Soviet Republics Berated for Keeping Price Controls

The national government berated the Russian and Kazakhstan republics today for refusing to obey a decree to lift price controls on jewelry, American cigarettes and other luxury goods.

The State Prices Committee said the move to free market prices for non-essential luxury items was inevitable, and that their prices should rise. The Communist Party newspaper Pravda quoted the committee as saying the defiant republics’ refusal to obey the order was illegal.

Prices of many luxury items have been fixed by the state, but many are regularly sold for much more than the official price by corrupt salesclerks and even the factory workers who produce the goods and the truck drivers who deliver them.

Women’s shoes now cost $439 on average on the black market, a pack of 20 cigarettes costs $9 and a color television set $3,638--all three to six times higher than state prices, a newspaper report said today.

The Council of Ministers, or Soviet Cabinet, announced last week that it was lifting price controls on select items to encourage production of consumer goods.

The order affected sales of furs, carpets, high-tech electronics, cut glassware, china, car parts, caviar and imported whiskey and gin.

Within hours of the surprise announcement, the Russian republic refused to enact it and temporarily forbade the sale of the affected goods on Russian territory. The Central Asian republic of Kazakhstan also nullified the decree within its borders, and Azerbaijan said today that it would ignore it while studying its impact.

Floating prices are an important element of the government’s plan to move to a market economy from central planning, in which the government sets all prices regardless of the cost of production.

The Supreme Soviet, or Parliament, adopted a plan for gradually freeing prices last month but has run into resistance from some republics, notably Russia, which has adopted its own plan.

The Rabochaya Tribuna (Workers Tribune) newspaper today quoted the Russian Federation Statistics Committee as saying the black market prices of some consumer goods in the republic exceeded state prices by 100% to 200% or more.

It said the average black market price for beef or pork was $16.20 and for a small jar of caviar, $37.80, both four times the state price.