Yeltsin contradicts Gorbachev over payments to Soviet budget

January 06, 1991|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- Russian Federation leader Boris N. Yeltsin denied yesterday President Mikhail S. Gorbachev's assertion that the republics had reached agreement on the Soviet budget and said that Russia would provide 40 billion rubles less to the union budget this year than last.

At the same time, Mr. Gorbachev ordered the republics to identify 7 million to 12 million acres of idle or inefficient agricultural land to be handed over to small farmers in time for next spring's planting season.

But since Russia, which has a land distribution plan already under way, and the other republics insist on the right to run their own economic reforms, the likely impact of the presidential decree is hard to gauge.

On the budget crisis, Mr. Yeltsin told reporters at an invitation-only news conference that he had been "alarmed" by Mr. Gorbachev's optimistic account of Thursday's meeting with republican leaders, the Interfax news agency reported.

Mr. Gorbachev, in a vague but upbeat interview with Soviet television Thursday night, said the republics "had approached an agreement" with the Kremlin on budget issues, suggesting that the budget crisis had been overcome. But he gave no figures and did not comment directly on the crucial conflict between the Soviet government and the giant Russian Federation over its contribution to the central budget.

In fact, Mr. Yeltsin said, there was "no consensus" at Thursday's meeting of the Federation Council. Republics had differing ideas about the budget and a planned emergency economic agreement covering the current year, he said, according to Interfax.

Russia, Mr. Yeltsin said, is offering about 80 billion rubles to the central budget, or about 40 billion rubles less than last year. (Widely varying exchange rates for the ruble make dollar comparisons almost meaningless, but the 40 billion is roughly 15 percent of the planned union budget of about 250 billion rubles.)

Mr. Yeltsin said Russia would refuse to pay an additional 27 billion rubles demanded by the Soviet government, represented by Finance Minister Valentin Pavlov. He called the demand "indecent" and said he didn't know what the money was to be spent on.

The budget tussle between Mr. Gorbachev and Mr. Yeltsin is part power struggle and part disagreement over the future shape of the Soviet federation.

Mr. Gorbachev is trying to preserve most of the existing central economic bureaucracy to protect his own power and hold together the union. Mr. Yeltsin is trying to slash the central bureaucracy and force a shift of economic control to the 15 republics.

It is a high-stakes conflict that makes the perennial U.S. federal budget clashes look trivial by comparison.

The Soviet state budget naturally plays a more significant role in the country's economic life that its U.S. equivalent, and with 1991 already under way, enormous sums are still up for grabs.

The 27 billion rubles Russia is declining to pay, for instance, is nearly half of the proposed 1991 Soviet defense budget.

Such a shortfall would force the layoff of thousands of state workers and the closing of major agencies and programs.

Given the unresolved dispute between Mr. Gorbachev and the republics over who runs the economy, the significance of his decree on land reform is difficult to gauge. But it represents a last-ditch attempt to create a substantial private sector in agriculture in time to affect this year's harvest.

By the standards of, say, one year ago, the Gorbachev proposals look extremely radical. The decree:

* Orders republican and local officials to make large land holdings available to new, innovative farmers, in most cases those leasing land on a lifetime basis, with the right to pass the family farm on to their children.

* Recommends to local government councils that they ensure easy credit for farmers and orders a minimum 50 percent increase in building materials offered for sale to farmers.

* Proposes that bankrupt state and collective farms be reorganized as associations of individual farms, but calls "impermissible" any forcible disbandment of unprofitable state and collective farms.

* Gives the union government and republican governments until March 1 to offer plans to encourage resettlement of people, including servicemen leaving the armed forces because of troop reductions, into agricultural areas.

But in recent months, several republics have already passed their own land reform programs, and Russia's is more radical than that proposed by Mr. Gorbachev, since it authorizes outright private ownership of land.

Thus the Soviet president is really playing catch-up on agricultural reform, though his decree may goad reluctant bureaucrats into accepting the need for change.

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