Publication: Monitor Volume: 2 Issue: 25

In an exclusive article published in today’s Financial Times, Anatoly Chubais speaks openly for the first time since his ouster from the Russian government last month. Chubais says he fears Russia is on the verge of a spending spree that will "increase the budget deficit,… give a boost to inflation,… lead to a crisis on the foreign exchange and bond markets, and threaten a collapse of the banking system." (7) Chubais’s statement echoed a similar warning issued over the weekend by another reformer, Economics Minister Yevgeny Yasin. Yasin remains within the government, although predictions of his ouster are widespread. In an exclusive interview with Interfax, Yasin said Yeltsin faced two choices: either to continue his government’s policy of fiscal austerity or to enter a "race of populist slogans" with the Communist party. (8) Yasin said that race was not a contest Yeltsin could win. The Communists are unfettered by the financial constraints faced by the government and can afford to outbid the president in electoral promises, he noted. The consequences for Russia of a such a contest would be severe, Yasin said, and would lead to the failure of negotiations with the International Monetary Fund and the Paris Club of Western government creditors and, in turn, to the collapse of the Russian economy.

According to Yasin, all details of the IMF agreement on a three-year $9 billion loan have already been concluded at the level of experts. All that remains is for the agreement to be finalized at the highest government level. However, Yasin warned that the IMF had set tough conditions, requiring the government not only to stick to tight monetary policies, but also to make certain structural reforms, "including industrial restructuring."

Duma to Examine Results of Privatization.