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. Last Updated: 07/27/2016

A New Team Takes On the Old Economy

It was almost exactly three years ago to the day the former acting Prime Minister Yegor Gaidar began forming his reformist government, replacing the old Soviet, communist government of Ivan Silayev.


The current change of government, although it was not triggered by catastrophic events such as the August 1991 coup and although it is not so sweeping, may nonetheless carry serious consequences for the country. Virtually all the agencies that have anything to do with economic policy have either gotten new leaders in recent weeks or are awaiting new leaders in the wake of the resignations of their old ones.


The Finance Ministry was the first to go. It should be recalled that three years ago Gaidar himself took this post, unwilling to trust even his closest friends in this crucial position. After Gaidar left, the post was held by Boris Fyodorov, a young and aggressive reformer, and then by Sergei Dubinin, who shared the majority of his predecessor's reformist views.


Now the Finance Ministry will be headed by Vladimir Panskov, who is neither a politician nor a macroeconomic strategist. Those who know the new minister well describe him as a professional accountant. This isn't bad, but it is far from sufficient for the head of a key economic agency. Moreover, Panskov has no connection with the reforms that have been carried out so far and has never taken part in the formulation of economic strategy or government programs.


Before his appointment, Panskov spoke out fairly sharply against the 1995 budget project that was presented last month. Even with the support of Dubinin, who prepared that budget, it had little hope of passing the Duma intact. Now, when one of the project's main critics is in charge of defending it, this document -- which embodies the government's strategic intentions -- looks completely doomed. It is possible that Prime Minister Viktor Chernomyrdin will order Panskov to reconsider his position and become an advocate of the government's budget, which -- after all -- a finance minister is obliged to be. But this would certainly raise questions about what Panskov's true opinions are.


Deputy Prime Minister and Minister of Economics Alexander Shokhin has resigned. While there has been a lot of talk about Shokhin's bad relations with Gaidar and speculation about the real reasons for his resignation, it must be acknowledged that Shokhin was committed to market reform. Key figures in the Economics Ministry have expressed deep regret that his resignation was accepted.


Anatoly Chubais now no longer heads the State Property Committee and will instead be First Deputy Prime Minister overseeing economic strategy. One might suppose that Chubais' promotion will only strengthen the position of the reformists in government and that now he will be able to supervise all state economic agencies. However, Chubais will no longer be the head of the State Property Committee, and the successes of privatization have been, to a considerable decree, connected with his personal dedication and resolution.


We will only learn what Yeltsin and Chernomyrdin really want when they announce who will head the Ministry of Economics and the State Property Committee. If we get some representative of the interests of the old Soviet directors like Georgy Khizhi or Yury Skokov, it will mean that Chubais was simply pushed away from real authority and that the government is following a new course.