A tablecloth restaurant is still one of the great rewards of civilization. - Harry Golden
OMRI DAILY DIGEST

No. 154, Part I, 9 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

GROZNY IN FLAMES. Heavy fighting continued in Grozny on 8-9 August as
separatist fighters pressed ahead with their assault on the
government compound in the center of the city, Russian and Western
media reported. Russian officers claimed that federal forces were
"expanding their area of control" in the city and driving back the
rebels. But a Russian TV (RTR) reporter trapped in a hotel attached
to the compound denounced such statements as "worse than lies" early
on 9 August, saying that the blazing main government building had
been gutted, while its defenders, having received almost no
reinforcements, had "moved to other strong points." Separatist
commanders earlier told AFP that they had seized part of the building
and would soon capture the rest. The complex, headquarters of the
pro-Moscow government headed by Doku Zavgaev, is a hated symbol of
Russian power in the republic and the site of frequent separatist
demonstrations. -- Scott Parrish

YELTSIN TAKES OATH OF OFFICE, NOMINATES CHERNOMYRDIN. Against the
background of fierce fighting in Grozny and reports of ill health,
President Boris Yeltsin began his second term on 9 August by pledging
to protect human rights and the integrity of the country, ITAR-TASS
reported. The president only spoke for a few seconds during the
ceremony and made no speech, suggesting that he has not recovered
from his tiring campaign. Western news described him as speaking
slowly but firmly. The entire ceremony lasted 25 minutes.  Yeltsin
also officially nominated Viktor Chernomyrdin as his prime minister:
the Duma is expected to meet on 10 August to vote on his candidacy.
The president's press service announced that Yeltsin will go on
vacation after the Duma vote but that the place and length of his
leave have not yet been determined, Izvestiya reported. -- Robert
Orttung

FEDERATION COUNCIL SETS UP CHECHNYA COMMISSION. The Federation
Council decided on 8 August to set up its own commission to seek a
peaceful resolution to the Chechen crisis, ITAR-TASS reported.
Council Speaker Yegor Stroev said that Kabardino-Balkariya President
Valerii Kokov will chair the commission. "Even with bandits it is
better to negotiate than shoot, even if it takes a long time," Stroev
argued. In July 1995, a Duma commission on Chechnya chaired by
Stanislav Govorukhin recommended President Yeltsin's impeachment,
attacked critics of the war like Duma member Sergei Kovalev, and
called for Chechnya's exclusion from the Russian Federation (see OMRI
Daily Digest, 24 July 1995). -- Robert Orttung

CHERNOMYRDIN CALLS FOR TOUGH MEASURES IN CHECHNYA. Prime Minister
Viktor Chernomyrdin called for the "toughest measures to be taken
against the terrorists and criminals in the Chechen Republic" but
rejected the resumption of full-scale war, ITAR-TASS reported on 8
August. He warned that "we cannot allow the situation to deteriorate
into another Afghanistan." He said that the introduction of federal
troops into the city had been delayed even though there were signals
of an impending attack. He added that a number of roadblocks and
checkpoints around the city had been withdrawn without explanation.
Chernomyrdin said that the procurator-general would determine what
had happened and punish the guilty parties. -- Robert Orttung

FEDERATION COUNCIL REJECTS MINIMUM WAGE, PENSION HIKE. The
parliament's upper house rejected on 8 August bills passed by the
Duma raising the minimum wage and minimum pension, Russian agencies
reported. Under the draft legislation, the minimum wage would have
increased by 26% to 95,320 rubles ($18.33) a month as of 1 July; the
minimum pension would rise to the same amount as of 1 August while
all other pensions would be indexed by 37%. The Federation Council
Social Policy Committee recommended against approving the increases,
which were also opposed by the government, on the grounds that they
are unaffordable. The minimum wage increase would require an
additional expenditure of 8.7 trillion rubles. The Pension Fund is in
severe financial difficulties, running a deficit of 6.5 trillion
rubles on 1 July. The upper house consists of regional leaders, who
are often held accountable for delays in wage and pension payments.
-- Penny Morvant

BABURIN REFUSES TO JOIN NEW OPPOSITION BLOC. The deputy chairman of
the Duma and leader of the Russian All-People's Union (ROS), Sergei
Baburin, has refused to join Gennadii Zyuganov's new Popular-
Patriotic Union of Russia, ITAR-TASS reported on 8 August. Baburin
criticized Zyuganov and the Communist Party for numerous strategic
miscalculations during the presidential campaign. Despite Zyuganov's
offer to Baburin of a position in a potential Communist coalition
government between the two rounds of the election, Baburin has been
extremely critical of the Communists since the campaign. He told Vek
(no. 31) that he would join President Yeltsin's government if offered
a serious position. -- Robert Orttung

ROSTOV MINERS CONTINUE STRIKE. The leader of the Rostov miners trade
union, Vasilii Kryukov, has announced that 40,000 local miners will
continue the strike they started on 4 August until all their demands
are fulfilled, ITAR-TASS reported on 8 August. The government's
transfer of 50 million rubles (about $10,000) to the Rostov Oblast
was only enough to pay half of the miners' wages for March. The
Russian Coal Industry Workers' Union has threatened to hold a
nationwide strike on 25 August-- miners' day in Russia--if their
demands are not met. -- Anna Paretskaya

PENSIONERS PROTEST DELAYED PAYMENTS. A crowd of angry pensioners
blocked the main streets of Abakan, the largest city in the southern
Siberian republic of Khakasiya, to demand their pensions for July,
ITAR-TASS reported on 8 August. Earlier this week, pensioners rallied
in Voronezh after rumors spread that they would not receive their
pensions for July, NTV reported on 5 August. -- Anna Paretskaya

YET ANOTHER BUSINESSMAN MURDERED. Nikolai Povosin, the president of
the construction company Boniks based in the Moscow Oblast town of
Krasnogorsk, has been shot to death, ITAR-TASS reported on 8 August,
citing an Interior Ministry spokesman. Meanwhile, the director of the
Moscow City Interior Ministry Department, Lt. Gen. Nikolai Kulikov,
said that 53,000 crimes--including 900 murders--have been reported in
Moscow so far this year. Kulikov also said that about 500 "tramps and
panhandlers" have been ousted from Moscow since the president's July
decree on combating crime in Moscow. An additional 600 "foreign
citizens doing illegal business in Moscow" were expelled after a
similar decree from the mayor. -- Anna Paretskaya

SHORTFALL IN MILITARY HOUSING GROWS. According to sources in the
Defense Ministry, more than 150,000 officers, NCOs, and warrant
officers in the armed forces are on waiting lists for housing, ITAR-
TASS reported on 8 August. Russian military construction workers were
said to have built 12,000 new apartments so far this year, but the
sources said the supply is far below demand. In October 1995, a
deputy defense minister said that 125,000 officers' families were
without apartments. -- Doug Clarke

WAGE DEBT GROWING DESPITE MASSIVE GOVERNMENT OUTLAYS. First Deputy
Prime Minister Oleg Lobov said on 8 August that 32% of all budget
expenditure during the first half of the year went on paying wages
and back wages, ITAR-TASS reported. Planned expenditure was only 15%.
Despite these efforts, following a pre-election pledge by President
Yeltsin to eliminate wage arrears in the state sector, the total wage
debt equaled 29.9 trillion rubles ($5.7 billion) at the end of July.
Continuing with his gloomy portrait of the economy, Lobov said that
the state budget is owed about 80 trillion rubles and that barter
deals account for up to 30% of industrial turnover. He added that
revenue from state securities is now lower than the amount needed to
buy back treasury bills that are due, that investment has fallen by
14%, and that capital flight exceeds $35 billion. -- Penny Morvant

TREASURY TAX EXEMPTIONS ABOLISHED. The head of the State Tax Service
(GNS), Vitalii Artyukhov, said that from 15 August 1996 the GNS will
not accept treasury tax exemptions (KNOs)--issued by the Finance
Ministry--from companies in lieu of tax payments, Radio Rossii
reported on 7 August. KNOs worth 9 trillion rubles ($1.7 billion)
have been issued: many of them are now being traded on the secondary
financial market. KNOs and other money-surrogates, such as bills of
exchange and the Finance Ministry's bank credit guarantees, are used
by companies as "payment" for taxes. -- Natalia Gurushina

RUSSIA SUES U.S. TAX AUTHORITIES. Russia's State Committee for
Precious Metals and Stones (Roskomdragmet) is suing the Internal
Revenue Service (IRS) over the sale of assets belonging to the U.S.
company Golden Ada, ITAR-TASS reported on 9 August. In 1992-1994,
Russia delivered more than $171 million worth of rough diamonds to
Golden Ada for cutting but received neither money nor diamonds, as
Golden Ada's owners resold the company and disappeared. The scandal
led to the dismissal of Roskomdragmet chairman Yevgenii Bychkov in
February 1996 on corruption charges. Golden Ada's office and assets
worth some $60 million were seized by the IRS for tax evasion. The
Russian side, however, contests this move and claims that the
confiscated property should be used to compensate Russia's losses. --
Natalia Gurushina

TRANSCAUCASIA AND CENTRAL ASIA

AZERBAIJAN, IRAN SIGN AGREEMENT ON FIGHTING DRUG TRADE. Azerbaijani
Interior Minister Ramil Usubov signed an agreement with his Iranian
counterpart on cooperation in the fight against drug smuggling last
week, according to a 6 August IRNA report monitored by the BBC.
Details concerning the accord were not made available. Iran and
Azerbaijan are both important transit countries for the trade in
southwest Asian opium and opium poppies and cannabis are also
cultivated along the border between the two countries. The opium that
reaches Azerbaijan from Turkmenistan, Kazakhstan, or Iran is being
transported via Nakhichevan to Turkey, according to the Observatoire
Geopolitique des Drogues, a Paris-based monitoring group. -- Lowell
Bezanis

ALIEV IN MOSCOW. Azerbaijani President Heidar Aliev expressed his
willingness to meet with his Armenian counterpart, Levon Ter-
Petrossyan, while in Moscow for the inauguration of President Boris
Yeltsin, NTV reported on 8 August. Aliev did meet with Moscow mayor
Yurii Luzhkov to discuss the recent arrests of Azerbaijanis in anti-
crime actions in Moscow. Aliev also said that Chernomyrdin is
preparing decrees for the opening of the Russian-Azerbaijani border,
which was closed after the onset of the Chechen war. -- Peter Rutland

ABKHAZ PEACEKEEPING UPDATE. The Russian Federation Council voyed on 8
August to extend the mandate of the Russian-dominated CIS
peacekeeping force in Abkhazia by six months, RFE/RL reported.
Georgia has been pushing Russia to involve the 1,500 peacekeeping
troops in mine clearing and in helping some 250,000 Georgian refugees
return to their homes in Abkhazia. Meanwhile, Georgian Radio on 5
August reported that the Turkish government will welcome Georgian
efforts to halt ships under the Turkish flag from entering Abkhazian
ports without the proper permits. The port of Sukhumi is a lifeline
for the breakaway region and is also believed to be vital to
smuggling activities involving Turkey and other Black Sea littoral
states. -- Lowell Bezanis

TURKMEN-RUSSIAN GAS PROJECT. Turkmen President Saparmurad Niyazov met
with the Russian Gazprom company chairman Rem Vyakhirev on 8 August
to sign an agreement on forming the new corporation Turkmenrosgaz,
NTV reported. Turkmenistan will hold 51% of the shares in the
venture, Gazprom-45% and the transnational corporation Itera-4%. The
first project the new corporation plans to undertake is a pipeline
providing Turkmen gas to Pakistan via Afghanistan. The disruption in
supply lines for Turkmen gas after the collapse of the Soviet Union
has cut export of Turkmen gas nearly in half. According to RTR,
Turkmenistan produced 90 billion cubic meters of gas in 1990,
compared to 48 billion so far this year. -- Bruce Pannier

TAJIK AUTHORITIES CLOSE TO WRAPPING UP OSIMI MURDER CASE. The Tajik
Security Ministry claimed on 8 August that one of the suspects in the
murder of Tajik Academy of Sciences chairman Mohammed Osimi (see OMRI
Daily Digest, 30 July 1996) killed himself in a shoot out with the
militia on 31 July, according to ITAR-TASS. Amrullo Saidov and five
others, who were allegedly part of a gang that operated near
Dushanbe, all died when the state militia raided their hideout. --
Bruce Pannier

[As of 12:00 CET]

Compiled by Victor Gomez

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