Votes in Soviet, Russian parliaments aid Gorbachev

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

MOSCOW -- President Mikhail S. Gorbachev got a double boost yesterday as the Soviet parliament approved a liberal foreign investment law and the Russian parliament, urged on by Boris N. Yeltsin, provisionally backed the proposed union treaty.

Both votes will substantially strengthen Mr. Gorbachev's hand in his meeting July 17 with leaders of the Group of Seven leading industrial nations. They offer the West reassurance that there may after all be a Soviet Union to invest in and that investors may have some chance of getting their profits out.

"The road to foreign capital is open," the official news agency Tass declared, with some hyperbole, after the overwhelming vote for the investment law.

The law permits 100 percent foreign ownership of Soviet enterprises and grants special concessions to investors in natural resources, including oil, whose production is dropping. It guarantees investors the right to export hard-currency profits and the right to buy hard currency with ruble earnings.

The vote represented a victory for westward-looking pragmatists over Communist ideologues who fear that foreign capitalists will buy up Russia and exploit its cheap labor.

The Russian parliament's union treaty vote came after an unexpected, impassioned appeal from Mr. Yeltsin, the newly elected Russian president. He warned of dangerous destabilization if republics did not soon sign a new treaty of union.

Nine of the 15 republics say they intend to sign, with the three Baltic republics of Lithuania, Latvia and Estonia, as well as Armenia, Georgia and Moldova, insisting on independence. But most of the nine, including Russia and the Ukraine, insist on further changes in the draft treaty.

Without the backing of Russia and the Ukraine, accounting for more than two-thirds of the Soviet population, Mr. Gorbachev would travel to London as "president of Soviet Central Asia," a Russian TV reporter said yesterday. It was no joke.

Mr. Yeltsin stressed that the draft document already represented a hard-fought compromise, recalling that over one phrase, negotiators had debated for five hours.

"It's an act of great political significance, and today everyone is looking toward Russia to see, in the end, what she will say. Simply to reject it would mean political collapse and destabilization of the whole political situation in the country," Mr. Yeltsin said.

"I ask you, esteemed people's deputies, in this case to show common sense and think about the state the country and Russia are in," he said. "We lose now every day because there's no union treaty."

The Russian parliament's vote, however, is far from final, because it leaves for further negotiation several important questions dividing the Soviet and Russian leadership. They include the status of the smaller republics within the Russian Federation, control over defense plants and, most critically, taxation.

Mr. Gorbachev insists that the union government should have the right to impose a direct federal tax to support the Soviet armed forces and other central institutions. Mr. Yeltsin, like the Ukrainian leadership, maintains that all taxes should go to the republics, which would then pass on part of their revenue voluntarily to support whatever central institutions they considered necessary.

Mr. Gorbachev, in Kiev yesterday for a meeting with German Chancellor Helmut kohl, consulted with Ukrainian leaders about the treaty, but the results of the talks were not revealed. The Ukrainian parliament has voted to postpone consideration of the treaty until September.

Ukrainian nationalists protested along Mr. Gorbachev's motorcade route, reminding him that they do not consider him their president. The opposition in the Ukrainian parliament criticized the Gorbachev-Kohl meeting for ignoring Ukrainian sovereignty.

As Mr. Gorbachev approaches the G-7 meeting, Soviet hard-liners have in various ways sought to undermine relations with the West.

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.