YELTSIN DEMANDS ECONOMIC GROWTH.

The Kremlin sought yesterday to dispel doubts about President Boris Yeltsin’s health by releasing film of him speeding through the forest in his snowmobile and meeting First Deputy Premier Boris Nemtsov at his holiday retreat. (Reuter, January 13) Nemtsov was invited, along with Yeltsin’s daughter Tatyana Dyachenko, to greet the "Old New Year" (what would have been the New Year had Russia not lost 13 days when it switched from the Julian to the Gregorian calendar in 1918).

Yeltsin and Nemtsov also discussed economic priorities. The Kremlin press service said Yeltsin told Nemtsov that the government must cut taxes and target welfare support only to the truly needy in order to ensure that 1998 becomes "the first year of solid economic growth (GDP 2-4 percent)." Nemtsov, however, had clearly written his own instructions: fostering growth by reducing taxes and reducing welfare payments were priorities he himself identified in a television interview the day before. (NTV, November 12)

Unless the shadow economy is taken into account (something that is, by definition, virtually impossible), few analysts seriously expect Russia to achieve even the 2 percent growth called for in this year’s draft federal budget. Finance Minister Mikhail Zadornov spoke for the skeptics when he warned in an interview published yesterday that he does not expect this year’s figure to top the 0.4 percent growth officially reported in 1997. One reason is that interest rates, raised at the end of last year to defend the ruble amidst the turmoil on emerging markets, are too high to encourage investment. Another reason, as both Yeltsin and Nemtsov recognized, is that high taxes offer companies no incentive to produce. (Nezavisimaya gazeta, January 13)

Yeltsin to Decide Where Imperial Family Should be Buried.