Toward a Two-Tier Commonwealth

Former Soviet republics split into core closely tied to Russia - and observers

By , Staff writer of The Christian Science Monitor

THE sixth summit meeting of the Commonwealth of Independent States, the loose confederation that replaced the collapsed Soviet Union, proved as fruitless as its predecessors.

Meeting last Friday in Bishkek, the capital of Kyrgyzstan, the leaders of 11 former Soviet republics were unable to reach agreement on any important issue on their agenda, which ranged from the fate of the ruble to military cooperation.

The commonwealth increasingly is becoming a two-tier body, with a core of states closely tied to Russia, surrounded by what are essentially observer states. The core states have chosen to join the "ruble zone," continuing to use the ruble as their common currency and submitting, de facto, to Russian monetary and credit controls. Aside from Russia, the "ruble zone" comprises Kazakhstan, Uzbekistan, Belarus, Kyrgyzstan, and Armenia.

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Ukraine, Moldova, Turkmenistan, and Azerbaijan are developing their own currencies and resisting any coordination of security or economic policy with Russia. (The 11th member, Tajikistan, is embroiled in civil war.)

Azerbaijan attended this meeting as observers after its parliament refused to ratify commonwealth membership. Georgia had previously opted for a similar status, and the three Baltic republics refused any links to the commonwealth from the start.

Even these lines are far from solid, however. Both Belarus and Armenia are already printing their own currencies, according to the independent Interfax news agency, but are holding off their introduction.

"We need the commonwealth for a transitional period," Kyrgyzstan President Askar Akayev told Reuters after the close of the summit in his capital. "It slows down the negative consequences of the collapse of the Soviet Union."

The Russian attitude toward the commonwealth has been one of "take it or leave it." Russia has almost invited former Soviet republics such as Ukraine to issue their own currency as soon as possible, seeking to end disputes over mutual payments and use of the ruble. Russians say Ukraine and others have expanded ruble circulation by issuing ruble-based credits and piling up ruble debt between Russian enterprises and counterparts in other former republics.

"Either ruble-zone states jointly work out common rules and abide by them, or they should leave it civilly by agreement," Russian President Boris Yeltsin declared to the Russian parliament last week.

This tough approach is also being displayed on oil and energy shipments from energy-rich Russia. Russian officials complain they are not being paid and last week the Russian energy minister warned that supplies might be cut off if debts were not paid.

But even those who elect to stay in the zone complain that they are the victims of arbitrary Russian policies over which they have no say. The massive increase in credits issued by the Russian Central Bank, in large part to avert bankruptcy of state-run industries, now is flowing outward to other republics in the zone.

"Kyrgyzstan is only a little island in the huge ruble ocean and we are drowning in the waves of Russian inflation," Mr. Akayev said. "Russia will do all it can to prevent the ruble zone plan from collapsing. If we try to get out of the ruble zone, Russia will make the problem of payments more difficult."

These disputes bedeviled two proposals before the summit. One would have formed a special executive group to coordinate economic policies, an idea pushed by Kazakhstan President Nursultan Nazarbayev to restore economic ties between former Soviet states. Another sought to create an intergovernment bank to coordinate monetary policies among ruble-zone members.

The first idea fell afoul of Ukraine, whose leaders react with hostility to anything they see as a return to the centralized Soviet and Russian-dominated state. Ukraine also torpedoed a Russian proposal to put all strategic nuclear weapons under sole Russian control.

And Russian officials were not eager to push the economic coordination plan. "We would not like to create illusions or suspicions that Russia with its `imperial ambitions' is forcing the creation of another union," Russian Premier Yegor Gaidar told the official Itar-Tass news agency before the summit.

Some observers say Russian is reluctant to give up sole control over the issuance of the ruble. Russians have not been enthusiastic supporters of Kazakh President Nazarbayev's desire to create a tighter economic union, including the formation of a super-central bank with joint control by all members.

Those two neighbors form the innermost core of the commonwealth, however. The Kazakh and Russian leaders made that clear by meeting separately after the Bishkek summit and signing an agreement to have open borders for trade, to use the ruble as common currency, and to coordinate military and foreign policies.

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