Economic reformer said to leave Primakov government Fyodorov's program denounced as foolish

Global crises

September 16, 1998|By NEW YORK TIMES NEWS SERVICE

MOSCOW -- An outspoken economic reformer reportedly has left the Russian government, removing one of the last strong voices for free-market reform in the team being put together by Prime Minister Yevgeny Primakov.

The future of the official, Boris Fyodorov, a former finance minister who returned to the government in the spring to spearhead an aggressive tax collection drive, has been closely watched here and abroad as a sign of whether the Primakov government will represent a range of economic viewpoints or will tilt heavily toward policies favored by the Communists.

Fyodorov's departure was announced by Aleksandr Shokhin, a centrist who accepted a job as deputy prime minister in charge of finances yesterday. In a televised interview last night, Shokhin said he would stay on only if he could influence government policy, especially to modify policies that in his view would lead to hyperinflation.

Fyodorov's office would not confirm his resignation, but he was not present at a meeting today between Primakov and representatives of the International Monetary Fund.

For the past two weeks, while Russia was caught in political paralysis, Fyodorov, as acting deputy prime minister and a figure well known to Russia's Western partners, stepped forward with a program designed to ease the country gently toward strict currency controls.

That program has since been dismissed as foolish by Russia's new central bank chairman, Viktor Gerashchenko, who regularly battled with Fyodorov over monetary policy four years ago, during Gerashchenko's earlier spell as central bank chairman and when Fyodorov was finance minister.

Yesterday, Gerashchenko reopened the dispute, saying he was in favor of printing more money to pay off months of unpaid wages.

"We can't do without that," he said.

Primakov, accompanied by Shokhin, told representatives of the IMF that his government would not halt Russia's reform process but would adopt policies to protect social welfare and spur industrial production.

Primakov also assured John Odling-Smee, the IMF official who is leading the talks with Russia, that the nation still intended to meet its domestic and foreign debt obligations.

Signs that Russia will abandon its reforms and revert to inflationary policies have raised doubts about whether the IMF will deliver its next installment of $4.3 billion in credits to Russia this fall, part of a package approved in July during the early stage of Russia's financial crisis.

At the government's request, a team of veteran Russian economists -- former advisers to Mikhail S. Gorbachev during the waning years of communism -- has presented its economic plan, which one Russian newspaper summarized yesterday as "emissions, emissions and more emissions."

In his interview on television last night, Shokhin, a former economy minister and head of the Our Home Is Russia party in the Parliament, said a mass printing of rubles would be disastrous, leading to hyperinflation in two or three months.

Shokhin said he had taken the job as deputy prime minister on condition that he would have a say in setting the new government's course.

But Shokhin said he had yet to meet with First Deputy Prime Minister Yuri Maslyukov, a Communist and former head of the Soviet state planning agency, to discuss his responsibilities and to reach a compromise on their conflicting views.

Primakov, who met with President Boris N. Yeltsin yesterday, has said he will have a government team and a program ready to be announced by tomorrow. But, with each passing day, Russia's economic situation worsens, as the ruble continues its wild gyrations and shops empty out their existing stocks.

"We are on the edge of a financial collapse," said Shokhin, noting that Russia's banking system is at a halt, with payments, salaries and tax collections frozen.

Pub Date: 9/16/98

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