Yeltsin Gets a Free Hand to Pursue Radical Economic Reforms

MOSCOW —  The Russian Parliament gave Russian Federation President Boris N. Yeltsin a virtual free hand on Friday to implement a radical plan that would pry his vast republic from socialism and thrust it toward a market-based economy.

The Congress of People’s Deputies, Russia’s first democratically elected Parliament, voted overwhelmingly to support Yeltsin’s program for pulling Russia out of its economic paralysis and give him expanded powers to carry out his plan.

The reforms would end government control of prices on nearly all goods, bring privatization of state enterprises, break up collective farms and revamp the monetary system.

But Yeltsin’s new authority is so sweeping that he will be able to implement practically any change he deems necessary for the economy’s health.

Yeltsin had asked for the new powers to ensure that his reform plan would not suffer the fate of more than a dozen previous Kremlin programs for the country’s economic revival that never got off the ground.

While Yeltsin’s plan stands to propel the Soviet Union’s largest republic toward a market economy, it also could spark discontent among the Russian people, who are likely to face rapid inflation and even greater poverty.

“The threat of unrest among the dregs of society, an explosion because of our programs, exists of course--you can’t deny it,” Russian Secretary of State Gennady E. Burbulis said. “But to refrain from what we are doing is impossible.”

Yeltsin has not said when or how he will put reforms into effect. Burbulis said some secrecy is necessary so as not to harm their chances; he indicated prices would be freed from state control by Jan. 1, but refused to be more specific. “To disclose the starting date for the price increase would be absolutely stupid,” Burbulis said.

The Parliament, voting 787 to 56, also granted Yeltsin the authority to remove from office uncooperative local officials and appoint local administrators to carry out his plan across the country. And Yeltsin won endorsement for his request to postpone all elections and referendums in the Russian Federation--the largest, most populous and wealthiest Soviet republic--until Dec. 1, 1992.

Lawmakers also agreed, voting 753 to 59, that Yeltsin’s decrees on banking, commodity and stock exchanges, currency, customs, the government budget and a wide assortment of other economic issues would take effect after seven days and become draft laws within 10 days, unless rejected by the Russian Supreme Soviet, the smaller legislative body whose members are elected from the congress.

In a first step, Yeltsin said that, as of Friday, Russia will stop financing most federal ministries; the ministries of defense, foreign affairs, railroads, culture and nuclear energy will be among the few that the republic will still support.

Leaders of the eight Soviet republics that last month created a new “economic community” decided on Friday that remaining federal ministries and departments, nearly 80 in number, will be dissolved in two weeks, as the central government is progressively stripped of its powers, the Tass news service reported.

But Burbulis rejected reports that Russia plans to take over the Soviet State Bank--speculation that had caused panic waves of buying this week. Burbulis told foreign correspondents that Russia is actually proposing a union of banks from the various republics as an alternative. The State Bank “is making the economy worse, not better,” he said.

Many of the reforms planned by Yeltsin were included in earlier programs presented by Soviet President Mikhail S. Gorbachev, who--like Yeltsin--won the authority to rule by decree but who seldom used the powers and continued to put off measures that he described as urgent.

But Yeltsin supporters contend that he will succeed where Gorbachev failed. As Russia’s first democratically elected president, Yeltsin has greater support than Gorbachev, particularly after leading the opposition to the conservative coup in August. This should help Yeltsin, they say, carry out the unpopular reforms the country needs.

Yeltsin is staking his reputation on his plan, which he introduced Monday, proposing that he be named Russia’s prime minister, as well as president, so he will bear full responsibility for it if his bold reforms fail.

Oleg M. Poptsov, head of Russian Television and Radio and a member of Parliament, said it is important that Yeltsin lead the reforms because he is like an “ice-breaker” who can crash through the conservatism in the society, while “accumulating the trust and love of the nation.”

This support is essential for successful reform, Poptsov said, adding: “Yeltsin intends to meet his goals, but if he has no support, he will fail to accomplish his program.”

Pushing the reforms through the congress proved a herculean task in itself.

Through a week of tough parliamentary debate, lawmakers repeatedly challenged Yeltsin about his intentions in gathering so many powers and some even accused him of abandoning democracy.

“Yeltsin already had enough power to realize any economic program, but he has not used it,” said Andrei L. Golovin, leader of the radical Smena faction, which emerged as the main opponent of Yeltsin’s reform program. “Before, there was hope that we would follow a democratic path, but (the vote) casts very serious doubt on that hope.

“In the first resolution, we revived the totalitarian system, where appointments--from the bottom to the top (of the governmental structure)--are made on the basis of personal loyalty. And in the second resolution, we said that the decrees issued by the head of the state have priority over laws passed by the Parliament.”

Many lawmakers had wanted the authority to approve or reject Yeltsin’s appointees as local and regional administrators; in a compromise, the resolution’s final wording requires the agreement of local councils on appointees.

Although almost every sentence in two of the three resolutions was hotly debated, most lawmakers voted in favor of the resolutions, saying they realized the necessity of drastic measures to stop the economy’s downward spiral. “It was the right thing to do,” said Anatoly V. Sysoyev, a lawmaker and director of a large aluminum factory in Yeltsin’s home district of Ekaterinburg. “A decision had to be taken. The longer we put it off, the worse the situation would be.”

But Sysoyev stressed that implementing the plan will be the real test of Yeltsin, who he said “has only put forward ideas, and there is a long distance between ideas and deeds. Everything depends on what kind of professional he is . . . .”

Many people fear that freeing prices from state controls will cause skyrocketing inflation because there are too few goods available for the vast amount of currency in circulation. But Burbulis said the government would try to counter this by putting reserve stocks on sale.

To protect people at the lowest economic level, prices on bread, butter, energy and even vodka will still be set by the government, Burbulis said. Freeing vodka prices would be dangerous, he added, because alcoholics would spend even more of their family food budgets for liquor.