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. Last Updated: 07/27/2016

Ministers Face Off Over Route Of Reform


The struggle for control of Russia's reform course intensified Friday with two ministers complaining about the way money is -- or is not -- being spent and the State Duma formally launching its bid to rein in Moscow's ambitious privatization program.

Interior Minister Anatoly Kulikov, concerned about the underpaid and overstretched military, said he favored nationalizing some commercial banks and reconsidering oil export tariffs to raise money for the army and his ministry.

On another front, Economics Minister Yevgeny Yasin sought to head off a big minimum-wage hike approved Wednesday by the State Duma.

Yasin, who has openly worried that the government might go on a budget-wrecking spending spree in the run-up to the June presidential election, said the measure was technically illegal and therefore was unlikely to become law.

The Duma, meanwhile, voted 267-to-29 to establish a commission to review the country's privatization program and determine whether any government officials should be held responsible for "negative results."

Though the body's role will be strictly advisory, its heavy weighting toward Communists and nationalists will make it a likely sounding board for the opposition ahead of the June elections.

Of the 14 commission members, at least five will be from the Communist Party, and two from the ultranationalist party of Vladimir Zhirinovsky, with the rest representing other Duma factions.

Kulikov, whose Interior Ministry troops are fighting alongside regular army forces against separatists in Chechnya, told Interfax that the army "is being ruined just like in February 1917, but then it was done by the Bolshevik propaganda and now by nonpayments."

He said his experts had searched for ways to radically raise budget revenues. In proposals sure to unsettle free-marketeers and powerful oil concerns, their suggestions included nationalization of some commercial banks and possible new oil export tariffs.

The comments came amid speculation that Russia might abolish oil export tariffs this year to secure new loans from the International Monetary Fund.

The IMF and World Bank extracted a promise from Moscow years ago to liberalize oil exports and abolish tariffs as part of the long-term criteria for receiving billion-dollar aid packages.

The IMF is insisting Russia do away with the tariff, currently at 20 European currency units per ton, and replace it with an excise tax on all oil sales. Moscow officials had said last year the tariff would be phased out altogether by Jan. 1, 1996.

On the budget front, the Duma's vote to raise the minimum monthly wage to 75,900 rubles ($16) a month from the present 63,250 rubles would cost the government an estimated 400 billion rubles a month. Though few people earn the actual minimum, it is used as a multiplier to figure wages throughout the economy.

"These are trillions of rubles which are not in the budget," Yasin said at a briefing Friday. "The budget does not have resources to pay that much. We still have unpaid money from similar rises voted last year." ()