Can Gorbachev's economic reforms take hold in Eastern Europe?
Time will have to show how Mikhail Gorbachev fares in his efforts to shake the Soviet Union into economic readiness for the next century. But a visible achievement so far is the way he has shaken the communist East Europeans into a frenzy of debate over the need for reform. Reform in Eastern Europe wears a patchwork coat.Skip to next paragraph
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There is Romania, where leader Nicolae Ceausescu rules with little apparent regard for economic reality.
There are the late-comers like Czechoslovakia, whose leaders have yet to recover from the fright of the 1968 reform movement. Or the Bulgarians who, about that time, flirted with reform and made some promising management innovations, but then settled for safer ideology instead. In each case, the economies stagnated accordingly.
And there are the already fully committed reformers. The Hungarians launched their New Economic Mechanism 20 years ago, but world recession and Moscow's conservatism prompted them to slow the pace of reform during the Brezhnev period. With Mr. Gorbachev at the helm in Moscow, it is again full steam ahead in Budapest. Hungary is even going so far as to eliminate subsidies for lame-duck state enterprises and to introduce personal income tax.
The Poles would take bold steps, too, if Gen. Wojciech Jaruzelski's commitment to reform carried enough conviction with former Solidarity leader Lech Walesa and the workers to fire a national sense of common effort. So far, that is not likely.
Everywhere the pigeons of false economics have come home to roost, and with them a host of political problems that must also be acknowledged if meaningful economic reform is to have a chance.
The problem is pretty uniform whether for Eastern Europe, or for communism's superpowers, the Soviet Union and China. Yugoslav dissident Milovan Djilas, who offered that observation in a recent talk, is not the only experienced observer to see that the same dilemma increasingly confronts communism and reform, whether it be in his own avant-garde Belgrade or in Peking.
The essential changes in China's illogical price system are already encountering opposition (as in all the communist states) from the conservatives as well as consumers. Consumers are also unhappy about the move to raise rents for urban housing. Low rents - a mere percentage point or two of earnings - were among the myths of early communist rule everywhere. When the Yugoslavs (and later, others) realized these subsidized rents left no margin for upkeep or new building, they raised rents and there was an angry public outcry.
The Bulgarian's recent draft reform - called ``a model of our society appropriate to the new historical reality'' - makes sweeping changes in legislative and economic organization. It proposes to eliminate 40 years of old-style trappings of communist rule. But it offers no changes in political style. Likewise, Prague recently published the terms of a new relationship between economic management and central government. In many ways, it hews close to the reform proposals of the 1968 Prague Spring movement - except that the Prague Spring leaders also wanted a workers' voice in the selection of managers and a genuine role for the unions. Under the current plan, the government will, as before, pick managers based on their political reliability, and the unions will still be the government's rubber stamp.
Market economics, price adjustments, cost effectiveness in enterprises, help for nonstate farming, and a private entrepreneurial sector to plug the numerous gaps in state consumerism - all these, according to the dogmatists the communist world over, can only lead to the kind of political challenges that have arisen in Hungary, Czechoslovakia, and Poland (twice) in the last 30 years.
Unemployment is the biggest bogey of all. The Yugoslavs have learned to live with it by letting people take jobs abroad (and so boosting Belgrade's hard-currency earnings). The Hungarians and the Poles, even the Russians, acknowledge the fast approaching demise of another communist myth - full employment.
But all remain exceedingly wary of the hazards in shutting down money-losing factories. At least the Hungarians have recently made a start. A new prime minister has said unequivocally that there is no option but reform and that even the attendant political risks of unemployment must be taken to secure that it works.
Full employment was once something that could be ``afforded,'' as a matter of communist politics. It was part of what a Yugoslav economist recently termed a ``premature excursion to communism.'' Now full employment is not affordable. The extent to which the East Europeans accept that, the better their chances for economic headway and for a more national, less dependent standing for themselves in relation to the Soviet Union.