RUSSIAN COAL INDUSTRY FACES DRASTIC CUTS.

The Fuel and Energy Ministry has agreed to terms with the World Bank for releasing a $150 million loan to facilitate coal mine closures. As proposed, the federal government will pledge 6 trillion rubles ($1 billion) to cover social welfare spending in mining regions. In return, regional authorities will assist in job placement for miners who lose their jobs, and the coal mine authorities will pay those who do not. Currently, miners are not receiving their pay until five to seven months after it is due. (Izvestiya, February 28)

The World Bank expects more than half of Russia’s 900,000 miners to lose their jobs over the next decade. This decrease is similar in scope to the cuts that have affected mining industries worldwide over the past several decades. One-third of Russia’s miners work in the province of Kemerovo in Siberia — scene of the 1989 strikes that accelerated democratization in Russia. Even though Kemerovo is the most efficient coal basin, last year the Kemerovo pits suffered losses of 1.3 billion rubles. Their debts accumulated to 7.4 billion, while wage arrears rose to 784 million. (Finansovye izvestiya, March 3)

The miners’ noisy political presence has made the government wary of cutting coal subsidies, which have been channeled through the monopoly Rosugol coal corporation. The World Bank made eliminating subsidies a condition of the structural adjustment loans it began granting to Russia in July 1996. In July 1997 it suspended payment of the $800 million loan — insisting that the government move more quickly to turn Rosugol into a joint-stock company, and take steps to ensure that the loan is spent on the targeted activities (such as taking schools and hospitals off the payroll of Rosugol) rather than being diverted to subsidize current production or still more speculative activities.

Unfortunately it looks as if the World Bank money may merely have flowed in to replace curtailed government subsidies. This year, the bank’s tougher stance may force Rosugol to confront the reality of pit closures. Sixty of the 400 pits have been closed so far. Another eighty may go this year. Protests can be expected. On March 3 an extraordinary congress of the Kemerovo miners convened and pledged support for the all-Russian protest action scheduled for April 9.

Also this week, prosecutors accused former Kemerovo governor Mikhail Kislyuk of diverting 17 billion old rubles ($2.8 million) of the World Bank loan. Kislyuk, who currently heads the federal service for the regulation of transport monopolies, denies any wrongdoing, and blamed the accusation on the machinations of Aman Tuleev, who replaced him as governor in July 1997. (Kommersant-daily, March 4)

Israeli Minister in Russia.