Ukrainian miners' struggle spreads


By Renfrey Clarke

MOSCOW — On June 19 a massive 12-day strike wave in the Ukraine, centred on the country's coal miners, began drawing to an uneasy close. But the fight had already spread; on June 21 Russian coal unionists began a picket outside government offices in central Moscow.

Vowing that the Russian coal industry would "not die quietly", the miners demanded that President Boris Yeltsin and his ministers honour a wage agreement and guarantee mine enterprises the funding they need in order to re-equip and survive.

At its height, the strike wave in the Ukraine involved work stoppages in some 90% of the country's coal mines, in scores of allied plants and in 123 unrelated enterprises.

An initial breakthrough occurred on June 17, when the parliament granted the miners' demand for a national referendum on confidence in the presidency and the legislature. Attention then shifted to the miners' economic demands. On June 19 workers at most of the mines began returning to work after government negotiators signed a 35-point deal with union leaders.

A state of "pre-strike readiness" will remain in force until the parliament and government meet all their pledges. If the September 26 referendum returns a vote of "no confidence" in the authorities, the strike will resume unless the parliament, within a week, schedules elections for no later than December.

Widespread scepticism has been voiced about the Ukrainian government's readiness to meet its economic promises, especially since first deputy premier Viktor Pynzenyk stated on June 23 that the government did not have the resources to satisfy all the concessions made to the miners. As of June 23, the Independent Union of Mineworkers of the Ukraine reported, miners at 53 out of 246 pits had refused to return to work.

While miners in the Ukraine were on strike, a fierce dispute was being fought out within the Russian

government over ways of dealing with the catastrophic problems of the coal industry. The prices which Russian coal enterprises receive for their output are controlled, and have not been raised since September 1992; they now reportedly cover only about 15% of the costs of production.

The rest must be made up by subsidies. But according to the newspaper Rabochaya Tribuna, only 29.7% of the subsidies promised by the government for April and May were actually handed over. The government has also flagrantly breached an industry wage agreement with coal unions. Funds for wage indexation have been provided late and only in part.

Russian coal enterprises now lack money even for such basic requirements as timber for pit props. Mine construction and repair work have ceased. An already terrifying level of deaths and injuries has grown still worse.

In mid-June fuel and energy minister Yuri Shafranik reportedly urged that coal prices should be raised immediately by 250%, and by an indexed 10-16% per month after that; in this way, revenue would be raised to pay a backlog of unpaid wages amounting to US$92.2 million. But in cabinet debates Shafranik clearly lost out to deputy premier and chief government economic strategist Boris Fyodorov. Arguing that Shafranik's approach would still require large-scale government subsidies, and that the critical goal in the fight to stabilise the economy was to reduce the budget deficit, Fyodorov convinced Yeltsin to issue a decree on June 21 abolishing price controls on coal from July 1.

According to neo-liberal theory, coal prices in Russia will now rise to their "natural" market levels. Mines that cannot operate profitably at these prices will have to shut down; those that survive will have the income to re-equip themselves without state support. The state budget will be relieved of a major source of inflationary spending, and the country as a whole will be better off.

Life should be so simple. But if the coal industry raises its prices by five or six times to the point where theory would suggest that most pits would be profitable, revenues will not rise by anything like

the corresponding amount.

Of the coal industry's major customers, the energy and metallurgical industries will simply not pay; even at current prices, they are unable to meet debts to coal suppliers of nearly $100 million. Many customers will seek alternative sources of energy or chemical feedstocks. As Izvestiya acknowledged on June 23, the result of Yeltsin's decree is likely to be a drastic fall in demand for coal, forcing the shutdown of as many as 30% of pits.

Much of what the government saves in production subsidies, it will then have to pay out in social welfare. In many coal towns, the mines are the only large employers. Relocating workers is impossible, because of Russia's acute housing shortage.

To the extent that budget outlays fall, the beneficial effects on inflation are likely to be cancelled by a surge of price increases as the "coal price shock" hits. Many of the coal industry's customers, especially in areas like the chemical industry, have monopolies and can pass on increases in their costs.

When the announcement of coal price liberalisation came, more than 100 miners were already on the picket line in Moscow, having begun arriving from Rostov province in the south over the previous days. Later, they were joined by colleagues from the Urals and Siberia.

On June 21 miners' representatives met for several hours with deputy premiers Boris Fyodorov and Oleg Soskovets, but came away voicing dissatisfaction.

The miners were "categorically against" freeing coal prices, declared Vladimir Katalnikov, head of the Rostov Territorial Committee of the Independent Union of Coal Industry Workers. Interviewed by Nezavisimaya Gazeta, Katalnikov said price liberalisation would "lead to the closure of more than half of the Russian mines". Meanwhile, there was no program of social support for jobless miners, and no program for developing other sources of employment in the coal regions.

The coal industry, Katalnikov said, would "not die

quietly", like the Russian textile industry or the defence complex. "The miners will fight", he predicted.