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No. 8, Part I, 11 January 1996

We welcome you to Part I of the Open Media Research Institute's Daily
Digest. This part focuses on Russia, Transcaucasia and Central Asia.
Part II, distributed simultaneously as a second document, covers
Central, Eastern, and Southeastern Europe.  Back issues of the Daily
Digest, and other information about OMRI, are available through our WWW
pages: http://www.omri.cz/Index.html

^^^^^^^^^^^^^^^^^^^^^^^^^^^TODAY'S TOP STORY^^^^^^^^^^^^^^^^^^^^^^^^^

The Chechen militants who left Kizlyar early on 10 January in a convoy
of buses with some 160 hostages were halted in the morning by Russian
federal troops in the village of Pervomayskoe near the Chechen-Dagestani
border, Russian media reported. Negotiations are reportedly underway
between the Chechens, led by Salman Raduev, and  Dagestani officials.
Representatives of the Russian forces are insisting that the Chechens
fulfill their promise to release their hostages at the border, according
to ITAR-TASS. The Chechens demanded, first, a Russian Ministry of
Interior escort through Chechnya, and then, talks with representatives
of the Russian federal government, according to ITAR-TASS. Radio Rossii
on 10 January quoted ITAR-TASS as reporting that Chechen President
Dzhokhar Dudaev said the hostage taking in Kizlyar had been undertaken
on his instructions. In Grozny, Chechen Prime Minister Doku Zavgaev has
dismissed the entire government, according to Russian TV. -- Liz Fuller



Gennadii Zyuganov, leader of the Communist Party of the Russian
Federation (KPRF), described recently appointed Foreign Minister
Yevgenii Primakov as "an experienced and skilled statesman," Russian and
Western agencies reported. Zyuganov said Primakov's appointment "implies
open political efforts to protect Russia's national interests which were
sacrificed to enemies of our state," adding that his party's victory in
the 17 December Duma elections demonstrated that voters did not trust
the government's foreign policy. Liberal Democratic Party Leader
Vladimir Zhirinovsky called Primakov's appointment "the best option
possible." Zhirinovsky predicted that Primakov would "turn Russia's
foreign policy toward the Arab world, India, and China." Western experts
are divided in their assessment of Primakov, with some regarding him as
a hard-liner, while others view him as "pragmatic." -- Scott Parrish

TRANSPORT MINISTER SACKED. President Yeltsin dismissed Transport
Minister Vitalii Yefimov on 10 January, Russian agencies reported.
Yeltsin also formally released from duty Minister without portfolio
Nikolai Travkin and State Property Committee Chairman Sergei Belyaev,
who are taking up seats in the new Duma. Yefimov recently came under
fire in the Russian press for the country's poor air safety record.
According to Deputy Economics Minister Ivan Materov, there were three
times as many civil aviation accidents in 1995 as in 1991. On 9 January,
Interfax reported that Moscow Airlines, the company running the Antonov-
26 plane that crashed in Zaire on 8 January killing 300 people, had been
suspended by the Moscow Air Transport Department five days earlier for
safety violations. -- Penny Morvant
ZHIRINOVSKY TO RUN FOR PRESIDENT. To no one's surprise, the seventh
congress of the Liberal Democratic Party of Russia (LDPR) unanimously
nominated Vladimir Zhirinovsky as a candidate in the presidential
election of June 1996, Russian media reported on 10 January. In his 45-
minute address, Zhirinovsky asked President Yeltsin to napalm all
Chechen rebel bases and promised to do so himself by 1 July if elected.
He also said the LDPR were the true winners of the Duma elections, since
the apparent victory of the Communist Party was only its "swan song."
However, Russian Public TV (ORT) reported that the LDPR branch in
Krasnoyarsk sent an appeal to the congress accusing Zhirinovsky and his
family of pocketing party funds, encouraging a cult of personality, and
talking nonsense: "Today the name Zhirinovsky is practically a
diagnosis." The appeal asked the party to choose a different
presidential candidate. -- Laura Belin

AGRARIAN DUMA FACTION TO BE FORMED. Duma Deputy Nikolai Kharitonov of
the Agrarian Party of Russia (APR) announced that he has recruited more
than the 35 deputies needed to form an officially registered Duma
faction, ITAR-TASS reported on 10 January. The APR failed to clear the
5% threshold, but 20 deputies were elected in single-member districts.
Kharitonov said the Communist Party of the Russian Federation (KPRF)
remains the APR's closest political ally, adding that some KPRF deputies
elected in individual districts will join the Agrarian Duma faction. APR
Chairman Mikhail Lapshin has returned to his home in Moscow Oblast,
since he did not contest a single-member district and will therefore not
have a seat in the new Duma. -- Laura Belin

will meet for the first time on 23 January, but many questions remain
about the structure of the upper house of parliament, according to the
current edition of Moskovskie novosti. Under a new law on its formation,
the Council will consist of two deputies from each region, the leaders
of the legislative and executive branches. The old Council appealed that
law to the Constitutional Court, which has not yet heard the case. The
Council's staff will most likely be expanded, since deputies running
regional governments or legislatures will not be able to devote their
full attention to their parliamentary duties. -- Laura Belin

Yeltsin issued a decree setting 16 June as the date for the Moscow
mayoralty election, the same day as the presidential election, Russian
and Western agencies reported. The decree also prohibits other Russian
regions and republics from holding referendums or elections on that day.
A 17 September presidential decree postponed all local elections until
after the presidential election in June. Later, 12 regions were allowed
to hold gubernatorial elections in December 1995. Gavril Popov won the
first mayoral election in Moscow  in June 1991, and upon his resignation
in 1992 he was replaced by vice mayor Yurii Luzhkov. Luzhkov will almost
certainly run for a second term. -- Anna Paretskaya

appointed Col. Gen. Vyacheslav Trubnikov as director of the Russian
Foreign Intelligence Service (SVR) on 10 January, ITAR-TASS reported. He
replaces Yevgenii Primakov, who was recently appointed foreign minister.
Trubnikov, 51, graduated from the Moscow State Institute of Foreign
Affairs (MGIMO) with a specialization in Asian countries. He spent his
entire career in the KGB, and became first deputy director of the new
SVR in January 1992. Both Yeltsin and Primakov expressed confidence that
Trubnikov will make an excellent intelligence chief. -- Constantine

. . .AND SIGNS LAW ON FOREIGN INTELLIGENCE. Meanwhile, President Yeltsin
signed on 1O January the law on foreign intelligence that was passed by
the old Duma in December 1995, ITAR-TASS reported. The law determines
the structure, main principles and government control over the SVR. The
law stresses the importance of human rights, and stipulates that any
cooperation between the SVR and private citizens should be voluntary.
According to the new law, the SVR is subordinated directly to President
Yeltsin. -- Constantine Dmitriev

YELTSIN IN PARIS. President Yeltsin arrived in Paris on 10 January to
attend a memorial service for former French President Francois
Mitterand, who died on 8 January. Speaking at Orly airport, Yeltsin
hinted that he will seek re-election in June. He told reporters, "it is
necessary to prevent the country from turning away from its current
path." -- Scott Parrish

BOLSHAKOV ON RUSSIAN CIS POLICY. Deputy Prime Minister Aleksei
Bolshakov, who chairs a governmental commission on cooperation with the
CIS, said Russia needs to develop a more coherent policy toward the CIS,
Russian agencies reported on 10 January. CIS integration is proceeding
only "with difficulty," he added, since other CIS states fear Russian
domination. Bolshakov also said that  "The USA and its allies are
achieving more and more new positions in CIS countries, which often
harms Russian interests of Russia." In the coming year, Russia will
focus on forming multinational firms involving other CIS states, and
increasing the share of exports which go to the CIS, which now takes
only 22% of total Russian exports. -- Scott Parrish

the Moscow and Moscow Oblast authorities will no longer require
residents to have a propiska, or residence permit, but residents will
still have to register with the authorities, Interfax reported on 10
January. The propiska system, first instituted in 1932, violates the
constitutionally guaranteed right of citizens to freedom of movement. It
was technically abolished by a USSR Constitutional Supervision Committee
decision in 1991 but continued to be enforced in some parts of Russia,
including Moscow. The new system is still restrictive in that
registration can be denied to people who do not have sufficient living
space; the current norm is 18 square meters per person. -- Penny Morvant

JEWISH CONGRESS OPENS. A unifying convention of the Russian Jewish
Congress opened in Moscow on 10 January, Russian media reported. The
forum was organized by Most Bank President Vladimir Gusinskii,
Rossiiskii Kredit Bank President Vladimir Malkin, and Alfa-Bank board
chairman Mikhail Fridman. It aims to unite the Jewish community in
Russia and encourage Jewish business leaders to donate money for causes
such as supporting synagogues and medical centers, building day-care
centers and homes for the elderly, and opening Jewish Sunday schools. --
Penny Morvant
CENTRAL BANK REVIEWS WORK IN 1995. . . Central Bank Chairman Sergei
Dubinin said at a meeting of the heads of the bank's regional branches
that 315 commercial banks, 12% of the total number, had their licenses
revoked in 1995, Russian Public TV (ORT) reported the same day. He said
the bank found serious procedural violations in 80% of banks
investigated. Dubinin welcomed the fact that inflation had been brought
down to 3.2% in December and noted that the federal deficit was covered
by the emission of treasury bills rather than the printing of money. The
same day, Radio Rossii reported four senior officials of the bank went
on trial in Moscow for awarding 5 billion rubles ($4 million) credits in
return for bribes in 1992. -- Peter Rutland

. . .BUT DEBTS REMAIN A -PROBLEM. Prime Minister Viktor Chernomyrdin also
spoke at the bankers' meeting, noting that the non-payment of debts by
firms and municipalities is a threat to economic recovery, Radio Rossii
reported on 10 January. Sergei Yegorov, chairman of the Association of
Russian Banks, estimates that late payments now total 300 trillion
rubles ($65 billion), Nezavisimaya gazeta reported on 4 January. As for
old debts, the government has prepared a law on compensation for people
who lost their savings in Sberbank in the great inflation of 1992, ITAR-
TASS reported 10 January. However, only partial compensation can be
expected, since the current value of the lost savings is equal to the
entire annual GDP of Russia, according to Moskovskaya pravda of 6
January. -- Peter Rutland


In a report to the UN Security Council made public on 10 January, UN
Secretary-General Boutros Boutros Ghali proposed that the mandate of the
136-person UN observer team in Abkhazia be extended by six months,
Western agencies reported. Reuters quoted Security Council Chairman Sir
John Weston as calling on both Georgians and Abkhaz to show greater
flexibility in the currently deadlocked peace talks on Abkhazia's future
status within Georgia. -- Liz Fuller

Nursultan Nazarbayev signed a decree establishing a reorganized National
Agency for the Media, according to a 10 January Radio Rossii report. The
agency is a state organ but is not responsible to the government--only
the president has the power to appoint and dismiss the chairman. Many
Kazakhstani journalists say the new agency gives Nazarbayev control over
all newspapers and magazines that are financed through the republic's
budget, according to the report. -- Bruce Pannier

Viktor Chernomyrdin and Kyrgyz Prime Minister Apas Jumagulov met on 10
January to sign several trade  accords and to discuss the 19 January CIS
summit, Western and Russian sources reported. Jumagulov noted that
Kyrgyzstan is ready to join the customs union currently involving
Russia, Belarus, and Kazakhstan. Uzbekistan has also committed itself to
formal involvement in the customs union. -- Roger Kangas

companies are involved in the construction of a refinery at the
Kokdumalak oil and gas field in the Bukhara region. According to
Interfax of 9 January, the Uzneftegaz company is overseeing the $200
million project, which involves the Turkish GAMA and French Technip
companies and financial support from the World Bank and the EBRD. The
participants hope that by the end of 1996, the plant will process gas
condensate and oil at annual rates of 2.5 and 5 million tons
respectively. -- Roger Kangas

[As of 1200 CET]

Compiled by Victor Gomez

The OMRI Daily Digest offers the latest news from the former Soviet
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              Copyright (c) 1996 Open Media Research Institute, Inc.
                       All rights reserved. ISSN 1211-1570
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