Yeltsin critics assailed by his U.S. adviser Parliament, Central Bank blamed for economic woes

January 16, 1992|By Kathy Lally | Kathy Lally,Moscow Bureau of The Sun

MOSCOW -- While Boris N. Yeltsin toured St. Petersburg yesterday in an attempt to drum up public support for his economic shock therapy, his chief U.S. adviser fired on the Russian president's critics.

Harvard economist Jeffrey Sachs blamed much of Russia's economic troubles on its Parliament and Central Bank.

But, he said, even if the bank, Parliament and the government all find a way to act together, there is no quick end to the crisis:

"There will be industrial crisis in this country for years to come because industry was not created for human needs but for the military-industrial complex. There remains a huge industry that stretches from the Elbe to Vladivostok that was not designed for human needs."

People will remain poor here, he said, for years to come.

As for now, he said the Central Bank was irresponsibly printing rubles as fast as the presses could roll and giving state-run enterprises endless credits, creating hyperinflation.

He said the Central Bank is under the control of the Parliament, not Mr. Yeltsin. Attacks against Mr. Yeltsin have been led in the last few days by the speaker of the Parliament, Ruslan Khasbulatov.

"During 1991 the Central Bank was the major source of the hyperinflation now under way," Mr. Sachs said. "The Central Bank has the major responsibility for stabilizing the currency. The Parliament also has a responsibility to keep the budget under control. I'm hoping reason can prevail."

As Mr. Sachs criticized the Central Bank for monetary irresponsibility and the Parliament for overspending and a reluctance to tax, he praised Deputy Prime Minister Yegor Gaidar, Mr. Yeltsin's economic strategist who also has been under attack.

"The world is extremely impressed with Mr. Gaidar and his economic team," he said, adding what they have accomplished so far is "amazing."

Mr. Gaidar, in an interview with the newspaper Izvestia, said thatthe government will be criticized whether it plunges ahead or backs off and that economic disaster would accompany any lack of resolve.

But it is becoming increasingly clear that not all the Russian leadership believes as heartily in market reforms as Mr. Yeltsin apparently does.

Mr. Khasbulatov said that Mr. Yeltsin's decision to withdraw subsidies and let prices of food jump Jan. 2 was leading to "anarchy and uncontrolled price rises."

A group of trade unions is threatening a mass protest tomorrow. Mr. Khasbulatov predicted that just because there has been little publicprotest so far doesn't mean trouble isn't coming.

"People are really worried," he said in an interview. "They are still silent yet, but it is the silence before the storm."

Though he avoided naming Mr. Yeltsin, Mr. Khasbulatov called on the Russian government to resign. Mr. Yeltsin is acting as his own prime minister.

Some of Mr. Khasbulatov's critics suspect he is assailing Mr. Yeltsin solely for political gain -- that he doesn't want to share the blame for any public anger over the higher prices.

Today, Mr. Yeltsin is expected to take on the Parliament in a debate over the economy.

Journalists in St. Petersburg reported that Mr. Yeltsin was jeered by a crowd unhappy with high prices yesterday and could offer small comfort.

"I have nothing to offer as consolation," he said. "The fall into the economic abyss will continue until at least this autumn, but then prices will start going down."

Mr. Sachs tried to pressure the Central Bank with the weight of world opinion.

"The world is waiting to see if the Central Bank can change its policy," he said.

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