Soviets Rush Economic Plan, as Chaos Threatens
AMID fear of the Soviet Union's breakup, the new authorities in Moscow are desperately trying to prop up the collapsing Soviet economy and launch radical market reforms.A four-man committee headed by Russian Premier Ivan Silayev is now the only effective authority running the Soviet economy. The first priority of the committee is "to prevent an emergency situation in the country arising out of complete economic breakup," says committee member Arkady Volsky, the head of the Scientific and Industrial League. At the same time, the group, formed after last week's failed coup, is working on proposals to create "a new structure of economic management," Mr. Volsky told reporters yesterday. A group headed by committee member Grigory Yavlinsky, the radical economist who wrote the aborted 500-day reform plan last year, is now drawing up plans for shifting quickly to a market economy. Mr. Yavlinsky is also drafting proposals for Western aid to the new government's program. Volsky expressed optimism about the eventual success of the committee's efforts, revealing that representatives of all 15 Soviet republics are active in its work, including observers from the three Baltic republics that have declared independence. Still, the fledgling democrat- controlled central government and its backers in Russian President Boris Yeltsin's Russian government are working against a tide of republican nationalism. "Strong emotions have swept everybody," admits Alexander Vladislavlev, deputy head of the Industrial League and, like Volsky, a leader of the Movement for Democratic Reforms. The Soviet and Russian leaderships have moved to contain the explosion of nationalist sentiments in the wake of the political revolution that has swept Russia. After a series of meetings between Soviet President Mikhail Gorbachev and republican leaders on Tuesday, a delegation from the Soviet parliament headed by Leningrad Mayor Anatoly Sobchak and a Russian delegation headed by Vice President Alexander Rutskoi were dispatched to the Ukraine yesterday. Ukrainian-Russian tensions have now emerged as the central focus of concern over the breakup of the Soviet Union. After the Ukrainian parliament voted late last week to declare independence, the Russian government issued a statement earlier this week saying that in the event of secession, it would seek to redraw its borders with the Ukraine. In that event, Russian leaders have called for the return of the Crimea, a largely Russian-populated area granted to the Ukraine by former Soviet leader Nikita Khrus hchev. Economic warfare between the republics is now a "very serious danger," says Hungarian-American financier George Soros, a backer of Soviet economic reform and an adviser to the Ukrainian government. "Looking further ahead, the warfare may be more than just economic," he said yesterday at a press conference with Volsky. Agreement with the Ukraine, the second largest republic after Russia and a major producer of grain, raw materials, and industrial goods, is urgent "if economic chaos is to be avoided," Mr. Soros said. The most urgent economic problem is likely to be food, especially as the Soviet Union heads into the winter. Volsky revealed that out of an estimated 80 million to 85 million tons of grain needed to feed Soviet urban areas, only 24 million to 25 million tons have been acquired by the government. Most of what is needed is available within the country, he said, but "our agricultural producers are holding back on their grain." The Ukraine and Kazakhstan are the two largest surplus grain producers. Both are republics whose governments have expressed strong opposition in recent days to Russian domination of the new post-coup government. Volsky said that the grain shortfall could be filled only by offering new economic incentives, which the government was preparing, to collective and individual farms, and through imports. Soviet reform economist Nikolai Petrakov, a former adviser to Mr. Gorbachev, suggested yesterday that cities may have to barter manufactured goods to get food. Economist Yevgeny Yasin, who is working with Yavlinksy on reform plans, described a gloomy picture in the daily Izvestia yesterday. Aside from food shortages, the country faces a complete collapse of the financial system, he predicted. The budget deficit may reach 300 billion rubles or 15 percent of the Soviet gross national product this year. He called for republics to agree on continued central control over banking, finances, taxation, and other macroeconomic policy. On Tuesday, the Movement for Democratic Reform, headed by former foreign minister Eduard Shevardnadze, presented a broader emergency program to the Soviet parliament. It calls for rapid signing by all the republics of a political and economic agreement to manage the country during a transition period to a new, more-permanent structure. The agreement would cover economic stabilization, defense, and maintenance of Soviet international economic and political agreements during that period. Mr. Vladislavlev, the Democratic Reform Movement leader, explained yesterday that work also would begin on a long-term economic agreement among the republics. In the meantime, the management of the rest of the country's affairs is divided among the committee's four members. Within two days, Volsky revealed, Yavlinsky and Mr. Yasin will bring together plans for short-term reform measures and for integration of the Soviet economy into the world economy. The group is "working around the clock," Volsky said. Some version of their plans will likely be presented to the Soviet Congress of Peoples' Deputies, the country's highest legislative body, which begins its own emergency meeting next Monday.