Gorbachev Admits Consumer Supplies Have Not Improved : Soviet Consumers Fear Price Rise From Reform

The winter coat that Olga Boguslavsky’s friend found at the GUM department store during her buying trip to Moscow cost 730 rubles. That’s $1,170--almost four months of wages for the average Soviet industrial worker.

For the same money, she could have bought enough meat at state-subsidized prices to last for six years.

Consider too the case of the collective farmer who can sell the government a kilogram (2.2 pounds) of meat for the established wholesale price of 4 rubles, then turn around and use that same money to buy back twice as much meat at subsidized retail prices.

Economists heading Soviet leader Mikhail S. Gorbachev’s economic reforms use examples like these to argue that the state-run economy’s price structure must be revamped.

Prices Worry Consumers

But Soviet consumers, long accustomed to low-priced necessities, worry openly that higher prices may be the only effects they feel from Gorbachev’s sweeping modernization. Even when merchandise is available, there’s an interminable wait on line to buy it. And, often, the products are of inferior quality.

The government reported last month that state-run enterprises in the first three months of the year had trouble meeting the country’s needs in many fields, from shoes to machine tools.

Gorbachev acknowledges that there has been little improvement in consumer supplies since he assumed power three years ago.

Speaking to a gathering of farm workers in March, he said: “A person is willing and able to pay for consumer services, but the trouble is that there is seldom any person or establishment supplying them.”

A month earlier, he told the Communist Party Central Committee, “There have been virtually no tangible changes for the better in the quality of consumer goods.”

He acknowledged that perestroika, his effort to rebuild and modernize the Soviet economy, will be successful only if those problems can be solved.

Bread Used as Soccer Balls

But he has also complained that bread, which costs about 30 kopeks (50 cents) a loaf, is so cheap that children use it for soccer balls.

Overhauling prices and new laws designed to make local enterprises self-supporting are at the heart of Gorbachev’s economic reforms.

The state now spends 84 billion rubles ($134 billion) a year on subsidies. That is expected to rise to 104 billion rubles ($166 billion) by 1990. Of that, 80 billion rubles ($128 billion) will be spent to subsidize food, said economist V.I. Shprygin of the Soviet Institute for Research.

Gorbachev and his economic advisers say they will try to ease the impact of reduced subsidies. But it won’t be easy for him to convince consumers that the higher prices that come with reduced subsidies are in their best interest.

The Communist Party newspaper Pravda receives more letters complaining about the price of consumer goods than on any other issue.

So it was for Boguslavsky’s friend, who had come to Moscow on a buying trip from the Ural Mountains.

Shopping for a Coat

“Beating our feet into the helpless pavement around the store . . . in the end we buy the coat for 700 rubles,” Boguslavsky wrote in a recent edition of Pravda.

After all, she said, “you can’t just wrap yourself in a blanket.”

“Who needs the kind of perestroika in which they raise prices for food and everyday goods that are in short supply?” A. Nasedkin of the Russian village of Bogdanovo wrote in the government newspaper Izvestia. “An increase in prices contradicts perestroika; it must be accompanied by a lowering of prices.”

The newspaper Komsomolskaya Pravda blamed moonshiners for a sugar shortage that has emptied shelves in many areas. The moonshiners are said to be trying to make up for state-imposed vodka shortages. Rumors that the price is about to rise has also contributed to sugar shortages.

Soviet consumers face regular price increases, despite the semblance of stability offered by prices printed or stamped on merchandise.

Cheaper products that factories cannot sell or make profitably simply disappear from the stores, to be replaced by slightly different versions at higher prices.