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Gaidar's Resignation Signals Russian Shift To Slower Reform


By Daniel SneiderStaff writer of The Christian Science Monitor / January 18, 1994


THE resignation of economic reform architect Yegor Gaidar from the Russian government was a surprise only in its timing.

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The exit of Mr. Gaidar and some of his band of young reformers from the government has been on the agenda ever since the Dec. 12 parliament elections, when his reformist Russia's Choice party was trounced by Communists and extreme nationalists. The vote was widely read, both at home and abroad, as a rejection of radical economic reform and the deterioration of living conditions that has accompanied them.

Russian President Boris Yeltsin quickly ended speculation he would press Gaidar to remain, issuing a statement yesterday accepting the resignation. ``I would like to stress the irreversibility of the course of reform,'' he said.

While Mr. Yeltsin had previously asked Gaidar to remain in the government, the Russia leader is also probably relieved to now have considerably wider political manuevering room.

``Gaidar's resignation creates good options for Yeltsin himself,'' argues his adviser Andranik Migranian. ``It would be a tragedy for Yeltsin to identify himself with Gaidar and his faction.... People are fed up with those faces. They identify them with a decline in their living standards.''

For Gaidar a similar political logic is at work. In interviews Sunday night, he forecast that the government was going to pursue an economic policy that could only result in growing inflation, which would deepen budget problems and likely trigger an attempt to resort to Soviet-era command methods. Unable to control policy in what is, and has been, a de facto coalition government and yet likely to take the blame for what comes, the young reformer prefers to retreat to the role of a ``constructive opposition'' in the new parliament.

The Gaidar move, coming a day after the departure of visiting US President Clinton, is sure to spark renewed concerns among foreign governments and investors of a retreat from market reform in Russia. Since the start of reform in January 1992, the rotund young economist has personified an unyielding commitment to both privatization and to tough financial stabilization.

``Gaidar is not the symbol of reform - Yeltsin is,'' retorts Mr. Migranian, the presidential adviser. ``He is the guarantor of continuity.''

Some reformers, most prominantly Anatoly Chubais, the head of Russia's widely praised privatization program, have already said they will stay on. But the withdrawal of Gaidar, and possibly also Finance Minister Boris Fyodorov, will further strengthen Prime Minister Viktor Chernomyrdin, whose power has grown visibly in recent months.

Pushing slower reform

Mr. Chernomyrdin, a former executive of the Soviet gas industry, is an advocate of gradual reform and a critic of the tight-money policies advocated by Gaidar. Instead he is more willing to funnel credits to state-run industry, arguing that the country can better afford higher inflation than the social and economic consequences of the collapse of these factories. His views are close to those of Central Bank chairman Viktor Gerashchenko, a bete noir of the reformers, who accuse him of pumping money uncontrollably into the economy.