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. Last Updated: 07/27/2016

Prime Minister Fires Tax Chief Fyodorov




This week began for Yevgeny Primakov just like the previous two: with the economy in crisis, the Cabinet half-formed, the same trickle of firings and hirings, and the new government's policies anybody's guess.


Primakov, who has said he favors a market economy disciplined by more state control, Monday fired two more market reformers, tax chief Boris Fyodorov and Deputy Prime Minister Viktor Khristenko. No replacements were announced for either minister f or for former Deputy Prime Minister Alexander Shokhin, who bolted the government late Friday evening after just 10 days in office.


The Kremlin also announced that State Property Minister Farit Gazizullin, like Fyodorov and Khristenko a holdover from the former government, would keep his job. As of Monday, about two-thirds of Russia's ministries had been filled.


Primakov's sluggish pace in Cabinet-building and his failure, after 18 days in office, to put forward a coherent economic strategy, drew a bluntly critical response Monday from the International Monetary Fund.


Martin Gilman, the IMF's representative in Moscow, was asked if he had a clearer idea of the government's intentions after recent meetings with Shokhin and Yury Maslyukov, the Communist first deputy prime minister placed in overall charge of the economy. His reply was, "The clear answer to that question is: No, we did not."


The IMF is waiting to see what course Primakov's government follows before giving Russia a delayed $4.3 billion installment of a $22.6 billion loan bailout package. It is likely to be waiting for some time: Deputy Prime Minister Vadim Gustov, in what was apparently supposed to be a reassuring comment, said Monday that the government would have its economic crisis program worked out entirely by mid-December f two months from now.


Finance Minister Mikhail Zadornov said Sunday that if the IMF does not come through with the rest of the loan package Russia will be hard-pressed to avoid printing rubles to make ends meet f an inflationary move the IMF has warned against.


"These sums [pledged in July by the IMF] would enable us to balance the budget in the fourth quarter and do without an emission" of new rubles, Zadornov said on RTR television's Zerkalo news program. "But if we do not get this assistance from international organizations, our situation will be substantially complicated."


But Primakov's government has already created new rubles through loans to Russia's ailing banking sector, and this week also began to pay off arrears in wages and social benefits f including two months' back salary owed to soldiers and 420 million rubles ($26 million at Tuesday's official rate) owed in student stipends.


The rubles doled out, however, are worth less than half what they were on Aug. 17, when the government announced its decision to let the currency fall and to default on some of its debt. The ruble was trading at around 16 to the dollar Monday, down from around six before devaluation.


Even so, a survey released Monday suggested Primakov's priorities so far are well in tune with those of voters. According to a poll by the All-Russia Public Opinion Center, 55 percent of Russians cited paying off wage arrears when asked to name the top three priorities for the new government, Interfax reported.


The second and third most important issues cited were keeping prices from rising, named by 46 percent, and supporting the ruble's exchange rate, chosen by 40 percent.


Tax collection and supporting the collapsed banking system, two other stated government policy goals, were named by only 9 percent and 7 percent of the 2,400 people polled as priorities.


Monday's Cabinet moves were no great surprise. Khristenko was one of the provincial reformers associated with former Prime Minister Sergei Kiriyenko, most of whom have been swept out along with their former boss and patron. And Khristenko's former role as chief economic minister was already given two weeks ago to Maslyukov.


The combative Fyodorov, meanwhile, had already lost his job negotiating with the international financial community to Shokhin. Fyodorov, moreover, had antagonized influential industries like Gazprom, the natural gas monopoly, by trying to squeeze more tax revenue out of them.


Gazizullin's job is of less significance these days as his ministry has been reduced to something of a backwater, with high profile privatizations f like the sales of stakes in oil company Rosneft and natural gas monopoly Gazprom f up in the air for now.


Shokhin, meanwhile, spent the weekend justifying his decision to quit. He said he could not work with Zadornov in the finance ministry because he blamed him for the Aug. 17 debt default, and complained that he should have been allowed to pick his own finance minister.


"When Yevgeny Primakov offered me the job of overseeing of the financial block he intimated at the same time that all appointments would be made only with my consent, that the key post of finance minister would not be occupied without my consent," Shokhin said on Zerkalo.Kremlin spokesman Dmitry Yakushkin quoted Yeltsin as saying Shohkin's decision to quit after 10 days on the job was "unstatesmanlike."


Yakushkin said Primakov and Yeltsin met Monday, and he quoted Primakov as saying he was in no hurry to replace Shokhin, Itar-Tass reported.


Shokhin denied his decision to return to the State Duma, where he headed the OurHome Is Russia faction, was connected to party leader Viktor Chernomrydin's decision last week not to seek a Duma seat in an upcoming by-election.


Former Prime Minister Chernomrydin had been expected to bump Shokhin as the parliamentary head of Our Home, the second-largest faction in the 450-member lower house of parliament with 67 seats.


Chernomyrdin's surprise refusal means Shokhin, who has not resigned his Duma seat, now has his legislative leadership post to return to.