Russian lawmakers on Friday approved an austerity budget after the country's finance chief warned that backing away from tough economic reforms now would mean chaos.
Other officials predicted more hardships: Millions may be out of work by fall, homelessness threatens thousands of soldiers returning from abroad, and supplies of many farm products are the lowest in years.Already, Russian President Boris N. Yeltsin's reforms have increased prices in food stores by several times. Bare store shelves have not filled, and consumers are angry.
At the same time, Yeltsin's government is trying to restrict rubles in circulation and curtail the large budget deficit.
The budget for the first quarter of this year approved by the Russian legislature was 420 billion rubles. The value of the ruble varies in Moscow's bewildering foreign exchange system, but it generally is worth no more than about 1 U.S. cent.
Virtually unrestricted printing of rubles in the final years of Soviet rule built high inflation into the economy.
Finance Minister Yegor Gaidar's proposal carried what he called a conservative estimate of 400 percent inflation during the first three months of the year. But he said any other economic policy would invite even more inflation.
Without drastic economic reforms, he warned lawmakers, critically needed foreign aid would dry up. "Russia does not have economic sovereignty," Gaidar, who is vice premier, said in remarks reported by the Tass news agency.
He pointed to the country's dependence on grain imports bought with Western credit. Without the imports, he said, "the people could be left without bread in March-April, and the government would have no chance to prevent chaos."
The Russian State Statistical Committee added more evidence confirming the desperate state of food.
The 1991 grain harvest of 89.1 million tons was 15 percent below the average for the previous five years. The Russian government purchased 6 percent fewer potatoes and 28 percent fewer vegetables for its stores than in previous years.
Fyodor Prokopov, chairman of the Russian Employment Commission, said 7 million to 8 million of Russia's 150 million people could be out of work by October.
His estimates were based on the experience of Poland, which submitted its economy to tough shock therapy several years ago.