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The Soviet Union on the Way to the Market: One Step Forward, then Two [Steps Backward]
- Fordham University Press
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THE SOVIET UNION ON THE WAY TO THE MARKET: ONE STEP FORWARD, THEN TWO [STEPS BACKWARD] Not only will the Soviets’ way to a free market economy be long and hard for Gorbachev, but the population must also have some painful experiences. The past year is proof. Inflation and unemployment have increased markedly. According to my evaluations, in 1990 the rate of inflation was at 18%, the unemployment rate at about 3%, but on a trend to increase as 50 to 60 million people are still working in positions that are not actually productive. The civil wars in the republics are bringing economic losses on the general order of 10% to 12%. Additionally, the concurrently uncertain political situation in the war regions has negative effects on foreign investment. Although in the past year total joint-venture international investments increased to more than $800 million, actually only a third of the joint ventures work according to plan. With half a billion dollars, American firms are the main investors. The efforts at autonomy have borne fruit in at least one area. Since January 1 the registration of joint ventures is no longer centralized at the Ministry of Finance, but, rather, administered by the Ministries of the republics. ‘‘Experts’ Forum,’’ Neue Kronen-Zeitung Wirtschafts (Vienna), January 26, 1991. ...