Foreign business welcomed Soviet economy inches toward privatization.

May 30, 1991|By Chicago Tribune

MOSCOW -- The Soviet government took the first of what was expected to be a series of rapid steps aimed at economic liberalization in a bid to attract massive infusions of Western aid and investment.

The Parliament voted 291-11 yesterday, with 29 abstentions, for a draft law that would clear the way for foreign firms to establish wholly owned businesses in the Soviet Union as part of a broad government program to privatize the economy.

The moves come as the U.S.S.R. is lobbying for foreign assistance in rebuilding its collapsing economy.

The scale of the looming economic disaster was outlined when Prime Minister Valentin Pavlov told the legislature that 42 percent of the nation's fixed industrial assets -- factories, offices, ports and plants -- needed urgently to be replaced. He put the cost at about $750 billion.

He also said $75 billion worth of equipment had to be scrapped immediately. That is almost the country's annual output of all manufactured equipment.

The government also is expected soon to introduce measures privatizing industry by turning over control and ownership to employees.

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