Reform Drive Spurs Yeltsin to Ban State Purchase of Foreign Cars

There aren’t many T-birds among them, but President Boris N. Yeltsin is taking the Russian leadership’s flashy cars away.

Yeltsin proclaimed a ban Wednesday on foreign car purchases using state coffers as of April 1, and he ordered those already imported at taxpayer expense to go on the auction block.

The moves, inspired by a reformist from Russia’s auto-producing region, are expected to win cheers from a struggling population and could mute today’s nationwide labor strike, which is expected to idle as many as 17 million workers.

With millions of Russians scratching out a living below the poverty level, the sight of sleek Mercedes, Volvo and BMW sedans with government license plates sweeping through the city inspires resentment among the masses.

It remains to be seen whether the edict to “buy Russian” will be adhered to by government fat cats who have grown accustomed to the perquisites of power and savvy about how to protect them.

Most imported luxury cars have made their way into this country duty-free, due to elaborate loopholes and schemes concocted by officials in a position to arrange tariff exemptions in return for kickbacks. Finance Ministry officials reported last year that fewer than 10% of the cars imported were assessed import duties designed to protect and bolster Russia’s domestic auto industry.

The advent of open borders and the removal of a Soviet-era ban on foreign car imports triggered a huge influx of Western luxury cars at the start of this decade, shattering the market for Russia’s own less-reputable autos.

But since Nizhny Novgorod’s popular governor, Boris Y. Nemtsov, was elevated by Yeltsin to the post of first deputy prime minister last week, the 37-year-old reformer has been lambasting the practice of spending government money on foreign-made rolling stock to the detriment of the Russian people.

Nizhny Novgorod is home to the vast GAZ auto works, which produces the Volga sedans that in the Soviet days were as good as it got for government and Communist Party functionaries.

Although GAZ continues to operate and perform better than most Russian industries, Nemtsov has argued that a ban on state-funded imports is essential to rescuing the rest of the industry.

Whether the edict will be applied to Yeltsin’s own stretch Mercedes remained to be seen. Unsold Zil limousines now languish at the Moscow factory that produced them for top officials during the Communist era.