Editorial Helping the USSR

The Soviet Union is going to need a lot of help from the West if it plans to continue the reform of its economy. There are, for example, a number of Canadian mining and consulting companies eager to look into the potential for ventures in the USSR. Should the way be cleared for them to do so, they could provide capital infusion, the transfer of technology and managerial skills, and exposure to market competition that the USSR lacks. But attracting foreign investors requires several things including broader legal protection for investors. After all, who is going to invest without reasonable assurance that there is some legal protection for their investment.

Some other basic considerations are pointed out in a recent joint study conducted by the International Monetary Fund, the World Bank, the Organization for Economic Co-operation and Development, and the European Bank for Reconstruction and Development.

It says price liberalization, a clarification of property rights, the encouragement of private ownership and the commercialization of large state enterprises are key steps the Soviet Union must address before meaningful reform can take place. Those are all basic concepts in the West but new territory in the USSR.

The study says the world community can play a significant role by supplying technical assistance in drafting rules on property rights, contracts, monopoly practices and bankruptcy.

Without such a reform,” the study says, additional financial resources would be of little or no lasting value. With it, assistance could provide important support during a time of a difficult transition to integration of the economy of the USSR into the world economy with benefits for all partners.”