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. Last Updated: 07/27/2016

Chubais: End Of Fight for Firm Principles

When I wrote last week about the possible dismissal of Vice Prime Minister Anatoly Chubais, I sincerely hoped that my premonition would turn out to be wrong.


Many are undoubtedly happy over his dismissal last Tuesday. He had more than a few enemies. It is not only a question of his ambitious revolution in the area of private property, which took place in large part thanks to his almost religious commitment to the idea of privatization. It was more that Chubais was not afraid to fight for his principles.


Before the eyes of the entire country, Chubais fought an uncompromising war over the principles of privatization against Moscow Mayor Yury Luzhkov, with whom no one wanted to quarrel.


Chubais tried to put the enormous company Gazprom under the control of the government, so that Gazprom would not be able to create its own multi-billion dollar reserve funds without some checks.


Less well known but no less significant were his battles with the National Sports Fund, which received extraordinary customs privileges from the president and brought alcohol and cigarettes into Russia duty-free. The budget losses from these operations are estimated to be 8 trillion to 10 trillion rubles in 1994 prices.


Chubais' struggle last October with industries that owed the most to the state budget were even more difficult and dramatic than his fight with Sports Fund. Chubais promised the then-director of Nizhnevartovsknefgaz, which headed the list of non-payers of back taxes with a debt of 1.3 trillion rubles, that if the debt were not paid back by Jan. 1, 1996, he would be fired.


But in January 1996, Chubais was the one fired. And his opponents -- the "victims" of his attack -- kept their positions and privileges.


Luzhkov, who had waited in anticipation for the dismissal of his main ideological rival, had already publicly called for correcting the "mistakes of privatization." Moreover, the mayor's speech on how Chubais had sold national wealth on the cheap, especially to foreigners, on the necessity of establishing order with the prosecutor's help, and on the return of a series of industries to the government looked more radical than even the announcements of the Communist Party leaders.


Last Friday, Boris Yeltsin announced that if Chubais had been fired earlier, then Our Home would have received twice as many votes as it did in December. In this comment lies the tragedy of the commissar of privatization. It means that the president today considers Chubais politically harmful and dangerous. But Chubais cannot be separated from the work he did. Therefore, the very idea of privatization could be re-evaluated by the Kremlin.


Today, several candidates are being proposed for Chubais' position in the government. Optimists are putting forward names of liberal officials and realists the names of the heads of large industries or state officials who were active under the Soviet period. In any case, it seems to me that the responsibilities of the vice prime minister in charge of macroeconomics and reform have ended. Even if someone like Alexender Livshits is chosen from among the liberal free-marketeers, his influence on economic policies will be minimal.


I think that soon everyone will have the chance to see how much depended on one man.





Mikhail Berger is economics editor for Izvestia.