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Criticized for Fiscal Crisis, Yeltsin Vows to Keep Office

By Richard C. Paddock
Los Angeles Times

President Boris N. Yeltsin, stung by a flurry of reports that he would resign over Russia's fiscal crisis, emerged from seclusion Friday and insisted on nationwide television that he will serve out his full term as president.

But facing enormous criticism over his government's mismanagement of the economy, the ailing, 67-year-old president announced he would not be a candidate for re-election when his term expires in less than two years.

"I want to say that I'm not going anywhere," Yeltsin said in an interview broadcast on state-run television. "I'm not going to resign. I will work as I'm supposed to for my constitutional term. In 2000, there will be an election for a new president and I will not run."

But Yeltsin's bid to remain in power comes at a price. In a major concession Friday, the Kremlin offered to give up a share of the president's authority to the Communist-dominated Duma, the lower house of parliament.

And ending the era of leadership by his so-called "young reformers," Yeltsin dismissed the two top officials who had been most closely associated with his failed effort to overhaul the economy along Western lines.

The president fired Anatoly B. Chubais from his post as envoy to international lending institutions, and he accepted the resignation of Deputy Prime Minister Boris Y. Nemtsov, once thought by some to be Yeltsin's heir-apparent.

For Russia, agreement on the power-sharing pact with the Duma would mean a step back from attempts to impose Western-style, market-oriented measures on the economy. It is also likely to assure the ascendancy of acting Prime Minister Viktor S. Chernomyrdin - a onetime Soviet-era boss who previously served five years as Yeltsin's prime minister.

But Yeltsin, while assuring the public he would try to limit price hikes and prevent Russians from losing their savings, stopped short of proposing a plan to halt the collapse of the economy.

During the 10-minute segment of the interview shown on RTR television, Yeltsin appeared stiff and deliberate, sometimes waiting many seconds before answering a question. Asked what was the way out of the fiscal crisis, Yeltsin answered only in brief generalities.

"Of course, now, it would be naive to say we will take measures' and so on and so forth, so that people do not suffer," Yeltsin said. "But nevertheless, I, as president, am obliged to say that we will take all measures to ensure that people's savings do not suffer."

Yeltsin's television appearance came only days before he is scheduled to hold a long-awaited summit with President Clinton in Moscow. The White House had hoped to focus discussion on the reduction of nuclear arms and the conflict in Kosovo, but Russia's economic troubles threaten to eclipse international issues.

Before the broadcast of the interview, Yeltsin met for 15 minutes with U.S. Deputy Secretary of State Strobe Talbott to discuss preparations for the summit. Afterward, Talbott declined through a spokesman to discuss the condition of the president, who has been sidelined much of the past two years by heart and lung ailments.

Yeltsin's government, facing the collapse of the ruble and the disintegration of the banking system, has begun resorting to methods of state control practiced in Soviet times.

Having temporarily banned trading in major currency markets, the government has set the value of the ruble at an artificially high rate of less than eight to the dollar. However, at exchange offices around Moscow, the ruble was trading at between 10 and 14 to the dollar.

Uncertain what the ruble was actually worth, many stores that sell imported goods simply shut down to avoid ending up with stacks of rubles whose value would quickly evaporate. Others kept raising prices throughout the day Friday to try to keep pace with what they estimated the ruble was worth.

With banks running out of funds and freezing payments to their clients, many companies were unable to carry out their business. And on city streets, depositors crowded outside bank branches hoping to withdraw the dollars or rubles they had put in their savings accounts.

Many financial institutions were headed for bankruptcy, including insurance companies that invested heavily in high-interest, short-term treasury bonds that are now nearly worthless under a government plan to restructure its debts.

Some advocates of free enterprise worried that the collapse of the economy and the growing influence of communists in the government could strengthen calls for the nationalization of certain sectors of the economy.

"It is clear that the pendulum of sentiments in the government has swung in a direction opposite from strengthening and supporting private ownership," said Andrei A. Nechayev, a former minister of the economy and now co-chairman of the Russian Business Round Table. "Many people in Russia find such a trend rather scary."