SOVIET INFIGHTING STIRS BUSINESS FEARS

SOVIET INFIGHTING STIRS BUSINESS FEARS

The rivalry between Soviet President Mikhail S. Gorbachev and Boris N. Yeltsin, the newly elected president of the Russian republic, creates some uncertainties for U.S.-Soviet business interests, according to international economists and foreign affairs experts.

Analysts fear that a power struggle between the Soviet leaders could further delay the pace of reforms, particularly if consensus on economic policy takes a back seat to politics.Whether or not Mr. Yeltsin's political star continues to rise at the expense of President Gorbachev, U.S. observers see a difficult period ahead for both a Soviet transition to a market economy and U.S. business opportunities.

"There's going to be a lot of turbulence either way," said Peter Perkins, an international economist with DRI/McGraw-Hill Inc. in Lexington, Mass.

"Yeltsin is such a wild card," said Gregory F. Treverton, a senior fellow at the Council on Foreign Relations in New York. "My guess is Yeltsin doesn't know what he wants or what he will do."

Mr. Yeltsin has made seemingly contradictory statements on economic policy, recently criticizing President Gorbachev's announced plan to raise some consumer prices, while implying that he would move more quickly toward a free-market economy, an approach that would surely lead to even more sweeping price increases.

On a recent visit to the United States, Mr. Yeltsin made clear that "he hadn't thought through this any more than Gorbachev and maybe less," Mr. Treverton said.

Franklyn Holzman, professor of international and economic relations at Tufts University, said that Mr. Yeltsin has demonstrated that "he's really a kind of dangerous guy (who) says things without really having thought them through."

Still, there seems to be little doubt that his growing influence is being felt. The erosion of support for President Gorbachev already may be taking its toll on Soviet economic policy, producing what former Secretary of State Henry A. Kissinger at a meeting in Boston this week called a "series of half- measures."

In describing a Soviet plan to triple the price of bread on July 1 as part of a market reform program, Mr. Kissinger highlighted President Gorbachev's

inexperience in handling the levers of economic power.

"I must say that I'm astonished that you would announce a price rise six weeks ahead of time and are then surprised that there is hoarding. And then, you go on television and say, 'don't panic.' That's the surest way to produce a panic," Mr. Kissinger said.

But most economists and foreign affairs experts agree that economic reforms leading to a convertible currency are essential to broadening U.S.-Soviet trade, which could provide the consumer goods and political key to Soviet problems.

"As it is now, every deal has to be a barter deal and that puts strict limits on the possible opportunities," Mr. Treverton said. "It's a matter of how much vodka we can drink."

One possible benefit for Soviet economic prospects could result if President Gorbachev interprets the Yeltsin victory as a mandate to proceed more quickly with his economic program.

"It's not that Gorbachev doesn't believe in doing it. He's afraid to do it," Mr. Holzman said.

Most observers see it as highly unlikely that the Soviet economy could withstand the rude shock of going "cold turkey" by eliminating subsidies and letting all prices seek their own level, as in Poland over the past six months.

But there also is great skepticism among economists that the Soviet move to fix bread prices at a higher level represents anything more than a variation on a managed-economy theme for political purposes.

"It's an attempt to diffuse the economic problem, not to solve it. Gorbachev is opting for what economists would call a stabilization program," Mr. Perkins said. "It's obviously not a market move. It's dictating prices."

At his first press conference since his election, Mr. Yeltsin said the Russian Republic should set world prices in its trade with other Soviet republics, according to a Reuter report from Moscow.

"We should pass in our trade with republics from fixed contract prices to world prices. . . . I don't think it would take us more than a year to transfer to world prices," Mr. Yeltsin said.

He also called Wednesday for the resignation of the national government and its prime minister, Nikolai Ryzhkov.