Soviet economic plan looks to be too hopeful
Washington — Soviet leader Mikhail Gorbachev probably won't see the results he wants from his economic reform until the late 1990s. A recently released study by the Joint Economic Committee of the United States Congress shows some sobering findings on the Soviet economy:
The Soviet Union is 7 to 12 years behind the West in many computer applications.
The Soviet defense burden is, by some measures, double that of the US.
Most economic measures show the Soviet economy has been in decline for more than a decade, and the performance is getting worse.
The USSR produces more energy than any other country in the world, but then uses two to three times more energy than other leading industrial countries to produce basic goods.
Moreover, it has one of the biggest populations in the world, but it's facing a labor shortage; not because the economy is surging, but because individual workers are producing so little that more of them are needed just to keep things from declining further.
The report documents some well-known trends in the Soviet economy. But it also calls into question some popular assumptions about what Mr. Gorbachev might do to turn things around.
For example, the study charts Soviet borrowing and credit practices in the past few years and determines that while the USSR has borrowed more from the West, overall trade with Western nations has declined.
Richard F. Kaufman, general counsel of the Joint Economic Committee, says the figures suggest that ``they're about as far into Western debt as they'd like to get.''
That calls into question, he says, the assumption that Soviet authorities will be seeking more credits from Western banks to finance the modernization of the country's economy.
Moreover, he adds, the figures indicate it's unlikely the Soviets will purchase substantially more goods from the West in the near future. Says Mr. Kaufman, ``They don't have the wherewithal to purchase [those goods.]''
So exhaustive is the study that some of Mr. Gorbachev's senior economic advisers, here for last week's superpower summit, headed back to Moscow with copies of the two-volume, 1,000-page report under their arms.
What they will find inside its covers can hardly make pleasant reading.
Dozens of economists and researchers, from the US and other countries, have analyzed virtually every sector of the Soviet economy.
And ``most experts would agree that it's going to be the late 1990s, if not the year 2000, before Gorbachev sees the kinds of results'' he wants in reversing his country's economic decline, Kaufman says.
``To me,'' he says, ``it's a case study in the misallocation of resources. If you starve one sector of your economy, you're going to have to pay a price.''
The sector that's been starved is, of course, the Soviet civilian economy - while the military continues to lay claim to much of the country's investment funds, resources, and top talent.
The report, basically a compilation of a number of specially commissioned studies, depicts a Soviet leader not only formulating some fairly far-reaching economic changes, but at the same time juggling the sometimes competing interests of the Soviet Communist Party, the government bureaucracy, the Soviet military, factory managers, the intelligentsia, workers, peasants, the far-flung Soviet republics, and Moscow's Eastern European allies.
For too long, the report concludes, Soviet authorities have laid stress on ``more'' - more manpower, resources, and energy - rather than ``better.'' Gorbachev is trying to reverse that by offering more incentives to workers and managers, by allowing some market mechanisms to come into play, by greater investments in the country's economic infrastructure, and by insisting on discipline in the workplace.
But the ``performance to date of the new strategy has been disappointing,'' concludes Stanley H. Cohn, a professor emeritus at the State University of New York at Binghamton.
While some forms of investment have been on the rise, he writes, the total amount ``has fallen woefully short in its bottom-line objective of accelerating growth in capital productivity.''
Among the complicating factors, Professor Cohn says, is the inflexible nature of Soviet central economic planning and the lack of a marketplace to establish demands and impel efforts to meet them.
Quite simply, says Cohn, ``The Soviet system is lacking in the supplier and consumer initiative so essential for technological advancement.''
The report is a treasure trove of data for Kremlin-watchers, Soviet specialists, and others concerned with superpower relations.
There are few other publications, for example, that contain minutiae ranging from the number of disturbances of public order attributed to alcoholism in Soviet Central Asia to the kinds of air pollutants being released in the Ukraine.
One of the most intriguing studies, however, concerns the results obtained from a computer model of the Soviet economy.
The study concludes that the current Soviet five-year economic plan, which ends in 1990, is ``so ambitious that it is inconceivable it will be fulfilled'' if the Soviet military continues to demand specialized machinery at the same rate it has in the past.
Moreover, the report concludes that the malaise in the Soviet system is widespread, and at its base is the low productivity of Soviet workers.
Unless productivity rises, the report concludes, ``the Soviets have no hope of meeting any of the targets laid out in the five-year plan.''