Frosty Figures

A harsh winter chills economic growth

The ill winds of Russia's winter blew very little that was good for the Soviet Union this year. The Central Statistical Administration of the U.S.S.R. last week released its figures on the performance of the Soviet economy in the first three months of 1979, and they were bleak. The coldest winter in 75 years sent temperatures plummeting to -45DEG C in Moscow suburbs and severely damaged pipes, power lines, railway beds, trucks and roads across the country. Never a strong point of the Soviet economy, transportation became a major national problem as a late spring delayed necessary repairs to the system. Energy was also a problem. Parts of the country suffered from a cutoff of Iranian natural gas, and oil production fell short of planned output.

Officially, the National Economic Plan was 99.7% fulfilled in the first quarter, but that figure is misleading. The Statistical Administration listed the output of 57 products that are basic to the Soviet economy, and 23 were down from the same period in 1978. Such industrial necessities as steel, chemicals, fertilizer, cement, nonferrous metals and forest products were below last year's production levels; such dietary staples as milk, vegetable oil and butter were also produced in smaller quantities.

More than foul weather is behind the slump. Experts on the Soviet economy point out that it has been slowing down for several years. Since 1976, which marked the start of the tenth Five Year Plan, annual growth has averaged 3.9% a year; in the first years of the decade, the average was 6%. The country now faces a serious labor shortage in industrialized areas, productivity has been sagging, and Soviet planners have yet to cope with serious management problems. Says Dimitri Simes, director of Soviet studies at Georgetown University's Center for Strategic and International Studies: "The Soviets find themselves with natural resources in the East, population growth in the Central Asian republics and the bulk of their industry in European Russia, and they don't know how to put the three together."

To regain economic momentum, says Oxford University Economist Michael Kaser, the Soviets will have to shift the planning emphasis from more factories and more workers to more efficient factories and more productivity per worker. Decentralizing the economy so that managers need not clear so many decisions with the sluggish Moscow bureaucracy will also be necessary. For the leaders of the rigid Soviet system, that kind of drastic reform will not be easy.

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