Yeltsin Urges Russia To OK Free-Market Plan

Populist leader says competition is essential for economic success

THE leaders of the Russian Republic insist they are serious about establishing a full market economy in Russia within one-and-a-half years. Boris Yeltsin, Russia's president, has come up with a ``500-day confidence mandate'' designed to widen and intensify the pace of reform. Under the plan, a market economy could be in place in the Soviet Union's largest republic by the end of 1991.

``Yeltsin has repeatedly said history has shown that without competition it is impossible to build a normal economic system,'' says Ruslan Khasbulatov, first deputy chairman of the Russian Republic's parliament.

In four stages, the 500-day plan will privatize land and business enterprises and streamline the bureaucracy before freeing prices and introducing safety net measures for the displaced.

Mr. Yeltsin intends to trim Russia's ministries roughly in half and use the slimmer government to help beef up financially sagging sectors of the economy.

``We are moving away from what is considered normal in our country - an overabundance of industrial ministries,'' Mr. Khasbulatov says. ``Many ministries don't have real management functions.''

Other problems to receive attention are those of land distribution to peasants and corruption among officials.

The 500-day plan must be ratified by the Russian parliament when it reconvenes next month before it can take effect.

To attract foreign investment, the Supreme Soviet approved plans to create six special economic zones in the cities of Leningrad and Vyborg and in the regions of Kaliningrad, Chita, Sakhalin, and Primorsky.

``An old complaint of Western businessmen is there is no guarantee that their investment is safe,'' Khasbulatov says in an interview. ``But we are declaring now that we will make such guarantees.''

Russia's plan is more radical in its approach than President Mikhail Gorbachev's free-market moves for the Soviet Union as a whole.

Drastic steps are the only thing that can rescue the fast-sinking economy, not only of Russia but of the entire Soviet Union, says Khasbulatov, an economist by training.

``When Gorbachev began, he said everything would be in order within about a year,'' he says. ``Well, that was five years ago.''

``If anything the situation has become worse today,'' he adds. ``Why? Because no one is willing to make tough decisions.''

Meanwhile, Yeltsin has recruited relatively young Cabinet ministers, hoping fresh blood will pump out new ideas.

So far, many people have supported Yeltsin's every move, and he enjoys greater credibility in Russia than perhaps even Mr. Gorbachev.

Nevertheless, there are those who have their doubts. To some, the 500-day declaration is just another in a long line of political pronouncements that will fail to materialize.

``It's a nice slogan, but I think it's a dream,'' says Yuri Morozov, an engineer who was waiting on an hour-long line to buy cigarettes. ``I consider Yeltsin to be an honest man, but I don't think he realizes the severity of the situation.''

Since Yeltsin quit the Communist Party during its congress in early July, he has been waging a nearly nonstop campaign to win over both the population and local government officials. The moves appear to be having some positive effects.

Shortly after the 28th Communist Party Congress last month, Yeltsin met with mayors from across Russia. He won the support of many of them.

``Before, it seemed that the people at the top ignored those at the grass roots,'' says Anatoly Karachiev, mayor of Syktyvkar, a city near the Ural Mountains. ``Yeltsin seems to be a step ahead of everyone else in that he listens to us.''

The government also knows that the reforms won't get off the ground unless there is food.

In a recent open letter published in the newspaper Sovietskaya Rossiya, Yeltsin called on the people to help ensure a good harvest this summer. To give the message some bite, he offered to create special ``Harvest '90'' certificates. The checks would go to those who sold their products to the state and could be used to buy ``hard-to-get goods.''

In another move to win popular support, Yeltsin has abolished perks for officials in Russia, such as vacation homes and cars.

Yeltsin is also giving thought to Russia's relationship with its 14 sister republics.

Khasbulatov says a proposed ``treaty of union'' is essential to Russia's move to the market. The plan was proposed by Gorbachev to keep the Soviet Union from splintering by granting its constituent republics broader powers, including greater control over their natural resources.

``The treaty is a big indicator of the sincerity of the central government,'' Khasbulatov says. ``If they are really for a market economy, they will push hard for the treaty.''

Many officials in Russian government have their doubts about how far Gorbachev wants to move toward a market economy. Yeltsin, meanwhile, has been keeping the pressure on Gorbachev.

First, Russia adopted a declaration of sovereignty in June, placing its laws above those of the Soviet Union.

Then, while on vacation last week at the Latvian resort of Jurmala, Yeltsin reached agreement with the leaders of the three Baltic republics - Latvia, Lithuania, and Estonia - to begin talks on separate political and economic treaties. The three Baltic leaders also declared that they will not sign a new union treaty and that all their negotiations with Moscow should be carried out jointly.

Yeltsin also has created problems for Gorbachev by declaring all Soviet banks in Russia to be the property of Russia. Gorbachev last weekend used a presidential decree to override Russia's declaration, requesting at the same time that republics refrain from passing laws that undermine the authority of the central government until the new treaty of union is adopted.

Although it is still early in Yeltsin's tenure, Khasbulatov felt confident enough in his early steps to predict success for the new government, adding that the electorate must be the final judge.

``After 500 days we should call new elections,'' he says. ``The people should have the chance to evaluate our programs.''