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. Last Updated: 07/27/2016

Politicians Offer Up Platter of Anti-Crisis Plans




In Russia these days, everyone has an anti-crisis economic program f except the government.


Prime Minister Yevgeny Primakov says his Cabinet is now looking at six different economic survival plans. The public can also take its pick.


On Friday, the Yabloko faction in the State Duma published the guidelines of its economic rescue plan in the daily Nezavisimaya Gazeta. The day before, the daily Segodnya printed a program written by former acting Prime Minister Yegor Gaidar's team of liberal economists. The daily Kommersant joined the program race with a copy of what it claimed to be First Deputy Prime Minister Yuri Maslyukov's plan.


Kommersant, in fact, seems to specialize on hard-line Communist economic plans. On Sept. 15, it published a draft program by a team of Soviet-era economists led by Dmitry Lvov, Leonid Abalkin and Oleg Bogomolov.


Sverdlovsk regional Governor Eduard Rossel reportedly has not one economic program but two, and he has submitted both to Primakov and President Boris Yeltsin.


It feels like 1990 again. Back then, the Soviet Union was in a crisis at least as deep as Russia's current one, and the government was unusually open to suggestions. The most famous of them, the 500 Days plan, was co-authored by Grigory Yavlinsky, who also wrote Friday's Yabloko program. The 500 Days plan was adopted by Yeltsin's separatist Russian government but was never actually used.


"This is a good time to publish an economic program f people might actually read it or at least go through it, which they would never do in calmer times," said Vladimir Pribylovsky, a political analyst at the Panorama research center. "It's also a good way to remind people that you exist and to tell them where you stand while the government is looking elsewhere for answers."


Hence the Yabloko plan, Pribylovsky said. Since the party refused to join the Primakov Cabinet, the only way for it to get its views across is to publish them in a newspaper.


For Gaidar, according to Pribylovsky, the main goal is to "justify himself and distance himself from the Aug. 17 devaluation and default."


As for Maslyukov and the academicians, Kommersant wanted to publish their plans more than the authors did: Their ideas are already getting plenty of attention from Primakov, Pribylovsky said.


Although the plans' drafters are on different sides of political barricades, some of the measures they propose are quite similar.


For example, the Yavlinsky plan calls for the obligatory sale of 75 percent to 100 percent of exporters' hard currency revenues on the domestic market. Maslyukov's program, if adopted, would also force exporters to sell 75 percent of foreign currency earnings, and the group of academics led by Lvov suggested they sell 100 percent. Though Yavlinsky is considered a social democrat and Maslyukov is a card-carrying Communist, they have some common ground.


All the plans, including Gaidar's, call for lowering taxes. Gaidar insists on getting rid of the sales tax and lowering income tax to a flat 20 percent for everyone. Yavlinsky agrees with the latter proposal and wants the value-added tax reduced. Maslyukov's plan calls for lowering both income tax and value added tax.


There are other similarities. All the plans call for canceling the Aug. 17 moratorium on the repayment of Russian banks' debts to foreign creditors. The authors of most of the programs agree that the Aug. 25 restructuring scheme for Russia's defaulted domestic debt should be reconsidered. But the methods differ.


Yavlinsky would offer investors the most favorable terms: He would convert the defaulted treasury bills to two-year or three-year dollar-denominated bonds bearing 7-8 percent annual interest. Gaidar would be less generous, offering either to buy back the T-bills at 20 percent of the nominal value, or to convert them into long-term dollar bonds.


The Lvov team and Maslyukov would be the least generous, denying foreign portfolio investors any change to the harsh Aug. 25 restructuring terms but offering Russian insurance companies and some banks a special deal.


Every plan except Gaidar's is based on the premise that inflation will be high in the next few years. Gaidar, the only one who stresses balancing the budget, insists that inflation can be kept down to between 1 percent and 2 percent a month, but he believes the Russian budget can be balanced with fresh foreign loans, in which few other program writers believe. Gaidar also argues that the government is now collecting a high "inflation tax" because taxes should rise with prices while spending will remain stable. The extra money, Gaidar says, could be used to pay off debts to the public sector.


Primakov has already adopted some of the measures on which most of the plans agree, telling exporters that they will have to sell 75 percent to foreign receipts in Russia. But he will be hard put to find consensus on some burning issues like the T-bill restructuring.