chapter
■ Domestic Costs of the Transition
WithMarie Lavigne
Pages 9

The Shatalin document begins with an assessment of the economic and financial situation of the country. This chapter aims to identify the costs of stabilization, and how they are to be covered. It analyzes the sequence of the measures, then the financial mechanisms to be put in operation, and finally the resources available for financing. The Shatalin plan had been well publicized in the West for its 500-days sequence. Its implementation was to begin on October 1, 1990. The plan had been endorsed by the Russian Supreme Soviet, but it was already hard to figure how an individual republic might begin to apply the plan independently of the union. The growth of the money supply has increased at a rate double to the rate of growth of GNP and stands at a level of 275 in 1990, as compared with a level of 140 for the GNP. Shatalin anticipates a strong supply response.