Soviets Warned That Recession Is Likely

From Associated Press

Premier Nikolai I. Ryzhkov warned his countrymen today of the “painful processes” needed to rescue their stagnant economy, but he said there was no choice but to abandon central planning and adopt a market system.

Ryzhkov himself owned up to the catastrophic state of the economy and faced a barrage of criticism that climaxed with demands for his government to resign. His two-hour address to the Supreme Soviet, or Parliament, was nationally televised.

He said there would be price hikes and unemployment--possibly in the tens of millions--but “our decision is made. We have to move to the market.”

Ryzhkov presented the program as a compromise between Polish-style “shock therapy,” which tries to keep the transition to a market economy short by taking more radical measures immediately, and appeals to return to the old-style centrally planned Soviet economy.


His vehement rejection of the Polish model led deputy Vitold Fokin to comment from the podium: “They’ve ruled out shock therapy, but now they’re recommending an operation without anesthesia.”

Immediately after Ryzhkov’s speech, several dozen opposition lawmakers voted to demand a motion of no-confidence in his government.

“The government is not proposing a market, only a price hike,” said Alexei Levashov, a lawmaker from Leningrad.

Galina Starovoitova, another deputy, warned that the angry, hungry populace might take to the streets when bread prices triple on July 1, the first step of the proposed reform. Bread is the staple of the Soviet diet and is extremely cheap, about 32 cents a loaf.


On the Parliament’s floor, radical economist Gennady Filshin demanded the government resign because he said it had lost the people’s trust and therefore lacked the authority to carry out the needed reforms.

Ryzhkov said the plan, which provides financial aid to compensate consumers for most of the price rises, would be presented for “nationwide discussion.” He did not mention a formal referendum, which other government officials have predicted.

Ryzhkov’s proposal brought objections. “To turn this into a poll or referendum is like asking me: ‘Do you want me to give you an enema?”’ said deputy Yuri Chernichenko. “Of course I’ll say no.”

Ryzhkov admitted the Soviet people would find it “very difficult to accept the proposal that has been put forward.”

“The government’s task is to explain, to convince people this is the road we have to take,” he told reporters.

The premier, a tall, former factory director whose voice sometimes trembles when he speaks in public, dismissed the efforts to unseat him.

“It’s a political game, no more,” he said.

Members of the opposition Inter-Regional Deputies Group, which claims about 70 of the Supreme Soviet’s 542 deputies, said they knew the no-confidence vote would fail and might not even have enough support to get onto the agenda. But they said they believed they had to make the gesture.


It is not expected to come up for a vote until discussion of the government project is complete.