08/23/1998 20:33:21 Kiriyenko a failed experiment for Yeltsin
By Oleg Shchedrov
MOSCOW, Aug 23 (Reuters) - Sergei Kiriyenko, sacked as
Russia's prime minister on Sunday after just four months in
office, is likely to go down as a short-lived, failed experiment
by President Boris Yeltsin.
The neat, scholarly-looking 36-year-old former banker
oversaw Russia's plunge into a deep financial crisis which went
all the way to a de facto devaluation of the rouble and what
amounted to a debt default.
Parliament blamed him and Yeltsin for the crisis on Friday.
But Kiriyenko portrayed himself as a victim of years of
failed economic policy by his predecessors, global economic
problems and parliament's refusal to pass all his proposed
"It is not disputes over resignations that are important now
but getting down to work on ending the crisis," he said.
When Yeltsin unexpectedly sacked veteran prime minister
Viktor Chernomyrdin on March 23 and plucked Kiriyenko from
relative obscurity, editors had to struggle to find anything in
their files about the former energy minister.
Kiriyenko, who had been in government for less than a year
after a career as a banker and oil company manager in the Volga
city of Nizhny Novgorod, said his appointment was a complete
surprise for him. He was told to accelerate reforms.
His appointment also shocked the public, but was typical of
Yeltsin who wants to nurture a new generation of politicians.
Before Kiriyenko, Yeltsin promoted Nizhny Novgorod governor
Boris Nemtsov, now 38, to be a first deputy prime minister. By
the time Kiriyenko was appointed a year later, Nemtsov seemed to
have lost much of his power and much of his credit with Yeltsin.
It took Yeltsin a whole month and a threat to dissolve
parliament to get the Communist-led State Duma (lower house) to
approve Kiriyenko. Deputies said he was inexperienced and too
young for the job.
In contrast to the down-to-earth Chernomyrdin, Kiriyenko did
not flirt with the Duma. He bluntly warned deputies that the
Russian economy was in an alarming state and said tough measures
were needed to improve matters.
But it soon became clear the lightweight Kiriyenko needed
more support to keep things running. He has no political party
behind him and no backing beyond Yeltsin's.
Yeltsin brought back Anatoly Chubais, a former finance
minister and first deputy premier, to negotiate with
international financial institutions.
Yeltsin also named his old ally Boris Fyodorov as head of
the tax service to try to make Russians pay their taxes.
Chubais arranged a $22 billion credit from the International
Monetary Fund and tax collection showed signs of improving.
But shares plummeted, banks ran into severe problems and
unpaid miners blocked railways. The country slid deep into
The Duma rejected much of Kiriyenko's anti-crisis programme,
prompting the government to take tough and unpopular steps, but
failed to restore investors' confidence.
The government effectively devalued the rouble on August 17
and in effect defaulted on debt payments, sparking more panic on
the markets and rocketing dollar rates.
"The biggest problem was that we failed to win confidence,"
Chubais said, explaining the move.
Kiriyenko and central bank chairman Sergei Dubinin were
reported by Russian news agencies to have offered their
resignations but Yeltsin has kept them on.
Kiriyenko's sacking appears to have been no less a surprise
to him than his appointment. His press office said on Sunday
that he had been holding meetings all weekend to prepare urgent
measures to tackle the effects of crisis.
"He is not responsible for what is actually happening,
because he hasn't had time to do anything real," Yeltsin's
liberal opponent Grigory Yavlinsky said last week. "But he is
responsible for assuming a job he did not measure up to."