What does Yeltsin mean, and when does he mean to do it?


Those are the questions gripping Russian exporters and the foreign business community after President Boris Yeltsin declared last week that he would ban the use of the dollar in Russia.


The foreign community has reacted with a combination of outrage and disbelief: Many said banning the dollar would send already nervous Western companies fleeing. On the other hand, they said Yeltsin would never impose the ban and were quick to point out that he had said this sort of thing before, recalling that the issue just went away with a whimper.


The president's speech to Parliament, as one western businessman pointed out, was more political than economic, designed to assuage the strong industrialist lobby.


Indeed, there are early indications that such a ban will not be enacted soon. Sergei Glazyev, Russia's first deputy minister of Foreign Trade, told Izvestia last week that a dollar ban could not be implemented before the end of the year.


He added, that the ruble must be stabilized before such a law could be passed. Assuming the government uses that criteria, it could be a long time before any action is taken. That's encouraging news for Russian exporters and foreign companies, who stand to lose the most if they are forced to deal only in rubles.


More encouraging was Glazyev's statement to Izvestia: "We are considering a set of measures which would allow the transition to a 100 percent sale of hard currency by exporting enterprises, enabling them, of course, to buy this currency back any time for making payments related to foreign trade contracts".


Under the right circumstances, a ruble-only economy could be relatively painless. International companies around the world do business in local currencies and such a law would go a long way toward abolishing the dollar apartheid that keeps most Russians out of hard-currency shops.


Some Eastern European countries have already enacted bans.


What matters to Western companies is that they not be forced to do business in a currency whose value is being eroded almost overnight by inflation.


But Yeltsin has a serious problem on his hands that amounts to something of a Catch-22. Government spending is out of control, and the wanton printing of rubles is driving inflation, which is pounding the ruble's value. The easy answer, controlling credit and ruble emissions, would force state enterprises to shut down, fueling public discontent and strengthening the political hand of the industrialists.


But not fixing the problem threatens to drive the ruble's value into oblivion, fueling public discontent and strengthening opponents.


What to do? Yeltsin picked the political road of least resistance. He made a strong statement about banning the dollar without offering any specifics about when or how it would be done. Let the foreigners and Russian exporters stew. So far, nobody has stood up in Parliament to protect either of these two groups.


That makes Yeltsin's Strategy not a whole lot different from Western politicians who bow to the pressure groups and ignore the politically impotent.