08/02/1998 15:54:06 Russian govt wins time, but problems abound
By Alastair Macdonald
MOSCOW, Aug 2 (Reuters) - The Russian government won praise from two very
different sources this weekend, the International Monetary Fund and rebel
Chechnya, but there were reminders too that both its financial and frontier
problems are far from over.
The IMF said an austerity plan was working and the Chechen leader hailed a
promise of aid from Moscow. But social unrest still brewed and there were
reports of violence around Chechnya.
The IMF's deputy managing director declared himself pleased with the
government's efforts to tighten its belt, gather taxes and so ensure the Fund
continues with a $22.6 billion rescue plan agreed last month to stave off
"Good progress has been made and if it continues that way the outcome will
be good," Stanley Fischer said on Saturday after meeting chief debt negotiator
Anatoly Chubais and others.
Almost simultaneously, the president of Chechnya, who led his million-strong
Moslem region's guerrillas to victory in a bitter war against the Russian army
two years ago, said he hoped at last to see some of Moscow's promised
Aslan Maskhadov won a new pledge of economic aid to rebuild Chechnya's
devastated economy from Prime Minister Sergei Kiriyenko, who was despatched by
President Boris Yeltsin after Maskhadov survived an assassination attempt last
"After today's meeting we have new hope that the agreements will, if only in
part, be put into practice," said Maskhadov.
Russia can ill afford generosity right now and it remains to be seen whether
these promises are any more honoured than similar ones made when Yeltsin and
Maskhadov signed a peace treaty last year, setting aside differences over
But Moscow appears to believe that Maskhadov, a soft-spoken former Soviet
colonel who won a free election in January 1997, as preferable to the violent
anarchy, fuelled in some cases by criminal groups or fundamentalist Islam, that
threatens to engulf Chechnya.
"We need stability and peace in Chechnya and the whole North Caucasus,"
Kiriyenko said in Nazran, just outside Chechnya's borders. "We need to settle
Chechnya's economic problems."
"There is a lawfully elected president and executive in Chechnya who have
the support of the people and we will give those authorities all the help we
can," he added.
Maskhadov, clearly eager to believe he was getting off on a new footing with
Moscow, made a point of stressing that the 36-year-old Kiriyenko, in office for
just four months, was of a new generation untainted by the war and the Kremlin
U.S. Treasury Secretary Robert Rubin last week called Kiriyenko's team "the
best government they (Russians) have had".
But time is short, at least as far as getting the budget in shape without
provoking either a crisis of confidence among investors or stoking social
Yeltsin, trying to defend his place in history with two years of his term to
run, flew back early from holiday last Wednesday saying he needed to prepare for
just such tensions.
On the Pacific island of Sakhalin, engineers at a major power station, which
has been sealed off for nearly two weeks by miners seeking months of back pay,
prepared on Sunday to shut off electricity to all but hospitals and water
In relatively well-off Moscow, consumers will feel the pinch after shops
jacked up prices on basic foodstuffs by 10 percent on Saturday as new sales tax
rules came into force.
In Chechnya, officials accused Russian troops of firing over the border,
while officials in a neighbouring region accused Chechens of opening fire at
night. There was also a report that an armed group broke into a Chechen police
post, freeing three suspected criminals and making off with dozens of weapons.
Violence was not confined to the Caucasus, however.
At Smolensk, in western Russia, the head of the country's biggest diamond
processing factory was gunned down in an apparent contract killing outside his
home on Sunday.
For Kiriyenko, marking his 100th day since being confirmed in office by
parliament, it was another reminder of the lawlessness still rife in an economy
from which he is striving to extract more taxes to fund the state while hoping
the impatience of millions of unpaid workers remains in check.
He hardly needed the IMF's Fischer to remind him: "There is still a lot of
work to be done...in the next weeks and months."