Publication: Monitor Volume: 4 Issue: 216

In what was perhaps a tacit admission that the bleakest forecasts for Russia’s economy might turn out to be correct, Prime Minister Yevgeny Primakov has attacked his predecessors–specifically the “so-called reformers,” whom he accused in an interview of destroying Russia’s banking system and building “financial pyramids which drew in short-lived speculative capital which tended to leave the country.” In the interview, published today (November 20) in “Izvestia,” Primakov said that the West was criticizing his government because it was listening to the reformers, whom he called “false prophets” who had “cheated the West.” The prime minister was clearly referring to last August’s decision by the government of former Prime Minister Sergei Kirienko to freeze Russia’s treasury bill market and devalue the ruble. In the ensuing financial collapse, Western investors lost as much as US$100 billion, according to one estimate. Primakov characterized as “a legend” his predecessors’ claims that they had achieved macroeconomic stabilization which, in turn, had allowed a middle class to form. The prime minister also defended his first deputy, Yuri Maslyukov, a communist economist who has been strongly criticized by the reformers and their supporters. Primakov called him a “top-level” professional (Izvestia, November 20).

Primakov’s comments came amidst ongoing uncertainty about the fate of the economy. The government has not yet submitted a 1999 budget to the parliament. Officials, including Maslyukov and State Duma Speaker Gennady Seleznev, said this week that Russia will probably have to operate through the first quarter of 1999 without a budget. Meanwhile, Aleksandr Pochinok, who heads the financial department of the governmental apparatus, said that chances of Russia receiving further tranches of the IMF’s US$22.6 billion loan are “equal to zero” (Vremya-MN, November 20). On Thursday (November 19), Ramin Habibi, president of the Thomson BankWatch rating agency, told a group of Russian bankers that Russia’s economic recovery is “years away.” Like Primakov, he criticized the Kirienko government, though not by name, for having allowed the payments system to collapse. He also warned that Russia’s economy was becoming “increasingly demonetized by barter,” and said he saw a real threat of the Russian Federation breaking up (Agence France Presse, November 20).