Discovery consists of seeing what everybody has seen and thinking what nobody has thought. - Albert Szent-Gyorgyi
OMRI DAILY DIGEST

No. 121, Part I, 21 June 1996

This is Part I of the Open Media Research Institute's Daily Digest.
Part I is a compilation of news concerning Russia, Transcaucasia and
Central Asia. Part II, covering Central, Eastern, and Southeastern
Europe is distributed simultaneously as a second document. Back issues
of the Daily Digest, and other information about OMRI, are available
through OMRI's WWW pages: http://www.omri.cz/Index.html

RUSSIA

CENTRAL ELECTORAL COMMITTEE PUBLISHES FINAL RESULTS. The final results
of the 16 June voting were published on 20 June, Reuters reported.

Registered voters 108,494,533
Total valid ballots 74,514,804
Total invalid ballots 1,072,119
Turnout 69.8%

                                % of votes / # of votes
Boris Yeltsin                  35.28     26,664,890
Gennadii Zyuganov              32.04     24,211,790
Aleksandr Lebed                14.52     10,974,597
Grigorii Yavlinskii             7.34      5,550,710
Vladimir Zhirinovsky            5.70      4,311,469
Svyatoslav Fedorov              0.92        699,166
Mikhail Gorbachev               0.51        386,069
Martin Shakkum                  0.37        277,058
Yurii Vlasov                    0.20        151,281
Vladimir Bryntsalov             0.16        123,065
Against all candidates          2.96      1,163,682
-- Robert Orttung

COMMUNIST REACTION TO YELTSIN FIRINGS. Communist leader Gennadii
Zyuganov on 20 June charged that the arrest of President Yeltsin's two
campaign aides was an attempt to stop the second round of the election
from taking place, NTV reported. Zyuganov also complained that the
firings of Oleg Soskovets, Mikhail Barsukov, and Aleksandr Korzhakov
represented "the decapitation of the power structures." Duma Speaker
Gennadii Seleznev said that Korzhakov and Barsukov were fired because
they "encroached on the holy of holies--the secret financing of the
Yeltsin campaign," ITAR-TASS reported on 20 June. Duma Defense Committee
Chairman Viktor Ilyukhin argued that the firings were the result of a
battle between "mutually exclusive" factions within the president's
inner circle. The Communist faction of the Duma also announced that it
will demand a detailed report on the events during the night 19-20 June
and the reasons for the removal of the three figures. -- Robert Orttung

CHUBAIS EXPLAINS RECENT EVENTS. Yeltsin campaign adviser Anatolii
Chubais said that Korzhakov, Barsukov, and Soskovets decided to arrest
Yeltsin campaign aides Sergei Lisovskii and Arkadii Yevstafev because
they believed that they were about to lose their own jobs, NTV reported
on 20 June. The arrests of the two aides was merely the first step in a
plan to discredit Yeltsin's entire campaign headquarters, Chubais
claimed. Chubais described the events as the conclusion of a power
struggle in the Yeltsin camp between a group that wanted to take power
by force and a group that wanted to win the election legitimately, ITAR-
TASS reported. He praised the efforts of Lebed in blocking the actions
of the hardliners. -- Robert Orttung

YEVSTAFEV, LISOVSKII DESCRIBE ARREST. "I was arrested at 5 p.m. at the
White House by men claiming to represent the president's Security
Service," Yevstafev told NTV on 20 June. The men held him until 3 a.m.
without explanation and asked numerous questions about the election.
Lisovskii said that the box of money allegedly found in his possession
was planted, Reuters reported on 20 June. He said that he and Yevstafev
had been collecting documents and surveys to prepare for the second
round. Lisovskii noted that his interrogators were particularly
interested in getting information about the role of Anatolii Chubais. --
Robert Orttung

KORZHAKOV PLEDGES LOYALTY TO YELTSIN. The former head of Presidential
Security Service (SBP), Aleksandr Korzhakov, said on 20 June that he
will remain in President Yeltsin's team and "will make every effort to
ensure Yeltsin's victory," Russian and Western media reported. Korzhakov
blasted Chubais for his critical comments on 20 June, describing him as
a "nightmare for Russia." Yeltsin had recently made Korzhakov a minister
and "first adviser," and granted broad new powers to the SBP (see OMRI
Daily Digest, 23 May 1996). Like Korzhakov, ex-FSB Director Mikhail
Barsukov began his career in the 9th KGB Directorate and allegedly was
Yeltsin's trusted adviser and drinking buddy. According to Izvestiya,
Barsukov's son is married to Korzhakov's daughter, and Korzhakov
reportedly helped his in-law obtain the position of counterintelligence
chief. -- Constantine Dmitriev

LEBED PRESENTED TO SECURITY COUNCIL. Shortly before firing Korzhakov,
Barsukov, and Soskovets, on 20 June President Yeltsin introduced newly-
appointed Security Council Secretary Aleksandr Lebed at a Kremlin
meeting of the council, Russian media reported. The council, including
former Federal Security Service chief Mikhail Barsukov, unanimously
endorsed Lebed's appointment. ITAR-TASS reported that Yeltsin charged
Lebed "personally" with strengthening the security of society and the
individual, as well as insuring political stability. During the meeting,
Yeltsin criticized the government for failing to prevent energy
companies from cutting off supplies to essential military installations,
and blasted the security ministries for "criminal mismanagement" of
budget funds, saying that the Defense Ministry had squandered more than
300 billion rubles ($60 million). After the meeting, Lebed said Yeltsin
had given him "carte-blanche" to reform the council. -- Scott Parrish

LEBED SAYS YELTSIN FIRED COUP PLOTTERS. Lebed was greeted "like a
national hero" by a crowd that gathered to hear him at a press
conference following the Security Council meeting, NTV reported. Lebed
declared that Yeltsin had personally decided to fire Barsukov,
Korzhakov, and Soskovets after the session. While Yeltsin did not
publicly link the sackings with the 19-20 June incident involving the
arrest of two Yeltsin campaign staffers, Lebed did. He said an "attempt
to pressure the president had been organized," and suggested that the
plotters had tried but failed to attract the support of the armed
forces. "A certain number of stupid people involved in it will be
dismissed," he added. Some observers have suggested that Yeltsin's
campaign staff are deliberately exaggerating the danger presented by the
recent incident in order to convince voters that Yeltsin and Lebed saved
the country from a major crisis. -- Scott Parrish

NEW RESPONSIBILITIES FOR LOBOV. Oleg Lobov will take over the industrial
policy portfolio previously held by sacked First Deputy Prime Minister
Oleg Soskovets, Russian and Western agencies reported on 20 June.
Soskovets was in charge of the Energy, Transport, Construction, Health,
and Nuclear Power ministries, among others. He also supervised various
state committees, including those on the defense industry and
metallurgy, and chaired the powerful Committee on Operational Questions.
Lobov was given the post of first deputy prime minister on 18 June after
losing the post of Security Council secretary to make way for Lebed. He
is still Yeltsin's special representative in Chechnya but said he will
soon relinquish that job. Lobov briefly held the posts of first deputy
prime minister and economics minister in 1993; at the time, he called
for increased state regulation of the economy and a slowdown in
privatization. -- Penny Morvant

ACTING SECURITY CHIEF NAMED. Following the abrupt dismissal of Barsukov,
President Yeltsin on 20 June named a deputy director of the Federal
Security Service (FSB), Nikolai Kovalev, as its new acting chief, ITAR-
TASS reported. Born in 1949, Kovalev has worked in state security since
1974. He served for two years in Afghanistan and worked in the Moscow
and Moscow Oblast branches of the FSB before being made deputy director
with responsibility for economic counterintelligence. He was promoted to
the rank of colonel general this May. Barsukov served as FSB head for
less than a year, taking over from Sergei Stepashin last July in the
wake of the Budennovsk hostage crisis. -- Penny Morvant

NEW BODYGUARD CHIEF FOR YELTSIN. To replace Aleksandr Korzhakov,
President Yeltsin signed a decree on 20 June appointing head of the
Federal Protection Service (FSO) Lt. Gen. Yurii Krapivin acting chief of
the Presidential Security Service (SBP), ITAR-TASS reported. It was the
second new title for Krapivin in two days: on 19 June, Yeltsin issued a
decree renaming the Main Protection Administration, which Krapivin had
headed since 1995, the FSO. That change was mandated by the recently
approved law on state protection, which regulates the provision of
bodyguards to senior state officials. According to the law, the FSO and
the SBP are under the command of the president. Their powers include the
right, in relation to their duties, to conduct searches, check identity
papers, make arrests, give orders to other state organs, enter premises
without the owners' consent, ban access to public places, and recruit
and use secret informants. -- Penny Morvant

IS THE CHECHEN PEACE AGREEMENT UNRAVELLING? Chechen Chief of Staff Aslan
Maskhadov on 20 June ordered his forces to refrain from further
hostilities until after the second round of the Russian presidential
election, reiterating a similar statement of 17 June, ITAR-TASS and Ekho
Moskvy reported. Russian Public TV (ORT) quoted the head of the OSCE
mission in Grozny, Tim Guldimann, as implying that the implementation of
the 10 June peace agreement has been stalled. A meeting between Chechen
and Russian military representatives planned for 21 June has been
postponed because agreement could not be reached on a venue for it. Each
side continues to accuse the other of violating the ceasefire agreement.
A Russian armored column is reported to have opened fire on the village
of Alkhan-Yurt on 19 June, and 15 Russian troops were killed in the
ensuing fighting, according to Ekho Moskvy. On 20 June, a Russian
transport helicopter was shot down over the village of Tsentoroi in
southeastern Chechnya, killing one person and injuring seven others, AFP
reported. -- Liz Fuller

CENTRAL BANK MAY REVOKE NEW RESERVE REQUIREMENTS. The Central Bank may
reverse its 10 June decision to increase mandatory reserves for
commercial banks by some 2 trillion rubles ($395 million) (see OMRI
Daily Digest, 11 June 1996), ITAR-TASS reported on 20 June. The bank
took the step to neutralize the inflationary effect of transferring $1
billion of the bank's profits to the federal budget. However, the
increase in reserves has worsened the commercial banks' liquidity
problems, already exacerbated by pre-election deposit withdrawals by
their customers. The Association of Russian Banks and the Central Bank
have agreed to set up a working group to resolve the problem. -- Natalia
Gurushina

FINANCIAL-INDUSTRIAL GROUPS ON INCREASE. The government's Commission on
Operational Questions held a meeting on 19 June to discuss the role of
financial-industrial groups (FPGs) in the economy, Kommersant-Daily
reported. The commission was chaired by First Deputy Prime Minister Oleg
Soskovets, who was dismissed the next day. FPGs are voluntary
conglomerates of legally independent firms: conservative figures in the
government see them as a way of fighting off foreign competition and
replacing the coordinating role formerly played by the central
ministries. There are currently 34 FPGs, uniting 1,457 firms and 49
banks. They account for 10% of GDP, up from 2% a year ago. Despite a
presidential decree and a law regulating FPGs, their status remains
unclear with respect to tax and investment privileges. Their future is
still more uncertain given the removal of Soskovets, their chief
sponsor. -- Peter Rutland

TRANSCAUCASIA AND CENTRAL ASIA

DEMONSTRATION IN BAKU. More than 100 people on 20 June staged a
demonstration in front of the U.S. Embassy in Baku and submitted a
petition to the embassy urging the U.S. Senate not to approve an
amendment passed by the House of Representatives that would provide
humanitarian aid to the mainly ethnic Armenian population of Nagorno-
Karabakh, RFE/RL reported. Under the terms of Amendment 907 to the
Freedom Support Act, the U.S. does not provide aid to Azerbaijan in
retaliation for the ongoing blockade of Armenia. Azerbaijani President
Heidar Aliev lodged a protest with the U.S. ambassador in Baku over the
amendment on 13 June. -- Liz Fuller

GEORGIA ISSUES WARRANT FOR BASAEV'S ARREST. The Tbilisi-based Abkhaz
government in exile has issued a warrant for the arrest of Chechen
military commander Shamil Basaev for his participation in the war in
Abkhazia in 1992-1993, and has requested the assistance of the Russian
Procurator-General's Office in apprehending him, Radio Rossii reported
on 20 June. Earlier this month, the Abkhaz authorities in Sukhumi denied
Georgian media reports that Basaev was vacationing in Abkhazia -- Liz
Fuller

DECLINE IN EMIGRATION FROM KAZAKHSTAN. Kazakhstani First Deputy Labor
Minister Alikhan Baymenov claims that the country's "increasing
political and economic stability" led to a sharp decline in the number
of people emigrating from Kazakhstan in the first quarter of this year,
RFE/RL reported on 21 June. About 309,000 people left Kazakhstan in
1995, compared with 480,000 the previous year. Anatolii Puzhai, the head
of the UN High Commission for Refugees in Kazakhstan, told ITAR-TASS on
20 June that the number of people arriving in Kazakhstan has steadily
increased since 1991. About a third of the 122,000 who came to
Kazakhstan between 1991-94 are ethnic Kazakhs and the remaining Russians
and Ukrainians, Puzhai added. -- Bhavna Dave

IRANIAN RADIO BROADCASTS IN CENTRAL ASIA. Iran's state radio began
broadcasts in the Kazakh language on 19 June, according to Tehran Radio
and IRNA reports on 20 June monitored by AFP. IRNA described the 30-
minute program as "a message of peace and friendship," and said it would
be broadcast daily in Kyrgyzstan and Uzbekistan as well. The Iranian
radio station broadcasts programs in some 20 languages. -- Bhavna Dave

KYRGYZ PRIME MINISTER ON RELATIONS WITH TURKEY. In the wake of a six-day
visit to Turkey, Kyrgyz Prime Minister Apas Jumagulov said Bishkek's
relations with Ankara are set to improve, according to a 19 June
Interfax report monitored by the BBC. He pointed out that "many
agreements" on economic cooperation have been signed but are not
working; for example only $39 million of a $75 million loan extended in
1992 had been used to date. In the wake of Jumagulov's visit, it appears
the remainder of the promised funds will be disbursed for the
development of Kyrgyzstan's hydroelectric sector. -- Lowell Bezanis

MORE FIGHTING IN TAJIKISTAN. Tajik government forces on 19 June launched
an attack on rebel troops near Tajikabad, killing 16 opposition fighters
and wounding eight, according to government sources. Also on 19 June,
eight government soldiers were killed at a checkpoint near the town of
Kijak, 35 km east of Dushanbe, when unidentified gunmen in a KAMAZ truck
opened fire on the checkpoint. Despite this latest violence, Tajik
President Imomali Rakhmonov on 20 June offered to meet with Tajik
opposition leader Said Abdullo Nuri as soon as possible, suggesting
Moscow as a venue. -- Bruce Pannier

[As of 12:00 CET]

Compiled by Victor Gomez

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