TIME: Almanac 1993/TIME Almanac 1993.iso/time/091790/0917015.000

Text File | 1992-08-28 | 7KB | 146 lines

                                                                                THE GULF, Page 28

Gorbachev's Home Remedy


Facing a restive nation and a populist rival, the Soviet
President prepares to unveil a 500-Day Plan aimed at
transforming the economy

By JOHN KOHAN/MOSCOW


    Even for someone as optimistic as Mikhail Gorbachev, the
news from the front lines of perestroika these days has been
decidedly bleak. The patience of Soviet consumers has become
completely shopworn, oil-industry workers are threatening to
go on strike, and even army officers grumble publicly about low
living standards. While a record harvest lies rotting in the
fields, bread -- that staple of Russian life -- has joined the
growing list of scarce goods. Meanwhile, pressure mounts for
the government of Prime Minister Nikolai Ryzhkov to resign.
Most worrisome of all for the Kremlin, the once monolithic Union
of Soviet Socialist Republics seems ever closer to fragmenting
into bits and pieces.

    Before heading off for the welcome relief of superpower
summitry, Gorbachev dispatched a telegram around the country
ordering local authorities to make sure that peasants deliver
grain to help solve the bread shortage. To ease tensions in the
army, he issued a decree on improving the legal and economic
rights of military personnel. A committee of top officials from
Moscow and the republics has been set to work by Gorbachev on
drafting a new treaty of the union. But one major item of
business, so important that it may determine Gorbachev's
political future and the very fate of the country, awaits his
return this week: finishing the draft of a new plan for
introducing a market economy.

    Since Gorbachev became President in March, he has tried to
wield the extra powers of the office to steer the country away
from a centralized system, where everyone took orders from
above, toward a society where decisions would come from below
and be coordinated with a vastly reduced administrative center.
The only problem is that the old chain of command has all but
collapsed, and nothing has arisen to take its place. The
President's decrees have been largely ignored by the country's
restive republics, determined to grab as much authority as they
can from Moscow. Leading the revolt has been the country's
largest republic, Russia, and Gorbachev's longtime political
rival, Boris Yeltsin.

    After Yeltsin became chairman of the Russian parliament in
May, he vowed that the republic would follow its own radical
reform program, known as the 500 Day Plan, with or without
Kremlin approval. Then, in a dramatic about-face last month,
Gorbachev invited the Russians to submit their scheme as the
basis for a new economic program for the central government,
to be drafted by a commission led by economist Stanislav
Shatalin, a member of the group of Gorbachev advisers who make
up the Presidential Council. The decision to join forces with
Yeltsin was a masterstroke. By siding with the maverick
Russian leader, who enjoys widespread popular support,
Gorbachev improved his chances of pushing through reforms in
an increasingly fractious country.

    The Shatalin program, worked out with cooperation from the
republics, represents a radical departure from the Kremlin's
fumbling efforts in the past to develop a "regulated market
economy" that would be subject to central control. At the heart
of the plan is a scheme to privatize state-owned property. In
what would amount to a vast redistribution of national wealth,
large enterprises would be converted into shareholding
companies; medium- and small-size businesses and shops would
be put on the market; and land would be offered for sale to
peasants. The Shatalin program also proposes the step-by-step
deregulation of prices, with some controls on "basic
necessities," along with the creation of a free market in hard
currency. Like the original Yeltsin plan, everything is
supposed to unfold within 500 days, beginning with a 100-day
period of "administrative" measures to stabilize the value of
the ruble.

    The decision to set up the Shatalin commission undercut the
wobbly Ryzhkov government's efforts to formulate a new
economic-reform package to replace a program that the national
parliament roundly rejected in June. During a meeting with the
Gorbachev-Yeltsin team last month, Ryzhkov reportedly protested
that the group's decentralization schemes would "ruin and bury
the Soviet Union." Deputy Prime Minister Leonid Abalkin, the
government's chief economic guru, has also charged that
"everything is being done to malign and overrun this last
stronghold" -- the central government. But the leaders of the
Russian republic take a different view. As Yeltsin bluntly put
it: "I consider the resignation of the Ryzhkov government a
condition for the successful implementation of economic
reforms." And he is not alone. Members of a radical
parliamentary bloc, the Interregional Group, plan to press for
a no-confidence vote when the U.S.S.R. Supreme Soviet convenes
this week.

    Although Gorbachev supports the Shatalin plan, he does not
appear ready to break ranks with Ryzhkov and has even warned
against a destabilizing shakeup of the central government.
Gorbachev has suggested a compromise: an economic package
following the Shatalin group guidelines, with amendments taken
from the Ryzhkov proposals. The unified program, which will be
prepared by a third group, led by economist Abel Aganbegyan,
will be submitted for debate to the republican and national
parliaments. The Russians, for their part, have made clear that
they want only the Shatalin plan and not the mixed version,
which Yeltsin said was like mating "a hedgehog and a snake."

    The economy has been worsened by the collapse of the
country's food-distribution system. The shortage of bread in
Moscow reached such proportions last week that Mayor Gavril
Popov proposed wage hikes for bakery workers to attract more
employees and even suggested that army conscripts be pressed
into service at the ovens. The list of excuses -- breakdowns
and labor problems at factories, outdated equipment, transport
troubles and an unexpected rise in demand for bread -- sounded
all too familiar to Russians, who are already fuming over the
scarcity of cigarettes. As the government daily Izvestia
sardonically noted: "We should not be surprised by the fact
that yet one more item has gone on the list of shortages -- we
should be surprised that anything can still be found in the
stores."

    Gorbachev can still make a dramatic bid to win back public
confidence by dismissing the increasingly unpopular Ryzhkov
government. He might also hitch a ride with Russia's rising
star, Yeltsin, even if he had to play a more circumscribed role
as President. But Gorbachev's options are fast dwindling. Not
only bread is in short supply these days. So is time. Whatever
economic program is approved, it may prove too much to ask a
weary and divided nation that has been languishing for years
to wait another 500 days.