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Moves on Union Reassure Russians

Ukrainian decision to sign Union treaty is seen as boosting prospect for stability

THE scramble for frozen ravioli outside one food store in the capital was frenzied. Russians have long been known to wait patiently in lines, but with order breaking down as scarcities grow, a policeman was placed at the store entrance to prevent altercations."A year ago these [ravioli] weren't hard to get, but now it's a real struggle - even though the price is much higher," says pensioner Lydia Makarova after emerging from the scrum. "If it keeps going this way, how will I be able to buy food?" Ms. Makarova's anxiety over proposed price liberalization is echoed by many Muscovites, increasing the pressure on officials trying to stabilize the collapsing economy before uneasy feelings degenerate into unrest. Soviet President Mikhail Gorbachev and republican leaders at a Soviet State Council (cabinet) meeting Nov. 4 took steps to allay fears by making progress on the creation of an economic union. Ukrainian Prime Minister Vitold Fokin reaffirmed that his republic would sign the economic union treaty. The treaty, which would create a Soviet common market, will not be viable without the participation of the Ukraine, the second most powerful republic after Russia, many experts say. Moldavia and Azerbaijan also indicated they would join the treaty, leaving Georgia as last of the 12 former Soviet republics still refusing to join. Grigory Yavlinsky, a chief architect of the economic union plan, says several important treaty amendments, including one on debt responsibility, still need to be worked out, according to the Interfax news agency. He adds that if republics adhered to all the treaty provisions, the economy would stabilize in about 18 months, according to the Tass news agency. Meanwhile, Mr. Gorbachev and World Bank President Lewis Preston then signed an agreement Nov. 5 to provide $30 million in technical assistance, including expert advice on the thorniest issues connected with the transition to a market economy. Consultants will advise on the reorganization of financial structures, price liberalization, privatization, infrastructure improvements, and the design of social safety nets, says Russell Cheetham, Soviet section chief at the World Bank. "We'll build up the program as quickly as possible to work with certain republics, or groups of republics," he says. To receive assistance from World Bank specialists, the republics will have to sign a document establishing a legal framework for bank activity. Mr. Cheetham will not disclose which republics are prepared to sign, but adds that extensive talks have already been held with Russia. Despite the steps in the right direction, Gorbachev warned at the State Council meeting that the Soviet Union still stands at the edge of an abyss. He cited Russia's announced intention to free prices as a cause for grave concern, calling on Russian President Boris Yeltsin not to attempt reforms independently. Mr. Yeltsin is reportedly preparing to issue a decree lifting restrictions on foreign trade activity. "Neither Russia itself, nor still less the other republics, can cope with the present dramatic situation by going it alone," Gorbachev said. "I am seriously worried about the lack of clarity ... with regard to the treaty on an economic community," Gorbachev added, referring to Yeltsin's reform plans. In addition to grappling with the renegade intentions of the Russian president, the State Council approved plans to dissolve many central government ministries. Reduction talks on the fate of the foreign and defense ministries were held behind closed doors. Gorbachev spokesman Andrei Grachev told reporters Nov. 5that the republican leaders agreed to maintain a common military but he did not offer further details. The Russian government had proposed a drastic 90 percent reduction in the Foreign Ministry's staff, making it into a purely coordinating body. But Foreign Minister Boris Pankin told reporters Nov. 5 that they had compromised on a 33 percent to 40 percent cut including virtual elimination of the offices of Soviet state trading organizations overseas. The ministry will be run by a collective of republican foreign ministers, he said.

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