Economic Reform

MOSCOW -- Taking Russia and the world by surprise, economic reformer Yegor T. Gaidar resigned from the government yesterday, raising serious questions about President Boris N. Yeltsin's commitment to rapid reform.Mr. Gaidar's departure was particularly jolting, coming just a scant day after President Clinton left Moscow full of promises from Mr. Yeltsin to pursue economic reforms faster than ever."I cannot be in the government and in the opposition at the same time," Mr. Gaidar said in a letter to Mr. Yeltsin, adding that recent government policy was damaging economic progress and wasting millions of dollars.

BEIJING -- A year and a half ago, China's paramount leader Deng Xiaoping toured southern China to launch his largely successful political drive to accelerate the country's shift to a market economy.Last week, Zhu Rongji, China's chief vice premier, embarked on his own tour of southern China -- a trip aimed at trying to rein in the financial excess, inflation and speculation that have risen along with the economic boom set loose by Mr. Deng.The one-two punch could broadly foreshadow the long-term course of Chinese politics.

MOSCOW -- As the extent of his victory at the polls became evident yesterday, President Boris N. Yeltsin played his cards close to the vest while his opponents busily went about declaring that it hadn't been a victory at all.In doing so, they made it clear that great political battles lie ahead.Ruslan Khasbulatov, leader of the Russian Congress, said that in capturing 59.2 percent of the vote (according to nearly complete tallies) Mr. Yeltsin had merely brought the divisions of society closer to the surface.

MOSCOW -- Boris N. Yeltsin, battered and beaten just a month ago by his foes in the Russian Congress, seemed on the verge of a major victory last night as millions of ordinary Russians turned out for him one more time and gave him their votes in a nationwide referendum.The combative Russian president, locked in a protracted and bitter fight with opponents of his sweeping economic reforms, has consistently drawn his strength from the remarkably unshakable support he enjoys among the Russian people, and yesterday's vote looked certain to give him new authority.

The Economist, in a Nov. 28 report, calls it "the world's biggest economic boom." Shops are "clogged," and factories, offices and homes "are being built as fast as round-the-clock construction crews can put them up."The subject: China. By 2012, if current growth trends continue, it could be the world's largest economy. That means, the magazine asserts, "the biggest change since the Industrial Revolution."The binge started in 1978, when Deng Xiaoping embraced sweeping economic reform. Since then, China's growth has averaged 9 percent a year (12 percent in 1992)

MOSCOW -- President Boris N. Yeltsin, who rushed home from China to shore up his control over the formation of a new government, agreed with his new prime minister yesterday that the "core" of the last Cabinet of Westernized, free-market economists would remain in office, a spokesman for Mr. Yeltsin said.After several hours of talks yesterday involving Mr. Yeltsin, Prime Minister Viktor S. Chernomyrdin and Vladimir Shumeiko, the first deputy prime minister, Mr. Yeltsin's spokesman announced, "The basic current team will be preserved."

JERUSALEM -- With relief but no euphoria over Washington's offer of $10 billion in loan guarantees to help absorb immigrants, Israel warily began looking forward to years of belt-tightening economic reform.It was widely noted that the guarantees are carefully pegged to Israeli policy on settlements in the occupied territories, which Prime Minister Yitzhak Rabin has ordered frozen -- except for some to be completed for "security" reasons.That argument is certain to be central to the Middle East talks scheduled to resume Aug. 24 in Washington.

WASHINGTON -- Western financial leaders warned Russia yesterday that any retreat from radical economic reform could throw possible financial aid into jeopardy.At the same time, Germany and Japan were urged to adopt growth packages to help underpin a world economic recovery and help the West ease the former Soviet republics and Eastern Europe into the capitalist world.The two initiatives set the major agendas for a series of international financial meetings here this weekend.They also preceded the arrival here of Yegor Gaidar, the Russian deputy prime minister and economic "czar," who will address both the policy-making interim committee of the International Monetary Fund and the finance ministers of the Group of Seven, the seven most powerful industrial democracies in the world.

WASHINGTON -- Gov. Bill Clinton's blueprint for a renewed America is as much social engineering as it is economic reform.The core elements of the plan, a middle-class tax cut and improved education, have as much to do with equity as with the economy. But its overall aim is clear: to boost productivity, investment and growth, energizing recovery.There is considerable question among experts whether, in its present form, it would do that, but it is expected to be refined as the Arkansas governor's hold on the Democratic nomination strengthens and the prospect of challenging President Bush looms closer.

MOSCOW -- If all the deputies who are attending the 9-day special Congress here were to lie down in a single row, head to foot, they would stretch a mile, just about enough to encircle the entire Kremlin.There are 1,002 of them, every one of them just dying to talk. Or maybe there are 1,004 of them; no one seems quite sure.They have divided themselves into 13 separate, registered factions -- and still there are 43 deputies who have remained aloofly non-aligned.This is the Sixth Congress of Russian People's Deputies.