For the Bravest Investors Only

MAYOR Anatoly Sobchak of Leningrad was in Washington recently to instill a little confidence in the Soviet economy - or at least his small part of it. He hopes the US will guarantee investments in his city by American businessmen. With world events taking Washington's attention elsewhere, and with developments in Mr. Sobchak's country anything but reassuring, chances don't look good that his hopes will be realized.

But he, and others in the Soviet Union who recognize the need for foreign investment, will keep trying anyway. They have no choice. Without substantial help from the West - expertise, technology, and investment dollars - the Soviets' rise from economic disaster will be nearly impossible.

Headlines from the Soviet Union of late would make the bravest investor shiver. Events range from the politically unsettling (civil war in Moldavia) to the economically confusing (the Ukraine's move to print its own currency). The Kremlin's loosening grasp makes it difficult for a businessman to discern whom he ought to do business with.

When President Gorbachev decrees that 40 percent of hard currency income from enterprises has to go to the central government to repay the national debt, the republics scream that they have first call on those profits.

But if the present chaos scares off many potential investors, others may venture in regardless. This huge chunk of the Earth and its people remains a vast, hungry, virtually untouched market. It also contains some of the largest mineral and oil deposits anywhere. That fact alone keeps Western energy companies interested.

Yet the hurdles are daunting. Soviet legal experts, in consultation with Western colleagues, are trying to sort out the critical question of who owns what. The government takes one step back from outright private ownership for every two steps forward. If large enterprises are ``destatized'' (taken out of the hands of the bureaucrats), there'll be a period when the plant managers will effectively ``own'' the operation. But further struggles will ensue. What about worker ownership?

What about the expectations of workers when Western partners come in with fresh capital? They'll want to streamline things and lay people off.

One expert on the Soviet economy, Ed Hewett of the Brookings Institution, has likened entering the Soviet manufacturing arena to jumping into the middle of a fire fight.

But jump some Western investors must, if they want to be in position once the dust settles. Private educational efforts, like those of the Soros Foundation in New York, are helping bring that settling closer by making free-market know-how available in the East. And as Mayor Sobchak suggested, Western governments have an interest in backing and encouraging such endeavors. They're crucial, after all, to an orderly post-cold war world.

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