Confusion reigns as Soviets weigh move to market

September 30, 1990|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- As summer turned to fall in this city, the cradle of the planned socialist economy, one word was on everyone's lips:


For some, at a time when belief in UFOs and miracle cures is at an all-time high, the market economy seemed a magic wand to be waved at the empty shops, the long lines, the ubiquitous shortages -- at all the country's agonizing economic woes.

Others understood that a long and difficult transition lay ahead but were determined that the Soviet Union would achieve the prosperity that free enterprise had brought to much of the rest of the world.

Most striking was the alliance of the Soviet Union's two most prominent politicians behind a decisive move toward the market. Russian President Boris N. Yeltsin and Soviet President Mikhail S. Gorbachev seemed ready to put aside their differences to back a 500-day program of privatization, an end to state subsidies, the beginning of free prices and real economic sovereignty for the 15 republics.

"We won't have abundance after 500 days," said Grigory Yavlinsky, a young Russian economist who helped author the plan along with economist and Gorbachev aide Stanislav S. Shatalin. "But we'll have an end to economic slavery, which is what we have now."

Today, the hopes of a few weeks ago for a determined, unified drive to transform the Soviet economy are fast fading. Disillusionment, confusion and fear are growing.

Despite official denials, rumors that conservative Soviet military officers are plotting a coup continue to sweep Moscow. The rumors are being countered by allegations in the Communist press that radicals plan to seize power by force. Some activists fear that certain new, little-known "democratic" groups may be controlled by KGB provocateurs.

Dmitri A. Volkogonov, a prominent historian and member of the Russian parliament, warned last week that the country was entering a "smutnoye vremya" or "time of troubles." The term is familiar from Russian history and refers to a time of power struggle, disorder and decline.

On Friday, a coalition of radical parliamentarians expressed alarm over what they called "an extremely dangerous situation, created by another capitulation by [President Gorbachev] before conservative forces; more tensions between the center and the republics, especially Russia; and the breakup of a fledgling center-left coalition that promised a way out of the crisis."

Here are the developments that led to those gloomy prognoses:

* The Soviet parliament, unable to choose between the 500-day Shatalin plan and the more cautious plan proposed by Prime Minister Nikolai I. Ryzhkov, has given up and asked Mr. Gorbachev to come up with a compromise plan by Oct. 15.

* Mr. Gorbachev himself has appeared to shift steadily away from his initial stance in favor of market forces and republican power. He proposed a time-consuming referendum on whether to permit private ownership of land. While seeming to reject Mr. Ryzhkov's plan, he also rejected demands for the resignation of Mr. Ryzhkov and his government.

Finally, on Thursday, at Mr. Ryzhkov's request, Mr. Gorbachev decreed that all existing economic ties between enterprises should be extended until the end of 1991, whether or not they are profitable. Mr. Shatalin gamely told Soviet television Friday night that the decree was not a "rejection of the market," but its provisions would appear to exclude any swift move to market relations.

* Mr. Yeltsin attacked Mr. Gorbachev last week for seeking expanded powers without consulting the republics. Meanwhile, the Russian Federation parliament, itself beset

by disagreement, decided to postpone implementing the Shatalin plan from Oct. 1 to Nov. 1.

Once again, a familiar pattern seems to be repeating itself. On the brink of embracing radical economic change, the Soviet Union loses heart.

The reasons are numerous, but the main factor seems clear: self-interest. While a market economy may be in the long-run interests of most people, it is against the short-run interests of many people -- including some of the most powerful.

As a result, Mr. Ryzhkov has proved to be a far more formidable opponent than expected, mounting a scare campaign to persuade the public that the 500-day Shatalin plan threatens catastrophe.

As prime minister, Mr. Ryzhkov represents a huge ministerial bureaucracy that is threatened with decimation by the Shatalin plan. As former director of a major defense-related enterprise, the huge Uralmash works in Sverdlovsk, Mr. Ryzhkov represents the military-industrial complex, which would see its budget and privileges slashed on the way to a market system.

One Russian Federation official claims defense industry representatives have privately warned Mr. Gorbachev that the military sector of the economy will strike if the Shatalin

plan is approved.

But big defense plants are far from the only interests that feel threatened by the market.

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