Catching up in Russia

Russia now has in place its most forward-looking, pro-reform cabinet since the first post-Soviet government took office more than five years ago. President Boris Yeltsin, resurrecting himself yet again after having been written off for the umpteenth time, named the new, relatively young team on Monday. If he now gives the team his full backing, as he has promised to do, the reform process that began in 1992 but then ground to a damaging standstill might resume in a serious way.

The first burst of reform freed prices, which had previously been set by the state, and privatized thousands of enterprises that previously had been state-owned. That was enough to fill once empty shelves with a profusion of goods and to unleash a wave of small-scale entrepreneurship. But mortal opposition from the "Red directors" -- managers of big, state-owned factories that could not survive in a free market -- kept Mr. yeltsin from finishing the job.

In one way or another, he kept funneling huge subsidies to money-losing enterprises, which stoked inflation for far too long and discouraged new investments in really productive enterprises. At the same time, the government continued to interfere in the market, protecting natural-resource monopolies and subsidizing credit, which fueled corruption and an expanding gap between rich and poor.

Inflation now is under control, and there are signs that Russia's long depression may have bottomed out; incomes and production figures inched up in January and February, probably the first such increase in more than a decade. But the government, as Mr. Yeltsin recently said, still interferes far too much where it doesn't belong and fails to accomplish what a government should: collect taxes, administer justice, provide a social safety net. The Red directors are no longer much of a force, but a powerful new class of corrupt capitalists -- many of whom call themselves reformers -- will fight to maintain its monopolies and privileges.

So the challenges facing Mr. Yeltsin's new team are daunting. His prime minister remains unchanged, in part because a new candidate would have to win confirmation from the anti-reform Duma. But two new first deputy prime ministers -- former privatization chief Anatoli Chubais, 41, and regional governor Boris Nemtsov, 37 -- have proven reform credentials. Just as important, they have succeeded as canny political operatives with practical skills that the first wave of reformers too often lacked. In the latest reshuffle, they seem to have had a reasonably free hand in assembling a team of like-minded deputies. Now they will try to make up for lost time.

-- The Washington Post