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No. 117, Part I, 16 June 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 CHECHEN SEPARATIST COMMANDER LEADS BUDENNOVSK ATTACK. The gunmen who attacked the Stavropol Krai town of Budennovsk are led by Chechen separatist commander Shamil Basaev, Russian and international agencies reported on 15 June. Basaev, a well-known field commander in the forces of Dzhokhar Dudaev, and a group of at least 50 pro-Dudaev fighters have barricaded themselves in the local hospital with a large number of hostages, estimated by a Russian Radio correspondent to number 2,000. Dudaev, however, continued to deny responsibility for the attack. Defense Minister Pavel Grachev said at least 74 people died in the fighting, including numerous civilians, although Russian journalists on the scene claimed the final death toll would be much higher. Russian television broadcast footage of burning buildings and rows of bodies lying on the streets on 15 June. Army and interior troops, under the command of Interior Minister Viktor Yerin and FSB Chief Sergei Stepashin, have surrounded the hospital and re-established control over the rest of the town. -- Scott Parrish, OMRI, Inc. NEGOTIATIONS BEGIN IN BUDENNOVSK. At a press conference in the barricaded hospital, Basaev demanded the withdrawal of federal troops from Chechnya, negotiations between Yeltsin and Dudaev, and amnesty for all Chechen fighters, Russian and Western agencies reported on 15 June. He threatened to shoot hostages, beginning with "servicemen and local officials," if those conditions are not met. Basaev claimed to have already shot five Russian officers in retaliation for a delay in allowing journalists to enter the hospital and begin the press conference. Sergei Medvedev, a spokesman for President Yeltsin, said in an interview that negotiators "will do everything possible to try to convince the terrorists, but it seems unlikely they will give in." Izvestiya reported on 16 June that the elite "Alpha" commando team was preparing an assault on the hospital, but Federation Council Speaker Vladimir Shumeiko told Interfax that military experts estimated that storming the hospital would result in 100 deaths. -- Scott Parrish, OMRI, Inc. YELTSIN TO AVOID CHECHNYA ISSUE AT G-7 TALKS. President Boris Yeltsin does not intend to "render an account" of current developments in Chechnya at the upcoming G-7 talks in Halifax, a senior Russian official told Interfax. The official said it would be "against the interest" of the meeting to spend too much time on the issue. On the eve of his departure, AFP reported, Yeltsin denounced the Chechen attack on Budennovsk, saying it demonstrates that "the slogans of a struggle for national liberation are merely a cover for criminals who have managed to lay their hands on arms." Elaborating on those comments, a high-ranking Russian diplomat told Interfax that the Budennovsk attack proves federal forces in Chechnya are fighting against "bandit formations" and "terrorists," not against the armed Chechen people as the West contends. The events in Budennovsk, the diplomat added, should compel the West to revise its stance towards Russian actions in Chechnya. -- Scott Parrish, OMRI, Inc. FEDERATION COUNCIL REVERSES ITSELF ON DUMA ELECTORAL LAW. The Federation Council decided to accept the compromise agreement on the Duma electoral law, by a vote of 113-9, one day after rejecting it, Western agencies reported. The Federation Council members changed their votes after the speaker, Vladimir Shumeiko, told them the Duma intended to override their veto and Yeltsin was planning to sign the law even though they opposed it. After the vote, presidential adviser Georgy Satarov told Interfax the president would sign the law as promised. Now the parliament and the president must agree on the law for forming the Council. Any decision must wait until the Constitutional Court irons out apparent inconsistencies in the constitution. According to Duma member Viktor Ilyukhin, the constitution calls for a division of power between the legislative and executive branches, but also states that the upper house of the legislature is partly formed from local representatives of the executive branch. -- Robert Orttung, OMRI, Inc. MORE ON LEBED AND HIS SUCCESSOR. Lt. Gen. Alexander Lebed said on 15 June that he would continue to command the 14th Army until he received official word that President Yeltsin had removed him. Lebed told Interfax that the president likes to send out trial balloons and it is possible that Yeltsin will not actually sign the documents to release him from the command. On 15 June, Segodnya characterized Yeltsin's apparent intention to remove Russian troops from Moldova as "political suicide." Maj. Gen. Valery Yevnevich, Lebed's replacement, supported Yeltsin in his October 1993 battle with the Russian legislature and he has the backing of Federation Council Speaker Vladimir Shumeiko, ITAR- TASS reported. -- Robert Orttung, OMRI, Inc. PROKHANOV CALLS FOR THE OPPOSITION TO UNIFY. Alexander Prokhanov, the editor of the extremist newspaper Zavtra, called on opposition parties to unite their strength to secure victory in the upcoming parliamentary elections in a declaration published on 15 June in Sovetskaya Rossiya. Prokhanov invited Communist Party leader Gennady Zyuganov, Liberal Democratic Party leader Vladimir Zhirinovsky, former Vice President Alexander Rutskoi, Agrarian Party leader Mikhail Lapshin, and Congress of Russian Communities' leader Yury Skokov to set aside their differences and form an alliance. He argued that "the people want to be sure that Yeltsin's 'temporary occupational regime' will be eliminated." He believes that the appearance of Viktor Chernomyrdin's bloc represents the greatest threat to the opposition's chances in the elections. -- Robert Orttung, OMRI, Inc. PLANS FOR NEW YOUTH LEAGUE. About 1,000 representatives of various youth organizations will hold a meeting on 23 June at the offices of the presidential administration in Moscow to announce the creation of the Russian Youth League, according to Moskovsky komsomolets on 14 June. The paper commented that several attempts have been made recently to set up a powerful youth movement and that this latest initiative reflects the authorities' interest in youth in the run-up to the elections. -- Penny Morvant, OMRI, Inc. DEFENSE INDUSTRY WORKERS HOLD ANTI-GOVERNMENT MEETING. Workers from the Severmorput defense plant staged a rally in Murmansk to demand that the Defense Ministry pay delayed wages, Segodnya reported on 14 June. The protest was supported by members of the Northern Fleet's Officers' Union and local communist activists. The demonstrators called for the dismissal of the government and early presidential elections. -- Penny Morvant, OMRI, Inc. INCREASED SECURITY AT NUCLEAR SITES. "All possible measures" have been taken to ensure the security of Russian nuclear power stations and enterprises, Nuclear Energy Minister Viktor Mikhailov told Interfax on 15 June. He said a special conference on security had been held that day. Mikhailov said that last December he ruled out terrorist attacks on nuclear sites as "an insane possibility." Recent events in Budennovsk have changed his view and he has called for the complete isolation of Chechnya "so that even a mouse cannot get out of there." -- Doug Clarke, OMRI, Inc. OSCE PRAISES IMPROVED RUSSIAN HUMAN RIGHTS RECORD IN CHECHNYA. The OSCE's special envoy to Chechnya, the Hungarian diplomat Istvan Gyarmati, praised Russia's improved human rights record in that republic, Reuters reported on 15 June. Speaking in Budapest, Gyarmati said Russia had taken steps to limit civilian casualties and develop democracy in Chechnya "as good as anywhere in Russia." He added that if the situation in the republic didn't worsen, Chechnya could hold its elections in December with the rest of Russia. "The rebels have to realize that they cannot get Russia to leave the republic," he said. "On the other hand, the Russians have to see that if they don't make peace with Dudaev, they will face years of guerrilla fighting which would continue to destabilize the region." -- Michael Mihalka, OMRI, Inc. FRANKLIN/TEMPLETON GROUP LAUNCHES RUSSIA FUND. The Franklin/Templeton Group, a U.S. pioneer in emerging market funds, announced its plan to raise $60 million with the initial sale of the Templeton Russian Fund, Western agencies reported on 15 June. The U.S. Securities and Exchange Commission (SEC) approved a plan in April allowing Franklin/Templeton to hold Russian securities using a special custody arrangement with Chase Manhattan Bank. It was the first time the SEC approved a U.S. based mutual fund to hold Russian stocks. Until now, the typical American investor had little opportunity to invest in Russia. An index of the 85 most actively traded Russian stocks has risen 15% since mid-April. The same stock index is up 21% in dollar terms since April, although the stock market has fallen 27% in dollar terms since the beginning of the year. -- Thomas Sigel, OMRI, Inc. DUMA QUESTIONS BUDGET DECREE. Members of the Duma have questioned President Yeltsin's decree which permits only the president to reduce or increase budget expenditures, Segodnya reported on 15 June. They claim that the decree contradicts the constitution which states that budgetary issues fall under the jurisdiction of the Federal Assembly. -- Thomas Sigel, OMRI, Inc. SECOND "BLACK TUESDAY" UNLIKELY TO OCCUR. Deputy Economics Minister Sergei Vasiliev said another collapse in the value of the ruble such as last October's "Black Tuesday" is unlikely to occur this year, Segodnya reported on 15 June. Vasiliev said hard currency reserves had risen from $2.5 billion to $8 billion, and by August will make up 8-10% of the Central Bank of Russia's overall monetary funds. Under the agreement concluded last week in Paris, Russia will only pay Paris Club creditors $1.1 billion this year instead of the $8 billion initially due, Moskovskaya pravda reported on 10 June. -- Thomas Sigel, OMRI, Inc. TRANSCAUCASIA AND CENTRAL ASIA GERMAN COMPANY TO LOOK FOR OIL IN KAZAKHSTAN. The German company Preussag Energy GmbH is the latest company to sign a deal to explore for oil and gas in Kazakhstan. Kazakh Deputy Minister of Geology Marat Bitimbaev announced the signing of a contract by the joint venture Aktobe Preussag Munai Ltd. to work in the Aktyubinsk hydrocarbon fields in northern Kazakhstan, according to Interfax. The company will prospect an 8,000 square km area for the next six years, investing $110 million in the process. The German company will control 50% of the charter capital with Kazakhstan's holding Tulpar and joint-stock company Aktyubinskneft each controlling 25%. The Kazakh government received a $1 million signing incentive from the company. The Kazakh government had been working in the fields previously but a shortage of finances caused its operation to close down. -- Bruce Pannier, OMRI, Inc. COUNTERFEIT AFGHANIS PRODUCT OF UZBEKISTAN? The Uzbek Foreign Ministry protested charges that it was involved in producing counterfeit Afghanis and smuggling them into Afghanistan, Interfax reported on 14 June. The charge was initially made by the Deputy Director of the Afghan Central Bank, Abdikadir Fitrat. -- Lowell Bezanis, OMRI, Inc. GEORGIAN DEBTS TO BE RESCHEDULED. On 14 June, Russia provisionally agreed to reschedule $135 million debts that Georgia accumulated in trade with Russia in 1992-93, Interfax reported on 14 June. The outstanding debts will be repaid from 1998 to 2002. Last year, Turkmenistan agreed to postpone for seven years the $400 million it is owed by Georgia for gas supplies from 1993-94. Georgia owes a total of more than $1 billion to foreign creditors, and expects to be granted credits by the IMF later this month. -- Peter Rutland, 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 OMRI 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 Copyright (c) 1995 Open Media Research Institute, Inc. All rights reserved.
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