Man's yesterday may ne'er be like his morrow; Naught may endure but Mutability. - Percy Shelley
OMRI DAILY DIGEST

No. 245, Part I, 20 December 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 OMRI Daily Digest, and other information about OMRI, are
available through OMRI's WWW pages: http://www.omri.cz/Index.html


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NOTE TO DAILY DIGEST SUBSCRIBERS:

The OMRI Daily Digest will not be published the week of December 23-27,
1996.  It will return on Monday, December 30, 1996.
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RUSSIA

SVR: SPY SCANDALS POLITICALLY MOTIVATED. Col.-Gen. Vyacheslav Trubnikov,
head of the Russian Foreign Intelligence Service (SVR), complained to
ITAR-TASS on 19 December that the widely publicized arrests of FBI agent
Earl Pitts and CIA officer Harold Nicholson (see OMRI Daily Digest, 19
December 1996) are part of a propaganda campaign to "kindle anti-Russian
sentiments." He blamed the campaign on "various forces abroad," which
object to Russia's "more resolute" pursuit of its "national interests."
Trubnikov refused to comment on whether Pitts worked for the SVR but
argued with obvious annoyance that his agency could easily stage similar
spy scandals but chose not to dramatize the "axiom" that all states
conduct intelligence operations. Meanwhile, in Washington, FBI Director
Louis Freeh told a Senate committee that Russian spying, especially a
recent increase in economic espionage, remains a "serious problem" for
his agency. -- Scott Parrish

DUMA GEOPOLITICS COMMITTEE MARKS BREZHNEV ANNIVERSARY. In what ITAR-TASS
described as an "atmosphere of nostalgia," a session of the Duma
Geopolitics Committee examined the foreign policy of Leonid Brezhnev on
19 December, the 90th anniversary of the former Soviet leader's birth.
Committee chairman Aleksei Mitrofanov (Liberal Democratic Party)
described Brezhnev's foreign policy as "realistic" and suggested that
"old experience could and should be applied at present." Anatolii
Gromyko, son of the longtime Soviet foreign minister, pointed out that
Brezhnev's foreign policy was based on mutually incompatible premises
but argued that the USSR was able to maintain its "geopolitical space"
until 1985, when Mikhail Gorbachev took power. Brezhnev's foreign
policy, which blended attempts at detente with an across-the-board
military build-up, adventurism in Africa, and the invasion of
Afghanistan, had plunged the USSR into deep international isolation by
the time he died in 1982. -- Scott Parrish

COMMUNIST PRESS CALLS FOR TOUGHER OPPOSITION STRATEGY. The opposition
press is calling on Communist Party (KPRF) leaders to adopt a less
compromising posture and be less afraid that President Boris Yeltsin
might dissolve the State Duma. The 20 December Pravda-5 argued that
public trust in the opposition would grow if the Duma risked sacrificing
itself on a matter of principle: "It is impossible to attain the title
of defender of the people's interests by constantly striving to preserve
your deputy's chairs at all costs." Likewise, a special 20-27 December
edition of Pravda argued that if the government ignores the 11
conditions set by KPRF leaders for further support of the 1997 budget
(see OMRI Daily Digest, 16 December 1996), the party should make good on
its threat to organize massive protests and vote no confidence in the
government. ('s editors have managed to publish several editions
irregularly since the paper was shut down in July.) -- Laura Belin

FORBES PROFILE. Security Council Deputy Secretary Boris Berezovskii said
an article published in the 30 December edition of the U.S. magazine
Forbes was filled with "fabrications, garbled facts, and direct lies,"
ITAR-TASS reported on 19 December. The article alleges that Berezovskii
became a billionaire through criminal means and suggests that he might
have been involved in the March 1995 assassination of TV journalist
Vladislav Listev and could perhaps be described as "the godfather of
Russia's godfathers." Berezovskii charged that Forbes had fallen victim
to a "disinformation campaign" and had become "a mouthpiece for
communist propaganda." The opposition Sovetskaya Rossiya published the
article in Russian before it appeared in Forbes, which NTV said "attests
to clear coordination between the two publications." Meanwhile,
Berezovskii was voted Patron of the Year by the Society for Supporting
Science and Education; his donation of $1.3 million financed conference
trips abroad for1,500 Russian scientists in 1996. -- Laura Belin

ANOTHER ATTEMPT TO CENTRALIZE REGIONAL POLICY. A new commission has been
created under First Deputy Prime Minister Vladimir Potanin to oversee
the allocation of federal funds to the regions, Segodnya reported on 19
December. Government decree no. 1450 grants the commission broad powers
to coordinate all federal economic policies that affect the regions. The
commission will be located in the Economics Ministry, and Deputy
Economics Minister Andrei Shapovalyants will be its deputy chairman. The
newspaper noted that the proliferation of new agencies reflects power
struggles within the government. -- Peter Rutland

MAYORAL CANDIDATE ATTEMPS TO SEIZE CITY OFFICES IN CHELYABINSK OBLAST.
Three days before a mayoral election in Zlatoust (Chelyabinsk Oblast),
candidate Aleksandr Morozov and about 100 supporters occupied several
offices in the city administration building, Russian media reported on
19 December. An eyewitness said Morozov, accompanied by young men in
black coats and yellow armbands, entered the office of incumbent mayor
Vasilii Maltsev and announced, "Power has changed hands." Meanwhile,
more supporters and an orchestra playing "triumphal marches" gathered
outside the building. Interior Ministry troops and riot police were
brought in to negotiate, and Morozov and his supporters eventually
surrendered peacefully. (ITAR-TASS reported that the band continued to
play after Morozov's men had left the building.) The Zlatoust
Procurator's Office has opened a criminal investigation into the bizarre
incident, and Maltsev promised to tighten security at polling stations
for the 22 December vote. -- Laura Belin

CHECHEN LEADERSHIP DENIES ABDUCTION OF NORTH OSSETIYAN DELEGATION.
Chechen First Deputy Prime Minister Movladi Udugov on 19 December denied
Russian media reports that Chechen militants were responsible for the
abduction of a delegation of North Ossetiyan and North Caucasian
officials, for whom a $6 million ransom has been demanded, AFP reported.
Udugov also told journalists that the Chechen Interior Ministry is on
the track of the killers of the six Red Cross volunteers and six Russian
civilians slain in Grozny earlier this week. He implicated Russian
security forces in the murders, which he said were intended to undermine
international support for Chechnya, Reuters and AFP reported. -- Liz
Fuller

MOSCOW ON CHECHEN ELECTIONS. Prime Minister Viktor Chernomyrdin told
journalists in Kazan on 19 December that the Russian leadership
considers the Chechen parliamentary and presidential elections
"essential to the Chechen people" and hopes that they will be
"democratic and legitimate," ITAR-TASS reported. In Moscow, however,
State Duma Chairman Gennadii Seleznev argued in favor of postponing the
elections, which are scheduled for 27 January. Meanwhile, Ekho Moskvy
claimed on 19 December that the Ukrainian Academy of Military Sciences
has asked Chechen field commander and presidential candidate Shamil
Basaev to deliver a course of lectures on the subject of waging a
guerilla war in current conditions. Basaev reportedly accepted the offer
and declined the fee. -- Liz Fuller

TATARSTAN OPENS CHEVROLET PLANT. Presidential Chief of Staff Anatolii
Chubais, Prime Minister Chernomyrdin and several other ministers on 19
December attended the ceremonial opening of the Yelabuga factory, which
will assemble Chevrolet Blazers, RTR and ITAR-TASS reported. The plant
plans to assemble 50,000 cars per year from imported components,
eventually rising to 300,000. They will sell at $23,000 each. The plant
will produce not the North American jeep but the more basic model that
GM sells in Brazil. General Motors owns 50% of the shares in the
venture; the Russian and Tatarstan governments 25% each. This is the
first foreign venture in the auto industry to start production since
Soviet times. -- Peter Rutland

NEW QUASI-MONEY IN YEKATERINBURG. Sverdlovsk Oblast began on 18 December
to issue new quasi-money to the local population, Radio Rossii reported.
The bills have a water-mark and carry a picture of local Tsarst-era
industrialist Nikolai Demidov. Local governor Eduard Rossel told ITAR-
TASS on 7 December that he had won Central Bank approval for the scheme.
Details are unclear, but it appears that the notes will be given to
welfare recipients and will be issued to an amount equal to the taxes
that local firms pay in barter goods. Rossel has thus backed off from
the idea of issuing a full parallel currency, the so-called "Urals
francs." -- Peter Rutland

CORRUPTION IN THE DIAMOND INDUSTRY. Komsomolskaya pravda argued on 19
December that the main reasons for the recent reorganization of the
precious metals sector was unprecedented theft and smuggling in the
diamond industry. President Yeltsin issued a decree in August disbanding
the State Committee on Precious Metal and Gems, and Prime Minister
Viktor Chernomyrdin recently appointed Deputy Finance Minister German
Kuznetsov to head the replacement State Fund of Precious Metals and
Gems. The paper said that a recent audit discovered that $300 million
worth of diamonds had been exported illegally in 1994 and $500 million
in 1995, severely damaging the domestic diamond cutting industry.
Yevgenii Bychkov, former head of the Committee on Precious Metals and
Gems, was fired in February amid allegations of corruption. -- Penny
Morvant

BANKS CONTRIBUTING LESS. Banks are contributing less to the federal
budget than in previous years, according to Finance Minister Aleksandr
Livshits. A study by the government's Working Centre for Economic
Reforms found that while banks account for 14% of GDP, they provide only
4% of total tax revenue, Segodnya reported on 19 December. Livshits said
that the government may have to change the tax mechanism for banks by
replacing the tax on profit with a tax on banks' assets or liabilities.
Meanwhile, reported on 19 December that the city of Moscow alone
accounts for 27% of federal budget revenue. -- Natalia Gurushina

SPACE AGENCY ASKS FOR MORE MONEY. Russian Space Agency head Yurii Koptev
told the Duma on 18 December that the government should increase
spending on the space industry in the 1997 budget by 1.8 trillion rubles
to 5.1 trillion rubles ($920 million), ITAR-TASS and AFP reported.
Koptev warned that without additional funds the agency will not be able
to continue work with the U.S. on the Alfa space station. He noted that
50% of Russia's satellites are outdated and that the stock of rockets is
virtually exhausted. Funds from Western companies and agencies accounted
for 40% of the industry's funding in 1996, and the industry expects to
receive $600 million from such sources in 1997. The space industry was
allocated 3 trillion rubles in the 1996 budget, but only 2.4 trillion
were released. As a result, Russia was able to carry out only 11 of 27
scheduled space lauches in 1996. -- Natalia Gurushina

TRANSCAUCASIA AND CENTRAL ASIA

LATEST ISSUE OF OPPOSITION NEWSPAPER CONFISCATED IN ARMENIA. The 18
December issue of Ayzhm, the newspaper of the opposition National
Democratic Union, has been confiscated by the Haymamul state-run
distributing agency, Groong reported on 18 December citing Asbarez-on-
line. Ayzhm's latest issue contained an article critical of Haymamul's
activities. The agency, which has a monopoly over newspaper
distribution, has been repeatedly slammed by Armenian journalists for
its allegedly inefficient work, including delays in paying periodicals
for copies sold. Some journalists claim that the agency is used by the
authorities as an instrument of control over the media. -- Emil Danielyan

TURKMENISTAN SUSPENDS GAS SUPPLIES TO ARMENIA. Turkmenistan has
suspended natural gas supplies to Armenia because of the latter's $15
million debt for 1996, Noyan Tapan and AFP reported on 19 December.
Armenian Energy Minister Gagik Martirosyan said that Armenia's energy
sector now has debts of $75 million as a result of nonpayments by
enterprises, government agencies, and individuals. He added that
Armenian officials are currently negotiating with the Turkmen side and
suggested that gas supplies may soon resume. -- Emil Danielyan

IMF SUSPENDS LOAN TO UZBEKISTAN. The International Monetary Fund on 19
December suspended a $185 million standby loan to Uzbekistan, Reuters
reported. Further disbursements have been postponed because Uzbekistan
failed to meet the fund's inflation targets, according to Mark O'Brien,
the IMF's resident representative in Tashkent. Uzbekistan's target for
1996 was 25%, but inflation is estimated to have exceeded 40%. Another
factor was the introduction of draconian foreign exchange controls in
October. Further payments have been condtioned on a "very tight
financial policy...combined with a full liberalization of access to
foreign exchange." -- Lowell Bezanis

HIGH PRICES FOR KAZAKSTANI BROADCAST FREQUENCIES. Information obtained
by Internews in Moscow suggests that prices at a planned auction for
broadcast frequencies in Kazakstan will prove prohibitively high for
independent stations. A decree signed by Deputy Prime Minister Imangali
Tasmagimbetov on 12 December lists annual fees and auction starting
prices for radio and television frequencies. Bidding for radio
frequencies with the weakest signals (FM 100-1,000W) will begin at
$30,857; radio stations will also have to pay an annual fee of $6,171.
The highest starting price--$114,285--is for UHF television frequencies
(100-1,000W). Companies will also have to pay an annual fee of $11,428.
Discounts will be available for stations broadcasting outside Almaty and
Akmola. Frequency licenses cost $500, and only Kazakstani companies can
apply. Such high costs are likely to force most independent stations off
the air. -- Bruce Pannier

ONE MAN'S SOLUTION TO WAGE ARREARS IN KAZAKSTAN. Kazhmurad Nagmanov, the
head (akim) of the eastern Kazakstan region, is encouraging heads of
local factories to sell their cars in order to pay their workers,
Reuters reported citing an article in the 20 December Kazakstani daily
Karavan Blitz. Unpaid wages have become a chronic problem in Kazakstan,
triggering several demonstrations to protest living conditions.
According to Karavan Blitz, there was no indication that "the directors
were rushing to take the akim's advice." -- Bruce Pannier

[As of 12:00 CET]

Compiled by Penny Morvant

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            Copyright (c) 1996 Open Media Research Institute, Inc.
                      All rights reserved. ISSN 1211-1570
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