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Yavlinsky's bargain road show

The European

July 12-14, 1991

The idea of a deal between Mr Gorbachev and the West has been given its most precise shape in the guise of the "Grand Bargain" that Grigory Yavlinsky has been hawking around the West the past few weeks, writes Michael Maclay.

Mr Yavlinsky, a former deputy prime minister of Russia, has been working with American academics on a blueprint for the Soviet economy that would draw heavily on Western backing.

He has to contend with the Pavlov plan, the Soviet Prime Minister's proposal for immediate stabilisation. This offers widespread privatisation, but is very cagey about the role of foreign capital. In contrast, Mr Yavlinsky would look to the West to provide upwards of $20 billion in the first phase of his plan (some estimates reach $150 billion), as the Soviet Union created the legal and financial framework for a market economy.

Treaties would simultaneously be negotiated between the Soviet republics, and a new constitution embodying multi-party elections would be adopted.

The economy would be stabilised, the price mechanism made to work and privatisation introduced (though more cautiously than under the Pavlov plan). Later in the Nineties the economy would be restructured and foreign aid flows reduced.

Those who support the Grand Bargain believe that Mr Gorbachev has learnt that he will have to be much bolder than before. They also think that the West will recognise they are not buying a pig in a poke if Mr Gorbachev recognises explicitly that he will only receive the funds as and when he delivers on reform.

Mr Yavlinsky and his academic minder, Dr Graham Allison from Harvard, were not above a little intellectual blackmail in London last week, suggesting that it could surely not be in the Western interest to have an impoverished superpower disintegrating violently with 30,000 nuclear weapons around its territory.

But generally, Mr Yavlinsky made a warm impression, a wry cherubic smile playing on his lips as he jousted with some of his more sceptical inquisitors.

When asked if there was any point in giving money to a Soviet Union on the point of disintegration into national republics, he responded bluntly: "Not helping would make it worse, much much worse. Then you will have eight Soviet Unions, or 80, the same problem many times over. Frankly, one Soviet Union has been enough."