Life, within doors, has few pleasanter prospects than a neatly arranged and well-provisioned breakfast-table. - Nathaniel Hawthorne
OMRI DAILY DIGEST

No. 66, Part I, 2 April 1996

New OMRI Analytical Briefs:
-  "Central Asian States Sort Out Unions, Treaties, and Independence,"
   by Roger Kangas

Available only via the World Wide Web:
http://www.omri.cz/Publications/Analytical/Index.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^^^^^^^^^^^^^^^^^^^^^^^^^
YELTSIN, LUKASHENKA SIGN INTEGRATION AGREEMENT. In a 2 April ceremony
broadcast live on Russian TV, the Belarusian and Russian presidents
signed a treaty of union that closely binds the two states together by
creating new supranational political institutions. Yeltsin termed the
agreement "highly symbolic" and said it "opens a qualitatively new phase
in relations between Russia and Belarus." With an eye towards his re-
election campaign, he promised that the new union aimed "to do
everything to achieve progress in the social sphere." Lukashenka also
hailed the agreement, which he termed the "highest form of community
within the CIS." Under the agreement, a joint Supreme Council will be
established to direct the activities of the union, and ITAR-TASS
reported that Russian Prime Minister Viktor Chernomyrdin had been
appointed to head its executive committee. (see related story in Central
and Eastern Europe section) -- Scott Parrish
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

RUSSIA

YELTSIN POSTPONES VISIT TO KYIV. Presidential press secretary Sergei
Medvedev announced on 1 April that President Yeltsin had postponed his
scheduled 4-5 April visit to the Ukrainian capital, Russian and Western
agencies reported. Medvedev blamed the decision on continued
disagreement with Ukraine about the terms under which the Black Sea
Fleet will lease port facilities in Sevastopol. Yeltsin could not "sign
agreements which, in his view, do not fully correspond with Russian
interests," added Medvedev. Russia wants Sevastopol to be an exclusively
Russian base, while Ukraine insists on joint use of it. NTV linked
Yeltsin's decision not to go to Kyiv with his election campaign, saying
that the president could not afford to appear to have "lost" Sevastopol
by signing a lease agreement on Ukrainian terms. The visit has been
postponed six times in the past 18 months. (see related story in Central
and Eastern Europe section) -- Scott Parrish

CHECHEN REACTION TO YELTSIN'S PEACE PLAN. At a 1 April session of the
Chechen government, Chechen Prime Minister Doku Zavgaev termed Russian
President Boris Yeltsin's peace plan "a great victory for all peace-
loving forces" and said that it fully corresponds to his government's
proposals, Radio Rossii reported. Chechen President Dzhokhar Dudaev has
not yet formally commented on the peace plan, although several of his
military commanders have expressed skepticism at its viability. Russian
Prime Minister Viktor Chernomyrdin, named by Yeltsin to head a state
commission to monitor compliance with the peace plan, told Russian
Public TV (ORT) on 1 April that considerable responsibility for its
implementation would devolve to the Chechen authorities. Russian Finance
Minister Vladimir Panskov said the commission would endeavor to preclude
further instances of embezzlement of funds allocated for reconstruction
in Chechnya; some 90 billion rubles ($18.8 million) went missing in
November 1995 alone. -- Liz Fuller

DUMA CONSIDERS CHECHEN AMNESTY. An amnesty for the Chechen fighters is a
key element of President Yeltsin's peace plan, his adviser Emil Pain
argued in Rossiiskie vesti on 2 April. Presidential legal adviser
Mikhail Krasnov said that the amnesties could even include rebel Chechen
President Dzhokhar Dudaev. According to the Russian constitution, only
the Duma can issue amnesties. Although some deputies have expressed
qualms about taking responsibility for such a step, Duma Speaker
Gennadii Seleznev did not rule out the possibility of granting Dudaev
amnesty in order "to stop the war" and "for the sake of the lives that
we can save," ITAR-TASS reported on 1 April. -- Robert Orttung

WESTERN POWERS HAIL YELTSIN'S CHECHNYA INITIATIVE. Western government,
including the U.S. and Germany, endorsed President Yeltsin's latest
initiative to end the Chechen conflict, Russian and Western agencies
reported on 1 April. Anthony Lake, U.S. President Bill Clinton's
national security adviser, "welcomed" Yeltsin's proposal, and called on
the Chechens to "respond in a similar spirit." State Department
spokesman Glyn Davies termed the proposal "a significant opportunity for
peace," and urged both sides to accept OSCE mediation. The endorsements
by the leading Western powers mirror their strong support for Yeltsin's
re-election campaign. Meanwhile, on 2 April OSCE Chairman Flavio Cotti
declared that the OSCE mission in Grozny stands ready to mediate a
settlement. The mission played a significant role in the talks that
produced the ultimately abortive military accord signed by federal and
Chechen negotiators in July 1995. -- Scott Parrish

LIBERALS SUPPORT YAVLINSKII. Prominent pro-reform activists Elena
Bonner, Sergei Kovalev, Yurii Afanasev, Ella Panfilova, and Arkadii
Murashev announced on 1 April that they had formed a committee to
support Yabloko leader Grigorii Yavlinskii in the presidential campaign,
saying he has the best chance of defeating the Communists. The members
of the committee were skeptical about Yeltsin's plan to resolve the
Chechen conflict peacefully because Dudaev had not agreed to it and
because it did not have a mechanism for restraining the activities of
those who supported the war, Radio Rossii reported. The timing of the
committee's formation, coming after Yeltsin's peace plan announcement,
suggests that the president's measures may be too little, too late to
bring together a broad pro-reform coalition before election day. --
Robert Orttung

YELTSIN GAINING ON ZYUGANOV. Yeltsin's popularity rose from 15% to 18%
during the last two weeks, but Zyuganov remains ahead with a stable 25%,
according to the latest VTsIOM figures, NTV reported 31 March. In third
place, Lebed improved his showing from 8 to 10 percent. Yavlinskii and
Vladimir Zhirinovsky each have 9%, while eye surgeon Svyatoslav Fedorov
has 7%. -- Robert Orttung

LESS THAN A THIRD OF RUSSIANS SUPPORT DECISION TO RESTORE SOVIET UNION.
Russians remain divided over the fate of the former Soviet Union. Less
than one third of Russians support the Duma's 15 March denunciation of
the treaty that formally disbanded the USSR. About 40% reject it,
believing that the Duma's action will only cause a deterioration in
relations with Russia's neighbors, according to VTsIOM figures reported
by Radio Rossii. Also, 46% believe that the restoration of the Soviet
Union is not realistic and only detracts attention from other problems,
14% believe it is a high priority task, and almost a quarter feel it
deserves some attention. -- Robert Orttung

CHINESE PARLIAMENTARY CHAIRMAN IN MOSCOW. In Russia for a six-day
official visit, Qiao Shi, the chairman of the Chinese National People's
Congress Standing Committee, met with Russian President Boris Yeltsin
and Prime Minister Viktor Chernomyrdin on 1 April, international media
reported. At their Kremlin meeting, Yeltsin told Shi that China is a
"priority" for Russian foreign policy, and confirmed that he will visit
Beijing on 24-26 April. The Chinese Xinhua news agency reported that
Yeltsin reiterated Moscow's position that Taiwan is an inalienable part
of China, while Shi said China views the Chechen conflict as Russia's
"internal affair." Shi later met with Chernomyrdin, who said that Shi's
visit would give a "new impulse" to the development of bilateral ties.
Shi will also visit St. Petersburg before departing Russia. -- Scott
Parrish

ITAR-TASS JOKE STORY CAUSES STIR IN EAST EUROPE. The official ITAR-TASS
news agency caused a stir on April Fool's Day by running a joke item
reporting that the State Duma was considering a resolution that would
restore the Warsaw Pact. The item, a spoof of the recent Duma resolution
denouncing the formation of the CIS, claimed the Duma resolution was a
"secret weapon" intended to block the eastward expansion of NATO.
Several news agencies mistakenly regarded the item as authentic, and
Czech media even reported the story as "a sensation of international
proportions." ITAR-TASS later issued a retraction, chiding these
agencies for lacking a sense of humor. It did, however, cite Czech
Foreign Ministry spokesman Karel Boruvka, who said that jokes about
restoring the Warsaw Pact could "give the shivers" to anyone who forgot
that it was April Fool's Day. -- Scott Parrish

CIS JOINT AIR PATROLS BEGIN. The integration of the CIS United Air
Defense System took another step forward on 1 April when Russian and
Belarusian air defense forces went on joint duty, ITAR-TASS reported.
Last week, the deputy chairman of the CIS Air Defense Coordinating
Committee said that joint patrols with Kazakhstani air defense troops
would start on 1 May, and those with Georgia would begin the following
month. All CIS countries except Moldova and Azerbaijan have indicated
they will become part of the united system, although the nature of
Ukraine's participation remains unclear. -- Doug Clarke

COLD WELCOME FOR REFUGEES. Moscow Mayor Yurii Luzhkov has issued an
order forbidding the registration of refugees in Moscow unless they can
move in with relatives who have a resident permit for the city.
Moskovskii komsomolets reported on 27 March. Presumably this rule
applies to forced migrants from within the Russian Federation as well as
refugees from other countries. Similarly, the authorities in Kabardino-
Balkariya announced on 29 March that they will no longer accept refugees
from Chechnya due to a lack of funds, ITAR-TASS reported. Of the 10,600
refugees currently registered in the republic, only 3,600 have been
officially re-registered and provided with temporary housing in holiday
homes and the like. The remainder must fend for themselves. -- Peter
Rutland

CALL FOR DECENTRALIZATION OF SOCIAL POLICY. A conference on the concept
of "State social orders" convened in Moscow on 29 March under the
sponsorship of the Moscow City Duma, ITAR-TASS reported. Participants
discussed the idea of "contracting out" the provision of services for
alcoholics, refugees, and the homeless to voluntary organizations on a
competitive basis. The deputy chairman of the State Duma Committee on
Social and Religious Organizations, Valerii Bortsov, said that "social
policy should not be a centralized monster." -- Peter Rutland

RUSSIA INTERRUPTS OIL EXPORTS VIA DRUZHBA PIPELINE. Russia halted its
oil exports on 29 March to Hungary, Slovakia, and the Czech Republic via
the Druzhba pipeline across Ukraine, ITAR-TASS reported. The stoppage
was initiated by the three countries, who argued that they satisfied
their requirements in Russian oil and are also receiving oil from other
suppliers. Hungary is now getting oil via Croatia's Adria pipeline,
while the Czech Republic is using Germany's Ingolstadt-Litvinov
pipeline. On 29 March, Russia reportedly agreed to levy the higher
transit fee of $5.2 per ton of oil which Ukraine unilaterally introduced
for its section of the pipeline on 1 January, RFE/RL reported on 2
April. -- Natalia Gurushina

RUSSIA WILL NOT INTRODUCE IMPORT QUOTAS FOR ALCOHOL. The State Customs
Committee announced that it will not impose restrictions on issuing
excise stamps on imported alcohol, ITAR-TASS reported on 1 April. The
introduction of licensing stamps and import quotas, which were to have
been auctioned through commodity exchanges, were part of a package of
proposals approved by the government in late January. The IMF, EU, and
WTO had objected to the measures. -- Natalia Gurushina

CENTRAL BANK TO CUT GKO YIELDS. Central Bank Chairman Sergei Dubinin
said that the bank intends to cut yields on short-term state treasury
bills (GKO), Segodnya reported on 30 March. At present, GKO is the most
profitable financial instrument on Russia's stock market, and Dubinin
noted that the minimum-risk securities should not have the highest
yields. GKO yields surged by 27% to 121% on 26 March. The Finance
Ministry has also decided to cut the six-month GKO issue scheduled for 3
April by 2.5 trillion rubles ($500 million) to 6 trillion rubles, and to
reduce the share available to foreign buyers from 50% to 30%. -- Natalia
Gurushina

NUMBER OF JOINT VENTURES ON INCREASE. The number of joint ventures with
foreign companies and foreign firms operating in Russia reached 14,600
in 1995, a 31% increase over the previous year, Western agencies
reported on 30 March, citing the State Statistical Committee. Of that
number, 2,611 joint ventures were set up by U.S. companies and 1,971 by
German firms. Companies from China and Ukraine founded 1,376 and 1,341
joint ventures, respectively. In 1995, joint ventures' industrial output
totaled 44 trillion rubles ($9.7 billion), of which goods worth $5.8
billion--mostly fuel--were exported. Joint ventures accounted for 7% of
Russia's total exports and 6% of total imports. -- Natalia Gurushina

TRANSCAUCASIA AND CENTRAL ASIA

NO PROGRESS (YET AGAIN) IN OSCE KARABAKH TALKS. The OSCE-mediated talks
on the Nagorno-Karabakh conflict held in Moscow from 25-30 March again
failed to make any progress, primarily because new proposals to resolve
the conflict tabled in March by the OSCE, Russia, and the U.S. were
rejected, Turan and RFE/RL reported. No date has been set for the next
round of talks. Russia and Finland intend to convene a special meeting
with the leaders of Armenia, Azerbaijan, and the self-proclaimed
Republic of Nagorno-Karabakh to convey to them the OSCE's
dissatisfaction with their unwillingness to compromise. -- Liz Fuller

RUSSIAN-GEORGIAN MILITARY AGREEMENTS. Defense officials from Russia and
Georgia signed 12 agreements on military cooperation in Tbilisi on 1
April and expected to sign another eight the following day, ITAR-TASS
reported. Russian Defense Minister Pavel Grachev said the agreements on
bilateral cooperation in training, cooperation between the air forces
and navies of the two countries, and on the transfer of Russian arms to
Georgia are of special importance. He said two countries are cooperating
in "the spirit of friendship and mutual understanding." -- Doug Clarke

GRACHEV: GEORGIA ENTITLED TO SOME BLACK SEA FLEET WARSHIPS. Following
his 1 April meeting with Georgian President Eduard Shevardnadze, Russian
Defense Minister Pavel Grachev said that Georgia is entitled to "at
least a few ships of the former Soviet Black Sea Fleet as its own."
ITAR-TASS quoted him as saying the matter would be discussed in detail
at a later date. He noted that Georgia would need to create the
"required infrastructure, including piers, control systems, and other
vitally important installations." -- Doug Clarke

MANDATORY HEALTH INSURANCE IN KAZAKHSTAN. Kazakhstan has introduced
mandatory health insurance for all its citizens in a bid to solve the
country's health care problems, RFE/RL and ITAR-TASS reported on 1
April. The government created a fund for that purpose that will pay for
90% of all insurance costs. RFE/RL reported that the government plans to
spend more than $300 million on insurance this year. Health care in
Kazakhstan has deteriorated due to a lack of medicine, outdated
equipment, and poorly-paid medical staff. It is not clear how the
government plans to acquire the funds to introduce the new program. --
Bhavna Dave

500 KG OF MARIJUANA SEIZED IN CENTRAL KAZAKHSTAN. Kazakhstani police
seized 500 kg of marijuana from the apartment of a resident of Karaganda
in Central Kazakhstan, ITAR-TASS reported on 31 March. Police are
looking for other members of the drug ring, which is involved in
shipping marijuana from the Chu valley in southern Kazakhstan to other
countries. About 140,000 hectares of land in the Chu valley is used for
marijuana cultivation, capable of producing an estimated 5,000 metric
tons of hashish. The authorities seized only 5 metric tons last year. --
Bhavna Dave

PRICE INCREASES IN UZBEKISTAN. Uzbek President Islam Karimov ordered
that prices for various goods and services be increased to better
reflect their current worth, RFE/RL reported on 1 April. For example,
public transport rates increased 50%, housing and rent payments by 80-
100%, and the prices for bread and milk increased by 40% and 30%,
respectively. To compensate for the price hikes, wages and pensions have
also increased in Uzbekistan, with the minimum wage increasing from 250
sum ($6.79) to 400 sum a month, and retirement pensions to 900 sum a
month (see OMRI Economic Digest, 28 March 1996). The government insists
that such centralized control over wages and prices is necessary during
this "transition period" in order to prevent hyperinflation and economic
collapse. -- Roger Kangas

KYRGYZSTAN REORGANIZES LOCAL ADMINISTRATIONS. Kyrgyz President Askar
Akayev has ordered a reorganization of the country's local
administration in order to fulfill his promise that 1996 will be the
turning point in the Kyrgyz economy, Radio Mayak reported on 31 March.
Under the decree, oblast akims will be renamed oblast governors and
given new rights and responsibilities. Tulebek Muraliev, the head of the
president's department for local organs of government, said the
governors will be responsible for implementing reform programs and for
taking an inventory of the social infrastructure of villages and cities
in order to facilitate a management take over by local organizations.
Muraliev said the plumbing system would be an example of duties that
would fall under the responsibility of local leaders. The reorganization
is essential for further privatization, but it also arguably provides
ready scapegoats should reforms prove ineffective. -- Bruce Pannier

[As of 1200 CET]

Compiled by Victor Gomez

The OMRI Daily Digest offers the latest news from the former Soviet
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              Copyright (c) 1996 Open Media Research Institute, Inc.
                       All rights reserved. ISSN 1211-1570


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