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. Last Updated: 07/27/2016

Primakov, Lebed Joust Over Regions

Prime Minister Yevgeny Primakov extended a hand to Russia's suffering coal regions as he visited Siberia on Friday, but he warned restive regional leaders to cease their separatist rumblings as Alexander Lebed lambasted the government for neglecting the regions.

"Our common cause is to find a way out of the situation the country is now in," Primakov told 19 Siberian leaders gathered in Kemerovo.

"There can be no talk of conflict between the center and the regions," Itar-Tass quoted him as saying.

Primakov and a delegation of his deputies and heads of energy monopolies traveled to Kemerovo, the regional capital of the coal-rich but cash-poor Kuzbass region, bearing a promise to pay out up to 12 million rubles ($550,000 at Saturday's official rate) to the coal industry by the end of the year and maintain output levels.

The promise came the same day the World Bank said it would scrap its loans for restructuring Russia's coal industry if Moscow doesn't come up with a plan for closing outdated mines and supporting workers who would lose their jobs.

The World Bank's $800 million loan to restructure the coal industry has been frozen since August, along with other aid to Russia. The bank may scrap the loan altogether if Russia doesn't keep its promise to overhaul the industry, said the chief World Bank representative to Russia, Michael Carter, Interfax reported.

It wasn't clear whether the money promised by Primakov was to go for streamlining the industry or for more subsidies to unprofitable mines.

Primakov and Kemerovo Governor Aman Tuleyev signed an agreement boosting regional control of Kuzbass coal firms. Members of Primakov's team said the government was seeking to draw the coal industry back into the government fold, with Primakov favoring a 50 percent government presence on the boards of directors of coal firms. Many are privately controlled.

Such plans are likely to play well with Tuleyev, who backed the miners last summer in their strikes against the government for unpaid wages.

Coal miners routinely go without pay for months at a time, but strongly oppose the industry restructuring plans, fearing they will be left even worse off. Many of the mines are located in isolated regions where no other jobs are available.

Primakov said regions too must shoulder responsibility for federal policy. But the prime minister, struggling to get the country's floundering economy under control, has a fine line to walk with the regional governors: They make up the nation's upper house of parliament, which will decide the fate of this year's draft budget as soon as the lower house approves it.

Federal spending is a major bone of contention for regional leaders, who, disgusted with the Kremlin's failure to pay out promised cash, have parted ways with Moscow.

"The budget cannot be passed in the form presented by the government," said Lebed, the most high-profile of the rebellious governors, who tore into the government for "over-centralization of the economy and finances" and encouraging "centrifugal tendencies."

"Give us a fishing rod, and we'll catch plenty of fish ourselves," Lebed told Primakov and the governors.

But Primakov immediately went on the counterattack. "You can't just reject the budget out of hand," he scoffed. "That's ridiculous."

"I am sure the opinion of Alexander Lebed is not shared by the rest of the 19 governors," Primakov added hopefully.