March 7, 1997
Yeltsin Pledges Housecleaning and Reform
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By ALESSANDRA STANLEY
OSCOW -- After months of illness and seclusion, a visibly reinvigorated President Boris Yeltsin, 66, promised Thursday to clean house in his administration and speed up free-market reform.
The cornerstone, he said, would be new people in power.
"The executive branch has turned out to be incapable of working without the president shouting at it," Yeltsin said in a state of the nation address. "The structure and composition of the government will be changed. Competent, vigorous people will join it."
He did not name names, but at least among reformers inside the government and out, his words were interpreted as a signal that the Kremlin chief of staff, Anatoly Chubais, would soon rejoin the Cabinet of Prime Minister Viktor Chernomyrdin with a mandate to improve management of Russia's imperiled economy.
The 25-minute speech delivered to both houses of Parliament and broadcast live on television, helped reassure viewers that the Russian president was well on the way to recovery.
But faced with a bleak social and economic landscape, where millions of workers are unpaid, bureaucrats and prosecutors take huge bribes, factories lie fallow, criminals are set free and soldiers go hungry, Yeltsin did not try to persuade his audience that the country was healthy.
In a shocking illustration of many Russians' misery and despair, a 60-year-old man set himself on fire in Red Square moments after Yeltsin finished his speech. The police said the man was hospitalized with severe burns to his hands and face.
Yeltsin, who was out of commission for months recovering from heart surgery and pneumonia, insisted Thursday that he was back at the helm. He fiercely castigated his administration and Parliament for inaction and ineptitude in his absence and promised to take bold steps, including changes in his Cabinet, to reform the system and redress the country's most gnawing problems.
In tone and in substance, his annual address to both houses of Parliament was in many ways the inaugural address Yeltsin was too ill to deliver after his re-election last summer. On Thursday, seven months into his second term, Yeltsin finally set out his vision for the last years of his presidency.
"The government is growing fat," he said, complaining of corruption in high places. "It is necessary to abolish individual privileges, the confused approvals procedure, preferential treatment, without competition, of government orders."
For days, newspapers have been predicting that Yeltsin would transfer Chubais back to the Cabinet as first -- and only -- deputy prime minister. Privately some government officials say they are certain Chubais' move is imminent, and that he will take over the daily responsibility of running the economy and streamlining the bloated Russian bureaucracy.
Chubais, who was the architect of Yeltsin's first, ambitious privatization program and ran his re-election campaign, is a bete noire of Yeltsin's Communist-nationalist opposition. But he is valued in the West and by Russian reformers as a highly competent administrator with a strong commitment to securing Russia's transition to a market economy.
The Kremlin did not confirm his appointment, and predictions of Cabinet shuffles have been proved wrong in the past. But few in high office were prepared to dismiss the notion. In a news conference Thursday, Chernomyrdin said that he would shuffle the government in the next few days and added that if Chubais joined his Cabinet, "the government will only stand to gain -- of that I am sure."
Grigory Yavlinsky, a radical reformer who leads the Yabloko Party in Parliament, told reporters that he met with Chubais Thursday and was told that five members of his party would be offered posts in a new Cabinet. "As far as I understand," Yavlinsky said, "Viktor Chernomyrdin will be prime minister and Chubais will be his first deputy."
There were also rumors that Yegor Gaidar, the radical reformer who pushed through Yeltsin's first free-market reforms in 1991 and then was dismissed when those reforms proved politically unpopular, could return to the government.
Few political analysts believe that Gaidar, who is even more hated by the Communist-nationalist opposition than Chubais, will be given a Cabinet position, but the very fact that he has suddenly reappeared on state-controlled television in the last week, makes some observers confident that he may again hold sway as an adviser -- at least with Chubais.
Yeltsin made perfunctory remarks about foreign affairs, restating his opposition to NATO expansion and reiterating the need to restore peace in Chechnya. The economy was his main preoccupation.
Little of what Yeltsin ticked off on his to-do list was new: He has vowed to reform Russia's devastated military and create a volunteer army before. He has bemoaned crime and corruption, tax inequities, government inefficiency, the drop in production and the government's repeated inability over the years to pay pensions and wages on time.
But he couched Thursday's promises in terms very likely to reassure reformers and the International Monetary Fund, which recently delayed the latest installment of an $11 billion loan in alarm over Russia's budget woes.
"I feel ashamed that millions of senior citizens are not getting their pensions on time," Yeltsin said. He promised to pay back pensions by June 30, and then added that he would also reform the pension system.
"If we leave it unchanged, it will nose-dive once again at some point in the future." Yeltsin, who has never immersed himself in the minutiae of economic policy, briefly alluded to the creation of individual savings accounts as a way to bolster the state pension fund -- an idea more popular with the IMF and economic reformers than with ordinary voters.
Yeltsin promised to submit a new and fairer tax code to the lower house of Parliament in the next few weeks. He also said the state would improve management and pricing of natural monopolies like utilities and gas and reorganize government spending. "What we have is this," Yeltsin said briskly. "The state interferes in the economy where it shouldn't, while where it should it does nothing."
Copyright 1997 The New York Times Company
