Gorbachev unveils plan for market Yeltsin says program is founded on 'fraud'

October 17, 1990|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- Within hours of the unveiling of President Mikhail S. Gorbachev's latest economic plan, Russian leader Boris N. Yeltsin rose from his sickbed to slam it as a "fraud" and a "catastrophe."

The clash between the leaders of the Soviet Union and the largest Soviet republic threatened once again to stall action to build a new economic system on the ruins of the disintegrating Stalinist planned economy.

Ironically for Mr. Gorbachev, Mr. Yeltsin's assault came as telegrams were flooding in to the Kremlin to congratulate the Soviet president for winning the Nobel Peace Prize on Monday. The conflict underscored how little weight frustrated Soviet consumers and the politicians who represent them give to the award at a time when the domestic economy is in crisis.

In an angry, 40-minute speech to the Russian parliament, Mr. Yeltsin accused Mr. Gorbachev of violating their agreement by giving in to pressure from Prime Minister Nikolai I. Ryzhkov and backing away from radical economic change.

Mr. Yeltsin, still recovering from a concussion and other injuries received in a car accident last month, insisted on coming to the parliament against doctors' orders to make the address, officials said. The speech was broadcast in full on radio and television.

He said the new Gorbachev plan, which amounts to a vague compromise between the radical "500 Days" plan backed by Mr. Yeltsin and the more cautious program of Mr. Ryzhkov, "is the latest attempt to preserve the old administrative system."

He charged that the new plan is "based on a grandiose, deliberate fraud" -- a huge understatement of next year's budget deficit. Instead of the 40 billion rubles projected in the plan, the deficit could reach 300 billion rubles under the proposed course of action, Mr. Yeltsin said.

Such a budget could be papered over only by printing more money, resulting in "hyperinflation," with prices rising by tens of times, Mr. Yeltsin said.

"The new program is a catastrophe that would occur in the first few months of its implementation," Mr. Yeltsin said.

If Mr. Gorbachev persists in pursuing the new plan and it is passed by the Supreme Soviet, Russia may be forced to follow its own program, he said. That would mean issuing Russia's own, separate currency, setting up customs control on borders with neighboring republics and establishing its own army, Mr. Yeltsin said.

He said Russian officials would "defend the peoples of Russia against the government program" by vetoing decrees of Mr. Gorbachev and laws passed by the Soviet parliament if they are seen as harming republican interests.

Mr. Yeltsin has maintained all along that combining the so-called "500 Days," or Shatalin plan -- after economist Stanislav S. Shatalin -- with the Ryzhkov plan is as impossible as "mating a hedgehog with a snake." The 66-page version given to members of parliament yesterday and signed by Mr. Gorbachev does little disprove his view.

At first glance, the plan appears to be a watered-down set of ideas for the transition to a market economy rather than a concrete plan of action. The 500-day plan prepared by a group of economists led by Mr. Shatalin has itself been criticized for offering few details on implementation, but the new plan is far less detailed.

Perhaps the most significant differences from the 500-day plan already approved for the Russian Federation are that the new Gorbachev plan postpones the introduction of free prices and preserves subsidies for money-losing enterprises. It also retains far more power in the center as opposed to the republics.

In his speech, Mr. Yeltsin accused defenders of the old system -- clearly having in mind Mr. Ryzhkov and his ministries -- of deliberately engineering shortages of basic goods to undermine faith in newly elected radicals.

"We have sufficient information to state with responsibility that we are facing outright sabotage in certain territories where there are democratic soviets [local governing councils] and in Russia as a whole," Mr. Yeltsin said.

In addition, he charged that at the prompting of the union leadership, the media were engaged in a campaign of "lies and deliberate disinformation" to discredit the Russian Federation's leadership.

The media campaign included false claims that Russian actions were destroying the union, he said. In fact, only a new web of voluntary, horizontal, economic ties between republics, not the old scheme of rigid vertical subordination, can save the union, Mr. Yeltsin said.

He also accused the media of "blatant speculation" on "the theme of democrats in power." He was not specific, but he appeared to be referring to recent scare stories in Pravda and Rabochaya Tribuna that discussed the program of a tiny militant

splinter group and concluded that radicals were planning to seize power in a coup.

But the union government still holds the power in the country and is unwilling to share it, he said.

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