Yeltsin's Prime Minister Rejected by Legislators, Darkening Reform Bid

Economic woes cited as key in defeat of reform architect Gaidar

RUSSIAN President Boris Yeltsin and his radical reform policies suffered a heavy political blow yesterday when the conservative-dominated Russian legislature voted to reject his candidate for prime minister.

In a secret ballot yesterday, the Russian Congress of People's Deputies turned back the move to confirm reform architect Yegor Gaidar as premier.

Economist Gaidar, the acting premier since June and the architect of the policy of a radical shift to a market economy pursued since the beginning of this year, has been the target of repeated attack by both conservative and centrist forces. His reform programs are assailed for leading to a collapse of industrial production and the impoverishment of the Russian population.

"What happened is what should have happened," says deputy Andre Golovin head of the centrist Smena-New Policy faction. "This is the result of a disastrous year for the economy."

Mr. Golovin's comments as well as the vote indicated that a substantial part of the centrist block in the Congress voted against the government.

Mr. Gaidar won only 467 votes, well short of the simple 521 majority of the Congress's 1,041 deputies, with 486 voting against Gaidar, according to official results. The decision likely will lead to a new round of nominations for the post and further voting tomorrow.

President Yeltsin may renominate Gaidar or chose a new, compromise candidate. Several names have already been floated for the post, including Deputy Premiers Georgy Khiza and Vladimir Shumeiko, both considered more acceptable to forces favoring a slower-paced reform effort. If no candidate can gain a majority, Yeltsin aides have suggested that Gaidar could continue as acting premier for another three months, as permitted by Russian law.

"We will continue work," a downcast Gaidar told reporters after the announcement of the vote. "The most important thing is to work in a calm fashion."

The decision here after eight days of turbulent debate in the Grand Kremlin Palace is certain to send shock waves through the world. Gaidar's role was widely viewed as key to Russia's reform policies, particularly among Western financial institutions. In his speech nominating Gaidar, Yeltsin argued that his presence was needed to provide a guarantee to the West of the continuation of reforms.

The vote was preceded by a series of moves and countermoves by the president and his opponents. The government narrowly averted an attempt to curb the president's powers through amendments to the constitution in a vote last Saturday, including a measure requiring parliamentary approval of all the Cabinet appointments. The near brush with defeat signaled that an attempt to gain backing for Gaidar's appointment was problematic, at best.

On Tuesday the president sweetened the pot, offering a constitutional change which would give the parliament the right to approve the heads of the ministries of defense, interior, security (the former KGB), and foreign affairs. The compromise gesture was widely interpreted as a sacrifice of liberal Foreign Minister Andrei Kozyrev, a frequent target of attack by both conservatives and centrists for his allegedly "pro-Western" policies.

Yesterday the Congress voted in favor of a constitutional amendment embodying the shift of authority proposed by Yeltsin.

On Wednesday morning, Gaidar opened the debate on his nomination with yet another signal of compromise. While saying he would not bargain over individual Cabinet posts, Gaidar promised to carry out a reshuffle long sought by his critics, particularly among the centrist factions backed by leaders of state-run industry.

IF elected, Gaidar told the Congress, "we will have to, while preserving the core of the government, make serious changes." He signaled a readiness to let go some of the inner group of young reformers whose removal has been a key demand of Civic Union, the centrist alliance which includes the Union of Industrialists and Entrepreneurs led by former Communist bureaucrat Arkady Volsky.

"We are not a company of friends who has gotten together for a party," Gaidar said of his reformist colleagues. "We have an enormous responsibility. This year showed that we can work in accord, but it also highlighted the weak points, showed that not everyone can cope with his duties, not everyone is suited for command work."

Gaidar also tried to take a step toward parliament deputies who have assailed him and his government for failing to consult them, for at times treating the legislature as nothing more than a nuisance.

"The main problem is that the Supreme Soviet never managed to accept this government, which was formed mostly without its participation, as its own, as a partner and coauthor in carrying out reforms," Gaidar admitted. "I would consider normalization of relations with the Supreme Soviet [the standing parliament], including on major political and economic issues, [and] personnel problems ... to be among my main tasks."

The reform economist concluded with a plea for political peace. "A government that is in constant opposition to the parliament and a parliament that is constant opposition to the government is too much of a luxury for Russia in its present rather deep socio-economic crisis."

The hour-long debate which followed was evenly balanced between supporters and opponents of the Gaidar government.

"What matters is not just personalities," said the goateed hard-line leader of Russian Unity, Sergei Barburin. "What matters is whether we continue the processes which I personally call the destruction of Russia, the destruction of her economy, the extermination of her people, or we demand changes.

"As prime minister, we need a person who knows how to work both with the state sector of the economy and the sector of new market structures," Mr. Baburin said, "a person who knows not only what do do but how to do it."

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