Soviet Republics OK Plan to Pay Off Debts : Economy: Most agree in principle to divide up the nation’s wealth as part of the ambitious program.

Pressured by Western creditors, the bulk of the Soviet republics have agreed in principle to divide up the nation’s wealth--from diamonds to embassies abroad--as part of an ambitious plan to pay off $65 billion in foreign debt and obtain huge new credits, officials said Sunday.

News of the Ukrainian-brokered accord came from a meeting in a swank Moscow hotel between leaders of the republics and envoys from the Group of Seven major industrial democracies.

Much work remains, however, before any concrete agreement can take effect.

The visit of representatives from the West’s richest nations was sparked by concern over the possibility of a default on the Soviet Union’s foreign obligations as the country’s economic crisis deepens and republics pursue their independence from Moscow.

“Above all, the G-7 is interested in knowing who will pay the debts of the U.S.S.R., and how,” Grigory A. Yavlinsky, an influential economist who played a major part in creating an inter-republic “economic community,” said before the meeting began.

There have even been doubts that some of the 12 republics will honor the debts of the Soviet Union, a country they now consider extinct. Such uncertainty has spawned “definite reluctance” on the part of the United States and other G-7 members to dish out more funds, Viktor V. Gerashchenko, chairman of the Soviet State Bank, said.

To help win back the West’s confidence, the Ukrainian proposal first stipulates that a given republic’s share of Soviet assets and debt obligations will be calculated according to its population, share in Soviet imports and exports and its percentage of the Soviet Union’s gross national product.

Then, an “interstate council” and a central clearing bank will be set up and republics will make advance debt payments into an “insurance fund” to be held in escrow.

If the republic defaults on its share of the debt repayment, the bank will be empowered to seize the fund and send it to creditors.

According to foreign experts, the G-7 wants the Soviet republics to establish a joint mechanism for reimbursing the debt, and the interstate council and central bank would be obvious steps toward meeting that requirement.

“Our creditors should not have to walk around (to the individual republics) with their hat in their hand. They should deal with just one person,” Ukrainian Prime Minister Vitold P. Fokin, explaining the plan’s rationale, told reporters.

According to Fokin, the plan won support from the majority of republics on Sunday, although Fokin said that Kazakhstan and Kyrgyzstan (formerly Kirghizia) expressed their opposition and Belarus (previously Byelorussia) had objections.

“I think definite agreement awaits our meeting in Kiev, when we assemble to discuss the division of national property,” Fokin said.

As of now, the single most important clause of the proposal--Article 4, which specifies the “Aggregate Index” that determines a republic’s share of the wealth and foreign debt, based on population, GNP share and the other factors--remains blank.

Much haggling over how to calculate it seems inevitable.

The issue of what to do about the Soviet Union’s existing debt has assumed an urgency because of the need for additional aid to halt the downward spiral in the country’s economy and the looming specter of a wintertime famine.

“It is clear that if the biggest republics refuse to recognize the old debt, then there is no hope for new credits,” Ernest Y. Obminsky, deputy Soviet foreign minister for economic affairs, said in an interview.

Obminsky estimated that the Soviet Union needs an additional $5 billion by the end of 1991, and at least $10 billion next year, to bring its balance of payments into equilibrium. The foreign debt now stands at about $65 billion, he said.

Earlier this month, the Ukraine refused to join with eight other republics, including Russia, in signing an agreement to create a Soviet “common market.” Fokin, however, termed the debt-repayment question “most acute,” and its pressing nature was evidently enough to motivate the Ukrainians to search for a solution.

For from being a matter for only bankers or economists, the debt problem could have far-reaching, perhaps fateful, social and political consequences. Because of the Soviet Union’s shortage of hard cash, foreign trade partners have been refusing for the past two months to supply food, Gennady Kulik, the deputy head of the Russian government, said over the weekend.

Meanwhile, in a related development, the Parliament in the Soviet Central Asian republic of Turkmenistan declared independence Sunday, a day after an overwhelming majority of the people voted for secession from Moscow in a referendum, wire services reported.