Roger W. Robinson, Jr. Offers Bleak Assessment Of Soviet Economic Prospects

The Center for Security Policy today released testimony provided this morning to the House Ways and Means Committee by Roger W. Robinson, Jr., a member of the Center’s Board of Advisors. Robinson, a preeminent authority on economic, financial and technology security issues, afforded the Committee with an important new analysis on the current condition of the Soviet economy — and its prospects.

Robinson’s analysis reveals that "Perestroika, at least as currently configured, is dead in the water." He identifies the following as among the principal contributors to the USSR’s moribund economic state: continued reliance on bankrupt centralized planning (as evidenced by the latest Five Year Plan); sustained over-investment in the Soviet military; dropping oil production; depressed hard currency earnings; increasing indebtedness to foreign lenders; mounting labor unrest; and ethnic strife.

Robinson concludes, "Should Soviet indebtedness continue to rise at the present rate and hard currency earnings remain depressed, the need for either formal or informal debt rescheduling arrangements could materialize when the gross debt level reaches $60-$70 billion, possibly within the next two-to-three years. The highly uncertain domestic political environment, particularly the prospect of debilitating strikes by the work force, could accelerate the downside risk for Western private and official creditors significantly."

Robinson’s testimony offers a seminal analysis of a number of issues now looming on the U.S.-Soviet economic agenda. These include: waivers of the Jackson-Vanik and Stevenson amendments that currently inhibit Moscow’s access to the American market and government credits; resumption of the sale of Soviet bonds in the United States; a bilateral Trade Agreement now in negotiation; the upcoming Bonn economic summit to be held in March under the auspices of the Conference on Security and Cooperation in Europe (CSCE); and decisions concerning economic assistance to Eastern European nations. In the latter connection, Robinson offers insights into the prospects for economic and political reform and identifies Czechoslovakia as the new "pace-setter" of East European transformation.

Robinson judges that, "large-scale infusions of Western capital and technology into the USSR have served to retard, not catalyze, genuine systemic reform." Accordingly, he believes "a more cautious and disciplined approach to the channeling of Western assistance resources to certain countries of the region is essential to maintaining the kind of ‘constructive pressure’ which is working in favor of those seeking the fundamental, structural transformation of these societies."

Copies of Robinson’s testimony on "U.S. Trade Relations with the USSR and Eastern Europe" may be obtained by contacting the Center.