Upon the education of the people of this country the fate of this country depends. - Benjamin Disraeli 1804-1881
OMRI DAILY DIGEST

No. 1, Part I, 2 January 1997


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

RUSSIA

YELTSIN SAYS ENDING WAGE AND PENSION ARREARS TOP PRIORITY . . . In a taped
television address broadcast on New Year's Eve, President Boris Yeltsin
said, "The most important thing for me in 1997 is to make life in Russia
better and calmer, to put an end to delays in the payment of pensions and
wages, to have order introduced in this country at last," ITAR-TASS
reported on 31 December. Campaigning for re-election last spring, Yeltsin
promised to end wage and pension delays, but a series of presidential
decrees issued in August rescinded almost all of his campaign spending
promises (see OMRI Daily Digest, 20 August 1996). -- Laura Belin

. . . WHILE CHERNOMYRDIN BOASTS OF PROGRESS ON ARREARS. Prime Minister
Viktor Chernomyrdin told ITAR-TASS on 1 January that the government
allocated about 8 trillion rubles ($1.5 billion) for salaries in December,
paying almost all wage arrears. The army was the only exception, he said,
promising that 780 billion rubles ($142 million) still owed to soldiers
will be paid in January. As for pensions, Chernomyrdin said 3 trillion
rubles in financial aid were allocated to the Pension Fund in December;
pension arrears total about 14 trillion rubles. He expressed hope that
pensions would begin to be paid on time in February, after which the
government would start to pay back pensions owed, settling all debts in the
area within the first half of 1997. -- Laura Belin

ZYUGANOV FORECASTS EXPLOSIVE YEAR. "It feels now like August 1917. No one
saw the revolution coming, but it came in three months. By March 1997,
things could blow up," Communist Party leader Gennadii Zyuganov told
Reuters on 1 January. Zyuganov also noted that while Russia has been calm
of late, an 11-year cycle of sun spot activity would soon bring the country
to a "very disturbed period. By 1999, it will be very tough." In writings
and speeches, Zyuganov frequently draws historical analogies; he has
compared present-day Russia to the "time of troubles" at the beginning of
the 17th century and the unstable months before the October Revolution of
1917. However, he has firmly rejected the revolutionary aspirations of
marginal left-wing radicals, calling instead for compromise and dialogue
between the government and opposition. -- Laura Belin

NON-PAYMENTS LEAD TO GAS SHORTAGE IN MURMANSK. About 1,500 homes in the far
northern city of Murmansk were left without heat in sub-zero temperatures
after a utility owed money by the city authorities refused to provide extra
natural gas, ITAR-TASS reported on 31 December. City authorities said a
train with liquefied gas was sent to Murmansk, and that some of the
emergency supplies would be sent to other towns in Murmansk Oblast that are
afflicted with gas shortages. -- Laura Belin

PROTEST OVER MARII-EL ELECTION. An assembly of organizations representing
various ethnic groups in the Volga and Urals issued a statement protesting
the 22 December presidential election in the Marii-El Republic, ITAR-TASS
reported on 31 December. The statement noted that candidates who do not
speak the Mari language were allowed to contest the election, in violation
of Marii-El's constitution. Many of Russia's 21 ethnic republics have
constitutional provisions stating that candidates for office must be
proficient in the republic's titular language. However, federal authorities
have repeatedly said that language restrictions violate the Russian
Constitution. According to the 1989 census, the Mari people make up 43% of
the republic's population, while ethnic Russians comprise 47%. The runoff
election in Marii-El will be held later this month between candidates
representing the Communist Party and the Liberal Democratic Party of
Russia. -- Laura Belin

CHECHNYA PREPARES FOR ELECTIONS. Aslan Maskhadov resigned as Chechen prime
minister on 1 January in order to run in the 27 January presidential
election, NTV reported. Chechen election law requires all government
officials running for office to step down by 2 January. As of that date, 19
candidates had submitted the required 10,000 nomination signatures to enter
the presidential race, and some 10 candidates had been nominated for each
of the 63 parliamentary seats. Russian Security Council Secretary Ivan
Rybkin told ITAR-TASS on 31 December that Russia would not interfere in the
elections, although he said he hopes that all 350,000 refugees from
Chechnya will be allowed to take part. So far, voting facilities are only
being arranged for refugees living in neighboring Dagestan and Ingushetiya.
-- Peter Rutland

DUMA PASSES LAW ON CHEMICAL WEAPONS DESTRUCTION.  The Duma on 27 December
passed a bill regulating the destruction of Russia's estimated 40,000
metric ton stockpile of chemical weapons, ITAR-TASS reported. The law
charges the president and government with laying out a schedule for the
destruction of the stockpile, and codifies safety standards. It also
attempts to soften local opposition to the destruction of chemical weapons
at the depots where they are currently stored (see OMRI Russian Regional
Report, 4 December 1996) by granting federal subsidies to neighboring
regions. Russia, like the U.S., has signed but not ratified the 1993
Chemical Weapons Convention, which will enter into force this April. The
lack of appropriate legislation has hindered efforts to begin liquidating
the Russian stockpile. The bill now goes to the Federation Council for
consideration. -- Scott Parrish

FEDOROV RIDICULES ALCOHOL MONOPOLY. Former Finance Minister Boris Fedorov
punctured the publicity around the recent decision to reintroduce a state
monopoly on alcohol in an interview with Rossiiskie vesti on 31 December.
He noted the existence of presidential decree no. 918, issued in 1993,
entitled "On Restoration of the State Monopoly on the Manufacture, Storage,
and Sale of Spirits." This mandated the licensing of all alcohol production
and sales, but the decree was not implemented. Adding to the confusion,
Deputy Prime Minister Oleg Davydov said on 30 December that the
government's earlier plan to introduce quotas on alcohol imports will now
be dropped, although all imports will be licensed, ITAR-TASS reported. The
IMF had been a strong critic of the plan to introduce import quotas. --
Peter Rutland

RUSSIA PROTESTS OVER ARREST OF DIPLOMAT IN NEW YORK. The Russian Foreign
Ministry on 31 December called in the U.S. charge d'affaires to protest a
29 December incident in which it claims a Russian diplomat was beaten by
New York police, international agencies reported. Moscow wants an apology
from Washington over the incident, involving Yurii Obnosov, first secretary
at the Russian mission to the UN, and his Belarusian colleague, Yurii
Oranzh. New York Police spokeswoman Eve Serrano, however, said Obnosov and
Orange, who appeared intoxicated, assaulted police who tried to cite them
for illegal parking. As they failed to identify themselves, she added, they
were taken into custody following a "slight struggle" but quickly released
after their identities were verified. The State Department is withholding
comment pending a full investigation, but New York Mayor Rudy Giuliani
rejected the Russian charges, and urged Moscow and Minsk to recall the two
diplomats. -- Scott Parrish

YELTSIN TO EMPHASIZE BLOCKING NATO EXPANSION IN 1997. Presidential foreign
policy aide Dmitrii Ryurikov said on 1 January that "overcoming the concept
of NATO expansion eastwards" will be a "major goal" of Yeltsin's foreign
policy during 1997, RFE/RL reported, citing Interfax. Ryurikov said the
NATO issue would be at the center of Yeltsin's scheduled 4 January meeting
with German Chancellor Helmut Kohl. Ryurikov added that Moscow views NATO
expansion as "as a kind of offense," arguing that "it was Russia that won
the Cold War by doing away with military confrontation for the good of all
countries." Writing in Segodnya on 31 December, military commentator Pavel
Felgengauer said Russian officials anticipate no "practical benefits" from
NATO Secretary-General Javier Solana's scheduled mid-January visit to
Moscow; they expect him to offer only "general theses" rather than address
specific Russian concerns about enlargement. -- Scott Parrish

DRAFT DODGER'S SENTENCE REVERSED. The Collegium of the Moscow City Court
reversed a sentence imposed against Muscovite Aleksandr Seregin by a lower
court for draft dodging, Komsomolskaya pravda reported on 26 December.
Seregin, a member of the Anti-military Radical Association, insisted on his
right to perform alternative service, as guaranteed by the constitution
adopted in December 1993. He was convicted on the grounds that there is
currently no law defining alternative service (see OMRI Daily Digest, 25
October 1996). The decision of the Collegium sets a an example for courts
that have usually postponed their decisions on conscious objectors. --
Nikolai Iakoubovski

PROFITEERING IN ALUMINUM INDUSTRY. In a special investigative report on 29
December, NTV's "Itogi" examined the privatization of Russia's lucrative
aluminum industry since 1992. British entrepreneur David Rubin was able to
acquire a controlling packet of shares in the Bryansk and Sayansk aluminum
works and a third of the Krasnoyarsk plant shares, at a time when the
domestic price of aluminum was less than half the export price. Rubin's
firm, Transis Commodities, was headed by Lev and Mikhail Chernyi, and by
Viktor Lisin, a close associate of Oleg Soskovets, the former head of the
Russian Metallurgy Committee who was appointed first deputy prime minister
in May 1993, and who was dismissed in June 1996. The program alleged that
Transis milked profits from the Russian plants and avoided taxes by
manipulating the prices of bauxite imports, and received approval for these
practices from a Russian government meeting in August 1994 chaired by
Soskovets. The Krasnoyarsk factory has broken away from the Transis group
and seemed to have been a source of information for NTV. In the first eight
months of this year, aluminum exports hit $2.7 billion, yet most of the
producers and domestic bauxite suppliers are insolvent. -- Peter Rutland

NEW RUBLE EXCHANGE CORRIDOR. The Central Bank intends to keep the ruble's
value within a corridor set at 5,500-6,100 rubles/$1 as of 1 January,
declining to 5,750-6,350 rubles/$1 by 31 December 1997. This will amount to
a ruble depreciation of 9% over the year--less than the expected 12%
domestic price inflation. In 1996 while inflation was 22% the ruble rose by
19.8%, from 4,640 rubles on 3 January to 5,560 rubles on 31 December 31.
This mere 2% real appreciation in the ruble in 1996 contrasts with a 43%
real appreciation in 1995, when the 130% annual inflation outstripped the
nominal fall in the ruble/dollar exchange rate. The Central Bank introduced
the managed currency corridor in July 1995 and switched to an inclined
corridor, allowing gradual devaluation, in July 1996. -- Peter Rutland

TRANSCAUCASIA AND CENTRAL ASIA

GEORGIAN PRESIDENT CALLS FOR NATIONAL RECONCILIATION. In his New Year's
address to the nation, Eduard Shevardnadze said he hopes 1997 will be a
year of reconciliation among Georgians, Abkhaz, and South Ossetians,
ITAR-TASS reported on 31 December. Shevardnadze condemned the calls by some
Georgian politicians to resolve the Abkhaz conflict by force as
"thoughtless" while adding that Georgia will never agree to Abkhazia's
outright independence. Shevardnadze called for a "more active" Russian
mediation in the Abkhaz conflict and said despite "certain difficulties and
problems" in relations with Russia, his government will continue the
strategic partnership policy with the latter. -- Emil Danielyan

GEORGIA HIT BY NATURAL DISASTERS. Rescue workers on 30 December managed to
clear a path into a 4 km-long tunnel connecting Georgia and Russia that had
been blocked off by an avalanche in the Caucasus Mountains on 26 December,
international agencies reported. Some 300 people, including one newborn
baby who died of hypothermia, were trapped in the tunnel. Some 60 truck
drivers, fearing that their vehicles and cargoes could be stolen, decided
not to leave the tunnel until traffic is resumed. The avalanche followed
floods in West Georgia that, according to ITAR-TASS, washed away more than
50 bridges and destroyed several hundred houses and buildings, causing an
estimated $10 million in damages. -- Emil Danielyan

ARMENIAN PRESIDENT ON 1997. Speaking on national TV, Levon Ter-Petrossyan
said that in 1997 Armenia will have to end the trade-route blockade and
deal with international pressure due to the Nagorno-Karabakh conflict,
ITAR-TASS reported on 1 January. The president said the two challenges can
be successfully overcome if people maintain solidarity and the country
remains stable. He also said that the new year will be marked by an
economic revival, an improvement in living standards, and a stronger rule
of law. -- Emil Danielyan

KYRGYZ PRESIDENT SEES ECONOMIC GROWTH. Askar Akayev on 28 December told
government officials that while living standards had not improved during
1996, "new dynamic sectors of the national economy" would correct that
trend in 1997. Akayev was alluding to the Kumtor gold mining operation
which is scheduled to begin production in 1997. Akayev said the government
will take measures to keep the national currency, the som, stable at the
present rate of 15-17 some/$1, cut annual inflation to 15%, and raise the
minimum wage and pensions by 30%. -- Bruce Pannier

TAJIK-IRANIAN RELATIONS. Iranian Vice President Hassan Habibi arrived in
Tajikistan on 30 December at the head of an 80-member delegation, the
largest Iranian group to visit the Central Asian state so far,
international press reported. Habibi on 31 December signed agreements with
Tajik Prime Minister Yakhye Azimov on double taxation, cooperation in
education, culture, trade, and industry, and a memorandum on developing
auto and rail transportation. ITAR-TASS reported on 30 December that
Tajikistan is seeking help in exploiting its gas reserves, estimated at 800
billion cubic meters, and its 130 million tons worth of oil reserves. In
Tehran, United Tajik Opposition leader Said Abdullo Nuri met with Iranian
Foreign Minister Ali Akbar Velayati on 30 December to discuss the recently
signed Tajik peace agreement. -- Bruce Pannier

[As of 12:00 CET]

Compiled by Victor Gomez

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