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. Last Updated: 07/27/2016

Put Budget Above Fate Of Chubais

It became highly likely this week that, despite months of polemical debate, Russia will enter the new year without an approved budget. On Thursday, the State Duma decided to defer once again the first reading of the 1998 draft budget, this time until well into December.


The Duma is refusing to debate the budget despite two months of arduous work by a conciliation commission, involving the government and both houses of parliament, which was supposed to come up with a version of the budget that was realistic and acceptable to all parties.


The commission produced a new and substantially rewritten draft, which took into account many of the Duma's criticisms of the government's original proposal.


To accommodate the Duma's demands for more spending, it substantially raised revenue projections, partly by some creative accounting and partly by raising taxes.


But parliament's lower house is now refusing to consider even this compromise document. The reason has nothing to do with economics but a lot to do with the ructions in the Kremlin that have been grabbing headlines this week.


The Communists and their allies had already tried to get First Deputy Prime Minister Anatoly Chubais sacked when the 1998 draft budget was first presented to the Duma.


They failed, but last week, when the press broke the scandal surrounding a $450,000 book advance paid to Chubais and his cronies, the Duma deputies smelled blood.


They issued an ultimatum to President Boris Yeltsin, warning him that they would not pass the budget until Chubais was fired.


Ever pugnacious, Yeltsin refused to sack a loyal, if controversial, minister. But he did cut Chubais down to size, taking away his post of finance minister and handing it, along with direct responsibility for the budget, to Mikhail Zadornov, the former head of the Duma's budget committee.


Now Yeltsin has asked the Duma to put aside their vendetta against Chubais and pass the budget. Yet the Duma responded by voting to delay the budget debate once again.


The passage of the budget should not be linked to the fate of Chubais. This political bickering is costing the country dearly.


Russia needs a budget to work under next year. The opposition is the first to acknowledge that the absence of a budget creates uncertainty in the economy, contributes to the nonpayments crisis and opens the door to corruption.The budget may be the only stick the Duma has with which to beat Chubais, but it is an irresponsible weapon. It will not even be such a good stick now that a Duma man, Zadornov, has taken responsibility for getting the law passed.