YELTSIN'S REFORM STANCE IN DOUBT.

Byline: Dave Carpenter Associated Press 

President Boris Yeltsin heightened concerns Thursday that Russia's commitment to tough free-market reforms is wavering, naming an old-style Soviet bureaucrat as chief of economic policy.

The appointment of Vladimir Kadannikov, a proponent of government subsidies for industry, was the latest evidence Yeltsin is diluting his unpopular reforms as part of gearing up for a re-election bid.

Apparently hoping to appease angry voters, Yeltsin this month jettisoned top liberals and approved a series of costly new spending measures, including pension and benefit hikes.

Yegor Gaidar, a former acting prime minister and the architect of Yeltsin's initial reforms, said he was "alarmed" at the president's latest tactics. "This is a shift in economic and financial priorities," said Gaidar.

Analysts said the changes have jeopardized a proposed $9 billion loan from the International Monetary Fund, now under negotiation.

Kadannikov, former head of troubled auto giant Avtovaz, replaces Anatoly Chubais as first deputy prime minister - a switch that calls into question the government's commitment to its austere anti-inflation program.

Chubais, the privatization chief and the last radical reformer left in the government, quit under pressure last week. He had helped bring inflation to a record monthly low of 3 percent in December by fighting to cut subsidies and stabilizing the ruble.

Yeltsin insisted the reforms would continue despite the Cabinet shuffle. But he indicated the pace could slow.

"One shouldn't confuse the pace of transformations with their goals, the strategy with the tactics we sometimes are required to use," he said in a speech Thursday at Baumann State Technical University in Moscow.

In recent public statements, Kadannikov has called for a sharp increase in government support for industry, including devaluing the ruble to help exporters.

But Kadannikov apparently will not have as much authority over economic policy as did Chubais.

Earlier Thursday, Yeltsin appointed a Chubais ally to head the privatization agency Chubais ran until he was forced out of government. Alexander Kazakov was named deputy prime minister and head of the State Property Committee.

Yeltsin, with the June presidential election nearing, has been ridding his government of reformers and liberals in response to the success of Communists and nationalists in December parliamentary elections.