MOSCOW, OCT. 16 -- President Mikhail Gorbachev today unveiled his long-awaited plan for the Soviet Union's transition to a market economy, a compromise with Kremlin conservatives that immediately embroiled him in a major political confrontation with the giant Russian republic.
Russia's president, Boris Yeltsin, denounced Gorbachev's draft as an attempt "to preserve the hated administrative-bureaucratic system." In a speech to the Russian legislature, he also accused the Soviet leader of breaking a personal promise to support a radical plan to create the foundations of a market economy within 500 days through the massive sale of state assets and the freeing of most prices.
Gorbachev's new 66-page draft seeks to merge the 500-Day Plan favored by radical economists with more cautious economic reform proposals drawn up by Prime Minister Nikolai Ryzhkov. Yeltsin has repeatedly ridiculed the attempt to produce a compromise plan, saying that it was like trying to mate "a hedgehog and a snake."
The latest draft waters down several key elements in the 500-Day Plan, postponing the liberalization of the pricing system and fudging the rigid stage-by-stage timetable for the abandonment of central controls over the economy. It also preserves some powers of the federal government that the radical plan would give to the increasingly assertive republics.
By taking several important steps in the direction of Ryzhkov, Gorbachev has averted the threat of an early government crisis and an open revolt of the conservatives. But he has rekindled his personal dispute with Yeltsin, the Soviet Union's most popular politician, after several months during which the two leaders seemed to be ready to work together.
Soviet television tonight broadcast Yeltsin's speech, in which he described Gorbachev's new program as "a deceit of the people" and predicted that it would result in economic "catastrophe." The Russian leader, who is recovering from injuries sustained in a car accident last month, appeared weak and halting as he addressed the legislature.
Gorbachev's support for the new program means that it is likely to be approved by a majority of deputies in the federal Supreme Soviet, who already have voted to give up much of their day-to-day authority to the president. The federal legislature is generally regarded as a more obedient and docile political body than its counterparts in the republics, which were elected a year later.
While the politicians have squabbled over a workable economic reform plan, shortages of food and basic consumer items have proliferated to the mounting frustration of ordinary Soviet citizens. Many Soviet economists are now predicting that, unless urgent measures are taken to stabilize the economy, production could fall catastrophically over the coming months.
The new draft, which was drawn up by Abel Aganbegyan, one of Gorbachev's senior economic advisers, begins with a ringing declaration of the superiority of the free market over the old system of central planning.
It also calls for legal guarantees of the equality of all forms of ownership, including private property, a concept denounced by orthodox Marxists as tantamount to the "exploitation of man by man."
"The choice has been made. There is no alternative to a transition to the market," the document proclaims.
As with many Soviet laws and declarations, however, the devil is in the details. A comparison of the latest draft with the 500-Day Plan, which was drawn up by a committee of economists appointed by Yeltsin and Gorbachev, suggests that Ryzhkov has succeeded in getting his way on several important points.
Provisions in the new draft that are likely to anger the Russian leadership include the insistence that the central government retain control over the export of oil, gas, gold, diamonds and other raw materials for at least two years. Most republics, including Russia, have adopted sovereignty declarations, asserting that they have the exclusive right to control their raw materials.
Although the draft commits the Soviet Union to create the basis of a market economy within 18 months to two years, it is vague about the timetable for selling off state property to private individuals and joint stock companies. The chairman of a Supreme Soviet committee on economic reform, Viktor Kucherenko, told journalists that studies of privatization in other countries showed that the process could not be completed in a short period of time.
The soaking up of billions of excess rubles through the sale of state assets was one of the key points in the 500-Day program, whose drafters were led by Stanislav Shatalin, a member of Gorbachev's Presidential Council. Shatalin claimed that his plan would create a balance between supply and demand, allowing the government to free prices without the risk of hyper-inflation.
In addition to postponing the transition to a free pricing system, the compromise draft also delays the abolition of subsidies to unprofitable firms. Government ministers have claimed that such a step would have resulted in the closing of vast numbers of factories and coal mines, leaving millions of Soviet workers without jobs.
Russian leaders have insisted that they will begin implementing the Shatalin plan on Nov. 1, whatever the federal legislature decides. Many Soviet economists are, however, skeptical that Russia can go it alone -- despite the fact that it includes 50 percent of the country's total population, 90 percent of its oil and gas, and 55 percent of its coal -- without extreme steps.
Yeltsin warned today that Russia might have to consider setting up its own currency, customs service and army if the Supreme Soviet adopted the Gorbachev draft.
Gorbachev is to address the Supreme Soviet on Friday after deputies have examined the new plan in committees. The deputies will be asked to approve the program in principle on Saturday, leaving the president free to introduce the most urgent measures by decree.