CHECHEN FORCES REGAIN GROUND IN BATTLE FOR GROZNY.
Heavy street fighting continued in Grozny on 2 January, Western agencies reported; Chechen forces succeeded in retaining control of the presidential palace and forced Russian troops out of the city center, after which Russian forces resumed their aerial bombardment of residential districts. The Russian government press center conceded that Chechen fighters had destroyed "several dozen" Russian armed vehicles, and that Russian forces were "regrouping;" it described the situation as "very tense." Speaking on local television in the late evening of 2 January, Chechen President Dzhokhar Dudaev said that the storming of Grozny had been "a catastrophe" for the Russians, and that several hundred Russian soldiers and officers had been captured. He again called for negotiations on a cease-fire and the peaceful withdrawal of Russian troops. Speaking at a press conference in Moscow on 2 January, members of the Russia's Choice faction in the State Duma who were in Grozny at the time of the Russian incursion on 31 December charged that a "full-scale war" was in progress in which "hundreds of military servicemen had been killed and tens of thousands of civilians made homeless," according to Interfax of 2 January. They demanded the resignation of Defense Minister Pavel Grachev and Deputy Prime Minister Nikolai Egorov, whom they hold responsible for massive human rights violations in Chechnya, AFP reported. Russian military spokesman rejected this estimate of Russian losses as "grossly exaggerated." In another development, the Russian government press service claimed on January 1-2 that the Chechens were using crude chemical weapons against Russian troops and that there had been casualties, ITAR-TASS reported. * Liz Fuller and Doug Clarke
RYBKIN ON CHECHNYA.
In an interview with ITAR-TASS on 2 January, State Duma Chairman Ivan Rybkin, who endorsed the Russian intervention in Chechnya shortly after it began, called on Russian forces to stop fighting and Chechen fighters to lay down their arms and begin talks. Rybkin rejected deputies' calls for a special session on the conflict, stating that questions of war and peace fell under the jurisdiction not of the Duma but of the upper house, the Federation Council. He also said he would urge the Security Council, of which he is a member, to take "political measures" to resolve the crisis. * Penny Morvant
FRANCE, GERMANY ADVOCATE OSCE INVOLVEMENT IN CHECHNYA.
In an interview given to Deutschlandfunk on 2 January, German Foreign Minister Klaus Kinkel said that he had asked his Russian counterpart Andrei Kozyrev to consider asking the Organization for Security and Cooperation in Europe to send observers to Chechnya; the French Foreign Ministry likewise advocated OSCE mediation in an attempt to achieve a peaceful settlement, according to AFP. Also on 2 January, a spokesman for the German Foreign Ministry expressed concern over human rights violations in Chechnya, and said that Germany had protested to Russia that the principle of using only means commensurate with the situation was not being observed. * Liz Fuller
UKRAINIAN FOREIGN MINISTER ON CHECHNYA.
On 2 January UNIAN reported that the Ukrainian foreign minister, Henadii Udovenko, condemned the losss of life on both sides in Chechnya in an interview. However, he added that events in Chechnya should not affect Russian-Ukrainian relations and that Kiev treats the conflict in Chechnya as a Russian internal affair. In recent days the Ukrainian Red Cross and other Ukrainian groups have issued statements condemning Russia's policy towards Chechnya. * Ustina Markus
DEFENSE BUDGET FAILS TO MEET EVEN MINIMUM NEEDS.
Col. Gen. Vasily Vorobyev, chief of the Russian General Staff's Main Directorate of Military Budget and Finance, told Interfax on 1 January that the proposed military budget of 44 trillion rubles for 1995 fails to meet even the minimum needs of the Russian military. He said that the government still had not paid 13 trillion rubles from the 1994 budget, resulting in the defense ministry owing defense enterprises 7.8 trillion rubles. Vorobyev reported that the ministry had found ways to save 4 trillion rubles but had to spend all the money it received on wages. As a result he said that oil refineries had practically stopped supplying the military with fuel and many military airports had no more aviation kerosene. In his view, reducing the number of people in the services would not be the answer, since this would require additional funds and aggravate social tension. * Doug Clarke
YELTSIN URGES REVISION OF CFE TREATY.
Russian President Boris Yeltsin is stepping up the campaign for a revision of the 1990 Treaty on Conventional Forces in Europe (CFE). Yeltsin wants to increase the number of Russian troops stationed in the Caucasus, and has sent a letter to this effect to several NATO countries, AFP of 30 December and the Sueddeutsche Zeitung of 31 December reported quoting a Western envoy to the CSCE. Germany opposes any modification of the CFE treaty that would set a precedent , as do Turkey and several other NATO members. * Liz Fuller
RUSSIAN FOREIGN MINISTRY ON IRAQ.
In an interview given to Interfax on 30 December, Deputy Foreign Minister Viktor Posuvalyuk said that France and China are moving closer to Russia's position over Iraq. Russia has been arguing that Iraq has been complying with resolution 687 on its disarmament since October 1993, and thus the UN Security Council should consider lifting the oil embargo against Baghdad. Posuvalyuk suggested that Iraq be given a six-month test period and if it complied with the UN disarmament requirements during that time the UN should consider lifting the oil embargo. Posuvalyuk also noted that Iraq has made some positive moves in regards to recognizing Kuwait's sovereignty and borders and the international community should respond to these. * Ustina Markus
DRUG SMUGGLING INCREASES IN RUSSIA.
The deputy chief of the interior ministry's department for combating drug smuggling, Nikolai Osipov, told Interfax on 1 January that Russia has become a target of international drug traffickers. According to Osipov, there were 75,000 drug trafficking crimes last year, a 50% increase from the previous year. In addition, the quantity of drugs being brought into Russia from outside the country increased by 47% last year. Osipov singled out the Russian Far East and its border with Central Asia as being particularly problematic and said that new measures would have to be implemented to fight the growth in drug trafficking. * Ustina Markus
RUSSIA RENAMES BORDER SERVICE.
Russia has changed the name of its border service from the Federal Border Service-Chief Border Troops Command of the Russian Federation, to the Federal Border Service of the Russian Federation, ITAR-TASS reported on 31 December. Under a presidential decree signed the day before, the head of the border service is to be appointed by the president and can be dismissed by him. Col. Gen. Andrei Nikolayev, who had been the commander-in-chief of Russia's Border Troops, has been appointed director of the new Federal Border Service. Nikolayev was born in 1949 and attended the Moscow Higher Joint Forces Command College, the Frunze Military Academy, and the General Staff Military Academy between 1971-1988. * Ustina Markus
MOSCOW'S MAYOR DENIES CHARGES ON FOOD IMPORTS.
Moscow Mayor Yuri Luzhkov claimed that Russian farmers are unable to meet the city's needs and this is why Moscow must import food from abroad, Interfax reported on 30 December. Luzhkov was responding to charges made by Deputy Prime Minister Aleksander Zaveryukha, who alleged that Moscow "prefers to import products" and this policy was forcing Russian farmers to slash their prices. Luzhkov said that Moscow is attempting to conclude contracts for food with Russia's regions, but the city will ultimately purchase food from whoever offers the cheapest rates. Luzhkov also criticized Zaveryukha's initiative to impose taxes on imported food. * Ustina Markus
OIL POLICY ENDANGERS FOREIGN LOANS.
Russian Economics Minister Evgenii Yasin told Radio Rossii on 31 December that Prime Minister Viktor Chernomyrdin would soon decide on Russia's oil export policy. Deputy Prime Minister Oleg Davydov told ITAR-TASS last week that the much criticized system of export quotas and licenses for oil products would be replaced by a system of compulsory deliveries of 65% of output to domestic consumers; the number of companies authorized to export oil would be reduced from 14 to 12. IMF and World Bank officials, who are considering Russian requests for billions of dollars in 1995, are unhappy about the proposals, arguing that continued export restrictions would cut Russia's foreign income, hold down tax revenues, and discourage foreign investment. Yasin, for his part, was quoted by The Daily Telegraph on 30 December as saying that the economics ministry believes "that fears that ending export quotas will lead to a shortage of oil in the domestic market are insufficiently grounded and that a decision to liberalize is absolutely essential." * Penny Morvant
INDUSTRIAL OUTPUT FALLS IN 1994.
GDP fell in Russia by 15% in 1994, and industrial output was down 21% compared with a drop of 16% in 1993, according to Russian Economics Ministry figures cited 1 January by Interfax; industrial output is now less than 45% of the 1991 level. Light industry, machinery, chemicals and pulp and paper sectors were among the worst hit. Overall capital investments were only 39% of the 1991 level. Inflation reached 16.4% in December but the annual rate was much lower than that in 1993: 320% as opposed to 940. Government statistics also show a sharply widening gap between rich and poor, with the top 10% earning 14 times the income of the poorest 10%. * Penny Morvant
MOSCOW STANDARD OF LIVING SAGS IN 1994.
On 1 January Interfax reported on comments made by Konstantin Buravlev, deputy head of the Moscow government, given the previous day at a Moscow government meeting. Buravlev reported that living standards for Muscovites dropped in 1994, with prices increasing on average by a factor of 5.3, and wages lagging behind, increasing only 4.5 fold. He also said there were some 19,000 registered unemployed in Moscow during December, with some 15,000 dependent on benefits; roughly 15% of the unemployed are under the age of 30. * Stan Markotich
EVTUSHENKO RETURNS AWARD FROM YELTSIN.
Evgenii Evtushenko, probably the most famous Russian poet of the 1960s, has returned his "Friendship of Peoples" order to protest Russia's increasingly hard-line handling of Chechen crisis. The order was awarded to the poet by Yeltsin on the occasion of Evtushenko's 60th birthday in 1994. In his statement, broadcast by RFE/RL on 1 January, Evtushenko announced that he could not keep an award with such a name during the bloody suppression of a small nation. * Julia Wishnevsky
KYRGYZ PROCURACY ISSUES WARNING TO UIGHUR IRREDENTIST ORGANIZATION.
The Kyrgyz Procuracy has refused to register the Uighur Freedom Organization, the stated aim of which is to detach the Xinjiang Autonomous region (largely populated by Uighurs) from the People's Republic of China, ITAR-TASS reported on 30 December. The leaders of the organization were warned by the procuracy that their activities contravened Kyrgyz and international law. The Uighur population of Kyrgyzstan is estimated at 40,000. * Liz Fuller
DIRECTOR OF LITHUANIAN RADIO AND TV RESIGNS.
Laimonas Tapinas announced on 2 January that he would explain at a news conference on 4 January why he had decided to resign as director of Lithuania's state-run Radio and Television (RTV), BNS reports. Tapinas was appointed by the parliament on the recommendation of the RTV board. During the past several years the board has sought to become more independent from the government, but its status has remained virtually unchanged. RTV is directly financed by the government with 24 million litai ($6 million) allocated for this year's budget. In 1994 RTV did not receive about 12% of promised state support, but survived on funds earned from commercials. * Saulius Girnius
ESTONIAN-RUSSIAN AGREEMENTS.
Estonian Justice Minister Juri Adams said that he believes that some Estonian laws related to the implementation of the 26 July agreements with Russia on the withdrawal of Russian troops and social protection for miltary retirees can be amended only after parliament ratifies the agreements, BNS reported on 2 January. Noting that "an international agreement always takes precedence over national legislation," Adams said that if the agreements are ratified problems could arise in selling apartments to Russian military retirees and calculating their length of service for issuing them privatization vouchers. The agreements allow Estonia to refuse a residency permit to military retirees deemed to be a danger to Estonia's security, but do not mention how and by whom the danger is to be established. * Saulius Girnius
AGREEMENT WITH LATVIAN LOCAL GOVERNMENTS ASSOCIATION.
On 30 December Prime Minister Maris Gailis and Local Governments Association (LGA) Chairman Andris Jausleinis signed an agreement protocol for the year 1995, BNS reports. The protocol provides that the government coordinate with the LGA all bills and regulations dealing with local governments. It forecasts that the 1995 revenues to local governments from land, income, and other taxes will be 152.3 million lati ($277 million). * Saulius Girnius
POLISH PARLIAMENT APPROVES 1995 BUDGET.
Poland's leftist-dominated lower house of parliament, the Sejm, on 30 December approved the 1995 state budget by a vote of 299 to 140 with five abstentions, Polish and international agencies reported. The budget projects economic growth of 5% and an annual inflation rate of some 17%. Deputies had previously voted to remove key tax and wage measures from the budget bill in a bid to prevent a veto by President Lech Walesa. The tax provision would extend through 1995 higher income tax rates adopted for 1994, while the wage measure would limit raises for public sector workers to 6% above the projected annual inflation rate. Walesa vetoed the measures when they were voted on separately, but the Sejm overturned both vetoes. Walesa has since appealed to the Constitutional Court to make a ruling in each case. The upper house of parliament (the Senate) will debate the 1995 budget this week. Walesa, whose approval is also required for the budget to pass, has threatened to veto the entire budget bill. Polish commentators see the latest clashes between Walesa and the government as initial skirmishes in the campaign for the presidential elections, due to take place later this year. * Jan Cleave
WALESA WANTS OLECHOWSKI TO STAY ON AS FOREIGN MINISTER.
Polish President Lech Walesa on 2 January said he wants Foreign Minister Andrzej Olechowski to keep his post until presidential elections are held later this year, Polish and international agencies reported. Olechowski tendered his resignation last week for the second time in two months after Justice Minister and Prosecutor-General Wlodzimierz Cimoszewicz, conducting an anti-corruption probe, named him as one of 58 high-ranking officials who receive payment for sitting on the boards of companies in which the government has a stake. Walesa, meeting with Premier Waldemar Pawlak, also demanded that his candidate for defense minister be appointed. Since Piotr Kolodziejczyk resigned from that post in November, the president and the ruling left-wing coalition have been deadlocked over his replacement. Walesa says his demands on the Defense and Foreign Ministries will have to be met before he discusses a compromise on issues such as the 1995 state budget. Under the Polish Constitution, the president has a say in who is appointed to the posts of defense, interior, and foreign ministers. But the ruling coalition has argued that his role in those appointments should be ceremonial only. * Jan Cleave
PRESS REPORTEDLY STIFLED IN BELARUS.
On 26 December Interfax reported that the International Confederation of Journalist Unions had issued a statement expressing concern over violations of freedom of speech in Belarus. The statement criticized Belarusian censors, citing incidents of white spots in newspapers where articles had been pulled by the censors. It also said that the press was not giving people free access to information and was not free to criticize authorities. The recent dismissal of Ihar Asinsky as editor-in-chief of Sovetskaya Belarusiya was mentioned as an example of stifling the press. The Confederation of Journalist Unions urged Belarusian authorities to review their policy towards the press. * Ustina Markus
BELARUSIAN DEPUTIES PASS 1995 BUDGET.
The Belarusian parliament passed the 1995 budget in its first reading on 30 December, Interfax reported. The budget provides for a deficit of 2.647 trillion rubels, or 4% of GDP. The budget also envisages a fall in monthly inflation to 1% by the end of the year, and the GDP is to triple to 66.2 trillion rubels. * Ustina Markus
UKRAINE STEPS UP PRIVATIZATION CAMPAIGN.
Ukraine has begun distribution of certificates in five central oblasts as part of a pilot privatization project, Interfax-Ukraine reported on 3 January. Residents of Kiev, Khmelnytsky, Zaporizhzhia, Zhytomyr and Kirovohrad regions will be able to claim their certificates at local branches of the State Savings Bank and exchange them for shares in some 8,000 large- and medium-sized enterprises, scheduled to be completely transferred into private hands by 1 June. Distribution of the U.S.-made certificates in the remaining regions is set to begin on 1 February. Ukrainian President Leonid Kuchma also ordered privatization of small enterprises to be completed by the end of the year, ITAR-TASS reported. In a decree signed on 2 January, Kuchma directed that revenue earned from small enterprise privatization be appropriated to local authorities for social programs. * Chrystyna Lapychak
UKRAINIAN DEFENSE MINISTRY ISSUES ORDER ON SERVICE ABROAD.
Ukrainian defense minister Valerii Shmarov has issued an order on the selection of servicemen who are to study and work abroad. According to the order, 2-3 candidates should be considered for each post; each candidate must be fluent in Ukrainian and the appropriate foreign language, and have good references. The order is meant to facilitate the implementation of military cooperation agreements with a number of countries with which Ukraine has regular exchanges of delegations and cooperates in the military-technical sphere. * Ustina Markus
FORMER CZECH COMMUNIST LEADERS CHARGED FOR ARMING PARTY MILITIA.
Seven former leading members of the Czechoslovak Communist Party have been charged with illegally arming the party's private militia with weapons from the defence ministry, Czech media reported. The seven include Milos Jakes and Lubomir Strougal, party general secretary and Prime Minister respectively at the time of the alleged crime in 1985, and could face up to five years in jail if convicted. Rude Pravo reported on 3 January that the charges were filed on 29 December, the last of the accused being informed just two hours before a statute of limitations for such crimes came into effect. The "People's Militia" was created after World War II as the "armed fist of the workers' movement." Its up to 18,000 armed members took part in the communist takeover of power in 1948, later shows of strength and in the suppression of demonstrations after the Warsaw Pact invasion of Czechoslovakia in 1968. It was disbanded after the "velvet revolution" of November 1989. * Steve Kettle
CZECHS NEGATIVE ABOUT INFLUX OF FOREIGNERS.
An opinion poll conducted by MENT, Gabal, Analysis and Consulting indicates that more than three quarters of Czechs view negatively the influx of foreigners who have decided to reside in the Czech Republic. The results of the poll were published by Mlada Fronta Dnes on 3 January. Only 16% of respondents thought that the influx of foreigners was a positive development. According to the Czech Interior Ministry, some 120,000 foreigners live legally in the country. However, according to experts, the real number of foreigners, including illegal immigrants, is much higher. The poll shows that Czechs are convinced that foreigners are responsible for growing crime rates, often engaging in such activities as money laundering, fraud, and mafia activities. * Jiri Pehe
SLOVAK CABINET'S MANIFESTO PAST DEADLINE?
On 2 January the Movement for a Democratic Slovakia board met in Bratislava. In a short briefing, MDS Deputy Chairman Augustin Marian Huska said the cabinet is expected to discuss its program manifesto next week, and it will be sent to parliament on 19 January. According to the constitution, however, a new government has 30 days from the time of its appointment to pass its program and win a confidence vote from parliament, and the current government was installed on 13 December. Concerning President Michal Kovac's New Year's speech, Huska said his party would have welcomed more "self-criticism" from the president, particularly in relation to his role in the fall of the government of Vladimir Meciar in March, Pravda reports. * Sharon Fisher
SLOVAK YEAR-END STATISTICS.
According to the latest statistics, Slovakia has approximately 5,358,400 inhabitants. In 1994 68,400 children were born and 51,200 people died. A total of 85.7% of the country's inhabitants consider themselves Slovaks, while 10.7% are Hungarians, 1.5% are Romanies,1% are Czechs, Moravians or Silesians, 0.3% are Ruthenians, 0.3% are Ukrainians, 0.1% are Poles and 0.1% are Germans. Another 0.3% belong to other ethnic groups or did not declare their nationality, Sme reports on 3 January. There are presently 9,845 civic associations, 70 political parties and movements and 76 organizations with international representation registered in Slovakia. * Sharon Fisher
HUNGARY DEVALUES FORINT, ANNOUNCES PLANS TO WITHDRAW COMMUNIST-ERA COINS.
The National Bank of Hungary has announced a further devaluation of the national currency, Hungarian and international agencies report. As of 3 January, the forint will be devalued by 1.4%. In 1994, it was devalued by a total of 16.8%. The bank has also announced that communist-era forint coins will be withdrawn from circulation by 30 June. The bulky old money is to be replaced by smaller, nickel coins, which have been in use since March 1993. Tourists found the existence of two sets of forint coins confusing, and many Hungarian residents complained bitterly about the dwindling numbers of old 5- and 10-forint coins needed for public telephones. * Jan Cleave
CROATS JOIN BOSNIAN CEASEFIRE.
The BBC said on 2 January that Bosnian Croat leader Kresimir Zubak signed the four-month truce agreement earlier endorsed by the Serb and Bosnian government forces. Bihac pocket rebel leader Fikret Abdic had given his verbal agreement as well, and now UN mediators are concentrating their efforts on getting the Croatian Serb forces to sign on. The Krajina Serbs are a major factor in the assault on government's Fifth Corps in the Bihac area, and the government backed the truce largely to ease pressure on that northwestern enclave. Meanwhile, international media report that the ceasefire is largely holding. The main exceptions involve some isolated fighting around Bihac and Sarajevo, where a missile hit the front of the Holiday Inn, apparently fired from a Serb position. * Patrick Moore
SKEPTICISM REGARDING BOSNIAN TRUCE.
Newsday and the New York Times on 3 January report on general skepticism regarding the latest Bosnian ceasefire and the chances of its leading to a lasting political settlement. Most diplomatic observers on the scene feel that the pact is merely a tool for both sides to buy time until a favorable opportunity arises to resume fighting. No moves appear to have taken place to implement provisions of the agreement other than the ceasefire.Newsday notes, however, that the Serbs welcome the possible stationing of UN troops as a buffer between them and government forces. This would enable the Serbs to freeze control of their conquests, much as the Vance plan did for them in Croatia at the start of 1992. * Patrick Moore
HIGHWAYS, RAILWAYS, AND TANKS IN CROATIA.
Croatian media reported on 23 December that the highway between Zagreb and Lipovac was reopened that day. The road can be used from 6am to 6pm under UNPROFOR supervision, and Vjesnik on 30 December said that traffic has been increasing steadily, including vehicles from Serb-held territories. President Franjo Tudjman and a host of government and party officials from his Croatian Democratic Community (HDZ) took a demonstrative trip to Osijek and Slavonski Brod on 27 December. He used the visits to stress that the government is doing all it can to promote the restoration of normal life despite continued Serb occupation of about one-third of the country, and to bolster ties to the Osijek-area warlord, Branimir Glavas. On another front, Vjesnik on 28 December also reported that the 20 day-old railway strike had been settled with a new compromise pay agreement. Finally, the same paper the next day ran a story describing the characteristics of Croatia's new "tank for the 21st century." It will be built in Slavonski Brod's Djuro Djakovic factory and is a successor to the Yugoslav M-84 and Soviet T-72. * Patrick Moore
MAIN ROMANIAN OPPOSITION POLITICIAN FORCED TO RESIGN.
Senator Valentin Gabrielescu submitted his resignation from the position of Secretary General of the main opposition party, the National Peasant Party Christian Democratic. A press release of the NPPCD carried by Radio Bucharest on 29 December said Gabrielescu, who is the chairman of a special senatorial commission investigating the events of December 1989 that led to the overthrow of the Ceausescu regime, had adopted a deferential position towards President Ion Iliescu by praising his testimony before the commission earlier this month, "which diametrically contradicts the position of the NPPCD." * Michael Shafir
STRICT WATER RATIONING IN SOFIA.
A new scheme of water rationing for households in certain parts of Sofia took effect on 2 January, Bulgarian Television reported. Water will be available from 4 pm until 10 am on a given day, followed by 54 hours without any at all. This regime will be in effect at least until the end of March. Industrial plants in areas of Sofia will face a reduction of 30%. Because of a summer drought and a dry autumn, the monthly amount of water available to supply the capital has been reduced from 13 million cubic meters to an insufficient 11 or 12 million. * Stefan Krause
MACEDONIAN CENSUS RESULTS.
The Macedonian Statistical Office has published the results of the June 1994 census, Nova Makedonija reported on 29 December. Out of a total registered population of 1.9 million people, only 1.3 million or 66.5% identified themselves as Macedonians. The 22.9% who declared themselves to be Albanians were followed by 4% Turks, 2.3% Gypsies and 2% Serbs. The remaining minorities each make up less than 1% of the population. Ethnic Albanian politicians have questioned the accuracy of the census, in which they needed a strong showing to prove their claim that ethnic Albanians make up some 40% of the population. The EU and CSCE monitored the survey and said it had been conducted properly. * Stefan Krause and Fabian Schmidt
ALBANIAN PROSECUTOR INVESTIGATES EX-MINISTERS.
Chief Prosecutor Alush Dragoshi has begun criminal investigations against four former ministers from the governing Democratic Party, Koha Jone reported on 30 December. Former Transport and Communications Minister Fatos Bitincka, along with Albert Gajo, an adviser to Prime Minister Aleksander Meksi, are accused of falsifying documents. Genc Ruli and Artan Hoxha, former ministers for finance and foreign trade respectively, and ex-Deputy Prime Minister Rexhep Uka are accused of abusing their positions as well, but Koha Jone gave no details. Uka and Ruli enjoy parliamentary immunity. Dragoshi has been criticized for starting proceedings against political enemies of President Sali Berisha such as Supreme Court Chief Judge Zef Brozi, whose immunity parliament refused to rescind. * Fabian Schmidt
[As of 1200 CET]
Compiled by Pete Baumgartner and Steve Kettle
Heavy street fighting continued in Grozny on 2 January, Western agencies reported; Chechen forces succeeded in retaining control of the presidential palace and forced Russian troops out of the city center, after which Russian forces resumed their aerial bombardment of residential districts. The Russian government press center conceded that Chechen fighters had destroyed "several dozen" Russian armed vehicles, and that Russian forces were "regrouping;" it described the situation as "very tense." Speaking on local television in the late evening of 2 January, Chechen President Dzhokhar Dudaev said that the storming of Grozny had been "a catastrophe" for the Russians, and that several hundred Russian soldiers and officers had been captured. He again called for negotiations on a cease-fire and the peaceful withdrawal of Russian troops. Speaking at a press conference in Moscow on 2 January, members of the Russia's Choice faction in the State Duma who were in Grozny at the time of the Russian incursion on 31 December charged that a "full-scale war" was in progress in which "hundreds of military servicemen had been killed and tens of thousands of civilians made homeless," according to Interfax of 2 January. They demanded the resignation of Defense Minister Pavel Grachev and Deputy Prime Minister Nikolai Egorov, whom they hold responsible for massive human rights violations in Chechnya, AFP reported. Russian military spokesman rejected this estimate of Russian losses as "grossly exaggerated." In another development, the Russian government press service claimed on January 1-2 that the Chechens were using crude chemical weapons against Russian troops and that there had been casualties, ITAR-TASS reported. * Liz Fuller and Doug Clarke
RYBKIN ON CHECHNYA.
In an interview with ITAR-TASS on 2 January, State Duma Chairman Ivan Rybkin, who endorsed the Russian intervention in Chechnya shortly after it began, called on Russian forces to stop fighting and Chechen fighters to lay down their arms and begin talks. Rybkin rejected deputies' calls for a special session on the conflict, stating that questions of war and peace fell under the jurisdiction not of the Duma but of the upper house, the Federation Council. He also said he would urge the Security Council, of which he is a member, to take "political measures" to resolve the crisis. * Penny Morvant
FRANCE, GERMANY ADVOCATE OSCE INVOLVEMENT IN CHECHNYA.
In an interview given to Deutschlandfunk on 2 January, German Foreign Minister Klaus Kinkel said that he had asked his Russian counterpart Andrei Kozyrev to consider asking the Organization for Security and Cooperation in Europe to send observers to Chechnya; the French Foreign Ministry likewise advocated OSCE mediation in an attempt to achieve a peaceful settlement, according to AFP. Also on 2 January, a spokesman for the German Foreign Ministry expressed concern over human rights violations in Chechnya, and said that Germany had protested to Russia that the principle of using only means commensurate with the situation was not being observed. * Liz Fuller
UKRAINIAN FOREIGN MINISTER ON CHECHNYA.
On 2 January UNIAN reported that the Ukrainian foreign minister, Henadii Udovenko, condemned the losss of life on both sides in Chechnya in an interview. However, he added that events in Chechnya should not affect Russian-Ukrainian relations and that Kiev treats the conflict in Chechnya as a Russian internal affair. In recent days the Ukrainian Red Cross and other Ukrainian groups have issued statements condemning Russia's policy towards Chechnya. * Ustina Markus
DEFENSE BUDGET FAILS TO MEET EVEN MINIMUM NEEDS.
Col. Gen. Vasily Vorobyev, chief of the Russian General Staff's Main Directorate of Military Budget and Finance, told Interfax on 1 January that the proposed military budget of 44 trillion rubles for 1995 fails to meet even the minimum needs of the Russian military. He said that the government still had not paid 13 trillion rubles from the 1994 budget, resulting in the defense ministry owing defense enterprises 7.8 trillion rubles. Vorobyev reported that the ministry had found ways to save 4 trillion rubles but had to spend all the money it received on wages. As a result he said that oil refineries had practically stopped supplying the military with fuel and many military airports had no more aviation kerosene. In his view, reducing the number of people in the services would not be the answer, since this would require additional funds and aggravate social tension. * Doug Clarke
YELTSIN URGES REVISION OF CFE TREATY.
Russian President Boris Yeltsin is stepping up the campaign for a revision of the 1990 Treaty on Conventional Forces in Europe (CFE). Yeltsin wants to increase the number of Russian troops stationed in the Caucasus, and has sent a letter to this effect to several NATO countries, AFP of 30 December and the Sueddeutsche Zeitung of 31 December reported quoting a Western envoy to the CSCE. Germany opposes any modification of the CFE treaty that would set a precedent , as do Turkey and several other NATO members. * Liz Fuller
RUSSIAN FOREIGN MINISTRY ON IRAQ.
In an interview given to Interfax on 30 December, Deputy Foreign Minister Viktor Posuvalyuk said that France and China are moving closer to Russia's position over Iraq. Russia has been arguing that Iraq has been complying with resolution 687 on its disarmament since October 1993, and thus the UN Security Council should consider lifting the oil embargo against Baghdad. Posuvalyuk suggested that Iraq be given a six-month test period and if it complied with the UN disarmament requirements during that time the UN should consider lifting the oil embargo. Posuvalyuk also noted that Iraq has made some positive moves in regards to recognizing Kuwait's sovereignty and borders and the international community should respond to these. * Ustina Markus
DRUG SMUGGLING INCREASES IN RUSSIA.
The deputy chief of the interior ministry's department for combating drug smuggling, Nikolai Osipov, told Interfax on 1 January that Russia has become a target of international drug traffickers. According to Osipov, there were 75,000 drug trafficking crimes last year, a 50% increase from the previous year. In addition, the quantity of drugs being brought into Russia from outside the country increased by 47% last year. Osipov singled out the Russian Far East and its border with Central Asia as being particularly problematic and said that new measures would have to be implemented to fight the growth in drug trafficking. * Ustina Markus
RUSSIA RENAMES BORDER SERVICE.
Russia has changed the name of its border service from the Federal Border Service-Chief Border Troops Command of the Russian Federation, to the Federal Border Service of the Russian Federation, ITAR-TASS reported on 31 December. Under a presidential decree signed the day before, the head of the border service is to be appointed by the president and can be dismissed by him. Col. Gen. Andrei Nikolayev, who had been the commander-in-chief of Russia's Border Troops, has been appointed director of the new Federal Border Service. Nikolayev was born in 1949 and attended the Moscow Higher Joint Forces Command College, the Frunze Military Academy, and the General Staff Military Academy between 1971-1988. * Ustina Markus
MOSCOW'S MAYOR DENIES CHARGES ON FOOD IMPORTS.
Moscow Mayor Yuri Luzhkov claimed that Russian farmers are unable to meet the city's needs and this is why Moscow must import food from abroad, Interfax reported on 30 December. Luzhkov was responding to charges made by Deputy Prime Minister Aleksander Zaveryukha, who alleged that Moscow "prefers to import products" and this policy was forcing Russian farmers to slash their prices. Luzhkov said that Moscow is attempting to conclude contracts for food with Russia's regions, but the city will ultimately purchase food from whoever offers the cheapest rates. Luzhkov also criticized Zaveryukha's initiative to impose taxes on imported food. * Ustina Markus
OIL POLICY ENDANGERS FOREIGN LOANS.
Russian Economics Minister Evgenii Yasin told Radio Rossii on 31 December that Prime Minister Viktor Chernomyrdin would soon decide on Russia's oil export policy. Deputy Prime Minister Oleg Davydov told ITAR-TASS last week that the much criticized system of export quotas and licenses for oil products would be replaced by a system of compulsory deliveries of 65% of output to domestic consumers; the number of companies authorized to export oil would be reduced from 14 to 12. IMF and World Bank officials, who are considering Russian requests for billions of dollars in 1995, are unhappy about the proposals, arguing that continued export restrictions would cut Russia's foreign income, hold down tax revenues, and discourage foreign investment. Yasin, for his part, was quoted by The Daily Telegraph on 30 December as saying that the economics ministry believes "that fears that ending export quotas will lead to a shortage of oil in the domestic market are insufficiently grounded and that a decision to liberalize is absolutely essential." * Penny Morvant
INDUSTRIAL OUTPUT FALLS IN 1994.
GDP fell in Russia by 15% in 1994, and industrial output was down 21% compared with a drop of 16% in 1993, according to Russian Economics Ministry figures cited 1 January by Interfax; industrial output is now less than 45% of the 1991 level. Light industry, machinery, chemicals and pulp and paper sectors were among the worst hit. Overall capital investments were only 39% of the 1991 level. Inflation reached 16.4% in December but the annual rate was much lower than that in 1993: 320% as opposed to 940. Government statistics also show a sharply widening gap between rich and poor, with the top 10% earning 14 times the income of the poorest 10%. * Penny Morvant
MOSCOW STANDARD OF LIVING SAGS IN 1994.
On 1 January Interfax reported on comments made by Konstantin Buravlev, deputy head of the Moscow government, given the previous day at a Moscow government meeting. Buravlev reported that living standards for Muscovites dropped in 1994, with prices increasing on average by a factor of 5.3, and wages lagging behind, increasing only 4.5 fold. He also said there were some 19,000 registered unemployed in Moscow during December, with some 15,000 dependent on benefits; roughly 15% of the unemployed are under the age of 30. * Stan Markotich
EVTUSHENKO RETURNS AWARD FROM YELTSIN.
Evgenii Evtushenko, probably the most famous Russian poet of the 1960s, has returned his "Friendship of Peoples" order to protest Russia's increasingly hard-line handling of Chechen crisis. The order was awarded to the poet by Yeltsin on the occasion of Evtushenko's 60th birthday in 1994. In his statement, broadcast by RFE/RL on 1 January, Evtushenko announced that he could not keep an award with such a name during the bloody suppression of a small nation. * Julia Wishnevsky
KYRGYZ PROCURACY ISSUES WARNING TO UIGHUR IRREDENTIST ORGANIZATION.
The Kyrgyz Procuracy has refused to register the Uighur Freedom Organization, the stated aim of which is to detach the Xinjiang Autonomous region (largely populated by Uighurs) from the People's Republic of China, ITAR-TASS reported on 30 December. The leaders of the organization were warned by the procuracy that their activities contravened Kyrgyz and international law. The Uighur population of Kyrgyzstan is estimated at 40,000. * Liz Fuller
DIRECTOR OF LITHUANIAN RADIO AND TV RESIGNS.
Laimonas Tapinas announced on 2 January that he would explain at a news conference on 4 January why he had decided to resign as director of Lithuania's state-run Radio and Television (RTV), BNS reports. Tapinas was appointed by the parliament on the recommendation of the RTV board. During the past several years the board has sought to become more independent from the government, but its status has remained virtually unchanged. RTV is directly financed by the government with 24 million litai ($6 million) allocated for this year's budget. In 1994 RTV did not receive about 12% of promised state support, but survived on funds earned from commercials. * Saulius Girnius
ESTONIAN-RUSSIAN AGREEMENTS.
Estonian Justice Minister Juri Adams said that he believes that some Estonian laws related to the implementation of the 26 July agreements with Russia on the withdrawal of Russian troops and social protection for miltary retirees can be amended only after parliament ratifies the agreements, BNS reported on 2 January. Noting that "an international agreement always takes precedence over national legislation," Adams said that if the agreements are ratified problems could arise in selling apartments to Russian military retirees and calculating their length of service for issuing them privatization vouchers. The agreements allow Estonia to refuse a residency permit to military retirees deemed to be a danger to Estonia's security, but do not mention how and by whom the danger is to be established. * Saulius Girnius
AGREEMENT WITH LATVIAN LOCAL GOVERNMENTS ASSOCIATION.
On 30 December Prime Minister Maris Gailis and Local Governments Association (LGA) Chairman Andris Jausleinis signed an agreement protocol for the year 1995, BNS reports. The protocol provides that the government coordinate with the LGA all bills and regulations dealing with local governments. It forecasts that the 1995 revenues to local governments from land, income, and other taxes will be 152.3 million lati ($277 million). * Saulius Girnius
POLISH PARLIAMENT APPROVES 1995 BUDGET.
Poland's leftist-dominated lower house of parliament, the Sejm, on 30 December approved the 1995 state budget by a vote of 299 to 140 with five abstentions, Polish and international agencies reported. The budget projects economic growth of 5% and an annual inflation rate of some 17%. Deputies had previously voted to remove key tax and wage measures from the budget bill in a bid to prevent a veto by President Lech Walesa. The tax provision would extend through 1995 higher income tax rates adopted for 1994, while the wage measure would limit raises for public sector workers to 6% above the projected annual inflation rate. Walesa vetoed the measures when they were voted on separately, but the Sejm overturned both vetoes. Walesa has since appealed to the Constitutional Court to make a ruling in each case. The upper house of parliament (the Senate) will debate the 1995 budget this week. Walesa, whose approval is also required for the budget to pass, has threatened to veto the entire budget bill. Polish commentators see the latest clashes between Walesa and the government as initial skirmishes in the campaign for the presidential elections, due to take place later this year. * Jan Cleave
WALESA WANTS OLECHOWSKI TO STAY ON AS FOREIGN MINISTER.
Polish President Lech Walesa on 2 January said he wants Foreign Minister Andrzej Olechowski to keep his post until presidential elections are held later this year, Polish and international agencies reported. Olechowski tendered his resignation last week for the second time in two months after Justice Minister and Prosecutor-General Wlodzimierz Cimoszewicz, conducting an anti-corruption probe, named him as one of 58 high-ranking officials who receive payment for sitting on the boards of companies in which the government has a stake. Walesa, meeting with Premier Waldemar Pawlak, also demanded that his candidate for defense minister be appointed. Since Piotr Kolodziejczyk resigned from that post in November, the president and the ruling left-wing coalition have been deadlocked over his replacement. Walesa says his demands on the Defense and Foreign Ministries will have to be met before he discusses a compromise on issues such as the 1995 state budget. Under the Polish Constitution, the president has a say in who is appointed to the posts of defense, interior, and foreign ministers. But the ruling coalition has argued that his role in those appointments should be ceremonial only. * Jan Cleave
PRESS REPORTEDLY STIFLED IN BELARUS.
On 26 December Interfax reported that the International Confederation of Journalist Unions had issued a statement expressing concern over violations of freedom of speech in Belarus. The statement criticized Belarusian censors, citing incidents of white spots in newspapers where articles had been pulled by the censors. It also said that the press was not giving people free access to information and was not free to criticize authorities. The recent dismissal of Ihar Asinsky as editor-in-chief of Sovetskaya Belarusiya was mentioned as an example of stifling the press. The Confederation of Journalist Unions urged Belarusian authorities to review their policy towards the press. * Ustina Markus
BELARUSIAN DEPUTIES PASS 1995 BUDGET.
The Belarusian parliament passed the 1995 budget in its first reading on 30 December, Interfax reported. The budget provides for a deficit of 2.647 trillion rubels, or 4% of GDP. The budget also envisages a fall in monthly inflation to 1% by the end of the year, and the GDP is to triple to 66.2 trillion rubels. * Ustina Markus
UKRAINE STEPS UP PRIVATIZATION CAMPAIGN.
Ukraine has begun distribution of certificates in five central oblasts as part of a pilot privatization project, Interfax-Ukraine reported on 3 January. Residents of Kiev, Khmelnytsky, Zaporizhzhia, Zhytomyr and Kirovohrad regions will be able to claim their certificates at local branches of the State Savings Bank and exchange them for shares in some 8,000 large- and medium-sized enterprises, scheduled to be completely transferred into private hands by 1 June. Distribution of the U.S.-made certificates in the remaining regions is set to begin on 1 February. Ukrainian President Leonid Kuchma also ordered privatization of small enterprises to be completed by the end of the year, ITAR-TASS reported. In a decree signed on 2 January, Kuchma directed that revenue earned from small enterprise privatization be appropriated to local authorities for social programs. * Chrystyna Lapychak
UKRAINIAN DEFENSE MINISTRY ISSUES ORDER ON SERVICE ABROAD.
Ukrainian defense minister Valerii Shmarov has issued an order on the selection of servicemen who are to study and work abroad. According to the order, 2-3 candidates should be considered for each post; each candidate must be fluent in Ukrainian and the appropriate foreign language, and have good references. The order is meant to facilitate the implementation of military cooperation agreements with a number of countries with which Ukraine has regular exchanges of delegations and cooperates in the military-technical sphere. * Ustina Markus
FORMER CZECH COMMUNIST LEADERS CHARGED FOR ARMING PARTY MILITIA.
Seven former leading members of the Czechoslovak Communist Party have been charged with illegally arming the party's private militia with weapons from the defence ministry, Czech media reported. The seven include Milos Jakes and Lubomir Strougal, party general secretary and Prime Minister respectively at the time of the alleged crime in 1985, and could face up to five years in jail if convicted. Rude Pravo reported on 3 January that the charges were filed on 29 December, the last of the accused being informed just two hours before a statute of limitations for such crimes came into effect. The "People's Militia" was created after World War II as the "armed fist of the workers' movement." Its up to 18,000 armed members took part in the communist takeover of power in 1948, later shows of strength and in the suppression of demonstrations after the Warsaw Pact invasion of Czechoslovakia in 1968. It was disbanded after the "velvet revolution" of November 1989. * Steve Kettle
CZECHS NEGATIVE ABOUT INFLUX OF FOREIGNERS.
An opinion poll conducted by MENT, Gabal, Analysis and Consulting indicates that more than three quarters of Czechs view negatively the influx of foreigners who have decided to reside in the Czech Republic. The results of the poll were published by Mlada Fronta Dnes on 3 January. Only 16% of respondents thought that the influx of foreigners was a positive development. According to the Czech Interior Ministry, some 120,000 foreigners live legally in the country. However, according to experts, the real number of foreigners, including illegal immigrants, is much higher. The poll shows that Czechs are convinced that foreigners are responsible for growing crime rates, often engaging in such activities as money laundering, fraud, and mafia activities. * Jiri Pehe
SLOVAK CABINET'S MANIFESTO PAST DEADLINE?
On 2 January the Movement for a Democratic Slovakia board met in Bratislava. In a short briefing, MDS Deputy Chairman Augustin Marian Huska said the cabinet is expected to discuss its program manifesto next week, and it will be sent to parliament on 19 January. According to the constitution, however, a new government has 30 days from the time of its appointment to pass its program and win a confidence vote from parliament, and the current government was installed on 13 December. Concerning President Michal Kovac's New Year's speech, Huska said his party would have welcomed more "self-criticism" from the president, particularly in relation to his role in the fall of the government of Vladimir Meciar in March, Pravda reports. * Sharon Fisher
SLOVAK YEAR-END STATISTICS.
According to the latest statistics, Slovakia has approximately 5,358,400 inhabitants. In 1994 68,400 children were born and 51,200 people died. A total of 85.7% of the country's inhabitants consider themselves Slovaks, while 10.7% are Hungarians, 1.5% are Romanies,1% are Czechs, Moravians or Silesians, 0.3% are Ruthenians, 0.3% are Ukrainians, 0.1% are Poles and 0.1% are Germans. Another 0.3% belong to other ethnic groups or did not declare their nationality, Sme reports on 3 January. There are presently 9,845 civic associations, 70 political parties and movements and 76 organizations with international representation registered in Slovakia. * Sharon Fisher
HUNGARY DEVALUES FORINT, ANNOUNCES PLANS TO WITHDRAW COMMUNIST-ERA COINS.
The National Bank of Hungary has announced a further devaluation of the national currency, Hungarian and international agencies report. As of 3 January, the forint will be devalued by 1.4%. In 1994, it was devalued by a total of 16.8%. The bank has also announced that communist-era forint coins will be withdrawn from circulation by 30 June. The bulky old money is to be replaced by smaller, nickel coins, which have been in use since March 1993. Tourists found the existence of two sets of forint coins confusing, and many Hungarian residents complained bitterly about the dwindling numbers of old 5- and 10-forint coins needed for public telephones. * Jan Cleave
CROATS JOIN BOSNIAN CEASEFIRE.
The BBC said on 2 January that Bosnian Croat leader Kresimir Zubak signed the four-month truce agreement earlier endorsed by the Serb and Bosnian government forces. Bihac pocket rebel leader Fikret Abdic had given his verbal agreement as well, and now UN mediators are concentrating their efforts on getting the Croatian Serb forces to sign on. The Krajina Serbs are a major factor in the assault on government's Fifth Corps in the Bihac area, and the government backed the truce largely to ease pressure on that northwestern enclave. Meanwhile, international media report that the ceasefire is largely holding. The main exceptions involve some isolated fighting around Bihac and Sarajevo, where a missile hit the front of the Holiday Inn, apparently fired from a Serb position. * Patrick Moore
SKEPTICISM REGARDING BOSNIAN TRUCE.
Newsday and the New York Times on 3 January report on general skepticism regarding the latest Bosnian ceasefire and the chances of its leading to a lasting political settlement. Most diplomatic observers on the scene feel that the pact is merely a tool for both sides to buy time until a favorable opportunity arises to resume fighting. No moves appear to have taken place to implement provisions of the agreement other than the ceasefire.Newsday notes, however, that the Serbs welcome the possible stationing of UN troops as a buffer between them and government forces. This would enable the Serbs to freeze control of their conquests, much as the Vance plan did for them in Croatia at the start of 1992. * Patrick Moore
HIGHWAYS, RAILWAYS, AND TANKS IN CROATIA.
Croatian media reported on 23 December that the highway between Zagreb and Lipovac was reopened that day. The road can be used from 6am to 6pm under UNPROFOR supervision, and Vjesnik on 30 December said that traffic has been increasing steadily, including vehicles from Serb-held territories. President Franjo Tudjman and a host of government and party officials from his Croatian Democratic Community (HDZ) took a demonstrative trip to Osijek and Slavonski Brod on 27 December. He used the visits to stress that the government is doing all it can to promote the restoration of normal life despite continued Serb occupation of about one-third of the country, and to bolster ties to the Osijek-area warlord, Branimir Glavas. On another front, Vjesnik on 28 December also reported that the 20 day-old railway strike had been settled with a new compromise pay agreement. Finally, the same paper the next day ran a story describing the characteristics of Croatia's new "tank for the 21st century." It will be built in Slavonski Brod's Djuro Djakovic factory and is a successor to the Yugoslav M-84 and Soviet T-72. * Patrick Moore
MAIN ROMANIAN OPPOSITION POLITICIAN FORCED TO RESIGN.
Senator Valentin Gabrielescu submitted his resignation from the position of Secretary General of the main opposition party, the National Peasant Party Christian Democratic. A press release of the NPPCD carried by Radio Bucharest on 29 December said Gabrielescu, who is the chairman of a special senatorial commission investigating the events of December 1989 that led to the overthrow of the Ceausescu regime, had adopted a deferential position towards President Ion Iliescu by praising his testimony before the commission earlier this month, "which diametrically contradicts the position of the NPPCD." * Michael Shafir
STRICT WATER RATIONING IN SOFIA.
A new scheme of water rationing for households in certain parts of Sofia took effect on 2 January, Bulgarian Television reported. Water will be available from 4 pm until 10 am on a given day, followed by 54 hours without any at all. This regime will be in effect at least until the end of March. Industrial plants in areas of Sofia will face a reduction of 30%. Because of a summer drought and a dry autumn, the monthly amount of water available to supply the capital has been reduced from 13 million cubic meters to an insufficient 11 or 12 million. * Stefan Krause
MACEDONIAN CENSUS RESULTS.
The Macedonian Statistical Office has published the results of the June 1994 census, Nova Makedonija reported on 29 December. Out of a total registered population of 1.9 million people, only 1.3 million or 66.5% identified themselves as Macedonians. The 22.9% who declared themselves to be Albanians were followed by 4% Turks, 2.3% Gypsies and 2% Serbs. The remaining minorities each make up less than 1% of the population. Ethnic Albanian politicians have questioned the accuracy of the census, in which they needed a strong showing to prove their claim that ethnic Albanians make up some 40% of the population. The EU and CSCE monitored the survey and said it had been conducted properly. * Stefan Krause and Fabian Schmidt
ALBANIAN PROSECUTOR INVESTIGATES EX-MINISTERS.
Chief Prosecutor Alush Dragoshi has begun criminal investigations against four former ministers from the governing Democratic Party, Koha Jone reported on 30 December. Former Transport and Communications Minister Fatos Bitincka, along with Albert Gajo, an adviser to Prime Minister Aleksander Meksi, are accused of falsifying documents. Genc Ruli and Artan Hoxha, former ministers for finance and foreign trade respectively, and ex-Deputy Prime Minister Rexhep Uka are accused of abusing their positions as well, but Koha Jone gave no details. Uka and Ruli enjoy parliamentary immunity. Dragoshi has been criticized for starting proceedings against political enemies of President Sali Berisha such as Supreme Court Chief Judge Zef Brozi, whose immunity parliament refused to rescind. * Fabian Schmidt
[As of 1200 CET]
Compiled by Pete Baumgartner and Steve Kettle