No. 95, Part I, 17 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

AIDES SAY YELTSIN WILL SIGN ELECTORAL LAW. Presidential aides Georgy
Satarov and Mikhail Krasnov indicated that President Boris Yeltsin will
sign the law on parliamentary elections, although he is dissatisfied
with its current form, Russian agencies reported on 16 May. On 11 May,
over the objections of the Federation Council, the State Duma passed the
final version of the electoral law, which maintains the current ratio of
225 deputies elected from party lists and 225 from single-member
constituencies. Yeltsin's aides said the president will sign the law in
order to allow the December 1995 parliamentary elections to be held on
time. But Satarov said Yeltsin will recommend amendments to the law
after he signs it, and if the Duma rejects them, the matter will be
referred to the Constitutional Court, Ekho Moskvy reported. Krasnov told
Interfax that the court appeal will concern provisions requiring
candidates for the Duma to resign from their other jobs and the alleged
discrepancy between rights enjoyed by party-list candidates in
comparison with those running in single-member constituencies. If the
court refuses to hear the case, then the December 1995 elections will be
held according to the current form of the electoral law. -- Laura Belin,
OMRI, Inc.

MOVEMENT TOWARD CREATING CENTER-LEFT BLOC. Leaders of the Federation of
Independent Trade Unions of Russia (FNPR), the Russian United Industrial
Party (ROPP), and the Union of Realists (SR) held talks on forming a
center-left electoral alliance, Russian agencies reported on 16 May.
Union of Realists leader Yury Petrov said the groups would work together
"for the good of the people" toward common goals, including the revival
of the Russian economy, Radio Rossii reported. Representatives said the
new bloc will oppose Prime Minister Viktor Chernomyrdin's center-right
movement Our Home Is Russia. Asked whether he would cooperate with a
bloc led by Duma Speaker Ivan Rybkin, FNPR Chairman Mikhail Shmakov told
NTV, "it is difficult to work with something that does not yet exist."
An anonymous source involved with the negotiations told Interfax that
the bloc plans to coordinate its actions with the Agrarian Party and
Women of Russia, although leaders of those parties have rejected recent
offers to join a broad electoral alliance. -- Laura Belin, OMRI, Inc.

"COMMON CAUSE" POLITICAL MOVEMENT CREATED. Duma deputy Irina Khakamada,
a member of Konstantin Borovoi's Party of Economic Freedom, announced
the creation of the political movement Common Cause (Obshchee delo),
Russian agencies reported on 16 May. The movement will unite the Liberal
Women's Fund, the Russian Women's Association for a New Social Policy,
the Liberal Youth Union and other students' groups. Khakamada said
Common Cause would represent the interests of those in the "silent
majority," Russian TV reported. She noted that the organization would
appeal to those who otherwise would not bother to vote, especially young
people and the "inactive intelligentsia," Radio Rossii reported.
Khakamada said she liked the policies advocated by Yabloko leader
Grigory Yavlinsky and had held talks with him but said she was given to
understand that it is "absurd" for a woman to participate in "great
politics," Russian Public Television reported. -- Laura Belin, OMRI,
Inc.

BUDGET ALLOCATIONS AS CAMPAIGN STRATEGY DISCUSSED . . . Roman Artemev,
an observer for Kommersant-Daily, discussed indirect methods of campaign
financing on the 16 May episode of the NTV current events program
"Segodnya." Artemev noted that even Prime Minister Viktor Chernomyrdin's
bloc, which has considerable financial resources, cannot directly buy
itself a nationwide victory: "for that the state budget is needed." He
said the April 1993 referendum, in which Yeltsin's government achieved
the outcome it wanted, demonstrated that using the budget to "give
presents" to the population before a vote is an effective strategy.
Artemev said the prime minister's position gives him a "trump card" to
play in this "form of pre-election populism," but he predicted that in
future campaigns, budget allocations will "inevitably" be used by
opposing camps as well. -- Laura Belin, OMRI, Inc.

. . . AS ILYUKHIN CALLS FOR INVESTIGATION OF CHERNOMYRDIN BLOC'S
FINANCING. Duma Security Committee Chairman Viktor Ilyukhin, a member of
the Communist Party, has asked the Duma to examine the financing of the
12 May founding congress of Chernomyrdin's Our Home Is Russia bloc, NTV
reported on 16 May. Ilyukhin proposed that the Duma ask the Prosecutor
General's Office to conduct an audit on the congress and the banquet
that followed to determine whether money from the state budget was used
for campaign purposes. Ilyukhin said the Prosecutor General should then
inform the deputies of the investigation's results. Chernomyrdin has
denied that budget funds were used for his bloc's founding congress,
which he said was paid for by donations from large enterprises. -- Laura
Belin, OMRI, Inc.

RUSSIAN INTELLIGENCE: CHECHENS HOLD CUNY; BODY REMAINS UNIDENTIFIED.
Russian security services in Chechnya maintain that Fred Cuny, a former
adviser to the Open Society Institute who has been missing since April,
may be alive and in the hands of the Chechen forces, Interfax reported
on 16 May. They assert that the body found recently near Shali, which
was originally believed to be Cuny's, is actually that of an exhumed
Russian serviceman, whose face had been disfigured by nitric acid.
Meanwhile, the body is apparently still in the village of Novyie Atagi,
some 25 km south of Grozny. The Ingush Ministry for Emergencies contends
that representatives of the Chechen separatists will agree to hand over
the body only to members of the OSCE mission, who are refusing to go to
the village because of ongoing combat operations. -- Michael Mihalka,
OMRI, Inc.

GRACHEV ON CHINESE NUCLEAR TESTS, COLLECTIVE SECURITY. Russian Defense
Minister Pavel Grachev said on 16 May that China is ready to cease
nuclear testing, Interfax reported on the same day. On 15 May, Grachev
had treated the recent Chinese test rather nonchalantly, saying on
Russian TV, "We are not concerned about the Chinese nuclear tests, but
we keep a watchful eye on them." Meanwhile, Grachev said China and
Russia have agreed on the need to develop a collective security system
in northeast Asia which would include Russia, China, the U.S., Japan,
and North and South Korea. -- Michael Mihalka, OMRI, Inc.

GRACHEV PESSIMISTIC ON QUICK BORDER ARMS AGREEMENT WITH CHINA. Grachev
also told reporters on 16 May that the conclusion of an agreement on
reducing Russian and Chinese armed forces along their mutual border is
"unlikely" in the near future, ITAR-TASS reported. Fifteen rounds of the
talks--that began between China and the Soviet Union and which now
include Russia, Kazakhstan, Kyrgyzstan, and Tajikistan--have been held.
The participants are aiming to reduce troops and arms within a 100 km
wide zone running along each side of the border. Grachev said the
ceilings suggested by China are "unacceptable" to Russia. He explained
that very few Chinese armed forces are stationed close to the border,
while geographic and climactic factors have led Russia to position
virtually all of its armed forces in the region within this zone. In a
related matter, the governor of Russia's Primorsky Krai announced that
he was giving territory near the town of Khasan--100 km southwest of
Vladivostok--to local Cossacks, Interfax reported. The territory is
supposed to be turned over to China under a 1991 agreement, but the
governor has demanded that Moscow denounce the agreement. The Cossacks
will engage in farming and help guard the border. -- Doug Clarke, OMRI,
Inc.

KOZYREV QUIZZED BY DUMA ON IRAN DEAL. In a closed session on 16 May, the
State Duma Committee on Foreign Affairs questioned Russian Foreign
Minister Andrei Kozyrev on the Russian deal to provide nuclear aid to
Iran, Interfax reported the same day. Vladimir Lukin, the committee
chairman, said some of Kozyrev's comments were "too general and rather
evasive" but expressed satisfaction that a dialogue has finally started
between the parliament and the Foreign Ministry. Although Lukin agreed
with President Boris Yeltsin that the deal should go through insofar as
it doesn't violate Russia's commitments on non-proliferation, he was
especially critical of the Nuclear Energy Ministry for concluding
arrangements with the Iranians without the knowledge of Yeltsin or
Kozyrev. -- Michael Mihalka, OMRI, Inc.

AVERAGE RUSSIAN INCOME DROPS. The average monthly income in Russia
measured in U.S. dollars fell from $87 in November 1994 to $72 in March
1995, a spokesman for the Economic Reforms Center under the Russian
government told Interfax on 16 May. The population's average real income
today is lower than one year ago by approximately 6%, a consequence of
the government's tight monetary credit policy, the center reported.
Meanwhile, Ekho Moskvy reported Goskomstat's latest figure: between
January and April, some 30% of the population--44 million people--had
monthly incomes below the subsistence minimum of 385,000 rubles ($45) a
month. -- Thomas Sigel, OMRI, Inc.

CENTRAL BANK LOWERS REFINANCING RATE. The Central Bank of Russia's Board
of Directors lowered the refinancing rate by 5% to 195% on 16 May, the
Financial Information Agency reported. Bank experts said the decision
was prompted by the current financial market situation and the steadily
declining inflation rate. The inter-bank market has been witnessing a
large gap between interest rates on short-term credits and the bank's
refinancing rate which considerably reduces the efficiency of the
discount rate as an instrument of regulating the financial market. The
bank's acting director, Tatiana Paramonova, told the agency that the
bank would adhere to a positive discount rate (a rate exceeding the rate
of inflation). "Only on this condition can we strengthen the national
currency and create real investment potential which will be used to
promote Russia's economic development," she said. -- Thomas Sigel, OMRI,
Inc.

TRANSCAUCASIA AND CENTRAL ASIA

LIBERALIZATION OF UZBEK ECONOMY? Uzbek President Islam Karimov told an
extended meeting of the republic's cabinet of ministers that the state
will no longer finance insolvent enterprises, Interfax reported on 16
May. While noting that inflation has been steadily decreasing in 1995,
he said managerial inertia is to blame for the republic's poor economic
performance and its failure to privatize. Karimov also indicated that
the only possible way to increase production in many cases is to turn
state-owned businesses into joint stock companies. The government
decided to ban the rescheduling of debts held by commercial banks on 1
June; debtor concerns will have to change ownership or will face the
auction block. State enterprises responsible for light industry, fruits,
vegetables, and wines, as well as oil and gas will also be able to sign
contracts to export their products. -- Lowell Bezanis, OMRI, Inc.

TURKMEN-SLOVAK AGREEMENTS SIGNED. Agreements on cooperation in air
transportation, avoiding double taxation, and visa-free diplomatic trips
have been signed by Turkmenistan and Slovakia, Interfax reported on 16
May. A draft agreement for the establishment of a gas and oil pipeline
in Turkmenistan has been submitted by the Slovak side; discussion also
focused on the possibility of a tripartite Turkmen-Slovak-Ukrainian
agreement that would involve Slovakia in the repayment of Ukraine's debt
to Turkmenistan. A similar three-way barter agreement involving Ukraine,
Turkmenistan, and Iran was proposed early last month. In other news,
Turkmen President Saparmurad Niyazov was scheduled to begin a two-day
official visit to Russia on 17 May, Interfax reported. -- Lowell
Bezanis, OMRI, Inc.

[As of 1200 CET]

Compiled by Victor Gomez

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