Russian Premier Set to Keep Key Reformers

AFTER days of negotiations, newly installed Russian Prime Minister Viktor Chernomyrdin yesterday moved to form a new Cabinet that includes many of the key figures who led the reform policies of the previous government.

The new government should reassure many, including Western governments and financial agencies, who feared that the more conservative premier would sweep away the personnel and policies of his predecessor, reform architect Yegor Gaidar. Indications that precisely that was being planned prompted Russian President Boris Yeltsin to break off an official visit to China Dec. 19 and rush back to Moscow to save his reform government.

While two reformist ministers have been removed, the new Cabinet preserves the senior vice premiers from Mr. Gaidar's team, including the men in charge of international economic policy, according to the Interfax news agency, and the controversial program to privatize Russia's huge system of state-run industries.

According to preliminary reports of the Cabinet's composition, the government will retain vice premiers Alexander Shokhin, who oversees all foreign economic relations; Anatoly Chubais, the privatization boss; and Boris Saltykov, who is in charge of social policies such as education, labor, health, and social security. Two other vice premiers also will keep their jobs - Vladimir Shumeiko, who is in charge of industrial policy, and Georgy Khiza, a former defense industry executive. Both men were brought in to the Cabinet last spring in response to earlier criticism of Gaidar's policies but are considered relatively pro-reform by Gaidar aides.

Mr. Chernomyrdin, who served as energy minister in the Gaidar government, had promised not to make major changes in the government following his selection last week by the conservative-dominated legislature. But there has been growing pressure, particularly from centrist political forces associated with the lobby of state-run industries, to replace some of the young market reformers on Gaidar's team.

President Yeltsin's swift return from China managed to save most of the Gaidar team. Only one key member was sacrificed - Pyotr Aven, the young minister of foreign trade who was also Russia's key negotiator in talks with Western governments and banks over payment of Russia's huge foreign debt. Mr. Aven has been a target of attack not only by conservatives, but also from within the government. Mr. Shokhin will likely take over Aven's duties as debt negotiator.

Concerns that the market reform strategy of Gaidar was being abandoned were heightened in recent days by reports that the Central Bank, along with the parliament, was ready to issue massive new credits to preserve state-run industry. A loosening of the tight money policy of the Gaidar government could trigger hyperinflation, many economists fear, and undermine steps to make the ruble a fully convertible currency.

The liberal daily Izvestia, in a Dec. 22 report, quoted a statement by Central Bank Vice Chairman Valerian Kulikov attacking the government for following the policies advocated by the International Monetary Fund. He said the bank was preparing to restore key state-run banks, which once subsidized industry and collective agriculture.

Mr. Kulikov denied a report that the bank was also considering issuing a new currency as part of this policy.

The fate of Foreign Minister Andrei Kozyrev, an outspoken advocate of liberal, pro-Western policies is also uncertain. Mr. Kozyrev has been one of the most frequent targets of both centrist and hard-line opponents of the government, assailed for tying Russia totally to the policies of an American-led West.

Kozyrev has been occupied in the past two weeks with a rushed effort to complete negotiations with the United States on the text of a new treaty to further drastically reduce strategic nuclear weapons, the START II treaty. Yeltsin had surprised the Bush administration by announcing during his recent China visit that the treaty was completed and a summit would take place in early January to sign it. White House officials called that statement premature.

Even if Kozyrev is included in the Cabinet list, his survival is questionable after President Yeltsin, as a concession to his opponents during the session of the Congress of People's Deputies, offered a constitutional amendment that allows parliament the right to approve the nominees for defense, foreign, security, and interior ministers.

The parliament on Tuesday finished work on a new law on forming the government, which paved the way for formation of the Chernomyrdin Cabinet. The law has been a subject of political struggle between the president and the parliament over the division of powers it embodies. The president won one important change in gaining the right to dismiss the prime minister, whose candidacy must still be approved by the parliament.

But the parliament moved a step closer to creating a system of government which is a hybrid of a US-style presidential executive and a European-style parliamentary government in which the Cabinet is responsible to the legislature. While the president can still form most of the Cabinet on his own, the new law states that it is the Cabinet which is the head of the executive authority, not the president.

An attempt by Yeltsin to offer an amendment which identifies the president as the head of the executive branch was rejected.