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Official: Soviet Union Has No Future As Power Without Reform

April 10, 1990

MOSCOW (AP) _ President Mikhail S. Gorbachev has promised radical market-oriented reforms but his top economic adviser says public resistance must be overcome to push any drastic measures through Parliament this year.

A promised economic package is still being drafted and discussed, Deputy Prime Minister Leonid Abalkin said Monday, offering no specifics on the shape it will take.

Gorbachev said today he will meet with top advisers Saturday to agree on the shape of the economic reform, the Soviet news agency Tass reported.

The news agency quoted Gorbachev as saying the meeting of his Presidential Council and the Federation Council should make difficult but essential decisions on the economy.

The 16-member Presidential Council advises Gorbachev under the presidential form of government instituted last month and is seen as a mechanism to transfer power from the Communist Party to the government. The Federation Council is an advisory group focusing on issues relating between Moscow and the Soviet Union’s 15 republics.

Gorbachev said the economic steps initially planned for 1992 and 1993 should be taken this year and early next year, Tass reported without further elaboration.

On Monday, Abalkin said the measures would accelerate a program for remolding the economy over five years approved in December by the Congress of People’s Deputies, the full national legislature.

Abalkin, a top adviser to Gorbachev, said he expected a quick transition to a market economy would come up against powerful opposition. ″But we must do it whether we like it or not.″

The Soviet people must understand that without painful economic reform ″the country has no future as a highly developed great power,″ he said.

″Unless we go over to the new methods, we will deprive ourselves and our children of a highly developed and efficient economy and a powerful country, where people will want to live and which the people will not be ashamed of,″ Abalkin said.

In speaking of the measures under consideration, Abalkin repeatedly dodged specifics, implying key decisions had not yet been made.

He said the state must lift controls on prices, but would not specify which prices would be freed or when.

He also denied reports that some form of convertible ruble would be introduced by this summer. He said experts believe the Soviet market must have something to sell first and it will take years before the country’s currency will be convertible.

Several officials have said the Soviet Union was considering a plan to provide a Polish-style ″shock therapy″ for the Soviet economy, which would boost prices, drastically cut the value of the ruble and raise unemployment.

With the economy stalled part way between central planning and a market system, industrial production fell 1.2 percent in the first quarter of 1990 compared with the last quarter of 1989.

The country is beset by serious consumer shortages.

In November, Gorbachev called for strict and unpopular measures to revive the faltering economy. He reiterated that pledge last month when he was given sweeping new executive powers as president.

Approved reforms to introduce a regulated market economy before 1995 are being speeded up due to ″destabilization of the political system, development of ethnic and regional conflicts, and deficits in the consumer goods market,″ Abalkin said.

But any economic measures must be adopted by the Supreme Soviet, the standing legislature, before they can take effect.

″A speedy transition to a market economy will come up against powerful opposition,″ Abalkin said. ″We will have to make sacrifices. ... But there must be a social consensus for that.″

State Price Committee chief Vyacheslav Senchagov told lawmakers last week that among the three reform variants under consideration was the Polish example of a crash transformation to a market economy.

Poland hopes to keep the painful adjustment period short - and its inflation rate has already fallen drastically from the triple-digit level of January.

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