Amid Political Tumult in Moscow, Yeltsin Forges CIS Economic Union

Integration represents a key to prosperity for the former republics

ALTHOUGH obscured by Russian President Boris Yeltsin's power-play against parliament, some experts here say an economic union pact signed by 12 former Soviet republics can play a vital role in hastening economic recovery.

Commonwealth of Independent States leaders, along with officials from the Transcaucasian nation of Georgia, signed the treaty Friday during a Moscow summit. Two CIS states, Ukraine and Turkmenistan, signed on only as associate members. The former Baltic republics of Latvia, Lithuania, and Estonia did not attend the meeting.

Under the agreement, the signatories pledged to form a common market that Mr. Yeltsin said could develop into ``one of the most integrated influential unions in the world,'' the Interfax news agency reported.

But several obstacles stand in the way of a viable economic union, including Ukrainian domestic turmoil and Transcaucasian wars.

Despite potential difficulties, the accord represented a major political triumph for Yeltsin. The president's move on Sept. 21 to dissolve the legislature and hold new parliamentary elections in December initially sparked concerns about upheaval in Russia. But Yeltsin's ability to pull off the summit without significant problems sent a signal that he is firmly in control.

For Russia and the other former Soviet republics, integration represents a key to prosperity, wrote Ivan Ivanov, economic analyst for the Itar-Tass news agency. ``A single economic space will be a decisive factor in stopping the industrial slump,'' Mr. Ivanov said.

The breakdown in economic ties among former Soviet republics, brought on by the collapse of the Soviet Union in December of 1991, is largely responsible for the acuteness of the economic crisis throughout the CIS.

Under Communist Party rule, a planned economic structure was devised to discourage industrial self-sufficiency in any particular republic. As a result, a factory in Ukraine might produce machine tools for plants in Russia, while being dependent on spare parts from Belarus.

Following the Soviet Union's collapse, many former Soviet republics hastily erected trade barriers, including tariffs, in an effort to establish their independent identities. But that left many factories without key markets and raw materials.

The primary goal of the new economic union treaty is to reestablish industrial ties by eliminating trade barriers within the CIS and establishing coordinated fiscal policies.

Russia is clearly seeking a leading role in the union's development. Yeltsin, in his summit keynote speech, called special attention to an agreement signed by six CIS states Sept. 7 establishing the Russian ruble as a common currency. That pact also gave Russia extensive control of fiscal policy in the five other CIS states - Armenia, Belarus, Kazakhstan, Uzbekistan, and Tajikistan.

An attempt to further integrate fiscal policy would likely face resistance by Ukraine, whose participation in the economic union is deemed essential by many if the venture is to succeed. Ukrainian nationalists are wary of Russian domination attempts.

Russian officials had hoped Ukraine would join the union as a full member. But with the Ukrainian government split by a severe economic crisis, President Leonid Kravchuk opted for the ill-defined status of associate member.

Ukraine's status may not be clarified until after new presidential and parliamentary elections. Parliament voted to hold early legislative elections March 27, and a presidential vote June 26, in the hopes of ending its political crisis.

When it encounters opposition to its leading role, Russia can pressure hesitant republics into closer integration by playing its energy card. Most CIS countries, including Ukraine, remain dependent on Russia as a source of energy, including oil and gas. But in this case, resource-rich Turkmenistan would be immune to Russian pressure.

Ultimately, the success of the economic union rests on political stability, Yeltsin said. Thus, the conflicts in Tajikistan and the Transcaucasus potentially endanger fulfillment of the accord.

At Friday's summit, Yelstin urged closer cooperation on CIS peacekeeping efforts in Tajikistan, where the conservative government is battling radical Islamic forces operating out of neighboring Afghanistan.

But Russia's credibility as a peacemaker has been severely damaged by the renewed fighting in the Abkhazia region of Georgia. Russia was the guarantor of a cease-fire agreement signed in July by the Georgian government and Abkhazian separatists. But Moscow has done little to stop renewed hostilities, which flared Sept. 16.

Georgian forces, led by President Eduard Shevardnadze, have been fighting desperately to prevent Abkhazian forces from capturing the besieged city of Sukhumi, the Abkhazian capital. Georgian officials have bitterly denounced Russia, saying Russian troops are fighting on the side of the Abkhazians. Moscow has denied involvement.

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