Publication: Monitor Volume: 4 Issue: 161

The Duma yesterday adopted a motion of censure on the chairman of the Central Bank, Sergei Dubinin, calling the efforts to overcome the financial crisis taken by the government and the Central Bank belated and unsatisfactory. Five essential elements are clear. First, the Bank is to tighten control over the banks, help them back on their feet and take steps to protect citizens’ savings. Second, the government–regardless of the fact that Russia at present has no government–is to hold urgent consultations with Belarus and other CIS member-states on coordinating efforts to stabilize the financial and banking systems. Third, the government is to both introduce currency controls and abandon all plans to sell state-owned stock in the natural monopolies (gas, electricity and railways) and other “strategically important” sectors of the economy. Fourth, the government is to renationalize export companies (primarily oil-exporters) in arrears on their taxes. Fifth, both the government and the Central Bank are to reduce the access of foreign investors to the Russian currency and stock markets. (Itar-Tass, September 2)

Meanwhile, Reuter described a draft document prepared by the Russian government of which the news agency had seen a copy as “a mix of market and state control instruments” with a strong dose of “wishful thinking.” Reuter said the document was drafted, at the behest of acting Prime Minister Chernomyrdin, by a group of prominent reformers led by acting Deputy Prime Minister Boris Fedorov and including Central Bank chairman Sergei Dubinin and acting Finance Minister Mikhail Zadornov. Two other members of the group were Vladimir Kostin, chairman of Vneshekonombank, and the acting head of Russia’s State Property Fund, Igor Shuvalov. Many of the measures contained in the draft, shown to Reuter by an official working with the group, pointed to greater state control of the economy. Import taxes on all except food products would rise sharply. A floating exchange rate could be introduced. Enterprises would be obliged to sell all their hard currency earnings to the Central Bank to boost its reserves. Exports of hard currency in cash could be restricted. Reuter commented that some of the proposed measures, such as calls to protect the value of citizens’ savings, improve tax collection, increase export earnings and safeguard the banking system, looked “more like a wish-list” than realistic proposals. (Reuter, September 1)