Publication: Monitor Volume: 4 Issue: 11

Russian prime minister Viktor Chernomyrdin flexed his muscles last week when he announced a sweeping redistribution of responsibilities for his deputies. (Itar-Tass, January 16; ORT, January 17) President Yeltsin’s spokesman, Sergei Yastrzhembsky, said that the changes, which amount to a devastating loss of authority for First Deputy Premiers Anatoly Chubais and Boris Nemtsov, were made with the president’s approval. Unless this turns out to be incorrect and Yeltsin decides to reverse the assignments on his return to work this week, Chubais and Nemtsov will be left with responsibility only for raising tax collection, paying wage and pension arrears, and cutting state subsidies to housing and housing utilities (electricity, water, etc.), all of them very necessary but highly unpopular tasks. This reshuffle of responsibilities amounts to a second stage in the downgrading of the leading reformers. In November, they lost the ministerial posts that they held in addition to the status both had (and still have) as first deputy premiers: the Finance Ministry in Chubais’s case, and the Ministry of Fuel and Energy in the case of Nemtsov. Now they have also lost the oversight of those ministries that they had retained after the first clipping of their wings.

In the long term (and again, if it is not reversed by the president), Chernomyrdin’s reshuffle could have far-reaching effects. Many commentators are describing his move as a sign that Chernomyrdin is positioning himself for a presidential bid in 2000. (Izvestia, January 17) Probably the most significant change is that Chubais loses responsibility for setting economic reform policy. He will still be involved in drafting reform proposals, but will no longer determine their implementation. He also loses oversight of the Finance Ministry, which he had retained even after Yeltsin removed him from the post of Finance Minister last November in the wake of the book scandal. From now on, the Finance Ministry will answer directly to Chernomyrdin and Chubais will supervise it only where tax-collection is concerned. Nor will Chubais any longer be responsible for the government’s links with the banking sector. What he will retain is responsibility for the thankless job of trying to raise tax revenues, but he will be yoked in the conduct of this task with his bitter enemy, Interior Minister Anatoly Kulikov. Together they are to supervise the federal tax service, tax police, and customs and export control. Chubais also loses responsibility for government policy on the media, which is going to Deputy Premier Vladimir Bulgak, a Chernomyrdin ally. (ORT, January 17)

Concurrently, Chernomyrdin is assuming all responsibility for oversight of the fuel and energy sectors from Boris Nemtsov, leaving Nemtsov with the unpopular brief of reforming pensions and trimming state subsidies for housing and utilities. As ORT commented, these are the responsibilities that deputy premier Oleg Sysuev has been executing for the past ten months, and the move seems calculated to set Nemtsov and Sysuev at loggerheads. (ORT, January 17) Nemtsov also retains responsibility for reforming the natural monopolies, a post which, in light of his failure over the past year to rein in the monopolies, now looks like a political graveyard.

Deputy Premier Vladimir Bulgak retains responsibility for science and technology and assumes oversight of the media. Russian commentators are speculating that Chernomyrdin made this move because he wanted to secure his influence over the media in good time for the presidential election. As for the other deputy premiers, Ramazan Abdulatipov continues to oversee nationalities policy. State Property Minister Farid Gazizullin, another Chernomyrdin ally, remains responsible for privatization and is in the future to report to Chernomyrdin instead of Chubais. Interior Minister Anatoly Kulikov must share responsibility for tax-collection with Chubais. Valery Serov keeps responsibility for CIS affairs. Oleg Sysuev must share social policy, health, employment, education, and culture with Nemtsov. Economics Minister Yakov Urinson retains responsibility for economic and trade policy and Viktor Khlystun remains responsible for agriculture. (Russian agencies, January 16)

How long Chubais will remain in the government must now be open to serious question. When he embarked on his government career in 1991, Chubais used to tell friends that he took each day as it came, treating it as if it were his last in office and using it to push the reform agenda as much further forward as was possible. Shortly before Christmas, he told Izvestia that he did not expect to remain in government much longer but that, when he left, it would be of his own volition. If he stays on now, therefore, it suggests that it is because he feels that even with restricted responsibility he still has a job to do. Poor tax collection remains the government’s Achilles’ heel; last spring Chubais described it as a threat to the state’s survival. Last week, Chubais told journalists that, unless there is a radical increase in budget revenue, "we shall not be able to solve anything." (ORT. January 17)

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