[PEN-L:364] Russia's Miners Put Pressure on the State

[Gregory Schwartz <grishas@xxxxxxxx>]

Financial Times (UK)
29 July 1998
[for personal use only]
RUSSIA: Miners' protest puts pressure on Kremlin
By Astrid Wendlandt in Chelyabinsk and John Thornhill in Moscow

Russia's coalminers yesterday stepped up pressure on the government to
pay back wages by threatening to block every branch of the
Trans-Siberian railway and to sever the European part of Russia from the

far east.

On Monday, 400 determined miners began a blockade of the southern Urals
section of the railway near Chelyabinsk, and local officials warned
yesterday that the protests were spreading to other branches along the
railway route. The local administration said the protests were causing
economic disruption to the region and suggested that they could threaten

the safety of nearby nuclear plants. Pavel Bolshakov, the Chelyabinsk
region press secretary, said the protests jeopardised the local Mayak
nuclear facility, the largest of its kind in Russia, which is dependent
on coal-fired electricity for its cooling systems. "The miners do not
understand the catastrophe their actions could bring about," he said.
However, Mayak should be able to find alternative sources of electricity

in an emergency.

The pressure on the government's finances rose yesterday as yields on
the domestic debt rose well above the central bank's refinancing rate of

60 per cent. The government said it would cancel two domestic bond
auctions scheduled for today but would speed up plans to sell a 5 per
cent stake in Gazprom, the giant gas monopoly, in August.

Sergei Generalov, energy minister, said the government was examining a
range of options for the Gazprom sale. "We are choosing between selling
it through derivatives, through small lots to portfolio investors, or in

two or three lots to strategic investors," he said.

Coalminers in the Urals region staged sporadic protests earlier this
summer but were bought off by government promises to eliminate wage
arrears in the sector. Earlier this month, Boris Nemtsov, deputy prime
minister, said the government had transferred all the money needed to
pay off its outstanding wage bill.

Russian law enforcement officials are investigating whether some of the
federal funds earmarked for the miners have been stolen by local
industry officials. But local miners blame the Kremlin. "We all know the

government has our money, sitting in commercial banks and they are
making profits on our backs," said Valery Kazantsev, 39, who recently
returned from Moscow, where he was demonstrating outside the government
headquarters.

"Moscow, Nemtsov, they are all good liars," said Yuri Chudinov, a
46-year-old miner, who has not received his salary since September.

In sweltering heat, the miners have set up tables and benches on the
railways and say they will not move until Moscow has paid back its
debts.

--
Gregory Schwartz
Department of Political Science
York University
4700 Keele St.
Toronto, Ontario
M3J 1P3
Canada

Tel: (416) 736-5265
Fax: (416) 736-5686
Web: http://www.yorku.ca/dept/polisci