Russia to push on with sale of state assets

RUSSIA will continue its rapid sell- off of state assets, despite a surge of support in parliamentary elections for neo-fascist nationalists, a revamped Communist Party and other groups committed to slowing a chaotic shift to the free market, a Deputy Prime Minister, Anatoly Chubais, said yesterday.

Mr Chubais's remarks follow pledges by other reformist ministers in recent days that radical reform must stay on course despite their election setback. Together, they mark a counter-attack by Westernised reformers in what, even before the 12 December poll, was already, in effect, a shaky coalition government.

Bolstering their position is a pledge last week by President Boris Yeltsin that the Economics Minister, Yegor Gaidar, and his policies will stay despite a strong showing by the far-right and the new-look Communists. The promise was hedged, however, by pledges of more support for the poor and respect for a new constitution guaranteeing a long wish-list of welfare entitlements.

Mr Gaidar, in a television interview last night, said he would resign if reforms were diluted. 'Of course there is a great danger that the policy will not be retained in full but - and I say this categorically - it will be without me.'

The exact balance of forces in the new parliament, particularly the more important 450-member lower house, the State Duma, is still uncertain, with scores of nominal independents holding the balance of power. None the less, deputies who are either hostile to the government's economic programme, or at best lukewarm to it, will outnumber its supporters. Mr Chubais described privatisation - perhaps the most critical as well as most controversial component of reform - as unstoppable, saying the private sector now accounted for 40 to 50 per cent of the economy as a whole. It employs more than 40 per cent of the total workforce, compared with only 15 per cent in 1991.

'I am convinced there is no political force in Russia or a potential alliance of political forces that would overturn privatisation in Russia,' he told a press conference. 'Nobody will ever be able to do it. We are absolutely sure of this. This is not just wishful thinking.'

Mr Chubais, along with Mr Gaidar and other radicals, were initially shell-shocked by the election debacle, when their party, Russia's Choice, came a distant second in a party-preference vote behind the far-right Liberal Democratic Party of Vladimir Zhirinovsky. The Prime Minister, Viktor Chernomyrdin, suggested a thorough rethink of economic policy, savaging what he called 'poorly thought-out experiments' and insisting that it was now time 'to think about the people'.

Whatever the make-up of the cabinet, the elections will force a review of which firms can be allowed to go bust. Mr Yeltsin signed a decree last week fixing bankruptcy procedure. But the head of the new Federal Insolvency Agency, Sergei Belyaev, said yesterday that firms should be reorganised, not closed down. More than 8,000 firms are insolvent, according to Interfax.