Newspaper article The Christian Science Monitor

To Keep Russia on Track, Yeltsin Forgives Sleaze despite an Apparent Bribe to Top Reformer Chubais, President Lets Him Stay - for Stability

Newspaper article The Christian Science Monitor

To Keep Russia on Track, Yeltsin Forgives Sleaze despite an Apparent Bribe to Top Reformer Chubais, President Lets Him Stay - for Stability

Article excerpt

As the Kremlin's top economic reformer teeters in the wake of a corruption scandal, in which three of his closest allies already have been fired, broader questions are being raised here about the economic future of Russia.

Allegations swirling around Deputy Prime Minister and Finance Minister Anatoly Chubais "undercut the whole economic policy," says Alexander Bevz, head of the Civil Society Foundation, a Russian think tank. "This is a very heavy blow to the reformists."

The storm blew stronger yesterday as the dominant Communist faction in parliament said it would refuse to debate the 1998 budget unless Mr. Chubais was dismissed. Though Mr. Chubais has clung to his job so far, his three co-authors of a book about privatization were fired from senior government posts over the weekend, when it was revealed they split $450,000 in royalties. They accepted the money from a publishing house owned by Oneximbank, a major financial institution that has profited hugely from the privatization of state property. It recently won the largest-ever auction of a public company, the telecommunications firm Svyazinvest. Chubais is a symbol of President Boris Yeltsin's renewed drive to reform Russia's economy, the Kremlin's point man in negotiations with international financial bodies, and the mastermind for the government's economic activity. But the stain on his reputation - Mr. Yeltsin said Chubais's actions were "impermissible" - will lose him much of his credibility. Some analysts see even deeper danger. "The flight of foreign investors from the Russian market is inevitable," warns Andrei Piontkovsky, head of the Center for Strategic Studies. "Any chance of economic growth this year is now compromised." Chubais's troubles come at a delicate moment for the government's economic policy. The International Monetary Fund is holding up payment of the latest installment of its $10 billion loan to Russia. The opposition-controlled Duma, the lower house of parliament, is due to start debating the 1988 budget tomorrow, and the Russian stock market is as nervous as any emerging exchange during the current international uncertainty. …

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