The Hunger Pangs in Soviet Future : West needs to grant Moscow commodity credits

Three months ago Soviet President Mikhail Gorbachev warned that unless ways could quickly be found to arrest his nation’s rapid economic decline, “everything living in our society will die.”

New statistics on Soviet economic performance for the first half of 1990 describe a country that is steadily slipping toward this terminal condition.

There is no good news in the official numbers, only bad news and worse. Productivity, gross national product and national income have all declined. Inflation, government debt and the trade deficit are all substantially up. Unemployment is approaching 5% of the labor force and bodes to expand as the military shrinks in size and as the long-promised shift to a market economy forces more and more inefficient state enterprises to shut down.

Consumer products of all kinds, from cigarettes to sausages, are in short or nonexistent supply. Gorbachev’s advisers now publicly warn that the situation could soon have “socially dangerous” results, i.e., protests, more strikes--even riots. For the first five months of this year an average of 130,000 workers a day boycotted their jobs. Time, says a leading economist, is “catastrophically short.”

One potentially bright spot can be discerned in a government estimate that the 1990 grain harvest could exceed the record set in 1978, important news for a country where food shortages have become not just occasional but chronic. But that bright spot could soon fade: Farmers, no longer interested in amassing more rubles when there is nothing to buy with them, are bartering crops for tools and machinery instead of marketing them in normal distribution channels. As of a week ago, collective farms had sold only 18% of the total harvest to the state. Meanwhile, Boris Yeltsin, president of the Russian Republic, calls for volunteers to help bring in the harvest before it rots in the fields.

Gorbachev is now appealing openly, urgently for Western help, especially for long-term, low-interest loans, including $2 billion in U.S. loan guarantees for food purchases. Why does the Soviet Union need massive credits, when earlier it made so many outright purchases? Moscow, which was long regarded as a worthy debtor, now finds itself as much as $3 billion in arrears on its foreign debt.

What’s gone wrong? A main answer is that Soviet oil exports, the major hard currency earner along with gold and diamonds, are down sharply as output from overworked fields has plunged. The government says there simply is no money to buy food from abroad--hence the need for credits.

U.S. credits to the Soviet Union await congressional action on a new trade agreement. Up to now it has been argued that Western aid was one way to help keep Gorbachev and other reformers in power. The dismal economic news from Moscow indicates that the question has become far more basic. The Soviet Union needs Western help not just to forestall civic unrest but maybe even possible famine. What had been a political question is rapidly becoming a humanitarian one, permitting only one response.