Raking in Loans and Doling Out Promises, Yeltsin Boosts June Bid

THE reelection campaign of Russian President Boris Yeltsin has begun to solidify as the reformist, democratic option for defeating the Communist candidate in the upcoming presidential election.

In quick succession last week, several prominent Russian democrats moved behind Mr. Yeltsin, and the West handed him a hefty endorsement in the form of the second-largest loan in the history of the International Monetary Fund (IMF).

On Friday, in his state-of-the-union address to the parliament, Yeltsin defined himself as a leader now committed to softening the suffering caused by reforms. But unlike his Communist opponents, he says he is also committed to sustaining the reform for which Russians have sacrificed.

The Russian presidential election in June is easily one of the most critical elections in the world this year. After four years of wrenching reforms toward democracy and free markets in Russia, Communists now dominate the Russian parliament, and their presidential candidate, Gennady Zyuganov, holds a sizeable and stable lead in opinion polls.

Yeltsin has raised strong doubts recently about his commitment to building more democracy and free markets in Russia. He forced all the prominent reformers out of his Cabinet in January and began stressing social welfare spending and boosting state subsidies.

He faces a substantial opposition from democrats in parliament, as well as Communists and radical nationalists. These democrats, led by economist Grigory Yavlinsky, argue that Yeltsin has betrayed democracy by gathering too much power in the presidency, ruling largely by decree. So far, Mr. Yavlinsky is also running ahead of Yeltsin in preelection polls.

But Yavlinsky became more isolated last week as supporters of Russian reform began throwing their lot in with Yeltsin as the candidate most able to beat communist Zyuganov.

The IMF approved a $10 billion credit to Russia over three years last week. IMF Managing Director Michel Camdessus insisted last week in Moscow that the loan was given not to take sides in Russia's election, but rather to support the building of a market economy in Russia. "Not to support Russia today could be also interpreted as taking sides,'' he said. "It is our duty and moral obligation to support this country.''

But Andrei Illarionov, a prominent Russian economist, argues that the greatest significance of the IMF loan was political, not economic. "It is a very clear gesture of support for Yeltsin'' and all his policies, he says. He notes that the Russian government will be able to spend the first chunk of the loan, worth $4 billion, before the election to help support Yeltsin's new promises to voters.

Yeltsin received gestures of support from domestic sources as well last week. Even Yegor Gaidar, former prime minister and the original leader of Russian reform in the days of "shock therapy,'' said on television a week ago that his party is reconsidering its opposition to Yeltsin.

Yeltsin outlined his task in the state-of-the-union message Friday as softening Russians' hardships while continuing reform.

His version of post-Soviet Russian history is that in 1991, Russia was on the brink of catastrophe and needed radical action. Yeltsin took it, stopping the disintegration of Russia, laying the basis for a lawful society, and supporting a market economy.

"For the first time in the history of Russia, large-scale transformations are carried out without suppressing or destroying political opponents,'' Yeltsin said.

But he also acknowledged the price of reform, which he mostly blamed on parliament or his own ministers: "We have come to that very dangerous point beyond which fatigue and discontent may outweigh perseverance and hope among the people," he said.

He has tried to soften the blows of reform by opening government purse strings further. He began a war on the delayed payment of wages last month, and is promising to partially compensate millions of Russians who have lost their savings to bank bankruptcies. He is also offering government support for creating 25-year loans for home purchases - something as yet unheard of in Russia.

Yeltsin's take on history is sharply juxtaposed to that of Zyuganov and his supporters. In the Communist view, the reform years were those of selling off the Russian motherland to elite insiders and foreigners - years of social destruction and growing anarchy.