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HARSH LOOK AT SOVIET PROSPECTS A top Soviet economist now lecturing and consulting in the U.S. believes the Soviet Union will begin to break up over the next year, that a significant portion is likely to fall into civil war, and that by November the country will be swept by a food crisis of severe proportions . Nonetheless, Vladimir L. Kvint, who lectured last week at Northwestern University’s J. L. Kellogg Graduate School of Management, said now is the time for American and other Western businesses to invest in areas of the Soviet Union that can be identified as having a low risk of unrest and a high probability of a good return. Kvint holds the lifetime title of Soviet Professor of Political Economy, and currently is distinguished lecturer at Fordham University. ‘‘The Soviet Union will cease to exist as a political unit in the next year, but the resources will stay,’’ Kvint said in an interview at Northwestern. ‘‘A substantial number of the regions carry little investment risk.’’ For example, he said, areas in Siberia and the Far East used during Stalinist days for internal exile are alive with the entrepreneurial spirit and have few, if any, of the social conflicts apparent in many other regions. Some of those people were exiled for demonstrating entrepreneurial skills. ‘‘It is no accident that the level of productivity [in such regions] is 30% higher than [in] other regions,’’ Kvint said. ‘‘In some spots, it is 40% to 50% higher. They have a totally different attitude to work—they have pride in their work.’’ Kvint’s positive assessment of business opportunity comes as American and Western firms are pulling back or retrenching in the Soviet Union in the face of mounting repression in the Baltic states and elsewhere, and in light of a host of difficulties and disappointments encountered in the past several years. Kvint, who advises American businesses, said he was not of the Article by John N. Maclean, The Chicago Tribune, Sunday, February 3, 1991. harsh look at soviet prospects 315 opinion that firms should invest in the Soviet Union ‘‘no matter what.’’ But if careful risk analysis shows profits can be made safely, ‘‘then why not?’’ he said. Kvint makes some of the same arguments in an article in the February 4 edition of Forbes magazine, blaming excessive Western support for Soviet President Mikhail Gorbachev for helping bring on the current round of repression. ‘‘Unwavering Western support for Gorbachev and centralized Soviet power have strengthened the hard-liners and increased the chance of a bloody civil war,’’ Kvint wrote in Forbes. He said Gorbachev tested the West by imposing last spring’s economic blockade on Lithuania. When the West failed to react to that and other provocations, Kvint argues, Gorbachev saw a ‘‘green light for today’s tanks.’’ Kvint, who was an advocate in the Soviet Union of market systems as long as a decade ago, said he has used a variety of criteria to do a risk analysis of the Soviet Union, combining historical, economic, and political approaches. The analysis is so specific, he said, that he can predict that about 12% of the country’s territory will be in a state of deep unrest in the coming year, if not civil war. In the long run, Kvint said, he believes at least some major areas of the Soviet Union will successfully pursue reform. ‘‘Now is the right time to invest in a number of regions in the Soviet Union,’’ Kvint said. ‘‘You should invest in separate producing regions where you know the local government has been democratically elected [7 of the 15 Soviet republics have elected parliaments]. ‘‘You should invest in those that have gained a significant independence from central controls such as where enterprises are leased from the state by employees,’’ he said. In hotel construction, for example, there are some businesses that have been leased back from the state. Building hotels raises the possibility of being paid in hard currency, as the concerns earn tourist and business cash. The Soviet ruble cannot be converted into other currencies. The Russian Republic, containing 85% of the Soviet Union’s natural resources, is so large it cannot be seen as a single unit, Kvint said. If the Soviet Union breaks up and Russia becomes a separate country , it would be the largest country in the world. Kvint predicted the republic’s president, Boris N. Yeltsin, may [18.117.196.217] Project MUSE (2024-04-20 03:24 GMT...

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