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. Last Updated: 07/27/2016

Chubais Quits, Shaking Reform

Anatoly Chubais, the last prominent liberal in the government, resigned as first deputy prime minister for the economy Tuesday, dealing a severe blow to the cause of economic reform in Russia.

"There have been a lot of rumors that I am leaving," Chubais, the architect of the government's privatization program, told a press conference Tuesday night, according to a Reuters report. "That is true. Having learned of [President Boris Yeltsin's] sharply negative assessment of my work, I have made the decision to tender my resignation."

According to the state-controlled ORT television network, Yeltsin signed a decree relieving Chubais of his duties Tuesday night. ORT quoted Yeltsin's top economic aide, Alexander Livshits, as saying that Yeltsin had fired Chubais for "failure to obey the president's orders and to make sure that people responsible for disbursement of government funds, including those meant for salaries, did their job."

The resignation came on the day a top-level International Monetary Fund delegation arrived in Moscow for talks on a $9 billion loan to Russia. The loan, called an Extended Finance Facility, would be spread over the next three years.

Chubais oversaw the talks with the IMF, and Western analysts believe his resignation could detract from Russia's credibility with foreign creditors and investors.

"The international financial community will be concerned that commitment to reform may not be as strong as when Chubais was in government," said David Boren, vice president of emerging markets research at the Salomon Brothers investment company in London.

Not a single member of Yegor Gaidar's original team of reformers, which joined the Russian government in November 1991, now remains in the cabinet.

Earlier this month, Yeltsin fired Foreign Minister Andrei Kozyrev, who had joined the government in 1990. After Kozyrev's departure and his replacement by the more conservative former spy chief Yevgeny Primakov, Chubais became the longest-serving minister in the cabinet.

"Yeltsin is giving up the brightest figures as a compromise before the presidential election," State Duma deputy Irina Khakamada, an independent, told Russian Television on Tuesday. "He has decided on a policy of making concessions to the Communists."

Yeltsin has recently made several key appointments that himself "from the entire team that has led the country to overall poverty and shame."

After the Communists won the December parliamentary election, Chubais said the reform policy would not change. But he seemed less sure Tuesday that reforms are unassailable.

"Changing the course five months before the presidential election would be a monstrous mistake," he cautioned. "I hope we are talking about replacing the man, not the policy."

Chubais, 40, is widely seen as the architect of the most important of Russian reforms -- privatization. Ever since he became head of the State Property Committee in late 1991, he doggedly pushed through first the voucher privatization program and then the second phase of sell-offs, in which investors could buy stock in enterprises for money rather than privatization vouchers.

Yeltsin appeared determined to stand by Chubais. When the old State Duma refused to pass Chubais' money privatization program in 1994, Yeltsin approved it by decree. Throughout several cabinet reshuffles, Chubais not only kept his job but was promoted to first deputy prime minister last year and put in charge of the government's economic policy.

Until the last moment, Chubais appeared to be consolidating power in the government. He was instrumental in forming a commission that is now vying for control over exporters' access to oil pipelines. Sergei Belyayev, former privatization minister and now head of the pro-government Our Home Is Russia faction in the State Duma, said he regretted Chubais' removal.

"He is a purposeful, constructive man, who every month, every year, confirmed his value to the government and his ability to learn and reach new levels," Belyayev told Russian Television. "Chubais' contribution to the economic successes of 1995, including the passage of this year's budget by the Duma, has been quite large."

But Chubais, who last year resigned his membership in the liberal Russia's Democratic Choice party and has since joined no other political party, had few political friends.

"He was not much loved as a politician, and that probably explains why the president has decided to part with him," commentator Nikolai Svanidze said on Russian Television's "Podrobnosti" news show.