No. 127, Part I, 30 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

SEVEN OFFICIALS APPARENTLY RESIGN OVER BUDENNOVSK. Defense Minister
Pavel Grachev, Interior Minister Viktor Yerin, Federal Security Service
Director Sergei Stepashin, Deputy Prime Minister Nikolai Yegorov,
Security Council Chairman Oleg Lobov, Stavropol krai Governor Yevgeny
Kuznetsov, and Prosecutor-General Alexei Ilyushenko tendered their
resignation at the Security Council meeting on 29 June, Russian media
reported. State Duma Speaker Ivan Rybkin revealed the names to
reporters, but no official documents listed who had offered their
resignations. The president will decide the fate of the ministers after
the Duma declares its position on the government on 1 July. Rybkin told
Russian TV that he should do so before 10 July. Earlier, Yeltsin had
announced that he would make his decision only by 22 July, when the
Duma's summer session was over. Waiting will allow Yeltsin to avoid the
appearance that he had to sack some of his ministers because of pressure
from the parliament. -- Robert Orttung, OMRI, Inc.

MINISTERS STILL AT WORK. Sources inside the Kremlin say that Yeltsin
will not accept all of the resignations, according to NTV on 29 June.
The press secretaries of Lobov, Stepashin, and Yegorov said their bosses
had not formally offered to resign. Although, on his way out of the
Security Council meeting, Stepashin had told reporters that "they want
to put me on a pension," a Federal Security Service spokesman later
explained that his statement had been in jest, Russian TV reported. All
of the power ministers were at work as normal after the Security Council
meeting, Russian Public Television reported on 30 June. -- Robert
Orttung, OMRI, Inc.

POLITICAL PARTY CAMPAIGN FINANCING DISCUSSED. An intensive effort to
find financial backers for the parliamentary campaign is underway,
Izvestiya reported on 29 June. To wage a successful campaign, parties
must spend approximately $2 million, according to the paper's estimates.
The author said the Agrarian Party receives substantial funds indirectly
from the state budget, in the form of donations from agribusiness
concerns which receive large credits and subsidies. The Communist Party
has 500,000 dues-paying members and 120 newspapers and bulletins to
publish campaign propaganda. By contrast, Yegor Gaidar's Russia's
Democratic Choice is mired in financial difficulties, since many of its
1993 backers are supporting Chernomyrdin's bloc, Our Home Is Russia,
this year. Izvestiya noted that risk-averse businesses are not likely to
support radicals or parties of "pure ideas." -- Laura Belin, OMRI, Inc.

COSSACK UNION MEETS IN MOSCOW. The All-Russian Cossack Union met in
Moscow on 28-29 June to discuss the status of Cossacks in Russia, NTV
and Russian TV reported. Currently the Cossacks serve only in military
units subordinate to the Defense Ministry in Chechnya. Since December,
the Cossack leaders have wanted to set up units that can help the local
police in Stavropol krai when unexpected situations arise, such as the
attack on Budennovsk. According to Union leader Alexander Martynov,
Yeltsin supports the idea. The Cossack leaders are also planning to
submit a draft law to the Federation Council that would grant them the
right to guard and protect Russia's borders. Ministerial sources say
that a draft law and five presidential decrees on the Cossacks are under
consideration. The Cossack Union marked its fifth anniversary on 28
June. It unites 2.5 million members from Russia's 10 million Cossacks.
-- Robert Orttung, OMRI, Inc.

EXTREMISTS CALL FOR DEPORTING CITIZENS FROM THE CAUCASUS AND CENTRAL
ASIA. Nikolai Lysenko's National-Republican Party of Russia (NRPR) is
distributing leaflets calling for the expulsion of all natives of the
Caucasus and Central Asia from Russia, Izvestiya reported on 30 June.
The leaflets depict certain ethnic groups as snails and insects being
cleared away by a Russian man in camouflage wearing the NRPR insignia.
Lysenko's party has distributed similar leaflets for more than a year,
but more than a million new copies were printed following the Budennovsk
hostage crisis. Izvestiya said such calls for "pogroms" or deportations
violate the constitution and play into the hands of Chechen President
Dzhokhar Dudaev. -- Laura Belin, OMRI, Inc.

CHECHEN NEGOTIATIONS CONTINUE. Despite sporadic fighting overnight,
Russian and Chechen negotiators continued working in Grozny on 29 June,
Russian and Western agencies reported. Russian television reported that
discussions centered on a Russian proposal, called the "zero option." In
order to prepare for new elections in the fall, the proposal calls for
the current Moscow-backed Chechen authorities and separatist leader
Dzhokhar Dudaev to both renounce their claims to being the legitimate
government of Chechnya, followed by the declaration of a general amnesty
for all participants in the Chechen fighting. Although the talks
adjourned at the end of the day without reaching agreement, Chechen
delegation head Usman Imaev said the atmosphere remained "friendly."
Russian negotiator Arkady Volsky also told journalists that if a third
round of talks becomes necessary, Prime Minister Viktor Chernomyrdin is
prepared to personally lead the Russian delegation. -- Scott Parrish,
OMRI, Inc.

YELTSIN SIGNS TREATY WITH SAKHA. President Boris Yeltsin and Mikhail
Nikolaev, President of the Sakha Republic (Yakutiya), signed an
agreement on 29 June that delineates the division of powers between the
federal and Sakha governments, Russian Public Television reported. The
treaty is the fifth such accord signed between Moscow and subjects of
the Russian Federation. At the signing ceremony, President Yeltsin
praised the agreement as a successful example of center-regional
relations. However, a recent analysis published in Nezavisimaya Gazeta
contends that such treaties contradict the Russian constitution. --
Scott Parrish, OMRI, Inc.

RUSSIAN MILITARY LACKS FUNDS TO PAY TROOPS. The Russian Defense Ministry
has enough money to pay only about 30% of its military personnel this
month, ITAR-TASS reported on 29 June. The agency reported that sources
in the ministry blamed the federal government for the problem, which
apparently resulted from late allocation of funds to the ministry from
the federal budget. Some personnel may have to wait until September for
their pay, a situation which might "create undesirable tension" in the
military, the agency added. The report comes one day after President
Yeltsin told a gathering of military officers that military spending
would not be cut in 1996. -- Scott Parrish, OMRI, Inc.

YELTSIN SIGNS LAW ON PENSION INCREASES. President Yeltsin signed a law
increasing all pensions by 20% and raising the minimum pension to 52,486
rubles ($12) per month, Radio Rossii reported on 29 June. However, the
chairman of the board of the pension fund said the fund lacks the money
to implement the increases, which would cost an extra 1 trillion rubles
($227 million) a month. He added that the pension fund is currently owed
more than 2 trillion rubles ($454 million) from the federal budget. --
Laura Belin, OMRI, Inc.

LEADERS VIEW U.S.-RUSSIA SPACE COOPERATION. Prime Minister Viktor
Chernomyrdin and U.S. Vice President Al Gore watched a live broadcast of
the American space shuttle Atlantis docking with the orbiting Russian
space station Mir, Russian and Western agencies reported on 29 June. The
docking was the first meeting of American and Russian spacecraft since
the 1975 Apollo-Soyuz mission. -- Scott Parrish, OMRI, Inc.

KOZYREV CRITICIZES FRANCE FOR RESUMING NUCLEAR TESTS. Speaking before
the International Conference on Disarmament on 29 June, Foreign Minister
Andrei Kozyrev criticized the French government's recent decision to
resume nuclear testing, Russian and international agencies reported.
Kozyrev called on France to adhere to the existing voluntary moratorium
on testing and said that a resumption of testing would violate the
spirit of the decisions reached at the Nuclear Non-Proliferation Treaty
conference this spring. -- Scott Parrish, OMRI, Inc.

FOREIGN MINISTRY REGRETS U.S. CONGRESSIONAL VOTE. Russian Foreign
Ministry spokesman Grigory Karasin expressed regret at the recent vote
in the U.S. House of Representatives to suspend aid to Russia under the
Nunn-Lugar program, Russian TV reported on 29 June. Karasin said the 13
June vote, which called for a suspension of the aid unless President
Bill Clinton certifies that Russia has no biological weapons program,
would complicate Russian efforts to dismantle its nuclear weapons.
Karasin said Russia "decisively rejects the insinuation" that it is
violating its obligations under a 1992 agreement on biological weapons
with Britain and the U.S. -- Scott Parrish, OMRI, Inc.

U.S. TO HELP RUSSIAN DEFENSE PLANTS BUILD HOUSES. Using money provided
by the Nunn-Lugar program, a U.S. consortium plans to convert three
Russian plants that once built weapons of mass destruction into
producers of prefabricated housing for demobilized Russian officers.
According to a Pentagon press release on 28 June, the three Russian
companies were NPO Soyuz, NPO Kompozit, and NPO Mashinostroeniya.
Besides converting the plants, the U.S. consortium--American Housing
Technologies--will train Russian military and defense industry personnel
in the manufacture and marketing of the prefabricated units. -- Doug
Clarke, OMRI, Inc.

TRANSCAUCASIA AND CENTRAL ASIA

MORE THAN 20 KILLED ON TAJIK-AFGHAN BORDER. Russian border forces
clashed with a group of suspected drug-traffickers on 28 June, killing
more than 20 of them, Western agencies reported. The group was part of a
caravan that was attempting to cross into Tajikistan from neighboring
Afghanistan along the Pyandj River. When the Russian troops tried to
stop them, they opened fire. No Russian casualties were reported.
Meanwhile, troops of the Tajik army's 11th brigade have taken a deputy
regional governor, Akakbir Odinayev, hostage in Kurgan-Tyube, according
to Western sources and Ekho Moskvy. The brigade was under the command of
Izat Kuganov, a Tajik parliament deputy also described as a local
warlord, who was murdered recently. The soldiers are dissatisfied with
Dushanbe's efforts to find and punish the killers. Tajik officials have
gone to Kurgan-Tyube to try to negotiate Odinayev's release. -- Bruce
Pannier, OMRI, Inc.

LOANS TO TRANSCAUCASIAN REPUBLICS. The IMF has approved loans for
Armenia and Georgia, Reuters reported on 29 June. Armenia is to receive
$96 million to improve economic growth and living conditions and reduce
inflation; Georgia is to get $157 million to speed economic reform,
reduce inflation, and stabilize the economy. The same day, the World
Bank announced that it had approved a $61 million rehabilitation loan
for Azerbaijan provided in the form of an SDR credit from the bank's
affiliate, the International Development Association. It will be used to
improve the water supply in Baku. -- Lowell Bezanis, OMRI, Inc.

VORONOV: NO COMMANDO CAMPS IN ABKHAZIA. Abkhaz Deputy Prime Minister
Yuri Voronov rejected allegations that there are training camps in
Abkhazia for Middle Eastern commandos destined for Chechnya, according
to Radio Rossii on 29 June. Voronov's statement was confirmed by the
head of the UN military observers' mission in Abkhazia. The day before,
Ekho Moskvy reported that the head of the Abkhaz security service had
denied separate allegations that Shamil Basaev is hiding in Abkhazia. --
Lowell Bezanis, OMRI, Inc.

KYRGYZ PRESIDENT SAYS ECONOMY IS A CATASTROPHE. There are no indications
that the Kyrgyz economy is on the road to recovery or that the financial
situation in the industrial sector is improving, Kyrgyz President Askar
Akayev said in a 29 June interview on Radio Mayak. He added that the
government will not be able to meet the budget accepted in December
1994. Also, 103 large and medium-sized businesses, which amounts to one
out of every five business in the country, shut down in May and more
than 100 others do not have the money to pay wages to workers. The
government itself needs another 500 million som ($45 million) to pay
wages. While accepting that the government shares some of the blame for
the situation, Akayev also criticized enterprise managers. -- Bruce
Pannier, OMRI, Inc.

[As of 1200 CET]

Compiled by Victor Gomez

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