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. Last Updated: 07/27/2016

President Assails Top Reformers

President Boris Yeltsin lashed out at top government reformers Thursday for the country's high inflation rate and singled out the Economics Ministry for "significant failures in the economy in 1992".

Yeltsin, speaking at a cabinet meeting on the country's disastrous 1992 economic results, said the Central Bank and the Finance and Economics Ministries were "pulling in three opposing directions".

Yeltsin directed the bulk of his criticism at Andrei Nechayev, the reformist economics minister who took office under former acting Prime Minister Yegor Gaidar.

Yeltsin blamed Nechayev for the sharp prices rises in December and January and for failing in his efforts to restructure the economy.

"There has been a lot of talk, but nothing has been done about it", Interfax reported Yeltsin as saying. "Someone should be made to answer for this".

Yeltsin's blast at Nechayev seems to be a clear signal to reformers to return to the tight monetary policies and shock therapy policies the Gaidar government was forced to abandon under political pressure last spring. It followed a government decision in January to reduce credits to industry, lower inflation and chop the budget deficit.

It also seems an effort by Yeltsin to distance himself from the poor economic performance.

Itar-Tass reported later that the president is not calling for Nechayev's resignation, but it marked the second time the president has publicly attacked the minister. In October, Yeltsin blasted Nechayev and former Foreign Trade Minister Pyotr Aven.

Aven resigned in December.

At a press conference later in the day, Nechayev said the government is ready to return to the tight economic policies of early last year and he shouldered much of the blame for the government's failure to stabilize the economy.

"The Central Bank deserves criticism but part of the blame must be laid at our door", Nechayev said of last year's 3. 5 trillion rubles of credits to industry.

Nechayev said the government will begin controlling industrial credits, and switch to a system of investment credits for enterprises to use for building new plants and purchasing equipment.

"The task has been set of phased reductions of major subsidies", he said. "I mean subsidies to agriculture, to food producers, to the coal industry and other subsidies to inefficient production".

It will also cut back on credits to exporters, which totaled 2 billion ECUs (about $2. 4 billion at current exchange rates) last year, and will reduce the list of subsidized imported goods.

Yeltsin's harsh criticism of Nechayev and other government leaders were echoed by Deputy Prime Minister Boris Fyodorov, who criticized Gaidar for failing to follow through on his promise to clamp down on the money supply.

"I think Gaidar could have done more in his position", Fyodorov said. "Tough monetary policy did not fail as it never existed".

He continued, "This does not look like radical reform or structural changes. Prices went mad, living conditions worsened but this happened without the reforms that had been promised".

Yeltsin said the financial policies of the Gaidar government's "uncontrolled credit emissions" had caused last year's 2, 600-percent inflation rate.

Yeltsin also did not spare the Central Bank, whose chairman Viktor Gerashchenko has been blamed for issuing cheap credits to support antiquated Soviet enterprises.

He called the bank's decision to release 3. 5 trillion rubles "a most crude mistake, adventurism".

"The consequences of this injection will be felt throughout the current year", he said.

Yeltsin said the country should increase arms sales to boost export earnings. and he called on creditor nations to accept an offer to trade debt for equity in Russian industry.