On March 23, 1998, Russian President Boris Yeltsin sacked his
entire government. Yeltsin appointed a political rookie,
35-year-old Minister of Energy Sergei Kirienko, as Acting Prime
Minister, replacing five-year veteran Viktor Chernomyrdin, aged 59.
First Deputy Prime Minister Anatoly Chubais, a leading economic
reformer, was fired by special presidential decree and will not
return to the new cabinet. Yeltsin apparently decided to keep
others, including Minister of Foreign Affairs Yevgenii Primakov and
Minister of Defense Marshal Igor Sergeev.
Kirienko must be confirmed by the State Duma (the lower house of
Russia's parliament), a process that could take weeks. The ouster
of Chernomyrdin, a known and predictable player, has heightened
political instability and uncertainty. This is the last thing
Russians wanted or needed. They now must wait to see whether
Kirienko, a reformer, will be confirmed and what kinds of policies
he will implement. The change at the top does not mean that
differences between the United States and Russia over foreign
policy will be resolved any time soon, however. President Yeltsin
still remains firmly in charge of defense and security issues.
Why? And Why Now?
A number of reasons have been advanced to explain Yeltsin's
surprise move. The most important explanation for the firings is
psychological: Yeltsin thrives on crises, but does not excel at
routine tasks of running the government. The crisis generated
political uncertainty and returned Yeltsin to the limelight.
Another important dimension is political: Frequently ill and away
from government for long periods, Yeltsin increasingly looked like
a lame duck. Chernomyrdin was busy positioning himself as heir
apparent, garnering media and big money support. Yeltsin's key
supporters were fighting: Chubais against Minister of the Interior
Anatoly Kulikov; tycoon Boris Berezovsky against Chubais. Yeltsin
cut the Gordian knot and emerged calling the shots.
Presidential politics also played a role in Yeltsin's decision.
According to persistent media reports, and despite his public
denials, Yeltsin is seriously considering running in 2000 for a
third term. If the Constitutional Court-and his health-do not
permit this, Yeltsin must consider possible successors. He is not
ready to anoint one yet, however. Chernomyrdin officially announced
on March 28 that he intends to run for the presidency in 2000. With
only about 6 percent of popular support according to recent polls,
however, Chernomyrdin remains a distant sixth in the field of
contenders. Communist leader Gennady Zyuganov leads the pack,
followed by First Deputy Prime Minister Boris Nemtsov, Moscow Mayor
Yurii Luzhkov, retired general Aleksandr Lebed, and Yabloko party
leader Grigory Yavlinsky.
There is also the "Yeltsin legacy" explanation for the shakeup.
Yeltsin was not happy with the pace and performance of economic
reform. Both the Land Code and Tax Code are stalled in the
legislative pipeline. Salaries have not been paid on time. Yeltsin
wants to leave Russia more prosperous and stable than it was when
he received it from the bankrupt communist rule in 1992. He may
feel that he needs a new team of competent technocrats to do the
A final explanation for the shakeup involves the billionaire
Berezovsky, who has emerged as an important mover and shaker in the
Yeltsin Administration. Last summer, Berezovsky lost a bid to
acquire 25 percent of the privatized shares of Sviazinvest, the
Russian telephone carrier, which was awarded instead to Vladimir
Potanin, director of the Onexim bank and an ally of Chubais. In
May, the government will privatize another gem: 75 percent of the
Rosneft oil company, valued at $2.1 billion. Chernomyrdin and
Chubais reportedly resisted a lower valuation of the stock, which
would have allowed Berezovsky to acquire it. Moscow media
speculate that the tycoon called in his chits with Yeltsin and had
The First Businessman at Russia's Helm
Kirienko, a former business executive with a background in oil
and banking, was brought to Moscow from Nizhnyi Novgorod by
Nemtsov, a key reformer, less than a year ago. He was educated as a
shipbuilding engineer and later received a graduate degree in
finance and management. Kirienko began his career in the Young
Communist League (Komsomol) and was a member of the Communist Party
during the end of the Soviet period. Unlike Yeltsin, he never
officially left the party. He is well-educated and pragmatic.
Well-liked by his colleagues in the government as well as by
foreigners, Kirienko's apparent lack of experience may raise
serious opposition to his confirmation in the State Duma.
According to Russia's constitution, the State Duma can vote
three times on a candidate for Prime Minister. If it rejects the
candidate, the President is entitled to disband the State Duma and
call for new elections. The deputies of the State Duma, who do not
relish the prospect of being removed from office, eventually may
confirm Yeltsin's choice.
Kirienko will need a lot of luck and hard work to improve
Russia's economic performance and make democracy and the
free-market economy more secure. One of his key challenges will be
achieving transparency in economic decision making, both in the
government and in corporate boardrooms-especially important in view
of the lessons drawn from the economic crisis in Asia. It is
imperative to achieve the rule of law to boost the confidence of
Russians in the workings of free markets and to attract a steady
flow of foreign investment. The United States should wish Kirienko
well and look for ways to assist him as he formulates his agenda.
He may be a moderating influence in the Washington_Moscow nexus. As
Kirienko manages the economic dimension of ties between the United
States and Russia, he is likely to continue the policies of his
Despite the dramatic changes in Russia's political field, some
important aspects remain the same. Most conflicts between the
United States and Russia lie in the realm of foreign policy and
security: the supply of missile technology and nuclear reactors to
Iran, support of Iraq, close cooperation with China, and the
failure of the communist-dominated State Duma to ratify the START
II arms control agreement. All of these policies are sanctioned by
Boris Yeltsin and need to be taken up with him. Even in his
frailty, Boris Yeltsin remains the true boss of Russia.
Cohen , is a Senior Policy Analyst
at The Heritage Foundation.
Ph.D., is Moscow Office Coordinator of The Heritage Foundation.