Human life is but a series of footnotes to a vast obscure unfinished masterpiece. - Vladimir Nabokov
OMRI DAILY DIGEST

No. 159, Part I, 16 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

LEBED MEETS YANDARBIEV . . . Security Council Secretary Aleksandr
Lebed held talks in the Chechen village of Starye Atagi on the
afternoon of 15 August with acting Chechen President Zelimkhan
Yandarbiev and Chechen Chief of Staff Aslan Maskhadov, Russian and
Western agencies reported. Lebed described the talks as
"constructive" and "hopeful," saying that both sides had agreed that
the conflict should be resolved by "exclusively peaceful means" but
that "purely military issues" must be resolved before discussing the
issue of Chechnya's status. Lebed also announced the creation of a
supervisory commission to monitor "the strict observance of ceasefire
conditions," saying it would include representatives from the
neighboring republics of Dagestan, Kabardino-Balkariya, and
Ingushetiya. Yandarbiev said Lebed's peace efforts "deserve the
highest praise," while separatist spokesmen later said that Lebed had
"confirmed his intention to withdraw troops from the territory of
Chechnya," after an unspecified "transitional period." -- Scott
Parrish

. . . AND PROMISES TO REVEAL THOSE "RESPONSIBLE" FOR THE CHECHEN
CONFLICT. At a press conference following his arrival in Grozny on
the morning of 15 August, Lebed promised to disclose the names of the
"heroes" responsible for both beginning and perpetuating the Chechen
conflict, Russian media reported. He then expressed the opinion that
the continuation of fighting in the republic is "profitable" for some
unnamed groups. "Nobody knows if this is a war or not. Nobody knows
who started it, what caused it," Lebed complained. Before his
afternoon meeting with Yandarbiev, Lebed met at the federal forces
headquarters in Khankala with Ruslan Aushev, president of neighboring
Ingushetiya. Aushev, a frequent critic of federal government policy
in Chechnya, said he fully backs Lebed's peace initiative. -- Scott
Parrish

GROZNY RELATIVELY QUIET. Despite sporadic gunfire, the night of 15-16
August was quieter than any in the past 10 days, ITAR-TASS reported.
Russian military spokesmen said two federal servicemen were killed
and 12 wounded overnight. One reason for the relative lack of
fighting, according to NTV, is that separatist fighters now virtually
control the entire city, with federal troops isolated in a few
barracks and bunkers. The network reported that instead of federal
troops, separatist fighters now run check points in central Grozny.
Despite the current truce, the fighters are digging fortifications in
anticipation of Russian efforts to storm the city. At a Moscow press
conference, Interior Minister Anatolii Kulikov said 2,000 Chechen
fighters confront 7,000 federal troops in the city. -- Scott Parrish

FOREIGN MINISTRY CRITICIZES OSCE ON CHECHNYA. Foreign Ministry
spokesman Mikhail Demurin lambasted the OSCE for making statements
that he claimed attributed "equal responsibility" to federal forces
and Chechen separatist fighters for the recent intensification of the
conflict. Demurin complained that current OSCE chairman Flavio
Cotti's references to "the sides in the conflict" and "the warring
parties" contradict the OSCE's position that Chechnya is an internal
matter of the Russian Federation. He added that Cotti unjustifiably
treated as equals the separatist fighters, whom he described as
"unconstitutional armed formations," and federal troops, which he
termed "government law enforcement organs." Meanwhile, Tim Guldimann,
head of the OSCE assistance group in Chechnya, said he stands ready
to mediate in any new negotiations aimed at resolving the conflict.
-- Scott Parrish

BOLSHAKOV: "A NORMAL SOVIET APPARATCHIK." First Deputy Prime Minister
Aleksei Bolshakov will be Chernomyrdin's main deputy in the new
government. Former Finance Minister Boris Fedorov has labeled him "a
normal Soviet apparatchik, not a radical reformer," Reuters reported.
Izvestiya on 16 August described his rise as a "surprise," while
Kommersant-Daily noted that he is the least known of the new first
deputy prime ministers. He worked in the military industrial
enterprises of Leningrad for more than 20 years. As deputy prime
minister for the CIS from 1994-1996, he succeeded in restoring some
economic ties between Russian and CIS enterprises and in creating a
new financial network to stimulate trade and the payment of debts to
Russia. His appointment indicates Yeltsin's priority on strengthening
CIS ties, Rossiiskaya gazeta reported on 16 August. -- Robert Orttung

REACTION TO GOVERNMENT FORMATION. Former Fuel and Energy Minister
Yurii Shafranik was apparently one of the main losers in the
government reshuffle as his ministerial post remains vacant. He may
be paying for his inability to pacify the country's miners and his
opposition to the IMF's proposals to replace export duties on oil and
gas with excise taxes, which also fall on domestic customers,
Kommersant-Daily reported. The deputy leader of the Communist Party
Duma faction Valentin Kuptsov said that the new government will not
change the social-economic situation in the country in any
substantial way, NTV reported on 15 August. Former acting Prime
Minister Yegor Gaidar said that there are too many deputy prime
ministers in the new cabinet. Chernomyrdin said that some of the
current vacancies could still go to members of the opposition. --
Robert Orttung

ILYUSHIN MOVES INTO GOVERNMENT. As expected, President Yeltsin's
senior aide, Viktor Ilyushin, was appointed first deputy prime
minister in charge of "social affairs." Ilyushin is a former Komsomol
organizer who had worked as Yeltsin's personal secretary since 1980,
when Yeltsin was party chief in Sverdlovsk. There is much speculation
over why Ilyushin has given up his crucial job as the "gatekeeper"
who controls access to the president for the thankless task of
dealing with Russia's bankrupt health, pension, and social welfare
systems. He could have been pushed out at Chief of Staff Chubais's
insistence; he could be trying to serve as "Yeltsin's man" inside the
government; or he might be positioning himself for the post-Yeltsin
succession struggle. -- Peter Rutland

VLADIMIR POTANIN PROFILE. Vladimir Potanin, the 35-year-old chairman
of Oneksimbank, was appointed on 13 August to the post of first
deputy prime minister in charge of economic affairs. Potanin is seen
as having close ties with a wide spectrum of Russia's political
elite, from reformer Anatolii Chubais to conservative Oleg Soskovets.
Although he describes himself as a banker and entrepreneur, he has
spent most of his career in state and state-owned foreign trade
organizations: the Soviet Foreign Trade Ministry, the Interros
foreign trade association (1991), and the International Financial
Company (1992). In 1993, he became president of Oneksimbank, one of
the five leading banks of Russia which has close ties to the state.
In March 1995, Potanin was instrumental in creating the consortium of
seven banks that suggested the controversial loans-for-shares auction
scheme to the government. His bank subsequently played an active role
in the auctions, acquiring a 38% stake in the world's largest nickel
producer, Norilsk Nickel. Potanin's task will be to improve tax
collection while simultaneously reviving capital investment. --
Natalia Gurushina and Peter Rutland

ALEKSANDR LIVSHITS PROFILE. The former economic adviser to President
Yeltsin, Aleksandr Livshits, has been appointed the new finance
minister and deputy prime minister, international media reported. His
main task is to concentrate on increasing taxes. Livshits spent most
of his professional career (1974-1992) in academic circles, and is
known for his liberal and monetarist economic views. Still, he
accepts that the country needs a social safety-net. He was behind the
government's pre-election campaign in March to repay wage arrears.
Livshits was also one of the first officials to draw attention to
unfair tax benefits enjoyed by sport organizations and organizations
for the disabled, which allowed them to make money on alcohol
imports. -- Natalia Gurushina

STRIKES SPREAD. Miners at five coal pits in the Kemerovo Oblast have
joined their colleagues in Tula and Rostov by walking off the job due
to wage arrears, ITAR-TASS reported on 16 August. By the end of July,
the wage debts in the sector totaled 2 billion rubles ($400,000). It
is highly unlikely that the government will be able to pay such a
large amount of money by 25 August, the day on which miners plan to
strike across the country. Workers at the Leningrad nuclear power
plant are threatening to strike unless they are paid their wages for
the March-July period, Segodnya reported on 13 August. Meanwhile, the
federation leader of the Independent Trade Unions, Andrei Isaev, has
announced that Russian trade unions are preparing a joint strike for
this fall. He added that workers in all industries are owed a total
of 34 trillion rubles in back wages. -- Anna Paretskaya

RYAZAN CITY DEPUTY KIDNAPPED. A deputy of the Ryazan city
legislature, Aleksandr Nazarov, was kidnapped by four masked men
while he was on his way to work on 15 August, Radio Rossii reported
the same day. Nazarov's car was stopped by a group of men with
machine guns who claimed they were with the tax police. They took him
to a nearby forest , where they beat him and threatened to kill him
if he did not quit his deputy job. Nazarov remains hospitalized. The
Ryazan legislature chairman, Pavel Mamatov, said that many deputies
and their families have been threatened. Most local deputies are
Communist Party members. -- Anna Paretskaya

FORCED HOLIDAYS FOR SATELLITE MANUFACTURER. Some 8,000 workers at the
Applied Mechanics Association company (OPM) in Zheleznogorsk (the
former Krasnoyarsk-26), which manufactures space satellite
communications systems, were sent on forced leave until 1 October,
ITAR-TASS reported on 16 August. OPM lacks the money to pay wages and
continue production, due to the fact that in 1996 its customers--the
Defense Ministry, the Russian Space Agency, and the Moscow--based
association Informkosmos--only paid 10% of the money they owed. The
company was in part paid with bills of exchange issued by the
recently collapsed Tveruniversalbank. -- Natalia Gurushina

TRANSCAUCASIA AND CENTRAL ASIA

SHEVARDNADZE CLIPS WINGS OF ANTI-SEMITE. Georgian President Eduard
Shevardnadze reacted indignantly to an anti-Semitic article printed
in the paper Noy, Segodnya reported on 15 August. Shevardnadze took
the article, which described Jews as "vampires and sadists," to task
during his weekly radio address. Western agencies reported that the
paper's editor has been charged with inciting hatred, a crime which
carries a maximum three-year prison sentence. He has also been fined,
and the paper has been suspended from publication. -- Lowell Bezanis

DASHNAK ATTEMPTS TO REGISTER. The Armenian Revolutionary Federation,
Dashnaktsutyun (ARF), has applied to be registered once again as a
political party with the Justice Ministry, Noyan Tapan reported on 14
August. The ARF, Armenia's largest opposition party, was banned in
January 1995, following allegations that it had a clandestine wing,
known as Dro, which was involved in drug trafficking and political
assassinations. The ARF's candidate in the presidential election,
Vahan Hovannessyan, has been arrested on charges of organizing a coup
and acts of terrorism, according to Noyan Tapan on 15 August. Efforts
to demonstrate that the Armenian ARFF is independent of its diaspora
strongholds are likely to be met with skepticism in Yerevan and
abroad. -- Lowell Bezanis

ARMENIAN EMBASSY IN GERMANY UNDER SCRUTINY. Armenian Foreign Minister
Vahan Papazian has announced plans to establish a commission that
will examine the work of the consular section of Yerevan's embassy in
Bonn following allegations raised in the German journal Focus that it
was involved in extorting money from Armenians in Germany, ITAR-TASS
reported on 15 August. The Armenian ambassador in Germany denied the
accusations. -- Lowell Bezanis

BELGIAN FIRM BUYS FORMER KAZAKHSTANI STATE ENERGY COMPANY. The
Kazakhstani government has sold Almatyenergo, the former state energy
company and the main provider of both electricity and heat to Almaty,
to the Belgian company Tractebel for $5 million, Kazakhstanskaya
pravda reported on 14 August. Tractebel also pledged to boost output
by 30% and spend $270 million to upgrade Almatyenergo's several power
stations and electricity grid. The government had feared that the
indebted and capital-starved Almatyenergo would be unable to provide
the capital with electricity and heat during the coming winter. The
same day, ITAR-TASS reported that the U.S. company A.E.S. had
concluded a similar deal for the Ekibastuz power station. -- Slava
Kozlov in Almaty

RUSSIA CUTS OFF ENERGY TO NORTHERN KAZAKHSTAN. Citing unpaid bills,
Boris Syutkin of Russia's Unified Energy System announced on 15
August that his company has temporarily ceased delivering electricity
to certain regions of northern Kazakhstan, ITAR-TASS and Radio Rossii
reported the same day. Syutkin said Kazakhstan owes the company $420
million for earlier deliveries. Syutkin also criticized Kazakhstan
for failing to fulfill its part of a deal to deliver coal to a
Russian power station, claiming that no more than 40% of contacted
coal had reached the Troitsk power station this year. Western
Kazakhstan will not be cut off as regions in that part of the country
have been making regular payments to Russian power stations. -- Bruce
Pannier

CORRECTION: In an item in OMRI Daily Digest, issue no. 158, vol. 2,
Natik Aliev, president of the Azerbaijani oil company SOCAR, was
incorrectly identified as President Heidar Aliev's son. Ilham Aliev,
vice president of SOCAR is President Aliev's son.


[As of 12:00 CET]

Compiled by Victor Gomez

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