Russia
Crisis and Reform

This essay addresses the political and economic impact of the East Asian crisis on Russia at this crucial stage in its post-Soviet transition. The essay outlines the steps taken by the Russian government to deal with the crisis and evaluates the ability of the new government to handle urgent problems. The author asserts that President Boris Yeltsin’s March 1998 decision to dismiss the cabinet of Prime Minister Viktor Chernomyrdin was not capricious, as many have asserted. Rather, the decision resulted from the recognition that bold reforms would be needed to keep the crisis from worsening. From the crisis has emerged “the most promising reform government of the Yeltsin era,” led by the new Prime Minister, Sergei Kiriyenko. The author argues that the $22.6 billion IMF-led package of loans to Russia, agreed to in mid-July, was awarded not only in recognition of the country’s strategic importance, but also as an expression of confidence in the young government.