TNAG-2611-FCO40-3802-International-support-from-the-USA-regarding-the-future-of-H-1992 — Page 11

CONFIDENTIAL

173755

MDHOAN 6095

Broad position not (yet) disastrous:

-

Seems to be emerging consensus in favour of land reform, continuing privatisation. De facto devolution of economic decision-making away from Moscow to the regions: enterprises compelled to improvise to survive, often with striking success. New government has to contend with powerful market dynamics which Gaidar created.

- ALL concerned respecting "constitutionality": eventual referendum in April should allow Russian people to express a view on different reform options - if all goes well this should clarify/Legitimise political alternatives and help consolidate democratic

institution-building.

-

As things were going, risk that the reform cause increasingly discredited because of failings prompted by conservative elements now "centrists" have to face the

music.

However, no grounds for complacency:

HURD

YYYY

ΜΑΙΝ

89

NAD

EAU

ECD (E)

AD (E)

DISTRIBUTION

89

MED

ERD

PS

HKD

FED

EASTERN D

NENAD

SCD

PS/MR LENNOX-BOYD

PS/PUS

SIR J COLES

MR BEAMISH

NNNN

5

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CONFIDENTIAL