Congress holds out little hope of finding cure for Russia's ills: The emergency session humiliated the President and wrecked his reforms, Andrew Higgins writes from Moscow

AT THE start of Russia's Congress of People's Deputies last week, a telegram appeared on the noticeboard of the Great Kremlin Palace, one of scores of angry, concerned or just plain cooky messages from citizens scattered across the former Soviet Union.

It urged deputies to call a referendum on a single question: 'Are you in favour of presidential power and a transition to capitalism or parliamentary power and a return to socialism?' The formulation is crude, but more than all the muddled manoeuvring and rhetorical thunder of the political elite, it addresses the central issue: where is the country going?

But there will be no referendum as straightforward as the one suggested by the author of the telegram, N I Vinokrug from Bychikha. Nor do political leaders have a response: 'I get the impression that no one today knows which path our society should take,' says Vyacheslav Novikov, head of the Siberian region of Krasnoyarsk. Such confusion is in itself an answer. President Yeltsin's defeat during a four-day emergency session of Congress is not just a personal humiliation but a blow to the one thing he offered: a programme.

'The present situation reminds me a lot of what happened in 1917 before the Bolshevik revolution,' says Mikhail Poltoranin, an ally of the President. No one seriously believes that Ruslan Khasbulatov, chairman of the Congress and a smaller standing parliament, the Supreme Soviet, is a Lenin. But the chaos and disillusion he has sown leave the country vulnerable to extremists, particularly those on the nationalist, neo- fascist right.

The public's faith in all politicians has plummeted. Mr Yeltsin, who won more than 60 per cent of the vote in 1991, now has a popularity rating of around 35 per cent. Only 12 per cent, according to a poll yesterday, support Mr Khasbulatov. The only institutions enjoying popular confidence are the church and army. Surveys show rising support for a firm hand in the Kremlin. Whom it belongs to does not seem to matter.

The Congress, like the constitution from which it draws its authority, is a legacy of the Soviet era. More than 80 per cent of its 1,000-odd members are former Communist Party members. All won their seats in a 1990 election rigged in the party's favour. Only its most diehard members, however, advocate a return to rigid central planning and authoritarian control. Most deputies stand for nothing much beyond a desire to limit Mr Yeltsin's authority and boost their own.

And this they did. They seized a right of veto for the Supreme Soviet over the appointment of four key ministries, including defence and foreign affairs; they refused to cede control over the Central Bank, State Property Fund and other state agencies crucial to the execution of economic policy; they rejected pleas for a referendum, though Mr Yeltsin has vowed to press ahead with a non-binding plebiscite of his own. They asked the Supreme Soviet to consider seizing control of Commonwealth Television and the national news agency, Itar-Tass.

'The fight is not finished, it has only just begun,' warned Ilya Konstantikov, a leader of the extremist National Salvation Front. 'One should not count on consensus: there is no such thing and will not be in the near future.'

What Congress, badly divided on all issues other than opposition to Mr Yeltsin, wants to do with power stripped from the President is unclear. It demands are negative: it wants the pro- Western Foreign Minister, Andrei Kozyrev, and the privatisation chief, Anatoli Chubais, sacked. It offers few policies of its own.

Economic reform, like democracy, is a slogan embraced by all sides. But most deputies - all but the 300 or so who support Mr Yeltsin - say they want to slow Russia's shift to the market. 'The President and the government want to form an effective market economy in Russia,' explained Nikolai Ryabov, Mr Khasbulatov's deputy. 'Parliament favours setting up a socially oriented market economy to serve the needs of the people.'

With inflation more than 2,000 per cent last year and industrial production down by 20 per cent, it is a seductive argument. But Mr Yeltsin's supporters see it as a ruinous mirage. 'There are two ways out of economic crisis,' The Deputy Prime Minister, Vladimir Shumeiko, told Congress. 'One is to continue the economic reform begun two years ago, which means restructuring the economy, carrying out a tough financial policy, continuing fast privatisation. There is another option, advocated by many political forces. It consists of slower movement towards the market, softer financial policy, slower privatisation, state controlled prices and so on. In my opinion, this would mean the end of reforms.'

Mr Novikov, Siberia's regional leader, put it this way: 'Adopting a gradual approach to the market is like slowly pulling out a painful tooth.' Emboldened by victory at the Congress, Russia's legislators seem set to delay Russia's extraction from socialism as long as possible. The muddle ahead could ensure the tooth is never pulled. The only victors will be hardliners such as Nikolai Pavlov who want Mr Yeltsin's entire reform experiment scrapped. 'A horrible end is better than a horror without end,' he told the Congress, 'So long as Mr Yeltsin remains President of our state no good things will ever happen here.'

(Photograph omitted)