Soviets warn that economy faces collapse Inflation rises

farming, oil exports continue to decline

April 19, 1991|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- The Soviet economy is sliding rapidly toward a total collapse worse than anything the troubled superpower has experienced since World War II, Soviet economists predict and new statistics confirm.

Production is plummeting as a result of disrupted supply lines, failing equipment and spreading strikes. Especially worrisome is steady decline in oil production and especially oil exports, which are the major source of the hard currency used to purchase grain abroad, officials say.

Soviet radio said yesterday that spring planting had been completed so far on only half of the land sown by the same time last year. It said that rain in some areas was slowing planting but that the major reason was the shortage of farm equipment, much of which is held up for lack of parts.

Inflation may reach several hundred percent for the year, partly as a result of pressure from an out-of-control state budget deficit. Already, national and local officials are scrambling to increase wages to stop or head off strikes.

In the first quarter of 1991, gross national product fell by 8 percent, national income by 10 percent and agricultural production by 13 percent compared to last year, Nikolai Belov, deputy chief of the State Statistics Committee, announced yesterday.

The combined volume of exports and imports dropped by

one-third, Mr. Belov said, according to the official Tass news agency. He said consumer-goods production, which has been increasing in recent years, also had begun to fall for the first time.

Because the numbers are in rubles and are not adjusted for inflation, the real decline is undoubtedly considerably greater than the official numbers. Soviet government statisticians still do not publish a measure of inflation.

"According to economists' estimates, there's going to be a fall in production of 25 to 35 percent in the near future," Yuri A. Ryzhov, a scientist and member of parliament, told the newspaper Radical. "Even very strong economies can't withstand such a sharp drop."

Yesterday, speaking to a parliamentary committee, government economist Vladimir Pokrovsky went further: "In July, production may drop to zero."

Mr. Pokrovsky, an author of the government's new anti-crisis program, said his apocalyptic prediction was based on the expectation of a worsening trade war between regions and republics, which increasingly are refusing to honor old supply commitments.

The new financial newspaper Finvest reported that Soviet oil exports in 1990 reached only 109 million tons, or 36 million tons fewer than two years earlier. The paper said exports could drop this year to 61 million tons, reducing the Soviet Union's already desperately short hard-currency supply.

The main reason for the decline, the paper said, is outmoded and unrepaired oil drilling equipment in the Tyumen region of western Siberia. Siberian oil fueled a 20-year spending spree by the Soviet Union after its discovery in the 1960s, but the joy ride is over now.

In fact, Finvest said, some experts say the Soviet Union, the world's biggest oil producer, could be a net oil importer by 1993.

Tyumen oil workers are expected to join a planned one-hour general strike April 26, called for all of Russia yesterday by the Federation of Independent Trade Unions. While it is intended to be largely symbolic, the action is designed to demonstrate the unity and determination of the workers' movement.

As the strike by more than a quarter-million coal miners continued yesterday, about 70 industrial enterprises in the key Sverdlovsk region in the Urals shut down for two hours in solidarity with the miners, journalist Boris Yarkov said by telephone.

In Minsk, where virtually all the industrial plants were on strike last week, workers' representatives said talks with the Byelorussian government were bogged down. They called for preparations to go back on strike beginning Monday.

Many Soviet and foreign analysts believe that the wave of strikes will be impossible to slow, let alone stop, without intervention by the country's most popular politician, Russian leader Boris N. Yeltsin.

Mr. Yeltsin has implicitly set a condition for his intervention: round-table talks with President Mikhail S. Gorbachev and other political forces leading to a power-sharing arrangement in a coalition government.

But at a news conference in Tokyo last night, Mr. Gorbachev showed no signs of moving toward a compromise solution to the strike problem.

On the contrary, he said a stopover in the Siberian city of Khabarovsk had convinced him that workers supported his policies. He dismissed strikers as dupes of certain ambitious politicians he did not name.

Mr. Gorbachev's confident tone contrasted with the substance of his economic message: that he had failed to make a deal with Japan over the disputed Kuril Islands, and that as a result he had received few concrete promises of Japanese investment.

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