Ryzhkov economic plan is treated with scorn by the Soviet parliament

September 12, 1990|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- The Soviet leadership was in disarray yesterday after a wild day in parliament in which President Mikhail S. Gorbachev in effect rejected the economic reform program of Prime Minister Nikolai I. Ryzhkov but said Mr. Ryzhkov nonetheless should stay on in office.

Mr. Gorbachev said he would try once more to hammer out a compromise between the Ryzhkov plan and the more radical economic program produced by a team led by Gorbachev aide Stanislav Shatalin, which the Soviet president said he favors.

Meanwhile, working far more calmly and efficiently across town, the Russian Supreme Soviet under President Boris N. Yeltsin approved the Shatalin plan with only one no vote.

Because the Russian Federation accounts for more than half the population and most of the territory of the Soviet Union, the question arose whether the debate in the U.S.S.R. Supreme Soviet had become irrelevant.

But Mr. Yeltsin rejected a proposal that the republican parliament demand Mr. Ryzhkov's removal, saying he hoped the national parliament would still adopt the Shatalin plan and avoid a clash.

Mr. Gorbachev told the national parliament that he was "more persuaded" by the Shatalin plan, because it has support from nearly all the Soviet republics and makes more economic sense. But he said calls for Mr. Ryzhkov's resignation had a "bad smell" and could destabilize the country.

"People are saying, 'Do something!'" Mr. Gorbachev said in a rambling, emotional speech provoked by his frustration at the failure of the two sides to produce a single, compromise plan. He spoke repeatedly, even though as president he appears legally in the Supreme Soviet only as a guest.

Mr. Yeltsin's prediction that combining the Ryzhkov and Shatalin plans was as impossible as "mating a hedgehog and a snake" seemed to be proving true. The two authors clashed yesterday in the U.S.S.R. Supreme Soviet on several fundamental principles of economic reform -- and deputies were frustrated because they had not received copies of either plan.

"I have the impression that Shatalin is somewhere off in Mozambique and Ryzhkov is in New Zealand and they haven't been able to get together in the halls of the Kremlin and work out a program to get the country out of this crisis," said Deputy Genrikh S. Igityan sarcastically, in a remark that reflected deputies' anger at the confusion and disorganization that seemed to reign.

The key difference between the two plans is that Mr. Ryzhkov's is based on preservation of the Soviet Union in its old form as a single, centralized state. Citizens and enterprises would pay half their taxes directly to the central government.

Mr. Shatalin's plan, by contrast, assumes that key economic decisions will be made at the level of the republics, 13 out of 15 of which have declared independence or sovereignty. Taxes would be paid strictly to the republics, which would themselves decide what functions they should pay a far more streamlined central government to carry out.

In addition, Mr. Ryzhkov's program would increase prices gradually while keeping them under state control. The Shatalin plan would free most prices starting Jan. 1, retaining control only over a minimum number of necessities.

While the Ryzhkov program foresees a major continuing role in agriculture for the existing state farms and collective farms, the Shatalin plan emphasizes private sale of land into the hands of individual farmers.

At a news conference during a break in the session, Mr. Ryzhkov strongly defended his program and sharply criticized the Shatalin plan. He said the latter program could lead to runaway inflation, a sharp drop in living standards and bankruptcy for many state and collective farms.

But he indicated that if his program is rejected and a program he differs with is adopted, he will resign. That appears the likeliest outcome, despite Mr. Gorbachev's fears that the resignation could create dangerous instability.

For all its support, the Shatalin plan, also known as the "500-day plan," met with some sharp criticism in the Russian parliament.

Mikhail A. Bocharov, a deputy of both parliaments and a top Yeltsin economic adviser, said yesterday that the plan offers only "principles" without elaborating the "mechanisms" necessary to put them into action.

"People think that all they have to do is pass the Shatalin plan and the transition to a market economy will begin," he said in an interview. "No such thing."

"The authors of the program do not believe that in 500 days there will be economic abundance," said Russian Deputy Prime Minister Grigory Yavlinsky, a co-author. "They believe only that after 500 days there will be a guarantee against the economic slavery we have now."

Partisans of both programs agree only on the catastrophic nature of the current economic situation, in which bread lines have lately appeared in the capital for the first time in decades.

Mr. Ryzhkov said that preparation for operating the economy next year is not taking place because of confusion over what program might be adopted and what relations might develop between republics and the union.

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