Yeltsin's Win Signals Fresh Start Of Campaign for Market Economy

HAVING won a majority of the people, Boris Yeltsin must now reach a lasting agreement with the Kremlin before he can start creating a market economy in the Russian Federation. But securing an enduring peace with Soviet President Mikhail Gorbachev could prove much harder than winning Wednesday's election.

The Russian leader won 57.3 percent of the first-ever vote for Russian president, aides claimed yesterday. Electoral officials reported that 75 percent of the republic's 105 million eligible voters participated. The independent Interfax news agency, in unofficial results, said Mr. Yeltsin won 70 percent of Moscow's vote, 65 percent in Leningrad, and 90 percent in his native Sverdlovsk.

In Leningrad, about 55 percent of the voters unexpectedly gave approval to the idea of changing the city's name back to St. Petersburg, Interfax reported. The change would have to be approved by the Russian parliament, however.

Bolstered by victory at the polls, Yeltsin has a popular mandate that makes him a much more formidable negotiating partner. It will be more difficult for Mr. Gorbachev, who was elected by the Soviet parliament and has never faced a popular test, to make Yeltsin give ground, political observers say.

As a result, many Russians say that instead of agreement, there could be further confrontation between the two most powerful political figures in the nation.

``Only bad things will happen with Yeltsin as president of Russia,'' predicts Valentin Malushin, chairman of the election commission in the village of Borodino, about 75 miles east of Moscow.

``The political battles will just continue and nothing will get done,'' Mr. Malushin adds. ``The people are tired and they want to see improvements.''

Yeltsin and Gorbachev have said they are prepared to cooperate with each other. Along with leaders of eight other Soviet republics, they say they are close to putting the final touches on a new treaty, which would redefine the relationship between the central and the republican governments. But there are still some difficult issues to be resolved, namely the structure of the new taxation system, Yeltsin says.

There is also the question of the amount of the Soviet foreign debt that the republics will take on. Russian Prime Minister Ivan Silayev has said Russia, which contains about 147 million (52 percent) of the Soviet Union's 280 million people, is responsible for 60 percent of the estimated $70 billion debt. Yeltsin, however, feels the percentage still has to be worked out, the independent Interfax news agency reported.

``There are different opinions. But each meeting brings new progress,'' said Yeltsin before casting his vote in the presidential election. He has indicated the treaty could be ready in July.

In the dispute over taxes, Yeltsin wants a one-tiered tax structure, in which all revenue goes first to the republic, which then passes along a share to the central government. Gorbachev is fighting for a two-tiered system, in which some revenue goes straight into Kremlin coffers. The dual system could cost Russia up to 50 billion rubles (about $29.4 billion at the commercial exchange rate) in lost revenue annually, Yeltsin says.

Though he adds that he is facing pressure from other republican leaders to accept the two-tiered system, as the newly elected leader of the largest and richest of the Soviet Union's 15 republics, Yeltsin may have the extra clout to get his way.

In any case, it is in Yeltsin's best interests to sign the union treaty, Gorbachev told the official Tass news agency before casting his Russian presidential ballot.

``Russia has got a good deal of its own problems,'' Gorbachev said. ``This is a huge republic that brings together many peoples. In this respect, the new leadership of the republic, just as the leadership of the country, is faced with urgent, literally crying, tasks which must be addressed.''

Yeltsin hopes to cure the Russian Federation's economic woes by proceeding with a transition to a market economy. To do it, he'll need harmonious relations with the central government, officials say. Laws that have already been passed, including one on land privitization, have not been effective because of opposition from the center, as well as the entrenched bureaucracy.

Shortly after the election, Yeltsin plans to shift reform into high gear, driven by a wide-ranging plan to privatize state-owned industries.

The government wants to privatize at least 20 percent of state property by the end of 1992, says Russian Deputy Prime Minister Mikhail Malei, author of the plan. Eventually all but 30 percent of state property would be sold off.

Each citizen would be entitled to coupons worth 7,000 rubles (about $4,117) which they could use to buy shares in an enterprise. At least 30 percent of the shares in each enterprise would be distributed to the workers, with the remainder available to the general public. The plan would start with food and light industry.

``The main aim of the privatization of state property is not to create rich people, but to stimulate economic development and growth in labor productivity, providing workers with motivation,'' Mr. Malei says.

Yeltsin also intends to increase foreign contacts, hoping to attract investment. A two-day trip to the United States could take place as early as next week, US officials say. Yeltsin has said he also wants to visit South Korea.

Foreign forays by Yeltsin could actually renew and intensify the confrontation with Gorbachev, especially if the Russian president receives assurances of economic assistance, officials say.

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