The Kremlin Goes Chinese

February 18, 1991

After five years of flirting with democracy and free market, the Kremlin seems to have decided those concepts cannot be transplanted to the Soviet Union in their Western form. Recently, ideologists and planners have become preoccupied with the experiences of China. There, economic successes have been achieved without relaxing the Communist Party's authoritarian controls.

It is ludicrous for the Soviets to believe that what works in the Far East would work in their country. Traditions of culture and work ethic are totally different. Yet Prime Minister Valentin Pavlov is now urging that the Soviet Union borrow part of its financial strategy from China and create a "socialist planned consumer market." Meanwhile President Mikhail S. Gorbachev is expected to visit South Korea, a country that only recently established diplomatic ties with the Soviet Union but has already extended billions in credits.

If the Soviet Union wants to follow Far Eastern models, that is its business. But we have a feeling that this sudden fascination with economic authoritarianism is just another half-baked attempt to find a quick fix by an administration that has not been able to decide what it wants and at what cost of sacrifice to its population.

Certainly Mr. Pavlov's recent behavior does not create the impression that he is competent to guide Soviet economic affairs.

As finance minister he was the man responsible for authorizing the printing of worthless rubles which bloated the money reserve while exacerbating shortages. When the situation finally got totally out of hand, Mr. Pavlov in one of his first acts as prime minister ordered a confiscatory money reform. For the third time since World War II, Soviets were told that 50- and 100-ruble bills would lose their value unless their possession was justified and they were exchanged for new ones. As in previous times, the action shattered the lives of retirees and other ordinary people who had stuffed their life savings into stockings and under mattresses.

The hue and cry was so great Mr. Pavlov came up with a bizarre explanation. He claimed confiscation was necessary because Western traders had accumulated so many rubles they were in a position to depose Mr. Gorbachev. There is no doubt some swindlers -- Western and Soviet -- have taken advantage of economic chaos. Nevertheless, the plot Mr. Pavlov concocted is pure hogwash.

The Soviet government has now announced it intends to increase the prices of most food items 200-300 percent but offset the impact by raising salaries and paying billions of rubles in subsidies. This strange move shows that even as it searches for a Chinese panacea to cure its fiscal ills, the Gorbachev government has no plan or real understanding of how economies work.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.