The murder of Ivan Kivelidi is a disturbing omen amidst Russia's much-heralded "stabilization."


Although Kivelidi rose to prominence as a businessman he will be remembered as a political figure. He was a man with the best connections among Moscow's new political elite and the spokesman for business in the corridors of power.


Kivelidi's Round Table of Russian Business, which lobbied on behalf of some 300 leading Russian businesses, and his VIP Club, where politicians and businessmen met informally, were organizations committed to civilized dialogue, not confrontation. The tributes to his honesty and vision at his funeral sounded, for once, genuine.


This suggests Kivelidi's murder probably had a political subtext. Surely no one can say any more that organized crime in Russia is a mere settling of scores between members of a shadowy underworld, it is involving more and more of the very top people in the country.


One of the paradoxes is that, even as the economic situation is getting better, the crime situation is getting worse. The two may even be linked.


As priests sang the Orthodox funeral service over Kivelidi's body in the hall of the Mayor's office last Tuesday, Igor Khazanov, public relations director of the Round Table of Russian Business, stood at the back and outlined one theory as to why the situation is getting worse.


"Open warfare is going on between the state's capital and private capital, and economically private capital is winning," he said.


Khazanov said that "forces in the state apparatus, who are trying to stop the process of reforms developing in a natural way" are fighting a war through fair means or foul to defend their economic privileges.


Some figures given by distinguished Kremlinologist Dimitri Simes at The Washington Post put flesh on this. Simes quotes statistics that more than 60 percent of the economy is at least nominally in private hands, but the government controls more than 80 percent of all bank deposits. In other words the bankers are getting more economically powerful, but they have to contend with the interests of the bureaucrats.


This is very murky territory but Khazanov and Simes are describing the same phenomenon, the collision of the two tectonic plates of the emerging private sector and the state apparatus.


The stakes being played for can be enormous. In some cases they involve control of Russia's mineral assets. According to this week's issue of Ogonyok, at least 13 people have been murdered in the Krasnoyarsk region recently over the selling-off of aluminum.This is all fed by the legal chaos in the country, where business deals are not properly protected by law and law enforcement bodies are weak and corrupt. In Moscow investigators not yet out of law college are being asked to sort out multiple murder cases on virtually non-existent salaries.


The government faces a choice. Either it starts to act to fill in the legal vacuum. That means a thorough purge of the prosecutor's office, the police and the intelligence services for corruption, as well as a new legislative program to give business practice a proper legal underpinning. Or it rubs along with those bureaucrats and crooked local leaders, who are happy to use the current transitional situation to get rich.


Kivelidi's murder is not only proof that the criminal elements are winning, it removes one of the leading proponents of the opposite tack. A leading Moscow political commentator, a member or the VIP Club, said he believed Kivelidi had been trying to change the "rules of the game" and had been removed for doing so.


Viktor Chernomyrdin and Yury Luzhkov made the right gestures at least by turning up to Kivelidi's funeral. And Chernomyrdin promised -- again -- to take "extraordinary measures" against crime. But we all remember Yeltsin's much feted crime decree last year and how much difference that made.


The critical choice that the government has to make is whether or not to bite the bullet and fight crime, Russia's biggest social and economic problem, even if that means stirring up a hornet's nest of vested interests.


Khazanov was not hopeful about the future. He predicted a "harvest of corpses" in the fall, when cash privatization takes place and enormous amounts of money change hands.


A Yeltsin adviser at the funeral was equally cynical. He predicted "a lot more words and no action."