Yeltsin Unveils Plan for Drastic Reform

By Michael Dobbs
Washington Post Foreign Service
Tuesday, October 29, 1991

MOSCOW, OCT. 28 -- Russian President Boris Yeltsin today staked his political career and the future of this vast republic on a program of drastic economic reforms designed to overcome the legacy of seven decades of Communist rule and steer Russia toward a Western-style market economy.

The plan would free prices and remove subsidies by the end of the year, privatize large sections of state-owned industry and agriculture and create a more viable currency.

Addressing the Russian parliament and nation at what he called "one of the most critical moments of Russian history," Yeltsin also nominated himself to the vacant post of Russian prime minister and said he was ready, in addition to being president, to head a new government of national unity to tackle a painful period of reforms.

By nominating himself, he has chosen to assume direct political responsibility for the success or failure of the long-awaited reform package.

In the past, successive Soviet governments have refrained from such a sharp shift toward a market economy for fear it would lead to runaway inflation and possibly uncontrollable social turmoil. But the economic situation has deteriorated to a point at which Russian leaders have concluded that they have no alternative.

Economists predict that this year's budget deficit will amount to about 25 percent of gross national product and that it could double by next year if present trends continue.

Yeltsin conceded that lifting price controls over a wide range of food items, consumer goods and transportation costs is a "painful measure" but said talk of a free market without such a step was "idle chatter."

"Over the last few years, everybody has realized this, but nobody had the nerve to actually do it," he told the legislators, who must vote on his economic plan.

"The time has come to act decisively, harshly, without hesitation," Yeltsin said, staking his political future on reforms designed to replace the old Communist regime's stultifying command economy with a market-driven system. "If we don't seize this real chance to break the unfavorable course of events, we shall condemn ourselves to beggary and our centuries-old state to disaster.

"This is the most difficult decision in my life. I have never sought the easy way out, but I clearly understand that the next few months will be the most difficult I have ever experienced," said Yeltsin, who played the decisive role in thwarting the Kremlin coup by hard-line Communists in August.

Yeltsin has previously shied away from making tough economic decisions that could harm the living standards of his supporters and had been expected to nominate either a professional economist or a close political aide as prime minister.

"He is putting his own popularity on the line. His rating in the opinion polls is bound to go down -- and he understands this very well. We all know what happened in Poland," said Pavel Voschanov, his press secretary, referring to the electoral defeat of Polish politicians responsible for introducing an economic-reform package known as "shock therapy."

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