Introduction
Substantiation
for the System of Measures and Relationships
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Economic interests, conditioned by property
relations, are
fundamental in all considerations. The initial state is
characterized by the majority of the population (excluding,
perhaps, real estate owners, private farmers, and certain
entrepreneurs) which has no property other than their
personal possessions. Consequently, the society is
unstratified. Yet the people, i.e. owners, who have
something to lose, will be most interested in the
preservation of stability in society.
Consequently, one of the keys to the proposed system of
measures involves the formation of a middle class -- a
stratum of the population with a sufficiently prosperous
and
stable property status -- by granting them the right to
dispose of land, real estate, the assets and output of
enterprises, and material and natural resources; and by
protecting their property rights from infringement, and
their incomes from inflation.
This is not a new idea. However, perhaps for the first time
in this country, an attempt is being made to realise this
idea with a specific geographic community, rather than with
the people or population in general.
Convinced of the futility of the idea of a "black
redistribution" of property, we instead propose the
formation of a stratum of owners as the mainstay of the
stabilisation policy, via:
- the privatization of the departmental
housing stock and public establishments;
- the free registration of private enterprises;
- the transformation of large state enterprises
into joint- stock companies;
- the consolidation of small business privatisation
(the holding of special auctions involving disabled people,
private farmers and pensioners);
- agricultural privatisation;
- land reform and the sale of land to the
population;
- the creation of a system of protection
of private property.
These transformations require the conversion
of the
population's incomes by removing subsidies for the
maintenance of the housing stock and public establishments,
and the direct payment of these funds to the population.
In
the end, individuals should receive all their earnings,
and
use those incomes to pay for the required services.
The second idea (a series of measures) includes social
transformations caused by property reform and high
inflation. We believe that these changes are absolutely
essential to create a social net.
Measures are proposed for social support.
Owing to the
inclusion of a mechanism of "self-preservation"
of the
population based on property ownership, this sector will
contract. These measures comprise:
- an improvement job placement system based
on unemployment
forecasts; and
- adjustments to, and partial indexing
of, the population's
monetary incomes.
The transformation of a significant part
of the population
into property owners will entail a change in the financing
of previously free services, for instance, medical
treatment. A projected transition to budgeted and insured
medicine is proposed. We have elaborated, together with
experts from Nizhni Novgorod oblast, proposals for the
development of education in the humanities.
Social support is based on an effective system of social
indices elaborated and implemented for the oblast as a
whole. At the next stage, this system should be developed
for regional and municipal levels as well.
The third projected measure involves the adaptation of the
economy of the region and its population to conditions of
hyper-inflation. We proceed from the conjecture that high
inflation will be one of the main characteristics of the
economy for the foreseeable future. We wil need to adapt
to
it via price and wage control and the transformation of
the
financial system.
Plans to transfer subsidies on housing, passenger transport,
medication, and fuel to incomes have been studied and are
being introduced. Auction sales of property -- land and
real
estate -- act jointly with indexing as social shock-
absorbers.
Small additional budget expenses related to the transfer
of
subsidies may be compensated by savings on individual budget
articels. In this way savings are made. The expansion of
demand, which acts as a support for production, thereby
preserves the budget's tax base.
A loan from the state to the oblast, extra-budgetary funds,
and available budget resources may be used to create a
financial reserve.
We have drafted a way of using these funds in a so-called
"grain loan". Such a loan could, inter alia, buttress
the
population's money and protect it from inflation via
investment into grain -- a stabilisation article --
purchased by the oblast.
The fourth idea concerns the adoption of the requisite steps
by the regional administration to create a policy of social
consensus. The following measures have been proposed and
implemented:
- the consolidation of social, ethnic, and
inter-religious
harmony, and a civil society in the oblast;
- creation of a permanent agency (headquarters)
to manage
the reforms: a Coordinating Council including the oblast
governor, oblast council chairman, Nizhni Novgorod mayor,
and municipal council chairman;
- the creation of a new oblast management information
system.
Most of the proposed measures may be realistically
implemented by the region itself from its own resources
and
existing legislation in the near future (approximately the
next six months or year).
The proposed solutions have been studied in various ways
and
include are proposals which are virtually ready for
implementation or have already been carried out in Nizhni
Novgorod oblast (transformation of the social
infrastructure, free registration, an oblast loan, and an
effective system of social indices). Certain proposals are
given as practical recommendations, methods, and draft
resolutions. Some of them are formulated as analytical notes
characterizing the potential of management structures, and
finally, as a generalization of practical experience or
the
formulation of a problem. Wherever possible, plans and
schedules for implementation of the measures were
elaborated.
The drafting and implementation of a whole series of
proposals involved specialists from the executive and
legislative bodies of Nizhni Novgorod oblast and its centre.
Some proposals (for instance, the consolidation of small
business privatisation and the allotment of land) constitute
a generalization and interpretation of their actual
functioning.
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