New Russia fears a dose of old medicine: Yeltsin is fighting for his political life. Helen Womack in Moscow reports

Click to follow
The Independent Online
BORIS YELTSIN appeared to be fighting for his political survival yesterday after he cut short a visit to China, saying he was needed in Moscow to 'restore order' and save reform. The Russian capital was quiet and it was not immediately clear what prompted Mr Yeltsin's hasty departure.

Speaking to reporters at Peking airport, Mr Yeltsin suggested that Russia's new conservative Prime Minister, Viktor Chernomyrdin, was trying to dismantle the reformist cabinet assembled by his predecessor, Yegor Gaidar. 'Someone has started fighting for portfolios too early, to pull the government apart, so the master must return to restore order,' the President said.

Although he had to sacrifice Mr Gaidar last week because of pressure from the Congress of People's Deputies, Mr Yeltsin was hoping to keep the rest of his circle of reformist economists.

However a claim by Mr Yeltsin's spokesman Vyacheslav Kostikov that things 'could have been worse' suggests that other candidates even more conservative than Mr Chernomyrdin might have been foisted on the President. One was Yuri Skokov, a shadowy figure from the unelected Security Council, who won more votes than Mr Chernomyrdin in the first vote in Congress. Mr Yeltsin said later he would take advice on foreign affairs from Mr Skokov, which was a bad sign for the liberal Foreign Minister, Andrei Kozyrev, and could be just as bad for the West, which may find Russia taking up positions less to its liking.

Mr Chernomyrdin, 54, was the best compromise Mr Yeltsin could hope for after losing his struggle with the turbulent assembly.

Now Russian business people and Western investors alike can only wait and see how the man who has been described as a 'dark horse' will handle the Russian economy. At his first press conference, Mr Chernomyrdin gave little away. He said he would continue the course of reform, but would not say how. He also hinted at more state intervention. His priority, he said, was to support industry, since a great country like Russia could not achieve a free market by 'becoming a nation of shopkeepers'.

Traders who have set up kiosks in Moscow are worried. 'It is not clear what will happen now,' said Genya, who runs a booth selling drinks, sweets and cigarettes. 'I'm sorry Gaidar has gone. I don't know what the new man intends. Anything is possible.'

His uncertainty was shared by Roma, who works in a kiosk which sells clothes and gives a percentage of its profits to charity. 'Probably we will be allowed to continue, but I don't rule out the possibility that they will come and close us down. Living in Russia is like living on a volcano.'

Western businessmen who dealt with Mr Chernomyrdin when he was a deputy prime minister for energy, say he is a good manager but not an imaginative reformer. Recently he gave a contract for development of a gas field to a Russian consortium rather than a Western firm, prompting energy expert George Reese to say: 'He's pro-Russian. He will insist on maximum Russian participation in foreign investment projects and that's not necessarily a bad thing.'

Mr Chernomyrdin, who comes from the southern Russian city of Orenburg and has spent his entire career in or administering the energy industry, was a member of Mr Gaidar's team and is therefore familiar with the reform strategy to date. Mr Gaidar himself has been made a special adviser to President Yeltsin, so his influence will still be felt.

So far no brakes have been applied to the privatisation drive. On the contrary, on Mr Chernomyrdin's third day in office, the government announced that it was giving Russians an extra month to apply for vouchers which they can use to buy shares in state property.

However, there have been other signals in the past week which suggested backtracking, if not to full Communism then at least to stronger state control.

In his acceptance speech to Congress, Mr Chernomyrdin said he was for reform, but not at the expense of social welfare. One of the most distressing aspects of the fledgling market has been the impoverishment of many Russians. But opinion polls have shown that most people understood that omelettes could not be made without cracking eggs. Mr Chernomyrdin seems inclined to spare the eggs.

At his press conference, the new Prime Minister said the state should continue to regulate energy prices, instead of allowing them to reach world levels, as Mr Gaidar wanted, in order to provide an incentive for proper management of resources.

And on Friday Mr Chernomyrdin proposed an amendment to the state budget to provide 200bn roubles (dollars 480m) of soft loans to the energy industry, seemingly spelling the end of Mr Gaidar's tight monetary policy.

Some political analysts suspect that Mr Chernomyrdin may be manipulated by more powerful people behind the scenes.

(Photograph omitted)

Comments