Importing of Goods Debated : Soviets Grope for Answers to Consumer Shortages

By DAN FISHER

Feb. 4, 1989 12 AM PT

Times Staff Writer

MOSCOW — What do you do these days if you’re an adviser to the Soviet government and find yourself in a direct disagreement with President Mikhail S. Gorbachev?

If you’re economist Nikolai Petrakov, and the issue is so important that the future of Gorbachev’s reform program may depend on it, you start by writing the Soviet leader a lengthy memo telling him where you think he’s gone wrong.

Then you air your differences publicly in an interview with a Soviet newspaper that reaches a select audience of opinion leaders, telling the editor you’ll understand if he’s afraid to print it. After all, some people might still be nervous about the limits of glasnost , Gorbachev’s program of openness.

Finally, if a Western journalist happens to call right in the middle of the whole affair, you happily make your case to him, as well, stressing that “the question is still open,” and that “even Gorbachev’s own position may change. He’s a very flexible leader and highly capable of listening to arguments.”

At issue is whether the Soviet Union should import up to $7 billion worth of consumer goods in the next two or three years to help offset increasingly painful and politically troublesome shortages in the domestic market.

But a widespread public debate that has flared over this question in recent weeks reaches much deeper, to critical issues of how far and how fast Gorbachev’s reforms can go. It also gives an instructive glimpse into the increasing use of public opinion here to try to influence state policy. And it demonstrates how, to a greater extent than sometimes perceived in the West, the policy of glasnost extends not only to history, but, within limits, to criticism of current government policy and even Gorbachev himself.

Last month the Soviet president appeared to rule out the possibility of a major consumer goods import program. Sounding frustrated by criticism that his reforms have so far failed to improve everyday life, Gorbachev told Moscow party leaders in a televised speech that the country had already tried “plugging our holes with ‘funny money.’

“Shall we continue this policy?” he continued. “We regard it as utterly irresponsible and will definitely not pursue it.”

If anything is imported, he implied, it ought to be the equipment to manufacture consumer goods, not the goods themselves.

A few days later, in a statement seen as intended to dampen consumer expectations, another of Gorbachev’s top advisers, Leonid Abalkin, said it would take until 1995 before the promised perestroika , or “restructuring” of the economy achieves significant results.

Sitting at Kitchen Tables

Abalkin, who is director of the national Academy of Sciences’ Institute of Economics, told a press conference: “The important thing to know is, when will people, sitting around their kitchen tables, finally be able to say: ‘Oh, life is much better now than it was.’ I think this will happen only by 1995, and we will be reaping the first palpable changes by then.”

But economist Petrakov, who is deputy director of the academy’s separate Central Economic Mathematical Institute, is still not giving up.

“I believe that if Abalkin’s vision comes true, perestroika will expire before 1995,” he said.

“I think we have about two years for our leadership to achieve favorable dynamics,” Petrakov said in an interview. “Of course, no problem will be finally resolved in that time. But at least in the next two years the situation must show real improvement.”

He said the nation’s store shelves are “practically naked,” and that as a result “we are exhausting the credit of trust which the population extended to our leadership.”

Promises of the Past

While in his own relatively privileged position he may be ready to wait for five or six more years to see major changes, Petrakov commented, “How can you explain that to an ordinary citizen, who heard the same thing from (Leonid I.) Brezhnev and before that from (Nikita S.) Khrushchev? That soon everything will be all right?”

Soviet intellectuals appreciate Gorbachev’s reforms for the impact of glasnost on political and cultural life, he said.

“But we have tens of millions of people who have no interest in politics and who never heard of (Boris) Pasternak and (Mikhail) Bulgakov,” Petrakov added, referring to Russian writers whose formerly suppressed works have been officially rehabilitated.

“And they must feel that it’s better than it was. They alone can provide that kind of powerful, grass-roots support that Gorbachev needs. Then and only then will perestroika become as ‘irreversible’ as he says it is,” the economist said.

Petrakov is not alone in his fear that waiting for Soviet industry to reorient its production lines will take too long.

“If someone is dying of tuberculosis, you don’t build sanitariums in the Swiss Alps,” scoffed one Moscow professional. “You give him a quick injection to save him!”

A woman from Barnaul, in Siberia, complained in a letter to the government newspaper Izvestia that she had just spent five hours waiting in line to buy three tubes of toothpaste and three bars of soap.

“We are patient people--that’s known,” she wrote. “But do they need to test the limits of our patience so thoroughly and for so long?”

Everybody in the line was cursing perestroika , she added.

“All right--much needs to be done,” she continued. “But in the meantime . . . they must give ordinary people a break. . . . Otherwise their anger will become too deep and no amount of perestroika talk . . . will move them.”

‘Who Will Feed Us?’

Even the Communist Party newspaper Pravda, which ran an article last week by the head of the State Statistics Committee claiming that things are not so bad, featured on the opposite page a contradictory piece headlined: “Who Will Feed Us?”

The officially acknowledged “unsatisfied internal demand” for consumer goods is 70 billion rubles. That represents money in peoples’ hands for which there are no things to buy. It’s equivalent to 250 rubles, or about five weeks’ pay for the average factory worker, for every man, woman and child in the country.

The shortages were exacerbated by a government policy of responding to declining oil export revenues with cuts in imports of medicines and other consumer goods. Just the opposite policy is required, not only to buy more time for the reforms to take hold, but also to provide added incentive to the people who must implement them, according to Petrakov.

Now, he said, the country is trapped in a “vicious circle. People don’t want to work effectively because the shops are empty. . . . On the other hand, as long as they don’t work, there will continue to be shortages.”

The only way to break the circle is with a “powerful impetus” that would result from diverting some of the country’s foreign currency reserves and Western credits to buy “huge amounts” of imported goods.

‘Great Risk’ Entailed

Petrakov acknowledged that such a step entails “great risk,” and that because of reduced earnings from oil exports, the timing is “horrible.” But the alternative of spending all the nation’s resources on new, consumer goods-producing equipment is doomed to failure, he argued. Certainly, he said, “we need our own equipment. We can’t rely on imports forever. But there is strategy and there are tactics. Those calling for just equipment don’t account for today’s situation.”

The Soviet Union has bought Western equipment in the past without generating any great leap forward. Eduard P. Gostev, deputy chairman of the national Bank for Foreign Economic Affairs, said in an interview with Britain’s Reuters news agency last week that “some of that equipment is still lying in the snow and has not been installed.” By last year, Gostev said, the equivalent of about $4.4 billion worth of goods bought with precious foreign currency had been wasted.

In order to avoid what Soviet officials refer to as the “Polish disease”--huge Western debts, skyrocketing inflation, and still shortages of consumer goods--Petrakov said the import program would have to be accompanied by other changes.

Capital investment must be “restructured” to cut out or at least slow down expensive industrial projects that are either unnecessary or will require many years to become profitable, he said. Other measures should encourage Western investment to take up the slack. And the government will have to cut its budget deficit by scaling back spending on defense and other items, as it already has announced it will do.

Petrakov acknowledged that eventually the Soviet Union must cut down huge government subsidies and allow the laws of supply and demand to determine prices if perestroika is to work. But that process threatens runaway inflation. By importing consumer goods, the government could bring more balance to the market in the next two or three years and reduce the disruption associated with genuine price reform, he said.

If the government moves toward market pricing in the current climate, the immediate result will be the worst of both worlds, continuing shortages and rampant inflation, he noted.

This “will cause a highly negative attitude toward ‘restructuring’ as a whole,” he said. And, referring to those here who already oppose Gorbachev’s reforms as threatening to their own positions, he added, “The old bureaucracy won’t miss this chance” to undermine the effort.

Petrakov is said to be one of about 15 economists whose opinions are regularly sought by top government leaders. In contrast to times past, Petrakov said, specialists are now “treated with respect. We have the opportunity to report directly to Gorbachev and (Premier Nikolai I.) Ryzhkov.”

They also count on the Soviet press to carry their debates into the halls of political power, he said.

Petrakov stressed that Gorbachev “hears arguments from many people.” As for himself, he is not around to know how the final decisions are reached.

“I am not familiar with the practical kitchen where the final cooking is taking place,” he said with a smile.