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Russian Prime Minister Says Free Market is Here to Stay

By Richard C. Paddock
Los Angeles Times

Acting Russian Prime Minister Viktor S. Chernomyrdin sought to assure his people and the West on Saturday that Russia will not revert to Soviet-style state control to rescue its beleaguered economy from its current crisis.

With a summit meeting between Presidents Clinton and Boris N. Yeltsin scheduled to begin here Tuesday, Chernomyrdin said that Russia's main goal continues to be the establishment of a market economy and a democratic society.

"We have already entered the world economy, and there will be no return to the past," he said in a statement broadcast on nationwide television.

Chernomyrdin's remarks were an attempt to restore calm after a tumultuous week in which the Cabinet was fired, the value of the currency plummeted, and Yeltsin was compelled to go on television to deny that he was about to resign.

Dealing simultaneously with a political and a fiscal crisis, Chernomyrdin, parliamentary leaders and representatives of the Kremlin met for much of Saturday to hammer out a pact for reconstituting the government and reviving the economy.

The members of the negotiating group said they were close to agreement, but the real test will come when the president - a tenacious fighter who has long clung to power - is asked as early as Sunday to sign a document that will force him to give up some of his authority.

According to the constitution, the Communist-dominated Duma, the lower house of parliament, must vote on whether to confirm the prime minister.

Now, Duma leaders want the power to confirm or reject all Cabinet ministers before they will agree to Yeltsin's choice of Chernomyrdin. They also want Yeltsin's guarantee that Chernomyrdin will have a free hand in selecting his Cabinet and that the president will not dismiss the government for at least a year.

The Communists' goal is to obtain seats in the Cabinet for at least a handful of their members and win a greater say in government policies.

Negotiations over the power-sharing pact touched off a firestorm of controversy earlier in the week when the Communists disclosed that the Kremlin was seeking a clause granting the president immunity from prosecution and financial security for his family if he was to resign.

After Yeltsin told the nation Friday night that he will not quit and that it would be "impossible" to remove him from office before his term ends in the year 2000, the Kremlin said its representatives no longer would seek the immunity and security provisions.

In Moscow, the arrival of the weekend seemed to take some of the edge off the crisis mood. Angry bank customers no longer crowded sidewalks outside banks trying to withdraw their savings.

Russians who earlier had hoarded dollars out of fear that their currency, the ruble, would keep dropping, began buying rubles again. Some small currency exchange booths even ran out of rubles, and the currency's value rose somewhat. In some places, it was trading as high as nine to the dollar, compared to 12 to the dollar at some locations Friday.

But prices remained high, especially for imported goods, as some shoppers stocked up on food that can be stored easily - just in case the crisis worsens.

In his televised remarks, Chernomyrdin attempted to reassure bank depositors that they will not lose their savings, despite the seizure of one major bank and a drop of at least 40 percent last week in the value of the ruble.

"The main thing is to make sure people don't suffer," Chernomyrdin said.

"For this, we should use our power, and we will use it as much as necessary. You can be calm. You will get your savings."

Trying to ease tensions before the presidential summit, the acting prime minister acknowledged that "exotic formulas" offered by Communists to end the crisis were "scaring a lot of businessmen and politicians in the West." But he said Western countries need not fear a Communist takeover.

To emphasize the point, he named three liberal officials who served in the old Cabinet - including acting Deputy Prime Minister Boris Fedorov - to form a team responsible for continuing Western-style market policies in the new government.

"We have a democratic country," he told the weekly German magazine Welt am Sonntag. "The Communists represent the interests of a considerable part of the population, and, representing their interests, they should influence the government. Naturally, by democratic methods."