Chernomyrdin Faces the Test Of Red Pressure

The majority of commentators analyzing Prime Minister Viktor Chernomyrdin's address to an expanded session of the government last Friday are saying that he painted an optimistic, even rosy picture. The massive attack on the government and on Chernomyrdin himself that had been expected at the session never materialized. The government's opponents were unable to turn the session into a condemnation of the current economic policy.


In part, this was simply because of the government's control over who addressed the session. But it was also extremely important that Chernomyrdin, in his own speech, did not show the slightest willingness to reconsider the current policy.


In speaking of the reasons behind the obvious transformation of Chernomyrdin's views, it must be remembered that he is the object of constant internal struggles between figures in his own circle. It would appear that the relatively small liberal wing surrounding Chernomyrdin are currently holding the high ground over the industrial lobbyists.


Be that as it may, the struggle to influence Chernomyrdin continues. Most recently, the text of the prime minister's address to the expanded session of government was the battlefield for this struggle. Since President Yeltsin was supposed to deliver an address Friday, his administration prepared a report for him. Shortly before the session, the administration and the government apparatus exchanged the texts of the president's and the prime minister's reports. As soon as Chernomyrdin's text found its way into the presidential administration, its contents became known to a number of interested agencies.


At that point, a process of pressuring the speechwriters began in order to convince them to strike a number of the report's most inconvenient theses. The State Committee for the Defense Industry, for instance, exerted massive pressure in order to avoid appearing in the prime minister's report as an example of an ill-considered and immoderate budget request. Nonetheless, this awkward part of the text was not removed.


A number of highly placed figures even tried to alter the general direction of Chernomyrdin's address, taking their cases directly to the prime minister. No one was able to introduce any basic changes to the report.


The liberalization of Chernomyrdin's views, however, is still not enough to ensure the success of the current liberal economic reforms. True, he did speak about such extremely difficult problems as the crisis of non-payments and the collapse of production: However, a number of problems, any one of which could destroy the current situation, went unmentioned.


The government's main achievement, relatively low inflation, has placed the budget in a difficult position, since the amount of tax revenues has fallen sharply. The budget so far has only been 74 percent fulfilled. Parliament's recent decision to raise pensions will demand nearly 1 trillion rubles per month -- money that just was not included in the budget.


The Agrarians have again been demanding money -- 5 trillion rubles worth of favorable credits to collect the harvest. It would seem that this is why the finance minister warned of a possible increase in inflation in the near future.


But now the main question: If the general economic situation begins to deteriorate out of control, will Chernomyrdin repeat the fate of Gaidar, or will he return to the camp of the "red directors?"