No. 134, Part I, 12 July 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
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RUSSIA

YELTSIN CARRIES OUT HIS DUTIES. In spite of his hospitalization,
President Boris Yeltsin continues to carry out his duties and is making
plans to visit Norway and Murmansk on 19 July after a short period of
rest, Ekho Moskvy reported on 11 July. The ruble fell and then recovered
against the dollar and Western financial markets took little notice of
the incident, with many traders saying that Yeltsin was no longer
crucial to Russian stability, Reuters reported. Prime Minister Viktor
Chernomyrdin's success in negotiating the Budennovsk hostages' release
and his recent showdown with the Duma have made him a plausible
replacement for Yeltsin. Viktor Ilyukhin, a member of the Duma from the
Communist faction, said that Yeltsin is "already dead politically" due
to his low popularity ratings, AFP reported. -- Robert Orttung, OMRI,
Inc.

QUESTIONING BEGINS IN CONSTITUTIONAL COURT CASE ON CHECHNYA. On the
second day of Constitutional Court hearings concerning secret decrees on
Chechnya, the legal team representing the president and government
answered questions, Russian Public Television reported on 11 July.
Deputy Prime Minister Sergei Shakhrai testified that the military
campaign authorized by the November and December 1994 secret decrees was
the government's only option after peaceful attempts to remove the
"illegitimate" and "anti-constitutional" regime of Dzhokhar Dudaev had
failed. Judge Valerii Zorkin called the court's attention to the fact
that Shakhrai "evaded a direct question" about whether the Chechnya
decrees, formed in the Security Council, were ever presented to the
cabinet. Shakhrai later testified that as soon as "illegal armed
formations" in Chechnya were liquidated, the government would introduce
a state of emergency in Chechnya. The parliamentary court appeal argues
that the constitution prohibits the deployment of troops on the
territory of the Russian Federation without a publicly declared state of
emergency. -- Laura Belin, OMRI, Inc.

GROZNY NEGOTIATIONS STALL. Despite reportedly reaching agreement on an
approach to the question of Chechnya's future constitutional status,
Russian and Chechen negotiators adjourned their talks on 11 June without
a concrete deal, Russian and international agencies reported. Russian
negotiator Arkadii Volskii told journalists that the Russian delegation
had worked through the night on a new set of proposals on the region's
status, and would resume discussions this morning. Commenting on the
lack of progress, Izvestiya reported on 12 July that optimistic
statements by Russian negotiators predicting an imminent agreement are
beginning to sound like "disinformation." Meanwhile, ceasefire
violations continue. Russian military spokesmen said on 12 July that
five Russian servicemen had died in sporadic fighting over the past 24
hours. -- Scott Parrish, OMRI, Inc.

YAVLINSKII SEES NO PROBLEM IN DEMOCRATIC DISUNITY. Grigorii Yavlinskii,
leader of the Yabloko bloc, declared that there is no tragedy in the
current split within democratic ranks in a 12 July Izvestiya article. He
accused the other democratic politicians of seeking to concentrate power
in Yeltsin's hands and supporting an economic policy that only benefits
a minority. He asserted that Russian voters have more choices than just
pursuing the status quo or returning to Communism and that only by
separating himself from leaders like Yeltsin, Yegor Gaidar, and
Chernomyrdin could he preserve a democratic alternative in Russia. --
Robert Orttung, OMRI, Inc.

DRAFT LAW REVISES ELECTORAL DISTRICT BOUNDARIES. The Central Electoral
Commission's proposed law determining the boundaries of the Duma's 225
single-member electoral districts has changed almost all of the lines
without public explanation, Izvestiya reported on 11 July. The districts
in Moscow and St. Petersburg have been completely altered, mainly
complicating the electoral prospects of democratic politicians who have
criticized Yeltsin's Chechnya policies. If the draft is adopted, the
incumbents representing those cities will have to compete in new
districts. In the provinces, the plan attempts to dilute reform-oriented
urban voters with their more conservative counterparts. Nizhnii
Novgorod, for example, is divided into four parts that are each paired
with rural voters. Some of the districts' peculiar shapes provide clear
evidence of gerrymandering. -- Robert Orttung, OMRI, Inc.

RUSSIAN ELECTORATE DECLINED BY TWO MILLION VOTERS SINCE 1993. Russia has
104,977,895 eligible voters, according to the Central Electoral
Commission, approximately 2 million fewer than were registered for the
December 1993 parliamentary elections, Izvestiya reported on 11 July.
The figure is important because it will be used to determine whether a
sufficient number of people voted for the elections to be valid. At
least 25% of eligible voters must participate. -- Robert Orttung, OMRI,
Inc.

DUMA DEPUTY CRITICIZES PLAN TO PRIVATIZE BOOK PUBLISHERS. In a 10 July
interview on Moscow Television, Duma deputy Igor Yakovenko, a member of
the Yabloko group and the Duma Press Committee, criticized the State
Press Committee's alleged plan to combine large state-owned book
publishers into one enterprise and subsequently sell half its shares to
a German corporation. Yakovenko warned that implementing the plan would
be a "national tragedy" that would allow foreigners to "dictate to the
Russian government." Yakovenko said that in principle, he is not against
privatizing parts of the publishing industry or even to foreign
investment in publishers. However, he said such privatization should be
carried out on a "competitive basis," without allowing "monopolies" to
develop. According to Yakovenko, the Duma will soon request that the
State Press Committee give a full report to the government on its policy
regarding book publishers. -- Laura Belin, OMRI, Inc.

RECOMMENDATIONS ON PRESS FREEDOM AND JOURNALISTS' RESPONSIBILITIES. The
president's Judicial Chamber on Information Disputes and the Union of
Journalists published a joint statement on freedom of the press and the
responsibilities of journalists in Rossiiskaya gazeta on 11 July. The
statement criticized journalists for excessive reliance on anonymous
sources and frequently publishing information without verifying its
accuracy. The authors added that the media too often absolved itself of
responsibility for running inaccurate or unlawful advertisements. They
recommended both "legal measures" and "self-limitations" by publishers
to protect the "moral health" of children against pornography and
publications calling for violence or advocating racial supremacy. The
statement also criticized the presidential and government apparatus,
which it described as more closed to journalists than party committees
of the Soviet period. -- Laura Belin, OMRI, Inc.

RUSSIA AND BURYATIA SIGN AGREEMENTS. Prime Minister Chernomyrdin and
Buryat President Leonid Potapov signed a number of agreements in a
Moscow ceremony, Russian Radio reported on 11 June. Among the documents
signed were agreements on natural resource utilization, environmental
protection, economic development of the Lake Baikal region, and the
division of powers between the federal and republican authorities on
foreign trade. The agreements are the sixth in a series of such packages
signed by Moscow with Russian Federation subjects. Chernomyrdin told
journalists after the signing that such agreements fell "within the
framework of the constitution," and that similar accords would be signed
with other federation subjects soon. -- Scott Parrish, OMRI, Inc.

ILLEGAL TRADE IN GROWTH HORMONES. Finnish customs officials said on 11
July that at least 75,000 ampoules of growth hormones worth millions of
dollars have been smuggled from Russia to Finland, AFP reported the same
day. The illegal trafficking came to light in May, when a Finnish
businessman was arrested on the border between the two countries with
2,000 ampoules of Moscow-made Somatropine and Gonadotropine in his car.
The man, who is to stand trial on 18 July, said he had made more than 25
trips. Growth hormones are taken by bodybuilders, but their uncontrolled
use can cause cardiovascular problems, diabetes, and aggressive
behavior. -- Penny Morvant, OMRI, Inc.

RUSSIA CONDEMNS TURKISH INCURSION INTO IRAQ. Russian Foreign Ministry
spokesman Grigorii Karasin condemned a recently completed one-week
Turkish military offensive aimed at rooting out Kurdistan Workers' Party
(PKK) rebels in northern Iraq, international and Russian agencies
reported on 11 July. Karasin characterized the Turkish action as
"unacceptable," because it violates the "territory of an independent
state." Moscow's reaction to the latest Turkish operation involving an
estimated 3,000 troops is markedly different from the tacit approval it
gave to Ankara's decision to send in some 35,000 troops for a six-week
operation in March. At the time, Karasin termed the "one-off" operation
an "internal affair" of the states concerned. The change may be
attributed to the fact that Moscow is now less exposed to criticism over
Chechnya, as well as its efforts to court Iraq. -- Scott Parrish and
Lowell Bezanis, OMRI, Inc.

RUSSIA TO SIGN MILITARY ACCORD WITH SOUTH AFRICA. A South African
military spokesman told Reuters on 11 July that South African Defense
Minister Joe Modise, currently visiting Russia, would sign a defense
cooperation agreement with his Russian counterpart on 14 July. The two
countries have already been cooperating to upgrade South Africa's aging
French-built Mirage fighters by installing more powerful Russian
engines. -- Doug Clarke, OMRI, Inc.

RUSSIANS TO MODERNIZE INDIA'S MIG-21s. Russia and India are expected to
sign a deal this month for the modernization of over 100 Indian MiG-21
jet fighters, the Chinese new agency Xinhua reported on 10 July. Quoting
Indian Air Force sources, the agency said that the deal would be worth
between $200 and $350 million, and would involve the complete
replacement of the fighters' avionics and weapons system. The same
sources said a Russian delegation would visit New Delhi soon to sign the
agreement since the two sides had resolved their differences over
pricing. -- Doug Clarke, OMRI, Inc.

FOOD GROUP LAUNCHES FIRST PUBLIC TAKEOVER BID ON RUSSIAN MARKET. A major
Russian food group, Koloss, launched the first public takeover bid in
the country's rapidly developing financial market, offering to buy 51%
of the shares in the major Moscow chocolate company Red October, AFP
reported on 11 July. Koloss offered $7.50 for each share in Red October
before 25 July, payable in rubles. The entire bid, being handled by a
branch of Menatep Bank, is worth some $25 million. In Moscow stock
trading on 10 July, market shares in Red October were quoted at 26,710
rubles ($5.90) each--the highest level since the company was privatized.
Koloss representatives said there are no management changes planned for
Red October if the bid is successful. -- Thomas Sigel, OMRI, Inc.

GOVERNMENT IMPLEMENTS PLAN TO IMPROVE TAX COLLECTION. The Russian
government began implementing a plan to make tax collection more
efficient, Rossiiskaya gazeta reported on 12 July. The goal is to
channel all taxes, customs duties, and other mandatory payments to the
State Treasury. Beginning on 1 August, the State Tax Service will
require enterprises and organizations submitting federal taxes to
specify their registration number. Those numbers will be used to create
a corporate taxpayer database. The government also plans to impose
stricter administrative measures and criminal prosecution to crack down
on tax evasion. -- Thomas Sigel, OMRI, Inc.

MANUFACTURERS' ENERGY PRICES INCREASE. The prices manufacturers pay for
energy (crude oil, petrochemicals, and coal) increased by an average of
130% during the first half of 1995, Rabochaya tribuna reported on 11
July, citing Goskomstat statistics. The combined output of the country's
fuel and energy sector during the first six months of 1995 dropped 3.6%
compared to the same period last year, while electrical power production
declined 3% and oil and gas production fell 2%. -- Thomas Sigel, OMRI,
Inc.

TRANSCAUCASIA AND CENTRAL ASIA

RESPUBLIKA TRIAL ENDS. A Kyrgyz court handed two journalists from the
Bishkek daily Respublika one-year suspended sentences for "libelous
publications insulting the honor and dignity" of the president, Radio
Liberty's Kyrgyz service reported on 11 July. The two reporters, Zamira
Sydykova and Tamara Slashova, will be banned from working as journalists
and traveling abroad for 18 months, according to Radio Liberty sources.
If they repeat the offense, they can be sent to prison. President Askar
Akayev brought the charges against them after they wrote an editorial
for the newspaper saying he has a villa in Switzerland and a house in
Turkey. -- Lowell Bezanis, OMRI, Inc.

CANADIANS IN THE CASPIAN. The Canadian firm International Petroleum
Corporation will invest $38 million to develop two key offshore Turkmen
oil fields, AFP reported on 11 July. The fields in question presently
produce some 8,200 barrels per day (bpd); after development this figure
is expected to rise to 80,000 bpd. As the legal status of the Caspian
Sea resources has not been finalized the agreement is of interest; to
date Turkmenistan has joined with Russia and Iran in demanding a
negotiated solution to this problem. -- Lowell Bezanis, OMRI, Inc.

TAJIKISTAN'S TROUBLED MONETARY REFORM. Only 10% of the new Tajik rubles
(totaling 18 billion rubles), which were introduced on 15 May, have
returned to the bank, Komsomolskaya pravda reported on 11 July. Without
adequate reserves, the republic's national bank will have to print more
currency than it had anticipated in order to pay state employees' wages,
but this increase in the money supply could trigger an inflationary
spiral. -- Lowell Bezanis, OMRI, Inc.

[As of 1200 CET]

Compiled by Victor Gomez

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