Yeltsin Plea Prods Russian Lawmakers to OK Budget

MOSCOW — After a dramatic personal plea from President Boris N. Yeltsin, the Communist-dominated Russian parliament dropped months of opposition to next year’s austerity budget and passed it Friday at its first reading.

In an atmosphere of growing anxiety over domestic economic turbulence stemming from the instability of Asian markets, Russian government and business officials feared that a further delay by the lower chamber, or Duma, on the budget would push the Russian economy into a tailspin.

The Russian government is struggling to meet financial commitments and improve its poor tax collection as well as trying to deal with allegations of high-level corruption, a stock market crisis, delayed privatization and a promise by Yeltsin to clear about $1.6 billion of public-sector wage arrears by year’s end.

The threat that the 1998 budget would be rejected Tuesday was potent enough to force Yeltsin into the Duma building to make his first address to the mainly opposition deputies, whose ties with the government have been strained since their election nearly two years ago.

“I know you are offended that I don’t come here more often,” Yeltsin told sullen deputies.

But the thrust of his message, delivered with emphatic gestures, was tough: “I think that the question you’re discussing today is critically important. There isn’t a more important question you’ve discussed this year. Not just Russia, but the whole world, is watching. Everything depends on the budget. . . . It’s a question of whether the ruble will collapse or hold up and remain firm.”

The president’s surprise visit to parliament Tuesday succeeded where months of argument, persuasion and compromise from lesser government figures had failed. The measure passed with 239 supporters, 137 opponents and six abstentions, even though many parliamentary factions--including Communists and the liberal Yabloko group of economist Grigory A. Yavlinsky--had sworn that they would reject it.

Finance Minister Mikhail M. Zadornov said Yeltsin’s unexpected presence at the stormy session had “definitely increased the number of votes for the budget.”

Although Friday’s vote was only on the budget’s outlines, with details of ministerial allocations still to be decided, Yeltsin pronounced himself “satisfied” as he left the parliament. The original budget had been heavily revised to incorporate opposition demands after the Duma threatened a no-confidence vote in the government in October.

Among new concessions extracted by lawmakers in return for their support, Alexander Zhukov, acting chairman of the Duma’s budget committee, told Ekho Moskvy radio that spending will be increased in the agrarian sector, in support of the regions and in subsidies to Moscow.

The budget sets Russia’s deficit at $22 billion, or 4.7% of gross domestic product. Expenditure is set at $83 billion and revenue at $61 billion.

Central Bank Chairman Sergei Dubinin said the budget will ensure growth of about 2% of GDP in 1998, with projected annual inflation at 5.8%.

Officials earlier pleaded with deputies to refrain from showing their displeasure with the government’s market reforms by rejecting the bill at a crucial moment in Russia’s economic development. Swift passage of the budget “would be a signal to participants in the market of confidence in the government,” Deputy Finance Minister Vladimir Petrov said.

The Duma had twice delayed consideration of the measure since it was first submitted in August.

Yields on government securities have increased to about 30% from less than 20%, and the stock market has lost about 22% in the last month.