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Yeltsin Enlists Ousted Deputy to Help Bolster Economy

June 18, 1998|RICHARD C. PADDOCK | TIMES STAFF WRITER

MOSCOW — Heading into delicate negotiations for new Western aid, Russian President Boris N. Yeltsin once again turned to economic mastermind Anatoly B. Chubais on Wednesday, naming him a "special envoy" less than three months after firing him from the Cabinet.

Chubais, a champion of capitalism whose name has been associated with some of Russia's most painful economic changes, will return to Yeltsin's inner circle as "special envoy to international financial bodies"--a post equal in rank to the job of first deputy prime minister he held until March.

Reviled by the opposition but respected in the West, Chubais will play a major role in trying to bring Russia back from the brink of fiscal crisis and restoring the confidence of foreign investors.

Even before his appointment was announced, Chubais was on his way to Washington for meetings with the International Monetary Fund on the release of a $659-million loan installment and as much as $10 billion more in assistance.

"Chubais has one big talent," said economist Larisa I. Piyasheva. "He knows how to borrow money from the West. The big problem is it will not be Chubais who has to pay back these loans, it will be Russia. It will be us."

Yeltsin fired Chubais and the rest of his Cabinet in a March 23 sweep. While the president brought many ministers back, Chubais moved on to the lucrative job of chairman of United Energy Systems, the government-controlled electric monopoly that is one of Russia's largest companies.

But since then, Russia's economy has gone into a tailspin, with oil prices falling, stock prices plunging, foreign investors fleeing and the Central Bank spending billions of dollars buying up rubles to prevent a collapse of Russia's currency. Faced with mounting debts and low tax revenues, Russia has become increasingly dependent on international investment and has sought to restore investor confidence by seeking more foreign assistance, including loans from the IMF.

Last fall, Chubais was tainted by scandal when it was revealed that he had accepted a $90,000 payment for a book on privatization that had not been written. The money came from a company with ties to a major beneficiary of the privatization program. Yeltsin stood by Chubais at the time and refused to fire him.

In his new post, it appears that Chubais actually comes out ahead. While not officially a Cabinet member, he will have more power than any individual minister, the Kremlin said. He also gets to keep his outside job as chairman of the electricity company--a privilege not granted other Yeltsin appointees.

Chubais, who turned 43 on Tuesday, is widely detested in the Communist-dominated Duma, the lower house of parliament, for his role in the privatization program that created a handful of billionaires while leaving millions of people in poverty.

The Duma, however, will have no say over the appointment, because as Yeltsin's special envoy, Chubais does not need confirmation by lawmakers.

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