Premier Blames Politics for Russia’s Economic Travails : Reform: Chernomyrdin unveils a new plan for transition to market system. But Parliament votes to suspend legal basis for privatization.
MOSCOW — Presenting a new three-year plan aimed at furthering Russia’s transition to a free-market economy, Prime Minister Viktor S. Chernomyrdin on Friday declared that the ailing political system has now become the major obstacle to economic stability.
As if to prove Chernomyrdin’s point, while President Boris N. Yeltsin and his Cabinet were meeting in the Kremlin on Friday, Parliament voted for a second time to suspend the legal basis for privatization, the heart of Yeltsin’s program for bringing capitalism to Russia.
The vote was 140 to 15, with two abstentions, an indicator of the huge ideological gulf between Yeltsin and the Soviet-era Parliament.
While Yeltsin was on vacation last month, Parliament voted to strip his privatization agency of the power to sell off thousands of state-owned enterprises, about 68,000 of which have already been put on the auction block.
Yeltsin responded with a presidential decree protecting the rights of Russians to participate in the privatization process by redeeming government-issued vouchers for shares in companies. The mass auctions continued, but in Friday’s vote the Supreme Soviet suspended Yeltsin’s presidential decree until Russia’s Constitutional Court can rule on its legality.
Deputy Prime Minister Anatoly B. Chubais vowed that the Yeltsin administration “will find the wherewithal to go on with privatization,” but the reformers in Yeltsin’s Cabinet are clearly on the defensive.
Even some of Yeltsin’s staunchest allies fault the president for squandering, by inaction, the political momentum of his April referendum victory. Now conservatives are flexing their muscles again.
“The referendum was kind of a knockdown for the Parliament, but unfortunately it was not a knockout,” said Maxim V. Boyko, head of the Russian Privatization Center. “Now they are recovering, and they are willing to strike back.”
Yeltsin’s chief tormentor, Parliament Chairman Ruslan I. Khasbulatov, on Friday called for the removal of the four key figures he blamed for the recent disastrous decision to yank all old ruble bills out of circulation: Yeltsin, Chernomyrdin, Finance Minister Boris G. Fyodorov and Central Bank Chairman Viktor V. Gerashchenko.
Khasbulatov’s attacks on the first three officials have no legal clout, but Parliament does have the right to fire the Central Bank chairman.
Just as Yeltsin’s radical capitalist reforms are in trouble with Parliament, his most aggressive reformers appear to be losing ground in the struggle with conservatives inside the Cabinet.
On Wednesday, Yeltsin said he was distressed by “a new round of meaningless and exhausting power struggles,” specifically mentioning the bad blood between the Central Bank and the Finance Ministry.
On Friday, Chernomyrdin said that any minister purporting to speak for the government but contradicting its policies would have to look for another job. Chernomyrdin made it clear he meant Fyodorov, reported the Itar-Tass and Interfax news agencies.
The prime minister had mixed news on the economy.
He said Russia’s raging inflation has eased and production has stopped plummeting. After two years of recession, exports rose 3% in the first half of 1993 to $18.2 billion, he said. Russia is selling more than raw materials: Machinery and equipment exports rose 13.5% to $1.7 billion.
“The first signs of (the) crisis weakening have become evident,” Chernomyrdin said, though he quickly added, “There is a long way to stabilization.”
Inflation was still 19% in July, and Russia still has a hard currency shortage. Worst of all, Chernomyrdin said, Parliament has passed a budget with a deficit of 23 trillion rubles (about $23 billion), or 47% of the gross national product.
His plan, approved by the Cabinet, calls for a tight credit and monetary policy that would slash the monthly inflation rate to 10% by the end of the year.
The plan envisions the completion of mass privatization by 1995, at which point state enterprises would amount to no more than 35% of the gross national product. By 1996, Russia would have laid the foundations for economic growth to begin.
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