Russia Reveals Basket of Economic Woes

Across this battered country, cows are giving less milk, chickens are laying fewer eggs, and sugar is disappearing from stores. And that is just a fraction of the bad news that Russians received Thursday when the government released grim reports on the moribund economy.

Almost one-third of Russia’s 148 million citizens live in poverty, earning less than 2,000 rubles a month--roughly $5 at the exchange rate set Thursday, when the ruble tumbled to a new low of 398 to the dollar, according to official statistics. Prices have skyrocketed 1,300% in the past 10 months, far outpacing salary increases. Retirees scraping by on meager pensions often spend more than 10% of their income just buying bread.

Although the official unemployment figure remains a startlingly low 1.5%, millions of workers have been ordered to take unpaid “vacations” or to halve their hours as factories scale back production. The latest government figures show industrial output down almost 18% compared with last year.

Under pressure from factory managers, the government has stepped up its subsidies to failing enterprises, although this policy spurs inflation and holds back Russia’s transition to a free-market economy.

“In moving from a command system to a market economy, the worst place to be is in between,” said Richard Layard, a British economic adviser to the Russian government. “It’s a very, very dangerous situation,”

Despite Acting Prime Minister Yegor T. Gaidar’s promise to attack inflation by cutting subsidies and halting round-the-clock printing of new bank notes, “We see no evidence of a tightening of monetary or credit policies,” said Sergei Vasiliev, director of the Center for Economic Reform.

The unrelentingly grim economic news has galvanized critics of Russian President Boris N. Yeltsin’s reform program. More than 40% of Muscovites now want the resignation of Gaidar, the architect of the “shock therapy” approach to dismantling communism in Russia, a poll released Thursday said.

Yeltsin’s enemies also are stepping up their attacks in preparation for the Congress of People’s Deputies session in early December, at which conservative legislators will try to turn back the reforms.

In an unprecedented slap at Yeltsin, the Novosibirsk Regional Council issued an audacious statement on Thursday, calling for the Russian Parliament to eliminate the post of president by constitutional amendment.

The Siberian lawmakers blamed Yeltsin’s reforms for destroying the local economy and demanded billions of rubles in emergency aid.

Leaders of the banned National Salvation Front, a coalition of conservative former Communists and nationalists that Yeltsin outlawed Wednesday as a “terrible menace” to society, echoed the call for the government’s ouster.

Giving the prophets of gloom more fodder, the government on Thursday released a proposed 1993 budget that acknowledges the need for still more belt-tightening.