The Washington Post
Navigation Bar
Navigation Bar

Related Items
  • Main Story

  •   Yeltsin Vows to Stay in Office

    By David Hoffman
    Washington Post Foreign Service
    Saturday, August 29, 1998; Page A01

    MOSCOW, Aug. 28 – President Boris Yeltsin vowed today not to resign in the face of severe challenges from parliament and a barrage of criticism over the imploding Russian economy. But he pledged not to run again and not to disband the opposition-dominated legislature.

    In a 10-minute interview on state-owned television, his first appearance since reappointing Viktor Chernomyrdin as prime minister Sunday, Yeltsin delivered a no-nonsense reply to reports that he might step down because of declining health and the worsening financial crisis.

    "I want to say that I'm not going anywhere, I'm not going anywhere," Yeltsin said, speaking slowly, but clearly. "I'm not going to resign. I will work the full term as given to me by the constitution. New presidential elections will be held in 2000. But I will not run." Yeltsin has in the past given conflicting signals about seeking another term.

    Seated at a small round table in the Kremlin, Yeltsin was responding to reports that swept Moscow Thursday that he was being urged by members of his family, as well as some prominent Russian financiers, to step down if – and after – Chernomyrdin is confirmed by parliament. "First of all, to remove me, that is too difficult a matter," Yeltsin said. "Considering my character, this I think is impossible, impossible."

    Yeltsin had little concrete to say about the economic meltdown, except pledging to protect individual savings, carry out some kind of "stabilization" program and "settle the question with cadres," meaning those appointed to a new government. He promised to try to minimize price hikes following the devaluation of the ruble, but acknowledged he could do little to stop them.

    Separately, in an effort to win confirmation of Chernomyrdin, Kremlin officials continued to negotiate two agreements with the lower house of parliament, the State Duma. One is a statement of economic policy, the other a proposed power-sharing deal that would give the parliament significantly increased prerogatives, limit Yeltsin's powers and open the way to changes in the 1993 constitution, under which Yeltsin enjoys broad authority and the parliament has few levers of power.

    Meanwhile, the drop in the ruble exchange rate to the dollar seemed to halt today. In street exchanges, the ruble was going for about 9.5 to the dollar, which had originally been the Central Bank's outer limit, to be reached only in December. The main Moscow currency exchange remained closed. Russia effectively devalued the currency Aug. 17. Before devaluation the ruble had traded at 6.3 to the dollar.

    Retail trade has been thrown into disarray because of the gyrating exchange rate, and crowds of depositors have lined up at banks in a vain attempt to get their money out. Reversing a decision made last winter, many businesses have stopped setting prices in rubles and now are using dollar equivalents, which was the practice during earlier years of high inflation.

    The Central Bank today made good on its threat to take over Russia's largest private retail bank, SBS-Agro, and said it would be closed for two weeks.

    In addition, a major brokerage house, Brunswick Warburg, issued a statement warning that Russia could default on its sovereign debt, such as Eurobonds. This would have further global financial repercussions beyond the current turmoil.

    Russia recently defaulted on its short-term internal debt and has offered to pay only about 20 to 30 cents on the dollar to investors. The investment house noted in an analysis that Russia is losing Central Bank reserves "at an extremely rapid pace," and has $17 billion in debt service coming due next year alone. "The only chance" to avoid a default on the sovereign debt, which is denominated in dollars and other hard currencies, is for a new international rescue package, the firm said.

    In another development, Yeltsin formally signed documents releasing Boris Nemtsov, the deputy prime minister, from his job. He resigned this week. Yeltsin also released Anatoly Chubais from his duties as special envoy to the international financial institutions, which had been expected. Chubais remains head of the electricity monopoly.

    Yeltsin's television appearance followed a day of high-profile meetings in the Kremlin that seemed designed to combat reports he is infirm. He met with Deputy Secretary of State Strobe Talbott to discuss next week's summit meeting here with President Clinton, and told him he would not resign. Yeltsin met jointly with three leading politicians, Chernomyrdin, Moscow Mayor Yuri Luzhkov and Yegor Stroyev, chairman of the upper house of parliament, who all offered vague pledges of cooperation.

    Chernomyrdin also devoted the day to soothing restless members of parliament, which is expected to vote next week on whether to confirm him as prime minister. Yeltsin reappointed him to the post Sunday after dismissing Sergei Kiriyenko, who had served only four months.

    In a bid to help win Chernomyrdin's confirmation, Yeltsin said in the television interview that he would not dissolve parliament, a promise that could have a significant impact on how the chamber votes. The Duma is dominated by Communists and nationalists, and members often fear a dissolution of the body before their terms expire. The next parliamentary elections are scheduled for December 1999.

    "No matter how hard they try to intimidate me," Yeltsin said, "I am not going to dissolve it."

    If parliament rejects Yeltsin's choice for prime minister three times, he has the right under the constitution to dissolve it and call new elections.

    Yeltsin's political standing has never been lower, and he has been subject to humiliating ridicule in the press following his recent about-face on devaluation and Kiriyenko. "No single political figure can force Yeltsin to resign," said Grigory Yavlinsky, leader of the centrist Yabloko party. "But the developments in the country may do the trick.

    Gennady Zyuganov, the Communist Party leader, mocked Yeltsin's pledge not to run again. "This intention is not serious," he said, according to the Interfax news service.

    But Alexander Lebed, governor of the Krasnoyarsk region in Siberia, called for support for Chernomyrdin. Lebed received financial help in his recent campaign from Boris Berezovsky, the prominent tycoon who helped arrange Chernomyrdin's appointment. Lebed, a former general, said "the country is in for a lot of trouble" if Chernomyrdin is not confirmed.

    The Communists, the largest faction in the Duma, called tonight for putting off a vote on Chernomyrdin from Monday until later next week. Zyuganov said more time was needed for negotiations on the power-sharing document. In addition to stripping Yeltsin of some authority and changing the constitution, he added a new demand – that the news media be brought under state control.

    The Kremlin has participated in the talks, but shied away from agreeing to a major shift in power to the parliament. Instead, the Kremlin has proposed a truce: Yeltsin agrees not to disband parliament and the lawmakers call off the ongoing impeachment process against him.

    The economic agreement, according to reports, calls for increasing the money supply, imposing controls to prevent capital flight, and more state regulation of the economy, including nationalization of some defense-industrial plants. However, it is not clear how specific the agreement is nor how far Chernomyrdin would go to implement it.

    But there is a growing consensus behind one aspect of the plan – to print more money, despite the risks of inflation. Russia followed a tight monetary and fiscal policy in recent years – initially to quell the hyperinflation of the first post-Soviet period. The harsh medicine did bring down inflation but also led to demonetization of the economy, and as inflation fell, a web of debts and wage arrears was created. For several years, companies and workers have relied on barter rather than money for many transactions. Now, politicians across the board are arguing that the government should print more money.

    © Copyright 1998 The Washington Post Company

    Back to the top

    Navigation Bar
    Navigation Bar
     
    WP Yellow Pages