No. 92, Part I, 12 May 1995

We welcome you to Part I of the Open Media Research Institute's Daily
Digest. 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.  Back issues of the Daily
Digest, and other information about OMRI, are available through our WWW
pages: http://www.omri.cz/OMRI.html

RUSSIA

THE MYSTERIOUS CASE OF THE CENTRIFUGE CONCESSION. Russian President
Boris Yeltsin's "concession" to his U.S. counterpart Bill Clinton on
sending gas centrifuges to Iran seems to have been no concession at all,
Interfax reported on 11 May. Georgy Kaurov, the spokesman for Russia's
Nuclear Energy Ministry, said Russia never intended to supply Iran with
the centrifuges. He stressed that no provisions for such equipment had
been included in the contracts to complete the Bushehr reactors or in
bilateral agreements for cooperation in nuclear power engineering.
Russian Nuclear Energy Minister Viktor Mikhailov ruled out revising the
nuclear power reactor contract with Iran, but added that the contract
for nuclear cooperation would be reviewed by the Gore-Chernomyrdin
commission. Moreover, no decision has yet been made on whether nuclear
waste from the reactor will be returned to Russia or remain under
inspection by the International Atomic Energy Association in Iran.
Meanwhile, Mikhail Kokeev, a deputy department head in the Russian
Foreign Ministry, said Russia did not, does not, and will not support
programs that will bring Iran "to another military level." However,
Kokeev did admit that several departments in various Russian ministries
had discussed the possibility of supplying "dual-use" technologies to
Iran. He said their search for funds is "quite understandable." --
Michael Mihalka, OMRI, Inc.

CLINTON AND YELTSIN AGREEMENT ON FISSILE MATERIALS. At their Moscow
summit, President  Yeltsin and  President  Clinton took steps to
strictly limit, if not eliminate, the production of new nuclear weapons.
In a joint statement published by the White House, they pledged not to
make new warheads out of the nuclear material to be removed from
dismantled warheads, not to use newly produced fissile materials in
nuclear weapons, and not to use fissile materials produced within
civilian nuclear programs in nuclear weapons. Plutonium and highly
enriched uranium are fissile materials used in weapons manufacture. The
two presidents also agreed to quickly conclude broad agreements on
exchanging detailed information about each other's nuclear weapons
stockpile. -- Doug Clarke, OMRI, Inc.

THE SUMMIT BETWEEN LIMITED SUCCESS AND QUALIFIED FAILURE. The 10 May
Clinton-Yeltsin summit was anything from a limited success to a
qualified failure, according to international media. Little progress was
noted on European security, Chechnya, and the Russian nuclear deal with
Iran. On 11 May, Krasnaya Zvezda observed rather blandly that the summit
laid out a practical work-plan for the two presidents. The state-owned
newspaper Rossiiskaya gazeta was decidedly more upbeat, writing that
Clinton and Yeltsin had made the best of a bad situation, and "the
Russian and U.S. presidents, contrary to predictions, managed to find
ways out of a situation that many people had believed to be an impasse."
Georgy Arbatov, honorary director of the Institute of U.S.A. and Canada,
noted, however, that no serious progress had been made on the major
issues separating Russia and the West, Interfax reported on 11 May.
Instead, he said "the public part of the summit shows that both
presidents have started their election campaigns," a reference to the
fact that presidential elections are scheduled in both countries for
next year. -- Michael Mihalka, OMRI, Inc.

CLINTON MEETS WITH OPPOSITION LEADERS. President Clinton held formal
talks with figures from across the Russian political spectrum at the
U.S. ambassador's residence in Moscow, Russian and Western agencies
reported on 11 May. Communist Party leader Gennady Zyuganov warned that
Russia faced "Bal-kanization" or "criminalization" if fair and
democratic elections were not held, Interfax reported. Yabloko leader
Grigory Yavlinsky criticized Yeltsin's economic policy and Russia's
"inadequate" democracy. Russia's Choice leader Yegor Gaidar said a
growing "tendency of confrontation" in Russia threatened to bring back
the Cold War. Other politicians invited to meet with Clinton included
Agrarian Party chairman Mikhail Lapshin, Democratic Party of Russia co-
chairman Sergei Glazev, "Forward, Russia!" leader Boris Fedorov, and
Women of Russia leader Yekaterina Lakhova. Liberal Democratic Party
leader Vladimir Zhirinovsky was the most prominent opponent of Yeltsin
to be excluded from the meeting. -- Laura Belin, OMRI, Inc.

DUMA OVERRULES FEDERATION COUNCIL ON ELECTORAL LAW. Overruling the
objections of the Federation Council, the State Duma passed the law on
parliamentary elections by a vote of 302 to 72 with six abstentions,
barely reaching the required two-thirds majority, Russian and Western
agencies reported on 11 May. The Council and President Yeltsin had
advocated electing 300 Duma deputies from single-member constituencies
and 150 from party lists, but the Duma upheld its version maintaining
the current ratio of 225 deputies chosen by each method. Presidential
aide Georgy Satarov told NTV that although Yeltsin disagrees with the
final version of the electoral law, he will not veto it, because
delaying parliamentary elections would provoke "confrontation" and
"instability" that would harm "the reforms, Russians and the whole
country's future." -- Laura Belin, OMRI, Inc.

VEDENKIN TRIAL POSTPONED UNTIL AFTER BY-ELECTION. The trial of Alexei
Vedenkin, who is charged with threatening to commit murder, has been
postponed for at least one week due to a backlog of cases facing the
court, Radio Rossii reported on 11 May. The delay means that Vedenkin
will be allowed to compete in the 14 May by-election for a vacant Duma
seat in Kolomna. Even if Vedenkin wins the seat, he may not be protected
from prosecution; some have suggested that parliamentary immunity does
not apply to crimes committed before being elected. On 22 February
during a Russian TV broadcast, Vedenkin threatened to shoot Sergei
Kovalev and Sergei Yushenkov, vocal critics of the military campaign in
Chechnya. For his part, Vedenkin asked the Kolomna election committee
not to permit any "provocation" against his campaign, Ekho Moskvy
reported on 11 May. Vedenkin accused the authorities of plotting to
plant firearms, narcotics, and forged documents on him in order to
arrest him on the day of the by-election. -- Laura Belin, OMRI, Inc.

CONSTITUTIONAL COURT TURNS DOWN CASE ON CHECHNYA DECREES. The
Constitutional Court will not examine the constitutionality of Yeltsin's
secret decrees on restoring order in Chechnya for some time due to flaws
in the Federation Council's request, according to the 7-14 May edition
of Moskovskie novosti. The Council submitted its request to the court as
a secret document and failed to include the full text of the decree to
be considered. The court refused to hold hearings on secret requests and
asked the Council to re-submit its appeal at a later date. Issa Kostoev,
chairman of the Committee on Constitutional Legislation, who was in
charge of drawing up the request, said his committee attached the
presidential edict to the relevant documents and never suggested making
the Council's appeal to the court secret. Moskovskie novosti suggested
that the appeal was altered and marked classified by the staff of
Federation Council Chairman Vladimir Shumeiko in order to delay the
case. Shumeiko is also a member of Yeltsin's Security Council and has
defended the legality of the military campaign in Chechnya. -- Laura
Belin, OMRI, Inc.

DETERIORATION IN SOCIAL SITUATION. Although Russia's economy has
improved in recent months, the social sphere has not recovered from the
price hikes caused by "Black Tuesday" last October, according to
Izvestiya on 11 May. The paper says the situation has not been this bad
since 1992 but then people believed the hardships were only temporary.
According to Goskomstat, in March 1995, the average salary was 33% lower
in real terms than a year earlier; and in the first quarter of 1995,
30.4% of the population had incomes below the subsistence minimum as
opposed to 25.3% in the same period in 1994. Not surprisingly,
confidence in the ruble has also declined: the report notes that while
the public spent 12.4% of its earnings on foreign currency in March
1994, the figure a year later was 15.2%. Employees in the health care,
education, and scientific research sectors are the worst off. While
acknowledging that this is not new, the paper says their situation has
deteriorated significantly in recent months and that the average
salaries in those sectors has dropped below the subsistence minimum. --
Penny Morvant, OMRI, Inc.

CONVENTIONAL WEAPONS TREA-TY STILL A PROBLEM. While President Clinton
expressed sympathy for Russia's complaints regarding the so-called
"flanks" limits of the CFE treaty, he also stressed that the U.S.
expects Russia to comply with the treaty until it can be revised,
possibly at a conference in May 1996. A "high-ranking Russian diplomat"
told Interfax on 11 May that Russia would not be able to implement the
flank limits when they became effective in November of this year. He
argued that the situation in the Northern Caucasus--and particularly
Chechnya--required Russia to station larger amounts of conventional
weapons in the region than the treaty allowed. "The Chechen problem will
hardly be settled by the time the CFE treaty comes into effect," he
said. Meanwhile, the military newspaper Krasnaya zvezda questioned why
Yeltsin had not linked NATO concessions on CFE to the discussions over
the eastward expansion of the alliance. -- Doug Clarke, OMRI, Inc.

SIX BANKS TO PARTICIPATE IN FINANCIAL INSTITUTION DEVELOPMENT. Six
leading commercial banks in Russia, Tokobank, Mos-biznesbank,
Promstroibank (St. Petersburg), the St. Petersburg Bank, the Stolichny
Savings Bank, and Uralpromstroibank, will participate in a program to
develop the country's financial institutions under the auspices of the
World Bank and the European Bank for Reconstruction and Development
(EBRD), Interfax reported on 10 May. The banks were selected on the
basis of economic criteria, which included substantial capital holdings,
profitable returns, normal liquidity, active credit policies, and
private sector servicing. A Russian Finance Ministry spokesman told
Interfax that the banks, which will be agents of the World Bank and
EBRD, will eventually be eligible for credit lines of up to $300
million. The credit lines will be granted by international financial
institutions to support medium-term and long-term programs being carried
out by private enterprises in Russia. -- Thomas Sigel, OMRI, Inc.

YELTSIN PLACES NATIONALLY OWNED SHARES ON STOCK MARKET. President
Yeltsin signed a decree on 11 May authorizing the sale of state shares
in Russian companies on financial markets, AFP reported. Presidential
economic adviser Alexander Livshits said the decree launches the
"capitalist" stage of the privatization of semi-public companies and
stipulates measures to ensure that the required revenue from
privatization is realized. The decree, however, does not address
companies of "strategic importance to national security". The government
has one month to establish a list of such strategically important
companies. The initial sale price of shares, which will be sold in
stages, must not be less than a figure due to be set by a government
commission. The decree also requires that a state committee for state
assets establish arrangements for the sale of some of the shares on
international stock markets. Under the new law, the worth of the land on
which a company is located has been reduced to 5% of previously
calculated values to encourage investment in the stock. -- Thomas Sigel,
OMRI, Inc.

TRANSCAUCASIA & CENTRAL ASIA

UZBEK MINISTERS, OPPOSITION TO TALK? Moscow is to be the venue for talks
between Uzbek ministers and opposition leaders later this month,
Segodnya reported on 11 May. The initiative for the talks came from the
Uzbek government, which will be represented by a delegation consisting
of Foreign Minister Abdulaziz Kamilov and Justice Minister Alisher
Mardiyev. It is unclear if Abdurrahim Pulatov, chairman of the
opposition movement Birlik, and Erk leader Mohammed Saleh have agreed to
participate in the talks, since both men are currently living in exile
and their participation could result in their being forcibly returned to
Uzbekistan as state criminals. Earlier talks held in Washington in late
January failed to achieve any breakthroughs. -- Lowell Bezanis, OMRI,
Inc.

TAJIKS TO TALK IN KABUL. Tajik President Emomali Rakhmonov and
opposition leader Said Abdullo Nuri will hold talks on 15 May in Kabul,
Russian and Western agencies reported on 11 May. The bilateral talks
will focus on setting the agenda for the fourth round of inter-Tajik
talks, which will be held in Almaty later in the month, and on the
continuing violation of a recently extended ceasefire on the Tajik-
Afghan border. Meanwhile, a former border guards commander in the
Caucasus, Lt.-Gen. Pavel Tarasenko, has been appointed to head the
Russian-led contingent of border guards in Tajikistan, Reuters reported
on 11 May. -- Lowell Bezanis, 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
distributed electronically via the OMRI-L list. To subscribe, send
"SUBSCRIBE OMRI-L YourFirstName YourLastName" (without the quotation
marks and inserting your name where shown) to
LISTSERV@UBVM.CC.BUFFALO.EDU
No subject line or other text should be included.
To receive the OMRI Daily Digest by mail or fax, please direct inquiries
to OMRI Publications, Na Strzi 63, 140 62 Prague 4, Czech Republic; or
electronically to OMRIPUB@OMRI.CZ
Tel.: (42-2) 6114 2114; fax: (42-2) 426 396

OMRI also publishes the biweekly journal Transition, which contains
expanded analysis of many of the topics in the Daily Digest. For
Transition subscription information send an e-mail to TRANSITION@OMRI.CZ