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To: Alex who wrote (16563)	8/25/1998 6:15:00 PM
From: goldsnow	Respond to of 117013

Yeltsin sups with crony capitalists as reformers leave Analysis, By Fred Brenchley, London The lights of liberal economic reform are going out across Russia. The young reformers who have blazed an often hazardous trail towards a market economy since the fall of communism are either leaving government or being pushed out. Alarmingly, they are leaving with chilling scenarios that Russia under Prime Minister Viktor Chernomyrdin and an increasingly isolated President Boris Yeltsin will be more insular, with communists and influential crony capitalists capable of reversing reforms. Boris Nemtsov, the 38-year-old Deputy Prime Minister often seen as a future leader, threw in his job after his younger reformist colleague Sergei Kiriyenko was dismissed as prime minister by Yeltsin earlier this week. "It is all too difficult to carry out any reforms, in the conditions of such an ugly market, where competition is non-existent, monopolies are rampant, where rules are few - you understand," he told Western journalists. "All the serious problems - first of all bringing order to the economy, normalising the situation with the financial-industrial or so called oligarch groups - all these issues are unlikely to find a solution from the Chernomyrdin Government". In the blunt, lowering of the guard style politicians use only when leaving office, Nemtsov gave the following insight into Kremlin politics that led to Kiriyenko's dismissal: "There is a great Byzantine element left in Russian politics. There is an intrigue there but I cannot judge how big it is. I never took part in it." Kiriyenko had his own parting shot at the crony capitalists that influenced the Kremlin when he took over from Chernomyrdin five months ago. The former prime minister said he was very proud of the fact that in his five months in power he did not "give in" to anyone. Some interpreters quoted this as Kiriyenko saying he had "kept his hands clean". But it was Anatoly Chubais, the reformer who has bounced in and out of power in various Yeltsin Governments, who sounded the most ominous warning. Chubais, whose tenure as IMF envoy to oversee the $US22.6bn support package is now uncertain, said he feared Russia faced unprecedented economic dangers in coming weeks. "The fate of the country rests on whether or not the new Russian Government is able to resist these dangers," he said. The main fears are whether Chernomyrdin will attempt to bring communists into a coalition government, and whether his Government will be unduly influenced by Russia's business oligarchs, whom many suspect were instrumental in his resurrection to power. On the former, the communist speaker in the Duma, Gennady Seleznyov, said negotiations were going on with Chernomyrdin for a coalition government that would be more independent of the president's powers of decree. Many are reading Seleznyov's statement as Yeltsin, in effect, anointing Chernomyrdin as his successor. One front page headline in Izvestia even went as far as saying, "Yeltsin hands over power". Russian radio also reported that the influential tycoon Boris Berezovsky would be appointed a deputy prime minister. Berezovsky is a longtime supporter of Chernomyrdin. Chernomyrdin, who presided over years of cronyism, acknowledges the policies will change. "It's unlikely that we need to remodel completely. However, we must deal with a lot of things," he said. Sonja Gibbs, Russian and emerging market expert at Nomura, said that Russia was becoming isolated - debt, foreign exchange and equity markets were barely trading - and she saw little scope for upside in the near future. "There are not many Western investors left in the Russian market who are there by choice," she said. The only hope she could see in the trend towards isolation was that after a period of sorting out its internal problems, Russia might again turn its sights outward. afr.com.au