"500 Days" program
Up to 1990, the need for reforms in the Soviet economy was obvious. Empty shelves, queues and ration cards were clear evidence of these problems. By 1990, the Soviet Union came up with a whole bunch of economic, administrative and even purely psychological problems that gave rise to a deep economic crisis. It is clear that it was impossible to solve all problems by one decision. Moreover that troubles had been accumulating for decades, so the stake was made on a gradual way out of the crisis. One of the options for overcoming this crisis was the economical "500 Days Program".
§ The main points of the "500 days program"
§ The launching of the project
§ The Background
The crisis of the Soviet Economy in the late 1980s forced to look for solution. The situation is clearly illustrated by the statistics of food products sales, published in the journal "Voprosy Economiki" (eng. The Economical Questions) in 1990
| Food | 1985 | 1988 | January-June 1989 |
|---|---|---|---|
| Number of products monitored | 179 | 221 | 221 |
The percentage of goods which are not in short supply (deficit) | 28 (16%) | 24 (11%) | 12 (5%) |
As you can see from the table, in the first half of 1989, the only 5% of food products could be purchased without problems. In other groups of goods, the situation was also critical, for example, in the category "fabrics-clothes-shoes" - only 12% of goods could be freely purchased. 1 So, the increasing of deficit was obvious. Even goods that could be easily bought earlier in 1987, became "deficit type", for example, detergents, pencils. 2
In 1989, by the decision of the First Congress of People's Deputies of the USSR, the State Commission on Economic Reform was established 3 This commission included prominent academic economists of that time: A. Aganbegyan, S. Shatalin, V. Martynov, R. Evstingeev and others. Grigory Yavlinsky, who had previously headed a Department in the State Committee for Labor, was also involved in the work of that Commission.
A quite significant point, Abalkin writes that on the large long table for meetings, he placed the tablets with Lenin's quote from a report at the IV Congress of the Communist International. 4 So ... the scientists, who were looking for a way to escape from the problems of the planned economy held their discussions next to Lenin's phrases, that was quite symptomatic.
Nevertheless, the group of experts was assembled and the process of preparing programs and proposals has begun. One of these programs was the so-called "500 days program" of Shatalin-Yavlinsky. It should be said that since 1988 Academician Shatalin was familiar with Gorbachev and was his advisor.
Another strong project was the so-called Abalkin-Ryzhkov program, named after the economist Lev Abalkin and the USSR Prime Minister Nikolai Ryzhkov, who actively supported it. Thus, competition developed between two main economic programs: Abalkina-Ryzhkov (more conservative) and Yavlinsky-Shatalin (more reformist). This phenomenon has received the name in history - "the war of programs". The official start to the program was given on July 27, 1990, when Mikhail Gorbachev and Boris Yeltsin signed a joint instruction to develop a "500 days program". In this case, the mix of the Gorbachev's reformist attitude and the popularity of Yeltsin was very useful for that project.
§ The main points of the "500 days program"
First of all, it should be said that the name "500 days program" was not official. The official title of the document was "Transition to Market: Concept and Program". Clarification about a certain number of days was attached later. Next, we should dwell on the main points of this program, i.e. actually what she suggested.
✔ The transition to the Market Economy as the main vector of the reform. The economic content of the proposed program was the transition to the Market, and also creating the foundations of a society with the new economic system 5 .In turn, the Market Economy should create strong incentives for people's self-realization and thereby accelerate the development of the economy.
✔ The privatization and private property. It is clear that in the USSR almost everything was in state ownership, so it was necessary to privatize the state property. The free will of privatization was also declared. In order for wide groups of the population to participate in the privatization process, various forms of transfer of ownership were envisaged, such as, for example, lease or buyout on credit. The wide scope of privatization was understood as a kind of act of social justice, a form of "the human right to his share in the national wealth of the country." 6
It is clear that in order to sell something, you need to at least roughly estimate the value of what is being sold. Accordingly, the sale of state property required a well-conducted inventory process. The program stipulated how the inventory was to be carried out and which authorities were to be carried out. Local Councils were aimed to play a key role in the assessment process.
✔ The legal basis for business activity. Business has to be decriminalized. The equality of rights of participants in economic activity has to be guaranteed. After contacting the State Property Fund, labor collectives have the opportunity to transfer their enterprise from state ownership to private ownership.
✔ Free pricing. Unlike previous attempts to reform the economy, Shatalin's program offered a full-fledged transition to a market economy. By 1990, it became clear that even regulated price increases still did not fill the store shelves. Those, there was no free pricing mechanism in the Soviet Union (so-called "Marshall scissors" term in economy). There is no motivation to increase the amount of production. Also, it was declared that the "free prices" will start from less socially significant goods to more significant (essential goods).
✔ Overcoming the monopolism.According to the State Supplies of the USSR Committee, the share of monopoly production in mechanical engineering was 80%. And in some types of products (for example, household air conditioners) it was 100%. That means, that all products of this type were produced at the same plant. There is no doubt that there was no competition in such conditions. Any "competitive advantages" were useless. The Shatalin-Yavlinsky program pinned their hopes on a new class of enterprise owners who, as a result of competition among themselves, would produce cheaper and better quality products. From a legal point of view, the point of monopolies had to be regulated by the law "On the Fundamentals of Antimonopoly Legislation in the USSR", which was proposed to be adopted before January 1, 1991.
✔ Economic rights of the Republics and the Union Center This item was perhaps the weakest vulnerability of the program ... Due to the unfolding political contradictions between the Republics and the Center, the issue of powers and competencies was extremely controversial. In addition, the constantly changing situation (declarations of independence, election of new authorities, etc.) made even the most detailed scenario irrelevant for a short period of time. The program assigned the republics responsibility for the situation on their territory.
As for the Soviet Union Central Authorities, it has to: 1) act within the "frames" delegated by the Sovet Republics Local Authorities; 2) manage the Soviet Union Central Authorities Property 3) To ensure consistency in the course of reforms. At the same time, the market economy was supposed to be the most optimal foundation for the "renewed reunification of the Soviet Republics" 7
§ The Stages
It was proposed to make the changes step by step. There are 4 steps in total:
I) The first 100 days: October 1, 1990 - early 1991 - days of emergency measures. Mass privatization of state property objects. Changes in legislation, incl. exclusion from criminal and administrative legislation of articles providing for punishment for entrepreneurial activity. Aid (except for humanitarian aid) to foreign states is reduced by at least 75%. At the same time, efforts are being made to partially sell the debts of other USSR countries on the world market. The Stock Exchange is to open in Moscow in November 1990.
II) 100th - 250th days: liberalization of prices and active continuation of the process of privatization of the economy. The process of denationalization should be especially active in the spheres of public catering and public services. At the same time, the market infrastructure is actively developing (i.e. exchanges, banks, financial institutions, etc.). The abolition of price controls should lead to the appearance of a large number of goods on the free sale, prices for which will be higher than the state ones, but lower than on the black market.
III) 250th - 400th days: stabilization, continuation of the denationalization process, antimonopoly policy is activated. By the 400th day, up to 30-40 percent of fixed assets of industry, up to 50 percent of assets in construction and road transport, at least 60 percent of trade, public catering, and consumer services should be privatized from state property. In addition, by the 400th day, state control should be removed from 70-80% of goods and services. The ruble becomes convertible.
IV)400th - 500th days: the beginning of an economic recovery, already based on market mechanisms. At this stage, internal competition begins to develop, including with foreign manufacturers. At the same time, customs tariffs protect the young Russian manufacturer. A labor market is being created, and the institution of registration is abolished. As for the financial sector, there is a tax on income from securities and from transactions with them.
Obviously, all the listed active reforms needed some support from the state, which was also spelled out by the drafters. First of all, the state order continued to perform the regulatory function. This seemingly receding economic lever was supposed to play a stabilizing role in the transition to a new economy. However, now the government order had to be carried out on the basis of the contract price.
On the one hand, the state order protected the enterprises accustomed to working according to such a scheme from downtime, but at the same time the negotiated price introduced a market culture of relations. The State Contract System was supposed to deal with the placement of government orders and the drafting of contracts. Thus, it is clear that the state still retained the key levers of economic management.
A certain financial insurance of enterprises was also envisaged with the help of special stabilization funds. The sources of funds for these "money-boxes" were supposed to be targeted budget allocations, proceeds from the sale of bonds, organized by them lotteries. It was assumed that such funds would consider applications from state-owned enterprises on certain conditions. Those. financial support should not have been received by everyone in a row, but those who formulate "well-grounded requests" and will be really affected by the transition to a new economic system. In addition, it was supposed to encourage "at all levels" to create a market infrastructure by entrepreneurs. the new mobile economy required new warehouses, bases, etc.
Until January 1, 1991, the Law "On the Foundations of Antimonopoly Legislation in the USSR" was to be adopted, which would define the features of unfair competition and, accordingly, would set clear rules of the game in terms of fair commercial rivalry.
It is clear that all these "measures", "assistance" and "support" required serious investments in the Union budget. It was supposed to be partially replenished at the expense of the All-Union Federal Tax + 80% reduction in aid to other states. (The USSR actively sponsored the communist parties in different countries of the world, supplied friendly states with weapons) + an annual moratorium on the adoption of new budget programs worth more than 100 million rubles. + reduction of budget expenditures recognized as ineffective.
§ The launching of the project
On September 3, 1990, the deputies of the Supreme Soviet of the RSFSR began to get acquainted with the program 8. As a result, the Shatalin-Yavlinsky program was adopted by the Supreme Soviet of the RSFSR on September 11, 1990, but its progress was stopped at the Union level. An idea arose to combine the 500 day program with the Abalkin-Ryzhkov program, but this eroded any specifics. Yavlinsky formulated the impossibility of such integration with the phrase "you cannot cross a snake and a hedgehog," after which he resigned.
In his autobiographical book "Life and Reforms", Mikhail Gorbachev assesses these programs not only from an economic but also from a political point of view. He supposed that the Abalkin-Ryzhkov program proceeded not only from the economic union between the republics, but also from the preservation of a single Union state with regulatory functions The Shatalin-Yavlinsky program, recognizing the need for an economic Union of the republics, left out of brackets the very problem of preserving their political Union" .9
Thus, the Allied leadership subconsciously or rationally felt a threat in this project. As a result, the unwillingness to "stay out of the brackets" of future economic changes, most likely, tipped the scales against this program at the Suzny level.
In a little more than a year, many of the points of this program were applied by Egor Gaidar's expert group. The time for decisive measures will probably come after the complete discrediting of attempts to solve deep-seated problems by half-measures. Of course, the question remains debatable whether, in fact, a year of saved time could have made the reforms not so painful. Although the situation in 1990 was bad, but it was still better than in the end of 1991 (in 1990 - the economic decline - 2%, in 1991 - already 9%). It is widely known that the implementation of economic reforms, requires certain controllability of the system, trust of citizens, etc.
The question about the first point of the transition to the Market Economy remained controversial: is it price liberalization or privatization? In 1992, during the course of Egor Gaidar's reforms, the price liberalization became primary, privatization came later, while in the Shatalin-Yavlinsky project, the privatization was on the first stage (price liberalization later). Because the "freed prices" in the absence of a private property owners could lead to a longer process of the formation of market prices. In other words, the debates about the "500 days program" (a missed chance or an unrealizable utopia) continue to the nowadays
§ The Authors of the "500 days program"
At the end of the published program there was the list of its authors: S. Shatalin, N. Petrakov, G. Yavlinsky, S. Aleksashenko, A. Vavilov, L. Grigoriev, M. Zadornov, V. Machits, A. Mikhailov, B. Fedorov, E. Yasin, V. Martynov, T. Yarygina.10
In addition, there were an experts from Soviet Republics:
| Republic | Representatives |
|---|---|
| RSFSR |
Yavlinsky G., Fedorov B., Mikhailov A., Zadornov M., Yarygina T .; |
| Ukrainian SSR |
Fokin V., Antonov V .; |
| Belorussian SSR |
Kozik L .; |
| Uzbek SSR |
Chirgadze I., Gafurov Sh., Dolgopolov P., Zinin V., Saakov V., Bronstein V .; |
| Kazakh SSR |
Abutalipov Zh., Abdykadirov T .; |
| Georgian SSR |
Gulua B .; |
| Azerbaijan SSR |
Sultanov I .; |
| Republic of Lithuania |
Alyashkaytis V .; |
| Moldavian SSR |
Tampisa K., Chebuk I.; |
| Republic of Latvia |
Aboltin Y., Raman M .; |
| Kyrgyz SSR |
Begaliev, Kunakunov K., Termechikov A .; |
| Tajik SSR |
Samadov A .; |
| Armenian SSR |
Bagratyan G., Barkhudaryan L .; |
| Turkmen SSR |
Bayramov D .; |
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1 Voronov A. On the problems of overcoming the deficit and methods of regulating the consumer market // Economic Issues No. 1 (1990) page 26
2 Voronov A. On the problems of overcoming the deficit and methods of regulation of the consumer market // Economic Issues No. 1 (1990) page 27
3Abalkin L.I. An unused chance. A year and a half in the government. Moscow, "Politizdat", 1991 page 51
4Abalkin L.I. An unused chance. A year and a half in the government. Moscow, "Politizdat", 1991 page 62
5The Transition to the Market. Concept and program. Moscow, "Arkhangelskoe", 1990 page 4
6The Transition to the Market. Concept and program. Moscow, "Arkhangelskoe", 1990 page 5
7The Transition to the Market. Concept and program. Moscow, "Arkhangelskoe", 1990 page 25
8Mikhail Gorbachev Life and Reforms. Moscow, "Novosti", 1995 page 575
9Mikhail Gorbachev Life and Reforms. Moscow,"Novosti", 1995 pages 575 - 576
10The Transition to the Market. Concept and program. Moscow, "Arkhangelskoe", 1990 page 235