Publication: Monitor Volume: 5 Issue: 118

The State Duma voted yesterday 219-101, with six abstentions, to reject a gas-pump tax bill–one of several revenue-raising bills the government of Sergei Stepashin is trying to get passed in order to meet the conditions of an International Monetary Fund loan. The Duma rejected the bill despite the fact that price control measures were subsequently added, and Stepashin’s recent statement that he would ask the Duma for a vote of confidence in the government if the lower parliamentary chamber refused to pass legislation meant to meet IMF conditionalities. The bill, if passed, would have meant sharp price rises for gasoline, and the Duma opposes measures which would lead to significant price rises on such basic items as gasoline and vodka in an election year (Russian agencies, June 17).

The government, predictably, was unhappy with the vote. Tax Minister Aleksandr Pochinok said afterward: “They have now put the financial plan for June, July and August under threat…. they have put salaries under attack, they have put foreign credits under attack and they have put foreign debt payments under attack” (Moscow Times, June 18). Pochinok was referring to the danger that if the IMF does not agree to a US$4.5 billion loan, which would essentially be a roll-over of Russia’s old debts to the Fund, Russia will default on billions of dollars in payments on international loans which are due this year.

Yet the Duma is really in a no-lose situation: Most deputies, reportedly, believe that the IMF will release the US$4.5 billion loan no matter what Russia does, in order to avoid the political fallout of a Russian default (Moscow Times, June 18). In addition, Stepashin’s threat of a confidence vote also appears to have backfired: Rather than voting no-confidence and risking the Duma’s dispersal and early elections, the deputies will most likely simply vote against the revenue-raising bills and, if asked, vote confidence in the Stepashin government. The Kremlin apparently understands that it has backed itself into a tactical corner and, reportedly unhappy with Stepashin’s confidence-vote threat, has embarked on a fence-mending campaign vis-a-vis the Duma. Yesterday Yeltsin ordered his representative in the Duma, Aleksandr Kotenkov, “to prevent strain in the presidential administration’s relations with the State Duma and to not seek confrontation where a compromise is possible.” Kotenkov said that this was Yeltsin’s “constant principled position” and that there is no basis to the rumors that Yeltsin is looking for a way to dissolve the Duma (Russian agencies, June 17).

Whether the peace offensive is genuine or merely a tactical shift remains to be seen. An analyst for the Interfax news agency wrote yesterday: “No matter how the current ‘lull’ is explained, all experts are sure that it is only temporary. The incumbent president and his ‘team’ have only one year in power left, and because of that they will be compelled to force events. Especially if the end goal of these actions will be to extend the term of Boris Yeltsin as head of state” (Russian agencies, June 17).