President Boris Yeltsin is shooting his own economic reform program in the foot. Yeltsin badly needs foreign investment, but his officials have slapped what amounts to a confiscatory 50% tax on hard-currency export earnings, in addition to a tariff of $4.50 on every barrel of Russian oil exported. Western companies say they aren't interested in investing in Russia if these policies remain in effect.

Some Western oilmen think the inexperienced Russians will soon come to their senses and slash the levies. At present, they say that all jurisdictions, from Yeltsin's Moscow central government to local councils, are tacking on tax after tax without coordination. "If you added them all up, it would amount to 100% of revenues. They know they can't do that," says one optimistic American executive.

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