Russian PresidentBoris Yeltsin summoned ten of the country’s leading industrialists andbankers to the Kremlin yesterday and appealed to them to help the countryout of its financial crisis. The situation, he told them, was “unbearable”and largely their fault. The failure of Russian investors to invest inRussia meant that foreign investors were abandoning the country. “Russia hasgot to help itself,” was Yeltsin’s message. The bankers and industrialists,who constitute ten of Russia’s most powerful men, promised to come up withsuggestions for an “anti-crisis” program which Yeltsin will unveil at aKremlin meeting on June 30. It will be preceded June 23 by a roundtablemeeting between the president and parliamentary leaders. (RTR, June 2)
Markets rallied in reaction to the news of yesterday’s meeting, wiping outMonday’s losses, but the Russian government remains on the horns of adilemma: to fight off speculation against the ruble, it has hiked interestrates to 150 percent. With interest rates at that level, it is very hard topersuade people to invest. Yeltsin has woken up to the danger late. He does,however, appear at last to have recognized that, after years of stop-and-goreforms, radical change is essential if Russia is to dig itself out of itsfinancial morass. Yeltsin is at his best in a crisis. The problem is that hehas a short attention span. In the past, he has risen to the occasion onlyto lose interest later and allow reform drives to be suffocated byinstitutional opposition and bureaucratic resistance.
IMF REPEATS THE MESSAGE.