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Russia: Chernomyrdin Warns Of Losses If Budget Not Approved

Moscow, 21 November 1997 (RFE/RL) - Russian Prime Minister Viktor Chernomyrdin warned today that the country's economy might suffer losses of up to 50 trillion rubles ($8.4 billion) in the first months of next year if the 1998 budget is not approved in time. Also today, First Deputy Prime Minister Boris Nemtsov said a recent government shake-up was part of a battle between powerbrokers over the path of economic reforms.

Chernomyrdin, presenting new Finance Minister Mikhail Zadornov to his staff, said the government will do everything to prevent losses incurred because of a delay of the budget discussion. He did not elaborate. Interfax however reported today that Chernomyrdin ordered his government to draft a stop-gap plan for January based roughly on 1997 spending patterns.

The draft budget was to have come up for debate today but the Duma put off discussion until early December in order to have more time to revise it.

Chernomyrdin again raised the issue of Russia's poor tax collection, saying that the government might collect 100 trillion rubles (some $16.8 billion) less than planned. Chernomyrdin said improving tax collection was the main task of the Finance Ministry.

Meanwhile, Nemtsov, who yesterday lost his post as Energy Minister, said the crisis is about a choice of ways between free privatization, benefitting a narrow circle of people, or lucrative state property auctions, benefitting the whole nation.

Nemtsov also accused the management of the oil company Rosneft of delaying the sell-off of the company by opposing government plans. Rosneft, the next piece of state property to be privatized, was due to be sold early next year.

Sales of state property have sparked a bitter controversy in Russia with critics accusing government officials of favouritism and graft. Anatoly Chubais, Russia's other First Deputy Prime Minister, lost his job as Finance Minister yesterday over graft allegations. Nemtsov today however welcomed Chubais' replacement, Mikhail Zadornov, saying Zadornov will be an asset to the government.