Soviet Budget Crisis, Strike Wave Reveal Limits of Gorbachev's Power
ON Tuesday, Soviet President Mikhail Gorbachev unveiled an ``anticrisis'' program, calling for an end to strikes and demonstrations and promising further economic reform. The next day, the central Lenin Square in Minsk was filled with about 75,000 striking workers calling for the ouster of Mr. Gorbachev and his government.Skip to next paragraph
Subscribe Today to the Monitor
``Gorbachev has lost touch with the people,'' strike leader Georgi Mukhin told reporters before the rally, which continued yesterday.
The general strike in the capital of the Byelorussian republic comes on top of the ongoing strike that is seriously disrupting the Soviet coal industry. In the republic of Georgia, which declared its independence Tuesday, the nationalist government has called for a general strike to protest the presence of troops in a troubled region of the republic.
Increasingly, Gorbachev seems like an emperor without an empire. At the Tuesday meeting of the Federation Council, which groups the leaders of the 15 republics, Soviet officials complained about the failure of republics to pay their promised tax receipts into the central coffers. At the same time, the republican leaders are far from ready to sign the new union treaty that Gorbachev hopes will bring order.
The central government places much of the blame for the growing economic crisis at the feet of the rebellious republics whom it claims are disrupting economic plans.
``The president stressed that the economy is in serious danger,'' presidential adviser Georgi Shakhnazarov told reporters during a briefing. ``If we do not establish some order, we might face anything, even hunger.''
So far, Gorbachev's call for a ban on strikes and demonstrations remains a warning. But he ``does not exclude the possibility of using his powers to the full extent,'' Mr. Shakhnazarov added.
This clearly would mean deploying the military and the paramilitary militia in a ``state of emergency,'' perhaps to open the coal mines.
The president is under pressure to do exactly that by the conservative wing of the Communist Party, led by the Soyuz (Union) group of parliamentary deputies, whose leaders met Gorbachev on Monday. They have been threatening to call an emergency meeting of the Congress of People's Deputies, the highest parliamentary body, and to oust the president in a vote there.
``We told the president that emergency measures to establish order and stop anarchy and chaos at all managing levels are a necessary condition for further reforms,'' Soyuz leader Yuri Blokhin told the Tass news agency. The group agreed to stop organizing the emergency meeting until the ``anticrisis program'' and the draft union treaty are discussed in the standing Soviet parliament.
The anticrisis program is a mixture of a call for order and discipline with promises to introduce long-discussed market reforms. On the reform side, the one-year plan would privatize small business and retail trade, open stock and commodity markets, encourage foreign investment, decentralize foreign trade, and complete a shift to free market prices by Oct. 1, 1992.
But these measures, none of which are new, are paired with a harsh austerity program and a bid to curb republican powers. Aside from a moratorium on ``political strikes,'' the plan threatens to cut off subsidies to republics that refuse to join the new union treaty or to contribute to the central budget. The Soviet central bank would get new powers to control the flow of credit to republics. And centralized control of grain and other food supplies would be established.
Gorbachev is seeking quick approval of this program, within the next few days, by the republican governments. But the budget crisis reveals the limits of his power over the republics.
At the Federation Council meeting, the Ukrainian and Russian republics, who account for the bulk of the missing funds, explained they have ``financial difficulties.'' The flow of tax money from the republics has slowed, creating a budget deficit of 31.1 billion rubles ($17.3 billion) in the first quarter of this year, more than the projected yearly deficit of 26.7 billion ($14.8 billion). At the same time, however, the republics continue to demand and receive money from the center.
``Being afraid of pushing the republics toward the introduction of their own currencies, the State Bank of the USSR is satisfying their demands,'' Alexander Orlov, deputy head of the parliament's budget committee, told the daily Rabochaya Tribuna on Wednesday. They are doing this by simply cranking up the printing presses, he revealed, increasing the money supply in the first two months of this year by 88 billion rubles, compared to 11 billion in a comparable period last year.