Despite efforts by Prime Minister Yevgeny Primakov to keep it confidential, the grand plan to relaunch the ruble became public on the very day First Deputy Prime Minister Yuri Maslyukov presented it to the government. Maslyukov is a past master of master plans: He was the Soviet Union’s last chief of central planning before that state collapsed. He has neither forgotten his old lessons nor learned new ones.
The paper Kommersant published what it called Maslyukov’s draft October 1, the day he met with Primakov and others in the leadership to lay out his ideas for comprehensive foreign-exchange controls. Dollars are to be legally available only to citizens who entrust them to banks, in special foreign-currency accounts. Commercial banks would be forbidden to carry out foreign-exchange transactions except with the authorization of the Central Bank, which will first require the commercial banks to repatriate to a Central Bank account all foreign exchange the banks hold abroad. Exporters may keep abroad no more than one fourth of their hard-currency earnings. Half must be repatriated and converted to rubles at an official rate and at an authorized bank. Another 25 percent must be deposited with the Central Bank, and only firms authorized by the state will be allowed to conduct foreign trade at all.
Domestically, the state would set prices for staples and would subsidize firms in the military-industrial complex.
Under the conditions Maslyukov would establish, not a penny, pfennig, centime or sen would voluntarily enter the Russian economy. So much for enlisting foreign support for capital formation. And to those Russians who still have hard currency in the country, Maslyukov seems to be saying: “We will not confiscate your money. We will, however, insist that you put it in one of Russia’s fine insolvent banks which will give you in exchange a handsome, personalized receipt.”
No wonder Primakov wanted to keep this plan confidential. The prime minister is still angling with the International Monetary Fund for release of the next US$4.3 billion installment of the US$22 billion loan the Fund approved in July. But even Russians who pleaded with the Fund for support in the past have turned around. Boris Fedorov, fired as deputy prime minister only last week, said the Fund should stop pretending to see the reforms the government pretends to enact. And Aleksandr Shokhin, who quit after just thirteen days as Primakov’s deputy and chief negotiator with the international banks, said “some people hold talks and get money and other people waste it.”
Primakov told the press Maslyukov’s plan is only one of several under consideration. And President Boris Yeltsin through a spokesman commented that prohibiting Russians from buying dollars would be “a return to the Iron Curtain in everyday life.” Presumably he meant that pejoratively–but it may be what the Communists have in mind.
Prime Minister Primakov says 4 billion rubles in arrears to the army have been paid, and payments to students, workers, and pensioners will follow. Central Bank President Viktor Gerashchenko claims the printing of rubles to cover these debts is controlled and inflation will be moderate. The Ministry of Industry and Trade reports prices of cooking oil, sugar, chicken and sausage up around 300 percent since the August 17 devaluation, and the general consumer-price level has risen an estimated 64 percent. Stock-market capitalization is about one-ninth what it was at the beginning of the year.