Soviets Confront Stark Choices for Future

Nationalist demands and economic woes push Gorbachev toward a radical leap forward - or retreat to the past

FOR Soviet citizens, and for the world which looks on, the new year looms like a dark abyss. The only surety is that it will be a time of profound change. And that it will bring a reply to many unanswered questions. After a decade of decay and five years of faltering reform, the economy is sliding into a deep crisis. Virtually all economists, both Soviet and foreign, predict that 1991 will bring an across-the-board decline, from production to trade. Severe shortages will be accompanied by explosive inflation and growing unemployment.

Will the crisis of 1991 force a radical leap to a market economy or a retreat to socialist commands?

The burst of democratic fervor that began with the spring 1989 elections for the Soviet parliament is fading, and disillusionment with democracy itself is spreading. Soviet President Mikhail Gorbachev's popularity has fallen apace with emptying shop shelves and unfulfilled promises. In the midst of a growing political vacuum, the yearning for order and a strong hand grows.

Will the political farewell warning of liberal stalwart Foreign Minister Eduard Shevardnadze that ``a dictatorship is on the offensive'' be realized in 1991?

Around the periphery of the Soviet Union, where nationalism and the demand for independence has taken deep root, people and their governments view Moscow as a foreign capital. But President Gorbachev is determined to renew a strong federal state, embodied in the ratification of a new treaty of union early this year.

Will 1991 be remembered as the year when the last great multinational empire finally collapsed?

The forces that are at work in the Soviet Union today owe much to the strategy for change that Gorbachev and his allies have pursued since the spring of 1985 in the name of perestroika (restructuring).

Perestroika began as a plan for radical economic reform, to lift the Soviet Union out of economic decay by introducing the use of market relations and advanced technology. Perestroika meant an end to the cold war, stopping the waste of massive resources on defense, and bringing the country out of isolation from the West.

Most of all, Gorbachev held that true economic reform could only rest on political reform - on democratization, on glasnost (openness), which would bring a free flow of information and access to the West. The force of a mobilized population was needed to break the entrenched power of the bureaucracy, embodied in the Communist Party and the vast central ministries, which would naturally resist economic reform.

In this he made a consciously different choice than that of the Chinese Communist leadership, which opened up the economy while keeping a lid on political freedom. The Chinese liberalization produced full stores, but the limits of that approach were brutally demonstrated last summer in Tiananmen Square and the subsequent retreat from economic reform.

The Soviet strategy seems to have come up against its own difficulties. Democratization has unleashed unanticipated forces of nationalism that increasingly seek freedom through independence. Starting with the three Baltic republics, followed by Moldavia, the western Ukraine, Armenia, and Georgia, the Communists have been ousted from power in election contests with openly nationalist movements.

At the same time, by delaying radical economic reform until political conditions were ripe, the government has failed to show tangible results from perestroika. Gradualism has worsened economic conditions as the command economy falls apart without a market structure to replace it. The result, particularly in the Russian-speaking heartland, is the collapse of the government's authority in favor of the kind of radical populism represented by Russian leader Boris Yeltsin. The conservative opponents of change are also strengthened, as they play upon fears of disruption.

No matter which approach to economic reform is followed - a radical ``shock'' or a cautious gradualism - all economists agree the country must go through a period of ``stabilization.'' That means controlling the huge budget deficit, halting the massive printing of rubles that has been used to cover up economic collapse, lifting controlled prices and ending subsidies to state enterprises.

Only a strong government can carry out this kind of policy, argues Hungarian reform economist Janos Kornai in a recent book. But there are various kinds of ``strong governments,'' he points out.

``A stabilization program accompanied by a great upheaval and a reinforcement of the market economy might be carried out by a repressive authoritarian administration, some military dictatorship of the Chilean or Turkish variety,'' he writes. But ``regardless of the economic results that might be accomplished by a government whose strength lies in repressive measures, I am strongly against paying such a price for stabilization.''

``The other possibility,'' the man considered the father of Hungary's economic reform continues, ``is a government whose strength lies in the support of the people, one to which free elections have given a real popular mandate to set the economy right with a firm hand.''

These two choices capture Gorbachev's own dilemma. By himself, the Soviet leader does not have the popular support to take the second path. The only way to do so would be to ally with those who do have backing - namely Mr. Yeltsin and the other republican leaders.

``Order is a wonderful thing, and obviously, everybody is yearning for it,'' says liberal sociologist Tatyana Zaslavskaya. ``People are saying, `There has to be some kind of government of the country!' This is a very positive development, because too many things are slipping out of control.... That's why the Yeltsin-Gorbachev confrontation is beginning to seriously alarm many people. It takes political wisdom to realize they have to work together and bear the burden together.''

But to reach such an alliance, Gorbachev would have to yield significant power to the republics, to accept a concept of confederation rather than a centralized federal union. The combination of confederation and radical economic reform was agreed on last August in the ``500-day program'' drafted by a Gorbachev-Yeltsin team. But in October Gorbachev backed away from that deal, offering in its place a vague package of economic reforms and looser federal union.

Having hesitated to adopt a democratic version of a strong government, Gorbachev seems, at times almost without a clear decision, to have drifted toward the authoritarian option. He has achieved a restructured presidency that has both executive and legislative powers, virtually eclipsing the role of the Soviet parliament. And, as recent weeks have shown, he seems inclined to use those powers to clamp down on nationalist revolts rather than to accommodate them.

But as Swedish economist Anders Aslund predicts in his book on Soviet economic reform, the very effort to curb national unrest can undo the prospects for economic reform. ``Such repression would imply centralization and have a negative impact on economic reform as well.''

Worst of all, some Soviet reformers fear, by creating an authoritarian structure, Gorbachev may have paved the way for the last radical - himself - to be ousted. Moscow Mayor Gavril Popov, speaking recently on Soviet television, compared Gorbachev to failed reformer Nikita Khrushchev. One by one, Khrushchev's allies were stripped from his side until he was alone and finally ousted.

Mr. Shevardnadze, the man whom Gorbachev said first gave him the idea of perestroika, seemed to point in the same direction when he resigned Dec. 21. Speaking to Gorbachev as much as to the nation, he said: ``No one knows what this dictatorship will be like, what kind of dictator will come to power, and what order will be established.''

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