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. Last Updated: 07/27/2016

Bold Program (Too Bold?) From Fyodorov

The basis of the emergency measures for Russia's 1993 financial and economic policy. WHICH the governmment discussed a few days ago, was a 10-page plan prepared by Boris Fyodorov, the new deputy prime minister. He brought it with him when he returned from Washington on Jan. 10 to assume his new duties.

It must be assumed that, in proposing these measures Fyodorov had two purposes. Thc first was tactical: to reinforce the attack on the conservative wing of the government which had man aged to obtain, from Prime Minister Viktor Chernomyrdin, a decree on government price controls. The second purpose was strategic: to use official discussion to reinforce a monetarist approach to the solution of economic problems.

The program, which was prepared by Fyodorov with the aid of Anatoly Chubais, Alexander Shokhin and Sergei Glazyev, in itself contains nothing surprising, nothing new in the practice of market regulation. Curbing inflation, cutting the budget deficit, stabilizing the national currency, stabilizing industry, harsh money-saving measures -- all of this is in most stabilization programs in one form or another.

The surprising part is the concrete conditions under which all of this must be attained.

Cutting inflation to five percent per month by the end of the year and cutting the budget deficit to the same figure is a task even more difficult than the one Yegor Gaidar tackled a year ago, given the current pace of inflation and the growth of government expenditures.

Fyodorov's plan calls for a sharp drop in subsidies to failing enterprises, including a drop in funds to bail out the coal industry. As soon as this policy begins to be implemented, the government will be accused of ruining domestic industry.

Another probable center of opposition are those regions and branches of industry which have preferential status on export/import and other taxes. They must be re-examined, and, as far as possible, their tax-exempt status taken away. This touches on such powerful material interests of large groups and individuals that insisting on the repeal of economic privileges will not just be difficult, it will be dangerous.

The proposal that, if it cannot meet its expenses, an enterprise should use its hard-currency savings or put its property up as collateral to cover the debt is not likely to cause great delight.

There are, however, in Fyodorov's plan some neutral proposals. These include the creation of an import/export bank to stimulate exports and guarantee credits, the lifting of limits on opening personal hard-currency accounts and on transferring hard currency from these accounts abroad. But it is the controversial proposals that will be most decisive for the economic situation