Sign in Subscribe
Prime ministers

Russian Government Leadership Crisis Deepens

Strategic Insights

— 1 min read

President Yeltsin has been struggling to name a Cabinet since the shock resignation of economic reformer Mr. Yegor Gaidar, with another prominent reformer, Mr. Boris Fyodorov, also refusing the economics job. The crisis talks between Yeltsin and Prime Minister Viktor Chernomyrdin have continued for six-and-a-half hours, with no resolution in sight. The prolonged crisis has led to a sharp decline in the rouble's value, with the exchange rate falling from Monday's record low of 1402 to 1607 roubles to the US dollar today.

Key Takeaways:

  • The Russian Government's leadership crisis has worsened with President Yeltsin struggling to name a Cabinet after the resignation of economic reformers Yegor Gaidar and Boris Fyodorov.
  • The prolonged crisis has led to a sharp decline in the rouble's value, with the exchange rate falling from Monday's record low of 1402 to 1607 roubles to the US dollar today.
  • The economics job has been offered to Deputy Prime Minister Alexander Shokhin, who is part of the Gaidar team but seen as more likely to take a more conservative approach to the economy.
  • Gaidar and Fyodorov have stated publicly that they could not control the economics decisions of the Government, leading to predictions of a return to hyperinflation and chaos in Russia.
  • Foreign Minister Andrei Kozyrev has contradicted Russia's commitment to withdraw troops from the Baltic states by August this year, stating that Russia should maintain troops to prevent a security vacuum.
  • The prime ministers of the Baltic states are meeting today to discuss Kozyrev's comments.
  • The crisis has opened a split in the Russian Government, with Chernomyrdin emerging as the winner in the struggle over economic policy, and leading figures of the reformist Russia's Choice party effectively going into opposition.

Statistics:

  • The rouble's value has fallen from Monday's record low of 1402 to 1607 roubles to the US dollar today.
  • The economy job has been offered to Deputy Prime Minister Alexander Shokhin.
  • 500 million: the cost of a new Parliament House that was taken behind Gaidar's back.
  • 1402: Monday's record low of the rouble to the US dollar.
  • 1607: the current rate of the rouble to the US dollar.

Sources:

  • Interfax news agency
  • Russian Government sources (cited in the article)
  • State Duma, Democratic Russia party
  • Russia's Choice party
  • Soviet-era industrial and power complexes (referenced as opposing the Gaidar team's economic policies)

Read more