Deputies say it's politics, not economics, delaying Soviet transition to free market

October 19, 1990|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- No economic plan can be implemented until the political standoff between Soviet President Mikhail S. Gorbachev and Russian leader Boris N. Yeltsin is resolved, several parliamentarians warned yesterday.

"The path of confrontation of Yeltsin and Gorbachev is a path to nowhere," said Tatyana I. Zaslavskaya, a parliamentary deputy and sociologist.

"For me, it's absolutely clear that without cooperation and agreement between the center and the republics, and in the first place between the center and Russia, it's hard to count on any success in the work we're beginning," said Deputy Oleg T. Bogomolov, a prominent economist.

Meanwhile, the author of the latest Gorbachev proposals warned that in the absence of any plan, a spontaneous and dangerous inflation is threatening the Soviet Union.

"The inflationary spiral has already begun," economist Abel G. Aganbegyan told the Supreme Soviet. A recent increase in wholesale prices for meat is likely to set off a round of related price increases, he said.

Individual republics and even individual cities, meanwhile, are unilaterally raising prices for certain foods, liquor and cigarettes. Certain industries are boosting pay with no corresponding increase in productivity.

"If we don't somehow stop this process, it could lead to hyperinflation," Mr. Aganbegyan said.

Mr. Aganbegyan answered deputies' questions yesterday about the latest compromise economic scheme,called "Basic Guidelines for the Stabilization of the Economy and Transition to a Market Economy."

Mr. Gorbachev signed the 66-page document Monday. On Tuesday, Mr. Yeltsin lambasted it as a "fraud" and "catastrophe." Mr. Gorbachev has not responded directly to the criticism, but he is expected to address the Soviet parliament today.

Mr. Yeltsin backs the radical 500-day plan for a shift to a market economy drafted by a group of economists headed by Gorbachev adviser Stanislav S. Shatalin and Russian Deputy Prime Minister Grigory A. Yavlinsky.

The Russian parliament has approved the plan and, at least until recently, expressed the intention of beginning its implementation Nov. 1.

Mr. Gorbachev, too, has spoken highly of the 500-day plan, and Mr. Yeltsin says the Soviet president gave his word to support that plan and no other.

But faced with bitter opposition from Prime Minister Nikolai I. Ryzhkov and the mammoth ministerial bureaucracy he heads, Mr. Gorbachev backed away from the 500-day plan. He directed Mr. Aganbegyan to come up with a compromise between the Shatalin plan and the more cautious Ryzhkov plan.

In his blistering attack Tuesday, Mr. Yeltsin said Mr. Aganbegyan's compromise plan in fact amounts to a version of the Ryzhkov program. He said it would preserve the Soviet ministerial bureaucracy and lead to enormous inflation.

But Mr. Aganbegyan said yesterday that the "Basic Guidelines" are so general that they will permit each republic to implement its own economic program.

Russia can go forward with the Shatalin plan, as its parliament has voted to do, he said. Kirghizia, whose legislature has approved the Ryzhkov plan, can go ahead and implement it. Neither will contradict the "Basic Guidelines," he said.

But Mr. Aganbegyan added that, given the freedom to define their own programs, republics will bear the responsibility for them. Mr. Yeltsin has predicted an economic catastrophe, he noted. If one comes, Mr. Yeltsin's own Russian program and not Mr. Gorbachev's "Basic Guidelines" will bear the blame, Mr. Aganbegyan insisted.

With hard times inevitably ahead -- Mr. Bogomolov predicted yesterday a 25 percent decline in real incomes -- it appears that the rival politicians are maneuvering to escape responsibility. But their inability to establish and preserve any kind of political alliance is preventing consensus on the economic future.

"What's delaying the transition to a market economy is purely politics," said Deputy Nikolai N. Engver in an interview.

"There is not a single economic reason for it," he said. "Until Gorbachev and Yeltsin settle who's the leader, who's the most popular, nothing can happen."

In Mr. Engver's analysis, the two men are clashing partly because they represent different interest groups: Mr. Gorbachev still depends to some degree on the Communist-

government elite; Mr. Yeltsin has "put all his bets on populism" and is beholden to the mass of ordinary people and their opinion.

The key to the division may be Mr. Ryzhkov.

Mr. Yeltsin has long demanded his resignation as the first step to dismantling the central bureaucracy. Mr. Gorbachev has said the prime minister's resignation would destabilize the country.

Ms. Zaslavskaya, the sociologist who heads the country's most respected public opinion center, said her polls show Mr. Yeltsin's popularity is still rising, while that of Mr. Gorbachev and Mr. Ryzhkov sinks.

Why has Mr. Gorbachev's rating steadily slipped?

"I think it's the public perception of his indecision and uncertainty -- in particular on the question of an economic program," she said.

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