Russia's new premier changes little


By Renfrey Clarke

MOSCOW — After the stirring events of mid-December, when the Congress of People's Deputies managed to sack acting Premier Yegor Gaidar despite Boris Yeltsin's desire to keep him in office, few Russians were expecting further reversals of fortune when new Premier Viktor Chernomyrdin announced his cabinet on December 25. A few days earlier, the liberal Democratic Russia movement had resigned itself to being back in opposition, pledging to fight against "any moves by the government to overturn or delay the reforms."

Both supporters and opponents of Yeltsin were therefore stunned by Chernomyrdin's appointments. Here was the new government — virtually the same as the old government.

In the vital economic portfolios the continuity was especially striking. Gaidar was gone, but his team of hard-line monetarist ministers had survived almost intact. It had even been strengthened by the addition of new Vice-Premier Boris Fyodorov, a former director of the World Bank.

Chernomyrdin is still reportedly working on a "program of emergency measures to lead the economy out of crisis". But whatever promises the new premier might make, there is only one type of economic strategy that will be implemented by people like Fyodorov, economy minister Andrei Nechaev, and chairperson of the State Committee on Property Anatoly Chubais.

A year after it was first set loose on a sceptical public, the Russian version of neo-liberal monetarism is to be sent back into action. Only this time, Yeltsin is not making confident predictions of an upturn by the autumn.

The first anniversary of the January 1992 price liberalisation provides a convenient point for judging how the Yeltsin-Gaidar policies have performed. According to the Russian government's Centre for Economic Reforms, production in the economy declined by 15% in 1992 compared with the previous year. However, a better indication of the current state of the economy is provided by the figures for monthly output. Production in November 1992 was down by 23% on the figure for November 1991.

Output since September last year has continued to fall at an average rate of 1.1% a month. This is mild compared with the falls of more than 3% a month registered in July and August. The collapse was slowed by large emissions of credit to sustain near-bankrupt enterprises.

The boost to the money supply has caused inflation to soar. According to the Centre for Economic Reforms, price increases in Russia in 1992 averaged around 1400%, and inflationary pressures are increasing. Economy ministry figures show that in November alone the cost of basic food products rose by 33%. Meanwhile, a survey by the bulletin Russian Economic Barometer shows that average money wages in November rose by only 14%. The fall in living standards, which slowed in mid-1992, is accelerating.

Among the population, the prevailing mood is one of pessimism. In an all-Russian poll reported recently by the paper Nezavisimaya Gazeta, 57% of those questioned replied that they expected their lives to become worse during 1993. Only 28% were hopeful of an improvement.

Yeltsin's current perspectives involve keeping the essence of Gaidar's strategies in force through political pressures on Chernomyrdin, and looking toward a constitutional referendum planned for April.

As part of this referendum, Russians are expected to be asked to approve a shift to a fully "presidential" system of government, giving Yeltsin virtually complete control over the appointment of ministers. In late December the president hinted strongly that Gaidar might soon return to a high government post.

Chernomyrdin, meanwhile, has carefully avoided making any specific promises of "corrections" to the Gaidar policies.