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. Last Updated: 07/27/2016

Chubais, Zyuganov Skirmish In Davos

Anatoly Chubais, the deposed architect of Russian privatization, took on Gennady Zyuganov in an international arena Monday, warning Western capitalists gathered in Switzerland not to listen to the Communist leader's reassuring "lies."


Russia's former first deputy prime minister for the economy told prominent business leaders at the World Economic Forum in Davos that if Zyuganov were elected his party would try to renationalize the country's industries, causing widespread bloodshed.


He was countering remarks by Zyuganov, who proved something of a sensation at the Swiss ski resort Sunday by telling the gathering that he was "the most peaceful man on the planet," interested merely in a slower process of reform than the one being pursued under President Boris Yeltsin, The Associated Press reported.


Also, renationalization would occur only in certain key industries and in factories that were ill-managed, Zyuganov said.


"Those companies that are privatized and working well with trade union rules being followed -- we will give them all the possibility to carry on working," he said, according to AP. Lowering taxes, improving their collection and fighting corruption would ensure that those who worked hard were rewarded.


"We have to do something to make it worthwhile for peo wants the opposite situation, when at least 75 percent of private property will be renationalized."


Reading from Communist Party documents and Zyuganov speeches, Chubais went further, telling journalists that the party's policy of renationalization would create conflict between the state and industry which "will inevitably lead to big bloodshed in Russia."


Zyuganov, in his comments Sunday, had used precisely the same assumption to show that he realized wholescale renationalization was out of the question.


"We understand that if we start taking factories back, there's going to be shooting from Murmansk to Vladivostok," he said.


Foreign business leaders and analysts were unrattled, however, noting that the current situation requires patience and a steady hand.


Eivind Djupedal, president of the American Chamber of Commerce in Russia, said in an interview that all Russian politicians "have their own agendas. I think no one knows yet what Zyuganov stands for. He's certainly spoken in different tones to different audiences."


After Chubais launched his verbal attack on the Communists, party leaders in Moscow dismissed his comments, telling Reuters that even Yeltsin has admitted to mistakes made during the course of reform.


Also, the party makeup provides balance between elements seeking a return to the past and those advocating continued reform, according to Yury Voronin, Communist Party member and head of the budget committee in the State Duma.


"There's no need to be afraid of the Communists because it is not just Zyuganov who decides, but a whole team which understands reality," he told Reuters.


Others, seeing Zyuganov as the moderate extreme of the party, have warned that there is reason for caution precisely because he is not alone in making decisions.


Also on Monday, the Communist Party announced a congress Feb. 15 to formally choose a presidential candidate, almost certain to be Zyuganov. Yeltsin is expected to announce his candidacy the same day.


Chubais' tough talk had no effect on financial activity, analysts said, with the Russian debt market remaining steady.


The comments represent yet another ploy by the democrats to demonize the Communist Party, said Sergei Markov, a Moscow-based associate of the Carnegie Endowment for International Peace.


"It's their weapon -- their weapon in the past and their weapon in the future, maybe," Markov said. "And it's their mistake."


The Russian people are tired of hearing anti-communist rhetoric, he said, and do not associate the current party with the Stalinist machine responsible for purges more than half a century ago.


Another analyst noted that Chubais' use of inflammatory language was uncharacteristic, and contrary to the tone of an opinion article written by the reformer for Monday's edition of the Financial Times of London.


In that article, Chubais devoted about three-fourths of his comments to the past, explaining the methods used to stabilize the Russian economy and providing insight into various events.


However, Chubais also described a future in which Russia stands a 50-50 chance of either maintaining reforms and seeing inflation continue to fall, or losing key deals with creditors and the International Monetary Fund. The latter scenario, he said, would drive inflation, spark crises on foreign exchange and bond markets and threaten the Russian banking system with another pre-election crash.


"Clearly his position is that any backsliding is very dangerous. He wants to see agreements with the IMF and the Paris Club" of government lenders, said Philip Poole, head of fixed income and equity research for Eastern Europe at ING Barings in London. "He seems to be laying down, in inflammatory terms, what ... could happen if those things don't take place."