Latsis: Economic Reform in USSR, page 2
The New Economic System Is So Far Incomplete
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The April 1985 Plenary Meeting of the CPSU Central Committee launched a course of intensive economic growth, because without it all social programmes would be little more than daydreaming. The way out seemed to be a far-ranging restructuring of the national economy on the basis of new achievements in science and technology and an overhaul of the economic mechanism and the management system. Structural and investment policies were to be revised. The progress of transformations, however, was affected by the momentum of old thinking and economic processes, by the haste with which the early steps were taken, and by clashes between different concepts. The transition has proved more difficult than expected. The new economic system Introduced in early 1988 is so far incomplete: no reform of wholesale prices has been put into effect, the distribution of the means of production according to centrally fixed quotas has not been replaced with wholesale trade in them, and the functions of the sectoral ministries have remained unchanged, while enterprises have been given new rights. The new, progressive model is having teething troubles: mistakes are being made and experience accumulated. Meanwhile, the old mechanism no longer works as it used to, but is a drag on the economy. Sharp public criticism and discontent with the results of transformations have been growing in society, especially in the past year, and the polarisation of opinions and moods has been increasing. Coal strikes In the Ukraine, Siberia and Vorkuta in 1989 and stoppages in other industries are evidence of these processes. The main reason is, I think, that people have not tasted the real fruit of perestroika. Its processes are going ahead, good decisions have been made, new important bills, including those on ownership, on the land and its use, on leasing and lease relations, etc., were discussed by the autumn session of the USSR Supreme Soviet. But everyday life is growing worse, not better, as empty-shelved shops demonstrate. Two years ago the situation on the domestic market began to worsen dramatically. In 1986-1987 alone the supply of goods to retail trade networks fell short of the plan target by 33 billion roubles' worth. According to the figures of the Institute of the Market and Consumer Demand of the USSR Ministry of Trade, in 1988, only 23 of the 211 groups of foodstuffs were considered non-deficit, while the situation with non-food consumer goods was even worse: Meanwhile, production was not reduced, nor did the overall volume of consumption diminish. Paradoxically, the production of most basic goods has grown over the past few years, in some cases considerably. But supply is still far behind consumer demand. For example, in the 1950s people were queuing up to buy black-and-white TV sets, while ten years ago colour sets were offered on credit because of overproduction. Now there are almost none in the shops, although in 1988 production increased by 6%, including an almost 25% rise in the production of colour TV sets. In the nine months of 1989. a total of 7.3 million TV sets, including 4.6 million colour ones, were turned out (an increase of 10% over the same period last year) -but it is still a problem to buy one. Or take detergents: last year 80 tons were sold in Moscow every day; this year's sales are 300 tons a day, but people complain that they cannot buy any. There is no soap, toothpaste, notebooks, batteries, cigarettes and many other goods in the shops. The reason behind this consumer rush is the disorganisation of the market. As a result goods produced in increasing quantities do not reach the shelves but go for special sales at enterprises or are sold under the counter, and many of them fall into the hands of black-marketeers. An unwelcome side effect of this situation Is rationing. Meat, sausage, butter and sugar are rationed in many parts of Russia. People no longer look at prices but buy whatever is available. This grave situation is fuelling political discontent as well as economic and social problems. But why have things come to such a sad pass when the economic reform is under way, when many bureaucratic distortions have been removed, when we have a more rational five-year plan, and when economic management has been upgraded?
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