NEWS ANALYSIS : Yeltsin, on the Stump, Sounds a Lot Like Bush : Russia: Voters are skeptical about his message that a better economic future is just around the corner.

As he campaigns for a vote of confidence in Sunday’s referendum, President Boris N. Yeltsin sounds at times like George Bush last fall--an embattled leader bearing tidings of economic revival to disbelieving voters.

Russia’s economic free fall is over, Yeltsin keeps proclaiming. Inflation is down.

“There is a myth floating around the country, which needs to be dispelled, that production is plummeting,” he says. “Don’t believe it.”

That message has drawn derisive laughter from an audience of rich industrialists and skeptical grunts from the elderly poor, who keep asking Russia’s leader to explain how they’re supposed to live on the minimum pension of less than $8 a month.

“Long Live Yeltsin--and High Prices!” proclaimed one sarcastic banner greeting the president at a coal mine.

In fact, the economy does show signs of stabilizing after a long, chaotic decline. But the fragile process is invisible to most voters, and it appears to be threatened by political turmoil over Yeltsin’s free-market reforms that the referendum is unlikely to resolve, whether the president wins or not.

Under “shock therapy” reforms launched in January, 1992, Yeltsin’s government wrenched Russia from seven decades of Communist central planning. It freed prices for most goods, filled shops and small commercial kiosks with imported consumer items and put more than 6,000 state-owned enterprises up for sale.

Yeltsin’s conservative rivals in Parliament say the reforms have destroyed Russia’s industrial base. While millions of Russians have become small-scale entrepreneurs, tens of millions of others, about one-third of the population, have fallen below the official poverty line of 8,500 rubles ($10.90) per month in an era of growing uncertainty, rampant crime and high inflation.

After watching industrial production shrink 20% last year, government economists announced good news last week: a 2% rise in output in the first quarter of 1993. Inflation, galloping at 25% a month most of last year, is projected to fall below 18% for April.

On top of that came a landmark agreement between Yeltsin’s ministers and the Parliament-controlled Central Bank to limit growth of the money supply to 10% a month. The deal helped Russia unlock $28.4 billion in aid pledges last week from the world’s leading industrial democracies.

Government economists said this week they expect about $10 billion of that aid to arrive in the second half of this year, enabling them to push the free-market transformation ahead without hyper-inflation or mass unemployment.

“I think one can definitely say that the economic situation is better than at any time in the past eight months,” said London School of Economics professor Richard Layard, who advises Russia’s government. “Of course all this continues to depend on satisfactory developments in the political sphere.”

That’s a big “if,” because the outcome of Sunday’s referendum is far from certain. Opinion surveys in Moscow show most people believe that life is still getting harder. Yeltsin has been unable to capitalize on the huge foreign aid package, because Russians remember a similar pledge a year ago and don’t see much to show for it.

If Russia’s first democratically elected leader loses the confidence vote and honors his promise to resign, the aid package would stall as Russia plunges into a power struggle over his succession. Even if he wins, his reform mandate would be muddied by the almost-certain “no” vote on another referendum question, asking whether voters approve of his economic policies.

The referendum campaign itself threatens to destabilize the economy. Furiously courting voters, Yeltsin has canceled a tax on coal exports and a rise in gasoline prices while promising everything from higher benefits for veterans of the war in Afghanistan to “presidential scholarships” for students to go abroad.

Yeltsin’s foes in Parliament have more than matched his largess with a pledge to compensate people for devaluation of their savings from last year’s 2,600% inflation, at a cost of $501 million.

Paying for all this would wreck the government’s credit curbs and jeopardize the whole foreign aid package, economists say. Central Bank President Viktor V. Gerashchenko predicts that Yeltsin’s ministers will come begging for extra rubles starting in June.

Deputy Prime Minister Boris G. Fyodorov and other reformers are urging Yeltsin to forget many of his vote-seeking promises as soon as the referendum is over. They are pushing for a more aggressive policy of selling off profitable state companies and forcing inefficient ones into bankruptcy.

The problem with that idea, however, is that the electoral season may be just beginning. In addition to determining voters’ attitudes toward Yeltsin’s leadership and his reforms, Sunday’s referendum will probably decide whether the president and Parliament must face early elections.

“In any situation, an election campaign is not the best time for stabilization,” said Andrei Illarionov, an economist at the government Center for Economic Reform. “I fear a race of populist actions, a race of giving away additional subsidies and privileges.”

Perhaps to avoid frightening voters, Yeltsin has shifted his campaign rhetoric away from reform economics. Speaking to students, he said, “There will be no second shock like we had to go through last year.”