Yeltsin assails bribery, crime, other ills in state-of-union address to parliament


MOSCOW -- President Boris N. Yeltsin's state of the union address yesterday might better have been titled: "What's Wrong with Russia."

In an hour-long speech to a joint session of the Federal Assembly, or parliament, Mr. Yeltsin touched on all the major ills of a nation in serious trouble.

Crime, pervasive bribery, corrupt and smothering officialdom, capricious taxation, the power of lobbies, inflation, deficit spending, a decline in the arts, a lack of respect from other nations -- they all demand action, Mr. Yeltsin said.

"Today our country is living through one of the most difficult periods in its history," he declared.

But what to do about it? With Russia at a historic turning point, which way will it turn?

Solutions unclear

Those are clear questions facing the nation. The answers become a little more complicated.

In his speech, the president offered few prescriptions and few specifics. In fact, he was more bland than many had expected. Several legislators said afterward they weren't sure what he stood for, especially concerning economic reform.

If anything, he seemed to be signaling a retreat toward Prime Minister Viktor Chernomyrdin's go-slow approach of continued state support for industry, with strong government regulation.

A separate written document, a 100-page report delivered to the parliament yesterday, had more bite.

In it, for instance, he paid a considerable amount of attention to factory managers who neglect to pay their bills -- a huge and growing problem -- and who nevertheless seek government handouts of credit.

The non-payment problem has reached crisis proportions and is helping to bring the whole economy to a halt, yet the factory managers seem to have particular influence in the government, especially with Mr. Chernomyrdin. In his report, Mr. Yeltsin said he would not rule out taking legal action against such managers.

"The crisis of non-payment," he said, "takes on political overtones and threatens national security." He promised to take "proportionate" actions to meet the threat.

No more subsidies

Moreover, he called for the abandonment of "costly subsidies and support to hopeless industries."

Additionally, he said the government must limit inflation to 3 percent to 5 percent a month and set quarterly ceilings on deficit spending. He said he would introduce laws to overhaul the country's entire banking system, which up to now has largely been a factor for chaos in the economy.

Clearly, Mr. Yeltsin took the dual approach -- the spoken and the written word -- out of political considerations.

Even though the State Duma, parliament's lower house, had taken the provocative move Wednesday of voting an amnesty for those involved in the 1991 coup and 1993 uprising, Mr. Yeltsin seemed intent on finding common ground with his political foes. He was also reaching out, through his televised address, to the nation as a whole.

And because few here can agree on what should be done, he perhaps wisely avoided specifics in his talk, saving them for the report. But everybody here can agree on what's wrong, so that's what came across yesterday.

"Organized crime," he said, "is trying to take the country by the throat.

"A person's life is still tangled in petty limitations and restrictions" by the state bureaucracy, he said. "A disgraceful bribe is often part of the answer to many problems."

'A painful death'

The tax system is so burdensome, he said, that "in this system an enterprise or an entrepreneur can do only one thing honestly -- die a painful death."

(Here, even Vladimir V. Zhirinovsky, the ultranationalist leader, could be seen nodding in agreement.)

Mr. Yeltsin talked about the need to remember those people who are hurt by economic reform, and to try to reduce their pain.

He also declared that Russia would never forget those ethnic Russians living in neighboring countries; that the world must recognize that Russia is not a "guest in Europe" but a strong player in European affairs, and that Russia must take on the burden of enforcing the peace in the other republics of the former Soviet Union, because no one else will.

None of this was calculated to offend anyone in his audience.

But few were thrilled, either.

"The president's message to parliament leaves an ambiguous impression," said Gennady Zyuganov, head of the Russian Communist Party.

Georgy Zadonny of the Russia's Choice reform bloc said he couldn't get a clear picture of Mr. Yeltsin's plans for the economy.

"It was often contradictory and there was too much covering too wide a field," said Viktor Davydkin, a Yeltsin ally from Voronezh.

"I was disappointed," said Vladimir Isakov, a hard-line Yeltsin foe. "He claimed he will stick to reforms on the one hand, and on the other hand he talked about the social difficulties people are having. I cannot imagine how the two things can be put together."

But the real question is how successful Mr. Yeltsin will be in acting on his words.

To steer a course between government regulation and a free market, between cutting inflation and increasing production, between intelligent investment to help industries through to better times and wasteful subsidies to dying factories -- "to find something in between, well, this is politics," Mr. Davydkin pointed out.

It won't be easy, he said, and Mr. Yeltsin hasn't helped himself any by being so reclusive this winter.

"In Voronezh we sometimes feel as if we don't have a president," the Yeltsin supporter said.

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