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The Financial Crisis--From Their View
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# : |
16942 |
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Section : |
CURRENT ISSUES
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| Issue
Date : |
4 / 1990 |
3,229 Words |
| Author
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Andrei Anikin
Andrei Anikin is professor of economics at Moscow University.
He is also director of a special studies group at the
Institute for World Economy and International Relations of the
USSR Academy of Sciences. |
The main obstacle in the path of Mikhail Gorbachev's reforms is an inflationary crisis that is overwhelming the economic and political scene. Although rooted in pre-Gorbachev era policies, the crisis has been intensified by various current economic policies and realities.
The fundamental fact is that reforms aiming at the introduction of a market economy cannot succeed under extreme inflationary conditions. Inflation, in fact, helps to perpetuate the basic features of the old system of economic management, the so-called command and administrative economy.
The fates of perestroika and of the Gorbachev administration depend to a substantial degree on the success of economic reform, or at least on making some progress toward it. These are the political and international dimensions of the Soviet financial crisis.
One problem in trying to analyze that crisis is the scandalously poor state of Soviet statistics. Many statistics that would be quite ordinary for Western economists are still not published openly or are not consistent enough, not interpretable enough, and so on. In attempting to use them, the old saying comes to mind: There are plain lies, damned lies, and statistics. Nevertheless, the primary manifestations of the crisis are clear:
1. The budget deficit. In recent months, its real size has gradually emerged from behind the veil of secrecy. The latest figure cited by the administration is enormous - 120 billion rubles in 1989, which is 13-14 percent of GNP. Next year they hope to reduce it to 60 billion.
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