Mikhail S. Gorbachev on Tuesday unveiled a new plan to rescue the Soviet economy, eliminating a 500-day deadline for switching to a market system but adding elements such as interest-free loans to help people buy cars and computers.
The 66-page blueprint, delivered to committees of the Soviet legislature and signed by the Soviet president, is at least the fourth recent plan for reviving the economy.It is the result of a three-week, behind-the-scenes effort by Gorbachev and the country's top economists to resolve fundamental differences over how to move away from a centrally planned system that fails to provide adequate food, shelter or services for the country's 285 million people.
"People's lives are becoming more difficult, their interest in labor is falling, their faith in the future is crumbling," the plan says.
The plan, which Gorbachev is scheduled to present to the full 542-member Supreme Soviet on Friday, sets no time limit for switching to a market economy but states: "The experience of applying stabilization programs in other countries shows that such a period can take about 1 1/2 to two years."
It would give the Soviet republics a powerful voice and new flexibility in running the country's economy.
"The main guidelines will determine only the principal approaches. Every republic, Moscow and Leningrad have the right to act as they like within the framework of these guidelines," Gorbachev's spokesman, Vitaly Ignatenko, told reporters Tuesday.
The plan calls for establishment of an "inter-republic economic committee" to oversee reforms and for republic representatives to be included in central executive bodies. Ignatenko called the committee a departure from the tradition of ministries in Moscow dictating to thousands of factories, farms and businesses what to produce, where to sell it and at what price.
In 1992, the plan says, only the prices of bread, meat, dairy products and a few other staples would remain fixed by the state. That is a slower transition to free pricing than envisioned in a draft prepared by Soviet economist Stanislav Shatalin, which envisioned a 500-day deadline.
Under Gorbachev's plan, republics would have the right to override price increases allowed by central authorities and to control most of the resources on their territory.
To ease some of the expected painful price increases, the plan suggests interest-free loans to the public to help buy scarce and expensive goods such as cars, computers, furniture, telephones, housing and rural plots.