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Date: Wed, 31 Dec 1997 12:22:54 -0800
Sender: Forum on Labor in the Global Economy <LABOR-L@YORKU.CA>
From: Sid Shniad <shniad@SFU.CA>
Subject: Russia at year's end
Date: Tue, 30 Dec 1997
For the Hindustan Times
From: Fred Weir in Moscow

Russia at year's end

By Fred Weir, Hindustan Times, 30 December 1997

MOSCOW (HT) -- Russia had a painful 1997 but new policies that emphasize humane values over unbridled market reforms will make the coming year more hopeful and productive, a well- looking President Boris Yeltsin has told the nation.

"It is obvious to most of us today that there have been very few noticeable successes," Mr. Yeltsin said in his year-end radio address.

"The every-day life of many of our people remains very difficult. People justly complain that the pace of transformation is too slow," he said.

"But we will correct the mistakes and draw the necessary conclusions."

Economic growth and social renewal have been promised every year since the collapse of the USSR six years ago. But Russia remains frozen in one of the 20th century's longest, deepest and strangest economic depressions.

The country's continuing problems have been caused by embracing Western-style capitalist ideology with too much enthusiasm while forgetting about traditional social values, Mr. Yeltsin charged.

"We overlooked many things when we entered the free market," he said. "We have fixed the market's legal frameworks, but have forgotten about the laws of morality, about such a simple thing as business ethics."

Russia's new rich minority are guilty of extravagant and selfish behaviour, he charged. "They continue to egotistically wallow in personal success, thereby tormenting the majority of their fellow countrymen."

By lashing out at the arrogant young business class, Mr. Yeltsin may have been warning their sponsors in government that major policy shifts are in the offing.

"The country has suffered too many years of poverty and hopelessness, and people are exhausted," says Nikolai Zyubov, an independent analyst.

"The president is reflecting the widespread view that it's time for the government to intervene in the economy, to redistribute the wealth and help the poor. That has very serious policy implications."

Mr. Yeltsin hinted that he may start by making key personnel changes in the New Year, perhaps by sacking leading liberal reformers such as First Deputy Prime Minister Anatoly Chubais.

Mr. Chubais, a 42-year old economist who has served in government almost continuously since 1992, said in a recent interview that he might resign before the president fires him.

Heaping more bad news upon Russia's beleaguered pro-market reformers, Mr. Yeltsin said he will step up cooperation with the Communist-led parliament in 1998, and consult more frequently with leaders of the left-wing opposition.

"I have asked Russians to turn this year into a year of reconciliation and accord," Mr. Yeltsin said. "And I am doing it myself, even when I have to force myself and seek agreement with the once 'irreconcilable opposition.'"

A year ago, many believed that Mr. Yeltsin's 1996 re-election as president against a strong Communist challenge, and his subsequent recovery from radical heart surgery, would stimulate a wave of foreign investment and generate an economic breakthrough in 1997.

But the economy remained flat, financial crisis struck when global stock markets tumbled, and the year ended with Mr. Yeltsin's health once more a potent political issue.

"As always, Yeltsin is interested in remaining in power rather than accomplishing any particular agenda," says Mr. Zyubov. "The fact that he is signalling a change of course tells us that the mood of the country and the balance of political forces is already moving that way."

In Russia's super-presidential system, however, all calculations are hostage to the chief's state of health.

Though Mr. Yeltsin looked well enough before the cameras this week, he has spent much of December in a Moscow-area sanatorium recovering from what aides called a "viral infection".

The Kremlin press office announced this week that Mr. Yeltsin will ring in the New Year with yet another extended leave of absence -- two weeks in a presidential rest house at Valdai, in western Russia, beginning this weekend.

"These constant unscheduled vacations by the president cannot help but raise doubts about his health and stamina for the job," says Mr. Zyubov.

"Yeltsin's health has become the defining issue of our times, upon which everything else depends."