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YELTSIN DEFENDS MARKET REFORMS, VOWS TO EASE PAIN AND SUFFERING

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Boris Yeltsin, facing voters in just four months, promised Friday in his annual state of the nation address to focus on easing the pain and trauma of market reforms - and threatened to dismiss his government if it fails.

"We have long appealed to our countrymen to tighten their belts, and they did so, but the limit of their patience is exhausted," the Russian president said in a nationally televised address before a joint session of parliament."We have come to the edge of that dangerous line beyond which fatigue and mistrust may outbalance people's fortitude and hope."

Yeltsin's 50-minute speech was itself a mixture of hope and grim recognition that social tensions and discontent were running too high, jeopardizing his chances at a second term.

"The task is to develop the market and reduce the social cost of that process, but without reducing the actual reforms," the president said.

"I will work to achieve that, and I require the same of all officials, above all the Cabinet. It will either be able to accomplish that task, or there will be another Cabinet to do it."

On Thursday, Yeltsin's reform efforts got a major boost when the International Monetary Fund agreed to loan Moscow $10.2 billion to move Russia toward a capitalist economy.

While listing such achievements as establishing free-market mechanisms and democratic freedoms, Yeltsin's speech also presented a dark picture of crumbling agriculture, underdeveloped industry and a poorly paid military.

But speaking firmly and confidently, he also defended his five years of reforms as the only way of saving Russia from economic collapse, and he blamed the Soviet legacy for many of the shortcomings.

Yeltsin said Russia was well on its way toward building a strong democracy and economy, and urged his countrymen not to give up now.

The June presidential election, Yeltsin insisted, "is probably our last chance to break free from the vicious cycle" of Soviet-style repressions and political upheavals.

Since communists and ultranationalists did well in parliamentary elections in December, Yeltsin has dismissed his most ambitious reformers and promised more social spending - causing many reformists to worry he will abandon the government's tough austerity program.

But Friday, Yeltsin largely stuck by his government's record. He said the reformists' guilt lay in ignoring people's suffering.