Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, May 24, 1990 TAG: 9005240387
SECTION: NATIONAL/INTERNATIONAL PAGE: A4 EDITION: METRO
SOURCE: Associated Press
DATELINE: MOSCOW LENGTH: Medium
The government believes it must have clear public support before starting the potentially destabilizing five-year reform plan, First Deputy Premier Yuri Maslyukov told a news conference.
It was unclear whether the public would endorse the reforms, which would double food prices Jan. 1, 1991, lead to widespread closures of inefficient factories, and eventually allow private ownership of most businesses.
Ryzhkov was to present the plan today to the Supreme Soviet parliament, where some radical reformers were planning to seek his resignation. He survived a similar no-confidence vote last fall.
No Soviet government has ever fallen because of either a referendum or a parliamentary vote, although prime ministers have been forced to resign by the Communist Party leader.
Even if the government falls, Soviet law guarantees that Mikhail Gorbachev would continue the four-year presidential term to which he was elected by the Congress of People's Deputies this year. He is also general secretary of the Communist Party, traditionally the top Kremlin job.
But Gorbachev has balked at standing for popular election, and defeat of the referendum would throw the future wide open, Maslyukov said.
Soviet reformers are seeking talks to discuss devolving political and economic decision-making power from central authorities, where it has resided since the Bolshevik Revolution of 1917.
The government has been wary of radical reform, however. Officials rejected proposals for a more abrupt, two-year Polish-style "shock therapy," fearing public anger. And Soviet officials have said they do not enjoy the same popularity as Poland's Solidarity leadership.
Shock-therapy, which calls for rapid reform to keep the period of dislocation short, could put 40 million Soviets out of work, Maslyukov said.
Deputy Premier Leonid Abalkin told a news conference that even under the proposed five-year transition, tens of millions of jobs could be lost.
The plan calls for rapid conversion of state-owned enterprises to stock companies, and the gradual sale of their stock to the public. It would permit certain companies and industries to contract directly for their supplies and to sell their products in a free market. Unprofitable firms would go bankrupt.
The plan sets target price increases for various sectors of the economy, including an 82 percent rise in energy prices, an average 43 percent rise in retail prices and doubling the price of food, which is now subsidized.
Wages and other compensation would rise to match only some of the price increases, Abalkin said.
Maslyukov said the Supreme Soviet would set the date for the referendum, which would be the first in Soviet history.
The outcome is far from certain, as Soviet people cling to an ideology that brands individual wealth harmful to the collective good. Gorbachev has blamed public opinion for retarding reform.
A recent poll found 54 percent of Soviets favor market reforms but 46 percent are opposed, said Stanislav Shatalin, the lone economist on Gorbachev's advisory Presidential Council. The council approved the reform plan Tuesday.
The government discussed radical reforms last fall, but backed away. The economy has deteriorated sharply since then. In the first three months of 1990, wages rose 13.4 percent while production declined. Official figures show that industrial output dropped by 1.2 percent.
by CNB