Helping the Soviets Help Themselves : But make aid contingent on reforms toward market-based economy

The Soviet Union is now openly, even desperately, soliciting major Western aid to try to head off threatened economic collapse. President Mikhail S. Gorbachev directs his plea for massive help to Western self-interest. If a lot of cash isn’t quickly forthcoming, he warns, the shock waves released by Soviet economic disintegration would affect world stability. The claim may be overstated, but the fact remains that preventing chaos in the Soviet Union and a lurch back into political reaction would make for a safer world. Potential donor nations accept that. What’s needed next are hard-headed decisions aimed at making an aid program not just politically acceptable but economically effective.

President Bush may soon have the chance to hear firsthand the Soviet case for help. Gorbachev has asked him to receive two special envoys who are part of a larger delegation that will be in Washington for economic talks next week.

The Soviets are said to be carrying some new ideas on economic reform. It’s expected that they will pledge to accelerate basic market reforms in the next few years if substantial Western aid is forthcoming. Certainly such aid would be of little lasting value in the absence of fundamental reforms. The trouble is that such changes have been promised for years. Still lacking is the political courage and the basic economic know-how to put them into effect.

And so to a great extent the old story goes on. The Soviet government continues to pour subsidies into wasteful enterprises. It continues to be stuck with a price system that takes little account of production costs or of supply and demand, and with a currency that is useless in international trade.

Agreement to provide aid to Moscow should and almost certainly will be conditioned on Soviet actions to move more rapidly and decisively toward a true market-based economy. At the same time political realities compel both the Soviets and the donor countries to recognize that there are other claimants for aid, notably those Eastern European states whose economies suffered so greatly under Soviet tutelage.

There is a further political reality to be taken into account: The future of the Soviet Union’s own aid programs. It makes no sense to seek Western help to reorient the Soviet economy at the same time, say, that Moscow continues to subsidize Cuba’s miserably inefficient Stalinist economy. Yes, the West in its own interests should be ready to help support the forces of Soviet economic reform. But it’s not improper first to ask for hard evidence that the Soviets are in fact ready and willing to help themselves.