There is always one moment in childhood when the door opens and lets the future in. - Graham Greene
OMRI DAILY DIGEST

No. 36, Part I, 20 February 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

***********************************************************************
OMRI, Radio Free Europe/Radio Liberty Announcement:

Due to a restructuring of operations at the Open Media Research
Institute, OMRI will cease publication of the OMRI Daily Digest with the
issue dated 28 March 1997. For more information on the restructuring of
the Institute, please access the 21 November 1996 Press Release at:
http://www.omri.cz/about/PressRelease.html

On 2 April, Radio Free Europe/Radio Liberty will launch a daily news
report, RFE/RL Newsline, on the countries of Eastern Europe and the
former Soviet Union. A successor to the RFE/RL Daily Report and the
OMRI Daily Digest, the new daily will nonetheless represent a major
departure from its predecessors. In addition to analytic materials,
RFE/RL Newsline will carry news gathered by the correspondents,
bureaus, and broadcast services of Radio Free Europe/Radio Liberty.
RFE/RL will disseminate this new publication both electronically and via
fax to all those now receiving the OMRI Daily Digest and for the time
being under the same terms.

OMRI will continue to publish the periodical Transition, for more
information on Transition please access
http://www.omri.cz/publications/transition/index.html or send a
request for information to: transition-DD@omri.cz

*********************************************************************

RUSSIA

RUSSIAN CITIES BAIL OUT BLACK SEA FLEET. Adm. Viktor Kravchenko, the
Black Sea Fleet commander, told a conference in Sevastopol that
"donations from 38 cities and 43 districts of the Russian Federation
worth more than 10.5 billion rubles (about $1.9 million at the current
rate) have helped Russian sailors to keep afloat," ITAR-TASS reported on
19 February. Moscow Mayor Yurii Luzhkov has been an active supporter of
the fleet and the city administration has allotted 6 billion rubles for
repairing the Moskva missile cruiser and is building 300 apartments for
serving officers in Sevastopol. The liberal governor of Nizhnii
Novgorod, Boris Nemtsov, has suggested establishing control over
Sevastopol by encouraging Russian businesses to buy up property and
firms in the city, according to Kommersant-Daily on 18 February.
"Historical justice should be restored by capitalist methods," Nemtsov
said. -- Peter Rutland

SOVETSKAYA ROSSIYA DEMANDS YELTSIN IMPEACHMENT. A statement signed by
the extremist Sovetskaya Rossiya Editor Valentin Chikin and Zavtra
Editor Aleksandr Prokhanov and published in Sovetskaya Rossiya on 18
February called for the impeachment of President Boris Yeltsin on the
grounds that he has "handed over all power to an anti-national group who
have brought the country to a territorial and political catastrophe."
The writers objected to the election and inauguration of Chechen
President Aslan Maskhadov, who has explicitly called for Chechen
independence. They also criticized Yeltsin, Federation Council Chairman
Yegor Stroev, and State Duma Speaker Gennadii Seleznev for
congratulating Maskhadov. Chikin and Prokhanov claim that Maskhadov's
inauguration marks "the territorial disintegration of Russia, the
deliberate flouting of the constitution, and the beginning of the rapid
degradation of Russia's entire state system." -- Robert Orttung

FSB OFFICERS ARRESTED FOR DRUG DEALING. Two officers from the Moscow
branch of the Federal Security Service (FSB) have been arrested on
suspicion of dealing cocaine, Segodnya reported on 20 February. The two
men, a lieutenant colonel and a warrant officer, were detained on 14
February in a joint operation mounted by the Interior Ministry and the
FSB. Their detention follows the arrest on 10 February of three drug
dealers involved in selling 500 grams of cocaine with a street value of
about $125,000. Izvestiya on 20 February, citing unofficial sources,
claimed that six officers were involved. -- Penny Morvant

UDUGOV NAMED CHECHNYA'S CHIEF NEGOTIATOR WITH RUSSIA. Chechen President
and Prime Minister Aslan Maskhadov on 19 February named acting First
Deputy Prime Minister Movladi Udugov to head a six-man commission that
is to negotiate "inter-state" relations with Russia on the basis of the
31 August 1996 Khasavyurt agreement, ITAR-TASS reported. Also on 19
February, Russia's deputy presidential representative for Chechnya,
Viktor Medveditskov, told ITAR-TASS that the situation of the ethnic
Russian population of Chechnya has significantly worsened since the
withdrawal from Chechnya of Russian troops. The head of the presidential
guard created by Maskhadov's predecessor has resisted Maskhadov's
attempt to replace him, according to ITAR-TASS and AFP. -- Liz Fuller

IRKUTSK JOURNALISTS DETAINED FOR BRIBE-TAKING. Robert Sheptalin, the
editor of the Irkutsk newspaper Zemlya-Novyi poryadok, and Aleksandr
Shakhmatov, a member of the paper's staff, have been arrested on charges
of extorting a large bribe from a businessman. The newspaper is well-
known locally for its reports on corruption in the Irkutsk Procurator's
Office, and the local offices of the Interior Ministry, judiciary, and
executive, ITAR-TASS reported on 18 February. The Irkutsk procurator has
informed members of the regional legislature that an unnamed local
businessman contacted the authorities complaining that the two
journalists initially wanted $1,000 for not publishing an article
critical of him and then demanded $20,000. The reporters were allegedly
arrested while taking the money. -- Robert Orttung

ARMS TRADE SHOULD BE STATE MONOPOLY. Minister for Foreign Economic
Relations Oleg Davydov said on 19 February that the state-owned company
Rosvooruzhenie should maintain its near-monopoly of arms exports, ITAR-
TASS reported. He said arms sales should be carried out "only under
strict state control." Although a total of nine firms now have
permission to export arms, in practice 98% of the trade, worth $3.5
billion in 1996, goes through Rosvooruzhenie (see related story in
Ukraine section on tank sales to Pakistan). Rosvooruzhenie was under the
tutelage of former presidential security chief Aleksandr Korzhakov until
his dismissal in June 1996. On 30 August, Davydov announced that his
ministry has taken over the functions of the Russian State Committee on
Military-Technical Policy. -- Peter Rutland

HIGHER EDUCATION TEACHERS TO GET BACK WAGES. Finance Minister Aleksandr
Livshits, Education Minister Vladimir Kinelev, and Education Workers'
Union Chairman Vladimir Yakovlev signed a document on 19 February
setting a timetable for the payment of delayed wages to Russia's
teachers, Russian Public TV (ORT) reported. Teachers at colleges and
vocational schools will receive wages for November and December 1996 by
June. The agreement does not cover salary debts to secondary school
teachers. The same day, about 160,000 education workers took part in the
second day of national protests over chronic wage arrears. Similar
protests were held in January and last autumn. -- Penny Morvant

CHERNOMYRDIN TO CHECK OUT STRATEGIC ROCKET FORCES. President Yeltsin has
asked Prime Minister Viktor Chernomyrdin to verify personally the
command system of Russia's Strategic Rocket Forces, NTV and AFP reported
on 19 February. Chernomyrdin, accompanied by Defense Minister Igor
Rodionov and missile forces commander Igor Sergeev, will visit the
forces' central command outside Moscow on 21 February. Yeltsin's order
follows Rodionov's public warning in early February that the army does
not have enough funds to maintain the nuclear command centers. -- Penny
Morvant

INVESTMENT SLUMP IN ENERGY SECTOR. Fuel and Energy Minister Petr
Rodionov said total investment in the industry in 1996 fell 16% compared
with the previous year, amounting to 104 trillion rubles ($18.4
billion), ITAR-TASS reported on 19 February. Investment in the gas
industry fell 5.5% and in the oil sector 25.7%. Rodionov noted that
investment fell by almost one-half in 1996, even in such major oil
companies as Yukos and Sidanko. Oil production dropped 2% in 1996, and
has fallen 40% since its 1987 peak. Major foreign investors are staying
away pending the approval of a list of sites authorized under the
production-sharing law. Few of the earnings from oil exports find their
way back into capital investment: on the contrary, oil companies are
behind in paying their taxes and wages. Delovoi mir reported on 18
February that half of the oil pipelines are more than 20 years old, and
2% of the oil is lost through leaks due to corrosion and accidents. --
Peter Rutland

CENTRAL BANK TO TRANSFER HALF OF PROFITS TO BUDGET. The State Duma voted
364 to 1 with one abstention to override the Federation Council's veto
on the law stipulating that the Central Bank (TsB) must transfer 50% of
its annual profits to the federal budget, ITAR-TASS and Kommersant-Daily
reported on 19-20 February. In June 1996, the government challenged the
independence of the TsB by introducing a law requiring the bank to
transfer $1 billion of its 1994 profits to the federal budget. The TsB
responded to that move by increasing the obligatory reserve requirements
for commercial banks in order to neutralize the inflationary impact of
the transfer. A similar reaction to the Duma's latest move may further
tighten the liquidity squeeze in the banking sector. -- Natalia
Gurushina

DUMA PASSES RESOLUTION ON NORILSK NIKEL. The State Duma has passed a
resolution on state support for the giant Russian non-ferrous metals
company, Norilsk Nikel, which owes 1.4 trillion rubles ($250 million) to
the consolidated budget and 1.3 trillion rubles in wage arrears, ITAR-
TASS and Kommersant-Daily reported on 19-20 February. The resolution,
which is not legally binding on the government, introduces a ban on the
sale of the company's federal equity stake until the year 2000;
obligates ONEKSIMbank (which received the federal equity stake under the
loans-for-shares scheme) to return the stake to the government;
stipulates that the government should repay the loan to ONEKSIMbank in
state securities; and obligates Norilsk Nikel to float an additional
share issue equal in value to the company's debt to the federal budget.
-- Natalia Gurushina

VChK BLASTS CUSTOMS PRIVILEGES. The Emergency Tax Commission (VChK) has
criticized the existence of individual customs privileges that resulted
in the loss of 12.4 trillion rubles ($2.2 billion) worth of budgetary
revenue for 1996, Kommersant-Daily and Segodnya reported on 19 February.
The commission has decided to follow the IMF's recommendations and
disband the governmental bureau for international humanitarian and
technological assistance (headed by Yurii Saltanov), which received 1.1
trillion rubles worth of customs benefits in the last year. VChK also
warned the head of the State Customs Committee, Anatolii Kruglov,
against allowing companies and organizations to postpone their customs
payments, a practice that resulted in the loss of 3 trillion rubles
worth of budgetary revenue in 1996. -- Natalia Gurushina

TRANSCAUCASIA AND CENTRAL ASIA

SHEVARDNADZE IN BAKU. Georgian President Eduard Shevardnadze arrived in
Baku on 18 February for a three-day visit intended to open what he
termed a "new stage" in the "strategic partnership" between the two
countries, Russian and Western agencies reported. Following a three-hour
meeting during which Shevardnadze and his Azerbaijani counterpart,
Heidar Aliev, signed more than 20 bilateral cooperation agreements,
including one on the export of Caspian Sea oil and gas via Georgia, the
two leaders reaffirmed their commitment to finding a peaceful solution
to all conflicts in the region, according to ITAR-TASS. Addressing
Azerbaijan's Milli Mejlis (parliament) on 19 February, Shevardnadze
criticized the inability of the CIS to safeguard the territorial
integrity of its member states, and argued that integration within the
CIS should not impede the desire of some of its members to join
unspecified "European structures." -- Liz Fuller

PRO-GOVERNMENT DAILY CLOSES DOWN IN ARMENIA. The editorial board of the
Yerevan-based Aravot daily newspaper decided on 15 February to cease
publication, Armenian media reported. The paper's editor-in-chief and
former spokesman for President Levon Ter-Petrossyan, Aram Abrahamyan,
claimed that "the daily has fulfilled its mission as a free media outlet
and exhausted its resources as such." He denied rumors in Yerevan that
it was closed down for "political reasons." Nominally independent,
Aravot largely supported the government's policies and is believed to
have been heavily financed by former Interior Minister and current
Yerevan Mayor Vano Siradeghyan and his associates. -- Emil Danielyan

BOWING TO BEIJING OVER XINJIANG? Kazakstan has officially stated its
resolute opposition to any kind of separatism in China, according to a
19 February Xinhua report monitored by the BBC. The statement comes in
the wake of Uighur protest rallies in Kyrgyzstan and Turkey following
Beijing's suppression of violent riots staged in early February by the
Uighur minority in the western Chinese province of Xinjiang. On 18
February, the Chinese Embassy in Kyrgyzstan described a demonstration
that took place outside its offices in Bishkek as an act of interference
in China's domestic affairs, ITAR-TASS reported on 18 February. On 17
February, Turkey officially apologized for the burning of Chinese flags
by protesters but also declared its intention to "maintain an interest"
in the people of the Xinjiang region, AFP reported. -- Lowell Bezanis

CENTRAL ASIAN ECONOMIC UPDATE. Turkmen President Saparmurat Niyazov
signed a $580 million agreement with three Japanese concerns -- Itochi,
JGC, and Nissho Iwai -- to build Turkmenistan's first polypropylene
plant in Turkmenbashy (formerly Krasnovodsk) on 18 February, RFE/RL
reported the next day. The Japanese government will reportedly extend a
$400 million credit to the plant which will produce 90,000 metric tons
of polypropylene annually. The U.S. firm CCL has won a tender for a
three-year concession to run the Pavoldar oil refinery in Kazakstan,
RFE/RL reported the same day. The terms of the deal have yet to be
disclosed; the idle plant previously produced more than half of
Kazakstan's gasoline needs. Local officials in the Gorno-Badakhshan
region of Tajikistan are negotiating with China to open a border trading
zone in the Mugab district, according to an 18 February Tajik Radio
report monitored by the BBC. -- Lowell Bezanis

TURKMENISTAN AIRLINES BANNED IN NETHERLANDS. Dutch Transport and Water
Management Minister Annemarie Jorritsma-Lebbink has banned Turkmenistan
Airlines (TA) from landing at Amsterdam's Schiphol Airport, ITAR-TASS
reported on 19 February. The decision comes after a TA flight chartered
in Dubai made an unauthorized landing at the airport on 17 February. The
flight was carrying 173 Sri Lankan Tamils who asked for asylum in the
Netherlands. No details on whether the Tamils will be allowed to stay in
the Netherlands have been released. -- Lowell Bezanis

ASSASSINATIONS, TYPHOID FEVER IN TAJIKISTAN. Unidentified assailants
killed seven people in different residential areas of Dushanbe within a
30-minute period on the evening of 18 February, Reuters reported on 19
February. Among those killed were two U.S. Embassy guards waiting at a
bus stop, a Russian serviceman, and an ethnic Uzbek scientist. The
Russian Foreign Ministry denounced the killings as anti-Russian; the
U.S. called on the Tajik authorities to apprehend the perpetrators. One
of the other victims was a Tajik policeman who worked at a psychiatric
hospital; he was killed when a "patient," reputedly connected with the
pro-opposition Sanginov brothers, was freed by his associates. In other
news, international aid officials in Tajikistan say that at least 10
people have died and thousands have been infected in an outbreak of
typhoid fever in the capital Dushanbe, RFE/RL reported on 20 February.
Some 3,000 cases of typhoid fever have already been reported. -- Lowell
Bezanis

[As of 12:00 CET]

Compiled by Victor Gomez

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            Copyright (c) 1997 Open Media Research Institute, Inc.
                      All rights reserved. ISSN 1211-1570
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