Briefing for '98: Chubais to keep reforms coming

Anatoli Chubais: under fire

Russia was the world's best- performing stock market in 1997 as its benchmark index rose 209 per cent. Much of the credit for this belongs to the first deputy prime minister, Anatoli Chubais, the mastermind of President Boris Yeltsin's massive sale of state-owned assets.

Despite the success of Russia's privatisation programme and the strength of its stock market, however, the former academic emerged in 1997 as a hate figure in much of his country. Last November Mr Yeltsin was forced to demote Mr Chubais, stripping him of his job as finance minister. In an end-of-year radio address the president virtually singled out Mr Chubais for further attack, criticising reformers for "bouncing the country from one extremity to the other".

A question uppermost in foreign investors' minds in 1998 is whether Mr Chubais can survive politically. The odds are he can and will.

Mr Chubais is no stranger to adversity and he has been sacked before from the government, in 1995. But he was taken back during Mr Yeltsin's re-election campaign, in which he played a key role in uniting Russia's financial elite against the communists. But soon after Mr Yeltsin's electoral victory, Mr Chubais upset his power base - Russia's new commercial elite - by insisting that the privatisation process be moved on to embrace competitive tendering. This turned businessmen losing out in tenders into adversaries.

The key privatisation since Mr Yeltsin's re-election has been the sale of the state telecommunication giant Svyazinvest. The winner in that privatisation was Oneximbank, which was established in 1993. Its president is Vladimir Potanin, head of an empire of industrial companies, banks and media groups which have assets of approximately $36bn (pounds 22bn), equal to 10 per cent of Russia's gross domestic product.

When Oneximbank won 25 per cent of Svyazinvest, Mr Chubais was accused of favouring Mr Potanin in the privatisation. Then in November Mr Chubais and his aides were accused of taking fees for an unpublished book on Russian privatisation from a Swiss subsidiary of Oneximbank.

Mr Yeltsin sacked Mr Chubais' team, dismissed him as finance minister, but kept him on as first deputy prime minister. In the weeks following, rumours circulated in Moscow that Mr Chubais' days as a political force in the country were numbered.

Mr Chubais is detested by Russia's communist-dominated parliament, which has repeatedly called for his head. It now seems, however, that Mr Yeltsin has been playing a canny game designed to keep him in power. By half- sacking his key reform adviser and by publicly criticising him, Russia's president appears to have done enough to prevent Mr Chubais' adversaries from going for the kill.

The book scandal that nearly sank him last autumn is likely to fade as a memory in 1998, and with time he may make up lost ground. Even if Russia's economy suffers a setback in 1998, and Mr Yeltsin is forced to make Mr Chubais a scapegoat, his reforms will carry on.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Administrator

£19000 - £22000 per annum: Recruitment Genius: An exciting opportunity has ope...

Recruitment Genius: Mortgage Administration Team Leader

Negotiable: Recruitment Genius: This company prides itself on its ability to p...

Recruitment Genius: Mortgage Advisor

Negotiable: Recruitment Genius: This company prides itself on its ability to p...

Ashdown Group: Solvency II Project Manager - 10 month contract - £800 p/d

£800 per day: Ashdown Group: A highly successful, global financial services co...

Day In a Page

A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

A Very British Coup, part two

New novel in pipeline as Jeremy Corbyn's rise inspires sequel
Philae lander data show comets could have brought 'building blocks of life' to Earth

Philae lander data show comets could have brought 'building blocks of life' to Earth

Icy dust layer holds organic compounds similar to those found in living organisms
What turns someone into a conspiracy theorist? Study to look at why some are more 'receptive' to such theories

What turns someone into a conspiracy theorist?

Study to look at why some are more 'receptive' to such theories
Chinese web dissenters using coded language to dodge censorship filters and vent frustration at government

Are you a 50-center?

Decoding the Chinese web dissenters
The Beatles film Help, released 50 years ago, signalled the birth of the 'metrosexual' man

Help signalled birth of 'metrosexual' man

The Beatles' moptop haircuts and dandified fashion introduced a new style for the modern Englishman, says Martin King
Hollywood's new diet: Has LA stolen New York's crown as the ultimate foodie trend-setter?

Hollywood's new diet trends

Has LA stolen New York's crown as the ultimate foodie trend-setter?
6 best recipe files

6 best recipe files

Get organised like a Bake Off champion and put all your show-stopping recipes in one place
Ashes 2015: Steven Finn goes from being unselectable to simply unplayable

Finn goes from being unselectable to simply unplayable

Middlesex bowler claims Ashes hat-trick of Clarke, Voges and Marsh
Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Atwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works