Angry Yeltsin Attacks His Economic Ministers : Russia: Alarmed by nation’s quickening slide into hyper-inflation, he accuses officials of inaction and incompetence.

His monumental temper triggered by Russia’s quickening slide into hyper-inflation, President Boris N. Yeltsin savaged his top economic ministers Thursday, accusing them of inaction and incompetence and saying that they would answer for their blunders.

Speaking at a meeting of Kremlin officials, Yeltsin also said the Russian economy has not made enough real progress in its structural shift from socialism to a free-market system. “There has been a lot of talk, but nothing has been done,” he complained, according to an account by the Interfax news agency of the closed-door meeting of the government’s Presidium.

Meanwhile, he said, prices rose by at least 25% in December and January and wages by 50%.

“Somebody has to be held responsible for this,” Yeltsin said.

Fighting inflation is now the declared top priority for Yeltsin’s government as it struggles to reduce the vast subsidies to industry and agriculture that have kept it from imposing discipline on its finances. If inflation slips fully out of control, it could scuttle Russia’s economic reforms.

Yeltsin reportedly growled at his assembled ministers that the government and Central Bank have recently issued more than 3 trillion rubles--about $5 billion--in credits and that “nobody--not the Ministry of Finance, not the Ministry of Economics--knows how these credits are distributed.”

He also criticized the country’s rapid push to convert defense industries to civilian manufacturing, saying that Russia has gone overboard in reducing its military production and should not forgo the badly needed hard currency that arms exports earn. Too many potential arms clients have been turning to the West instead, he said.

Viktor Glukhikh, the official in charge of Russia’s conversion process, said that Russia’s arms industry began to “degenerate” last year after the Russian government cut defense procurement by two-thirds.

Yeltsin told Foreign Trade Minister Sergei Glazyev to work out a system, within the next two or three weeks, for pumping up arms exports from Russia, according to the Itar-Tass news agency.

In the verbal buckshot that Yeltsin fired at his economic ministers, he accused the Central Bank, the Economics Ministry and the Finance Ministry of failing so badly to coordinate their policies that they reminded him of the swan, the crayfish and the pike--characters in a Russian fable who tried to pull a cart in opposite directions, getting nowhere.

He cited as another policy failing the fact that not a single Russian factory has gone bankrupt, although many deserve to be closed down or reorganized immediately. Russia’s new law on bankruptcy does not go into effect until March 1, but Yeltsin has already issued a decree providing for bankruptcy procedures.

Economics Minister Andrei Nechayev assured reporters later Thursday that his ministry is already beginning to move in the directions that Yeltsin pointed. Preparations have begun for bankruptcy proceedings, he said, and “now we are looking for victims.”

Nechayev said Yeltsin had even suggested that bankruptcy proceedings should be shown on television.

Despite his harsh words, the Russian president said that he does not plan to sack any ministers at this point, proposing instead that they correct their shortcomings.

Even from the Cabinet that preceded the current one, the team of young economists who launched the painful reforms that cost Yeltsin much of his popularity, the Russian president effectively fired only one member: Foreign Trade Minister Pyotr Aven.

Glazyev, Aven’s replacement, acknowledged Thursday that under Aven in 1992, Russia’s exports had dropped by 12% from 1991 to a total of $45 billion, and imports dropped by 6% to $42 billion.

Vice President Alexander Rutskoi added his voice to the recitation of Russia’s economic ills Thursday, saying that if the country does not get the ruble’s exchange rate under control soon, “we shall utterly destroy the national currency and reduce the worth of Russia to $10,000.”