Yeltsin Sets Payment of $800M to Pensioners

President Boris Yeltsin has signed a decree allocating more than $800 million to provide all back-payments to pensioners by the end of the month, Alexander Livshits, the president's top economic adviser, said Monday.


But economists say the government, under a tight fiscal policy imposed by international lenders, will be hard-pressed to find the funds, which amount to almost 40 percent of the government's monthly budgeted deficit.


The scheduled pension payments will go to people who form the basis of communist support and come just two months before the presidential elections, but Livshits maintained that the decree is not political.


"We are not buying votes for the forthcoming presidential elections. The 1996 budget is tight," Livshits told Interfax. "We are now able to pay the debts and it would be shameful not to do it."


The decree comes just two days after Yeltsin promised in a fiery speech Saturday to look after the affairs of pensioners and to focus on raising living standards.


"We can and should arrange things in such a way that old age would not feel itself forgotten, humiliated by indifference," Yeltsin told supporters.


The decree allocates 4 trillion rubles (about $830 million) to the Russian Federation Pension Fund and gives its officials a week to submit a plan for making the payments.


A second decree signed by twice the 1996 federal budget. "It is impossible to start immediate payment of this sum. ... We need a set of measures to restore the savings, and starting from 1997, the budget will provide the money to start the compensation."


But some analysts note that after paying off 23.5 trillion rubles in wage arrears and payments to regions last month, Yeltsin's people will be left scrambling to find new sources of financing.


Some have even speculated that there is a close correlation between recent wage-arrears payments and a buildup in pension arrears.


Yeltsin "is having difficulty financing all that he wants to spend," said Roland Nash, an economist with the Russian-European Center for Economic Policy.


"This 4 trillion rubles -- I'm sure he can pay it, but it will be at the expense of something else, and this ... has to stop somewhere."


But if Yeltsin's administration is under the fiscal gun, he did not show it Saturday before a congress of his supporters where, flanked by his family and appearing in fighting trim, the Russian president portrayed himself as standing above the country's partisan fray.


"I cannot be a member of any party so long as political strife is splitting up our society," he told the delegates to the congress of the All-Russia Movement of Public Support of Boris Yeltsin's Re-election. "I consider it my task to consolidate society."


While citing continuation of reforms as a major goal, Yeltsin conceded that they have come at a price.


"Almost half the population lives poorly, but 10 percent are doing very well," he said. "Parasitic capital has begun to take shape, and national wealth is being shared out instead of being multiplied. Because of political instability in the country, a lot of capital is fleeing abroad."


Despite his criticism of the dark side of reforms, Yeltsin played up the June election as the battle between good and evil, in which support for his candidacy and reforms would prove the only road to continued freedom.


"We will win so that these elections should not be the last," he said. "We will win so that the time when Russia was considered 'an evil empire' will never come back."


The president did not deliver on a promise, made by his campaign officials, to unveil his platform at the congress. Instead, he said it would be presented in May.


"The program is ready, but I don't want to publish it. I don't want it to be ... used by my rivals or to be forgotten by the time the elections come," he told reporters after the congress.


Yeltsin, who declared his main goals to be prosperity, freedom and happiness for the individual and the family, was frequently interrupted by applause at the congress.


In attendance were luminaries of the Russian establishment, including Moscow Mayor Yury Luzhkov; Vladimir Shumeiko, head of Reforms-New Course; former finance minister Boris Fyodorov; Sergei Belyayev, head of the State Duma faction of Our Home Is Russia; Women of Russia leader Yekaterina Lakhova; Academy Award-winning producer Nikita Mikhalkov and popular psychic Dzhuna.


In a clear reference to his Communist opponent, Yeltsin declared: "It is our duty to the memory of those millions who were tortured and killed in the camps, to our children and to the succeeding generations to prevent the neo-Stalinists, fascists and extremists from rising to power in Russia. Russia must enter the 21st century without that scum."