. He sounded much more the young fogy than the young reformer. Of course he could have been dissembling to win votes from the Communists and their allies, but deceit would be a poor foundation for a new round of reform.
Kirienko addressed the upper house of parliament on April 1 and the Duma on April 9. His views on key issues as expressed in those speeches are summarized below:
On the economy and public finance: The situation is very difficult. Gross domestic product is down, so are investment and real incomes. The Asian crisis wiped out the very small gains that had been made by lowering world commodity prices, damaging our trade position and driving up interest rates. Debt service takes 30% of the budget and is on track to take 70% in 2001. Tax collection is inadequate. We import far too much food — 40% of consumption. We should bring that down to 15%-20%.
On privatization and the state: The state must be stronger during this period of transition. A separate government body should be created to conduct industrial policy. Privatization is acceptable in principle but cannot include "strategic" sectors. "Natural monopolies" like Gazprom (natural gas), UES (power distribution), or Transneft (pipelines) need "unambiguous direct government control" and the sale of the government’s stake in them is "impermissible." There must be strong regulation in other sectors like agriculture and science where state ownership is not required. When state assets are sold, proceeds must be invested productively, not applied to current expenses.
On government: Professionals, not politicians, should staff the ministries. The ministries must act more decisively, with less red tape. The government and the state must be strong enough to counter major financial groups. Federal law must take precedence over regional law.
On wages and pensions: Payment of arrears is complicated but perfectly feasible. Wages owed to Russians are as much an obligation as interest owed to foreigners. Regional governments owe 20 billion rubles ($3.3 billion) to the Russian Pension Fund. More money is needed.
On the draft tax code: The government’s proposal is flawed but we can work with legislators to get a code that can be enacted by September.