Истинное величие состоит в том, чтобы владеть собою. - Жан де Лафонтен

No. 49, Part I, 11 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:

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



GOVERNMENT RESTRUCTURING BEGINS. President Boris Yeltsin issued a decree
on 11 March instructing Prime Minister Viktor Chernomyrdin to suggest
within one week which deputy prime ministers and ministers should be
sacked, and who should replace them, ITAR-TASS reported. The number of
first deputy prime ministers will be reduced from four to one (Anatolii
Chubais, who was appointed on 7 March). The number of deputy prime
ministers -- currently, nine -- will also be reduced. Those government
members whose ministries or agencies are to be restructured or
eliminated must resign. -- Laura Belin

KULIKOV ON THE OFFENSIVE . . . First Deputy Prime Minister Anatolii
Kulikov published an open letter on 10 March in which he replied to
charges leveled by David Reuben, chairman of Trans-World Metals, in an
open letter carried by Western newspapers on 7 March, ITAR-TASS
reported. Reuben accused Kulikov of using corruption charges and a media
smear campaign to try to renationalize aluminum plants which had partial
foreign ownership. Kulikov said that he was neither opposed to foreign
ownership nor private property, but was investigating accusations of
money-laundering and other possible crimes "in cooperation with Interpol
and U.S., Canadian, and British law enforcement agencies." Kulikov said
the tax advantages enjoyed by foreign companies on the Russian market,
such as VAT exemption on alumina imports, "condemn tens of thousands of
Russian citizens involved in alumina production to poverty and
deprivation." -- Peter Rutland

. . . BACKGROUND TO KULIKOV-REUBEN EXCHANGE. Critics accuse Kulikov of
dredging up old charges from 1994 in a bid to discredit the political
camp of Aleksandr Korzhakov and Oleg Soskovets, who supervised the
privatization of the aluminum industry, as noted in Itogi on 4 March.
Others accuse the UK-based Trans-World Metals of illegally moving
profits out of Russia through "transfer pricing" in the import and
export of aluminum, as argued in Nezavisimaya gazeta of 6 March. Russian
aluminum exports totaled some $3.9 billion last year. The situation is
complicated by the fact that other Western investors are trying to
dislodge Trans-World Metals from their dominant position on the Russian
market (see OMRI Daily Digest, 7 March 1997). The Reuben letter has
given Kulikov an opportunity to portray himself as a defender of market
reform in a situation where, in Kulikov's words, "mafia-like structures
are monopolizing and destroying the market." -- Peter Rutland

Interior Ministry spokesman said on 10 March that, contrary to Russian
media reports, an explosion on 9 March close to the Grozny headquarters
of field commander Shamil Basaev was caused by the accidental detonation
of a small quantity of explosive material and not by a bomb, according
to Reuters. Also on 10 March, Radio Rossii reported that Chechen
President Aslan Maskhadov has issued two decrees suspending broadcasting
by private TV companies, allegedly in order to prevent the spread of
pornography and the moral degradation of youth, and introducing
compulsory licenses for broadcast media outlets. -- Liz Fuller

NATO-RUSSIA UPDATE. Citing anonymous NATO diplomats, Reuters reported on
10 March that Russia and NATO are edging toward a deal under which
Moscow will accept a limited eastward expansion of the alliance. The
main sticking point in the ongoing talks between Moscow and NATO is
reportedly Russian insistence that no NATO military installations be
constructed on the territory of new members, a condition the alliance
refuses to accept. However, echoing the tone of a report issued the same
day by the Stockholm Peace Research Institute (SIPRI), Western diplomats
contended that Moscow has accepted expansion, but is simply angling for
the best possible deal. After NATO Secretary-General Javier Solana left
Moscow for a tour of Central Asia, NATO Assistant Secretary-General
Gebhart von Moltke remained behind to continue negotiations on the text
of the proposed Russia-NATO charter. -- Scott Parrish

received from anonymous military officers, Izvestiya on 11 March argued
that the military wastes hundreds of millions of rubles annually because
of inefficient duplication of weapons systems, training facilities, and
command staff. By eliminating such duplication, the paper said, the
military could find resources to launch a serious reform program without
an increase in the military budget. For example, the paper attacked the
current policy of maintaining separate Air Defense Forces and Air
Defense Forces of the Ground Troops, each with its own command
structures, incompatible weapons systems, independent weapons
development and procurement, and training facilities. It blamed
duplication on the narrow bureaucratic interests of the military
leadership, implicitly criticizing Defense Minister Igor Rodionov, who
contends the military budget must be increased if reform is to proceed.
-- Scott Parrish

in the 10-16 March edition of the weekly Interfaks-AiF, the commander of
the Strategic Rocket Forces, Army General Igor Sergeev, said that
despite its shortcomings "there is no alternative" to ratifying the
START II arms control treaty. The 1993 treaty has been ratified by the
U.S. Senate, but not by either house of the Russian assembly, both of
which must approve it before it can enter into force. Sergeev endorsed
the idea of extending the term for implementing the treaty from 2003 to
2006 or 2007. Some of the treaty's Russian opponents have argued that it
would be too expensive to implement in just a few years. Sergeev also
linked ratification of START II with strict American adherence to the
1972 ABM treaty. Moscow and Washington have a long-standing disagreement
over the interpretation of that treaty. -- Scott Parrish

GERMAN TOXIC WASTE INTERCEPTED. A five-truck convoy carrying 108 metric
tons of liquid sodium cyanide was intercepted by the Federal Security
Service (FSB) in the Smolensk region on 11 March, ITAR-TASS reported.
The convoy had originated in Germany and claimed to be en route to
Tajikistan, although the report suggested its actual destination was
somewhere in Russia. It had taken back roads to avoid customs posts on
the Russo-Belarusian border and had penetrated 120 kilometers into
Russia. The trucks were returned to Belarus. -- Peter Rutland

PRESIDENTIAL DECREE ISSUED ON UDMURTIYA. A presidential decree signed on
10 March orders the State Council of the Republic of Udmurtiya to abide
by a 24 January Constitutional Court ruling, which struck down portions
of the April 1996 Udmurt law on state institutions. The decree instructs
local legislatures that were disbanded and heads of local administration
who were forced to resign after April 1996 to resume their duties, ITAR-
TASS reported. The decree also declares invalid organs of government
formed and acts of the State Council adopted on the basis of the Udmurt
law. Russia's Procurator General is instructed to hold Udmurt officials
legally responsible if they do not implement the Constitutional Court
decision. The refusal of the State Council to abide by the court ruling
is a prime example of what concerned federal officials have called
"legal separatism" in the Russian regions. -- Laura Belin

CORRUPTION IN THE TAX POLICE. Maj.-Gen. Vladimir Shlyk, the head of the
department of internal security in the Federal Tax Police Service
(FSNP), complained in an interview that although "one hears about the
problem of corrupt officials all the time" from politicians, there is
still no law on corruption, nor an independent agency to deal with it,
Nezavisimoe voennoe obozrenie reported in its 7 March issue. Shlyk, a
25-year KGB veteran, noted that the Duma has passed three anti-
corruption bills, but none of them made it into law - the last was
vetoed by President Yeltsin in 1995. The FSNP is responsible for rooting
out corruption in the State Tax Service and Tax Inspectorate. In 1996
101 tax officials were convicted of corruption, up from 54 in 1995, and
including three district tax inspectorate directors. Shlyk noted that
criminal gangs are making determined efforts to penetrate the tax
police, even trying to recruit cadets at their academy. -- Peter Rutland

Viktor Ilyushin criticized regional authorities for reducing their
contributions to the state Pension Fund recently by as much as 40-50%,
ITAR-TASS reported on 10 March. The largest reductions were made by
Kareliya, Khakassiya, Buryatiya, Yakutiya (Sakha), the Altai and
Krasnoyarsk krais, and the Arkhangelsk, Kostroma, Kurgan, Kemerovo,
Magadan, Sakhalin, Sverdlovsk, and Tyumen oblasts. The fund has received
only 11 trillion rubles ($1.93 billion) of the expected 12.5 trillion
rubles for current pension payments. Ilyushin noted that each time the
federal government steps in to bail out the Pension Fund and promises to
pay overdue pensions, the regions allow their arrears to the fund to
rise. -- Natalia Gurushina


SARKISYAN RESIGNATION UPDATE. Armenian presidential spokesman Levon
Zurabian told journalists on 10 March that President Levon Ter-
Petrossyan would not yet accept the resignation, tendered on 6 March, of
Prime Minister Armen Sarkisyan, ITAR-TASS reported. Sarkisyan, who is
recuperating from surgery in London, is reportedly determined to step
down as he considers that the state of his health precludes his
continuing to discharge his duties. -- Liz Fuller

Shevardnadze, in his regular Monday radio broadcast on 10 March, said
that relations with Russia "remain, as before, the key question for
Georgian foreign policy," ITAR-TASS reported. Shevardnadze professed
incomprehension at Russian opposition to the burgeoning Uzbekistan-
Azerbaijan-Georgia-Ukraine axis, arguing that cooperation between CIS
member states benefits the CIS as a whole. He also pleaded yet again
that the mandate of the Russian peacekeeping troops in Abkhazia, which
expired on 31 January and is due to be renewed at the CIS summit later
this month, should be amended to allow the force's deployment throughout
Gali raion, home of many of the ethnic Georgians who fled Abkhazia in
1993, and as far north as the river Galidzga. -- Liz Fuller

in Afghanistan sent a note to the UN complaining of rival military
factions using bases in Tajikistan, ITAR-TASS and Reuters reported on 10
March. According to the Taliban, Afghan Gen. Ahmad Shah Masoud, the
right-hand man of ousted President Burhanaddin Rabbani, has established
a safe haven at the southern Tajik city of Kulyab. The Taliban claim
helicopters ferry weapons from this base into Afghanistan to help in the
fight against Taliban forces which are slowly moving northward.
According to a 10 March broadcast from the Kabul Voice of Radio Shari'a,
Tajikistan is working in coordination with the Russian Federation "for
the purpose of intensification of the war against the Islamic State of
Afghanistan." Tajik presidential spokesman Zafar Saidov dismissed the
allegations, saying the government of Tajikistan has never allowed
foreign forces to use its country as a base. -- Bruce Pannier

RED CROSS RETURNS TO TAJIKISTAN. Just over one month after the
organization pulled out most of its workers from the country, the Red
Cross began operations in Tajikistan again, according to a 10 March
report from ITAR-TASS. Workers delivered food to people in the Vanch
Valley and set out for the Tavil-Dara area, the scene of intense
fighting during most of 1996. The Red Cross announced its temporary
departure in early February when two of its employees were taken hostage
along with UN workers and Russian journalists. -- Bruce Pannier

on 10 March issued a deadline for Prime Minister Akezhan Kazhegeldin to
solve the wage and pension arrears problem, RFE/RL and Reuters reported.
"I give April 10 as the deadline," Nazarbayev said at a meeting of the
government; by then Kazhegeldin must "tell how he will resolve the
problem--or leave." Arrears amount to well over $500 million, which
Nazarbayev feels is contributing to his unpopularity. Nazarbayev also
promoted the head of the Semipalatinsk region, Galymzhan Zhakiyanov, to
the new post of head of the Agency for Control of Strategic Resources.
Zhakiyanov will keep track of trade in oil, grain, ferrous and non-
ferrous metals, and the pipeline network. In another appointment, former
oil and gas minister Nurlan Balgimbayev now heads the new state Kazak
Oil company. Both Balgimbayev and Zhakiyanov are seen as opponents of
Kazhegeldin. -- Bruce Pannier

released the details of the investigation of the murder of American
journalist Chris Gehring in the Kazakstani capital Almaty on 8 January
(see OMRI Daily Digest ,10 January 1997). The report claimed the
perpetrators made a video confession of the crime. The three men said
they stole Gehring's key and entered his apartment looking for hard
currency. When they were unable to find any money they decided to wait
for Gehring to return. They admitted to torturing Gehring, tying him up
and cutting his throat, then stealing a telephone answering machine and
computer. One of the criminals was apprehended as he attempted to sell
the answering machine. Gehring was working for Internews, helping
independent media in Central Asia. -- Bruce Pannier

TURKMENISTAN'S OIL AND GAS LAW. Turkmen President Saparmurat Niyazov
signed what was termed the Republican Law on Hydrocarbon Resources on 7
March, ITAR-TASS reported the same day. The document defines the
republic's hydrocarbon resources as national property; the right to own
and manage them belongs to the Cabinet of Ministers. It also recognizes
the validity of contracts for production sharing, defines ownership
rights for trunk pipelines, and sets out financial and tax regulations,
according to a BBC-monitored Turkmen Television report. -- Lowell

[As of 12:00 CET]

Compiled by Steve Kettle


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


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