Gorbachev's need for high-tech trade
WATCH trade. Watch Eastern Europe's leaders. In the wake of Washington's and Moscow's swift turn toward renewed d'etente, most media eyes are on the next East-West shoes to drop: (1) the third Reagan-Gorbachev summit in America (and perhaps fourth in Moscow); (2) bargaining on a 50 percent cut in long-range nuclear missiles. But, for Moscow, that intercontinental missile bargaining - like the medium- and short-range deal just struck - is in part a means to an end. The end involves East-West trade and loan credits for Moscow and its East European allies.
Mikhail Gorbachev needs a weapons downturn to permit a diversion of domestic resources to civilian factory retooling, consumer goods, housing, and more competitive exports. Ironically, he also needs a nuclear downturn to speed the high-tech modernization of his conventional ground, air, and naval military forces. But the resources freed up by not having to service missile warheads and not having to run a breakneck new nuclear arms race are not alone sufficient to fuel the civilian (and military) modernization he seeks.
Savings of rubles and hard currencies will not, by themselves, provide the USSR and Eastern Europe with a sophisticated phone network capable of reliably linking computers. It will not provide the drilling and pumping technology needed to increase petroleum output to take advantage of future rising world prices. It will not provide the advanced robotics and maintenance know-how (and the computer software and hardware) needed for factory automation. Nor the food processing and herbicide plants needed in agriculture. Etcetera.
All those desired components of an efficient, modern economy could perhaps be attained the old, centrally planned Stalinist way. But the delay would be prohibitive. More of the world - like the Pacific Rim states - would be shouldering its way past the USSR to join the United States, Japan, and Europe at the head of the economic race.
So trade in technology and modern manufacturing systems is essential. And for both Moscow and its Eastern European clients, major loan guarantees will be needed.
Mr. Gorbachev and his Politburo colleagues face a serious and probably growing problem because of their dependence on Eastern Europe as a transfer agent in this modernization process. MIT Prof. William Griffith has shrewdly analyzed this Kremlin dilemma. He points to five factors that have periodically stirred unrest in Eastern Europe since the arrival of Soviet control in 1945: economic crisis, nationalist resentment of Moscow's domination, the siren call of Soviet internal reforms, East-West d'etente, and leadership succession crises. All five are present today, he suggests, plus a sixth element: ``the decreasing economic attractiveness of the technologically backward Soviet Union and the increasing economic attractiveness of West Germany....''
At present, economic crisis is expressed in loan default or near-default in Hungary, Poland (and nonaligned Yugoslavia), as well as in the stagnant economy resulting from Romania's attempts to pay down its Western debt. Resentment of Moscow is heightened by a renewed feeling that the center of empire is weighing down its neighbors as the world moves ahead. Gorbachev's glasnost policy threatens to undermine neo-Stalinist party leaders' policies.
Finally, there is the tug of war all these states face, in varying degree, between military and economic links to Moscow and their economic needs, which can best be met by West Germany. Gorbachev and his planners are demanding higher-quality imports from the East bloc to fulfill promises to Soviet consumers and to help upgrade and retool Soviet industry.
At the same time, the rest of the world is demanding higher-quality products if it is to buy from East Europe rather than Korea or Brazil or India (not to mention the US, Japan, and Western Europe). Only exports to the larger world will bring hard currencies to pay off debt, buy new technology (from Bonn and elsewhere), and stave off harsh austerity measures if debt is not paid off. In this trade bind, the flagship of the East is East Germany. It has long served as a transplant bed or direct conduit for Western technology into the USSR. Despite some misgivings, Moscow encourages East German trade with Bonn. It will increasingly have to tolerate or encourage growing West German trade for its other clients. And that means more than deutsche marks and dealings between businessmen - as the East German example shows.
Conservatives in the West worry that Washington's medium- and short-range missile deal with Moscow may leave Western Europe at the mercy of superior Soviet conventional forces. That fear is understandable. But it does not appear to account sufficiently for the added uncertainty facing Soviet planners as they contemplate the erosion caused by change in Eastern Europe.