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Plan aims to help Russia's poor

Russia's leaders unveiled a draft budget Friday that aims to halt a further plummet in living standards and production while bringing monthly inflation to under 10 percent by the end of 1994.

"Democracy in Russia today means primarily stability, order and cooperation," President Boris Yeltsin said as he embarked on what is bound to be a fractious budget season.

Russia cannot afford "reform at any cost," Yeltsin told government leaders summoned to a budget conference in the Kremlin's Marble Hall. "People may reject reform if it involves too many hardships," he said. At the same time, he warned that delaying essential reforms could cause still more hardship.

In the 27 months since Russia decontrolled them, consumer prices have jumped 245 times, while real income after inflation has decreased by 43 percent.

To ease the pain, Yeltsin promised that the government this month would pay the billions of rubles in back wages it owes workers, some of who have gone six months without a paycheck.

Prime Minister Viktor Chernomyrdin, in a 40-minute speech, argued that the country could withstand neither hyperinflation nor a massive shutdown of factories.

He said the privatization program would continue. But the government's priority would shift from merely promoting an unstructured, sell-off of state property to trying to make the newly privatized enterprises productive and competitive.

Chernomyrdin said there would be no dramatic change in course. "The country, the reforms and all of us are different from what we were one or two years ago," he said. "A market economy already exists in Russia. We should now move ahead, not retreat."

"Much of what the prime minister said is absolutely right," said Yegor Gaidar, a free-market advocate who quit as economics minister earlier this year. "But in real life and in economics, what is done is more important than what is said."