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POLITICAL FORECAST : 500 Days to Fix a Failing Soviet Economy : Reform: Gorbachev backs an all-or-nothing economic plan that abolishes state ownership and central planning. Five experts analyze its chances.

September 16, 1990|MAURA REYNOLDS | Forecast interviews were conducted by Maura Reynolds, a staff writer in The Times' Washington bureau.

L ast Tuesday, Soviet President Mikhail S. Gorbachev declared in a loud voice before the Supreme Soviet that he was withdrawing support from a moderate--some say timid--economic reform program advocated by his protege, Soviet Prime Minister Nikolai I. Ryzhkov. "I am more impressed by the Shatalin program," Gorbachev said bluntly, and threw his support behind an all-or-nothing economic make-over proposal drawn up by a panel headed by economist Stanislav S. Shatalin.

The 500-Day Plan, as it is known, abolishes state ownership and central planning with one swift blow and grants autonomy to the economies of the 15 Soviet republics, sells off government-owned enterprises to private individuals in an enormous, year-long fire sale.

But can the Shatalin plan save the Soviet Union? In 500 days from now, what will conditions be like? The Times posed these questions to five Soviet and American observers. Peter Toumanoff,associate professor of economics at Marquette University in Milwaukee:

The plan, which I saw in draft form on an recent trip to Moscow, was written by three young economists who recently received their doctorates in economics at Mocow State University. They looked around and said, "Everyone talks about the transition to a market economy but no one has even begun to talk about how to actually accomplish it." So they put together a 36-page draft and said, "We think it can be done in 500 days and here are the steps."

But you cannot make the kind of institutional change that they want to make in that short period of time.

I think the plan's chances for success depend critically on how decentralized the process of implementing the reform is. Without a very decentralized process, it has almost no chance. Only if the republics feel like they have some stake in adopting the reform does it have some chance of success. The reform that we will see, however, will not be a coherent central policy but a piecemeal regional reform.

If the reform is done on that kind of basis, I think it will start changing the Soviet system in two years. But we are certainly not going to be sitting here in 500 days talking about the new market system in the Soviet Union. It is going to take longer than that.

The worst-case scenario is that radical reformers in the central government decide they know exactly how to bring the entire country into some new set of economic institutions and they impose their concept unilaterally from the central level. I think that's a blueprint for a civil war. Igor Birman,an economist expelled from the Soviet Union in 1974 and the author of "Private Consumption in the U.S.S.R. and the U.S.A." (St. Martin's):

I've spoken with members of the Shatalin commission and nobody expects miracles tomorrow or even the day after tomorrow. But with all due respect to Shatalin and his people, I'm afraid that his plan isn't radical enough. My largest criticism is that even with all this talk about reforming the economy, they have not stopped military expenditures, which according to my calculations are still something like 25% of their GNP. No radical plan can succeed unless they stop the production of weaponry.

It will be very difficult for the government to more or less "normalize" the state of the economy. It will be very hard on people. I am especially afraid of what may happen this winter. There may not be enough fuel to keep people warm in their houses and although this year they had an excellent harvest, it wasn't harvested and there will probably be food shortages. Food prices in Moscow are too high--they are high because the economy is collapsing.

Mikhail Gorbachev, the darling of Washington, hasn't been doing his job. He should immediately permit private property and then organize a government of national salvation that will sell land to the peasants.

I'm very gloomy about prospects for the Soviet economy. In 500 days, the economy will still be in bad shape. Yuri Kolochkov,deputy director of the scientific and technological progress committee of Gosplan, the state planning agency:

The Shatalin plan is a radical plan in every respect--radical because it is a short-term plan that has concrete stages that require serious changes in the economic system. I think practically every structure of management is going to have to undergo change. But whether it works and what institutions will have to change depends on the final form of the plan adopted by the Parliament.

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