Gorbachev grants economic independence to Russian coal mines

May 07, 1991|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- In a landmark step toward dismantling central control of the Soviet economy, the Kremlin freed Russian coal mines yesterday from the ministerial bureaucracy, granting them unprecedented economic independence under Boris N. Yeltsin's Russian Federation.

But despite that major concession, forced by striking miners, President Mikhail S. Gorbachev last night seemed to drop his brief cease-fire with the republics.

He accused Mr. Yeltsin of "cheap politics," dismissed Armenia's charge that a bloody Soviet military operation has been launched against it and declared defiantly that the Soviet Union will survive as a "great power."

At a news conference with visiting French President Francois Mitterrand, Mr. Gorbachev also sharply scolded the Western news media and politicians for concluding on the basis of certain TC "episodes" -- presumably Soviet troops' violence against Baltic civilians in January -- that reform was over. Such hasty judgments, he said, could undermine improved East-West relations, producing "big disappointments" and "big unpleasantness."

After surprising the country by signing a joint statement along with the leaders of eight other republics April 23, Mr. Gorbachev and Mr. Yeltsin now have renewed their sparring -- ironically, over just who gave up more ground in reaching the agreement.

In an interview televised Saturday, Mr. Yeltsin portrayed the "Statement of 10" as a clear victory for the republics, whose sovereignty Mr. Gorbachev was at last forced to recognize. He said he had warned the Soviet president that the agreement represented his political "last chance."

Clearly angered by that interview, Mr. Gorbachev said Mr. Yeltsin had engaged in "cheap politics" by distorting the agreement as "a knockout of the president." On the contrary, Mr. Gorbachev said, it was he who had initiated the meeting and drafted the agreement, while Mr. Yeltsin and the rest of the republican leaders had merely offered their advice and consent.

Despite Mr. Gorbachev's tough rhetoric, the coal-industry transfer document signed yesterday by Soviet Deputy Prime Minister Vitaly Doguzhiev and Russian Deputy Prime Minister Yuri Skokov was a clear victory for Russia. It is one of the most important blows struck to date against the central economic bureaucracy.

The coal agreement represents far more than a turf battle between union and republican bureaucracies. The Soviet Coal Industry Ministry traditionally has run the country's far-flung mines by decreeing investment, production and pricing policies from Moscow. Mr. Yeltsin's Russian government has pledged to let the mines run their own show, collecting taxes on their profits but otherwise leaving them alone.

The mines will be permitted to keep 80 percent of any hard currency they earn, for instance, creating a powerful incentive to boost production. They will be allowed to turn the state-run mines into leased operations, stock companies or private businesses.

The agreement takes from the control of the Soviet Coal Industry Ministry the coal mines of Western Siberia, the Arctic and the area around Rostov in southern Russia. It is likely to put an end, possibly today, to the crippling two-month miners' strike that has starkly demonstrated the power of the workers.

Strike leaders said yesterday that they would review the text of the union-Russian agreement before making a final decision on suspending the strike. But a considerable number of mines already have returned to work, and it appears unlikely that strike advocates could draw substantial support for renewing the strike.

Some mines are unprofitable, and the transfer will deprive them of their state subsidies. Thus the promise of economic independence is not equally attractive to all the mines.

Mr. Yeltsin has said the coal agreement will become a model for transfers away from the union bureaucracy in the energy, metallurgy and construction industries. If the agreement is widely duplicated, it will be a death sentence for the massive central Soviet ministries, which are viewed by many Western experts as the chief obstacle to creating a functioning market economy.

If Russia was getting concessions, Armenia seemed to be targeted for the Kremlin's bully treatment.

Armenian President Levon Ter-Petrosyan asserted yesterday that Soviet troops were attacking Armenian towns. But last night, Mr. Gorbachev described army and Ministry of Internal Affairs actions in Armenia as merely enforcing his decree of last summer ordering the confiscation of illegal weapons.

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