No. 138, Part I, 18 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
pages: http://www.omri.cz/OMRI.html

RUSSIA

LANDMARK TALKS WITH NATO . . . Vitalii Churkin, Russia's ambassador to
NATO, met in Brussels with the ambassadors of NATO's 16 member-states on
17 July in the first of a series of meetings that aim to define Russia's
"special relationship" with the alliance. Churkin said the meeting went
well and that Russia's relationship would be "an evolutionary one,"
Reuters reported. He confirmed that he had repeated his country's strong
objections to NATO expansion. A NATO official said that one priority was
to get Russia more involved the alliance's activities. He added that
Churkin had suggested a "hot line" between Moscow and NATO headquarters.
The Russians also indicated they would sign the so-called secrecy
agreement, which is a pre-condition for occupying offices at the
headquarters in Brussels. -- Doug Clarke, OMRI, Inc.

. . . BUT NO SYMPATHY FOR CHANGING THE CFE TREATY. Churkin also brought
up Russia's objections to the flanks limitations of the 1990 CFE treaty
and two generals gave the ambassadors a briefing as to why Russia wanted
these limits changed. Western agencies reported that Churkin suggested
altering the treaty "to satisfy Russian security concerns in the
Caucasus" but was rebuffed by the ambassadors. A NATO official was
quoted as saying the alliance could accept "minor amendments" but was
not prepared to accept "a fundamental renegotiation of the treaty." --
Doug Clarke, OMRI, Inc.

RUSSIA SIGNS INTERIM TRADE ACCORD WITH EU. Russian Foreign Minister
Andrei Kozyrev initialed an interim trade agreement between Russia and
the EU on 17 July, Russian and international agencies reported. The
temporary accord implements the economic provisions of a broader EU-
Russia partnership agreement signed in June 1994. Its implementation had
been frozen since January because of European objections to Russian
military intervention in Chechnya. According to Russian TV, the EU is
Russia's largest trading partner, accounting for 37% of foreign trade.
The accord aims to reduce tariffs on both sides, and spokesmen claimed
it will eliminate EU import quotas on Russian products by 1998, except
for textiles, steel, and nuclear fuel. Currently, however, the EU
imposes quotas on over 20 categories of Russian products. The agreement
calls for free trade talks to begin only after 1998. Following the
signing ceremony, Kozyrev praised the interim accord, but added, "it is
now necessary to move forward to a permanent agreement." -- Scott
Parrish, OMRI, Inc.

KOZYREV ON BOSNIA. Russian Foreign Minister Andrei Kozyrev said on 17
July that Russia continues to support a political solution to the
Bosnian conflict, saying that the Contact Group, the UN Security
Council, and other international actors "are far from having exhausted
their diplomatic potential in Bosnia," Russian and Western agencies
reported. Kozyrev criticized French suggestions that in the wake of
recent Bosnian Serb actions, UN peacekeepers must be dramatically
reinforced or else withdrawn altogether. He stressed the Russian
preference for an alternative policy between those two extremes, and
repeated Russian concerns about the possibility of a military escalation
of the conflict. -- Scott Parrish, OMRI, Inc.

CHERNOMYRDIN MEETS WITH GROZNY NEGOTIATORS. Prime Minister Viktor
Chernomyrdin met on 17 July with Russian negotiators to the Grozny
talks, Russian and Western agencies reported. Chernomyrdin reportedly
gave his approval to the draft political settlement prepared by the head
of the Russian delegation, Minister for Nationalities Vyacheslav
Mikhailov. After the meeting, Mikhailov confirmed that the status of
Chechnya is the main obstacle to reaching an agreement. He reiterated
the Russian federal government's position that Chechnya's future status
should be determined "only by those who are elected in the [republic's]
upcoming November elections." -- Scott Parrish, OMRI, Inc.

CONSTITUTIONAL COURT HEARS CLOSING ARGUMENTS IN CHECHNYA CASE.
Federation Council deputy Yelena Mizulina gave closing arguments for the
upper house of parliament in the Constitutional Court case concerning
the legality of secret decrees issued by the president and government
that authorized the military campaign in Chechnya, Russian media
reported on 17 July. Mizulina said the constitution forbids deploying
troops on the territory of the Russian Federation without a declared
state of emergency, which requires a presidential decree to be published
and approved by the Council. On the same day, Constitutional Court
Chairman Vladimir Tumanov announced that the court had denied
parliamentary requests to call Defense Minister Pavel Grachev and
Federation Council Chairman Vladimir Shumeiko as witnesses in the case.
-- Laura Belin, OMRI, Inc.

NEW HEAD OF PRESIDENTIAL PRESS SERVICE APPOINTED. While still in the
hospital, President Boris Yeltsin signed a decree appointing Igor
Ignatev to lead the presidential press service, Russian and Western
agencies reported on 17 July. Ignatev had previously served as business
news chief for ITAR-TASS. On 1 June, ITAR-TASS Director General Vitalii
Ignatenko was appointed deputy prime minister in charge of media
affairs. -- Laura Belin, OMRI, Inc.

DEPUTY PROCURATOR DEFENDS CASE AGAINST TV SHOW. An article published in
Sovetskaya Rossiya called "Kremlin Tramps," which attacked sketches
aired on the NTV satirical show "Puppets," gave the Procurator General's
office legal grounds to open a criminal case against the show for
allegedly insulting the honor and dignity of high government officials,
Deputy Procurator General Vasilii Kolmogorov told ITAR-TASS on 17 July.
Kolmogorov said article 108 of the Criminal Code stipulates that
articles published in the press may provide the grounds for opening a
criminal case. He said investigators had determined that the puppet
parody deliberately depicted officials, including President Yeltsin and
Prime Minister Viktor Chernomyrdin, in an offensive manner. Kolmogorov
refused to comment on further developments in the case, citing the need
to question more witnesses and experts. Under the Criminal Code,
possible punishment for the show's creators could include corrective
labor for up to two years or a fine and bans from certain kinds of
employment. -- Laura Belin, OMRI, Inc.

RYZHKOV TO LEAD RUSSIAN PUBLIC UNION IN ELECTIONS. Nikolai Ryzhkov, the
former Soviet prime minister under Mikhail Gorbachev, will top the list
of the Russian Public Union (ROS) for the December parliamentary
elections, Ekho Moskvy reported on 17 July. Duma member Sergei Baburin
is the leader of the ROS, which is known for its extreme nationalist
views. Baburin recently announced his willingness to give up the top
places on the party list in order to attract allies. -- Robert Orttung,
OMRI, Inc.

LYSENKO ON LOCAL GOVERNMENT. The main question in adopting a law on
local government is whether relations between Moscow and the regions
should be regulated by the constitution or separate treaties between the
capital and each member of the federation, according to Vladimir
Lysenko, chairman of the Duma Subcommittee on the Development of Federal
Relations, Radio Mayak reported on 16 July. The separate treaty with
Tatarstan was very useful in keeping the republic within the Russian
Federation but gave it privileges and benefits no other regions or
republics have, Lysenko pointed out. Moscow has signed six treaties with
other federation members and approximately 50 other regions and
republics are pushing for similar treaties. If the Duma does not adopt a
law on local government soon, Lysenko said, the regions and republics
will start taking power unilaterally. -- Robert Orttung, OMRI, Inc.

LAW GIVES JAILED ACCUSED LEGAL PRIVILEGES. According to a new federal
law signed by President Yeltsin, accused prisoners held in isolation
have gained the right to certain privileges, Moskovskaya komsomolets
reported on 18 July. Such prisoners are now entitled to eight hours of
sleep each night without interrogations, searches, or other procedures.
They also have the right to an hourly walk within every 24-hour period,
the right to meet with a lawyer without being overheard, and the right
to unlimited visits. Cells are to be equipped with radios, and wherever
possible, a television, refrigerator, and fan. The norm for spatial
allocation is to be four square meters per person. Minors are to be
allowed longer walks, and jail administrations are to provide areas for
sports. -- Alaina Lemon, OMRI, Inc.

RUSSIA, IRAN, AND OIL. Russian Deputy Fuel and Oil Minister Anatolii
Fomin and Iranian Oil Minister Gholamreza Aghazadeh held talks in Tehran
on 17 July, Reuters reported, citing Tehran Radio. According to the
station, Iran and Russia are to start cooperating in oil exploration,
drilling, and forming joint oil companies. The Iranians are seeking to
join forces with Russia for offshore drilling and platform construction
in the Caspian; they are also interested in joint activities with Russia
in Central Asia. As in its recent deal with France's Total and its
recent offer of 11 energy projects for foreign bidding, Tehran's talk of
enhanced cooperation with Russia in the energy sector is a direct reply
to the U.S. policy of isolating Iran. -- Lowell Bezanis, OMRI, Inc.

FEDERATION COUNCIL REPORTED TO OPPOSE START-2. The Federation Council
will soon recommend to the State Duma that it postpone ratification of
the START-2 treaty and call for a renegotiation of its terms, Ekho
Moskvy reported on 17 July. The report said that experts on the
Council's Foreign Affairs Committee had concluded that the treaty must
be revised, because it does not provide "equal military security" for
the U.S. and Russia. It also said that Russia cannot afford the cost of
dismantling the weapons slated for elimination under its provisions.
According to the Russian Constitution, treaties must be ratified by both
houses of the Federal Assembly. -- Scott Parrish, OMRI, Inc.

RUSSIA VIES FOR ENTRY TO WORLD TRADE ORGANIZATION. Russian Foreign Trade
Minister Oleg Davydov held talks on 17 July in Geneva with Renato
Ruggiero, the director general of the World Trade Organization (WTO),
Rossiiskaya gazeta reported on 18 July. Davydov asked Ruggiero to
promptly consider Moscow's application for membership, which he said is
vital to Russia's transition to a market economy. WTO officials said
Russia must present hard evidence of economic change, including reforms
in the still heavily subsidized farm sector, before it can be admitted
to the organization. -- Thomas Sigel, OMRI, Inc.

SIX RUSSIAN BANKS RANK IN WORLD'S TOP 1,000. Six Russian banks rank
among the world's top 1,000 financial institutions, according to a
British financial publication cited by Finansovye izvestiya on 18 July.
Vneshtorgbank, with capital totaling $722 million, ranked 372nd on the
list. Sberbank, with $653 million in capital, ranked 414th; Tokobank
($257 million) ranked 749th; Inkombank ($205 million) ranked 850th;
Oneximbank ($173 million) ranked 916th; and Imperial Bank ($154 million)
placed 969th. -- Thomas Sigel, OMRI, Inc.

ECONOMY GETS "C+" FOR FIRST HALF OF 1995. The Russian economy received a
grade of C+ for the first half of 1995 from an 18 July Finansovye
izvestiya article. The GNP growth rate, hitting an annual 7.9% during
the second quarter of 1995, was cited as a reason to forecast a
stabilization in the GNP. At the same time, the article noted that
manufacturers' prices have developed a tendency to lag behind retail
prices, indicating that inflation will not be higher than 5.5-5.7% in
July. If the government assumes a stricter monetary policy, inflation
could be held to 5-10% during the fourth quarter and the exchange rate
could remain between 4,700-5,400 rubles to $1. -- Thomas Sigel, OMRI,
Inc.

NAZARCHUK: DUTY HIKES WILL NOT RESULT IN FOOD SHORTAGES. Russian
Agricultural Minister Aleksandr Nazarchuk said the recent increase in
customs duties on imported food will not result in shortages or a
dramatic climb in prices, Russian Public TV reported on 17 July. The
minister said average price increases for food in the country will
remain within "routine inflationary and seasonal limits". -- Thomas
Sigel, OMRI, Inc.

TRANSCAUCASIA AND CENTRAL ASIA

ABKHAZ PRESIDENT AT CENTER OF NEW TENSIONS. After talks in Tbilisi on 17
July with UN mediator for Abkhazia Eduard Brunner, Georgian Deputy Prime
Minister Tamaz Nadareishvili told Iprinda news agency that Georgia does
not need any input from either the UN, the OSCE, or Russia on the
question of repatriating an estimated 200,000 Georgian refugees to
Abkhazia. He added that if no formal agreement is reached by the end of
July on their return, they will do so spontaneously. Nadareishvili
objected in particular to Brunner's meeting with Abkhaz President
Vladislav Ardzinba, whom he referred to as "a state criminal." Speaking
to journalists in Tbilisi last week, Russian Federation Council Chairman
Vladimir Shumeiko had indirectly accused Ardzinba of genocide and
compared him to Chechen President Dzhokhar Dudaev. Russian Foreign
Minister Andrei Kozyrev was quoted on 17 July by Russian TV's "Vesti" as
agreeing with Shumeiko's negative assessment of Ardzinba. Tatar
President Mintimer Shaimiev, who signed a friendship and cooperation
treaty with Abkhazia in August 1994, condemned Shumeiko's statement,
which he said did not reflect the opinion of the entire Federation
Council -- Liz Fuller, OMRI, Inc.

ARMENIA SETS DATE FOR PRESIDENTIAL ELECTIONS. In line with the
provisions of the newly-adopted Armenian Constitution, presidential
elections are to take place in Armenia on 21 September 1996, 50 days
before President Levon Ter-Petrossyan's mandate expires, Aragil reported
on 16 July quoting a 15 July edition of Lragir. -- Liz Fuller, OMRI,
Inc.

[As of 1200 CET]

Compiled by Victor Gomez

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