Foreign Trade Drop Reported by Soviet Union : Decline in Exports Hurts Drive to Boost Economy

Exports from the Soviet Union declined last year despite a major push by Moscow to expand its foreign trade, while the total cost of imports increased significantly, the government said Wednesday.

But even though the total value of imports and exports rose to the equivalent of nearly $220 billion in 1988, the growth was so small--only 2.3%--that no real recovery was possible from a massive drop in 1987, the official Soviet newspaper Government Herald reported.

Thus, foreign trade has stagnated at a time Moscow had hoped that increased trade would help revitalize the country’s economy, the newspaper said.

The report was one of the most pessimistic accounts of the Soviet Union’s deepening economic crisis. It made clear that growth is small and circumscribed and that various quick solutions that have been proposed, such as joint ventures with foreign investors, are not likely to be the breakthroughs the government wants.

Scathing Criticism

Economic relations with the Soviet Union’s socialist partners, Moscow’s most important trade links by far, are “unsatisfactory,” the newspaper frankly declared. “New forms of cooperation have not yet produced any returns, and direct ties between socialist countries have turned into a means to exchange deficit items,” it added.

According to the paper, prices for raw materials and fuels, the principal Soviet exports, declined worldwide, and Moscow did not meet its sales targets.

Sales of machinery and other equipment fell as well. They now account for less than 12% of the country’s exports and, largely because of shoddiness and old technology, only 3% of Soviet sales to capitalist countries.

“Soviet industry continues producing planes, vehicles, tractors and agricultural machines whose specifications differ very little from previous models and which are inferior to Western types,” said the newspaper, an authoritative new semimonthly publication from the Council of Ministers.

Cost of Imports Rises

At the same time, it said, the cost of imports rose 6.5%, an increase that reduced the Soviet Union’s trade surplus in 1988 by almost half, to the equivalent of $6.5 billion. But it calls into question the ambitious plans put forward by some Soviet officials for massive imports of Western consumer goods and equipment to expand Soviet industries--all of which would have to be financed by foreign loans and credits if the surplus declined further.

Overall prospects for Soviet economic restructuring this year do not appear promising, the Government Herald reported, saying that contracts for the delivery of raw materials this year are well below targets set in the country’s economic development plan.

It said fuel prices seem unlikely to increase much and that various trade development programs, including joint ventures and new deals with the West, have brought little investment and limited trade.