Soviet Lada boss to steer Russian economy

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Speculation about the fate of Russia's fragile economic reforms swelled yesterday as Boris Yeltsin appointed a Soviet-era industrialist to mastermind his economic policy, opening himself to criticism that he is trying to curry favour with Communist and nationalist voters before the presidential election in June.

The Kremlin announced that Vladimir Kadannikov, an executive from the Russia's troubled motor industry, would replace Anatoly Chubais, the liberal- leaning minister who headed Russia's mass privatisation programme before being sacked last week.

His appointment is certain to fuel fears among the free market lobby that the embattled President is willing to sacrifice Russia's tough, if painful, anti-inflationary strategy in order to win support among an estranged electorate.

Although seen as relatively progressive during the Gorbachev era, Mr Kadannikov, 54, has advocated protectionism and import tariffs in his capacity as head of Russia's largest car plant, AvtoVAZ, which makes Ladas.

A friend of Mr Yeltsin, and also of the President's hardline bodyguard, Alexander Korzhakov, he is thought to align himself with the more conservative element in the Kremlin's inner circle.

His appointment coincides with a swing towards the right by the Yeltsin administration, marked by the ousting of several of its top liberals in favour of hardliners. Such is the volume of comment about the Kremlin's current tack that Mr Yeltsin yesterday decided to intervene, lambasting those who come to "hasty, and superficial conclusions" about his personnel changes.

According to the Interfax news agency, he said he had no intention of "betraying" his political or economic course, but talked about the need to be aware of the "tactics" of reform, which were "often forced by circumstances".

This suggests that the President has two aims. On the one hand, he seems to want to convince reformers that his latest moves are merely vote-winning tactics; on the other, he is clearly hoping to overhaul his image, presenting himself as a decisive leader who will slay the dragons of corruption and poverty.

Whether cosmetic or not, the shift has been nothing if not eventful. Since the Communists' victory in December's parliamentary elections, Mr Yeltsin has replaced his foreign minister, Andrei Kozyrev; his chief of staff, Sergei Filatov, and Mr Chubais - all reformers whose jobs have gone to more conservative successors.

Meanwhile, he launched a crude and failed attempt to crush by brute force a band of hostage-taking Chechen rebels in Dagestan.

And yesterday, uncomplimentary comments were already circulating about Mr Kadannikov's credentials as economic supremo of the world's largest country. It has not escaped his critics' attention that his firm has not put a new Lada model on the road for more than five years.