Russian roulette

PUBLISHED : Wednesday, 25 March, 1998, 12:00am
UPDATED : Wednesday, 25 March, 1998, 12:00am

Progress towards democracy and market reform in Russia has never been clear cut, but Boris Yeltsin's decision to sack his entire cabinet introduces a dangerous element.

No one believes the explanation offered by the quixotic president, that the team lacked dynamism and initiative. Stability is what the economy most urgently needs, and if the progress of reform was not as swift as Mr Yeltsin required, at least it was in the right direction.

Under the skilled hand of his ousted prime minister Viktor Chernomyrdin, a steady programme of reforms was under way, without antagonising either the communists or the nationalists who dominate the State Duma. The currency had regained ground, interest rates had fallen, and the stock market was recovering after a 20 per cent fall at the end of last year.

Mr Chernomyrdin's modest successes could have brought about his downfall. He was widely regarded as Mr Yeltsin's heir, but recently began asserting himself in a way that may not have pleased his boss. Mr Yeltsin enjoys control. His health is precarious and he has indicated that he will not stand in the presidential elections in 2000, but there are suspicions that he may have his eye on a third term.

His immediate problem, however, is - or was - a vote of censure against the Government due in the Duma next week. By dismissing his ministers, Mr Yeltsin seems to have gambled that he has turned the tables on his critics. He also has a new and unknown heir, Sergei Kiriyenko, a 35-year-old technocrat with no power base, lacking in experience, and likely to stay for some years in Mr Yeltsin's shadow.

Reforms will continue, even pick up pace, but the economic problems are formidable. If swift reforms are carried out against a background of power struggles and political infighting, there may be domestic unrest. International confidence will suffer, and foreign investment will be cut back. Mr Yeltsin may have overplayed his hand.