No. 42, Part I, 28 February 1995

We welcome you to Part I of the Open Media Research Institute's Daily
Digest. The Digest is distributed 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.

RUSSIA

GRYZUNOV TO BE FIRED? State Press Committee Chairman Sergei Gryzunov, a
liberal who has shut down several fascist newspapers during his five
months in office, announced on 27 February that he would be dismissed
because "not all officials" share his belief in a free press, Interfax
reported. But a presidential source told Interfax on 27 February that
President Boris Yeltsin supports Gryzunov, who is "widely known for his
democratic and anti-fascist views." The mixed signals continued into the
evening, when Prime Minister Viktor Chernomyrdin confirmed that Gryzunov
would be dismissed. The heads of nearly every major Russian newspaper,
television, and radio company praised the outgoing chairman in a letter
to Yeltsin calling Gryzunov's rumored dismissal "unfounded" and
"unjustified." The letter suggests that Gryzunov's opponents intend to
stir up resentment toward the president and divisions within the
democratic camp in the early stages of this year's electoral campaign.
Last autumn, Gryzunov was appointed coordinator of the Russian
government's Temporary Information Center on the Chechen conflict, but
he was soon removed, reportedly because of his "inability to cope" with
discrepancies in the government's official version of events. -- Laura
Belin, OMRI, Inc.

RUSSIAN TROOPS SEAL GROZNY. Russian troops have formed a second circle
around Grozny, effectively sealing off the city, and are proceeding to
hunt down those Chechen fighters still remaining there, Interfax and AFP
reported on 27 February. Russian troops advancing south from Grozny were
halted by intensive Chechen resistance in the village of Stary Atagi.
Also on 27 February, Russian First Deputy Prime Minister Oleg Soskovets,
Interior Minister Viktor Yerin, and other ranking Russian officials
arrived in Mozdok for a conference on economic reconstruction in
Chechnya. -- Liz Fuller, OMRI, Inc.

CAMPAIGN HEATS UP IN THE REGIONS. Communist Party candidates won a
majority of seats in elections to the Orel Oblast legislature on 26
February, Interfax reported. Additionally, preparations for the December
parliamentary elections are rapidly moving ahead outside Moscow.
Agrarian party leader Mikhail Lapshin just completed a visit to Rostov
Oblast, while Russia's Choice leader Yegor Gaidar was seeking support in
Smolensk, Nezavisimaya gazeta reported on 28 February. On 25 February,
Nizhnii Novgorod hosted the founding conference of a new national
organization, Spring Union. That organization, under the leadership of
State Duma Deputy Vadim Bulavinov, is seeking to strengthen the Russian
state by fostering parliamentary democracy. In an earlier incarnation as
a strictly regional organization, the Spring Union succeeded in electing
20 of its 24 candidates to the State Duma and the Nizhnii Novgorod
Assembly. It is now actively seeking allies among the other political
parties for the parliamentary elections. -- Robert Orttung, OMRI, Inc.

ZHIRINOVSKY: DECEMBER 1995 ELECTIONS WILL BE DELAYED. Vladimir
Zhirinovsky, the ultra-nationalist leader of the Liberal Democratic
Party, told Interfax on 24 February that the Russian government will
refuse to call parliamentary elections in December of this year. He
claimed that as the political climate in Russia worsens in the summer of
1996, the government will use the "civil war" as an excuse to further
postpone legislative elections. Based on recent meetings with unnamed
members of the Russian armed forces, Zhirinovsky asserted that "only the
army can guarantee that the election takes place." -- Laura Belin, OMRI,
Inc.

ILLEGAL FLIGHT OF CAPITAL, CORRUPTION INCREASING. The illegal flight of
capital from Russia totaled about $50 billion in 1994, according to an
official of the Interior Ministry's Main Department for Economic Crimes,
cited by Interfax on 26 February. He said the illegal capital outflow
was rising at a rate of $1.5-2 billion a month, much of it stolen from
the public. About 9,600 crimes were recorded in the financial sphere in
1994, 4,800 of them involving theft. A 24 February Interfax report, also
citing an Interior Ministry official, said the state apparatus had been
eroded by corruption. State officials figured in 2,700 law suits, more
than half of them on bribery charges. In an article published in
Izvestiya on 28 February, former Finance Minister Boris Fedorov poured
scorn on the official bribery figures for 1994, arguing that there were
more likely to have been 5 million than 5,000 cases. He blamed the
scourge on high-level reluctance to address corruption, judicial
shortcomings, unclear bureaucratic decision-making procedures, and the
power of officials to issue credits, licenses, and quotas. -- Penny
Morvant, OMRI, Inc.

PEASANTS' PARTY ACCUSES AGRO-INDUSTRIAL LEADERS OF CATTLE SLAUGHTER. The
Russian Peasants' Party has accused "agrarian apparatchiks of large-scale
cattle slaughter which is a crime against the Russian people,"
according to a report read by party leader Yuri Chernichenko at the
Fourth Party Congress in Moscow on 27 February, Interfax reported.
Chernichenko compared the huge cattle slaughters in state and collective
farms to those under Stalin in 1929-1933. Commenting on federal
allocations to the agro-industrial sector, he said farmers are being
oppressed throughout the country by high taxes and government diktats.
-- Thomas Sigel, OMRI, Inc.

DUMA SUB-COMMITTEE MEETS ON BANK BANKRUPTCY BILL. The sub-committee for
banking legislation in the Duma met on 27 February to spell out the details
for the bill "On Changes and Amendments to the Russian Law on
Bankruptcy of Enterprises." The law is expected to address the
bankruptcy peculiarities of banks and credit organizations, Interfax
reported. The bill will change the procedure for declaring a bank
insolvent. Arbitration courts will initiate the insolvency case before a
bank is stripped of its license. The license annulment will be the final
stage of a bank's bankruptcy and will only be admissible if the Central
Bank approves the liquidation commission's report. The bill will also
address how to sell insolvent banks. Temporary control over the
insolvent bank will be exercised by authorized persons from highly
reliable banks and auditing firms. The bill will also allow bank
liquidation if reorganizational inefficiency can be proven. The
liquidation commission must involve an authorized representative from
the Bank of Russia. Under the bill, bank shareholders will have property
accountability for bank obligations in case the bank goes bankrupt. The
bill will be submitted to the State Duma this spring. -- Thomas Sigel,
OMRI, Inc.

FIRST RUSSIAN COMPANY ENTERS U.S. STOCK MARKET. The U.S. securities and
stock market commission has passed a resolution to allow the Toggliatti-
based AvtoVAZbank of Russia access to the American stock market, the
first company to do so, Interfax reported on 24 February. Several other
Russian companies, including the leading LUKoil holding, also plan to
break into the U.S. stock market. -- Thomas Sigel, OMRI, Inc.

KOZYREV PUBLISHES NEW BOOK. Foreign Minister Andrei Kozyrev presented
his book, Transformation, on the formation of Russian foreign policy, on
27 February in Moscow, Interfax reported. Describing Russia's place on
the international stage as "more solid and dignified than that of the
USSR," he said the latter may have been more feared but Russia has
earned greater respect. Commenting on extracts published earlier, he
said Japan was not offended by his revelation that the country had
offered Russia $28 billion for the four Kuril islands. Boris Likhachev,
director of International Relations Publishing House, said the book will
be translated into English and published abroad. -- Robert Orttung,
OMRI, Inc.

U.S. PRESSURE FAILS TO STOP RUSSIAN-IRANIAN NUCLEAR DEAL. U.S. Secretary
of State Warren Christopher continued to express concern about the
Russian plan to supply Iran with nuclear reactors, international
agencies reported. "We oppose any nuclear cooperation with Iran by
Russia or other countries," he said on 27 February. Meanwhile, Sergei
Karagonov, a member of the Russian Presidential Council, said, "We are
negotiating (the sale) of a peaceful nuclear facility (for a) power
plant. We aren't selling them anything which can be connected with
arms." Russia's failure to drop the deal may threaten Clinton's proposed
visit in May, a Foreign Ministry source told Interfax. A Nuclear
Ministry source accused the U.S. of duplicity for intending to send the
same kind of reactors to North Korea. He said the U.S. action may
subvert the extension of the Nuclear Non-Proliferation Treaty when it
comes up for review in April. Iran and other states may decide not to
sign if they are prevented from pursuing peaceful nuclear programs.
Contrary to U.S. beliefs, Russia maintains that the Iranian program is
entirely peaceful. Russian Deputy Foreign Minister Georgy Mamedov was in
Iran over the weekend and secured yet another statement from Tehran that
it would continue to adhere to the NPT. However, one Yeltsin adviser
shares U.S. concerns. In a Deutsche Welle interview on 26 February,
Aleksy Yablokov, head of the Security Council environment commission,
said Iranian interest in the proposed nuclear power plant has only one
purpose, "Tehran wants its own atomic bomb." -- Michael Mihalka, OMRI,
Inc.

RUSSIA SIGNS NUCLEAR SAFETY DEAL WITH EU. Russia has signed a nuclear
safety deal with the European Union that will greatly facilitate Western
aid in nuclear safety projects, Reuters reported on 27 February. EU
Foreign Affairs Commissioner Hans van den Broek and Russian Atomic
Energy Minister Viktor Mikhailov signed the document, which contains a
controversial clause limiting the liability of Western suppliers in the
event of a nuclear accident. The lack of a liability-limitation deal has
stalled a number of EU-backed safety projects. The EU will continue to
press Russia to sign the Vienna Convention which limits liability to the
owner of the nuclear facility. -- Michael Mihalka, OMRI, Inc.

KOZYREV WARNS AGAINST HASTY NATO EXPANSION; DANGER OF "COLD PEACE" REAL.
Foreign Minister Kozyrev has warned once again against the "hasty
expansion of NATO," ITAR-TASS reported on 28 February. The timing of his
comments are particularly important as the U.S. has been actively
pursuing efforts to secure Russian approval for NATO expansion. That was
one of the topics Russian Deputy Foreign Minister Georgy Mamedov
discussed last week on his visit to Washington. Kozyrev told Japanese
journalists before his trip to China, "it is not with expanding the old
NATO that one needs to hurry, but with the joint quest for ways to
transform the alliance, to develop a genuine Russia-NATO partnership."
He reminded them that Yeltsin had spoken of "a cold peace" at the CSCE
summit in December. "In our view, this danger is an extremely real one,"
he said. -- Michael Mihalka, OMRI, Inc.

UNEMPLOYED UP 75,000 IN FEBRUARY. The Federal Employment Service
announced on 27 February that the number of officially registered
unemployed increased by almost 75,000 in February to 1.71 million,
Interfax reported. The actual number of unemployed is thought to be two
to three times the official figure. A quarter of the unemployed had been
working in state organizations. According to the Labor Ministry, 85% of
vacancies are for blue-collar workers, while two-thirds of the
unemployed have a higher or specialized secondary education. -- Penny
Morvant, OMRI, Inc.

TRANSCAUCASIA AND CENTRAL ASIA

TAJIK ELECTION UPDATE. Up to 85% of Tajikistan's 2,684,000 registered
voters participated in the parliamentary elections of 26 February, a
Central Electoral Commission spokesman told Interfax on 27 February.
Candidates were elected in 161 of 181 constituencies. Repeat elections
will be held in 13 constituencies where no single candidate obtained the
necessary minimum number of votes, and results are still outstanding in
the remaining seven. Among the candidates elected are Abdulmadzhid
Dostiev and Shodi Shabdolov, leaders of the Tajik People's Party and the
Tajik Communist Party respectively. A spokesman for the Tajik Foreign
Ministry told Interfax that the government will continue to cooperate
with the OSCE despite that organization's refusal to send observers to
monitor the elections. -- Liz Fuller, OMRI, Inc.

As of 12.00 CET.
Compiled by Victor Gomez

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