A good eater must be a good man; for a good eater must have a good digestion, and a good digestion depends upon a good conscience. - Benjamin Disraeli
OMRI DAILY DIGEST

No. 46, Part I, 06 March 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

YELTSIN CALLS FOR "ORDER," CRITICIZES GOVERNMENT . . . The need to
establish "order based on law" was the prevailing theme of President
Boris Yeltsin's annual address to the parliament on 6 March -- his first
major policy speech since his long illness. Yeltsin distributed a 66-
page text to the parliament, and delivered a 30-minute speech in the
Kremlin which was televised for the parliamentarians. Yeltsin said he is
dissatisfied with the government and will announce changes in its lineup
soon, Russian and Western agencies reported. (Anatolii Chubais evaded
journalists' attempts to confirm an Ekho Moskvy report that he had
already been appointed first deputy prime minister, ITAR-TASS reported.)
Yeltsin also criticized proposed constitutional amendments, saying the
parliament should first "learn to respect" the constitution and pass all
the federal constitutional laws called for in the document. Communist
Party leader Gennadii Zyuganov told AFP that Yeltsin's speech made him
feel "ashamed," as it contained no specifics on how to solve key
problems. -- Laura Belin

. . . DISCUSSES CHECHNYA . . . Yeltsin admitted that the top political
leadership made mistakes in Chechnya and that the conflict has inflicted
a deep wound on Russian society and tremendous damage on the economy. He
noted that a decision on Chechnya's independence has been put off until
2001 to allow emotions to abate, but he stressed that the negotiation
process will continue. The Chechen conflict showed that the country has
weak state institutions and suffers from the fragmentation of power and
society, the president said. The main lesson to be drawn from the
conflict, he added, is "Russia needs order." -- Robert Orttung

. . . FOREIGN POLICY . . . Yeltsin repeated his "profoundly negative
view" of NATO expansion, saying "times are getting critical for Europe."
He argued that "without Russia, and even more so against her," it would
prove impossible to create "an effective system of security." He
reiterated Moscow's demand that any Russia-NATO charter take the form of
a legally binding international treaty. Emphasizing that he will strive
for "cooperation between equals" at his meeting with U.S. President Bill
Clinton later this month, Yeltsin cautioned that no one country should
be allowed to dominate international affairs. He termed fostering
integration with Belarus "the most important direction" in Russian
foreign policy in 1997. -- Scott Parrish

. . . MILITARY REFORM . . . Yeltsin declared that he will soon make "a
decision in principle" on the direction of military reform, describing
its goal as the creation of a smaller, more efficient military that
maintained Russia's capability to deter potential aggressors. He said
reform will downsize and improve the professionalism of the military,
streamline the number of service branches, reduce the number of
ministries with uniformed servicemen, and create new mobile forces in
each of Russia's eight military districts. Calling for technological
modernization, he admitted that the Russian military lags five to
fifteen years behind its Western counterparts in some areas. -- Scott
Parrish

. . . AND ECONOMICS. Yeltsin's address contained few new economic ideas
but was rather a catalog of ills and an affirmation of the importance of
continuing reform and implementing existing policies. Yeltsin called for
a balanced budget by 1999, excluding the costs of debt servicing, and
said he intends to take the drawing up of the budget under his "personal
control." He called, predictably, for a crackdown on corruption and
lamented the fact that "the criminal world has openly challenged the
state and launched into open competition with it." -- Peter Rutland

EFFORTS INTENSIFY TO FIND JOURNALISTS KIDNAPPED IN CHECHNYA. Russian
officials and journalists continued to seek information on the
whereabouts of four Russian journalists taken hostage in Grozny on 4
March. The four include an ITAR-TASS correspondent and three employees
of Radio Rossii. According to initial reports, only two journalists had
been captured. The Federal Security Service claimed to have preliminary
information on where the journalists are being held, while executives
from ITAR-TASS and Radio Rossii flew to Grozny to coordinate the search
efforts. Chechen President Aslan Maskhadov has ordered his deputies to
take all steps to find the journalists, Radio Rossii reported.
Komsomolskaya pravda on 6 March argued that the authorities will be
unable to accomplish much and that the correspondents' freedom will have
to be bought. -- Robert Orttung

DUMA CONCERNED ABOUT TV COVERAGE. The State Duma has affirmed its
decision to strip Russian Public TV (ORT) correspondents of their
accreditation for one month as punishment for biased coverage, Russian
media reported on 5 March. An ORT commentator complained of "political
censorship," saying the Duma's own legal experts had found that the
action violated Russian media law. Glasnost Defense Foundation head
Aleksei Simonov called on all Russian journalists to impose a one-month
news blackout on the Duma in solidarity with their ORT colleagues,
according to ITAR-TASS. Also on 5 March, Deputy Prime Minister Vitalii
Ignatenko and new Russian TV (RTR) Chairman Nikolai Svanidze appeared in
the Duma to dispel rumors that part of RTR may be auctioned off. In late
1994, Russia's Channel 1 broadcaster Ostankino was transformed into
Russian Public TV (ORT), and 49% of the company's shares were sold to
select investors. -- Laura Belin

FEDERATION COUNCIL APPROVES TROPHY ART LAW. By a vote of 140 to 0 with
one abstention, the Federation Council has approved a law laying claim
to artworks seized by Soviet troops in Germany at the end of World War
II, Russian and Western media reported on 5 March. The new legislation
states that such works of art belong to the Russian Federation and are
compensation for the massive losses sustained by Russia during the war.
Last July, the Federation Council rejected a similar bill. Yeltsin must
now sign the new law for it to go into force. Deputy Culture Minister
Mikhail Shvydkoi said he believed Yeltsin would not sign it "in order to
save Russia from the complications" that would follow. Russia and
Germany have been disputing ownership of so-called trophy art since the
breakup of the Soviet Union. -- Jan Cleave

IRAQI-RUSSIAN RELATIONS. During his 5 March meeting with Iraqi Deputy
Prime Minister Tariq Aziz, Russian Foreign Minister Yevgenii Primakov
said that the UN economic embargo imposed on Iraq after its 1990
invasion of Kuwait should be lifted as soon as Iraq implements UN
Security Council disarmament resolutions, Russian and Western agencies
reported. Primakov said he hopes that the upcoming April report of the
UN special commission on Iraqi disarmament will resolve outstanding
problems. But on 3 March, the UN Security Council, which includes
Russia, voted to extend the embargo for another two months, after the
commission reported it still cannot verify that Iraq has destroyed its
stockpiles of nerve gas and ballistic missiles. Iraq owes Russia an
estimated $7 billion, which cannot be repaid until the embargo is
lifted. -- Scott Parrish

TAX BREAK FOR FOREIGN INVESTORS. The Federation Council on 5 March
approved amendments to article 5 of the law on value-added tax, removing
VAT from equipment imports for foreign investors, ITAR-TASS reported.
The agency also reported that the government has issued a decree laying
down the procedure for implementing the state monopoly on alcohol, which
Yeltsin announced in December 1996. Licenses will be issued by the
Federal Service for the State Monopoly on Alcohol, and quotas will be
allotted to Federation subjects. The fulfillment of quotas will be
monitored by the Ministry of Agriculture and Food, which is the
responsibility of Deputy Prime Minister Aleksandr Zaveryukha, an ally of
Prime Minister Viktor Chernomyrdin. -- Peter Rutland

CHERNOMYRDIN SIGNS DECREE ON MANAGING STATE DEBT. Chernomyrdin has
signed a decree on creating a unified system of managing Russia's
domestic and external debt, ITAR-TASS reported on 5 March. The decree
aims at reducing debt-servicing costs by increasing the proportion of
longer-term securities. The Finance Ministry will also have the right to
repurchase state securities. The government on 3 March issued short-term
state securities (GKOs) with a face value of 262.2 trillion rubles ($46
billion). It is also trying to persuade commercial banks to accept 10-15
trillion rubles of long-term federal bonds (OFZs) at a 20-25% rate of
interest to pay wage and pensions arrears. However, if such an issue is
placed with Russian commercial banks, they are likely to demand a
reduction in the obligatory reserve requirements. -- Natalia Gurushina

GOVERNMENT INTRODUCES NEW DEBT-RESTRUCTURING PLAN. Chernomyrdin has
signed a decree on restructuring companies' debts to the federal budget,
ITAR-TASS reported on 5 March. If a company's debt is smaller than its
equity capital, it will be asked to float additional share issues equal
to the size of the debt; those shares will then be transferred to the
state. If the debt is larger than the equity capital, the company will
have to transfer to the government 50% of shares plus one. In the latter
case, shares will be held by the State Property Committee, which will
have the right to sell them if companies do not meet current obligations
to the budget. Repayment of the debt's principal and interest will be
spread over five and 10 years, respectively. As of 1 January 1997,
companies owed 62.1 trillion rubles ($11 billion) to the federal budget.
-- Natalia Gurushina

SCIENTISTS PROTEST WAGE ARREARS. Scientists from the Russian Academy of
Sciences demonstrated against wage arrears near government headquarters
in Moscow, Russian TV (RTR) reported on 5 March. They urged the
government to reconsider financing for science and to grant some tax
concessions to producers of goods that make use of advanced scientific
methods. They also want scientists to have the status of civil servant.
The previous day, St. Petersburg scientists and research workers called
on Yeltsin and Chernomyrdin to change the official attitude toward
science and education, ITAR-TASS reported. The federal budget owes
scientific institutions some 3 trillion rubles ($ 530 million) in back
wages and unpaid research grants. -- Nikolai Iakoubovski

TRANSCAUCASIA AND CENTRAL ASIA

MANUKYAN TAKES RESPONSIBILITY FOR POST-ELECTION UNREST IN YEREVAN.
Opposition leader and former presidential candidate Vazgen Manukyan has
said in a letter addressed to the procurator-general that he was
responsible for the 25 September attack on the parliament building, Ekho
Moskvy reported on 5 March. The attack followed reports of widespread
election-rigging in favor of incumbent President Levon Ter-Petrossyan.
Manukyan argued that it would be "logical" to conduct criminal
proceedings against him but not against the rank-and-file opposition
activists who went on trial last month on charges of inciting mass
disorder. Manukyan demanded the release of the defendants and expressed
readiness to testify "only in court." -- Emil Danielyan

RUSSIAN WEAPONS TO ARMENIA VIA IRAN? Top security officials told the
Azerbaijani parliament on 4 March that Iran is the conduit for Russian
weapon supplies to Armenia, Russian media reported. They claimed that
heavy arms, 30 anti-aircraft systems, and 1,000 Strela-2 and Strela-3
missiles have been transported by ship across the Caspian Sea and over
land from Iran to Armenia. Last week, Yerevan denied earlier charges of
illegally receiving weapons from Russia. In related news, the
Azerbaijani parliament has drafted a statement calling on the Russian
Duma to identify and punish those responsible for weapons transfers. --
Lowell Bezanis

TBILISI JUDGE FOUND DEAD IN HIS APARTMENT. Vakhtang Alania, the 43-year-
old chairman of a Tbilisi district court, was found shot dead in his
apartment, ITAR-TASS reported on 5 March. Investigators suggest that the
judge committed suicide but do not discount other scenarios. Georgian
media reports that Alania had debts totaling $5,000 and had recently
said he wanted to commit suicide. -- Emil Danielyan

KYRGYZ PLANT TO REFINE KUMTOR GOLD. Jalgap Kazakbayev, director of the
Kara-Balta state mining company, and Leonard Homenyuk, president of
Kumtor Operating Company, have signed an agreement whereby gold
extracted at Kumtor will be refined at the Kara-Balta complex, RFE/RL
reported on 5 March. KOC is a joint venture between the Kyrgyz
government and the Canadian company CAMECO. Some 12 tons of gold are
expected to be refined at Kara-Balta this year. There are believed to be
500 metric tons of gold at the Kumtor site. Earlier reports that gold
would be refined abroad led to an outcry from opposition groups in
Kyrgyzstan. -- Naryn Idinov

ROUTING PROBLEMS FOR TURKMEN GAS. The U.S. is attempting to foil plans,
initialed last year, to transport Turkmen natural gas to Turkey across
Iran, AFP reported on 5 February. Washington has threatened to impose an
embargo on Botas, Turkey's state pipeline company, if it goes ahead with
the deal. The U.S. has also declared its support for an alternative plan
to transport natural gas beneath the Caspian Sea to Turkey and European
markets via Azerbaijan and Georgia. Meanwhile, Turkmenistan is
pressuring Kazakstan to repay $24 million in debts for electricity
supplied in 1995-96, ITAR-TASS reported on 5 March. -- Lowell Bezanis

[As of 12:00 CET]

Compiled by Jan Cleave

*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!

Changes Ahead For OMRI's Magazine Transition

We've learned much in the last two years about what sort of magazine
Transition can be and what role it should play in Central and Eastern
Europe and the former Soviet Union. Of greatest help in this process has
been the advice of readers. Among some of the desired changes are for
Transition to offer even more articles by writers in the region - lively
opinion pieces as well as fact-filled analysis and expanded departments.

Accordingly, Transition will be substantially restructured and
relaunched as a monthly with the issue dated June 1997. The last
biweekly issue will be 6 April, followed by a brief hiatus. All existing
subscriptions will be honored and extended according to the new monthly
frequency, which is priced at $65 for 12 issues. As before, we offer a
substantial discount for readers in and of the countries we cover (apply
to the contacts listed below for more information).

For engaged intellectuals, policymakers, journalists, and scholars from
the region, the new Transition will provide a rare forum for the
exchange of ideas and criticism on political, economic, and cultural
issues and events. Transition will also offer readers from abroad a
window on the experiences of countries moving away from a single
ideology. We are certain that the magazine's new format and orientation
will make it even more useful for your work, as well as contributing
more to your understanding.

For more information, contact the OMRI Marketing Department at tel.
(420-2) 6114 2114, fax (420-2) 6114 3181; email: transition-DD@omri.cz

*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!*^!

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