Russian PM for foreign investment, no to currency controls

The demonstrators, waving red flags and Communist banners, were also marking the fifth anniversary of Yeltsin’s suppression of a revolt by the Soviet-era Russian parliament.

However, a group of coal miners who have been picketing the White House (Russian Parliament) since June 11 over unpaid wages announced they would end their protests on Monday to allow the new government to focus on the country’s problems including rampant corruption.

The miners, mostly from the Far North and Siberia, have been living rough in tents and other makeshiftaccommodation.

Primakov’s new cabinet, a loose coalition dominated by moderate leftists and non-party professionals, has still to hammer out an anti-crisis economic programme acceptable to both Russia’s Communist-dominated parliament and global creditors.

Russian media have buzzed with speculation in recent days that the programme might include a ban on the circulation of dollars, in which many Russians hold their savings.

"These ravings disseminated by the mass media about the government preparing to ban dollar circulation and reverse privatisation do not correspond to reality," Primakov told the investors in televised remarks at the start of their meeting.

He said Moscow would take steps to prevent capital flight, which he believes has badly sapped Russia’s ability to pull out of its decade-long recession."We need an inflow of capital into the real sector of the economy," Primakov told the investors, who included representatives of major companies such as French car maker Renault SA and U.S. GiantsProcter & Gamble and Coca-Cola.

"We shall continue the privatisation of state property. But it will be carried out not just to top up the budget. It will be carried out with a view to growth in output, investment, efficiency…so that it serves the people’s interests."

Primakov, confirmed in his post by parliament three weeks ago, has been critical of foreigners drawn only to short-term speculation in the high-yielding, short-term debt market.

Russia is counting on loans worth $ 2.5 billion from international sources to help stabilise its finances. Zadornov said on Friday the loan figure was already factored into the government’s draft budget for the fourth quarter of 1998.

Meanwhile, the President Boris Yeltsin warned the Russian government on Friday that he would step in to defend economic freedoms if ministers tried to bring down a new “Iron Curtain” of control in their bid to stem a financial crisis.

“If there is a threat that citizens’ rights, including economic ones, might be violated, thenin this case, his reaction would be very tough,” Yeltsin’s spokesman, Dmitry Yakushkin, told reporters at the Kremlin.“If we take actions like banning dollars, the president understands perfectly what this ban would mean it would mean the violation of many of our rights…a return to the Iron Curtain.” “There will be no return to the old days,” Yeltsin said.

Yeltsin, 67, is a much diminished figure since he was forced by the Communist-led parliament to appoint compromise prime minister Yevgeny Primakov and appoint a Communist former head of Soviet state planning as his first deputy for economic affairs.

But despite his uncertain health and shrinking authority as retirement looms in mid-2000, he still has vast constitutional powers and could step in if the government acted on suggestions it ban free trade in hard currency and nationalise some banks. Yakushkin stressed that the president, whose public approval rating is in single figures after seven years of economic chaos, was not about to getinvolved in the nuts and bolts of financial policy but would defend “the pillars of the economic system, which provides for a whole range of freedoms.”