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West must aid Soviet reform says Yavlinsky

Financial Times

By Leyla Boulton in Moscow

May 21, 1991

MR Grigory Yavlinsky, the economist who is trying to broker a western-assisted reform package for the Soviet Union, has warned that the west would have as much to lose from a failure of Soviet reform attempts as the Soviet Union itself.

Mr Yavlinsky, who is currently in Boston to draft an outline reform plan with Harvard economists, said in an article published yesterday that the west could not isolate itself from the consequences of chaos in the Soviet Union.

He said there was no way of predicting the geopolitical implications of the economic collapse of a country bristling with nuclear weapons and atomic power plants. The continued free-fall of the Soviet economy could also spell ruin for hundreds of western companies which depended on business with it.

But in the article in lzvestia, the government newspaper, he dismissed Soviet fears of abdicating the country's independence by accepting western assistance on conditions agreed with the west.

"Certainly we will have to review our traditional idea of independence based on isolation from the world. We long prided ourselves on our exceptional nature, without even beginning to understand that the gap between the development of the Soviet Union and that of other countries was not narrowing but widening," he said.

He pointed out that the country had already become so dependent on western imports that its present lack of hard currency threatened to paralyse several sectors of Soviet industry.

"Today there are all the premises for the appearance of conditions favourable to a qualitatively new relationship between the Soviet Union and the leading countries of the world," he wrote.

He cited President Mikhail Gorbachev's landmark agreement last month with the leaders of nine Soviet republics as one example of an emerging political consensus within the Soviet Union.

But he warned that unless the Soviet Union undertook rapid reforms to produce concrete economic results, the fragile political harmony could be split asunder by new social and ethnic conflicts.

Mr Yavlinsky said he hoped to complete an outline reform plan by June 15. If agreed by both the Soviet and US presidents, the plan would then be sent to all Group of Seven governments a month before their July 15 summit in London.