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OMRI DAILY DIGEST - No. 59, Part I, 25 March 1997
No. 59, Part I, 25 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 YABLOKO, NEMTSOV NEGOTIATING ON CABINET POSTS. Earlier this month, members of Grigorii Yavlinskii's Yabloko movement refused to join the cabinet, saying that the government was not committed enough to revising economic policy. However, the appointment of First Deputy Prime Minister Boris Nemtsov last week revived speculation that some State Duma deputies from the Yabloko faction may accept cabinet posts, and Yavlinskii and Nemtsov are still holding negotiations, ITAR-TASS and NTV reported on 24 March. Yavlinskii, who worked closely with Nemtsov in 1992 on economic reforms implemented in Nizhnii Novgorod, has said he will support Nemtsov's efforts, even if Yabloko members do not join the cabinet. Nezavisimaya gazeta noted on 22 March that the Kremlin and the government are interested in securing the support of the Yabloko Duma faction, and Nemtsov is interested in building his own "team" within the cabinet. -- Laura Belin CHECHEN ROUNDUP. Chechen President Aslan Maskhadov on 24 March submitted to parliament his list of nominations for the new government, which he will head, ITAR-TASS reported. The same day, Chechen Deputy President Vakha Arsanov claimed that the so-called "party of war" in Moscow had recruited Chechen renegades to perpetrate terrorist acts in three Russian cities in order to torpedo the ongoing peace talks, according to ITAR-TASS and Reuters. On 23 March NTV summarized an address by Maskhadov to the Chechen people calling for the mobilization of all national forces to consolidate peace and build an independent state. Maskhadov further claimed that unidentified foreign intelligence services are spreading rumors that a coup will take place in Chechnya on 1 April, and warned the population not to give in to "provocations." He also denied rumors of a struggle for power between himself and prominent field commanders. -- Liz Fuller AGRICULTURE MINISTER PROTESTS GOVERNMENT REORGANIZATION. Agriculture Minister Viktor Khlystun on 24 March criticized Yeltsin's decision to include the State Fishing Committee in his ministry as part of an effort to streamline the government. He charged that the decision would destroy the system for managing the fishing industry, ITAR-TASS reported. Khlystun pointed out that the government had tried a similar move in 1992, but had to separate the fishing industry after only four months. Regional leaders in Primorskii Krai and Kamchatka also protested the decision. -- Robert Orttung AGRARIAN PARTY HOLDS CONGRESS. Addressing the fifth congress of the Agrarian Party of Russia (APR), party leader Mikhail Lapshin called for directing more bank capital toward the agrarian sector and sharply reducing food imports in order to revive agricultural production, ITAR- TASS and NTV reported on 22 March. Delegates passed resolutions opposing the sale of farmland and calling on agricultural workers to participate in the nationwide protest planned for 27 March. Communist Party leader Gennadii Zyuganov was a guest at the APR congress. Having fared poorly in the December 1995 parliamentary elections, the Agrarians depend on Duma deputies elected from Communist ranks to maintain the 35 deputies needed for a registered Duma faction. -- Laura Belin REACTIONS TO HELSINKI SUMMIT. U.S. President Bill Clinton has come under fire from conservative critics who accuse him of having abandoned the Baltics by not including them in the first round of NATO expansion, and of having made too many concessions to Russia in restricting work on ABM technologies. In Russia, most centrist commentators have reacted with cautious approval to President Boris Yeltsin's diplomacy at Helsinki. Director of the USA-Canada Institute Sergei Rogov, writing in Nezavisimaya gazeta on 25 March, noted that Russia had no chance of stopping NATO expansion and praised Yeltsin for avoiding a "senseless confrontation." However, Izvestiya on 25 March warned that the summit left many crucial differences unresolved, hidden within the "matrioshka" of the five agreements. -- Peter Rutland VISITORS FROM INDIA . . . Indian Prime Minister H.D. Deve Gowda arrived in Moscow on 24 March for two days of talks, ITAR-TASS reported. He is expected to sign a $2 billion deal for delivery of two VVER-1,000 light-water reactors to India. The deal was initially planned in 1988, but delayed due to disagreements over payment arrangements. Later this year Russia will begin delivery to India of seven cryogenic kick (fourth) rocket stages which will be used for satellite launches. The rocket stages will cost $150 million. After U.S. complaints, Russia withdrew an earlier $800 million plan to sell India the technology to make the cryogenic boosters. This month Russia also began delivery of Su-30 MK fighter jets to India under a $1.8 billion contract signed in November 1996. -- Peter Rutland . . . AND CHINA. Also on 24 March Chinese Foreign Minister Qian Qichen began a four day visit to Moscow, aimed at preparing for the Russo-Chinese presidential summit scheduled for April. Due to a mix-up Qian was left waiting by his hosts for 20 minutes at Sheremetevo airport, Reuters reported. Deputy Foreign Minister Grigory Karasin said that at the summit Russia, China, Kyrgyzstan, Tajikistan, and Kazakstan intend to sign a treaty on the reduction of military forces along their mutual borders, ITAR-TASS reported. According to a poll by the Beijing Public Opinion Institute, 40% of Chinese think that relations with Russia are more important than relations with Japan or the U.S., although 46% thought all three countries were of equal importance, ITAR- TASS reported on 25 March. 19% approved of the changes in Russia since 1991, 35% disapproved, and 25% thought the changes would not last. -- Peter Rutland VOLGOGRAD CITY COUNCIL BANS LOLITA. The Volgograd City Council, a majority of whose members are communists, demanded that the oblast executive ban a local theater production of Vladimir Nabokov's Lolita, ITAR-TASS reported on 24 March. The council members believe that the story about an affair between a 12-year-old girl and an old man is "amoral" and would corrupt the city's youth. A local youth theater is sponsoring the production. -- Robert Orttung TUBERCULOSIS RATES RISING. The Russian Health Ministry said on 24 March that about 65 people in every 100,000 are suffering from tuberculosis, a 10% increase in comparison with last year, ITAR-TASS reported. The number of deaths from tuberculosis has risen by almost 90% over the past five years. TB rates are particularly high in Tyva and the Koryak Autonomous Okrug (three times the national average) and in Buryatiya, Dagestan, North Ossetiya, the Jewish Autonomous Oblast, and Kurgan Oblast (almost twice the national average). Those most at risk from the disease include prisoners, migrants, "shuttle-traders," and the homeless. TB rates in prisons and penal colonies are more than 40 times the national average. -- Penny Morvant MOSCOW POLICE MUST GET OUT OF SECURITY BUSINESS. Moscow's police chief, Lt.-Gen. Nikolai Kulikov, has issued an order prohibiting the capital's policemen from concluding private agreements to guard businesses or their employees, Kuranty reported in its issue of 19-25 March. The decision followed the discovery that a Moscow police unit had been guarding a leading organized crime figure. After the murder on 23 January of Vladimir Naumov, a businessmen and prominent member of the Koptevo criminal gang, investigators found that he had been guarded by a Moscow spetsnaz (special-designation) unit in their off-duty hours. Many former law enforcement personnel are involved in private security, while others moonlight in the sector to boost their income. -- Penny Morvant STATISTICAL CHEATING EXPLAINS REPORTED GDP GROWTH. The State Statistical Committee (Goskomstat) reported GDP growth of 0.1% in January and 0.9% in February. However, Reuters reported on 17 March that the apparent upturn may be due to a change in Goskomstat methodology. Goskomstat increased its estimate of shadow economy activity for 1997 from 20% to 25% of GDP - but did not adjust upwards the 1996 figures. This allegation was confirmed in a Financial Times article on 25 March, which noted that without the alteration reported GDP would have fallen by 6% in January. The Financial Times said that the new methodology would have produced a figure of 5% growth for February, which was so unbelievable that the figure was adjusted downwards. Russian GDP has been falling for the past seven years; the World Bank predicts the fall will cease this year, but does not expect positive growth till 1998. -- Peter Rutland MEASURING THE RUSSIAN BUREAUCRACY. Many of Russia's government ministries have surprisingly low budgets and staffing levels, according to Profil no 10. The journal examines the spending on ministry bureaucracies in the 1997 budget. The State Tax Service takes up a huge 4.8 trillion rubles out of the total budget for civilian ministries of 11.6 trillion rubles ($2 billion). The tax service will also get an additional 1.5 trillion rubles from a special fund. Second in line is the Finance Ministry, with 2.6 trillion rubles, followed by the Presidential Administration with 824 billion. The foreign ministry will spend 113 billion rubles, the justice ministry 52 billion. Many ministries have extremely low administrative budgets - the health ministry budget is 13 billion rubles ($2.3 million), the State Property Committee 9 billion, the communications ministry 7 billion. -- Peter Rutland CONSTITUTIONAL COURT REJECTS REGIONS' TAX PETITION. The Constitutional Court has rejected the petition filed in February by representatives of the Komi Republic, Irkutsk Oblast, Altai Krai, and Volgograd and Vladimir oblasts, in which they argued that the tax law forbidding local authorities from introducing their own taxes contradicts the Russian constitution, ITAR-TASS and Kommersant-Daily reported on 21-22 March. The government has prepared a new draft of the tax code which envisage a drastic cut in the number of taxes (from some 200 to just over 30). The court confirmed the legitimacy of these restrictions and ruled that regions only have the right to impose those taxes that have been specifically allowed by the federal government. -- Natalia Gurushina CENTRAL BANK CHANGES RESERVE REQUIREMENTS. The Central Bank (TsB) has decided to lower obligatory ruble reserve requirements for commercial banks effective 1 May, Kommersant-Daily reported on 22 March. Requirements on deposits of up to 30 days, those of 31-90 days, and of over 91 days will go down from 16% to 14%, from 13% to 11%, and from 10% to 8%, respectively. This measure should help the government to place 10-15 trillion rubles of long-term federal bonds (OFZs) with commercial banks in order to raise money for repaying wage and pension arrears. At the same time, the TsB increased requirements on foreign currency deposits (from 5% to 6%), attempting to reduce the dollarization of the economy. This step, however, may weaken the position of banks specializing in foreign trade operations. -- Natalia Gurushina TRANSCAUCASIA AND CENTRAL ASIA SHEVARDNADZE ULTIMATUM TO RUSSIAN PEACEKEEPERS. Georgian President Eduard Shevardnadze argued in his traditional Monday radio interview on 24 March that the upcoming CIS heads of state summit should either broaden the mandate of the CIS peacekeeping forces deployed in Abkhazia to enable them to protect the Georgian population more effectively, or comply with the Georgian parliament resolution calling for their withdrawal, Reuters reported. Both the Turkish Ambassador in Tbilisi, Tofik Okiazus, and Georgian presidential press secretary Vakhtang Abashidze have rejected the claim by Russian State Duma deputy Sergei Baburin that Turkey has moved troops closer to its border with Georgia in anticipation of the deployment of a NATO peacekeeping force in Abkhazia, Nezavisimaya gazeta reported on 21 March. Meeting two weeks ago with a delegation from the Turkish parliament, Shevardnadze had proposed that Turkey take a more active role in resolving conflicts in the Caucasus, and Abkhazia in particular. -- Liz Fuller ALIEV IN KYIV. On arrival in Kyiv on 24 March for a two-day official visit, Azerbaijan's President Heidar Aliev held talks with his Ukrainian counterpart Leonid Kuchma on bilateral cooperation, the planned Transcaucasus transport corridor, European security, and the future of the CIS, ITAR-TASS reported. Aliev subsequently told journalists that after the existing Baku-Batumi oil pipeline is repaired and extended to the Georgian Black Sea port of Supsa in 1998, Azerbaijan's Caspian oil will be shipped from Supsa to Ukraine for export to the West. Azerbaijani and Ukrainian representatives signed a series of bilateral inter-governmental agreements including several on military cooperation, but Ukrainian Foreign Minister Henadii Udovenko stressed that the latter are not directed against any third country. -- Liz Fuller ARMENIA'S NEW PRIME MINISTER INTRODUCED TO CABINET. President Levon Ter-Petrossyan on 24 March introduced newly appointed Prime Minister Robert Kocharyan to the government members, Armenian and Russian media reported. Ter-Petrossyan said that Kocharyan's "popularity, efficiency and ability to get things done" were the reasons for his choice. He said the appointment of the Nagorno-Karabakh leader will not change Armenia's economic strategy, arguing that his country remains committed to democracy and free-market reforms. Also, according to Radio Rossii, Foreign Minister Aleksandr Arzumanyan claimed that Yerevan will not take a harder line at the negotiations on the Nagorno- Karabakh conflict's settlement as a result of the change of prime ministers. Vazgen Manukyan, the leader of the Armenian opposition, told NTV that Kocharyan's appointment is "absurd" as it will create additional problems for Armenia regarding Nagorno-Karabakh. -- Emil Danielyan KAZAKSTANI OIL COMPANY SOLD. On 24 March it was announced that Central Asian Petroleum (CAP), a subsidiary of the Indonesian Setdco Group, has won a 60% stake in Kazakstan's largest oil company, Mangistaumunaigaz, Reuters reported. Mangistaumunaigaz produced six million metric tons of oil, about one third of the Kazak total, and 1.8 billion cubic meters of gas in 1995. CAP offered $250 million, outbidding five other minor challengers. Analysts were concerned that major Western oil companies stayed away from the sale, suggesting that they do not trust the Kazakstan government to clearly define the assets and liabilities of the firms up for sale. -- Peter Rutland [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 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. 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