YELTSIN CALLS FOR STRONGER STATE ROLE IN THE ECONOMY.

Russian president Boris Yeltsin called for a stronger role for the state in managing the economy when he addressed the upper house of the Russian parliament, the Federation Council, on the opening day of its autumn session this morning. (Itar-Tass, September 24) He said there is no intention of returning to Soviet-style central planning, but that the state must use its powers to intervene in the economy to ensure a level playing field for all players. The state will not interfere in legitimate business activities, but it will act to establish common rules of the game, Yeltsin stressed.

Yeltsin also proposed an amnesty to entice those who have illegally exported capital to return it to Russia and invest it in the national economy. He proposed charging a fee of between 10 and 15 percent on all repatriated capital, in return for which citizens and institutions would be guaranteed immunity from criminal prosecution.

Yeltsin also proposed lifting all the numerous taxes on Russia’s farmers except for one — the land tax. He urged regional leaders, who make up the bulk of the members of the Federation Council, to speed up the sale of agricultural land to private owners — something many regional leaders strongly oppose.

Yeltsin also indicated that the government will make more decisive use of the state’s stake in some of Russia’s "vitally important industries." In Hong Kong yesterday, First Deputy Prime Minister Anatoly Chubais predicted that this would be a key element of Yeltsin’s speech. Chubais identified the gas giant Gazprom and the electricity monopoly United Energy Systems as likely objects of increased government intervention. Chubais also indicated that the government intends to act more aggressively to ensure that Russia’s most rebellious regional governors toe the line. The government is anticipating opposition from the Federation Council to its new Tax Code, under which the regions’ share of taxation revenue is due to shrink. (Itar-Tass, Reuter, September 23)

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