Gaidar takes tough line on economy

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The Independent Online
YEGOR GAIDAR, Russia's fast-talking acting Prime Minister, yesterday ignored calls from conservative MPs for his resignation and countered by demanding tougher financial policies to avoid economic collapse.

In a speech to the new session of parliament, Mr Gaidar painted a grim picture of the economy sliding deeper into crisis as a result of back-tracking on his radical reforms. Defying conservatives' calls for a softer and slower pace towards market reform, Mr Gaidar suggested monetary and financial policies should be toughened up. He told reporters that he had no intention of resigning.

While he spoke in the parliament, Moscow currency dealers scrambled to buy dollars. The rouble lost almost 20 per cent of its value against the dollar, ending the day at 241 from 205.

Over the next few days a motley alliance of conservative, or neo- Communists, and radical democrats and monarchists is expected to press for Mr Gaidar's resignation. They are also seeking a special session of the Congress of Peoples' Deputies at which they would propose the impeachment of President BorisYeltsin for his handling of the economy.

They are not expected to succeed in either quest. The handful of protesters outside the parliament waving red flags and shouting for Mr Yelstin's and Mr Gaidar's resignations was an indication of how much support anti- government groups can muster these days, despite Mr Yeltsin's falling popularity.

Mr Gaidar delivered his state of the nation speech at such a speed that he was at one time asked to slow down by the Speaker, Ruslan Khasbulatov, a fierce Yeltsin critic. Mr Gaidar agreed, but then resumed in the same high gear,with deputies shaking their heads in disbelief.

Much of what the 37-year-old Mr Gaidar has to say about economics probably goes over the heads of many of the deputies, who were elected more than two years ago in the Soviet era. He easily fielded questions, sometimes even correcting deputies for having outdated information.

The figures he mentioned spoke for themselves, however. Industrial production was down 25-27 per cent in August, compared with a decline of 15 per cent in the same month last year. So far this year gross national product was 55 per cent of last year's figure, while the budget deficit continued to grow.

In the first nine months of the year wages had gone up by 10.6 times and prices by 15.3 times. The population was still buying the same level of food, however, but the percentage of wages spent on food, which rose dramatically when prices were freed at the beginning of the year, had subsided somewhat. In December it was 22.4 per cent, in January - the first month of the price deregulation - it was 88.3 per cent, but in July it had fallen to 35 per cent.

Sudden, high unemployment this winter is one of the most feared results of Mr Gaidar's radical reforms, but he was optimistic. He said the current figure was 500,000, or 0.4 per cent, but by the end of the year he said it would be 1.5 million, or 2 per cent. The worst hit would be small towns relying on only one type of industry.

(Photograph omitted)

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