Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.news From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Yeltsin's survival plan boosts fuel prices within CIS Date: Tue, 17 Nov 92 15:07:56 EST Message-ID: \SE A;WORLD \SS (WS) \HD Yeltsin's survival plan boosts fuel prices within CIS \BY Clinton O'Brien \CR ASSOCIATED PRESS \DT MOSCOW MOSCOW - President Boris Yeltsin and his Cabinet yesterday completed an "anti-crisis plan" to get Russia through the winter but rejected opposition demands to freeze prices and slow reforms. The government also decided to charge world prices for oil, gas and other natural resources to former Soviet republics that no longer use the ruble, chief economic spokesman Alexei Ulyukayev told a news conference. "This is what we have in mind: not to subsidize the economies of neighboring states," Mr. Ulyukayev said. Mr. Ulyukayev's remarks followed a Cabinet meeting to complete the government's four-month plan and a draft budget for 1993. The program, to be submitted to lawmakers next week, will shore up Russian industries through subsidies and tax breaks, as well as tariffs on some foreign imports, he said. Russia's military budget will stay roughly at the same level next year. The government will spend less on weapons production, but these savings have been offset by housing and relocation costs for troops returning from Eastern Europe and the Baltic states, Mr. Ulyukayev said. Military spending this year accounted for $4.2 billion, or 16 percent, of Russia's budget. Mr. Yeltsin's government has faced pressure from the increasingly powerful Civic Union parliamentary bloc to slow reforms. Civic Union, which includes factory managers and key figures such as Vice President Alexander Rutskoi, has demanded a freeze on prices and wages - steps that Mr. Yeltsin rejected last week. Mr. Ulyukayev said Civic Union lacks a practical plan for improving Russia's economy. The demand for world prices from nations that have left the "ruble zone" follows Ukraine's move last week to ban the Russian ruble in the second-most populous former republic. "If Ukraine has already moved to its own national currency, let it immediately start paying us in foreign currency," Mr. Yeltsin was quoted by ITAR-Tass news agency as telling the Cabinet. "This also applies to Lithuania, Latvia, Estonia and those Commonwealth countries that will move to national currencies," he said. Some republics have bought Russian fuel or raw materials for rubles, and then sold them abroad at higher prices for foreign currency, Mr. Ulyukayev said. These republics will now have to pay Russia in foreign currency, the ruble equivalent or goods, he said. Lithuania recently agreed to pay world prices for a guaranteed supply of Russian oil and gas in 1992 and 1993. The agreement would be a model for future sales of Russian resources to other members of the Commonwealth of Independent States that have banned the ruble, Mr. Ulyukayev said. Besides Ukraine and Lithuania, the other republics that have replaced the Russian currency are Latvia and Estonia. Tajikistan, Moldova and others are considering similar moves. Mr. Ulyukayev also said the government expects a 70 percent inflation rate next year and a budget deficit of 4.8 percent of GNP. Earlier this month, Finance Minister Vasily Barchuk told Interfax news agency that the 1993 budget deficit would be more than 6.5 percent of the gross national product. Monthly inflation soared to 400 percent earlier this year after the government lifted price controls on most goods and services, then settled down to about 10 percent a month. Also yesterday, the government clarified aspects of its privatization plan: * The deputy chairman of Russia's State Property Committee said the first auctions of enterprises for privatization vouchers will be held Dec. 15 in several cities, including Moscow, St. Petersburg, Vladimir and Perm. * Mr. Yeltsin signed a decree limiting the privatization of oil and gas companies, power and communications utilities and other key state-owned enterprises. It allows the government to retain a controlling share for up to three years. This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM