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Newsline - August 9, 1996

Heavy fighting continued in Grozny on 8-9 August as separatist fighters pressed ahead with their assault on the government compound in the center of the city, Russian and Western media reported. Russian officers claimed that federal forces were "expanding their area of control" in the city and driving back the rebels. But a Russian TV (RTR) reporter trapped in a hotel attached to the compound denounced such statements as "worse than lies" early on 9 August, saying that the blazing main government building had been gutted, while its defenders, having received almost no reinforcements, had "moved to other strong points." Separatist commanders earlier told AFP that they had seized part of the building and would soon capture the rest. The complex, headquarters of the pro-Moscow government headed by Doku Zavgaev, is a hated symbol of Russian power in the republic and the site of frequent separatist demonstrations. -- Scott Parrish

Against the background of fierce fighting in Grozny and reports of ill health, President Boris Yeltsin began his second term on 9 August by pledging to protect human rights and the integrity of the country, ITAR-TASS reported. The president only spoke for a few seconds during the ceremony and made no speech, suggesting that he has not recovered from his tiring campaign. Western news described him as speaking slowly but firmly. The entire ceremony lasted 25 minutes. Yeltsin also officially nominated Viktor Chernomyrdin as his prime minister: the Duma is expected to meet on 10 August to vote on his candidacy. The president's press service announced that Yeltsin will go on vacation after the Duma vote but that the place and length of his leave have not yet been determined, Izvestiya reported. -- Robert Orttung

The Federation Council decided on 8 August to set up its own commission to seek a peaceful resolution to the Chechen crisis, ITAR-TASS reported. Council Speaker Yegor Stroev said that Kabardino-Balkariya President Valerii Kokov will chair the commission. "Even with bandits it is better to negotiate than shoot, even if it takes a long time," Stroev argued. In July 1995, a Duma commission on Chechnya chaired by Stanislav Govorukhin recommended President Yeltsin's impeachment, attacked critics of the war like Duma member Sergei Kovalev, and called for Chechnya's exclusion from the Russian Federation (see OMRI Daily Digest, 24 July 1995). -- Robert Orttung

Prime Minister Viktor Chernomyrdin called for the "toughest measures to be taken against the terrorists and criminals in the Chechen Republic" but rejected the resumption of full-scale war, ITAR-TASS reported on 8 August. He warned that "we cannot allow the situation to deteriorate into another Afghanistan." He said that the introduction of federal troops into the city had been delayed even though there were signals of an impending attack. He added that a number of roadblocks and checkpoints around the city had been withdrawn without explanation. Chernomyrdin said that the procurator-general would determine what had happened and punish the guilty parties. -- Robert Orttung

The parliament's upper house rejected on 8 August bills passed by the Duma raising the minimum wage and minimum pension, Russian agencies reported. Under the draft legislation, the minimum wage would have increased by 26% to 95,320 rubles ($18.33) a month as of 1 July; the minimum pension would rise to the same amount as of 1 August while all other pensions would be indexed by 37%. The Federation Council Social Policy Committee recommended against approving the increases, which were also opposed by the government, on the grounds that they are unaffordable. The minimum wage increase would require an additional expenditure of 8.7 trillion rubles. The Pension Fund is in severe financial difficulties, running a deficit of 6.5 trillion rubles on 1 July. The upper house consists of regional leaders, who are often held accountable for delays in wage and pension payments. -- Penny Morvant

The deputy chairman of the Duma and leader of the Russian All-People's Union (ROS), Sergei Baburin, has refused to join Gennadii Zyuganov's new Popular-Patriotic Union of Russia, ITAR-TASS reported on 8 August. Baburin criticized Zyuganov and the Communist Party for numerous strategic miscalculations during the presidential campaign. Despite Zyuganov's offer to Baburin of a position in a potential Communist coalition government between the two rounds of the election, Baburin has been extremely critical of the Communists since the campaign. He told Vek (no. 31) that he would join President Yeltsin's government if offered a serious position. -- Robert Orttung

The leader of the Rostov miners trade union, Vasilii Kryukov, has announced that 40,000 local miners will continue the strike they started on 4 August until all their demands are fulfilled, ITAR-TASS reported on 8 August. The government's transfer of 50 million rubles (about $10,000) to the Rostov Oblast was only enough to pay half of the miners' wages for March. The Russian Coal Industry Workers' Union has threatened to hold a nationwide strike on 25 August-- miners' day in Russia--if their demands are not met. -- Anna Paretskaya

A crowd of angry pensioners blocked the main streets of Abakan, the largest city in the southern Siberian republic of Khakasiya, to demand their pensions for July, ITAR-TASS reported on 8 August. Earlier this week, pensioners rallied in Voronezh after rumors spread that they would not receive their pensions for July, NTV reported on 5 August. -- Anna Paretskaya

Nikolai Povosin, the president of the construction company Boniks based in the Moscow Oblast town of Krasnogorsk, has been shot to death, ITAR-TASS reported on 8 August, citing an Interior Ministry spokesman. Meanwhile, the director of the Moscow City Interior Ministry Department, Lt. Gen. Nikolai Kulikov, said that 53,000 crimes--including 900 murders--have been reported in Moscow so far this year. Kulikov also said that about 500 "tramps and panhandlers" have been ousted from Moscow since the president's July decree on combating crime in Moscow. An additional 600 "foreign citizens doing illegal business in Moscow" were expelled after a similar decree from the mayor. -- Anna Paretskaya

According to sources in the Defense Ministry, more than 150,000 officers, NCOs, and warrant officers in the armed forces are on waiting lists for housing, ITAR-TASS reported on 8 August. Russian military construction workers were said to have built 12,000 new apartments so far this year, but the sources said the supply is far below demand. In October 1995, a deputy defense minister said that 125,000 officers' families were without apartments. -- Doug Clarke

First Deputy Prime Minister Oleg Lobov said on 8 August that 32% of all budget expenditure during the first half of the year went on paying wages and back wages, ITAR-TASS reported. Planned expenditure was only 15%. Despite these efforts, following a pre-election pledge by President Yeltsin to eliminate wage arrears in the state sector, the total wage debt equaled 29.9 trillion rubles ($5.7 billion) at the end of July. Continuing with his gloomy portrait of the economy, Lobov said that the state budget is owed about 80 trillion rubles and that barter deals account for up to 30% of industrial turnover. He added that revenue from state securities is now lower than the amount needed to buy back treasury bills that are due, that investment has fallen by 14%, and that capital flight exceeds $35 billion. -- Penny Morvant

The head of the State Tax Service (GNS), Vitalii Artyukhov, said that from 15 August 1996 the GNS will not accept treasury tax exemptions (KNOs)--issued by the Finance Ministry--from companies in lieu of tax payments, Radio Rossii reported on 7 August. KNOs worth 9 trillion rubles ($1.7 billion) have been issued: many of them are now being traded on the secondary financial market. KNOs and other money-surrogates, such as bills of exchange and the Finance Ministry's bank credit guarantees, are used by companies as "payment" for taxes. -- Natalia Gurushina

Russia's State Committee for Precious Metals and Stones (Roskomdragmet) is suing the Internal Revenue Service (IRS) over the sale of assets belonging to the U.S. company Golden Ada, ITAR-TASS reported on 9 August. In 1992-1994, Russia delivered more than $171 million worth of rough diamonds to Golden Ada for cutting but received neither money nor diamonds, as Golden Ada's owners resold the company and disappeared. The scandal led to the dismissal of Roskomdragmet chairman Yevgenii Bychkov in February 1996 on corruption charges. Golden Ada's office and assets worth some $60 million were seized by the IRS for tax evasion. The Russian side, however, contests this move and claims that the confiscated property should be used to compensate Russia's losses. -- Natalia Gurushina

Azerbaijani Interior Minister Ramil Usubov signed an agreement with his Iranian counterpart on cooperation in the fight against drug smuggling last week, according to a 6 August IRNA report monitored by the BBC. Details concerning the accord were not made available. Iran and Azerbaijan are both important transit countries for the trade in southwest Asian opium and opium poppies and cannabis are also cultivated along the border between the two countries. The opium that reaches Azerbaijan from Turkmenistan, Kazakhstan, or Iran is being transported via Nakhichevan to Turkey, according to the Observatoire Geopolitique des Drogues, a Paris-based monitoring group. -- Lowell Bezanis

Azerbaijani President Heidar Aliyev expressed his willingness to meet with his Armenian counterpart, Levon Ter-Petrossyan, while in Moscow for the inauguration of President Boris Yeltsin, NTV reported on 8 August. Aliyev did meet with Moscow mayor Yurii Luzhkov to discuss the recent arrests of Azerbaijanis in anti-crime actions in Moscow. Aliyev also said that Chernomyrdin is preparing decrees for the opening of the Russian-Azerbaijani border, which was closed after the onset of the Chechen war. -- Peter Rutland

The Russian Federation Council voyed on 8 August to extend the mandate of the Russian-dominated CIS peacekeeping force in Abkhazia by six months, RFE/RL reported. Georgia has been pushing Russia to involve the 1,500 peacekeeping troops in mine clearing and in helping some 250,000 Georgian refugees return to their homes in Abkhazia. Meanwhile, Georgian Radio on 5 August reported that the Turkish government will welcome Georgian efforts to halt ships under the Turkish flag from entering Abkhazian ports without the proper permits. The port of Sukhumi is a lifeline for the breakaway region and is also believed to be vital to smuggling activities involving Turkey and other Black Sea littoral states. -- Lowell Bezanis

Turkmen President Saparmurad Niyazov met with the Russian Gazprom company chairman Rem Vyakhirev on 8 August to sign an agreement on forming the new corporation Turkmenrosgaz, NTV reported. Turkmenistan will hold 51% of the shares in the venture, Gazprom-45% and the transnational corporation Itera-4%. The first project the new corporation plans to undertake is a pipeline providing Turkmen gas to Pakistan via Afghanistan. The disruption in supply lines for Turkmen gas after the collapse of the Soviet Union has cut export of Turkmen gas nearly in half. According to RTR, Turkmenistan produced 90 billion cubic meters of gas in 1990, compared to 48 billion so far this year. -- Bruce Pannier

The Tajik Security Ministry claimed on 8 August that one of the suspects in the murder of Tajik Academy of Sciences chairman Mohammed Osimi (see OMRI Daily Digest, 30 July 1996) killed himself in a shoot out with the militia on 31 July, according to ITAR-TASS. Amrullo Saidov and five others, who were allegedly part of a gang that operated near Dushanbe, all died when the state militia raided their hideout. -- Bruce Pannier

The government has cut off power to 15,000 delinquent customers, chiefly businesses, Ukrainian TV and Reuters reported on 8 August. Energy Ministry officials told reporters that more than 50,000 enterprises, including small retail outlets and large factories owe regional utilities some $1.1 billion in unpaid bills. In other news, Ukraine's acting Prosecutor General announced that his office had found evidence of large-scale corruption among officials and managers of enterprises in the coal mining, education, health care, and other government-financed sectors. Oleksander Khrystenko said his investigators had discovered dozens of cases of embezzlement of government funds destined for wages, particularly by the managers of 10 coal mines in eastern Ukraine, which greatly exacerbated the wage debt crisis. He also said ministry officials neglected to monitor the use of the funds. Khrystenko said his office would continue its inquiry, which may prompt pressing charges. -- Chrystyna Lapychak

The number of questions on President Alyaksandr Lukashenka's 7 November referendum has reportedly been reduced to two, Belapan reported on 8 August. The referendum will now ask if people prefer public or private land ownership and whether they approve of the new version of the constitution. The government is reportedly launching a large-scale propaganda campaign to educate people on the necessity of amending the constitution. Prior to the May 1995 referendum, in which each of the four questions passed with more than 75 percent of the vote, the state-controlled media had worked overtime promoting Lukashenka's agenda. It can be expected to do the same this fall, and the yes-or-no nature of the vaguely worded questions will likely work to Lukashenka's advantage. -- Ustina Markus

The aviation squadron of the Black Sea Fleet has had its electricity cut off because it owes the supplier Krymenergo 25 billion karbovantsy ($140,000), ITAR-TASS reported on 8 August. In addition, 500 servicemen in the squadron have not been paid since the beginning of the year. The electricity cut coincided with the Ukrainian government's crackdown on enterprises that fail to pay their bills. During a 5 August press conference, Ukrainian Navy Commander Volodymyr Bezkorovainy addressed the fleet's debts, saying it was "living off of Ukrainian money," Ukrainian radio reported The fleet owes the city of Sevastopol 2 trillion karbovantsy ($11 million) for utilities, and 5 trillion ($27.7 million) for damages to the city. -- Ustina Markus

Representatives of the Pro Patria Union, the Moderates, the Estonian Farmer's Party, and the Republican and Conservative People's Party signed an agreement on 8 August establishing the coalition "Right-Wing Parties and Moderates" for the local elections in Tallinn on 20 October, ETA reported. Pro Patria Chairman Toivo Jurgenson noted that the coalition is only for Tallinn and that, depending on local conditions, the four parties could run on separate lists in other areas. None of these parties are in the current ruling coalition, but ruled the country from 1992 to March 1995 under different names. -- Saulius Girnius

Three coordinators of the "Money Laundering" project under the auspices of the EU PHARE program "Combatting Drugs in CENTRAL AND EASTERN EUROPE" arrived in Lithuania on 8 August, BNS reported. The goal of their three-day visit is to analyze the situation and help draft a law on money laundering. Dr. Ona Grimalauskiene, deputy chairwoman of the State Narcotics Control Commission, said that the adoption of such a law might influence the attitudes of foreign governments and attract more investments to Lithuania. The republic intends to join the 1988 United Nations Convention on the Control of Illegal Narcotics Funds. One of the most important criteria for membership is the adoption of a money-laundering law. -- Saulius Girnius

The regional court in Gdansk ruled on 8 August that Gdansk shipyard is bankrupt. The Solidarity movement was born in the shipyard in 1980 and Poland's former President Lech Walesa worked there as an electrician. The shipyard employs 6,000 people and has debts of 414 million zlotys ($152.1 million) and assets of only 350 million zlotys ($128.6 million). The shipyard's creditors have two months to file claims. The current management has created a new company using some of the shipyard's assets. The company, New Gdansk Shipyard, is to take over the profit-generating contracts of the bankrupt shipyard. It is estimated, however that half of the work force will lose their jobs. -- Jakub Karpinski

The Pilsen-based Kreditni Banka on 7 August became the most recent Czech financial institution to have its banking license revoked by the Czech National Bank, Hospodarske noviny reported the following day. Kreditni Banka's losses may run as high as 10-12 billion crowns ($370-$440 million), and more than 4 billion crowns worth of claims against the bank have already been filed by its depositors. This sum, which is likely to increase in the future, is well in excess of what can be covered either by Ceska pojistovna, Kreditni Banka's owner and the Czech Republic's largest insurance company, or by the banking insurance fund. Since the state holds significant equity stakes in Ceska pojistovna's shareholders, Czech taxpayers are likely to pick up the tab for the losses incurred by Kreditni Banka's incompetent, if not outright fraudulent, management. -- Ben Slay

Prosecutor General Michal Valo has ordered that President Michal Kovac's pardon of two men involved in the Technopol fraud case (see OMRI Daily Digest, 19 July) cannot be implemented until the Constitutional Court rules on Valo's earlier complaint regarding presidential pardons, Narodna obroda reported on 9 August. Valo had filed a complaint with the Constitutional Court after Kovac pardoned former secret service agent Oskar Fegyveres, who confessed to participating in Kovac Jr.'s abduction last year. The two men granted pardons by Kovac were his son's business associates. Kovac argued that the case was overly politicized, and he wanted to allow them to testify in Germany. In a letter to Valo, Kovac pointed to sections of the Constitution and Penal Code obliging the prosecution to immediately accept a presidential pardon. Presidential legal expert Ivan Trimaj said "it is hard to imagine a grosser infringement of the constitution and the law." -- Sharon Fisher

Hungarian environmental activists and hydrotechnicians demanded at a 7 August meeting that Slovakia stop diverting the Danube to feed the Gabcikovo hydroelectric plant, CTK reported the following day. The meeting's participants called on the International Court of Justice in The Hague, where the case is waiting to be heard, to rule that Slovakia should stop diverting the waters. "Hungary is not just asking the court to rule whether Slovakia was justified in completing Gabcikovo after Hungary pulled out of the project. We are also asking the court to decree that the full amount of water should be released into the old Danube course," activist Laszlo Valki told MTI. The joint Slovak-Hungarian project was launched in 1977, but Hungary pulled out after communism fell. -- Sharon Fisher

The UN's top body approved a non-binding resolution on 8 August demanding that all sides in Bosnia-Herzegovina cooperate with the Hague-based war crimes tribunal, the BBC reported. The text added that "the council is ready to consider the application of economic enforcement measures to ensure compliance by all parties with the obligations under the peace agreement," Reuters noted. The latest resolution singles out the Bosnian Serbs' failure to deliver to the court their military chief Gen. Ratko Mladic and leading civilian figure Radovan Karadzic. Earlier sanctions hit Belgrade and Pale hard and helped bring the Serbs to the peace talks in Dayton last year. Bosnia's UN ambassador, Muhamed Sacirbey, cautioned that any initiative to reimpose sanctions would have to start in the major capitals, not at the UN. -- Patrick Moore

Bosnian Federation senior officials failed to agree on 8 August on the dissolution of the Croat mini-state of Herceg-Bosna, Oslobodjenje reported the next day. Bosnian Prime Minister Hasan Muratovic said the Croats had presented new conditions on the Herceg-Bosna dissolution instead of simply abolishing it. Bosnian Federation President Kresimir Zubak accused Muslims of preventing the functioning of the federation by not transferring the authority from the republic to it. U.S. envoy to Bosnia John Kornblum and Croatian Foreign Minister Mate Granic were present at the meeting. Kornblum voiced deep regrets over the failed talks, Reuters reported. Meanwhile, the High Representative for Bosnia Carl Bildt said he was not satisfied with anything concerning the implementation of the federation, Reuters reported on 7 August. Bildt said he remained concerned about its future despite the Mostar power-sharing agreement between Muslims and Croats. -- Daria Sito Sucic

The OSCE's spokesman in Sarajevo, Joanna van Vliet, said on 8 August that the organization overseeing Bosnia's upcoming general elections was concerned over Bosnian Serb officials' statements giving the Republika Srpska (RS) the right to assert sovereignty as an independent state, international agencies reported. Biljana Plavsic, acting RS president, said repeatedly during her pre-election campaign that the September elections would "legalize the sovereignty" of the RS, Reuters reported. The OSCE reminded Bosnian Serb officials that the rules set up by the Dayton peace accords state that "Bosnia-Herzegovina shall consist of the two entities, the Bosnian Federation and the Republika Srpska." Meanwhile, UN special envoy to Bosnia Iqbal Riza discussed security arrangements for Bosnia's elections with RS Foreign Minister Aleksa Buha. Buha was concerned over possible incidents if a large number of voters crossed from one entity to the other, AFP reported on 8 August. -- Daria Sito Sucic

Serbia's opposition leaders have begun reacting to the 7 August summit between Serbian President Slobodan Milosevic and Croatian President Franjo Tudjman, Nasa Borba reported on 9 August. The Serbian Renewal Movement, led by Vuk Draskovic, welcomed news of a possible normalization of bilateral relations but queried: "Why didn't Tudjman and Milosevic agree on normalization three or four years ago? Why didn't agreement...come when nearly a million Serbs lived in Croatia?" The SPO added that it would "fight for the return of Serbs to Krajina [in Croatia] and to those places where they have lived for centuries." For his part, Vojislav Seselj, accused war criminal and ultranationalist leader of the Serbian Radical Party, said Milosevic once again "sold out" Serbian national interests, especially by abandoning the Serbs in eastern Slavonia through his hints that he would recognize Croatia's international borders. -- Stan Markotich

Serbian President Slobodan Milosevic may be trying to influence voters for in the industrial town of Kragujevac, where he has recently promised to give the local car manufacturer Zastava a large cash grant of about $19 million, Reuters reported on 8 August. Opposition Democratic Party spokesman Slobodan Vuksanovic reacted to Milosevic's announcement by saying the president "is buying social peace ahead of the elections...It is a usual thing. This is the best time for the government to start promising and misleading people." Federal parliamentary elections in Serbia-Montenegro are due before year's end. -- Stan Markotich

President Ion Iliescu, Prime Minister Nicolae Vacaroiu, and other leaders of the Party of Social Democracy (PSDR) in Romania discussed on 7 August the feasibility of a government reshuffle, Radio Bucharest reported on 9 August, citing the independent news agency Mediafax. The Health, Agriculture, Labor and Social Protection and Youth and Sports ministries are likely to be affected, as well as several county prefect positions. A final decision is to be made next week. Also next week, the PDSR leadership expects a reply from Minister of Foreign Affairs Teodor Melescanu to the PDSR initiative that he take over managing President Ion Iliescu's electoral campaign. Melescanu is officially not a PDSR member and the offer has been criticized by some political observers and opposition leaders. -- Michael Shafir

A group of employees of the Information and Synthesis Center of the RADOR news agency, which is part of the Romanian Radio Company, on 7 August protested the dismissal of their editor in chief and his replacement by a former activist of the Communist Party's Central Committee. Its protest letter, which was received by OMRI, says that Mihai Andrei, the dismissed editor in chief, set up the center six years ago and implemented stringent standards for unbiased, non-discriminatory reporting and prompt delivery of information. The center monitors broadcasts in Romania and foreign broadcasts in the Romanian language, supplying information bulletins to government and non-governmental organizations, political parties, and news agencies. The signatories say Andrei's dismissal will endanger independence and emphasize that this bodes ill on the eve of elections. -- Michael Shafir

Dniester breakaway region leader Igor Smirnov told a press conference on 7 August that "Moldovan President Mircea Snegur is the only one to blame for the delay in signing the memorandum on settling relations between Moldova and the Dneister region," BASA-Press reported the next day. Smirnov said Russian President Boris Yeltsin and Ukrainian President Leonid Kuchma are "ready to sign the memorandum" and everything now depends on Snegur. Snegur himself left on 8 August for Moscow, heading the Moldovan delegation attending festivities for the Yeltsin inauguration. A Moldovan Ministry of Foreign Affairs spokesman told BASA-Press that he could not comment on speculations that the memorandum will be signed in Moscow on this occasion, but added that the Dniester representatives will be present at the event too. -- Michael Shafir

The Bulgarian government submitted to parliament on 8 August the annual bill governing the trade regime in grain, Trud reported the same day. The proposed law limits grain producers' profitability to 15%, requires them to declare the size of their harvests within one month of their gathering, allows the government to introduce "extraordinary measures"--which some interpret as forcible grain requisitioning--in cases of shortage, and sets fines for grain trading without a license and refusing to provide information on grain dealings. The government has set aside 25 billion leva ($134 million) to purchase this year's harvest, whereas 70 billion leva is needed, Pari reported on 7 August. In other economic news, consumer price inflation in July was 23.3%, the highest rate since March 1991, bringing such inflation to 81.9% so far this year. -- Michael Wyzan

The Central Electoral Commission for the upcoming presidential election held its first meetings on 7 and 8 August, Trud and Standart reported. At the initial meeting, opposition and majority representatives in the commission disagreed on whether candidates should register as "Bulgarian citizens" or "Bulgarian citizens by birth." The latter could bar the Socialist candidate, Foreign Minister Georgi Pirinski, from registering, since he was born in New York and acquired U.S. citizenship at birth. At the 8 August meeting, the commission approved a registration form on which the candidate does not have to declare his citizenship. But candidates must present a certificate from the police stating their citizenship and saying how they acquired it. Candidates must register between 12 August and 22 September. Decisions of the Central Electoral Commission must be made by two thirds of its members. -- Stefan Krause

A special commission has been set up to investigate the mysterious death of Shpetim Cashku, president of the Agi trade company, Koha Jone reported on 9 August. Cashku was shot by special police forces inside the Tirana Savings Bank on 27 July and later died in the hospital. Reports are conflicting, however. Early ATSH reports said Cashku had taken hostages after he was refused a credit of $300,000, but bank employees later denied that report. ATSH also quoted witnesses as saying that only Cashku's arm was injured, but later he reportedly died of shots in his back. Koha Jone also mentions a mysterious letter from Prime Minister Aleksander Meksi, who apparently had approved the credit, that later disappeared. Koha Jone also pointed out that the Albanian TV broadcast the 27 July incidents live for about an hour. -- Fabian Schmidt

In the past six months, 166 army deserters have been sentenced to between four and six years imprisonment in Tirana alone, international agencies reported on 7 August. Reportedly four times as many deserters are awaiting trial in the capital. Hundreds more have fled the army to neighboring countries and the situation is similar in other parts of Albania. Prosecutors have reportedly begun calling for harsher sentences against deserters and draft dodgers. -- Fabian Schmidt