Yeltsin’s Privatization Chief Gives Up Hope, Plans to Quit

The chief of Moscow’s privatization campaign said Friday that she has lost almost all hope that Russian President Boris N. Yeltsin’s reforms will be successful and plans to quit her high-profile job in protest.

Larissa I. Piyasheva, one of the country’s leading free-market economists and the chief of Moscow’s privatization department, said she opposes the way that Yeltsin’s economic czar, Yegor T. Gaidar, is trying to force economic change.

“Gaidar has made a mistake,” she said at a press conference. “Reforms cannot be done in fits and starts. They are like surgery, you do everything in strict sequence. . . . The crucial part of the reform is privatization, but no one seems aware of this in the government.”

Piyasheva has long maintained that privatization and the elimination of monopolies must precede the removal of price controls and subsidies. Gaidar, instead, started the reform by lifting price controls and subsidies.

Although she disagreed with the overall strategy being implemented by Yeltsin’s men, she stayed with her job, hoping that she could at least push forward her plan for selling Moscow’s municipal property to private owners.

Gaidar’s plan envisions privatization through auctions, where the largest sum gets the property, and competitions, where the property is awarded subjectively by a “panel of bureaucrats.” Piyasheva had wanted commercial property to be sold to the people who work there.

She opposes the auction system because those with the biggest purses will buy everything, depriving ordinary workers of the motivation and productivity that self-ownership breeds. The competition plan is flawed, she said because it gives an opening to abuse by the bureaucrats.

Now it seems clear that the Moscow government has chosen to follow Gaidar’s plan for privatization rather than Piyasheva’s--and, for her, this was the last straw.

Since she cannot support Gaidar’s approach, Piyasheva said, there will be no place for her in the new Moscow administration. “I am spending my last days in this office; after that I will be a private person, not involved in any official business,” she said.

Grebenshikov is a reporter in The Times’ Moscow bureau.