A Measure of Plummet at the G-7 Summit : A sense that there was less in London than met the eye

Secretary of State James A. Baker III promised that Mikhail S. Gorbachev would not depart empty-handed from his London meeting with the Group of Seven. But neither, he might have added, would the Soviet president walk away with a blank check in his pocket.

The G-7--the world’s leading industrial countries--listened respectfully as Gorbachev appealed for Western help. He made clear that he knows that the West desires to see his country’s economic and political reforms progress, supports the Soviet Union’s interest in integrating itself into the world economy and wants to assure the Soviet people that they don’t stand alone as they face the necessity and the ordeal of wrenching change. But the G-7’s sympathy stopped well short of any promises to rush to the aid of the rapidly collapsing Soviet economy.

The Soviets, if they want it, can have technical help in such laggard areas as agriculture, energy production and conversion of military plants to consumer-oriented purposes. And they will be granted special status with the International Monetary Fund and the World Bank. What comes after that will depend on what they are able to do for themselves.

DISAPPOINTING LETTER: Gorbachev, it must be said, didn’t help his case with the letter he sent the G-7 just before the London meeting. Disappointingly short on key details about land reform and privatization, the letter still speaks of a “transition to a mixed economy” and a “socially oriented market system” as primary goals of reform. The vision, in other words, is of continued state domination in some key areas, most notably heavy industry. While this is intended as a sop to Communist Party conservatives--though it may also reflect Gorbachev’s own inclinations--it also describes an approach that is the antithesis of needed reforms. The command economy, portions of which Gorbachev indicates he would retain, is what has brought the Soviet Union to economic calamity. Abandoning it will no doubt be painful and disruptive. But failure to leave it behind would be disastrous.

For now then, following the American lead, the G-7 will proceed cautiously in the matter of Soviet aid. It is of course right to do so, for any aid that isn’t tailored to what the Soviets are able productively to absorb is aid that would surely be wasted. The overriding fact remains that the Soviet Union still is without a credible, officially adopted program for arresting its economic slide. In these circumstances it makes no sense to move ahead with large-scale loans, credits or investments.

President Bush will have another chance to talk with Gorbachev about economic change when he journeys to Moscow at month’s end to sign a strategic arms treaty that was nine years in the making. He can go with his status as head of the world’s only real superpower implicitly reaffirmed by his G-7 colleagues. Not only did the prudent U.S. view on helping the Soviets prevail--Germany and Italy say they prefer doing more, more quickly--but Bush also won endorsement of his Middle East peace plan and his continuing tough stance on sanctions against Iraq.

DISAPPOINTING TRADE: The annual G-7 summit, to be sure, is supposed to be primarily an economic meeting, and in London economic issues were indeed discussed. The leaders agreed on the desirability of lower interest rates to help global economic recovery and promised to stay personally involved in efforts to re-energize stalled trade negotiations, with the hope of concluding them by year’s end. The big disagreement there, in what is known as the Uruguay Round under the auspices of the General Agreement on Tariffs and Trades, remains agricultural subsidies within the European Community. That may not be quite as tough an issue as restructuring the Soviet economy, but it’s beginning to look as if it could take just as long to resolve.