|Much unhappiness has come into the world because of bewilderment and things left unsaid. - Dostoevsky|
No. 14, Part I, 19 January 1996
************************************************************************ Do you need sharply focused economic news? OMRI's weekly Economic Digest provides thorough coverage of business and financial developments throughout the region. This week's edition includes stories on the fall of retail trade and the standard of living in Russia and how price hikes in Montenegro have caused the closure of its border with Albania. For subscription and rate information, please send a message to email@example.com Also: Exchange rates for 27 currencies from throughout Eastern Europe and the former Soviet Union are now updated weekly on the OMRI WWW server: http://www.omri.cz/Econ/ExchangeRates.html *********************************************************************** 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 ^^^^^^^^^^^^^^^^^^^^^^^^^^^TODAY'S TOP STORY^^^^^^^^^^^^^^^^^^^^^^^^^ FEDERAL TROOPS TAKE PERVOMAISKOE. Russian federal forces succeeded in regaining control of Pervomaiskoe by the early evening of 18 January, but Chechen commander Salman Raduev escaped with a group of his men, Russian media reported. The figures cited for the number of hostages released or found dead are considerably lower than the total number taken by Raduev's men from Kizlyar and subsequently seized in Pervomaiskoe. An Interior Ministry spokesman told NTV that 28 Chechen militants were taken prisoner and 153 killed, while 26 Russian soldiers died and 93 were wounded. Federal Security Service head General Mikhail Barsukov told NTV that two "foreign mercenaries" from Syria and Egypt had entered the Russian Federation via Azerbaijan to fight on the Chechen side. AFP quoted Chechen President Dzhokhar Dudaev's spokesman, Movladi Udugov, as saying that Raduev still has several dozen hostages and will release them if the remaining wounded Chechen gunmen still in Pervomaiskoe are allowed to leave. -- Liz Fuller ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ RUSSIA HIJACKED FERRY BARRED FROM ISTANBUL. After three days of steaming through stormy seas, the hijacked ferry Eurasia has arrived near the entrance to the Bosporus Straits where Turkish authorities expect it to anchor, Western agencies reported on 19 January. Turkey had earlier barred the ferry from sailing to Istanbul through the crowded straits, and the commander of the pro-Chechen hijackers, Mohammed Tokcan, told Turkish TV that he had agreed not to enter the straits for "safety reasons." The ferry, with about 200 hostages on board, has been sailing in circles about 72 km from Istanbul since 1 a.m. local time, according to AFP. Turkish Interior Minister Teoman Unusan said he expects Tokcan to surrender and release the hostages soon. Reports on 18 January suggested that Tokcan had agreed to release the hostages in Istanbul if he were permitted to give a live television news conference. -- Scott Parrish PRESS SLAMS GOVERNMENT OVER PERVOMAISKOE. An 18 January political commentary on Ekho Moskvy derided official accounts of the Pervomaiskoe operation as "fairy tales," pointing out numerous factual inconsistencies in them. Izvestiya on 19 January characterized the government's handling of the crisis as "incompetent," adding that the "smokescreen of feckless lies" purveyed by official spokesmen could not hide the "bungling of the Russian military-police machine." NTV on 18 January also expressed disbelief that after four days of heavy fighting, the government claimed that 153 dead Chechen fighters were found in the village but no dead hostages. The station noted that losses were inevitable in such an operation and wondered what had become of the hostages who remain unaccounted for by official government figures. -- Scott Parrish DUMA ELECTS FIVE DEPUTY SPEAKERS. The Duma elected five deputy speakers at once on 18 January by a vote of 359 to 56, with one abstention, ITAR- TASS reported. Aleksandr Shokhin (Our Home Is Russia) became first deputy speaker. The deputy speakers are: Svetlana Goryacheva (Communist Party), Mikhail Gutseriev (Liberal Democratic Party), Artur Chilingarov (Russian Regions), and Sergei Baburin (People's Power). The Yabloko faction refused to nominate a candidate for deputy speaker because it objected to having two Communists in the leadership--as speaker and deputy speaker. Duma Speaker Gennadii Seleznev said that a deputy speaker slot would be held open for Yabloko since "they are likely to go back on their decision within a month or so." Yabloko has been criticized lately for working closely with the Communists. The Duma is expected to vote for another deputy speaker who will be responsible for ethnic issues. -- Robert Orttung IZVESTIYA: SELEZNEV WILL BE PARTY MOUTHPIECE. Those democrats who think of the newly elected Duma speaker as a potential liberal or someone capable of carrying out an independent policy are "either naive or deliberately deceiving themselves," Izvestiya charged on 19 January. Seleznev's career shows that his life has been devoted to voicing the decision of his superiors in the party, the paper asserts. The "loyal and personally disciplined" Seleznev was able to rise through the Communist Party media with the help of Leningrad Party boss Grigorii Romanov, a strong opponent of reform. When Mikhail Gorbachev started perestroika, Seleznev, then editor of Komsomolskaya pravda, began toeing the new line, giving him the aura of a "liberal." Seleznev announced on 18 January that he would not leave the Communist Party during his term as speaker, violating an informal tradition of nonpartisanship. -- Robert Orttung INDUSTRIALIST TIPPED TO SUCCEED CHUBAIS. Vladimir Kadannikov, general director of the Avtovaz car manufacturer, will probably replace the reformist Anatolii Chubais as first deputy prime minister in charge of economic issues, ITAR-TASS reported on 18 January citing an "informed source" in the government apparatus. The 54-year-old Kadannikov, a close ally of President Yeltsin, is regarded as a competent, fairly forward- thinking industrial manager. He trained as an auto mechanic in the 1950s and played a key role in building up the Lada plant in Tolyatti. Presidential economics aide Aleksandr Livshits has been tipped as another possible successor to Chubais, according to Segodnya on 18 January. As the 1996 budget is already fixed and Russia is currently negotiating with internal organizations for another large loan, it is unlikely that Russian economic policy will shift dramatically in the short term. -- Penny Morvant CHAMBER SENDS ANTI-SEMITIC PAPER TO PROCURATOR GENERAL. The Judicial Chamber on Information Disputes sent a case involving an Al-Kods article to the procurator general for further action, ITAR-TASS reported. The chamber said that an article entitled "Plan to Free Palestine from Zionism" violated laws against advocating war and inflaming national and social tension. The newspaper is owned by a former citizen of Jordan, Shaaban Khafez Shaaban, who became a Russian citizen after marrying a Russian woman. Russian law prohibits foreigners from establishing media outlets. The chamber does not have the power to enforce its own decisions. -- Robert Orttung IZVESTIYA COMMENTATOR QUITS PRESIDENTIAL COUNCIL OVER PERVOMAISKOE. Izvestiya's political commentator, Otto Latsis, has asked President Boris Yeltsin to relieve him of his duties on the Presidential Council. In a letter to the president published in Izvestiya on 19 January, Latsis denounced the storming of Pervomaiskoe and the war in Chechnya. Latsis said that he does not want to hold any position that might be perceived as even indirectly supporting Yeltsin's decisions on the war in Chechnya. The Presidential Council, created in February 1993, has no real power beyond advising the president. -- Anna Paretskaya SAMARA PRESIDENTIAL ENVOY REFUSES TO RESIGN. On 18 January, Kommersant- Daily reported that the presidential envoy in Samara Oblast, Yurii Borodulin, has refused to resign despite being asked to do so by members of the president's staff. Borodulin said he had been appointed by President Yeltsin and could be fired only by him. The president's representatives are touring the regions fingered by former Chief of Staff Sergei Filatov as having "held elections in an unsatisfactory way" due to the local administration's weak organizational efforts. However, Borodulin claims that the situation in his oblast is the same as elsewhere in Russia. In the 17 December election, the Communist Party finished first in the oblast, with about 20% of the vote. The president had expected Our Home Is Russia to prevail since the oblast's governor, Konstantin Titov, was Prime Minister Viktor Chernomyrdin's deputy in the pro-government bloc. -- Anna Paretskaya SPY SATELLITE SYSTEM ON VERGE OF COLLAPSE. Russia's military satellites are wearing out and its early warning system could collapse by the end of the century, according to a report in the Defense Ministry newspaper Krasnaya zvezda on 17 January cited by Reuters. Under Soviet leader Leonid Brezhnev, up to four spy satellites were launched each year to monitor U.S. nuclear missile silos and airbases. But following the break-up of the USSR, a lack of money and the loss of production facilities in Ukraine and Armenia meant that the launch program ground to a halt. The paper reported that some of the satellites have been in operation for three times as long as their design lifespan and warned that if new equipment is not forthcoming, Russia "will have to get used to the idea of losing strategic equality with the United States." -- Penny Morvant ABOUT 40% OF COMPANIES SAID NOT TO PAY TAXES. An estimated 40% of Russian companies and organizations do not pay any taxes, Central Bank First Deputy Chairman Sergei Aleksashenko said on 18 January. Aleksashenko was quoted by ITAR-TASS as saying he believes this situation could soon lead to a serious budgetary crisis. The 1996 federal budget calls on the State Tax Service to provide 246.9 trillion rubles (about $52 billion) in revenue from taxation and other compulsory payments, according to ITAR-TASS on 11 January. According to preliminary results, the tax service raised 146 trillion rubles for the federal budget in 1995. As of 1 December 1995, the total tax debt to the state budget was 33.8 trillion rubles. -- Penny Morvant RUSSIAN CRUDE OIL EXPORTS FELL BY 4.6% IN 1995. Russia exported 122.3 million metric tons of crude oil in 1995, a 4.6% drop compared with 1994, the State Statistical Committee informed Interfax on 17 January. Exports to the former Soviet Union dropped by 22.2%, while exports to the rest of the world increased by 1.5%. A possible explanation could be that each ton of crude oil exported within the former Soviet Union brings only $73.9, compared with $107.5 elsewhere. Russian exports of oil products fell from 47.3 million metric tons in 1994 to 45.3 million tons in 1995 (a 4.2% decline). Meanwhile, Russia exported 192.1 billion cubic meters of natural gas in 1995, a 4.3% increase over 1994. -- Natalia Gurushina INDUSTRIAL OUTPUT DECLINE SLOWS DOWN IN 1995. According to the State Statistical Committee, Russia's industrial output in 1995 fell by 3% compared with 1994, totaling 989 trillion rubles ($211.19 billion) in current prices, Interfax reported on 16 January. In 1994, industrial production declined 23% over the previous year. The committee reported sustained production growth in steel and iron (a 9% increase), the chemical and petrochemical industry (a 8% increase), non-ferrous metals (a 2% increase), and pulp and wood industries. Production in machine- building, food, and construction materials dropped by 10%, 9%, and 8% respectively compared with1994. Russia's production of electricity fell by 2%, crude oil by 3%, natural gas by 2%, and coal by 3%. -- Natalia Gurushina RUSSIA-DE BEERS DIAMOND CONTRACT EXTENDED TILL MARCH. After two days of talks in Moscow, the Russian government and the South African multinational diamond company De Beers failed to reach an agreement on a new contract to sell Russia's uncut diamonds despite a statement from De Beers' saying the two sides had made "useful progress," ITAR-TASS reported on 18 January. The current arrangement, under which De Beers buys 95% of Russia's exports of rough diamonds, has been extended for another month, until 1 March 1996 (see OMRI Daily Digest, 28 December 1995). Russian producers are getting increasingly dissatisfied with low prices for their rough gems. Last year, they started to sell some uncut diamonds for higher prices directly on markets in Antwerp and Tel Aviv, causing a 7% drop in De Beers' earnings in 1994. The next round of talks will take place in February. -- Natalia Gurushina TRANSCAUCASIA AND CENTRAL ASIA RUSSIA, AZERBAIJAN SIGN PIPELINE DEAL. Russian Prime Minister Viktor Chernomyrdin and Azerbaijani President Heidar Aliev signed a package of bilateral agreements, including one on the export of so-called early oil from the Russian port of Novorossiisk, Russian and Western media reported on 18 January. The agreement, under which up to 5 million tons of "early" Caspian oil will be transported to market annually via Russian pipelines, confirmed an October decision of the international consortium managing the so-called "deal of the century." According to Vagit Alekperov, president of the Russian company "LUKoil," which holds a 10% stake in the consortium, the agreement calls for a $60 million renovation of the Baku-Grozny-Novorossiisk pipeline, to be completed later this year. Other agreements included one on economic cooperation through the year 2000 and a protocol on supplying major industrial production in 1996. -- Lowell Bezanis and Scott Parrish [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 Daily Digest is distributed electronically via the OMRI-L list. 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For Transition subscription information send an e-mail to TRANSITION@OMRI.CZ Copyright (c) 1996 Open Media Research Institute, Inc. All rights reserved. ISSN 1211-1570
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