Soviet trade reforms enacted to lure capitalist investment first conquests of Russian

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Gorbachev's measures In December 1988, on the eve of Soviet leader Mikhail Gorbachev's visit to New York, the Soviet government gave the green light to a series of foreign-trade reforms aimed at luring greater amounts of foreign investment to the Soviet Union.

These reforms will provide (1) wider trade rights for Soviet factories, (2) more favorable joint-venture rules for foreign capitalists, and (3) a gradual transition toward the convertibility of the ruble, the Soviet currency.

What will all these reforms mean for the Soviet economy?

Opening the trade door The Soviet bureaucracy headed by Gorbachev is trying to revive the Soviet economy by offering profitable openings into the Soviet economy to world capitalism. This has entailed allowing the growth of private enterprise-domestic and foreign-in the Soviet Union and the use of capitalist "incentives" such as piece-work, inflation, bankruptcies, and unemployment to increase the productivity of the Soviet workers and farmers.

One of the main conditions demanded by the capitalists for investing in the Soviet Union is that the Soviet leadership open "free trade" doors in the state's monopoly on foreign trade. Gorbachev's December 1988 reforms do just that.

At present some 200 state factories in the Soviet Union (out of a total of 48,000 factories) have import-export rights; that is, they can trade directly on the world market instead of going through the special state import-export houses. Beginning next April, all Soviet enterprises whose output is "competitive on the foreign market" will have the right to trade directly.

To attract capitalist investment, the Soviet government is also relaxing the rules governing joint ventures. These are companies with mixed Soviet and foreign capital. There are currently 130 joint ventures operating in Revolution the Soviet Union.

In December 1988, the law requiring 51 percent Soviet equity in a joint venture was scrapped. From now on, foreign investors will be able to hold controlling interests in Soviet companies. And, for the first time, foreign bosses will have the right to hire and CONTRAC threat to the economic foundation of the Soviet workers' state.

The step-by-step erosion of the state's monopoly of foreign trade and the gradual devaluation and convertibility of the currency will allow the uncontrolled penetration of cheaper and higher-quality commodities from other countries into the Soviet economy.

The inevitable consequence of this process is that nationalized industry, unable to compete in an open world market, will be severely undermined.

Uncontrolled direct purchases by soviet bureaucrats and other individuals of cheap imported goods would immediately begin to erode the socialized planned economy. And as production is shifted toward high-profit luxury items, shortages of basic consumer items will inevitably appear.

In recent months, moreover, the Soviet bureaucracy has announced its desire to join the GATT (General Agreement on Tariffs and Trade) and the International Monetary Fund. (Already Poland, Yugoslavia, and Hungary have joined the IMF.)

In an article published in the Sept. 2, 1988, issue of Soviet Current Affairs a top Soviet official noted that "the entry of the Soviet Union into the IMF would go a long way in helping to resolve many of our internal problems."..Joining the IMF would open wide the door to submitting the Soviet planned economy to the dictates of imperialist finance capital. It would mean dismantling industries that the capitalists deem "unproductive" —as occurred in the case of the Gdansk shipyards in Poland—or industries oriented to meeting the internal needs of the population.

And it would require implementing austerity packages to guarantee of profits imperialist investors.

Another alternative needed There is an alternative to resolving the crisis of the Soviet economy other than Gorbachev's increased reliance on world capitalism and market mechanisms. But it is one that Gorbachev is incapable of proposing. It is one that entails, among other things, fully democratizing the planned economy, replacing the bureaucratic administration altogether with genuine forms of soviet democracy.

This would mean instituting democratically controlled planning at all levels of society in which both the planners and the plan implementers are one and the same: They are workers.

This alternative program is beginning to be formulated by currents within the Soviet opposition movement. For example, a Soviet dissident was recently quoted by a French socialist weekly as follows:

"There are today in the Soviet Union 15 or so Popular Fronts [mass opposition organizations, some independent of the bureaucracy, others not.] This does not include the Popular Fronts in the Baltic countries, which are legally recognized and registered. Our Popular Front in Moscow has 1800 members today. We have many members in five factories. This is not that much, but it's a start. ...

"We call for the full democratization of Soviet society, the restoration of the power of the soviets, full freedom of the press, and the defense of the social guarantees and services— and their extension. ...

"The people shouldn't be made to pay for the mismanagement and crimes of the bureaucracy." (quoted in Informations Ouvrieres, Dec. 14-21, 1988)