the key numbers of the 1995 draft
budget which was approved in the second reading on 25 January, Interfax
reported on 7 February. Committee chairman Mikhail Zadornov told
Interfax that with the approval of the 1.5% special tax for supporting
agriculture and coal mining, the key indices are: revenue--248.3
trillion rubles (4,133 rubles/$1), spending--175.2 trillion, deficit--
73.2 trillion rubles or 29.5% of expenditures. Zadornov said an
additional 5.3 trillion rubles collected in the form of a special tax,
will be directed to "needy branches of the economy," which the committee
will discuss in more concrete terms on 13-14 February. Zadornov expects
the third reading of the draft budget on 17 or 22 February. -- Thomas
Sigel, OMRI, Inc.

TALKS OF FIXED RUBLE RATE MAKE BANKERS UNEASY. International Industrial
Bank Chairman Sergei Pugachov said a fixed ruble rate would promote the
creation of a black currency market, an increase in illegal transactions
by non-banking structures, and would result in a federal tax revenue
decline. The comments came during a 7 February Financial Information
Agency interview with top bank managers. Avtobank Chairwoman Natalya
Raievskaya said a fixed rate would first affect industrial enterprises
and then the banking system. Banks would also suffer losses on hard
currency operations, she added. Most Bank Chairman Boris Khait said the
government must publish and justify the financial reasons for such a
move before implementing a fixed rate. Neftyanoi Bank Deputy Chairman
Stanislav Balakin commented that the introduction of a fixed ruble rate
is a "totally unrealistic task" due to high inflation and economic
instability. At the same time, the Russian bankers said they intended to
"support any governmental decision in order to not rock the economy."
Meanwhile, MICEX trading held steady on 7 February as the market closed
at 4,133 rubles to $1. -- Thomas Sigel, OMRI, Inc.

CIS

UNIFIED AIR DEFENSE ON CIS AGENDA. A unified CIS air defense system will
be one of two items on the agenda of the CIS Defense Ministers' Council
meeting in Almaty on 10 February, Interfax reported. Russian Defense
Minister Pavel Grachev is to chair the meeting. At present, only Russia
and Armenia have formally combined their air defense efforts. The second
topic was said to be an agreement on CIS external borders. -- Doug
Clarke, OMRI, Inc.

RUSSIAN-UKRAINIAN TALKS. Russian First Deputy Prime Minister Oleg
Soskovets arrived in Kiev on 7 February for another round of
negotiations between Russia and Ukraine, Ukrainian radio reported.
Soskovets held talks with Ukraine's First Deputy Prime Minister Yevhen
Marchuk. Issues under discussion included: the treaty on friendship and
cooperation; implementation of bilateral agreements; the Black Sea
Fleet; and problems in economic relations. Nearly all disputes over the
broad treaty on friendship and cooperation have been resolved, and
President Yeltsin should visit Ukraine no later than March to sign the
agreement, Interfax reported. Marchuk said the biggest problem has been
settling Ukraine's energy arrears to Russia. -- Ustina Markus, OMRI,
Inc.

[As of 1200 CET]

Compiled by Victor Gomez

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