1990 Reports

Foreign Investment in the USSR

Carey, Sarah C.

The Soviet Union today faces a huge demand for capital to pay off its growing deficit, to modernize industry, and to satisfy consumer requirements. To meet this demand, Soviet policy makers are exploring a range of options that include the sale of bonds, the lease or privatization of a variety of state-owned properties, and dramatic cuts in defense spending. In addition to these potentially far-reaching measures, it is likely that a significant percentage of capital requirements will be met by foreign trade and investment. Soviet economist Nikolai Smelov estimates that over the next decade foreign trade and investment (along with cooperatives and small family businesses) will comprise thirty to forty percent of the Soviet economy.