Publication: Monitor Volume: 4 Issue: 20

At the end of last year, Yeltsin promised to devote all his energies to getting parliamentary approval for the government’s 1998 federal budget. By institutionalizing the "Big Four" and making pleasant noises to the opposition yesterday, he seems to have secured their agreement that the Duma will approve the draft budget when it comes up for the third of its statutory four readings on February 4. Large numbers of amendments have been proposed but compromise appears in sight. If all goes according to plan, a fourth and final reading on February 10 will see the budget finally adopted.

Resistance to market reform remains a real danger, however, as demonstrated by this week’s attempt by Communist-era managers to regain control over Russia’s national power grid. (See Monitor, January 28) The past week also saw the Moscow city government using dubious tactics to try to force out minority shareholders and reassert control over the Moscow telephone system. (Financial Times, January 29) The auction of Rosneft, the largest oil company still in state hands, will be a litmus test of the federal government’s reform intentions. The government has still to decide the terms on which Rosneft will be auctioned. Rumors of the possible exclusion of foreign investors and of last-minute alterations in the number of shares to be offered (enabling the state to retain a decisive 25 percent share) are discouraging. Yesterday Duma Deputy Vladimir Medvedev, leader of a statist oil and gas lobby, called on the government to cancel its plans to privatize Rosneft altogether. The government, he said, has no right to impoverish future generations by "giving away" priceless national assets. (Itar-Tass, January 29)

Moscow Maintains Role in Iraq Crisis.