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  •   Yeltsin Fires Entire Russian Government

    Yeltsin Announces Shake-up
    President Boris Yeltsin announces the dismissal of his government on Russian television. (Reuters)
    By Washington Post Staff
    and News Services

    Monday, March 23, 1998; 7:15 a.m. EST

    MOSCOW – President Boris Yeltsin, dissatisfied with the progress of Russia's economic reforms, dismissed his entire government today.

    Yeltsin, back at the Kremlin after illness, said in a television address that "the current cabinet team ... unfortunately could not cope with a number of key questions." Top economic reformers had been locked in a power struggle with some of Russia's top business tycoons over control of the economy.

    The Moscow Stock Exchange dived 10 percent on word of the dismissals.

    Yeltsin appointed Fuel and Energy Minister Sergei Kirienko, 35, as first deputy prime minister and acting prime minister. Yeltsin said he would soon nominate his permanent candidate to replace Prime Minister Viktor Chernomyrdin. His nominee will have to be approved by the parliament.

    "The dismissal of the government does not mean a change of course in our policy," said Yeltsin, who is due to host German Chancellor Helmut Kohl and French President Jacques Chirac in Moscow on Thursday. "It is an effort to make economic reforms more energetic and effective, to give them a political push, a new impulse."

    Yeltsin told Chernomyrdin, a longtime Yeltsin loyalist, to prepare for presidential elections in 2000, but he stopped short of naming him as his candidate.

    The dismissals came at a time when Chernomyrdin's government seemed to have found some political stability. Calls in the parliament for a no-confidence vote have died down recently, and the two "young reformers," deputy prime ministers Anatoly Chubais and Boris Nemtsov, seemed to have solidified their position.

    After months of threats late last year to impose a shake-up, Yeltsin seemed to have hesitated in late February and settled for a few minor personnel changes.

    Nemtsov said the dismissed members of the government would meet with Yeltsin later today.

    "The dismissal of the government is the decision of the president," Nemtsov told reporters. "I have nothing to add. What's going to happen next? A new government is going to be formed. And it's up to the president who will be appointed."

    Yetsin and Chernomyrdin
    Yeltsin and Chernomyrdin talked during a cabinet session Feb. 26. (Reuters)
    Yeltsin had recently said Chernomyrdin and other top cabinet officials would stay in place for the rest of his term, which runs until 2000. There had been strong speculation recently that Chernomyrdin, a former head of the Soviet gas ministry who was appointed in December 1992 to succeed reformist Yegor Gaidar, would be a candidate in the next presidential election. By law, Yeltsin cannot run for a third term.

    A major decision on the direction of the Russian economy is hanging over Yeltsin and his government. Some of his top lieutenants say Russia is nearing a crossroads: Will it follow what many here call the Asian model in which government and favored big businesses and banks dominate the economy, or an American and emerging European model where government sets the rules but keeps business at arm's length?

    Many Russian business leaders favor the Asian model because, during the past decade, it provided East Asian economies with impressive economic growth and riches for well-connected tycoons. But Chubais and Nemtsov had been attacking the Asian model, the local version of which they refered to as crony or bandit capitalism.

    "Such relations between big business and the government ... result in the state ... forming private links. It results in setting up different rules of the game for different structures," Chubais said in a recent newspaper interview.

    Chubais, who directed Russia's privatization campaign, stands accused of creating a Frankenstein monster of pushy big businesses. Beneficiaries of the program returned the favor by financing Yeltsin's 1996 reelection campaign. Chubais said today that he and Yeltsin had agreed that he will stay in the government, but he did not say in what role, Interfax news agency reported.

    Yeltsin also moved swiftly today to replace hard-line Interior Minister Anatoly Kulikov, one of the longest-serving members of the cabinet, who had survived earlier reshuffles.

    The Kremlin said Kulikov, who is also a deputy prime minister, was moving to another job, and Interfax said Yeltsin had put Kulikov's deputy, Pavel Maslov, in temporary charge of the ministry.

    Washington Post staff writers David Hoffman and Daniel Williams, Reuters and the Associated Press contributed to this report.

    © Copyright 1998 The Washington Post Company

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