Publication: Monitor Volume: 4 Issue: 103

Russia’s battered ruble won a temporary reprieve yesterday as investors paused to consider the government’s emergency efforts to shore up the currency. Markets rallied and the ruble strengthened slightly against the dollar. Now the Kremlin has to follow through on its promises of further tough action, especially as regards improving tax collection. President Boris Yeltsin kicked off this morning by sacking the head of the Russia’s federal tax service, Aleksandr Pochinok, and replacing him with Boris Fedorov. (BBC, May 29) Fedorov, 40, was Finance Minister in Yegor Gaidar’s government. Seen as a nationalist on foreign policy, Fedorov has been a strong and consistent supporter of market reform. It will now be his job to ensure that Russia gets the new tax code it desperately needs. Also this morning, Yeltsin announced a further 12 percent cut in budget spending and signed a decree threatening twenty of Russian’s largest corporate tax laggards with bankruptcy.

Yeltsin is due to meet today with leading Russian businessmen and bankers. He is expected to appeal to them to help the country get out of its present financial crisis. Expected to attend today’s meeting are the top bankers who met with Yeltsin in September 1997 when the president warned them that their squabbling was harming the economy. They are Inkombank’s Vladimir Vinogradov, Media-Most’s Vladimir Gusinsky, Oneksimbank’s Vladimir Potanin, SBS-Agro bank’s Aleksandr Smolensky, Yukos’ Mikhail Khodorkovsky and Alfa-Group’s Mikhail Fridman. Also attending will be the meeting will be Gazprom’s Rem Vyakhirev and LUKoil’s Vagit Alekperov. Conspicuous by their absence will be Unified Energy System’s Anatoly Chubais, who is visiting the USA, and CIS Executive Secretary Boris Berezovsky. (Itar-Tass, May 25)