Putin May Delay Reforms to Win Communist Support
Moscow, Jan. 19 (Bloomberg) -- Russian Acting President Vladimir Putin may put economic reform measures on hold until the March presidential election as he seeks to win support from all political parties, including the Communists, analysts said.
The Unity party, endorsed by Putin, yesterday allied itself with the Communist Party in the lower house of parliament, the Duma, to reelect Communist Gennady Seleznyov as speaker. In exchange, Unity won posts in key Duma committees such as defense.
Putin will ``will try to keep everyone's support before the elections and (only) then take more decisive action,'' said Peter Boone, director of research at Brunswick Warburg in Moscow.
The new alignment of parties, which alienated minority free-market advocates such as the Union of Right Forces and Yabloko, casts doubt on the outlook for increased cooperation between the president and parliament to pass legislation needed to reach agreement with the International Monetary Fund, such as laws on restructuring banks and strengthening bankruptcy laws, at least until the election.
Putin, who became acting president after Boris Yeltsin resigned Dec. 31, is the leading contender ahead of the March 26 presidential election, with an approval rating of more than 55 percent, according to a recent poll. Until the vote, Putin's main efforts in the Duma probably will focus on building bridges to the main parties, analysts said.
``At this stage it looks as if Mr. Putin is trying to establish a close degree of cooperation with the Duma,'' said Alan Rousso, director of Carnegie Moscow Center. ``By backing Seleznyov he is sending a signal to Communists he has every intention on working with them.''
Crucial Vote
Pleasing every party probably will be impossible. The Union of Right Forces, Fatherland-All Russia and Yabloko walked out of the Duma yesterday in disapproval over agreements reached between Unity and the Communists, notably concerning support for the Duma speaker and assignment of posts in key Duma committees.
Unity, Communists and three pro-government groups defied calls to delay votes on the posts and won chairmanships in 24 out of a total of 27 committees in the Duma. The positions are often crucial for the legislative process.
Yevgeny Primakov, leader of Fatherland-All Russia in the Duma, criticized the move and said legislative process will be stalled.
``Democracy should protect the rights of minorities in parliament,'' Primakov said. ``The country is waiting for laws.''
Grigory Yavlinsky, leader of Yabloko, blamed the events on Putin.
``The responsibility for the Duma's inability to work and the serious parliamentary crisis lies in the hands of the acting president,'' Yavlinsky said.
Minority parties are significant only in mustering 300 votes, or two-thirds of total votes, necessary to approve changes to the constitution and override vetoes from the president and upper house of parliament.
With an IMF team visiting this month, Putin will try to show the outlook for cooperation with the Duma is good, though the government doesn't expect to receive any new money from the fund in the first quarter. The IMF suspended lending to Russia in September and has called for better bankruptcy legislation and other changes to the government's economic program. It has released only one $640 million payment last year out of a total package of $4.5 billion approved for Russia in 1999.
As the government will be able to pay $3 billion in foreign debt payments in the first quarter from its own resources, it will be under less pressure to please the IMF before elections. Getting support domestically, including for the war in Chechnya, may be more important for Putin until March.
Russia's benchmark RTS Index plunged 5.6 percent to 183.63.