YELTSIN RETURNS TO WORK.

President Boris Yeltsin returned to work in the Kremlin this morning. (BBC, December 23) He had been nearly two weeks in a sanitarium suffering from what doctors said was a viral infection. His doctors have advised him to take a holiday. But, to prove his determination to retake the reins of power, Yeltsin has announced that the roundtable on land reform, which had to be postponed because of his sickness, will now be held on Friday, December 26. (RTR, December 22)

Yeltsin is said to be determined to press ahead with the creation of a land market in Russia, which is fiercely opposed by the Communist opposition and its agrarian allies in the State Duma. On other fronts, however, the last few days have seen several serious setbacks for the reform wing of the Russian government, which is led by First Deputy Premiers Anatoly Chubais and Boris Nemtsov. The appointment of Farit Gazizullin as Privatization Minister, replacing Chubais-ally Maksim Boiko, is seen as a reversal for Chubais. Gazizullin, an ally of Prime Minister Viktor Chernomyrdin, has criticized the way privatization has been carried out to date and is expected to be much more cautious about future privatization deals than Boiko and Chubais. This is likely to mean less cash for the federal budget.

Meanwhile, Nemtsov’s recent ouster from the government board overseeing Gazprom is being seen as a symbol of his failure to reform the gas giant. (See accompanying article.) There are, moreover, rumors of plans to deprive Nemtsov of his overall responsibility for the fuel and energy complex and place it under Chernomyrdin’s direct supervision. (Financial Times, December 23)

These setbacks come at a time when Russian stock and debt markets are reeling from the shock of last week’s decision by Standard and Poor’s to downgrade its rating outlook for Russian sovereign debt and for nine blue chip companies and regions — from "stable" to "negative." The rating agency went on to warn, moreover, that it will downgrade Russia’s speculative BB minus rating if the Russian government does not improve its tax-collection performance. (Wall Street Journal Europe, Financial Times, December 20) The outlook on this score is not good: the government is still struggling to put together a new tax code and the Communist and Liberal Democratic factions in the Duma are threatening to vote against the 1998 federal budget when it is debated by parliament on December 24.

New Gazprom Trust Agreement Signed.