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. Last Updated: 07/27/2016

President To Decree Right to Buy Land

President Boris Yeltsin is preparing a decree that would at last give Russians the right to the private ownership of land, a presidential spokesman said Tuesday, a populist move that would set the Kremlin on a collision course with the Communist-dominated legislature.

The land decree would largely obviate the far more conservative Land Code being considered in the State Duma's agriculture committee and was immediately attacked by critics as illegal, election-year posturing.

Indicating that Yeltsin does see campaign appeal in legalizing private ownership of agricultural land, he chose last week's speech in Yekaterinburg, where he declared his candidacy for a second term in office, to propose the idea.

On Tuesday, presidential spokesman Igor Ignatiyev said a decree is now being prepared, although he declined to give details.

The announcement already appeared to be yielding dividends Tuesday. Vladimir Bashmach farmers, Yeltsin turned to small businessmen Tuesday, telling them at the start of a three-day conference in Moscow that their future depends on his government's continued market reforms and their work could be undermined if a Communist wins the presidency.

"I hope that you, Russian entrepreneurs, realize that your own fate as well will be decided this June," he told the 3,500 delegates, adding that he was appointing First Deputy Prime Minister Oleg Soskovets a coordinator of small-business issues.

"Small business constitutes one pillar of economic development, of the population's well-being, as well as of social and political stability, and I would say in many ways of the country's moral standing," Yeltsin said. "In a word, we are talking about creation of a powerful new middle class."

According to statistics released at the forum, small businesses employ more than 9 million people full time and account for more than 10 percent of overall production in Russia.

Both the land and small business initiatives, however, are problematic.

Alexei Chernyshev, chairman of the Duma's agriculture committee and a member of the Agrarian Party, said Tuesday that the planned decree on land ownership was "hasty" and "unconstitutional." Chernyshev pointed to Article 36 of the Russian Constitution, which states that the "conditions and procedure of land use are determined on the basis of federal law." That would appear to preclude Yeltsin from legislating the matter by decree.

"The Land Code is the law according to which land relations should be regulated, and while it is still under development, deputies should be helped to pass the law as quickly as possible ... at least by the end of the first half of this year," Chernyshev said.

However, the issue of what, constitutionally, can be legislated only by the parliament and what by presidential decree has been rich soil for dispute, and the president has in the past successfully imposed his will in other politically sensitive areas, such as privatization.

"We actually expected more than one decree before the elections," said Andrei Udachin, a consultant to the agriculture committee. He added that Prime Minister Viktor Chernomyrdin tried to win votes by proposing a referendum on land ownership before last December's parliamentary polls, but that no referendum had materialized.

"Yeltsin's announcement reeks of populism," he said.

Chernyshev said his committee had not yet seen a draft of the decree, and was continuing work on the Land Code bill, which he predicted would be ready for a second reading in the full house by mid-March. Work on the code has dragged on for over five years, beginning in the former Supreme Soviet.

In its current form, the Land Code bill prohibits private ownership of agricultural land, which is distributed on a rental basis. This land can be bequeathed by a farmer to his heirs, but not sold. The bill does, however, allow for private ownership of other land, including gardens and the land beneath buildings, garages and the like.

And while small business owners applauded Yeltsin's encouraging remarks to their congress Tuesday, many expressed skepticism about what the president would do to help them.

Last year thousands of enterprises were forced out of business by huge tax levies, capital shortages and racketeering, said Stanislav Smirnov, president of the Chamber of Commerce and Industry, Russia's major business lobby.

"Small business is surrounded by an iron curtain of problems created by the government," Smirnov said. "It's not surprising that only 1.5 percent of all small business pay proper taxes. The rest avoid them because they would not be able to survive otherwise."

"Doing business in contemporary Russia is very difficult," said Nikolai Karagoda, director of the Palmira trading company from Ulan-Ude in southeastern Siberia.

"Instead of dealing with our customers, we spend most of our time running around government offices and negotiating with the mafia. We don't ask the government for money. We would be able to pay more to the budget if the government relieved us of huge taxes and bandits."