Yeltsin takes up plight of the workers

BORIS YELTSIN said yesterday that, while the fight against inflation remained a priority for Russia, collapsing state industry had to be supported and workers who have been kept waiting months for their wages must be paid as a matter of urgency. The President's concern was apparently aroused by the threat of strikes by workers from miners to ambulance drivers.

'Take the situation in the coal-mining regions,' Mr Yeltsin told a meeting of ministers and parliamentary leaders in the Kremlin. 'It is inadmissible to delay the payment of wages for several months. I am closely watching developments and the position of the labour unions. Emergency decisions must be made. Let those who delay the payment for coal and the payment of wages be the first to shoulder the responsibility.'

The Prime Minister, Viktor Chernomyrdin, echoed Mr Yeltsin in his speech, although it is widely believed that the conservative premier, who forced the President to drop two young monetarists from the cabinet earlier this year, is really calling the shots over economic policy now. 'Our choice is fairly limited,' said Mr Chernomyrdin. 'If we let inflation rip, we will end up in a spiral fall from which we will not be able to extract ourselves. But if we stop production we will end up with a seething country, collapse and chaos. Today's most important task is to walk literally along the edge of a razor, without falling to one side or the other.'

Yegor Gaidar, one of the reformists dropped from the cabinet, scoffed at this analysis, telling reporters: 'There is no such dilemma. Economic decline is by and large caused by our failure to adhere to tough monetary policies.'

Mr Chernomyrdin said he aimed to have inflation, now raging at a rate of 22 per cent a month, down to no more than 9 per cent by the end of the year. But industry could not be neglected, because production in many sectors was only half what it used to be four years ago. Statistics did not yet show much joblessness, but there was considerable hidden unemployment and mass redundancies loomed.

'However, there is no reason to draw hasty conclusions that a catastrophe is imminent or that reforms have stopped. A market already exists in Russia. Now the country must move on, taking into account the political and economic situation of today and learning from past mistakes,' the Prime Minister said.

On Thursday, the government approved a draft budget for 1994, envisaging a deficit of 61.5 trillion roubles ( pounds 25bn) or 10.2 per cent of GNP, compared with 10.5 per cent last year. But the question is: can the cabinet resist the demands that will inevitably come from the Communist and nationalist-dominated parliament to spend more public money?

Mr Chernomyrdin made clear that he intended to be tough with the agricultural lobby. Refuting press reports of planned farm subsidies worth 34 trillion roubles, he said: 'There is no such plan and there will not be. Support for the agrarian sector will remain at the same level as in 1993 and money will be handed out only when results are guaranteed and the purpose is completely clear.' He also called for more efficient tax collection, saying the state has been cheated of trillions of roubles.

The parliamentary deputies at the meeting received the speeches warmly, which bodes well for Mr Yeltsin's relations with the legislature, provided hardliners do not try to rock the boat again. The President was angry that the State Duma (lower house) amnestied his jailed enemies last week, and repeated yesterday that he still regarded the decision as hasty and unconstitutional. But he indicated that he would not pursue the issue, preferring to look to the future. 'Today in Russia democracy means above all stability, order and co-operation,' he said.