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World - Europe

Russia PM vows to get tough to boost economy

November 25, 1998
Web posted at: 8:51 AM EST (1351 GMT)

MOSCOW, Nov 25 (Reuters) -- Prime Minister Yevgeny Primakov, taking the initiative while President Boris Yeltsin is sidelined by pneumonia, vowed on Wednesday to take tough measures to pull Russia out of its economic crisis and crack down on crime.

In televised remarks, Primakov stood firm in his drive to tighten state control of the economy after an International Monetary Fund (IMF) mission left Moscow without agreement on the release of the next slice of a $22.6 billion loan intended to help Russia through its crisis.

The IMF opposes strengthening the role of the state and fears Primakov is steering Russia away from liberal reforms.

The prime minister's comments on Wednesday contained no specific new proposals, simply repeating his calls for increased state intervention.

"In the economy we must of course foresee the strengthening of the state's regulatory role," Primakov, 69, said in televised comments at a meeting with officials from the Emergencies Ministry and law-enforcement bodies.

"We cannot go any further just counting on market forces solving everything."

Primakov also pledged to "toughen measures to combat crime and corruption."

"We will reject and prevent it," he said.

Concern has intensified since the murder on Friday of Galina Starovoitova, a liberal politician and human rights activisit who was buried in St Petersburg on Tuesday. Many politicians blame Yeltsin for doing too little to fight crime.

The government is now trying to draw up its draft budget for 1999 but is having problems making calculations because it does not know how much foreign aid Russia is likely to receive.

The government, facing huge wage arrears and looming debt payments, wants the IMF to free a $4.3 billion tranche of its $22.6 billion loan as soon as possible. But the IMF mission left on Tuesday without saying when the money would be released.

Government officials say the IMF mission criticised the government's latest budget draft for doing too little to boost tax revenues and too much to support unprofitable enterprises.

Former finance minister Alexander Livshits, in an interview with the Kommersant newspaper, said liberal reforms had been discredited by Russia's crisis, in which the rouble and share prices have sunk, the banking system is near collapse and Russia faces huge debts.

"The shop of liberal reforms is now closed for stock-taking," Livshits said. "The start of a new stage, if it takes place, will be no earlier than 2004."

A presidential election would be due in 2004 provided Yeltsin serves out his term until 2000. Livshits seemed to accept that the president who immediately follows Yeltsin in 2000 is unlikely to be a liberal reformer.

The Kremlin described Yeltsin's condition on Wednesday as stable and said he was continuing treatement in hospital for pneumonia, the latest illness to mar his ill-fated second presidential term. He has been in hospital since Sunday.

Yeltsin's decline has forced him to hand some of his responsibilities to Primakov, whose authority is growing.

Copyright 1998 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.



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