Soviets more dependent on trade than experts thought
The Soviet Union may be more vulnerable to economic sanctions than most Western observers have previously believed.Skip to next paragraph
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A new US Census Bureau report released here Monday indicates that Soviet dependence on foreign trade - both exports and imports - is much higher than traditionally thought and that this dependence has risen steeply in the last decade.
The importance of the findings, says Bruce Chapman, director of the bureau, is that ''the Soviets are far more vulnerable to economic sanction than many people have realized.''
Release of the eight-year study comes at a time when America's West European allies have sharply criticized the Reagan administration for embargoing US technology that was to have been used in a natural gas pipeline from Siberia to Western Europe.
According to the report, Soviet foreign trade in 1980 was approaching 27 percent of the country's gross national product (GNP). Preliminary figures for 1982, not included in the report, raise foreign trade's share of Soviet GNP to 32 percent, says Vladimir G. Treml, a Duke University economist who prepared the report with Barry L. Kostinsky, a staff economist with the Census Bureau.
Soviet foreign trade, he says, grew from 5 billion rubles in 1960 to 32 billion rubles in 1980 - a 540 percent increase in 20 years. (The current rough conversion rate is .66 to .67 rubles to the US dollar). Further, he adds, in 1970 foreign trade accounted for 15 to 16 percent of national income as compared to today's 32 percent.
In 1982, the value of Soviet imports is expected to reach 20 percent of its GNP and exports 11 percent, says Dr. Treml. More than 50 percent of the imports will come from outside Soviet Bloc countries.
Before Monday's census report - which involves a new method that gauges the Soviet economy on the domestic value of imports and exports - economists had consistently placed foreign trade at only 6 percent to 10 percent of the national income.
The new estimates place the Soviet Union right up with other industrialized nations like the US, Canada, and Japan, whose ratio of foreign trade to GNP is roughly between 25 percent and 30 percent, Dr. Treml says.
The older method for calculating the weight of foreign trade in the USSR's economy perpetuated the idea from as far back as the 1930s that the Soviets had a ''self-sufficient, insulated'' economy, explains Dr. Treml.
''This textbook case is misleading,'' he says, noting that previous conventional economic research had been based on external prices converted to rubles through an exchange rate set by the Soviet government, not by true market forces. ''These values had nothing to do with internal Soviet values . . . what consumers actually paid or what Soviet manufacturers actually received,'' he says.
The method used by Treml and Mr. Kostinsky was made possible because the Soviets have only recently begun publishing the kind of data the economists needed to construct a model of the actual domestic values of exports and imports.
The data tends to confirm the leverage the US attempted to use in the 1979 grain embargo and the recent refusal to allow an American-made rotor to be sold for use in the Soviet natural gas pipeline.
The most crucial areas of dependence on foreign trade appear to be in the sectors of food and high technology, the researchers say. For example, 50-to-80 percent of all Soviet-built machinery is dependent on imported tools and computerized equipment.
''The (Soviet) diet is dependent on imports,'' adds Dr. Treml, noting that food and agricultural products account for 20 percent of all Soviet imports.
He detailed the delicate balance foreign imports can have on the food cycle. If imports of grain are slowed down, livestock are slaughtered because they can't be fed and in turn the whole cycle can suffer a lag that can take several years to make up.
Mr. Chapman explains that the Census Bureau's interest in such a project: As an arm of the Commerce Department, the Bureau has maintained a school for international demographics for 40 years. He says the bureau aims to expand its Foreign Demographic Analysis Division into ''a leader of international statistical analysis.''