Being entirely honest with oneself is a good exercise. - Sigmund Freud

No. 158, Part I, 15 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:

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Former Soviet Union -- "1995: Building Democracy."
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systematic and comprehensive review of the most pivotal events in the 27
countries of the former Communist bloc and former Soviet Union during
1995. Available to OMRI subscribers at a special price of $25 each (plus
postage and handling). To order, please email your request to:


FIGHTING SLACKENS IN GROZNY. An uneasy calm settled over central Grozny
on the afternoon of 14 August, Russian and Western agencies reported.
Chechen fighters control most of the town, except for isolated Russian
strongpoints. The commander of federal forces in Chechnya, Lt. Gen.
Konstantin Pulikovskii, denied that a formal ceasefire had been
negotiated, saying he had merely ordered his troops to open fire only if
attacked. Pulikovskii and separatist Chechen Chief of Staff Aslan
Maskhadov met at 5:45 p.m. to discuss joint monitoring of the ceasefire
and a prisoner exchange. But while nine wounded federal servicemen were
later exchanged for nine Chechen fighters, Pulikovskii later told
Russian TV (RTR) that a formal ceasefire could not begin until the
separatists gave up their demand for Chechen independence, and he
accused separatist forces of launching several attacks. -- Scott Parrish

August attacked a column of refugees near the village of Guliakov, just
south of Grozny, Russian and Western agencies reported. The attack
killed 10 refugees, according to separatist Chechen Information Minister
Movladi Udugov. On the same day, the pro-Moscow Chechen government
complained that Russian air raids in Gudermes and Grozny had killed at
least 35 Chechen civilians on 13 August. Meanwhile, Chechen officials
estimate that up to 40,000 refugees remain trapped in the village of
Staraya Sunzha outside Grozny. Federal troops will only allow women and
children to pass through checkpoints there on foot. About 200 seriously
wounded refugees were evacuated by bus from the village late on 13
August. -- Scott Parrish

on 14 August signed a decree granting Security Council Secretary
Aleksandr Lebed primary responsibility for finding a settlement to the
Chechen conflict, ITAR-TASS reported. The decree gives Lebed "additional
powers to coordinate the activities of federal executive agencies," and
also dissolves Prime Minister Viktor Chernomyrdin's State Commission for
Regulating the Chechen Conflict, which Lebed had harshly criticized. The
decree, which was short on details, specifies that any settlement of the
conflict must be in accord with "the existing constitution," which
precludes full independence for Chechnya. Shortly after the decree was
issued, Lebed left Moscow for Grozny on 15 August for additional talks
with Chechen leaders, who are insisting on full independence. -- Scott

claimed that he had not forsaken responsibility for Chechnya and that it
is not an issue that befits a power struggle, ITAR-TASS reported.
According to Chernomyrdin, Lebed's Security Council will have three new
committees to handle the problem. One will bring together
representatives of the power ministries to resolve strategic issues, the
second will address logistical problems, and the third will be a working
group made up of representatives from federal agencies. -- Robert

Chernomyrdin announced that former Deputy Prime Minister Aleksei
Bolshakov, 56, former Presidential Senior Aide Viktor Ilyushin, 59, and
Oneksimbank President Vladimir Potanin, 35, will serve as first deputy
prime ministers in the new cabinet, ITAR-TASS reported. Potanin will
apparently take charge of the economy, Ilyushin will be responsible for
social policy, and Bolshakov will handle industry and stand in for
Chernomyrdin when he is away. Potanin's bank, one of Russia's largest
commercial financial institutions, was a key player in last year's
shares-for-loans scheme in which banks gave loans to the government in
exchange for shares in state-owned firms. He is considered to be close
to Chubais, Reuters reported. Bolshakov has worked on building a high-
speed train between Moscow and St. Petersburg and in the last cabinet
handled Russia's relations with the CIS. Ilyushin has worked as a
Yeltsin aide since his days in Sverdlovsk. -- Robert Orttung

. . . AND OTHER CABINET MEMBERS. In addition to the three first deputy
prime ministers, the new cabinet has seven deputy prime ministers--two
of whom are also ministers--and 15 ministers. The new government is
broadly similar to its immediate predecessor. The deputy prime ministers
are: Vladimir Babichev (also government chief of staff), Oleg Davydov
(foreign economic relations), Aleksandr Livshits (finance), Aleksandr
Zaveryukha (agriculture), Vitalii Ignatenko (information), Oleg Lobov
(demoted from first deputy prime minister), and Valerii Serov. Livshits
replaces Vladimir Panskov, whom Chernomyrdin criticized last month for
failing to implement Yeltsin's decrees (see OMRI Daily Digest, 26 July
1996). Defense Minister Igor Rodionov, Interior Minister Anatolii
Kulikov, Foreign Minister Yevgenii Primakov, Economics Minister Yevgenii
Yasin, Nationalities Minister Vyacheslav Mikhailov, and Justice Minister
Valentin Kovalev will remain in place. Vladimir Kadannikov, who replaced
Chubais as first deputy prime minister for monetary and finance policy
in January, was not included in the new government. Overall,
Chernomyrdin cut the number of federal departments from 89 to 66. --
Robert Orttung

Chubais now has the authority to decide whether or not presidential
decrees are ready for signing, according to a presidential directive
published in Rossiiskie vesti on 15 August. Only decrees that include
direct instructions from the president may circumvent this new
procedure. It is the first attempt to impose a one-man system of
administration within the president's staff, Segodnya argued on 14
August. In the past, the president's decrees were the product of stiff
competition among his subordinates. The paper views Chubais as a
competent administrator although biased in favor of a "political-
economic group whose interests are generally considered to be
objectively progressive." -- Robert Orttung

has refused to carry out Security Council Secretary Lebed's proposal
that a purge of officers be carried out in his ministry, Argumenty i
Fakty reported on 13 August. Lebed lobbied for Rodionov to take over the
ministry and the two are said to be very close. -- Doug Clarke

HARDLINERS PREPARE NEW COMMUNIST BLOC. A group of hardline communist
parties, including the Russian Communist Party-KPSS, the Officers'
Union, and the United Front of Working People, have set up an organizing
committee to form a communist bloc opposed to Gennadii Zyuganov's
Popular-Patriotic Union, Kommersant-Daily reported on 15 August. The
bloc accused Zyuganov of compromising with the current authorities and
only pretending to fight against them. Working Russia leader Viktor
Anpilov was barred from the organizing committee on the grounds that he
was too close to Zyuganov during the recent election. The so far unnamed
organization is planning a founding congress for 12-13 October. --
Robert Orttung

Yeltsin formally placed the blame for last month's energy crisis in the
Far East on the Primorskii Krai administration, ITAR-TASS reported on 14
August. Yeltsin ordered krai Governor Yevgenii Nazdratenko, whom he
described as "not completely qualified," to fire his deputy, pay miners
their overdue wages, and stabilize the situation in the region's energy
system by 15 September. Yeltsin's orders come after the presidential
Main Oversight Administration commission reported that Nazdratenko was
not to blame for the crisis in the region (see OMRI Daily Digest, 14
August 1996). -- Anna Paretskaya

FORMER VLADIVOSTOK MAYOR ACQUITTED. After an 18-month trial, the
Khamovniki Raion Court of Moscow on 14 August ruled to retain
Vladivostok Mayor Viktor Cherepkov in his office, ITAR-TASS reported.
Corruptions charges against Cherepkov were dropped for lack of evidence
earlier this year. President Yeltsin dismissed Cherepkov, who was
popularly elected in July 1993, in a December 1994 decree citing
corruption charges. Cherepkov will resume his work on 24 August if the
ruling is not appealed within 10 days. -- Anna Paretskaya

Adygeya, Aslan Dzharimov, has protested against the federal Interior
Ministry's intention to send one of the republic's police units to
Chechnya, ITAR-TASS reported on 14 August. Earlier this week, Tatar
President Mintimer Shaimiev sent a similar protest to the ministry (see
OMRI Daily Digest, 14 August 1996). -- Anna Paretskaya

MOSCOW DENIES "DEAL" ON NATO EXPANSION. Presidential Press Secretary
Sergei Yastrzhembskii refuted on 15 August media reports that President
Yeltsin had told his U.S. counterpart, Bill Clinton, that Russia would
acquiesce in the admission of Poland, the Czech Republic, and Hungary
into NATO, if the alliance promised not to include the Baltic states,
ITAR-TASS reported. Kommersant-Daily, citing BNS, reported the day
before that Yeltsin had sent a confidential letter to Clinton proposing
such a deal. Yastrzhembskii denounced the reports as "pseudo-
information," and said that Moscow's opposition to NATO expansion
remains unchanged. Meanwhile, the CIS Council of Defense Ministers,
meeting in Moscow on 14 August, issued a communique expressing their
negative opinion on the eastward expansion of NATO, Russian and Western
sources reported. The Ukrainian minister did not sign the communique,
saying that it is "a matter for the president." -- Scott Parrish and
Roger Kangas

RUSSIAN-UKRAINIAN BORDER TALKS. Russian and Ukrainian delegations agreed
in Moscow on 14 August to form a working group that will begin the
process of delineating their common border, which has not been
officially codified since the collapse of the USSR in 1991, Russian
media reported. The two delegations, led by Russian First Deputy Foreign
Minister Boris Patyukov and Ukrainian Deputy Foreign Minister Konstantin
Grishchenko, said that while the border should be legally defined, and
customs and contraband controls tightened, they plan to maintain its
"openness" and simplify crossing procedures for citizens of both
countries. Ukraine has long pushed Russia to begin talks on formalizing
the border. -- Scott Parrish

Chernomyrdin's remark in a 13August speech about the possible
introduction of custom duties on imports of foreign currency caused a
stir in the Russian financial community, Kommersant-Daily reported on 15
August. Russian banks reportedly import as much as $30 billion a year in
cash. A tax on imports of large sums of cash imports would be a somewhat
desperate measure to raise revenue and limit the dollarization of the
domestic economy, which may have reached some 25% of current operations.
Bankers argue that such a tax would shift cash imports to the shadow
economy, increase the commission for currency buyers, and lead to a rise
in currency speculation (as the gap between the cash and non-cash
exchange rates will widen). The step may also cause a conflict with
international financial organizations, since the new duty may be
classified as tariff protection or as a violation of IMF provisions on
current account convertibility, which the Russian government accepted in
June. -- Natalia Gurushina


MORE ON ABKHAZ PEACEKEEPER MANDATE. Russian Foreign Ministry spokesman
Mikhail Demurin said that Georgia and Abkhazia have agreed to extend and
somewhat amend the mandate of the Russian-dominated CIS peacekeepers in
Abkhazia, ITAR-TASS reported on 14 August. The extension is expected to
be approved at a meeting of CIS heads of state in two weeks time. The 8
August vote of the Russian Federation Council to extend the mandate was
not legally sufficient without the consent of the two parties and the
CIS presidents, contrary to earlier media reports. The fourth
anniversary of the onset of hostilities between the breakaway region of
Abkhazia and Georgia passed on 14 August. ITAR-TASS, citing a recently
released Georgian Defense Ministry report, noted that 3,365 Georgian
soldiers died in the fighting, plus an estimated 5,000 Abkhaz fighters.
Eleven journalists (six Georgian, three Abkhaz, and two Russians) were
killed during the conflict. -- Lowell Bezanis

SOUTH OSSETIAN POLITICIAN SENTENCED. A court in Tskhinvali has sentenced
the former deputy chairman of the South Ossetian parliament, Alan
Chochiev, to five years imprisonment, according to a 13 August ITAR-TASS
report monitored by the BBC. He was found guilty of abuse of office and
the embezzlement of state funds. From 1989-1994, Chochiev was the
chairman of Adamon Nykhas (Voice of the People), the leading public and
political organization in South Ossetia, and he held senior posts in the
regional administrative apparatus from 1990-1994. -- Lowell Bezanis

Aliev said on 14 August that his company considers the Russian port of
Novorossiisk as the best point for transporting early oil, ITAR-TASS
reported. The comment comes just two days after Aliev was quoted as
saying that Azerbaijan would try to accelerate the construction of a
pipeline running from Baku to the Georgian port of Supsa if the war in
Chechnya continues to escalate. He now predicts that preparations for
moving the oil to Russia will be completed soon and that the oil will
begin to flow "on the first day of next year." The Turkish press has
interpreted Aliev's original remarks as a demonstration of his
willingness to "change" horses in mid-stream. Aliev is the son of
Azerbaijani President Heidar Aliev. -- Lowell Bezanis

UZBEKISTAN'S AIRPORTS TO BE UPGRADED. International sources are to
contribute nearly $200 million to upgrade the airports in Tashkent,
Bukhara, Samarkand, and Urgench, ITAR-TASS reported on 14 August.
According to the head of Uzbekistan's national airline company, Arslan
Ruzmetov, the reconstruction will make it possible for the airports to
handle up to 500 flights a day. The Tashkent Airport is currently being
renovated at a cost of $49 million, while Japan has pledged $146 million
to upgrade the other three. -- Roger Kangas

[As of 12:00 CET]

Compiled by Victor Gomez

            Copyright (c) 1996 Open Media Research Institute, Inc.
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