CRITICISM MOUNTS AS GOVERNMENT DRIFTS.

Efforts continued yesterday to fill the gaps in the Russian cabinet. President Boris Yeltsin fired the reform-oriented Boris Fedorov as deputy prime minister and head of the Federal Tax Service. Fedorov said he had twice offered to resign out of disgust since his appointment last May, but had this time decided to wait to see what would happen. Also fired yesterday was Deputy Prime Minister Viktor Khristenko (Russian agencies, BBC, September 28).

Fedorov’s replacement has not yet been named. Several other key government posts also remain vacant. This reinforces the sense of confusion surrounding the government, which has still not announced details of its economic program. Dmitri Vasiliev, who resigned last week as head of the Federal Securities Commission, warned yesterday that Russia faces a “financial and political catastrophe” unless the Central Bank and Finance Ministry change course. Vasiliev singled out plans announced last week by Central Bank chairman Viktor Gerashchenko to set up a two-tier currency market with different rates for exporters and importers, which would, Vasiliev said, render the ruble effectively nonconvertible. Vasiliev also deplored the government’s proposal to accept equity in lieu of tax payments since this, he said, would amount to renationalization and violation of shareholders’ rights (Russian agencies, September 28; Financial Times, September 29). Vasiliev resigned last week, as did Aleksandr Shokhin, in reaction to Mikhail Zadornov’s reappointment as finance minister. Vasiliev said yesterday that Zadornov bore responsibility for the government’s mid-August decision to effectively default on some of its debt. Vasiliev criticized the plan being discussed for restructuring GKO treasury bills and OFZ federal loan bonds on the ground that it would give Russian investors preference over foreign ones.

Prime Minister Yevgeny Primakov announced yesterday that the government has paid off wage arrears to the army. Arrears of student stipends, he said, will be next. Primakov has promised that his top priority will be paying off debts to millions of workers, students and pensioners who have not been paid in months. He has made no secret of the fact that he will do so by printing money, despite the fact that this will inevitably produce inflation. The IMF is making no secret of its unhappiness. Yesterday, the head of the IMF’s Moscow office, Martin Gilman, dismissed Viktor Gerashchenko’s promise of a “controlled emission” leading to only “moderate inflation” as nonsense (Ekho Moskvy, September 28).

WEAKNESS OF RUSSIAN STATE BLAMED FOR RISE OF ORGANIZED CRIME.