Yeltsin Fires Cabinet To Step Up Reforms

A newly activist President Boris Yeltsin opened the third chapter in his presidency with an order March 11 reorganizing his entire government. The restaffing and reorganizing will be largely in the hands of a market-oriented manager who ran the privatization of Russia's economy in the early 1990s and is forever tapping notes into his laptop computer: Anatoly Chubais.

After a couple of years of policy drift, political campaign distraction, and serious health problems, Mr. Yeltsin has shaken off his doldrums and moved his sights beyond stability to aggressive reform. His thrust is to improve the effectiveness and efficiency of the chaotic Russian government - especially how it monitors and spends its money.

Yesterday, Yeltsin dismissed all his Cabinet ministers with the exception of Prime Minister Viktor Chernomyrdin and newly appointed First Deputy Prime Minister Chubais. The replacements will be named within a week. Yeltsin has asked for fewer ministers in the Cabinet and a more reform-oriented structure to the bureaucracy.

But Yeltsin has yet to move definitively beyond talk to action. The next telling sign will be whether he in fact drastically cuts the number of ministers. A Western diplomat notes that the week's delay before naming the new Cabinet represents an opportunity for Chubais's clout to erode against pressures from strong interest groups in the Russian economy.

The kind of reorganizing Chubais is planning would mean that instead of naming vice premiers to oversee branches of government and ministries, Mr. Chernomyrdin and Chubais would appoint vice premiers to each of four key areas for reform: housing, pensions, the military, and the natural monopolies. Chubais - widely credited as the most decisive and effective manager in Russian government - will probably take a close personal role in overseeing the defense and finance ministries.

"The main idea is that each vice premier will be responsible for a concrete area of reform," says Yevgeny Gontmacher, an economist who works as a consultant on the reorganization. The Chubais team plans to reform the way the government spends its money through changes such as putting defense projects up for competitive bids.

"It's a attempt to make government more effective according to liberal norms," says Sergei Kolmakov, a political analyst and consultant close to many Kremlin officials.

It is also an attempt to meet the demands of the International Monetary Fund for stricter budget controls, Mr. Kolmakov says. The IMF is partway through loaning more than $10 billion to the Russian government, although the fund keeps delaying the loan over failures on the Russian side to meet budget-deficit targets.

"One of the biggest difficulties for our reforms is very bad management of our country," Mr. Gontmacher says. Whole ministries, such as the Ministries of Labor and the Economy, have virtually no responsibilities and virtually no money.

The biggest obstacle to a new round of reforms will be the Russian Duma, or lower house of parliament, now dominated by the Communist Party. Yeltsin promised a tough attitude toward the Duma in his state-of-the-union speech last week, and the new prominence of Chubais is something of a provocation since possibly no public figure in Russia is as hated by the Russian left as Chubais.

The tension between the Duma and Yeltsin may erupt into Yeltsin dissolving the Duma next fall and requiring new elections, Gontmacher says. The elections could mean that the Duma turns even further to the left. That puts the pressure on Yeltsin and his new government to show practical results now.

The dismal state of tax collections in Russia will not be a priority until next year, Gontmacher says. For now, the Chubais team will try to spend the money it has more effectively.

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