Old age is the most unexpected of all the things that happen to a man. - Leon Trotsky
OMRI DAILY DIGEST

No. 136, Part I, 16 July 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

GORE MEETS YELTSIN. U.S. Vice President Al Gore met with Russian
President Boris Yeltsin at the Barvikha sanitarium outside Moscow, one
day later than originally scheduled, Russian and Western agencies
reported on 16 June. Some Western reporters at the meeting--the first
chance for independent observers to see the president first-hand since
26 June--described him as "pale and stiff" but noted that he often looks
that way in public appearances. Gore congratulated Yeltsin on his "great
election victory," to which the Russian president replied, "it's our
common victory." AFP reported that the two leaders would discuss
European security, arms control, and possible plans for a U.S.-Russia
summit meeting. -- Scott Parrish

RUSSIAN MEDIA PLAY DOWN YELTSIN'S HEALTH PROBLEMS. As they did before
the second round of the presidential election, Russian commentators are
playing down the issue of President Yeltsin's health. Presidential press
secretary Sergei Medvedev said there are no grounds for concern after
Yeltsin postponed a meeting with U.S. Vice President Al Gore, RIA
Novosti reported on 15 July. Repeating an oft-heard explanation for
Yeltsin's disappearances, he said the president is merely tired and
needs rest before his inauguration. Komsomolskaya pravda on 16 July was
the only paper to focus on the issue, citing the opinion of two Duma
members as well as Medvedev. Duma Security Committee Chairman Viktor
Ilyukhin, a Communist, said he was alarmed by the president's decision
to take a vacation, but he added that the Communists will not make an
issue out of his health before the inauguration on 9 August. -- Penny
Morvant

CHUBAIS REPLACES YEGOROV AS PRESIDENTIAL CHIEF OF STAFF. President
Yeltsin replaced hardline Chief of Staff Nikolai Yegorov with the
reformer Anatolii Chubais on 15 July, Russian agencies reported. The
move completes the rout of the hardliners within Yeltsin's inner circle
following the election and the ascendance of more liberal figures.
Chubais will also take over the post of first presidential aide,
formerly held by Viktor Ilyushin who is expected to become a deputy
prime minister. Chubais served as the linchpin of Yeltsin's economic
reform program until January when he was sacked as first deputy prime
minister and then played a key role in coordinating Yeltsin's reelection
campaign, particularly the financial aspects. -- Robert Orttung

CHUBAIS TO RESTRUCTURE ADMINISTRATION. Chubais is expected to submit a
plan for restructuring the administration within 12 days. According to
former Chief of Staff Sergei Filatov, Chubais' appointment will
facilitate the amalgamation of the administration, the presidential aide
service, and the Presidential Security Service, which had been separate
until now and had competed with each other for influence, ITAR-TASS
reported. Chubais said that he would not deal with economic issues,
since that is the government's role. Instead, he will focus on "state
building in the broadest possible sense of the phrase." He said that his
staff will include the best workers from the Yeltsin campaign effort. --
Robert Orttung

REACTION TO CHUBAIS APPOINTMENT. Filatov described Chubais' appointment
as "a brilliant move by Boris Yeltsin," ITAR-TASS reported on 15 July.
He said that Chubais would attract people with a "liberal or democratic
orientation" to the Kremlin. Duma member Sergei Shakhrai said Chubais'
appointment as chief of staff--where he will play a key role in
relations between the federal and local governments-- is connected to
Yeltsin's desire to get sympathetic governors elected in the regional
elections set for later this year. The governors also work as members of
the Federation Council, the upper house of the national legislature.
Leftist Duma members Nikolai Ryzhkov and Viktor Ilyukhin denounced the
appointment, noting that Chubais is widely hated for his economic
policies. Chubais is likely to ally himself with Prime Minister Viktor
Chernomyrdin against Security Council Secretary Aleksandr Lebed within
the president's inner circle. -- Robert Orttung

YEGOROV TO KRASNODAR. President Yeltsin appointed Yegorov the governor
of Krasnodar Krai, a position he held from December 1992 to May 1994
when he became nationalities minister, ITAR-TASS reported. Yegorov lost
his position at the top of the administration because Yeltsin did not
win many votes in the south, the region that Yegorov was responsible
for, Moskovskii komsomolets reported on 16 July. A strong backer of the
Chechen campaign, he lost his ministerial position after the Budennovsk
crisis in June 1995, but was able to return to power just six months
later, replacing Filatov. Whether this setback will prevent another
return to high office remains unclear. He will direct Yeltsin's
inauguration ceremonies on 9 August. -- Robert Orttung

COMMUNISTS WILLING TO JOIN GOVERNMENT. . . Speaking to journalists
before the appointment of Chubais was announced, Duma Security Committee
Chairman Viktor Ilyukhin said members of the Communist Party (KPRF)
would be willing to accept any cabinet posts offered to them, ITAR-TASS
and Radio Rossii reported on 15 July. Prime Minister Chernomyrdin has
not yet made any formal proposals to the Communists. Ilyukhin's remarks
suggest a change in KPRF strategy; Duma Legislation Committee Chairman
Anatolii Lukyanov recently claimed that Communists would only accept
cabinet posts if they were given control over economic policy. Ilyukhin
noted that only by joining the government could the Communists decide
whether it is possible to work with it, suggesting that KPRF members may
demonstratively quit the cabinet later. In January 1995, the KPRF
expelled Valentin Kovalev after he left the Duma to take the post of
justice minister, which he still holds. -- Laura Belin

. . . AS YABLOKO CONTINUES TO SET CONDITIONS. Appearing on NTV on 14
July, Grigorii Yavlinskii said he could join Chernomyrdin's government
"if certain fundamental conditions" were met and policy mistakes
corrected. However, Yavlinskii stressed that members of his Yabloko
party could not work in a government that is escalating the war in
Chechnya. Echoing this line, Duma Foreign Affairs Committee Chairman
Vladimir Lukin told ITAR-TASS on 15 July that Yabloko members would not
join the cabinet as "cover" for Chernomyrdin and must be allowed to do
real jobs. Yabloko members have recently touted Duma Budget Committee
Chairman Mikhail Zadornov as a good candidate for the post of finance
minister. -- Laura Belin

GORE SEES CHANCE FOR NEW CHECHEN CEASEFIRE. Russian federal troops on 15
July succeeded in taking the Chechen village of Makhketi, inflicting
serious losses on the Chechen forces, AFP reported quoting Interfax.
During the evening of 15 July, Russian helicopters launched a rocket
attack on the home of acting Chechen President Zelimkhan Yandarbiev's
parents in the village of Stariye Atagi south of Grozny, injuring one
child. On 16 July, Grozny residents congregated outside the government
building to demand an investigation into the killing the previous day of
10 civilians when unidentified armored cars opened fire on three cars,
according to ITAR-TASS. Visiting U.S. Vice President Gore said in Moscow
on 16 July that he thinks there is "a distinct chance" that within a few
days the Russian leadership will revise its Chechen policy and agree to
a new ceasefire, Reuters reported. -- Liz Fuller

RUSSIA, CHINA SIGN BORDER COOPERATION PROTOCOLS. Federal Border Service
Director Andrei Nikolaev began an official visit to Beijing by signing
three cooperation protocols with his counterparts from the Chinese
Ministry of State Security, ITAR-TASS reported on 16 July. The protocols
outline the procedures by which the Chinese and Russian border services
will exchange information, experience, and maintain working contact
under the terms of an August 1995 bilateral agreement on policing the
Russian-Chinese frontier. Nikolaev said the border problem that most
concerns Russia at the moment is illegal immigration from China, which
he attributed to Chinese people overstaying tourist visas. He downplayed
the importance of narcotics and gun smuggling across the border, and
expressed optimism about developing closer cooperation with his Chinese
counterparts. -- Scott Parrish

PAPER: RUSSIA WANTS TO TIGHTEN ABM RESTRICTIONS. Citing leaked State
Department documents, The Washington Times reported on 15 July that
Russia wants to impose new limits on U.S. tactical ballistic missile
defenses, while hoping to use nuclear warheads on its own equivalent
systems. The Russian proposals were reportedly contained in a message
from Russian Foreign Minister Yevgenii Primakov to his U.S. counterpart
Warren Christopher, discussing ongoing talks on clarifying the terms of
the 1972 ABM treaty. The treaty strictly limits strategic but not
tactical missile defenses, and the two sides have been unable to agree
on a mutually acceptable definition of "tactical" systems, as each fears
the other will try to develop ostensibly "tactical" systems that
actually have strategic capability. State Department spokesman Nicholas
Burns refused to confirm the authenticity of the document but said the
U.S. commitment to developing tactical missile defenses remains
unchanged. -- Scott Parrish

COURT SENTENCES TRAFFIC POLICE IN BUDENNOVSK CASE. Five traffic police
officers have been found guilty of negligence for failing to halt the
progress of Shamil Basaev's convoy of Chechen fighters through southern
Russia last June, ITAR-TASS reported on 15 July. The trucks were
eventually stopped near Budennovsk, leading to a bloody hostage-taking
crisis. The officers said the convoy had not passed through their
checkpoint, but their testimony ran counter to eye-witness reports. The
officer in charge of the checkpoint was sentenced to three years'
corrective labor, suspended for two years, and the other four officers
received two-year sentences. The five were also suspected of taking
bribes, but those charges were dropped for lack of evidence. -- Penny
Morvant

ENERGY CRISIS IN PRIMORE CONTINUES. A severe energy crisis in Primorskii
Krai in Russia's Far East has again left many homes and enterprises
without electricity for long periods. Severe power cuts were experienced
from 10 to 12 July, and after improving over the weekend, the situation
again deteriorated on 15 July. ITAR-TASS on 16 July said the area's most
powerful electric power station was producing only 30 MW of power in
comparison with its usual output of 1,400 MW. Some hospitals were cut
off for several hours. In an attempt to alleviate the situation, on 12
July the local coal company Primorskugol suspended a ban on shipments of
coal to the power company Dalenergo, but other coal mines were still
refusing to make deliveries until Dalenergo paid its debts. Dalenergo
owes Primorskugol alone 400 billion rubles ($78 million). -- Penny
Morvant

RUSSIAN ECONOMY CONTINUES TO STRUGGLE. Most Russian macroeconomic
indicators showed no improvement in the first half of 1996, Reuters
reported on 15 July, citing the State Statistical Committee. GDP fell by
5% over the same period in 1995. In June, GDP declined by 9% relative to
the same month a year before, following a 7% drop in May. Some experts
cite holidays in May and the economic standstill on the eve of the
presidential election as the main reasons for the decline. They also say
that the official data are likely to underestimate the private sector's
growth. Others, however, argue that the economic decline is a result of
the government's tight monetary policy, which brought annual inflation
to June 1996 down to 50.2%. -- Natalia Gurushina

U.S.-RUSSIAN COOPERATION IN ENERGY SECTOR. The Gore-Chernomyrdin
Commission's Energy Policy Committee has announced that major U.S.
financial organizations are willing to provide Russia with an $8 billion
credit to develop the fuel and energy sector, ITAR-TASS reported on 15
July. The U.S. side hailed Russia's work on the production-sharing law,
the absence of which was a major obstacle to U.S. investment in the
sector. At the same time, U.S. officials noted that the opening of a
U.S. credit line to Russia is being held up by flaws in accounting,
taxation, and business legislation. Russian Fuel and Energy Minister
Yurii Shafranik said that by the year 2000 Russian fuel and energy
companies will receive some $12 billion worth of U.S. investment. In
order to encourage investment in Russia, the Gore-Chernomyrdin
Commission will continue its work on creating a special working group at
the New York Stock Exchange. -- Natalia Gurushina

TRANSCAUCASIA AND CENTRAL ASIA

GOVERNMENT FORCES NOT TOTALLY IN CONTROL OF CENTRAL TAJIKISTAN. Despite
the Tajik government's claim that it has retaken the Tavil-Dara region,
a representative of the United Tajik Opposition (UTO) said planes
continue to bomb the region, according to Reuters. Ali Akbar
Turajonzoda, speaking from Ashgabat, Turkmenistan, said government
planes are attacking the area almost every day but that the opposition
still occupies the town of Tavil-Dara, which he said has been almost
completely destroyed by the attacks. The UTO representative accused the
government of using the latest round of peace talks in Turkmenistan as a
screen for launching new assaults in central Tajikistan. He added that
government forces have lost 700 soldiers in the attacks and 513 more
have been taken prisoner. -- Bruce Pannier

UIGHUR ORGANIZATION IN KAZAKHSTAN REPORTS CLASHES IN CHINA. The United
Nationalist Revolutionary Front (UNRF), a separatist movement of the
Muslim Uighur minority in China, reported that 450 Chinese soldiers and
militiamen have been killed in the Chinese province of Xinjiang since
April, AFP reported on 15 July. The UNRF claims that on 4 July, the day
Chinese President Jiang Zemin was in Kazakhstan, a member of the
movement killed 20 Chinese border guards in the Kundjerbad Pass. AFP has
reported that a wave of arrests occurred in Xinjiang following the
signing of border treaties between China, Russia, Kazakhstan,
Kyrgyzstan, and Tajikistan in April. -- Bruce Pannier

[As of 12:00 CET]

Compiled by Victor Gomez

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