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Kazakhstan: Labor Unrest Has Roots In Failed Privatization

Prague, 12 March 1998 (RFE/RL) -- Evidence is mounting that Kazakhstan's flawed privatization program between 1995 and 1997 is at the root of a series of major strikes that began last autumn and continue today.

Workers at Achisay Polymetal Factory in Kentau City in Shymkent Oblast, Sokolov -- Sarbay Iron Ore Plant in Qostanay Region, Phosphorus Producing Plant in Janatas Town, Jambyl Oblast all have mounted strikes, demonstrations or other labor actions.

A trial of three leaders of the Janatas strikers started this week. They face up to 10 years imprisonment on charges of organizing an unsanctioned mass protest and blockading railway traffic in Taraz City on February 16.

A leader of the Workers' Movement in Almaty City, Madel Ismailov, is in cell no. 147 of Almaty Central Jail. He is to be tried starting tomorrow after having participated in an assembly February 27 in Almaty of Kazakh opposition movements and parties, at which creation of a new opposition alliance called People's Front was announced. He is accused of publicly cursing Kazakh President Nursultan Nazarbayev last November.

Some of the labor actions have won concessions. A strike of Achisay Polymetal Plant's workers in Shymkent Oblast ended after the Kazakh government agreed to pay off the main part of the plant's wage arrears to the workers. The Kazakh government also allocated some financial support for the phosphorus industry in response to the Janatas strikers.

All of these strikes and protest actions have one factor in common: All the industrial facilities involved had been sold or ceded in part to nominally foreign companies.

Last week one more such foreign company attracted the attention of Kazakh news organizations. The Global Minerals Reserves Company convened a press conference in Almaty. Company representative Boris Nozhkin issued a statement that a Kazakh government decision to annul Global Minerals' ownership of Shubarkol coal mine in Qaraghandy Oblast, central Kazakhstan, was unfounded. Global Minerals acquired the mine last year.

The agreement between the government and the company was that production was to be increased from the Shubarkol mine, considered one of the most potentially productive mines of central Kazakhstan. In fact, the mine produced 1.75 million tons of coal in 1995, 1.56 million tons in 1996 and 1.35 million tons last year.

In addition, Global Minerals agreed to invest the equivalent of $5 million in the facility each year. But last year, it spent less than $1 million on the facility's infrastructure. The mine's technology remains remnants of the old Soviet-era.

There had been objections three years ago when the decision was made to sell the mine to what was declared to be a "foreign company," Global Minerals. But the deal went through, at least partly due to the enthusiastic support of Piyotr Nefiyodov, then governor of Qaraghandy Oblast. Information has emerged since that Nefiyodov's own son was a principal of Global Mineral Reserves and that the company itself, though registered offshore, is led by former Soviet citizens.

About 13,000 miners in Qaraghandy Oblast have became unemployed as mines in the region have closed and the region looms as likely to be the next embroiled in labor unrest.