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OMRI Daily Digest 17 May 1996, Part I.

No. 96 Part I, 17 May 1996

The OMRI Daily Digest is published by the Open Media Research Institute, a nonprofit, public service research organization funded by the Open Society Institute, independent grants, and contracts with broadcasting organizations.

CIS SUMMIT IN MOSCOW. The presidents of Russia, Kazakhstan, Kyrgyzstan, and Belarus met on 16 May and signed an integration agreement that covers 35 points, including tariff regulation, the unification of foreign currency control, and statistical accounting, RFE/RL and ITAR-TASS reported. On 17 May, the four presidents met with the other CIS leaders to discuss the 1996-1997 integration measures, and declare their "support of the democratic process in Russia," a veiled show of support for President Yeltsin. Their agenda also included an extension of the CIS peacekeeping mandate in Abkhazia, which was decided at the CIS foreign ministers meeting on 16 May. -- Roger Kangas

YELTSIN DECREES GRADUAL ABOLITION OF CONSCRIPTION. In a dizzying policy reversal, President Yeltsin on 16 May issued a decree ordering the gradual transformation of the Russian military into an all-volunteer force, Russian media reported. The decree calls for conscription to end by the spring of 2000, and orders the government to develop plans--including changes in the 1997 budget--to attract volunteers to military service. Yeltsin previously supported retaining conscription and had even vetoed efforts by the Duma to reconsider the April 1995 law lengthening the service term from 18 months to two years. In a separate decree, Yeltsin also ordered that only volunteers be sent to combat zones, like Chechnya. Yeltsin's about-face seems designed to help his re-election campaign, although Boris Gromov, a former deputy defense minister who now actively supports Yeltsin's re-election, denied any link with the upcoming election. -- Scott Parrish

YELTSIN MEETS WITH YAVLINSKII AGAIN. After a second meeting with President Boris Yeltsin in less than two weeks, Yabloko leader Grigorii Yavlinskii said he would continue to campaign as an independent candidate, NTV reported on 16 May. Yavlinskii added that Yeltsin supports many of Yabloko's positions, including a wide-ranging personnel shakeup to include Prime Minister Viktor Chernomyrdin, Defense Minister Pavel Grachev, and First Deputy Prime Minister Oleg Soskovets, a reduction in the powers of the presidency, direct negotiations with the Chechen separatists, and major corrections to the course of economic reforms. Presidential spokesman Sergei Medvedev's description of the meeting as reported in ITAR-TASS was vague and did not mention the personnel changes. ITAR-TASS commentator Tamara Zamyatina argued that the Kremlin's negotiations with candidates Yavlinskii, Aleksandr Lebed, and Svyatoslav Fedorov are aimed at gaining their support during the runoff, when they could have a "decisive influence" on the outcome. -- Robert Orttung

FEDOROV OUTLINES PLANS FOR COALITION GOVERNMENT, ECONOMY. Addressing voters in the Kuzbass region (Kemerovo Oblast), presidential candidate Svyatoslav Fedorov said a new government should be formed after the first round of the presidential election and should include communists, socialists, and representatives of the "bourgeois" strata of society, ITAR-TASS reported on 16 May. In a 15 May campaign address on Radio Mayak, monitored by the BBC, Fedorov outlined his plans to reorganize the economy on the model of "private workers' collectives," in which workers would manage their own enterprises. Labor productivity could rise by a factor of 10 under such a system, he argued, and taxes paid to the government by profitable collectives could be spent on the elderly, education, and health care. Because he believes workers should control the output of their own labor, Fedorov described himself as a "real Marxist" in an interview published in Rabochaya tribuna on 17 May. -- Laura Belin

ZYUGANOV, ZHIRINOVSKY ON COALITION GOVERNMENT. Reaction was mixed among the leading candidates to Svyatoslav Fedorov's proposal that President Yeltsin appoint a coalition government of national trust and unity (see OMRI Daily Digest, 16 May 1996). Gennadii Zyuganov said a new cabinet should be appointed by the winner after the election, ITAR-TASS reported on 16 May. In contrast, Vladimir Zhirinovsky suggested that Yeltsin should share power immediately with his rivals, after which all other candidates should withdraw from the upcoming election. Zhirinovsky said his Liberal Democratic Party of Russia would request the "power ministries"--Defense, Interior, and Federal Security Service--and possibly also the Finance Ministry, Reuters and AFP reported. -- Laura Belin

ZYUGANOV CAMPAIGNS ON ENEMY TERRITORY. Communist Party (KPRF) leader Gennadii Zyuganov campaigned in President Yeltsin's home town of Yekaterinburg on 16 May, where he accused the authorities of spreading lies about him and the state of the country, Russian media reported. According to Radio Rossii, Zyuganov said an unsigned document purporting to be the KPRF's secret economic program, published in the 15 May Komskomolskaya pravda, was a "falsification." KPRF member Valentin Varennikov, who was involved in the August 1991 coup and now chairs the Duma's Veterans' Affairs Committee, caused a stir in March when he said the Communists have an unpublished "maximum plan." Zyuganov has consistently refuted Varennikov's statements. -- Laura Belin

TsIK CITES NUMEROUS CAMPAIGN VIOLATIONS. The Central Electoral Commission (TsIK) criticized Pravda, Sovetskaya Rossiya, Pravda Rossiya, and Russkie vedomosti for beginning campaign agitation in support of Communist candidate Gennadii Zyuganov earlier than provided for by law, ITAR-TASS reported 16 May. It also accused the pro-Yeltsin Stavropolskaya pravda of the same offense, and accused the anti-communist Ne dai bog (God Forbid!) of lacking the proper publication information in its masthead. The commission accused Zyuganov and Vladimir Zhirinovsky of using their status as Duma members to gain access to regional air time in Voronezh Oblast and Altai Krai. Mikhail Gorbachev also allegedly received illegal air time in Buryatiya. The TsIK also criticized Moscow Mayor Yurii Luzhkov and St. Petersburg Mayor Anatolii Sobchak for supporting Yeltsin's campaign without resigning their positions. Members of the commission debated whether Yeltsin's numerous recent trips around the country counted as campaign activity without coming to a conclusion. -- Robert Orttung

YELTSIN PROPOSES LIMITING USE OF CAPITAL PUNISHMENT. President Yeltsin issued a decree on 16 May on gradually reducing the use of the death penalty in Russia, international agencies reported. When Russia joined the Council of Europe in February, it obligated itself to abolishing capital punishment within three years, and the council urged Russia to place an immediate moratorium on executions. Citing high crime rates and prison overcrowding, however, Russian officials have said that the country will not give in to foreign pressure on this issue, and Yeltsin's decree falls short of the council's recommendations. It gives the government a month to draft a bill on Russia's adherence to the European Convention on Human Rights. It also recommends that the parliament consider reducing the categories of crimes subject to the death penalty and gives the Interior Ministry three months to submit proposals on ensuring that conditions for prisoners facing execution or serving life sentences meet UN standards. -- Penny Morvant

YELTSIN WINS MOSCOW "PRIMARIES." President Yeltsin won the voting sponsored by the Round Table of Moscow Democratic Parties held on 15-16 May to identify a single candidate from the democratic camp, ITAR-TASS reported 17 May. There were 1,469 participants in the elections which were announced in Moskovskii komsomolets. Yeltsin won 73% of the vote, Yavlinskii 12%, Gorbachev 5.7%, Lebed 4.8%, and Fedorov 4.3%. The results have only symbolic significance since the sample of participants is not representative of Moscow and the December Duma election showed that the preferences of Moscow voters differ from those of voters outside the capital. -- Robert Orttung

YELTSIN MEETS UN SECRETARY-GENERAL. Visiting UN Secretary-General Boutros Boutros Ghali met with President Yeltsin on 16 May to discuss conflict resolution in the CIS and Russia's role in the international organization, Russian and Western agencies reported. Yeltsin emphasized Russia's continuing political and financial support for the UN, and urged the UN not to "underestimate" Russian peacekeeping operations in the CIS. Moscow has sought, unsuccessfully, to gain UN sponsorship of operations like the one in Tajikistan. In a 15 May speech to the Russian Duma, Boutros Ghali praised Russia's "working for peace and security" but omitted any reference to the ongoing Chechen conflict. The warm atmosphere of the visit may reflect an implicit quid pro quo: Yeltsin's wants international support for his re-election, while Boutros Ghali may need Russian backing if he decides to seek a second term as secretary-general. -- Scott Parrish

FREE PRESS, HUMAN RIGHTS CONFERENCES. Participants in the Free Press Congress organized by Russia's Union of Journalists and attended by more than 250 journalists declared that attacks on press freedoms are continuing in Russia and they may result in the introduction of new censorship regulations, ITAR-TASS reported on 16 May. They claim that certain forces within the country's power structure are trying to prevent the development of politically free and financially independent media. In another conference in Moscow to mark the 20th anniversary of the Moscow Helsinki Group, activists voiced concern about unlawful, undemocratic trends in Russian government policies, the BBC reported, citing a 14 May Interfax report. They also criticized the war in Chechnya, the remilitarization of the country, government pressure on the media, "a secrecy mania" among government bodies, the radical expansion of police powers, the failure to carry out judicial reform, and the state of prisons. Radio Rossii contended on 16 May that all of these points have been addressed in President Yeltsin's pre-election platform. -- Anna Paretskaya and Penny Morvant

COMPENSATION FOR INVESTORS. President Yeltsin signed a decree on 17 May authorizing the payment of compensation to depositors who are more than 80 years old and lost their savings in the 1991-92 inflation, ITAR-TASS reported. The pensioners will be compensated on a sliding scale up to 1,000 times their initial deposit, with a maximum payment of 1 million rubles ($200). A new Federal Social State Fund for the Defense of Depositors and Shareholders was formed at the beginning of May, Izvestiya reported on 15 May. It is headed by Dmitrii Vasilev, the head of the Federal Securities Commission, and includes representatives from the State Privatization Committee, the Russian Federal Property Fund, and three public associations representing defrauded investors. At the government meeting on 16 May, Prime Minister Viktor Chernomyrdin castigated Vasilev's commission for failing to stop fraudulent operations, Russian Public TV (ORT) reported. Chernomyrdin said that 70% of the financial companies currently in operation lack licenses. The IMF has given $31 million to be used to compensate investors. -- Peter Rutland

RUSSIA ADOPTS SLIDING EXCHANGE RATE . . . On 16 May, it was announced that Russia will switch from the "ruble corridor" to a sliding exchange rate, Russian media reported. Each day at 10 a.m., beginning on 17 May, the Central Bank will announce selling and buying rates, based on prevailing market rates and allowing a slow daily devaluation at a pace slightly below domestic inflation. The current corridor of 4,550-5,150 rubles/$1 formally expires on 30 June. The ruble now trades at 4,970/$1: had the corridor continued, the 1 July band would have been 5,000-5,600 rubles and the 31 December band 5,500-6,100 rubles. The introduction of the sliding rate is in effect a continuation of the existing corridor approach rather than a new departure. The government has shown that it can stabilize the value of the ruble despite worrying trends in fiscal policy and the securities market. -- Peter Rutland

. . . AND CURRENT ACCOUNT CONVERTIBILITY. Central Bank head Sergei Dubinin also announced that Russia will move to full current account convertibility, in conformity with Article 8 of the IMF Charter. Presidential aide Aleksandr Livshits said joining Article 8 will attract foreign investors, because otherwise Russia is regarded "as belonging in a second class of states," Russian TV (RTR) reported on 16 May. In fact many countries, such as China, have succeeded in attracting foreign investment without having fully convertible currencies. -- Peter Rutland

FOREIGN TRADE INCREASES IN FIRST QUARTER OF 1996. Russia's trade turnover reached $34.9 billion in the first quarter of 1996, increasing by 10% over the same period last year, ITAR-TASS reported on 16 May. Total exports went up by 12% to $21 billion, while total imports rose by 8% to $14 billion. There was a 29% in Russia's exports to CIS countries (which now stands at $4.5 billion), and a 55% increase in imports ($4.6 billion). Russia's major trade partners in the first quarter of the year were Ukraine (13% of the trade turnover), Germany (9%), Kazakhstan (6%), and the U.S. (6%). -- Natalia Gurushina

GEORGIAN-OSSETIYAN MEMORANDUM ON CONFIDENCE BUILDING SIGNED. On the sidelines of the CIS summit, on 16 May representatives of Russia, Georgia, and North and South Ossetiya signed a memorandum intended to expedite a settlement of the continuing standoff between the Georgian authorities in Tbilisi and the breakaway region of South Ossetiya, Russian and Western media reported. Under the terms of the agreement, which was mediated by Russia and the OSCE, Georgia and South Ossetiya renounce the use or threat of force political and economic pressure against each other. -- Liz Fuller

ANTI-GOVERNMENT DEMONSTRATIONS SPREAD IN TAJIKISTAN. Demonstrations entered their fifth day in the northern city of Khojent on 16 May, with new rallies taking place in the cities of Shakristan and Isfana, Russian and Western media reported. The protesters are demanding more representation for northerners in the regional governments as well as greater economic rights. RFE/RL reported that approximately 300 members of the Presidential Guard has been sent from Dushanbe to Khojent, where an estimated 10,000 people are participating in the demonstration. Meanwhile, fighting continued in the Tavil-Dara region, as opposition forces advanced to the city of Komsomolabad, NTV reported. Russian Defense Minister Pavel Grachev has stressed that Russian peacekeepers will not become involved in the conflict. -- Roger Kangas

OIL, PIPELINE UPDATE. Kazakhstan has decided to resume oil exports to Russia's Yukos-owned refineries in Samara, ITAR-TASS reported on 16 May. The head of Yukos described the agreement as the first step toward his company's expanded role in Kazakhstan's oil sector. Meanwhile, talks are underway in Ankara between the U.S. firm Chevron and Turkish officials, Reuters reported the same day. It appears that Chevron, while indicating it is prepared to discuss all options including the Baku-Ceyhan pipeline, is attempting to persuade Turkey to permit Tengiz oil to pass by tanker through the Turkish Straits. Earlier in the week, company representatives told a pipeline conference in Istanbul that full-stream Tengiz output could add one tanker (with a capacity up to 150,000 metric tons) to daily traffic in the Bosporus. In other news, Mobil Corporation announced that it had paid $1.1 billion for a 25% interest in the Tengiz oil field, AFP reported on 16 May. -- Lowell Bezanis


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