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| INTRIGUE IN THE KREMLIN The Shake-Up in the Russian Cabinet December 5, 1997 |
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Questions answered in this forum:Will corruption and crime dismantle reform? Will Chubais' reform programs be maintained by the next administrator ? How did Russia move from state owned business to independent business? Should we invest in Russia? What can the West expect from this cabinet shuffle ? Viewer comments
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September 29, 1997:
A new Russian law limits all religions outside the Orthodox Church.
July 22, 1997:
Elizabeth Farnsworth speaks with David Hoffman, The Washington Post's Moscow Correspondent.
May 27, 1997:
Russia agrees to the expansion of NATO.
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S ince the break of the Soviet Union, Russian politics has been a complex weave of plots and subplots that rivals a Tolstoy novel. The latest plot revolves around Anatoly Chubais. Once viewed by many in the West as one of the leaders tough enough to reform Russia’s economy and limit the power of the nation’s banks, Chubais was removed from his post as finance minister by Russian President Boris Yeltsin after a $90,00 advance from a book deal was disclosed.
Chubais’ publishing house is owned by Vladimir Potanin, a Russian businessman whose bank, Oneksimbank, recently gained control of a privatized telephone company many companies had sought.
The perceived "sweetheart" deal triggered a major reshuffling of Yeltsin's cabinet. In the wake of Chubais' dismissal, another reformer and energy minister, Boris Nemtsov, and three of Chubais' aides lost their posts. Both Chubais and Nemtsov remain in President Boris Yeltsin’s cabinet, but in a reduced capacity, as first deputy prime ministers.
"The essence of the conflict is that it is not purely a government crisis," Nemtsov said of the shake up. "In fact, it is a crisis that is much deeper and more ideological."
According to published reports, Yeltsin refused to completely dismiss the two from the government mainly because their removal could damage the reform effort and dampen the confidence of Western investors. Yeltsin replaced Chubais with Mikhail Zadornov, the chairman of the budget committee of the Duma, Russia's parliament. But no one knows what the impact of the appointment may be on several pending reforms.
And the political crisis created by the Chubais book scandal took on added energy last week when foreign capital began fleeing Russia's emerging markets, mainly as a result of the economic troubles in Asia. Chubais himself traveled to Washington to meet with International Monetary Fund officials. He urged them to begin sending $700,000 in promised loan money that could be used to sustain Russia's already-meager two percent growth. The IMF had stopped the loan disbursement due to the government's failure to collect taxes.
Our forum asks: Is this simply internal political squabbling or will the removal of Chubais and Nemtsov end capitalistic reforms in Russia? How concerned should the U.S. be in these Kremlin moves? How will this shake up change the reform movement in Russia?
Your questions are answered by Clifford Gaddy, a Brookings Institution economist who specializes in Russia, and David McGuffin, a Moscow correspondent for Feature Story, Inc.
Will corruption and crime dismantle reform?
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