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. Last Updated: 07/27/2016

Chernomyrdin Signals a Shift in Tactics

Viktor Chernomyrdin, Russia's new prime minister, declared Tuesday that his government would not stray from the general reform strategy of his predecessor, Yegor Gaidar, but at the same time indicated that some policy changes might be in store.


"I have never given anyone any reason to claim that the course of reforms would be changed under my leadership", Chernomyrdin said at a press conference less than 24 hours after his nomination at the Congress of People's Deputies.


But he added that his main task would be to halt a continuing decline in industrial production, a move that would require stepping back from Gaidar's shock-therapy reforms and increasing subsidies to loss-making state enterprises.


"I believe in developing industry", the veteran technocrat said. "My number one task is to stop the fall in production".


Chernomyrdin, 54, the former deputy prime minister in charge of energy, was President Boris Yeltsin's compromise candidate for prime minister after it became clear that the conservative Congress would not elect his first choice, Gaidar.


An industrialist who headed the country's largest gas company, Gazprom, he appealed to the centrist and hardline legislators who had demanded that Gaidar be removed.


Unlike Gaidar, he has a strong endorsement from the legislature.


In a separate press conference Tuesday, Ruslan Khasbulatov, the parliament speaker, vehemently denounced Gaidar's program as "destructive" and said the legislature would work with the new government to correct the "huge number of mistakes".


The new prime minister -- who looked bewildered beneath his Brezhnevian eyebrows at the sea of faces and microphones confronting him -- said that he might make some changes in his cabinet, but that he hoped those ministers who had served Gaidar would stay.


"I think that the government working now should continue to work", he said.


Gaidar himself resigned Monday, but he has urged his cabinet members to remain in the new government. No resignations were turned in Tuesday, but the newspaper Izvestia quoted unidentified government sources as saying that at least four key ministers would resign.


A press secretary for Vladimir Shumeiko said that the deputy prime minister, who was appointed to the cabinet along with Chernomyrdin in May, would stay. The Associated Press reported.


Pavel Karikov, a spokesman for Pyotr Aven, the foreign economic relations minister, said that members of the Gaidar cabinet had met Tuesday to discuss their plans, but there was no immediate word on their decision. Alexander Shokhin and Anatoly Chubais, both deputy prime ministers, and Andrei Nechayev, the economics minister, are believed to have attended the meeting.


At the press conference, Chernomyrdin said that the privatization program, an integral part of the economic reforms which hardliners have vehemently opposed, would continue as planned.


But in a statement that could worry Western investors and creditors, he said that he favored continuing controls on fuel prices. Russia has raised fuel prices dramatically this year as part of the Gaidar reform program, but prices are still fixed well below world levels.


"I am a convinced backer of regulating energy prices", he said, indicating that Russia would continue to regulate oil, gas and electricity prices.


Mikhail Gorbachev, the former Soviet president, who as a longtime rival of Yeltsin has sharply criticized the president's approach to economic reform, said Tuesday that the West should not be alarmed by the apparent change in the government's course.


"I think that Chernomyrdin, having worked in the same team with Gaidar and Yeltsin, is to some extent an element of continuity", Russian television quoted him as saying. "A new policy is needed to avoid the country's complete collapse".


But Jacques Attali, the president of the European Bank for Reconstruction and Development, said Tuesday that if the new prime minister were to curtail the Gaidar reforms, it would be a disaster for Russia, Reuters reported.


Attali said that Shokhin had told him in a telephone call Tuesday that Chernomyrdin wanted to move ahead with loans from the European Bank and World Bank for the privatization program.


"I think it is a good signal", he said.