Yeltsin Offers Compromise To Save Reform Program

INSIDE the pale yellow halls of the Grand Kremlin Palace, the members of the Russian Congress of People's Deputies drone on about minor amendments to the Constitution. But out in the lobby, where politicians and government officials huddle close to the walls so as not to be heard, the talk is only about the struggle for power between President Boris Yeltsin's government and the leadership of the insurgent parliament.

The Russian president moved April 14 to reach a compromise with conservative opponents of reform. Mr. Yeltsin offered a resolution that seeks to preserve the main thrust of the government's economic reform policies and its demands for political power to implement them. But it promised to revise those policies in accordance with a resolution passed April 11 by the rebellious Congress.

The search for compromise is an attempt to cool passions which erupted April 13 when Yeltsin's Cabinet threatened to resign en masse unless the Congress backed its policies. When Parliament leader Ruslan Khasbulatov rebuked them for "blackmail," the ministers walked out. Tensions have been heightened by Yeltsin's silence on the government's resignation request.

Some, including the young reformist economists in the government who have taken the brunt of the conservative assault in parliament against their policies, waited anxiously outside the chamber. "[Yeltsin] has to make some choices," said Pyotr Aven, who runs the government's foreign economic policies. "Now we are completely in the hands of the president."

Others expressed confidence that Yeltsin, always the wily tactician, is in command, ready to pick his spot. "Yeltsin will speak when the timing is better," says Pavel Bunich, head of the association of entrepreneurs and a Yeltsin adviser.

"He's distanced himself a bit from the government. He didn't provoke the resignation of the government and neither did he accept it," Bunich says.

But that kind of game makes not only men like Mr. Aven nervous but also Western governments who are committed to backing their reform policies.

"We are worried," Alexei Ulykaev, the government's spokesman on economic policy told the Monitor. "No one can be sure that not one dollar will be invested in this country ... if we turn aside this government."

The International Monetary Fund (IMF) is scheduled to vote April 27 on Russia's membership in the organization, the first step toward getting access to a promised $24 billion in Western aid without which the reforms cannot succeed. (See story below.) Government officials worry that unless the government gets the authority it needs to continue its reforms, the entire package is in doubt.

The conservative-dominated Congress, where some 600-700 votes among the 1,049 members are regularly going against the reformist course, voted April 11 to pass a resolution providing for huge social welfare payments and new subsidies to state-run industry and agriculture. Such payments would void the stiff financial austerity policies, which both the government and the IMF consider key to making market reforms work.

"If I was in the place of the Western powers, I wouldn't give aid to a country that can't control its economy and resorts to all sorts of populist measures that prevent ... financial stabilization," says prominent reform economist Evgeni Yasin.

The immediate issue for the government is to retain the special powers granted Yeltsin by the Congress last fall.

The series of market reforms enacted since the beginning of the year, starting with freeing most state-set prices, has been made almost entirely through a series of presidential decrees. The Congress moved to cut those powers in just three months.

"Three months is not enough," Aven retorts. "It's not a question of three months, it's a question of guarantees [of the reforms]."

The government thought they had a deal on all this before the Congress began on April 6. But, government economic spokesman Alexei Ulykaev charges Khasbulatov welched on the deal.

"We tried," Mr. Ulykaev. "We made some personnel changes in the government. We made some corrections in monetary policy.... It was our half of the compromise. We expected them to make their half but they didn't do it."

If Yeltsin's new compromise fails, then Yeltsin's other option is to go above the heads of the Congress with a direct appeal to the population in some kind of referendum to be held in as little as a month, Ulykaev says.

But Ulykaev is careful to emphasize that this is a "threat" of a referendum - one government leaders clearly want to avoid carrying out. Though they feel confident that Yeltsin's popularity is still enough to carry the day, they are not eager to test that proposition.

Still, Ulykaev is confident that Yeltsin will triumph. "The president is a better politician than me and the other guys in the government.... He is waiting for the right time, the right moment to make his statement, to do his job and to control the situation."