Publication: Monitor Volume: 4 Issue: 169

Primakov continues to put his new cabinet together and says it will be complete by the end of this week. He met yesterday with President Boris Yeltsin in the Kremlin for the first time since the Duma approved his appointment as premier last week. Yeltsin is rarely seen these days in central Moscow, spending most of his time at his suburban residence. Following the meeting, the appointment of Aleksandr Shokhin as deputy prime minister in charge of financial issues was announced. Shokhin, a moderate reformer who served as economics minister in Russia’s first reform government in 1991-2, is a leading member of the “Russia is Our Home” movement led by former Prime Minister Viktor Chernomyrdin. Earlier in the day, Shokhin reportedly refused the post of deputy prime minister in charge of social issues. It looks as if acting Deputy Premier Oleg Sysuev will keep that post, universally regarded as a political graveyard, since no one else wants it. Even Sysuev is said to be keen to give it up.

Boris Fedorov, the former acting deputy prime minister, appears increasingly unlikely to be offered a place in the new government. Fedorov yesterday lost his post as head of the State Tax Service to Georgy Voos, another member of “Russia is Our Home”. Fedorov warned yesterday that printing new money would inevitably fuel inflation and called the Central Bank’s threat to discriminate against foreign investors “immoral.” Acting Finance Minister Mikhail Zadornov also appears unlikely to keep his post.

Primakov has been consulting with a number of veteran economists from the Economics Department of the Academy of Sciences. They include Leonid Abalkin, Oleg Bogomolov, Dmitri Lvov and Nikolai Petrakov. All were respected figures during the Gorbachev period of the late 1980s, but were pushed to the side when Russia launched its market reforms in 1992. They have consistently criticized the application of “shock therapy” to Russia: Abalkin was quoted yesterday as saying that the IMF is to blame for Russia’s present crisis. He said his team will present Primakov with its recommendations within two weeks. An outline published in Kommersant-daily today recommends greater state intervention in the economy and the introduction of currency controls as mooted by Gerashchenko, but also insists that Russia must honor its debts to foreign creditors (Russian agencies, September 15 and 16).