Gorbachev's Home Remedy

By JOHN KOHAN MOSCOW

Even for someone as optimistic as Mikhail Gorbachev, the news from the front lines of perestroika these days has been decidedly bleak. The patience of Soviet consumers has become completely shopworn, oil-industry workers are threatening to go on strike, and even army officers grumble publicly about low living standards. While a record harvest lies rotting in the fields, bread -- that staple of Russian life -- has joined the growing list of scarce goods. Meanwhile, pressure mounts for the government of Prime Minister Nikolai Ryzhkov to resign. Most worrisome of all for the Kremlin, the once monolithic Union of Soviet Socialist Republics seems ever closer to fragmenting into bits and pieces.

Before heading off for the welcome relief of superpower summitry, Gorbachev dispatched a telegram around the country ordering local authorities to make sure that peasants deliver grain to help solve the bread shortage. To ease tensions in the army, he issued a decree on improving the legal and economic rights of military personnel. A committee of top officials from Moscow and the republics has been set to work by Gorbachev on drafting a new treaty of the union. But one major item of business, so important that it may determine Gorbachev's political future and the very fate of the country, awaits his return this week: finishing the draft of a new plan for introducing a market economy.

Since Gorbachev became President in March, he has tried to wield the extra powers of the office to steer the country away from a centralized system, where everyone took orders from above, toward a society where decisions would come from below and be coordinated with a vastly reduced administrative center. The only problem is that the old chain of command has all but collapsed, and nothing has arisen to take its place. The President's decrees have been largely ignored by the country's restive republics, determined to grab as much authority as they can from Moscow. Leading the revolt has been the country's largest republic, Russia, and Gorbachev's longtime political rival, Boris Yeltsin.

After Yeltsin became chairman of the Russian parliament in May, he vowed that the republic would follow its own radical reform program, known as the 500 Day Plan, with or without Kremlin approval. Then, in a dramatic about-face last month, Gorbachev invited the Russians to submit their scheme as the basis for a new economic program for the central government, to be drafted by a commission led by economist Stanislav Shatalin, a member of the group of Gorbachev advisers who make up the Presidential Council. The decision to join forces with Yeltsin was a masterstroke. By siding with the maverick Russian leader, who enjoys widespread popular support, Gorbachev improved his chances of pushing through reforms in an increasingly fractious country.

The Shatalin program, worked out with cooperation from the republics, represents a radical departure from the Kremlin's fumbling efforts in the past to develop a "regulated market economy" that would be subject to central control. At the heart of the plan is a scheme to privatize state-owned property. In what would amount to a vast redistribution of national wealth, large enterprises would be converted into shareholding companies; medium- and small-size businesses and shops would be put on the market; and land would be offered for sale to peasants. The Shatalin program also proposes the step-by- step deregulation of prices, with some controls on "basic necessities," along with the creation of a free market in hard currency. Like the original Yeltsin plan, everything is supposed to unfold within 500 days, beginning with a 100-day period of "administrative" measures to stabilize the value of the ruble.

The decision to set up the Shatalin commission undercut the wobbly Ryzhkov government's efforts to formulate a new economic-reform package to replace a program that the national parliament roundly rejected in June. During a meeting with the Gorbachev-Yeltsin team last month, Ryzhkov reportedly protested that the group's decentralization schemes would "ruin and bury the Soviet Union." Deputy Prime Minister Leonid Abalkin, the government's chief economic guru, has also charged that "everything is being done to malign and overrun this last stronghold" -- the central government. But the leaders of the Russian republic take a different view. As Yeltsin bluntly put it: "I consider the resignation of the Ryzhkov government a condition for the successful implementation of economic reforms." And he is not alone. Members of a radical parliamentary bloc, the Interregional Group, plan to press for a no-confidence vote when the U.S.S.R. Supreme Soviet convenes this week.

Although Gorbachev supports the Shatalin plan, he does not appear ready to * break ranks with Ryzhkov and has even warned against a destabilizing shakeup of the central government. Gorbachev has suggested a compromise: an economic package following the Shatalin group guidelines, with amendments taken from the Ryzhkov proposals. The unified program, which will be prepared by a third group, led by economist Abel Aganbegyan, will be submitted for debate to the republican and national parliaments. The Russians, for their part, have made clear that they want only the Shatalin plan and not the mixed version, which Yeltsin said was like mating "a hedgehog and a snake."

The economy has been worsened by the collapse of the country's food- distribution system. The shortage of bread in Moscow reached such proportions last week that Mayor Gavril Popov proposed wage hikes for bakery workers to attract more employees and even suggested that army conscripts be pressed into service at the ovens. The list of excuses -- breakdowns and labor problems at factories, outdated equipment, transport troubles and an unexpected rise in demand for bread -- sounded all too familiar to Russians, who are already fuming over the scarcity of cigarettes. As the government daily Izvestia sardonically noted: "We should not be surprised by the fact that yet one more item has gone on the list of shortages -- we should be surprised that anything can still be found in the stores."

Gorbachev can still make a dramatic bid to win back public confidence by dismissing the increasingly unpopular Ryzhkov government. He might also hitch a ride with Russia's rising star, Yeltsin, even if he had to play a more circumscribed role as President. But Gorbachev's options are fast dwindling. Not only bread is in short supply these days. So is time. Whatever economic program is approved, it may prove too much to ask a weary and divided nation that has been languishing for years to wait another 500 days.