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Yeltsin resigns
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December 31, 1999: 6:17 a.m. ET
Russia's President names Putin acting president; elections in 90 days
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LONDON (CNNfn) - Russian President Boris Yeltsin announced his resignation Friday and said early elections will be held in the next 90 days to name his successor. Yeltsin handed over power to his Prime Minister Vladimir Putin, a move that appears to significantly enhance Putin's own presidential ambitions.
In a shock announcement during a New Year's television address, a tired-looking Yeltsin told the nation he "will not cling on to power for another half year." He also apologized in the address for failing to live up to early expectations as the architect of Russia's new democracy.
Yeltsin's exit from power is not expected to cause any significant ripples in world financial markets. World markets barely shrugged at other recent political upheavals in Russia, preferring to take a long-term view that the country will need time to successfully tackle its massive economic and social problems.
Friday's news sparked a 10 percent surge on Moscow's benchmark RTS1 index, which climbed to 165.828, a new year-high. By the close, at 11 a.m. London time, the index had extended its gains to nearly 17 percent. Volume was a paltry $3.2 million, however, with many brokerages closed for the new millennium celebrations.
One Moscow-based trader told CNNfn the news came as a total surprise to markets, which dipped in the immediate wake of the announcement, before shooting back up.
Yeltsin, 68, has been the paramount force in Russian politics since he captivated millions of Russians by facing down an abortive coup attempt from atop a tank eight years ago. Yeltsin was the first freely elected president of Russia when he took the post in 1991.
But with his health clearly on the wane in recent years and months, Yeltsin has made little secret that he was grooming Putin - the fifth prime minister in 18 months when he was appointed in August - to continue his legacy.
Putin, 47, will now serve as acting president for three months pending presidential elections.
That will give him a prominent pulpit from which to exploit his already booming popularity, which has soared on the back of a brutal military campaign against Islamic rebels in the breakaway Russian republic of Chechnya. Putin's staunch promotion of the campaign has appealed to Russians' historical desire for a firm hand at the helm, say some experts.
A market moderate?
While the Chechen campaign has accentuated Putin's hardline image in the West, the prime minister, a former KGB officer, has also tried to pitch himself as a market moderate in an apparent bid to widen his electoral appeal. In a policy statement issued Tuesday on a government-sponsored Web site, Putin said Russia "is going through one of the most difficult periods of its many centuries of history."
Russian GDP is expected to grow by 1.5 to 2 percent in 1999. Putin said Russian gross domestic product had halved in the last decade of the century.
Eschewing major promises, Putin made a plea for what he called a "long-term nationwide development strategy", perhaps drawn out over 10 to 15 years, that would help Russia speed up growth and lure more investment.
He also cited expert predictions that Russia would require a growth rate of average eight percent annually for the next 15 years to match Spain or Portugal. Rates of 10 percent average growth would be needed to catch up to Britain or France.
"I'll tell you frankly, the country's recovery will be long and difficult without foreign capital," he said. "We have no time for a slow revival, so we should do everything to attract foreign capital to our country."
Earlier this month, the International Monetary Fund delayed disbursement of a $640 million portion of a $4.5 billion loan, amid recriminations over the country's Chechnya campaign and dismay over the sluggish pace of economic reform.
Yeltsin appeared calm and straightforward in his address. "Today on the last day of the old century I am going to resign," he said.
His departure also paves the way for a pre-election free-for-all among a host of candidates for the presidential post. Putin is on the public record saying he intends to continue Yeltsin's democratic policies.
That is seen as crucial in the West if Russia hopes to lift itself out of an economic rut that has seen millions of workers go unpaid for months. The new economy has also spawned a yawning gap between a new generation of young, relatively rich "New Russians" and their mostly older compatriots who have felt left behind. The average male life expectancy has plunged to 57 years - among the lowest in the industrialized world.
Putin is described by analysts as a pro-market politician intent on rooting out corruption in the New Russia. But his image has taken a battering in the West, which has harshly censured the Chechnya campaign.
This month's parliamentary elections, in which a bumper crop of centrist candidates emerged victorious, could signal a shift in the balance of forces in the Communist-dominated Duma, as the lower house is known.
This could further strengthen Putin's hand, according to Anna Zelkina, a research fellow at the School of Oriental and African Studies at the University of London. Zelkina said Yeltsin's move was aimed at preventing a sharp U-turn in policy once he steps down. 
-- from staff and wire reports
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Russian Government
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