Soviet Shortages May Get Even Worse -- U.S.S.R. Faces Social Unrest, Premier Warns
MOSCOW - The Soviet Union is facing even greater food shortages, and the result might be explosive social unrest, Premier Nikolai Ryzhkov warned in a hard-hitting report published yesterday.
The flash point, Ryzhkov warned, could be a severe shortage of bread, the Russian staple.
Although the summer grain harvest is likely to be larger than last year's, deliveries to state granaries are much lower than a year ago, with less than a tenth of the expected amount delivered so far.
That translates, Ryzhkov warned, into even greater shortages of bread, of flour, of cereals, of feed for livestock and consequently of meat.
In contrast with past years, however, there is no hoard of dollars, earned by oil exports, to finance Soviet imports of grain from the United States, Western Europe or South America, Ryzhkov said.
With the divisions in the country growing, the Soviet premier said, the risk of social unrest and possibly an explosion would also increase with the severity of the food shortages, particularly bread.
``We cannot but see that the polarization of political movements is growing in the country,'' Ryzhkov told a joint session Friday of the Presidential Council, the country's top policy-making body, and the Federal Council, which includes representatives from the Soviet Union's 15 constituent republics. The government newspaper Izvestia published the report yesterday.
``The organizations that are against constructive polices are activating themselves, open calls are heard for the overthrow of the state system, and interethnic conflicts do not stop. The growing crisis in the economy only amplifies this social tension.''
Ryzhkov said food production, up less than 2 percent, had barely kept pace with the country's population growth.
The government's purchases of grain from state and collective farms are lagging behind last year's, he said, and the goal of 85 million tons is much higher than the 59 million purchased last year.
At the same time, the Soviet Union's ability to buy large amounts of grain abroad has decreased sharply as a result of the drop in its foreign-currency holdings.
``Unless we fundamentally change the situation, then, the country is not in any condition - I can say this categorically - to purchase that much grain,'' Ryzhkov said, comparing the 44 million tons imported last year with the less than 20 million that the Soviets plan to buy this year.
``That means we have to purchase for the state 60 million tons, which is enough to feed the people, plus 25 million tons to feed the cattle.''
The supply of consumer goods also remains insufficient, according to Ryzhkov, although there was a 15 percent increase in the first half of the year.
``I understand what sort of reaction people have when I speak of increases, and they see empty shelves in the shops,'' he said. ``Supplies of tape recorders increased by 126 percent, of television sets by 113 percent, of videotape recorders by 3.2 times (320 percent), detergents by 10 percent. So, there are some changes.''
Ryzhkov said the government would present a modified economic program to the Supreme Soviet, the country's legislature, when it reconvenes in September with the hope of beginning the much-discussed shift to a ``regulated market economy,'' away from central planning and a state monopoly in most sectors of the economy.
The Soviet prime minister, whose initial plans were savaged by legislators, said a compromise package was being worked out to reflect the widely divergent views on the country's immediate needs.
Ryzhkov said the first moves, most of them previously approved by the Supreme Soviet, would include five main elements:
-- The step-by-step privatization will start this summer of state-owned enterprises in an effort to end the state monopolies, promote competition and gradually to develop a market economy. A large number of enterprises are expected to be sold to their employees or managers - or to entrepreneurs hoping to make them profitable.
-- Price reform, long the crunch point of all economic reforms, will begin with a gradual transition to market-set prices for most commodities - balanced by ``mechanisms for social protection'' to ensure that the burden does not fall fully on consumers.
-- Fiscal reforms, starting with curtailment of federal spending, a shift of programs to the constituent republics, and great use of state bonds at higher interest rates to finance the continued deficit spending. Interest rates are expected to rise across the board, making money tighter for industry.
-- A complex system of indexing to enable workers and farmers to survive the price increases inevitable in the other reforms.
-- A new relationship between the central government and the constituent republics and among the governments at all levels and the state enterprises, with the emphasis on decentralization and local initiative.
In preparing the government's next budget, Ryzhkov said a major effort will go into reducing inflation, although 65 percent of state spending goes toward social programs.
``We will have to apply special measures to stop the inflationary spiral,'' he said. ``Most of them will not enjoy total support . . .''