RUSSIAN Finance Minister Boris Fyodorov, a leading advocate of reform and tough anti-inflation policies, resigned Jan. 18, following in the wake of the resignation of economic reform architect Yegor Gaidar on Jan. 16.
Mr. Fyodorov's departure has triggered widespread fears that the recently decreased inflation is about to rage out of control again. Anticipating his announcement, Russian currency traders dumped rubles yesterday, dropping the currency from 1,402 rubles to the dollar to 1,504 in just one day.
Fyodorov refused to remain in the government unless Russian Central Bank Chairman Viktor Gerashchenko and deputy Premier Alexander Zaveryukha were fired. Mr. Gerashchenko has been an open enemy of Fyodorov's tight money policies, while Mr. Zaveryukha represents the interests of Russia's agricultural sector, which is dependent on state subsidies.
The young Fyodorov sees those two as key representatives of the old-style Soviet economic institutions. But Prime Minister Viktor Chernomyrdin shares many of the more conservative views of those two men and, according to press reports, refused Fyodorov's demand.
The way is now open for Mr. Chernomyrdin to seek a base of support in the new parliament among more conservative parties advocating a slower path to reform, including those from the Communist and Agrarian Party.
Mr. Gaidar's Russia's Choice party, now finds itself increasingly in the role of the opposition. Only two key Russia's Choice figures remain in the Cabinet - Foreign Minister Andrei Kozyrev and chief of privatization, Anatoly Chubais.
A privatization official, Maxim Boiko, explains that Mr. Chubais is committed to stay until July, when the current program of privatization vouchers is due to end, at which point some 70 percent of the labor force will be in the private sector. ``There would be a base for a market economy based on the private sector,'' he says.
But Mr. Boiko admits that a new flow of cheap credits to state-run industry could undermine some of the gains of privatization. ``We'll see much more inflation in the months to come and much more privatization.''