After One Year in Power, Yeltsin Is Losing Focus

ON his first anniversary as President of Russia, Boris Yeltsin has reason to be pleased.

Despite a depression-level collapse of production accompanied by hyperinflation, the silver-haired former Siberian Communist boss retains remarkably high popularity. And his government continues to win praise abroad for its willingness to continue a policy of rapid shift toward a market economy.

US Ambassador Robert Strauss sat down with President Yeltsin recently to talk about his trip to the United States next week. "I saw a very confident, upbeat, secure ... president of Russia," Mr. Strauss told American journalists.

But a very different view of Yeltsin's rule is found here. The broad shake-up of his government two weeks ago, bringing in a raft of new faces from the ranks of managers of huge state-run industries, has sparked renewed fears that the reform course is weakening. Yeltsin is accused of yielding to pressure, to the threat of mass industry shutdowns, in many cases organized by the factory directors themselves.

The tight-money policies aimed at restoring the value of the ruble and opening the door to foreign capital, engineered by the young market economist Vice Premier Yegor Gaidar and his team, are visibly slipping as billions of rubles pour off the printing presses to satisfy the demands of industry for new subsidies and to pay months of unpaid wages due to their workers.

The new government appointees, nicknamed the "red generals" in the press for their close ties to the military-industrial complex, openly call for putting off privatization plans for years, if not decades.

Ambassador Strauss defends some of these steps as concessions aimed at preserving the main course of reform. "Gaidar is going to have to loosen a bit ... if President Yeltsin is going to keep the consensus to govern," the US political veteran said.

A far harsher view was offered yesterday by Mikhail Leontiev, an experienced analyst of the respected Nezavisimaya Gazeta (Independent Newspaper): "The new Yeltsin government is exactly the `consensus' that was so much loved by his predecessor, Mikhail Gorbachev," he wrote.

"In the center of this consensus, one cannot perceive any constructive idea or policy - it is the consensus around nothing."

The appointments of five new vice premiers, three of whom come from the old Soviet industrial structure, is arguably a matter of politics, not policy. It is the implementation of the deal Yeltsin made in April with the leaders of an angry parliament to broaden his government. And the loosening of credit flows was also agreed on at that time in response to clear danger of mass bankruptcies and large-scale unemployment among the huge industrial plants.

"Now it is some kind of coalition government," says Alexsei Ulyukayev, the government's economic spokesman and a member of the Gaidar team. "Before it was a government of the liberal party. But that government in a nonliberal country could survive only for a few months. We enjoyed more success than we expected. Now it's time to have a coalition government ... with the only other real power in the country, the industrial party."

SUCH a move isolates the hard-line Communists as the only real opposition in the parliament, Mr. Ulyukayev argues, and the industrial managers, once in office, will be forced to change their views. In this `liberal-industrial coalition,' the Gaidar aide argues, "the only question is who is the leader."

The answer he offers is simple. "Gaidar is de facto prime minister.... He controls the approach of the government; he controls the economic situation. Any manager of state enterprise knows he should go to Mr. Gaidar for any purpose, for money, for subsidies, for tax policy. He knows Gaidar is really in power."

Vladimir Shumeiko, the industry chief and parliament deputy leader who has been appointed senior vice premier alongside Gaidar, offers a slightly different slant. "Gaidar is a strategist," he told the weekly Moscow News this week. "Together with his team he is planning large-scale goals. But there is a need to have a vice premier tactician who would translate these goals into immediate tasks, who knows this socialist economy from within."

But many observers find this vision illusory. Decisions are already being made, including the appointments of new ministers, in which Gaidar played no role, says reformist Vitaly Tretiakov, editor of Nezavisimaya Gazeta. The newly formed Defense Ministry, for example, is completely outside Gaidar's control.

Even on the economic-policy front, Gaidar is visibly losing power. The appointment of Viktor Chernomyrdin, the former Soviet gas minister, as vice premier in charge of the energy industry was "declared without warning" by Yeltsin, the well-informed editor recounts. The new minister opposes his predecessor's policies of market reforms and encouraging foreign investment to revive the oil industry.

"Decisions like that are not always rational ones," says government official Ulyukayev with a shrug. "Yeltsin personally likes Chernomyrdin. He is an old friend." The two worked together in the Central Committee of the Communist Party, he explains.

Tretiakov describes the decisionmaking process inside the Yeltsin government as "chaos," with three groups competing for influence - the Gaidar team, the state industry bosses, and the apparatus of presidential advisers. This last he compares to the old Communist Party Politburo, composed of shadowy men such as Yuri Petrov, an acquaintance from Yeltsin's days as Party boss in the Urals. "It is not a question of Yeltsin consciously analyzing three opinions and forming his own," he says. "It is just a ques tion of Yeltsin siding with one of the three groups...."

It is for this reason that Tretiakov as well as members of the Gaidar team are openly campaigning for Yeltsin to yield his post as premier and give it to Gaidar. They try to use the prospect that Russia could lose the $24 billion Western aid package now being negotiated with the International Monetary Fund as a card.

"The whole world associates the reforms with two names - Yeltsin and Gaidar," said Konstantin Kagalovsky, the chief negotiator with the IMF, in an interview published yesterday. "That is why the world will be extremely surprised if in the nearest future Gaidar is not appointed prime minister. It will be unequivocally interpreted as a retreat from the course of reforms."