Yeltsin vows to proceed with reforms Rigid controls out, industrialists told


MOSCOW -- Heading for a December showdown over the fat of his government, President Boris N. Yeltsin yesterday took his case to a powerful and not-too-friendly audience of conservative industrial leaders -- and told them that there is no turning back on reform.

He lashed out as well at those critics who have stepped up their denunciations of his government, accusing them of launching "an unbridled campaign to whip up political hysteria."

A pro-Communist lawmaker on Friday accused Mr. Yeltsin of planning to dissolve Parliament and declare emergency rule.

With the charges and countercharges flying around Moscow in anticipation of a fateful December session of the Communist-dominated Russian Congress, Mr. Yeltsin laid his case out before the conservative managers of state industries -- a powerful group that may hold the key to the future of his reform program.

The gathering was organized by the conservative Union of Industrialists and Entrepreneurs.

In a sandpapery voice, he asked for their support -- but it sounded more like a warning than a plea.

"Scandalous groups, with few ideas, want to sow panic and disrupt the reforms," Mr. Yeltsin said.

"Emotions run high, pronouncements do not square with facts, and there is a lack of constructive proposals."

Mr. Yeltsin said he favored much of the industrialists' own program -- stopping the decline in the standard of living, for instance -- but he said there is no chance of increased subsidies for industry or a return to central regulation of prices and production.

Opponents of Mr. Yeltsin's program have set their sights on the next session of the Congress, the super-parliament that generally meets just twice a year. They hope to slow or stop the reforms, toss out most or all of the Cabinet ministers, and perhaps seize power from Mr. Yeltsin.

The industrial managers, who have been unhappy but not politically active, could hold the balance of power, controlling as they do most of the nation's means of production.

Their acknowledged leader, Arkady Volsky, has been playing a careful game for several months now. One day he will suggest that the acting prime minister, Yegor Gaidar, should resign. The next day he'll backtrack.

He says he has no interest in stopping reform.

But yesterday he followed Mr. Yeltsin at the industrial managers' meeting and said the reforms need "serious adjustments" -- that there should be a transition to a market economy but that it should be guided by state regulation.

Later, he said that leaders of the industrial managers' group would sit down with members of the government on Wednesday to try to iron out their differences.

If that should fail, he said, then the Civic Union bloc of parliamentary deputies, of which he is one of the leaders, would turn against the government at the December Congress.

There was nothing fidgety about Mr. Yeltsin's speech yesterday. He essentially told the industrial managers that the choice was between him and his extremist foes.

"The days of storms and squalls are not over," Mr. Yeltsin said.

But he did point to a few glimmers on the horizon. The cash shortage of last spring has vanished. The decline in industrial production has been slowed. The harvest is going well.

He congratulated the managers on "not yielding to the efforts of certain political forces bent on plunging Russia into chaos," which was by implication an acknowledgment, as well, of the old industries' lingering clout.

Mr. Gaidar didn't fidget yesterday, either.

Addressing a meeting of local government councils, he said the government's loose money policy of last summer was the only reason unemployment had not yet become a big problem in Russia -- but he predicted that it was about to.

He said hyperinflation -- currently running at about 1,000 percent -- posed an even bigger threat to the country.

The Congress convenes Dec. 2. Elected in the days of the Soviet Union, it is top-heavy with Communists and has never been friendly to Mr. Yeltsin. At its last session, in April, it almost forced the government to fall, only pulling back when cooler heads began to question who would be in charge if not Mr. Yeltsin.

Since then the economy has started to flow again, but the ruble has collapsed, and the Yeltsin administration's popularity has fallen with it.

A study by Izvestia newspaper last week showed that out of 479 "democrats" identified last year, 98 have turned against reform, FTC 155 have become "uncommitted" and only 226 have stayed in the reform camp led by Mr. Yeltsin.

Mikhail Poltoranin, Russian minister of information and the press, said Friday the Congress should consider electing a new working parliament, and he dismissed the charge that Mr. Yeltsin was considering direct presidential rule.

"The president is more of a democrat than he needs to be in this situation," Mr. Poltoranin said.

But the main question, with just over two weeks to go before the Congress convenes, is this: Who's got the votes to sustain or block reforms?

On Friday, the regular Parliament passed a bill to strip the Cabinet and Mr. Yeltsin of their power -- although to become law it would require seven constitutional amendments and Mr. Yeltsin's signature, none of which is at all likely. But as a symbolic protest, nevertheless, the bill made its point.

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