Yeltsin, Russian economy, both trying to recover
President leaves hospital
November 22, 1996
Web posted at: 9:30 a.m. EST (1430 GMT)
In this story:
MOSCOW (CNN) -- Seventeen days after quintuple heart bypass
surgery, Boris Yeltsin left a Moscow hospital on Friday to
continue his convalescence at a government rest home just
outside the city.
The Russian president could return to work in two to three
weeks, earlier than expected, said head Kremlin doctor Sergei
Yeltsin has a full plate of duties to tackle when he returns
to office. The main course? The faltering Russian economy.
Russian officials on Thursday promised a thriving economy by
the year 2000, but acknowledged they had problems in the
latest round of talks with the International Monetary Fund
Russia's Economy Minister Yevgeny Yasin said the cabinet gave
its blessing Thursday to a blueprint for economic development
which foresees output growth of 5 percent a year by 2000.
"It is an exceptionally difficult task," Yasin said. "But we
cannot do it any other way."
Changes it wants include a shift to international accounting
standards for Russian firms, and higher gas and electricity
prices for households but lower prices for industry.
Officials have been predicting a return to growth in Russia
for years, but it has yet to materialize.
An IMF mission is currently in Moscow to assess whether to
issue the November installment of a $10 billion loan to
Russia. The IMF is concerned about the country's low levels
of tax revenue.
Poor tax collection is among the toughest problems facing
Russia's economy. Tax receipts are only 65 percent of
The IMF wants to see more tax revenues filling government
coffers before they hand out another $320 million of the loan
promised to help Yeltsin stabilize the country's economy.
Russia's economy, as measured by gross domestic product,
shrank by 6 percent in the first nine months of 1996. Yasin
has previously forecast a 5 percent GDP fall in 1996.
"The arrears on the consolidated budget has got to 132
trillion by the end of September," said Professor Richard
Layard of London's School of Economics. "We know that many
of the firms owing money have money."
Coziness = corruption?
In the physically and economically treacherous realm of
Russian finance, there are accusations that the marriage
between government and business is a cozy and continuing one.
"I think the leaders of these companies are simply the
leaders of the government," said Gregory Yavlinsky, a member
of the Russian Parliament. "That's why they have the
exclusions and they (do) not have to pay taxes."
The charges are serious, but not new. Prime Minister Viktor
Chernomyrdin regulated the gas industry while he was director
of Gazprom, the country's largest gas company.
Yeltsin said after he was re-elected in July that reviving
production was a key economic task.
The new program foresees annual inflation of five to eight
percent and a boom in overseas investment to at least $10
billion-$12 billion by the year 2000, Yasin said, from an
expected $3 billion-$4 billion in 1996.
But a state committee said if the current trend continues,
inflation in November could tick up to 2 percent, the highest
monthly rate since April, from 1.3 percent last month. It
also said inflation for the year could be 22 percent.
While high by Western standards, this would be a huge
reduction from last year's 131 percent.
Meanwhile, the tax police go after middle income Russians.
Many here feel taxes are too high, hence many companies and
individuals just cannot or do not pay them.
Problems with the IMF failed to mar Russia's return to
international capital markets on Thursday with its debut
And Russia is now saying to the IMF, don't push us, we can
get along without your money, thank you.
But on the other hand, any loans would be greatly
Correspondent Betsy Aaron and Reuters contributed to this report.
Related sites: Note: Pages will open in a new browser window
External sites are not endorsed by CNN Interactive.
© 1996 Cable News Network, Inc.
All Rights Reserved.