Baltic republics to test economic reform

Press, 29 July 1989, Page 11

Baltic republics to test economic reform

NZPA-Reuter Moscow The Baltic republics of Latvia, Lithuania and Estonia have launched an ambitious package of economic reforms that its backers hope could prove a sharp stimulus for the ailing Soviet economy.

The Supreme Soviet yesterday gave preliminary approval to greater economic autonomy in the region from the start of 1990 and local officials promised to push on immediately. In two resolutions, the deputies easily approved the region’s transfer to strict profit-and-loss accounting and the basics of economic independence. A Moscow deputy, Fyodor Burlatsky, a political commentator, said the action opened the way to similar reform elsewhere in the country. “This is the beginning of a movement in the direction of real radical structural reform,” he said after the vote. The Estonian Prime

Minister, Indrek Toome, told Reuters the resolutions “open the road to economic independence in our republics and in the country as a whole.” Baltic deputies said the changes would mean dismantling the central command economy and basing future economic relations among republics on a market system. Goods and services would be bought and sold rather than simply transferred at Moscow’s orders, a move supporters say will subject Soviet enterprises to the bracing effects of competition for the first time. The Parliamentary action came as minority Russians continued scattered strikes in Estonia in

protest against local legislation which they said was biased against them. Deputy Yevgeny Kogan said the Baltic programme, which would give local control over industrial plants largely manned by ethnic Russians, contained a secret agenda to reduce non-Balts to second-class citizens. “No-one has really seen what they have in mind,” said Mr Kogan, a Russian speaker from Estonia. The Communist Party leadership in the Baltics, pushed along by surging national feeling, has backed plans for greater autonomy from Moscow. However, the new measures, which will give the republics control over

most of their industry, trade and natural resources, exceed earlier proposals from the Kremlin that would have left heavy industry and final say over republic budgets in Moscow’s hands.

In giving the go-ahead to the Baltics, the deputies did not vote on legislation introduced at the request of Estonia and Lithuania. Instead, in a compromise move, they approved two resolutions backing programmes already passed at the local level.

Formal legislation on economic independence was referred to committees for further study, with Parliament to take another look by October 1.