Absence makes the heart grow fonder. -
OMRI DAILY DIGEST

No. 149, Part I, 2 August 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

YELTSIN FILLS OUT ADMINISTRATION. President Boris Yeltsin appointed
Yevgenii Savostyanov, Maksim Boiko, and Aleksei Kudrin as deputies
to Chief of Staff Anatolii Chubais on 1 August, at Chubais'
recommendation, ITAR-TASS reported. Savostyanov, who will be in
charge of personnel, was a democratic activist who was appointed to
head the Moscow office of the KGB (and its successor organizations)
from 1991 to 1994. Yeltsin fired Savostyanov after the clash
between the presidential security service and Most Bank guards in
December 1994. Boiko will coordinate the administration's ties with
political parties and social groups. Kudrin, former first deputy to
former St. Petersburg Mayor Anatolii Sobchak covering economic
issues, will head the president's oversight department, following
socio-economic developments in the regions. -- Robert Orttung

KREMLIN PREPARES STRATEGY FOR REGIONAL ELECTIONS. The presidential
administration has started developing strategies to try to prevent
the Communists winning the forthcoming gubernatorial elections. The
31 July edition of Nezavisimaya gazeta published a document
prepared by Kremlin analysts which outlines the main directions for
the regional campaign. It suggests that the president should keep
his personal involvement in the campaign to a minimum, and should
avoid clashes with incumbent governors prior to the elections. The
document also proposes making a careful selection of incumbent
governors to be supported for reelection while trying to eliminate
the influence of various Kremlin clans on this selection. Since
Yeltsin has no party of his own, the document says, he should run
his campiagn out of the Our Home Is Russia's regional branches. --
Anna Paretskaya

STUDY ANALYSES RUSSIANS' FEELINGS ABOUT DEMOCRACY. Russians
consider freedom of the press and free elections of their
leadership as the most important kinds of freedom, winning 18% each
in a poll of 1509 voters conducted at the end of May by the Central
Electoral Commission, Nezavisimaya gazeta reported on 1 August.
Regarding the form of government Russia should have, 48% support
the current presidential republic, while 11% prefer a parliamentary
democracy and 21% want a republic of soviets. 59% support using
free elections to elect their leaders, while 5% prefer that they be
named from above. 22% would prefer a mixed system of elections and
appointments. 68% believe that elections can change the situation
for the better. Only 20% consider themselves members of political
parties, and 56% of these are communists. -- Robert Orttung

TALKS ON BLACK SEA FLEET MAKE NO PROGRESS. Ukrainian Foreign
Minister Hennadii Udovenko met in Moscow on 1 August with his
Russian counterpart Yevgenii Primakov, Security Council Secretary
Aleksandr Lebed, and presidential foreign policy aide Dmitrii
Ryurikov, Russian and Western agencies reported. Ryurikov told
ITAR-TASS that no progress had been made yet on resolving the issue
of the Black Sea Fleet, which continues to block the signing of a
long-delayed bilateral friendship treaty. -- Scott Parrish

OFFICIAL NEWSPAPER TERMS ALLEGATIONS OF CIA PLOT PLAUSIBLE. The
official newspaper of the Presidential Administration, Rossiiskie
vesti, published an article on 31 July contending that recent
allegations by Duma Security Committee Chairman Viktor Ilyukhin of
a CIA plot to overthrow Belarusian President Alyaksandr Lukashenka
are "plausible." Although other government officials and most
Moscow media ridiculed Ilyukhin's allegations, the paper asserted
that while they were unverifiable, his charges "fit entirely" with
current plans to expand NATO eastward and isolate Russia with a
"cordon sanitaire." It also argued that the allegations were
consistent with what it termed an American policy aimed at
minimizing Russian influence in the other former Soviet republics.
Meanwhile, Nezavisimaya gazeta, which had earlier lent credence to
Ilyukin's charges, on 2 August published two additional articles
suggesting that the allegations have some substance. -- Scott
Parrish

RUSSIA SKIPS PFP EXERCISE DUE TO LACK OF FUNDS. Russia will not
send even a single observer to an upcoming 12-30 August Partnership
for Peace (PfP) exercise at Camp Lejeune, North Carolina, Izvestiya
reported on 1 August. Defense Ministry officials said that as they
have no budget funds for PfP operations, so cannot afford to
participate. Russia did take part in PfP maneuvers near Lviv,
Ukraine, this June, but only because the United States paid some
$40,000 to cover the transportation costs of the Russian
participants. The Defense Ministry blames the Finance Ministry for
the situation, saying that although President Yeltsin has ordered
the release of funds for PfP exercises, the Finance Ministry has
failed to disburse them. -- Scott Parrish

KOVALEV CLAIMS CHECHENS PREPARING DUDAEV DOUBLE. Russian counter-
intelligence director Nikolai Kovalev on 1 August attributed rumors
that Chechen president Dzhokhar Dudaev is still alive and will
return to Chechnya on 2 August to plans by his supporters to
produce a double, Russian media reported. Kovalev, speaking at a
press conference in Moscow , also claimed that a group of Chechen
fighters led by field commander Ruslan Khaikharoev are planning
terrorist acts in the Russian Federation in order to draw Dagestan
and North Ossetiya into the conflict. Chechen Security Council
secretary Ruslan Tsakaev stated that reports of an attempt on 29
July to kill chief of staff Aslan Maskhadov were untrue and had
been circulated to bolster Maskhadov's standing in advance of his
planned meeting with the commander of the North Caucasus Military
District, Lt.-Gen. Anatolii Kvashnin, according to ITAR-TASS. --
Liz Fuller

COURT SENTENCES BUS HIJACKERS; MAN DETAINED IN LISTEV CASE. The
Stavropol Krai court on 1 August convicted three Chechens in
connection with the hijacking of a bus near Mineralnye Vody in May
1994, ITAR-TASS reported. Four men stormed the bus, demanding $10
million, drugs, arms, and a helicopter in exchange for freeing the
hostages on board. The hijackers' demands were met, but three of
the men were arrested when the helicopter landed in Chechnya; they
were each sentenced to 15 years imprisonment last year. The fourth,
captured later, has now also received a 15-year term. The other two
men convicted yesterday were sentenced to 12 years for supplying
weapons to the gang. Also on 1 August, the Georgian security
minister confirmed that a man has been detained on suspicion of
organizing the murder of TV star Vladislav Listev on 1 March 1995.
-- Penny Morvant

IZVESTIYA MAKES NEW CORRUPTION ALLEGATIONS. In the latest of a
spate of articles on corruption, Izvestiya on 1 August accused the
Russian coal association Rosugol of squandering 1.2 billion rubles
($235,000) on a fund to support the poor and the unemployed. The
fund, located on Rosugol premises, received money from the
association for scientific research projects. It then contracted
out the work to false companies, which the tax police found to be
registered to people who had at some point lost their passports and
had no idea of the firms' existence. The money disappeared. Rosugol
President Yurii Malyshev denied any wrongdoing, Radio Rossii
reported. -- Penny Morvant

LACK OF ALTERNATIVE MILITARY SERVICE LAMENTED. In an interview with
Trud on 1 August, Institute of Religious Rights Director Anatolii
Pchelintsev commented on the failure to resolve the question of
alternative military service--something that is guaranteed by the
constitution but for which there is no legal mechanism. He argues
that the current situation means that many draftees end up
performing no service, since many courts, particularly in Moscow
and St. Petersburg, show understanding toward conscientious
objectors. In the spring the Duma Defense Committee recommended
against an alternative service bill prepared by liberal deputies.
He then criticized a new draft prepared by the Communists that
envisages a four-year term of service to be performed on Defense
Ministry construction sites rather than in hospitals or other
social services. The total number of conscientious objectors in
1995 exceeded 23,000. -- Penny Morvant

NAZDRATENKO THREATENS FOREIGN RELIGIOUS GROUPS... Primorskii Krai
Governor Yevgenii Nazdratenko threatened on 1 August to banish
members of Sun Myung Moon's Unification Church and various other
religious groups active in the region, Reuters reported. "I want to
warn activists of foreign religions," he said on television, "that
if religious psychoses happen again while I am leader... I will
employ the police force to throw them out." Many foreign religious
groups, including Hare Krishna and the Church of Christ, are active
in the region. Moon's church is reported to be particularly active
in the education sphere. -- Penny Morvant

... AND VISITS POWER STATION. Also on 1 August Nazdratenko visited
the Primorskii power station, where more than 300 workers have been
on hunger strike for nine days to protest a five-month delay in the
payment of their wages. He handed over an interest-free credit of 5
billion rubles from the Russian Savings Bank, ITAR-TASS reported.
The agency added that miners at 14 mines in the region are
continuing to strike (earlier reports had put the figure at 15)
despite the transfer of about 50 billion rubles from Moscow. Work
has also stopped at 17 mines belonging to the Rostovugol company in
southern Russia. -- Penny Morvant

OILMEN TURN DOWN FOREIGN LOANS. Kogalymneftegaz, a subsidiary of
Lukoil, has declared that it will not take up the remaining $130
million of the $272 million loan it received from the World Bank
back in 1993, Segodnya reported on 1 August. Earlier Purneftegaz,
part of Rosneft, also refused $80 million of the $174 million
credit it was granted by the EBRD. The companies complain that high
taxes and transport costs make it unprofitable to invest in new oil
wells even with the favorable loan terms offered by international
institutions. A bill lifting the tariffs on imports of equipment
paid for by international loans (one of the main complaints of the
oil companies) was passed by the Duma last month. (See OMRI Daily
Digest 22 July). State Investments Corporation Deputy Chairman
Boris Furmanov said that Russia is expected to attract only some
$1.6 to 2 billion of foreign direct investment in 1996, Finansovye
Izvestiya reported on 1 August. -- Peter Rutland

INFLATION ONLY 0.7% IN JULY. Consumer prices rose by only 0.7% in
July, down from 1.2% in June, ITAR-TASS reported on 1 August,
citing the State Statistical Committee (Goskomstat). Inflation in
the first seven months of 1996 was 16.4%, compared to 87.5% over
the same period last year. Annual inflation in 1996 may be as low
as 20% if the current trend continues. However, this reduction in
inflation has come against a background of a continuing fall in
living standards and GDP -- which fell 5% in the first half of the
year, Reuters reported on 15 July. -- Natalia Gurushina

CROP IMPORTS STILL POSSIBLE. Official projections put Russia's 1996
grain harvest at 73-77 million metric tons, up from 63.4 million
tons in 1995, but down from an average of 88 million tons in the
early 1990s, Reuters reported on 1 August. Much of Russia is
currently experiencing a drought. The International Grains Council
(London) predicts that Russia will need to import around 1.5
million tons this year. -- Natalia Gurushina

TRANSCAUCASIA AND CENTRAL ASIA

KVIRAYA DENIES ALLEGING RUSSIAN INVOLVEMENT IN WOODRUFF MURDER.
Georgian Minister for National Security Shota Kviraya on 1 August
denied ever having claimed that the murder in August 1993 near
Tbilisi of U.S. diplomat Fred Woodruff was instigated by Russian
intelligence, ITAR-TASS reported. Kviraya said that a statement to
this effect attributed to him, which was circulated on 25 July by
Noyan Tapan, was aimed at undermining relations between the Russian
and Georgian security services. -- Liz Fuller

ARMENIAN PRESIDENTIAL CANDIDATE WITHDRAWS. Businessman Yuri
Mkrtchyan, one of10 candidates who announced their intention to
contest the 22 September Armenian presidential election, has
withdrawn, protesting that the pre-election campaign is "unfair and
immoral", Noyan Tapan reported on 1 August. Other candidates and
opposition political organizations have repeatedly claimed that the
electoral law, although apparently democratic, gives an unfair
advantage to incumbent Levon Ter-Petrossyan, who is seeking
reelection. -- Liz Fuller

AZERBAIJAN PROTESTS ARRESTS. First Deputy Prime Minister Abbas
Abbasov and Azerbaijani ambassador to Russia Ramiz Rzayev met
Russian Deputy Prime Minister Aleksei Bolshakov and Nationalities
Minister Vyacheslav Mikhailov to discuss the recent wave of arrests
of Caucasians in Moscow, Turan reported on 30 July, as monitored by
the BBC. Some 4,000 Azerbaijani citizens have been arrested over
the past week. Bolshakov also talked to Azerbaijani President
Heydar Aliyev by phone, trying to reassure him that the operations
were not targetting Azerbaijanis. -- Peter Rutland

KYRGYZSTAN AND IRAN SIGN ECONOMIC AGREEMENTS. In a sign of further
cooperation between their countries, Kyrgyz Prime Minister Apas
Jumagulov and Iranian Vice President Hasan Habibi on 31 July signed
several economic accords, according to Kyrgyz Television First
Channel monitored by the BBC. The agreements include mutual
investment protection, cooperation in industry, and trade and
transportation. Among the first fruits of industrial cooperation
will be the establishment of a factory in the northern Kyrgyz city
of Tokmak to produce minibuses and later automobiles. The accord on
trade and transportation allows direct air links between Bishkek
and Tehran, and Bishkek and Meshhed. Kyrgyzstan will receive
200,000-300,000 tons of crude oil beginning in 1997 and in turn
will export meat to Iran. -- Bruce Pannier


[As of 12:00 CET]

Compiled by Steve Kettle

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