The new premier has yet to present an economic program, but he and his first two appointees have dropped hints. Last week, addressing the Duma prior to his confirmation, Primakov denounced “wild capitalism,” saying that the state “must intervene and regulate many of the processes taking place in the economy.” He added, however, that this would not mean a return to the command economy, but something more like FDR’s New Deal. Maslyukov, meanwhile, said that he would present a ruble stabilization plan to Primakov, adding that he would work on indexing wages, compensating “the low-paid part of the population” and replenishing the Pension Fund. He did not say where the money would come from.
Gerashchenko, for his part, said on September 11 that a “small-scale” printing of rubles will be unavoidable. What was meant by “small-scale,” he did not reveal. But he did hint that he might transform the Central Bank from an independent body charged with monetary policy into a tool of the government and the parliament. “[I]n its time,” he reminded Duma deputies, “the Central Bank credited the needs of the budget only by decisions of the government, which were then approved by the Supreme Soviet”–the Soviet-era parliament.
Such comments suggest that Boris Fyodorov, the acting first deputy prime minister who has been pushing the idea of allowing the dollar to circulate in parallel with the ruble, will not be in the line-up when the rest of the cabinet nominees are announced later this week. Fyodorov was finance minister in the early 1990s, when Gerashchenko ran the Central Bank; they were bitter foes. On the other hand, the new government may feel compelled to retain the services of at least one “energetic young reformer.” After all, it is going hat-in-hand this week to a meeting of the G-7 in London, and the International Monetary Fund announced last week that it would delay the second tranche (US$4.3 billion) of its US$22.5 billion bailout package.
Russia’s credit rating was not helped by the news that it had missed part of its interest payments on Soviet-era debt to some members of the Paris Club of country creditors – mainly to Germany, which might explain Chancellor Kohl’s kind words for the new prime minister. Primakov declared that Russia would make good on its debts. “We shall pay all our debts,” Itar-Tass news agency quoted him as saying. “Russia is not the kind of country that will declare itself bankrupt and it will never become this.”