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A Sigh Of Relief In Russia For The Moment

International Business: RUSSIA


Yeltsin's return means Russia can start tackling its woes

At 6:00 a.m. on Nov. 6, a scant 23 hours after surgeons began quintuple-bypass surgery, doctors removed Russian President Boris N. Yeltsin's respirator. As soon as he could talk, Yeltsin requested a pen. Within seconds, he signed a document reclaiming his presidential powers and control over Russia's nuclear arsenal. As with so many close calls in his political career, Yeltsin seemed to have again bucked the odds to pull himself out of a tough spot.

Yeltsin's return gives Russia a chance to restore political stability after months of tumult. Within days, if all goes well, Yeltsin and his aides are likely to begin firing off decrees to show he's back in charge and pushing ahead with the agenda he had set for his second term before his reelection last summer. At the top of the list are spreading reforms to the grass roots by winning regional elections and convincing the international markets that the economy is on track. "Yeltsin's survival removes a big chunk of the uncertainty," says Roland Nash, chief economist of Moscow-based Renaissance Capital.

Lack of firm leadership has led to a series of setbacks for the Yeltsin administration this fall. Pro-Yeltsin candidates have lost 7 of 17 regional gubernatorial elections held since September. An additional 35 governors are yet to be elected. Now, as Yeltsin reassumes control, aides such as Anatoly B. Chubais will put their energies to helping pro-Yeltsin candidates win. Chubais, Yeltsin's chief of staff, engineered his reelection and is bent on making reforms irreversible at the local level.

But big obstacles also face Yeltsin. Among them are the plans of opponents such as the Communists and former general Alexander Lebed. Since the summer elections, Yeltsin's aides have attempted to co-opt moderate Communists by giving them posts on government commissions. So far, the strategy has worked: Communist leader Gennady Zyuganov has made it clear that his party won't stir up trouble in the immediate future.

NO SECRET. Lebed, on the other hand, is a bigger challenge. He was fired as security chief in October after criticizing the President, and he makes no secret of his desire to become Yeltsin's successor. To build support, Lebed is hooking up with nationalists and may run for governor of the Tula region. That would give him a base for attacking Yeltsin.

While tussling with his opponents, Yeltsin will also have to find new sources of money for his government. Most important, he must find funds to assuage millions of angry unpaid workers, who altogether are owed close to $8 billion. To ease his financial woes, Yeltsin will have to regain the confidence of international bankers, who have been discouraged by recent instability. They'll be looking to see if Yeltsin can force his government to collect taxes and keep its deficit down--the keys to keeping a monthly $340 million International Monetary Fund loan disbursement. Russia's planned $1 billion Eurobond offering in December will be a test of market sentiment toward the country.

Of course, Russia's stability still rides on how rapidly Yeltsin will recover. There's a chance that the Russian President could suffer a relapse or die. And in the tumult of Russian politics, his opponents will be looking for signs of weakness. But most Russians are tired of instability. For now, they seem to sense that their own economic health is tied to the vigor of the President they reelected just last June.By Patricia Kranz in Moscow

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