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Russia: Candidates Look Ahead To Presidential Election In 2000

Moscow, 30 January 1998 (RFE/RL) -- Russia's Central Electoral Commission this week set July 9, 2000, as the date for the next presidential election. More then two years ahead of that date, the struggle to succeed Boris Yeltsin is already underway.

The names of likely candidates have been known since last year, and include Communist Party leader Gennady Zyuganov, retired General Aleksandr Lebed and pro-reform economist Grigory Yavlinsky. They all ran unsuccessfully against Yeltsin in 1996, and their participation in the next presidential race is considered certain.

The real fight is to establish who could be the candidate for the so-called "party of power," and the fiercest battle at the moment involves Prime Minister Viktor Chernomyrdin and one of his first deputies, Boris Nemtsov.

Influential business leaders, intent on picking the candidate, who will guarantee them continued economic and political influence, are involved in the struggle, and, for the time being, Nemtsov seems to be losing out.

Chernomyrdin, at the moment, relies on the support of energy-related industry, and on part of the financial-and-media elite. They helped him strengthen his position among members of Yeltsin's administration, which led to Yeltsin's approval of a major redistribution of cabinet portfolios this month. Chernomyrdin now directly controls the financial, energy, security and defense sectors - and, has also said he will closely oversee the media.

President Yeltsin announced this week that he had signed a list of 12 main tasks for the government this year. The names of several cabinet members and officials from the presidential administration are listed after each of the tasks. Chernomyrdin's name is not listed after any specific task. Nemtsov said that Chernomyrdin "answers for everything" in the program, but some observers said the Prime Minister had been given the "right not to be responsible" over eventual government failures.

Since the Summer of 1997, Russian politics has been dominated by the feud among some of the business tycoons, who, in 1996, had bankrolled Yeltsin's successful re-election. They are Boris Berezovsky and Vladimir Gusinsky, on the one side, and Vladimir Potanin, on the other.

The 'war' was fought at first through the electronic and media outlets controlled by the three businessmen, who had clashed over the sale of stakes of Russia's telecommunications giant Svyazinvest in July. Potanin's Uneximbank led an investment group, which included foreign investors, which won the bid. It was assessed by financial analysts as the "fairest" in the history of Russia's privatization of state assets, so far. The Svyazinvest tender angered Gusinsky and Berezovsky, who were behind the losing bid. During the ensuing battle, Berezovsky lost his job as deputy secretary of the Security Council, First Deputy Prime Minister Anatoly Chubais and four government associates were shown to have accepted a 450,000 dollar advance for a yet-to-be-published book from a company linked to Uneximbank, the Svyazinvest winner, and, Nemtsov faced allegations of corruption.

In the most recent case, Nemtsov ally Boris Brevnov, the young executive appointed to head the state-controlled electricity giant Unified Energy Systems nearly lost his job this week, in an abortive attempt to oust him, led by the former Soviet-era director of UES.

Observers say that the battle to control UES is an attempt further to discredit Nemtsov.

The media war that started in the Summer continues as a less-open rivalry for political and economic power. Berezovsky seems inclined, at the moment, to throw his influence behind Chernomyrdin.

Constant, favorable television coverage on Gusinsky-controlled NTV and on Russia's Public television (ORT) seems to be aimed at improving the image of Chernomyrdin, who is not know for high ratings in public opinion polls.

Nemtsov said this week that Chernomyrdin should soon select one of three possible privatization plans for Rosneft, the last major, fully state-owned Russian oil company. Nemtsov said the government might sell a 75 percent-plus-one share of Rosneft, or, a 50 percent-plus-one share, and may retain a "golden share" that would allow it to veto certain decisions of the new owners. Potential bidders for Rosneft recently criticized proposals to sell off less than 75 percent of the company, saying such a decision would make the investment less attractive.

Russian observers say the Rosneft tender will have important implications for the next presidential campaign.

For the moment, three groups have been formed to take part in the bid. Once again, Potanin and Berezovsky are facing each other in a privatization bid. Sidanko, a company controlled by Potanin's Uneximbank, allied for the competition with British Petroleum. Another group unites Russia's gas monopoly "Gazprom," LUKoil - until recently - Russia's biggest oil company, and international oil giant Royal Dutch Shell.

In preparation for the bid, two major Russian oil companies announced plans to merge to create the country's biggest oil company, Yuksi. It unites Yukos, controlled by Menatep bank, and Sibneft, a company in which Berezovsky owns substantial stakes.

Chernomyrdin had words of high praise for Yuksi at the merger-signing ceremony. The creation of Yuksi was immediately followed by rumors that LUKoil could leave the group with Gazprom and Royal Dutch Shell to join the Sidanko-British Petroleum group. This account proved to be only a rumor. However, "Nezavisimaya Gazeta," a daily controlled by Berezovsky, said in a front-page article that Russia's new president "will be chosen at the Rosneft sale." The tone of the article seemed to warn Chernomyrdin, who has strong ties with both Gazprom and LUKoil, to take a clear position on which of the three competing groups he would support.

It is still unclear whether foreign investors will be allowed to bid for Rosneft. Gazprom head Rem Vyakhirev, traditionally a Chernomyrdin ally, recently predicted foreign investors will be barred from the auction. But government officials, including Nemtsov, have said the government's main goal in privatizing Rosneft is to receive the maximum possible revenues for the budget. Nemtsov also said the government would be disappointed, if major companies that have expressed the intention to bid for Rosneft, withdrew from the auction.

Russian observers say that an excellent opportunity to discuss strategic ventures, and to forge strategic alliances coincide this week, on the fringes of the World Economic Forum at Davos, Switzerland. An impressive Russian delegation, led by Chernomyrdin, is attending the Forum. Chubais and all the major Russian industrial-and-financial magnates are also in Davos.

Some commentators speculate that the magnates, who in a previous Davos session agreed to support Yeltsin's re-election, may decide at the same venue whom to back in 2000. Other observers argue that a decision will probably come later, and that the magnates may have several candidates in mind. Beside Chernomyrdin, another possible candidate could be the populist Moscow Mayor, Yuri Luzhkov.

So far, Chernomyrdin, Nemtsov and Luzhkov have denied presidential ambitions, since it is still unclear what Yeltsin will decide to do. Yeltsin, who certainly would not like to be seen as a lame-duck more than two years ahead of the end of his current term, has suggested he might yet compete, using some legal loopholes to bypass the law limiting his period in office to two terms.

Nemtsov said last week that a third presidential bid by Yeltsin could be a "stabilizing" factor in Russian politics. Nemtsov added that Yeltsin's candidacy would "not be the worst variant," provided the Constitutional Court rules that Yeltsin is legally entitled to seek a third term. According to Nemtsov, Chernomyrdin and Luzhkov, would not challenge Yeltsin. Nemtsov also said starting the campaign too early "would undermine hopes for economic stabilization."

Meanwhile, Berezovsky's "Nezavisimaya Gazeta" argued in an article this week that the presidential 2000 election "will not be - and cannot be - democratic," since Russia lacks a large middle class.

Yeltsin and others - with power and money - clearly want to influence the choice of the 2000 candidate.