Gorbachev Eclipsed? under Union Treaty, Republics Shine Brighter

Article excerpt

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 control over the hard currency reserves. …