Soviets Studying the Japanese Way : Development: The longstanding dispute over the Kuril Islands is overlooked as they search for a workable model for economic growth.

Little noticed recently at the Tokyo Stock Exchange was a peculiar spectator, Grigory Yavlinsky. As a top economic planner in Moscow, he was taking a cram course in how pit traders use finger language to furiously buy and sell private capital.

He, like dozens of other Soviets, is doing what Western nations have been doing for more than a decade: learning from the Japanese. As the Soviet Union prepares a new economic blueprint for itself, Japan’s spectacular rise to economic stardom has drawn Moscow’s attention, despite a longstanding territorial dispute over the Soviet-occupied Kuril islands.

“The Soviet situation today--confusion, food shortages, a command economy--is very similar to Japan just after World War II,” said Ivan Tselichtchev, a Japan specialist from Moscow’s Institute of World Economy and International Relations, who is studying in Tokyo. “The Japanese model is useful for a quick catch-up.”

But Japan is just one of a number of industrialized nations hoping to influence how the world’s largest country will conduct business in the 21st Century.

“The Soviets have several economic models before them, but the Japanese model is taken seriously,” said Nobuo Shimotomai, a Soviet expert at Hosei University. “The Russian ideal of communal life is very different from the Western way of life,” he explains. “Japan’s way of management and its economic mechanisms may be better for the Soviet Union.”

Moscow is keenly interested in how the Japanese government was able to “guide” competing industries toward national goals and how Japanese managers have been able to instill loyalty in workers.

Also, Japan’s recent success in privatizing state enterprises in railroads, tobacco, and telephone service--while keeping loose government control--is attractive to Moscow planners.

A number of Japanese economists have lectured in Moscow during the last year. And the Soviets have sent two high-level missions to Japan. Reports from the mission were used in the recent Soviet economic plan, said Tselichtchev.

The Ministry of International Trade and Industry (MITI) plans to open a Moscow branch of the Japan Productivity Center (originally founded under American guidance) to train Soviets in such techniques as worker “quality circles.” A prominent politician, Toshio Yamaguchi, is working on setting up a university in Moscow to teach Japanese economics and engineering. Japan will also provide advice on government finance, taxes, currency controls, and general administration.

“Imposing the Japanese model on perestroika is one of the strategies of the Japanese elite,” said Shimotomai, a frequent visitor to Moscow.

Competing with Japan in the post-cold war rivalry over the shape perestroika will take are the United States and several European nations. Germany and France each plan to invite about 3,000 Soviets for training during the next three years. (Moscow has also studied Sweden’s social welfare system.)

Postcommunist Poland’s radical step in adopting an American-style free market--at the advice of Harvard University economist Jeffrey Sachs--signaled Japan that it too can help shape the future of emerging centralized or Marxist economies.

“Perhaps the Japanese model will be the new type of capitalism for the next century,” said Kenichi Imai, professor at Hitosubashi University.

Some Japanese leaders see much at stake in the way rules are set for trade, investment, standards of technology, and the extent of government intervention.

“The communist command economy has been defeated,” said Yasuhiro Nakasone in a recent speech, in which the former prime minister cited an Asian model for development, as led by Japan, as being the most suitable for the Soviet Union. “Francis Fukuyama (an American intellectual) has called this the end of history. I would rather consider it the beginning.”

By developing close ties with Soviet economic leaders, Japan also hopes to gain valuable knowledge about a potential market of more than 290 million people and be able to sway such decisions as how to exploit resources in the Soviet Far East.

One example of long-range thinking in Japan comes from Seiji Tsutsumi, the head of the highly successful Saison Group of retail and travel companies, who said he is writing a book with other businessmen to help Soviets follow the Japanese example.

“Japan knows the Soviet Union is very confused now and companies are generally avoiding investment,” said Shimotomai, “but in the next century, the economy may become more attractive.” At present, only about 20 Japanese firms have joint ventures in the Soviet Union.

The Japanese ministry most eager to open doors with the Soviets is MITI, the ministry which helped create the Japanese economic “miracle.” In fact, the Soviet chairman of the State Planning Commission, Yuri Maslyukov, said last year that he wanted his ministry to be like MITI.

In coming months, Japanese missions to Moscow will offer advice on running trading companies, rail transport, distribution networks and telecommunications. One mission to the Soviet Far East will encourage special economic zones near the Japan Sea. Another will help Moscow to “internationalize” its standards for technology, a potential advantage for Japanese firms.

“The Soviet government is already in the game,” said the director of MITI’s Soviet division, Sadao Nagaoka. “So it should have good vision of what is going to happen.”

One Japanese idea already adopted in the Soviet economic plan, said Tselichtchev, is a method of price liberalization coupled with industry protection. Moscow also admires Japan’s success in creating a high savings rates (accomplished by such tactics as restricting bank withdrawals and bank hours).

But the biggest potential contribution will be transfer of management know-how, although the Japanese system is sometimes overestimated, said Tselichtchev, who has translated the Japanese book “Corporate Capitalism in Japan” into a Russian bestseller.

Wide differences in culture, however, will make it difficult to graft Japanese ideas onto the Soviet Union, say both Soviet and Japanese officials. The Japanese model, said Tselichtchev, seems unacceptable to many countries because it requires sacrificing diversity and individual freedoms.