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Russia: Yeltsin Faces New Doubts

Moscow, 9 July 1998 (RFE/RL) -- Russian President Boris Yeltsin has the reputation of thriving on crisis and holding a tight grip on power. But both Western investors and Russian media are wondering how Yeltsin will deal with a financial crisis many fear could soon get out of control.

Yeltsin today vowed to protect the ruble from a devaluation, saying that Russia has "the ability, resources and a plan of action." But many observers in Moscow are skeptical that the conflicting factions in Yeltsin's inner-circle will be able to defuse the complicated situation. Loyalty of close Kremlin aides also is a matter of concern.

A deputy head of Yeltsin's administration, Igor Shabdurasulov hinted in an interview with the daily "Russky Telegraf" today that Yeltsin should not run in the next presidential election. He said Yeltsin should plan instead for a "stable and legitimate change of the guard."

Shabdurasulov said Yeltsin's physical condition is far from ideal. He said the best way to transfer power would be a "troika" with former Prime Minister Viktor Chernomyrdin as president, Moscow Mayor Yuri Luzhkov as prime minister and Communist Party leader Gennady Zyuganov as opposition leader.

Until the March government reshuffle, Shabdurasulov was Chernomyrdin's spokesman. He reportedly is still close to his former boss. Yeltsin's press service immediately dismissed Shabdurasulov's claim that his views also reflect the opinion of presidential administration chief Valentin Yumashev.

Yeltsin's spokesman Sergei Yastrzhembskii said Shabdurasulov's comments represent only his personal opinion and not the mood of administration officials.

Shabdurasulov's remarks imply that Yeltsin is being offered a compromise solution. But some analysts say that Yeltsin's past performance indicates he may not be inclined to compromise. The director of the Moscow Institute for political research, Sergei Markov, told RFE/RL that Shabdurasulov could lose his job because of the interview.

Markov said Yeltsin is likely to reassert his power by establishing a standard of conduct for the government and taking measures against the oligarchs trying to influence his moves.

Deputy Prime Minister Boris Nemtsov today criticized Russian business leaders who said last month they want to cooperate with the government. Nemtsov told RFE/RL that those business leaders "have shown, with their reaction to the recent showdown with Gazprom over the payment of taxes, that they have only personal interests and lack patriotic feelings."

In addition to the opposition of oligarchs, Yeltsin and his government are under pressure on other fronts. Labor protests are gaining momentum in the quest of unpaid back wages. But the magnitude of the strikes are being amplified by Russian media that are controlled by business interests opposed to Moscow's efforts to increase tax collection.

Some 1,500 defense industry workers took their protest to the center of Moscow yesterday, as others staged rallies in the Far East and coal miners protesting across Siberia halted traffic on the Trans-Siberian railway for the sixth straight day. Their demands, which are being emphasized by Russian media, also include the immediate resignation of Yeltsin and his government.

Kemerovo Oblast Governor Aman Tuleev has urged Yeltsin to take action as an arbiter between the government and protesters. But the Chairman of Russia's trade-union federation, Mikhail Shmakov, has instead called for early parliamentary and presidential elections. He says fresh elections could be "cheaper for society."

Some analysts, noting past demonstrations, argue that the effect of protests alone is unlikely to destabilize the situation. But they caution that a combination of social unrest and a financial meltdown would worsen the situation tenfold.

Nikolai Korgonyuk, of the Indem think tank, told the English language newspaper "Moscow Times" today that it will take either a "mass uprising in Moscow" or the devaluation of the ruble to bring an end to Yeltsin's reign of power.

Financial analysts say Russia may not be able to hold out much longer. Eric Kraus, chief strategist at Regent European Securities, told RFE/RL that the financial markets are deteriorating and Central Bank reserves are eroding rapidly. He said a dwindling gold and hard currency reserves could reach a dangerously low level within the next few weeks.

Kraus said Russia will either get a bailout package from the International Monetary Fund or Russia's financial markets will disappear.

Markov has written that popular anger and criticism by the media of Yeltsin will reach a peak by mid-October. He told RFE/RL that "a rapid deterioration of the situation may prompt Yeltsin to take drastic moves much sooner than that."

Questions also remain about the possible behavior of the Russian military. Retired General Aleksandr Lebed, who was recently elected governor of the Siberian Krasnoyarsk region, said yesterday that Yeltsin has mishandled the crisis so far by failing to get all political forces to rally behind the government.

Lebed told the daily "Kommersant" that "if it is a question of systemic crisis, and everyone recognizes that it is, then it is a question of consolidation of the nation." He said "the father of the nation --the president-- should start the consolidation."