YELTSIN PRAISES RUSSIA’S EMERGING MIDDLE CLASS.

In his weekly radio address broadcast this morning, President Yeltsin said the growth of a new middle class is essential for economic growth, prosperity and stability. He said there are already one million small businesses in Russia, accounting for 12 percent of GDP and employing 20 percent of the workforce. But he also said that Russia needs far more people who are well-to-do, independent and ready to take risks. (BBC World Service, February 27)

Irina Khakamada, a liberal member of parliament who set up her own small business in the late 1980s and went on to play a key role in the establishment of the Moscow stock exchange, was brought into the government at the end of last year to chair the State Committee to Support Small Business. She said then that her first priority was to simplify the tax system. (Ekonomika i zhizn, No. 39, December 1997) This week, Khakamada presented her proposals for a federal support program for small business. According to Kommersant-daily, Khakamada’s draft is unprecedented since it calls for an allocation from the federal budget to pay parliamentarians who agree to sponsor legislation favoring small businesses. Her proposal ran into strong resistance from the Finance Ministry, which insisted that the budget could not be used to pay kickbacks. "Precisely," Khakamada shot back. "That’s why the Duma is refusing to pass it." Khakamada’s no-nonsense approach has won First Deputy Premier Anatoly Chubais’s endorsement for her draft. (Kommersant-daily, February 25)

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