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. Last Updated: 07/27/2016

Reformist Ministers Face Demotion

Cabinet ministers who for two years have led Russia down a path of rapid reform are to be demoted in a sweeping reshuffle this week, making way for a new policy of more investment and looser budgets, according to a report in the official government newspaper.

One of the government's three first deputy prime ministers, Oleg Soskovets, is set to become the "very first deputy prime minister," second only in authority to Prime Minister Viktor Chernomyrdin, Rossiiskiye Vesti reported Friday.

Yegor Gaidar, Russia's most celebrated market reformer and another first deputy prime minister would probably keep his job, the paper said, but with reduced authority.

Gaidar would apparently become subordinate to Soskovets, a former industrialist from Kazakhstan who is an ally of Chernomyrdin and advocates more support for Russia's ailing industry.

The other prominent market reformists in the government, Finance Minister Boris Fyodorov and privatization chief Anatoly Chubais are likely to be demoted from the rank of deputy prime minister to plain minister, wrote Ivan Gorev, the paper's commentator, quoting "competent sources."

Fyodorov has been waging virtual open war with the head of the Central Bank, Viktor Gerashchenko over budgetary policy. Chubais is a less controversial figure but according to Rossiiskaya Vesti he "has completed his work and it is possible to sacrifice him now without any damage."

A presidential decree of Dec. 23 gave Chernomyrdin two weeks to put together a list of proposals for a complete overhaul of the government, which would involve a reduction in the number of ministries and a 20 percent cut in the government apparatus.

The details of the cabinet reshuffle are expected to be made public "before Christmas" on Jan. 7, the paper said, four days before the new Federal Assembly convenes.

Leaders of the main parties in the lower house of the new legislature, the State Duma, met Friday to choose a speaker for the chamber but failed to agree, Reuters reported.

The main candidates appear to be Deputy Prime Minister Sergei Shakhrai, Ambassador to Washington Vladimir Lukin and Agrarian Party official Ivan Rybkin.

There were equally conflicting signals issuing from the Kremlin on Monday on government priorities, as Yeltsin spokesman Vyacheslav Kostikov repeated the watchwords of market reform in an interview with Itar-Tass, saying the president would seek lower inflation and a strong ruble in 1994.

The Rossiiskiye Vesti article, however, predicted that the new government's "main brain center" would be the State Committee for Industrial Policy.

t said there would be a policy of general retreat from tight budgetary controls in favor of "investment in industry, putting a halt to industrial decline, support for agriculture."

Interfax on Friday quoted "well-placed sources" in the government as saying that after the shake-up five of the current nine deputy prime ministers in the government would be removed or demoted, leaving just four.

In another section of his Itar-Tass interview Kostikov made comments likely to alarm further some of Russia's ex-Soviet neighbors, saying that in 1994 "the definite accent of foreign policy will be the defense of the national interests of Russia, the rights of the Russian and Russian-speaking population within the framework of international law and stemming from the idea of pan-national solidarity."

Yeltsin included similar remarks about the rights of the estimated 25 million Russians outside Russia in his New Year television address, prompting a public statement of concern from the foreign minister of Estonia, which has a large Russian minority.