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. Last Updated: 07/27/2016

Industrialists Jeer Yeltsin on Economy

Instead of the support he was looking for, President Boris Yeltsin got derision from Russia's powerful lobby of factory directors Friday, when he told them his economic policies were bringing inflation under control.

The president was interrupted by laughter and catcalls three times during a half-hour speech to several thousand factory managers at a day-long meeting of the Russian Union of Entrepreneurs and Industrialists.

Yeltsin was attacked from another quarter on Friday by his rebellious vice president, Alexander Rutskoi, who accused top members of his government of profiteering by selling state property to Western firms and Russian criminals at bargain prices.

Rutskoi, who chairs the state anti-corruption commission, told parliament that in this role "I have come across numerous cases where national wealth has been looted and where high government officials are involved". He said he did not believe that Yeltsin himself was implicated.

The vice president also said that he did not intend to resign, despite coming under increasing pressure from Yeltsin to do so.

"The people elected me, like President Yeltsin", Rutskoi said, adding that he would not give way "to any provocation".

On Thursday, Yeltsin said he was removing the vice president from his post in charge of agriculture, while Rutskoi's aides said his bullet-proof Mercedes limousine had been taken away from him, as well as most of his bodyguards and a personal doctor.

Yeltsin has long courted the support of the industrialist's lobby that criticized him so harshly.

Their harsh response Friday to his remarks was the clearest sign to date that he is failing to win their support for a crucial April 25 referendum, designed to renew his mandate to rule Russia and to overcome opposition in the legislature.

The longest interruption came when the audience burst into jeering laughter as Yeltsin read figures showing that inflation was diminishing.

"While the rate of inflation was 27 percent in January and 25 percent in February, then in March . . ". he stopped as laughter and shouts filled the hall.

"I do not understand why", the president said of the response, turning to the podium from which the meeting was being chaired. "In March it was 17 percent. and if we count in five-day periods, in early March . . ".

At this point, Yeltsin could not continue over the shouts, and industrialist leader Arkady Volsky appealed to the unruly crowd to hear the president out, asking them to behave in a more civilized manner.

Volsky spoke directly after the president and promptly delivered an hour-long attack on the rapid pace of reform.

"Economic blitzkrieg for Russia is unacceptable", he said as the crowd applauded.

Yeltsin, campaigning for support in the referendum, hopes to convince Russians that the painful economic reforms that began in January 1992 are finally starting to bring positive results.

His opponents are trying to persuade voters of the opposite. Yeltsin's arch-rival, parliament speaker Ruslan Khasbulatov, addressed students in St. Petersburg on Friday.

"It is clear that they have lost the confidence of the people", Khasbulatov said, referring to Yeltsin and his reformist government.

The president needs the support of the industrialists, who often have had as much influence as local governments in their regions, where they are the main employers.

But the factory directors, long the beneficiaries of the command system, have been dubious supporters of Yeltsin's attempts at privatizing their firms -- and thus prying loose their control over the economy.

Volsky, who has long supported a more gradual approach to reforms, insisted the state has a role to play and heaped scorn upon members of Yeltsin's government, who he said panicked at the very mention of state control.

"This kind of behavior is forgivable in a first-year cooking student but should not be allowed among professionals", he said, as the crowd broke into more applause.

Volsky also criticized Yeltsin for not following through on his promises.

"In all respect to you, Boris Nikolayevich", he said, turning to the podium. "You issued a decree forbidding hard currency last July 1, and yet the dollar is still used".

The crowd erupted in an ovation. Other speakers who followed Volsky continued the derisive mood. Boris Nemtsov, the administrative head of the Nizhny Novgorod region who has spearheaded an independent rapid privatization program, said Yeltsin and Khasbulatov should be fined "for every stupid thing they say in Moscow".

"It would mean billions for the state budget", Nemtsov said to cheers.

Yeltsin, speaking to reporters before departing for a summit meeting of the heads of the Commonwealth of Independent States in Minsk, dismissed the industrialist's scornful remarks and jeers.

"I would not say there were rebukes", he said. "I would say there were observations, criticism". Asked if he thought the industrialists -- and their employees -- would support him in the referendum, Yeltsin answered. "I feel that yes, they will".