The Washington Post
Navigation Bar
Navigation Bar

Related Items
  • Main Story

    Yeltsin Picks Centrist as Finance Chief

    By David Hoffman
    Washington Post Foreign Service
    Friday, November 21 1997; Page A45

    President Boris Yeltsin reached out to parliament today and picked a widely respected young lawmaker from the centrist Yabloko party to head Russia's Finance Ministry following the removal of Anatoly Chubais, who remains a first deputy prime minister.

    Yeltsin named Mikhail Zadornov, 34, chairman of the budget committee of the State Duma, the lower house of parliament, to fill the post at a critical turning point for the Russian economy. Industrial growth has barely begun after years of depression, interest rates are rising, and the stock market has taken a big dive as foreign investors fled following the global market turmoil.

    Chubais was removed from the Finance Ministry post on Wednesday following an uproar over the disclosure that he and four aides accepted $90,000 apiece for a still-unpublished book on the history of Russian privatization. The money came from a publishing house owned in part by a bank that had been successful in several recent government sell-offs of state firms. The payments came just as Chubais was proclaiming that the government would be independent from the bankers.

    Yeltsin, who fired three Chubais subordinates last weekend, decided to keep Chubais in the government, apparently in hopes of soothing edgy Western investors. While generally disliked at home, Chubais is widely respected in international financial circles as an architect of Russia's transition from a command economy to free markets.

    Zadornov, elected to parliament in 1993, had earned respect in the legislature for his no-nonsense, practical approach to Russia's mountain of budget troubles. In recent years, the parliament repeatedly has approved budgets that were wildly unrealistic, especially since tax revenues have plummeted.

    The giant gap between the budget promises and the reality that only 60 percent of planned revenues have been collected has made the Finance Ministry a hot spot. The ministry has had to dole out available funds to regions and programs under intense pressure. Critics have said the money is distributed both arbitrarily and corruptly. Chubais had taken the portfolio in March, along with that of first deputy prime minister, to try to impose tighter controls while steering through parliament key economic reform bills such as a tax overhaul.

    In taking the post, Zadornov also abruptly took leave from the centrist Yabloko faction, headed by Grigory Yavlinsky, who has strongly criticized the Yeltsin government's tax proposals. However, Zadornov won plaudits from the Communists, who are the largest faction in the parliament.

    Meanwhile, the Duma put off a first vote on next year's budget. The Communists had threatened to block the fiscal plan, which now will be reconsidered next month.

    © Copyright 1997 The Washington Post Company

    Back to the top

    Navigation Bar
    Navigation Bar