We welcome you to Part I of the Open Media Research Institute's Daily
Digest. This part focuses on Russia, Transcaucasia and Central Asia.
Part II, distributed simultaneously as a second document, covers
Central, Eastern, and Southeastern Europe.  Back issues of the Daily
Digest, and other information about OMRI, are available through our WWW
pages: http://www.omri.cz/Index.html

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This week's edition includes stories on the economic turbulence in
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performance of Russia's privatized enterprises compared to state-run
outfits.

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^^^^^^^^^^^^^^^^^^^^^^^^^^^TODAY'S TOP STORY^^^^^^^^^^^^^^^^^^^^^^^^^
DUMA APPROVES 1996 BUDGET. On 6 December, the State Duma passed the
final draft of the 1996 federal budget on both second and third
readings, by a vote of 253-71 with six abstentions, ITAR-TASS reported
on 6 December. The budget puts monthly inflation at 1.9%, revenue at 347
trillion rubles ($75.8 billion), and expenditure at 436 trillion rubles
($95.1 billion), leaving a deficit of 88.6 trillion rubles ($19.3
billion). As a result of Duma objections during the first reading,
planned spending has been increased for defense by 3.5 trillion rubles
($764 million), farming and housing construction by 8 trillion rubles
($1.8 billion), welfare by 2 trillion rubles ($444 million), and law-
enforcement by 1.37 trillion rubles ($304 million). Deputies voted not
to allocate an additional 5 trillion rubles ($1.1 billion) for
reconstruction work in Chechnya. The budget's approval is an important
prerequisite for reaching an agreement with the IMF on a three-year loan
of $9 billion. The Federation Council will consider the budget on 9
December. -- Natalia Gurushina
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

RUSSIA

YELTSIN SIGNS FEDERATION COUNCIL LAW. President Boris Yeltsin signed the
law on the formation of the Federation Council, the upper house of
parliament, one day after the State Duma overrode the Council's veto of
the law, Russian media reported on 6 December. Under the law, each of
Russia's 89 regions will have two representatives in the Council: the
governor or chief administrator, and the head of the regional
legislature. Federation Council Speaker Vladimir Shumeiko, who will lose
his position once the law goes into effect, said he still considers the
law unconstitutional but noted that it "must be fulfilled" now that it
has been signed by the president, Russian TV reported. Governors must be
popularly elected by December 1996, but Shumeiko, who is from
Kaliningrad, said he would not run for governor in any region next year,
according to NTV. -- Laura Belin

YELTSIN VETOES CRIMINAL CODE. President Yeltsin has rejected the new
Criminal Code passed by the Duma on 2 November, Russian media reported
on 6 December. According to an explanatory note issued by the
presidential press service, Yeltsin used his veto because the code has
not been linked to the current Criminal Procedures Code--a situation
that could make it virtually impossible to institute criminal
proceedings and would thus result in a crisis in the country's law
enforcement system. The president also expressed surprise that the code
does not deal with a number of crimes, such as the obstruction of a
journalists' professional duties, that threaten the development of a
civil society. A conciliation commission will now be set up to amend the
draft code. -- Penny Morvant

PLANE DISAPPEARS IN FAR EAST . . . An Aeroflot plane en route from
Sakhalin to Khabarovsk with 97 people on board disappeared from radar
screens early on 7 December and is presumed to have crashed, Russian and
Western agencies reported. Rescuers temporarily gave up their search for
the missing plane, a TU-154, when darkness fell. A total of 302 people
died in air crashes in Russia in 1994, up from 222 the previous year,
according to Reuters. -- Penny Morvant

. . . AND FOUR KILLED IN HELICOPTER CRASH. Four people were killed when
a military helicopter crashed about 20km from the Ingush capital of
Nazran early on 7 December, ITAR-TASS reported. The agency said the MI-
24 helicopter gunship was escorting an MI-8 transport helicopter
evacuating Russian servicemen wounded in Chechnya. According to Ingush
Vice President Boris Agapov, the MI-24 hit a high-voltage power line.
Earlier reports quoting a spokeswoman from the Emergencies Ministry said
that both helicopters had crashed. -- Penny Morvant

NEW HEALTH MINISTER APPOINTED. President Yeltsin has signed a decree
appointing Aleksandr Tsaregorodtsev to the post of health minister,
ITAR-TASS reported on 6 December. Tsaregorodtsev, who has been acting
minister since the dismissal of Eduard Nechaev (see OMRI Daily Digest,
29 November and 4 December 1995), is a specialist in children's
diseases. He graduated from the Kazan medical institute in 1970 and was
head of the Tatar ASSR Health Ministry from 1986 to 1989. -- Penny
Morvant

EDITORS DISCUSS PROBLEMS OF REGIONAL PRESS. A 6 December Moscow round-
table discussion involving regional newspaper editors illustrated the
limits on freedom of the provincial press in Russia. Some participants
said newspapers are forced to choose between criticizing the authorities
and survival. For instance, if a paper has the local administration as a
co-founder, it may be protected, but to keep that protection it will
have to support the authorities or at least refrain from open criticism.
Sergei Titov, editor of the independent Simbirskii kurer in Ulyanovsk
(considered one of the regions of Russia least changed by reforms), said
the economic pressure on his paper amounted to a "blockade" by the
authorities. He said some private businesses had been threatened with
tax inspections if they placed advertisements in or otherwise financed
his paper. When asked whether he had turned to the local chapter of the
Union of Journalists for help, Titov noted that the chairman of the
union's Ulyanovsk branch also works in the press service of the local
administration. -- Laura Belin

SECURITY TIGHTENED AFTER DUMA EXPLOSION. Duma Speaker Ivan Rybkin said
on 6 December that security at the entrance to the parliament would be
tightened following an explosion the day before in the office of
National Republican Party leader Nikolai Lysenko, Russian and Western
media reported. Lysenko said he believed the blast, caused by three hand
grenades triggered by a timing device, could have been the work of "the
Caucasian mafia" or even the Turkish secret services. A spokesman for
the Turkish Embassy in Moscow was quick to reject the latter allegation
as absurd. A number of reports in the Russian press speculated that
Lysenko staged the attack himself for propaganda purposes. Meanwhile,
President Yeltsin met with Federal Security Service Director Mikhail
Barsukov to discuss the upsurge of violence in Chechnya and moves to
bolster national security in the run-up to the parliamentary elections.
-- Penny Morvant

MORE CORRUPTION IN VLADIMIR OBLAST. Ivan Morozov, the head of
administration of the town Gus-Khrustalnyi in Vladimir Oblast, has been
detained on suspicion of accepting bribes amounting to more than 20
million rubles ($4,370), ITAR-TASS reported on 6 December. The first
deputy governor of Vladimir Oblast and the chairman of the region's
department of the Central Bank have already been convicted on corruption
charges, and two other oblast officials have been accused of bribe-
taking. -- Penny Morvant

KOZYREV: "YES TO PARTNERSHIP, NO TO ENLARGEMENT." With that phrase,
Russian Foreign Minister Andrei Kozyrev expressed his country's policy
toward NATO at the meeting of the North Atlantic Cooperation Council on
6 December, Western agencies reported. The day before, Russian Foreign
Ministry spokesman Mikhail Demurin said his country takes credit for
engineering the "pause" in NATO plans for enlargement (see OMRI Daily
Digest, 6 December 1995). A former member of U.S. President George
Bush's staff, Peter Rodman, wrote an article for the December issue of
National Review in which he suggests that U.S. President Bill Clinton
assured Russia that NATO enlargement would be placed on the back burner
in exchange for its support of the Bosnian peacekeeping operation.
Izvestiya carried a commentary on the article in its 7 December issue.
U.S. Secretary of State Warren Christopher, speaking in Brussels on 6
December, dismissed Rodman's claims as "nonsense." -- Michael Mihalka

GRACHEV CALLS CHINA A KEY MILITARY PARTNER. Russian Defense Minister
Pavel Grachev met with the Chinese Central Military Council Deputy
Chairman Liu Huaqing to discuss bilateral military cooperation and Asia-
Pacific security, ITAR-TASS reported on 6 December. After purchasing 26
Su-27 fighters in 1992, China is interested in manufacturing Su-27
warplanes under Russian license. According to Interfax, Russian and
Chinese experts are currently working on an intergovernmental agreement
to be signed by Liu before the end of his visit on 8 December. Grachev
and Liu agreed that better Sino-Russian ties would serve to strengthen
regional security and international peace. Russia views closer
cooperation with China as a possible counterbalance to NATO's eastward
expansion, but China is primarily interested in gaining access to
Russia's advanced weapons' technology, and has ruled out the idea of a
military alliance. -- Constantine Dmitriev

RUSSIA, U.S. AGREE TO CHANGES IN ABM TREATY. During talks in Geneva,
Russian and the U.S. officials reached an understanding on changes to
the ABM treaty that would allow for some high-speed missile defense
systems, Western agencies reported on 6 December. Negotiations aim at
resolving the dispute over the terms of the 1972 ABM treaty. Russia
argues that U.S. intentions to develop more sophisticated missile-
defense systems are undermining the treaty (see OMRI Daily Digest, 29
November 1995). State Department spokesman Glyn Davies said that Russia
would not oppose the deployment of an Upper Tier high-speed defense
system, which is considered to be the most promising defense system in
the U.S, AFP reported. Davies' statement contradicts earlier reports
that the Upper Tier missile would be prohibited because it exceeds the
velocity cutoff under the terms of the Russo-U.S. "agreement" published
last week by the Washington Times. -- Constantine Dmitriev

NORWAY FEARS RUSSIA, SWEDEN DOES NOT. The Norwegian government decided
to conduct joint exercises with NATO close to the Russian border,
thereby lifting its voluntary limitation on such exercises, Segodnya
reported on 7 December. Norwegian Deputy Foreign Minister Siri Berke
said that Russian military activities on the Kola Peninsula, including
the disposal of nuclear waste, represent a new challenge to Norwegian
security. Meanwhile, Sweden plans to reduce its military expenses by 4
billion Swedish krona by the year 2001, ITAR-TASS reported. Swedish
Defense Minister Tage Peterson said that although Russia retains its
nuclear capabilities, it has lost its economic and military might since
the dissolution of the USSR. -- Constantine Dmitriev

DEFENSE MINISTRY BLOCKS ROCKET DEAL. The Russian Defense Ministry is
blocking export permits for the sale of NV-33 rocket engines by Samara
Dvigateli to the California-based Aerojet company, Interfax reported on
6 December. The Russian government approved the $100 million deal in
October, but a Defense Ministry official claimed that the U.S. side
changed the terms to allow the rockets to carry military cargoes. The
official also objected to the low price tag, describing the $5 million
license fee as "absurd." Rather than selling the 25-year-old NV-33, the
Defense Ministry would like to see the development of a new RD 180
engine, which is part of a joint venture by Pratt and Whitney and
Energomash. The companies are bidding to supply engines to Lockheed-
Martin's Atlas booster rockets. -- Peter Rutland

RUSSIA WANTS MORE TIME TO CUT OZONE-THREATENING SUBSTANCES. At a
conference in Vienna to review the 1987 Montreal Protocol on ozone
protection, Russian
Environment Minister Viktor Danilov-Danilyan said Russia needs more time
and investment aid to develop substitutes to ozone-harming substances
such as chlorofluorocarbons (CFCs), AFP reported on 6 December. Under
the protocol, signed by 150 countries, industrialized countries are to
stop producing CFCs by 1996 and the rest of the signatories by 2010.
Danilov-Danilyan said Russia is now producing only half the ozone-
threatening chemicals it was in 1987, but he added that the drop was a
byproduct of the fall in industrial output. -- Penny Morvant

TRANSCAUCASIA AND CENTRAL ASIA

UZBEK, US OFFICIALS DISCUSS MILITARY CONVERSION. Uzbek President Islam
Karimov and U.S. Under-Secretary of Commerce Barry Carter discussed the
conversion of the Uzbek military industrial complex in Tashkent on 6
December, Interfax reported. Karimov expressed the hope that U.S.
businessmen accompanying Carter would propose joint ventures with Uzbek
defense-oriented enterprises. -- Liz Fuller

ZAVGAEV IN ALMATY. Chechen Premier Doku Zavgaev and Kazakhstani
President Nursultan Nazarbayev discussed the political implications of
the Chechen crisis during talks in Almaty on 6 December, Russian TV
reported. They signed a number of bilateral agreements on cooperation,
including one that provides for the refining of Kazakhstani oil in
Grozny once the political situation in Chechnya stabilizes. -- Liz
Fuller

[As of 1200 CET]

Compiled by Victor Gomez

The OMRI Daily Digest offers the latest news from the former Soviet
Union and Central, Eastern, and Southeastern Europe. It is published
Monday through Friday by the Open Media Research Institute.  The OMRI
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              Copyright (C) 1995 Open Media Research Institute, Inc.
                       All rights reserved. ISSN 1211-1570
 
         
     


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