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Alastair Macdonald
Moscow, Oct 3: President Boris Yeltsin warned the Russian government on Friday that he would step in to defend economic freedoms if ministers tried to bring down a new ``Iron Curtain'' of control in their bid to stem a financial crisis.
``If there is a threat that citizens' rights, including economic ones, might be violated, then in this case, his reaction would be very tough,'' Yeltsin's spokesman, Dmitry Yakushkin, told reporters at the Kremlin.``If we take actions like banning dollars, the president understands perfectly what this ban would mean - it would mean the violation of many of our rights...a return to the Iron Curtain.''
``There will be no return to the old days,'' Yeltsin said.Yeltsin, 67, is a much diminished figure since he was forced by the communist-led parliament to appoint compromise prime minister Yevgeny Primakov and appoint a communist former head of Soviet state planning as his first deputy for economic affairs.
But despite his uncertain health and shrinking authority asretirement looms in mid-2000, he still has vast constitutional powers and could step in if the government acted on suggestions it ban free trade in hard currency and nationalise some banks.
Yakushkin stressed that the president, whose public approval rating is in single figures after seven years of economic chaos, was not about to get involved in the nuts and bolts of financial policy but would defend ``the pillars of the economic system, which provides for a whole range of freedoms.''
In any case, Primakov's disparate and squabbling coalition seems a long way from taking any decisive action, three weeks after parliament confirmed the ex-foreign minister in office.
The premier himself denied on Thursday that any strategy had been finalised after a newspaper ran what it said was the economic plan drawn up by Communist first deputy prime minister Yuri Maslyukov and liberals branded the scheme a return to a command economy which risked re-igniting runaway inflation.
Confirming the impression of disarrayin the government ranks in the face of the worst economic crisis since communism, business newspaper Kommersant-Daily carried a long and detailed report saying liberal finance minister Mikhail Zadornov had opposed virtually every point of Maslyukov's crisis plan.
Central bank chief Viktor Gerashchenko also rubbished the idea, which was not actually in the Maslyukov plan, of banning people from holding dollars -- currently the favoured form of saving for millions of Russians who no longer trust banks.
Such is the economic dislocation caused since the previous liberal government defaulted on some domestic debt on August 17, prompting a slump of some 60 per cent in the value of the rouble, that Primakov found himself having to assure regional leaders on Friday that he would take steps to ensure food supplies.
``The government is taking a...series of measures to prevent a deterioration in the supply of produce to the population,'' he said in televised remarks to a congress of local politicians.
Foodimports, which account for a major part of Russian consumption, are down sharply due to the rouble devaluation and the paralysis of the banking system.
The grain harvest on state farms is also expected to be some 40 per cent down on last year.
But Primakov noted that Russians grew some 80 per cent of their own potatoes and vegetables on household plots and said such private efforts, which made up for state shortages in Soviet times too, should be encouraged as much as possible.
The confusion over economic strategy seven weeks after the crisis blew up will be an embarrassment to Zadornov and Gerashchenko when they turn up this weekend in Washington for the annual meetings of the International Monetary Fund and World Bank, both major creditors of Moscow.
Fellow officials from around the world will be seeking assurances from the Russians that the problems that have contributed to fears of a global recession and slumping stock markets from Tokyo to Toronto are being dealt with.
The IMF has expressedconcern that Gerashchenko's current scheme to refloat the banking system, as well as government plans to pay off billions of roubles in pensions and back-wages to public employees, could mean a return to high inflation.
Having lent Russia $4.8 billion in July under a new $22.6 billion credit facility, the Fund has held off making a second $4.3 billion payment until it sees how things are going.
Gerashchenko suggested there was little chance of making dramatic progress in Washington.
``We are going basically to set out certain points of syntax,'' he told reporters.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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