No going back to old ways, pledges Russia's next PM

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The Independent Online
RUSSIA'S Prime Minister in waiting, Viktor Chernomyrdin, moved to reassure the West yesterday by bringing leading reformers into his team and vowing on television that he would not take the country back to its Soviet past.

Russia was "already part of the world economy", Mr Chernomyrdin told viewers: there was no going back. It also emerged that he had formed a troika of senior reformers to prepare measures to tackle the economic crisis. The group is headed by the acting Deputy Prime Minister Boris Fyodorov and includes the central bank chairman, Sergei Dubinin, and the acting Finance Minister, Mikhail Zadornov.

The premier-designate's remarks followed a stark warning from the International Monetary Fund that the West would not come to Moscow's rescue if it backtracked on efforts to introduce a market-based economy. The US also weighed in, saying the $23bn rescue package to Russia would now have to be renegotiated. Yesterday Tony Blair, chairman of the Group of Seven industrialised nations, was contacting fellow G7 leaders from Balmoral, where he is discussing the crisis with the Queen.

Concern about Russia's direction has been mounting steadily with the deepening economic crisis, which has seen a fast-falling rouble, price rises, a flurry of bank mergers and queues of Russians trying to get dollars from banks. The impact has been felt on world stock markets, which last week took their worst beating since the 1987 crash.

The 40 per cent of ordinary Americans who own shares have remained calm, while Wall Street professionals have panicked. But if small American investors join the worldwide sell-off of shares, the collapse may become unmanageable, and there were market rumours that the world's main industrial nations were planning a co-ordinated cut in interest rates to offset a liquidity crisis.

In Britain the Russian crisis, coming on top of mounting evidence of a slowdown in the economy, could prompt the Bank of England's monetary policy committee to cut rates when it meets next week.

Focus, pages 17-19 Anne McElvoy, page 20