Article

The State of the Soviet Economy

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
January 1991
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As the Union of Soviet Socialist Republics (USSR) struggles to craft and implement far-reaching economic and political reforms, global attention has focused on the state of the Soviet economy. At the July 1990 “Houston Summit,” the heads of state and government of the seven principal industrial democracies and the President of the Commission of European Communities requested the International Monetary Fund, the World Bank, the Organization for Economic Cooperation and Development (OECD), and the designated president of the European Bank for Reconstruction and Development to undertake a joint study of the Soviet economy. The team undertaking this study was also requested to make recommendations for reform of the Soviet economy and establish the criteria under which Western economic assistance could effectively support such reforms.

The Soviet authorities cooperated with this study and provided an unprecedented amount of information to the team. The study was completed in December 1990. The accompanying tables and charts, which try to capture briefly the main recent economic trends in the USSR, are based on the summary report of the study. This report is now available from the World Bank (see page 14 for ordering information). The background papers that comprise the full study will soon be published by the OECD.

The next issue of Finance & Development will contain an article that will discuss the main features of the Soviet economy and its near-term outlook, as well as the recommendations made by the team of experts representing the four institutions that produced the study.

Table 1USSR: distribution of population, net material product, and budget revenue by Union Republic
NMPDeliveries to other republicsExports abroad
Population(Current prices, peiceni of lotai in 1968)(Percent of republican NMP in current domestic prices in 1988)
(Percent of tolal in 1989)
Armenia1.10.9641.4
Azerbaidzan12.51.7593.7
Belorussia3.64.2706.5
Estonia0.50.6677.4
Georgia21.91.6543.9
Kazakhstan5.84.3313.0
Kirgizia1.50.8501.2
Latvia0.91.1645.7
Lithuania1.31.4615.9
Moldavia1.51.2623.4
RSFSR351.361.1188.6
Tadzhikstan1.80.8426.9
Turkmenistan1.30.7514.2
Ukraine18.016.3396.7
Uzbekistan47.03.3437.4
Total100.0100.0
Source: Data provided by the Soviet authorities.

Includes 1 autonomous republic.

Includes 2 autonomous republics.

Russian Soviet Federated Socialist Republic, includes 16 autonomous republics.

Includes 1 autonomous republic.

Note: Net malerial pioduci differs Irom GDP largely due to the exclusion from the lormer of depreciation and the value-added of services provided by the so-called non-material sector that do not contribute directly to malerial production
Source: Data provided by the Soviet authorities.

Includes 1 autonomous republic.

Includes 2 autonomous republics.

Russian Soviet Federated Socialist Republic, includes 16 autonomous republics.

Includes 1 autonomous republic.

Note: Net malerial pioduci differs Irom GDP largely due to the exclusion from the lormer of depreciation and the value-added of services provided by the so-called non-material sector that do not contribute directly to malerial production

USSR: output and expenditures, 1976-90

Sources: Data provided by the Soviet authorities.

1 This is similar, though not identical, to the Western concept of constant prices. It is widely believed that official Soviet statistics underrecord inflation. and hence overestimate real growth in both output and expenditures.

Fiscal and external Imbalance

(In percent of GDP)

Source: Ministry of Finance, Gosksomstat and staff calculations.

1 including extra budgetary agricultural price support.

2 Excluding gold. Converted at the 1989 official exchange rate of rub. 0.58=$1.

Money, Income and prices, 1986-90

Source: Goskomsiat.

1 M2 is composed of currency, demand deposits, time deposits, and lottery bonds.

Table 2External debt and reserves In convertible currencies, 1985-90(In billions of US dollars)
1985198619871988198919901
External debt228.931.439.243.054.052.21
of which:
Short-term6.97.48.611.217.710.01
External debt
service37.88.88.29.413.4
(In percent of goods and services)4(—)(27.7)(26.5)(23.1)(24.2)(33.0)
Foreign exchange reserves512.914.714.115.314.75.1
Source: Data provided by the Soviet authorities, the Bank for International Settlements (BIS), and staff projections.

Staff projections. June 1990.

External debt contacted or guaranteed by the Vneshekonombank.

Total debt service on debt contracted or guaranteed by the Vneshekonombank, excluding repayments of short-term debt.

In convertible currencies.

BIS dala.

Source: Data provided by the Soviet authorities, the Bank for International Settlements (BIS), and staff projections.

Staff projections. June 1990.

External debt contacted or guaranteed by the Vneshekonombank.

Total debt service on debt contracted or guaranteed by the Vneshekonombank, excluding repayments of short-term debt.

In convertible currencies.

BIS dala.

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