Newspaper article The Christian Science Monitor

Critics Slam Economic Reform Plan Government's Credibility Is on the Line, as Both Conservatives and Radicals Demand Revisions

Newspaper article The Christian Science Monitor

Critics Slam Economic Reform Plan Government's Credibility Is on the Line, as Both Conservatives and Radicals Demand Revisions

Article excerpt

MIKHAIL GORBACHEV is back in town and the first order of business is to save his government's much-assailed economic reform plan.

The widespread view here is that Mr. Gorbachev's ability to stay in power will depend in large part on his ability to gain support for the controversial program for a transition to a "regulated market economy."

Gorbachev is scheduled to address the Soviet parliament next Tuesday, his first major public statement since his return from the United States. The speech will probably be followed quickly by a vote on his economic design.

This weekend, according to press reports, a special meeting of the Communist Party Central Committee will be convened. According to Interfax news agency, the meeting may take up a new version of the plan, responding in some way to the barrage of public criticism it has received.

The plan, unveiled two weeks ago after months of discussion within the government, has been hit from both sides of the Soviet political spectrum.

Party conservatives have attacked the government for failing to protect workers and the poor from the fallout of inflation and unemployment expected to accompany the shift to a market economy. Much of their fire is aimed at plans to double and treble the long-subsidized prices for basic goods such as bread.

The radicals on the left, including many leading economists, charge the government with indecisiveness, with failing clearly to establish a market structure. Instead, they argue, the government has compromised with the right, creating what economist Oleg Bogomolov calls an unworkable "hybrid of a command economy and a quasi-market."

The reaction has forced the government to back away from an earlier promise to hold a referendum on the program and to resign if it lost.

The reform plan, by the government's own account, would have been far easier to put across two or three years ago when Gorbachev enjoyed great popularity and could blame the inevitable pain of transition on the problems left by the previous Soviet regime. But after five years in power, marked by a zigzag path of reform and retreat, the government's credibility has worn thin.

More for political than economic reasons, the Gorbachev government rejected the advice of more-radical economists to follow the path of Poland's "shock therapy." In one stroke, the Poles freed all prices from state control, ended subsidies of state-run industries, and began privatizing those government assets. The popularly elected Polish Solidarity government imposed a wage freeze, despite the higher prices and unemployment that have come with the program.

"If we embarked on the Polish way ... we wouldn't be able to ride it out for even half a year," Deputy Prime Minister Leonid Abalkin, the architect of the reform strategy, frankly admitted in an interview with Commersant, an independent Soviet economic weekly.

Instead the government, six months after putting forward an even more timid plan, proposes a gradual transition to market conditions. …

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