Gorbachev Eclipsed?

Under Union Treaty, republics shine brighter

By , Maxim Kniazkov is a former foreign correspondent with the Soviet news agency Tass. He now edits a business newsletter in Chevy Chase, Md.

ONCE home after meeting the G-7 leaders in London, Soviet leader Mikhail Gorbachev may find out that his dream of joining the exclusive club of the world's mighty as the leader of a renewed Soviet Union is further from reality than ever before.It is not that the USSR does not have any chance to regain its potential. But there are good chances that it will reemerge from its current crisis with a totally different political and economic structure, in which Gorbachev's role would be comparable to that of the British queen. Reports coming from Moscow indicate that the Union Treaty, which the Soviet president so vehemently advertised to the Group of Seven in London, may not materialize in the form Gorbachev expects it to. As proposed by the central authorities, the new draft Union Treaty provides Moscow with the right to formulate defense and foreign policies and oversee communication and transportation networks. It also gives the central government the right to control gold and diamond reserves and define energy policy. State laws will have precedence over republican laws. Although the representatives of nine Soviet republics initialed this treaty at the end of June, many analysts consider it more a political gesture aimed at influencing the West on the eve of Gorbachev's trip to London than a sincere expression of their will. "There are areas of competence [of the central government] that are still not recognized by everyone," one of the leading Soviet reformist newspapers, Kommersant, pointed out. The main challengers to the central government are Russia and the Ukraine, the richest and most self-sustaining of the nine republics. * Both favor a tax system in which the republics would annually contribute a portion of their revenues to the federal budget, something that is staunchly opposed by Moscow, which is not willing to live at the mercy of the "provinces." * While not rejecting the proposed notion of the "unified energy system" as a whole, the government of Russia opposes including into this system the republic's energy resources such as oil and coal that constitute its main wealth. This refusal renders the whole "system" meaningless. * During his electoral campaign, Russian President Boris Yeltsin repeatedly stated that the legislation of the Russian Republic would have absolute priority over that of the Union. Speaking in Samara, an old Russian town on the bank of the river Volga, he promised to free the republic's enterprises from paying 40 percent of their hard currency earnings to the union budget and, instead, proposed that they sell a portion of these earnings to the government of Russia, a clear attempt to undermine Moscow's c ontrol over the hard currency reserves. * The Ukraine, as is stated in its Declaration of Sovereignty of July 16, 1990, wants to conduct an independent foreign policy and even become a nuclear-free zone, a posture that undermines Moscow's reliance on nuclear deterrence. * Kiev has announced its intentions to create a separate Ukrainian currency before the end of this year and objects to the proposed priority of union laws over republican ones. Ukrainian President Leonid Kravchuk, a party functionary who turned out to be an astute fighter for national independence, plays it cool. "I firmly believe that it is the Ukraine that will determine the kind of union we will have," he told the Ukrainian Business Digest, a Westport, Conn.-based newsletter. Kravchuk says he wants the central government to have only those powers that the republics would provide it with. He feels they should be limited to issues related to national defense. Kiev's determination to set the rules of the game apparently stems from the assumption that under the present circumstances, Moscow cannot allow itself any punitive action against the rebellious republics. And chances are good that the Ukraine will have its way. These obstacles to the Union Treaty will be hard to overcome. However, since the republics seem to be in a better bargaining position after Yeltsin's victory, it is clear that if the treaty is to be accepted by all parties, it should differ significantly from the June draft. The Soviet Union will probably emerge after this negotiating process as a very loose confederation of sovereign states, sort of a Group of Nine whose president would be ceremonial. Ironically, by refraining from a direct pledge to provide financial assistance to the USSR, the participants of the London summit have severely undercut their favorite Soviet politician - Mikhail Gorbachev. A package of Western aid would have been a crucial trump card up his sleeve in his negotiation with the republics. Since the hoped-for aid was denied, Gorbachev has returned to Moscow with a weakened bargaining position. Relations between the central government and the republics are now more likely to be guided by a secret memorandum reluctantly accepted by Gorbachev during his negotiations with the republics in Moscow on April 23. This memorandum, Kommersant says, recognizes the republics as sovereign states and the priority of their laws. It concedes that the wishes of the republics, not of the central government, should constitute the basis for a new Union Treaty. If so, very soon we'll see something that Gorbachev has tried to avoid - a totally revised draft of the treaty.

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