Doing Business with the Soviet Union

Article excerpt

Winston Churchill once said that Russia is ``a riddle wrapped in a mystery inside an enigma.''

Over the centuries the Russians built the world's largest modern empire, sprawling over one-sixth of the land mass of the planet, from Poland to Japan and from the Arctic Circle to India. It is an amalgam of more than 100 nationalities and languages. It has no internal logic but the exercise of power, centralized until 1917 in the bureaucracy around the czar and since then in the bureaucracy established by Stalin.

In natural resources, the Soviet Union is easily the richest nation on earth. It has more oil than Saudi Arabia, more gold than South Africa, more arable land than the United States and virtually all the resources needed to operate a modern industrial state.

Yet the Soviet Union is the sick man of Europe. For 70 years it has systemically sought to eradicate initiative, creativity and individuality in the sense that these values are understood in the West. The Soviets tried to remold human nature according to what was called the Marxist-Leninist pattern, cutting the arm to fit the sleeve.

Under the czar, Russia exported wheat; today it must import vast amounts to feed its population. Staple goods such as meat, milk, sugar and tea are rationed.

While it leads the world in the production of heavy industrial goods like iron, the U.S.S.R. is 10 to 12 years behind in advanced computer technology. The country is plagued by diseases controlled or eradicated in the other industrial nations. Now AIDS is of major concern, mostly because of the repetitive use of unsterilized needles in hospitals. Nearly half of all HIV-infected citizens are children.

In the midst of this systemic failure, Mikial Gorbachev is trying to implement reforms that will lead his nation, hopefully in one piece, toward democratization, economic reform and normal international relations. If he succeeds, he will be not only the man of the decade, as Time called him, but the man of the half-century, as Time called Churchill.

Yet if Gorbachev is to succeed, he must succeed economically. To do so, he needs international economic partners - and Americans can profitably participate.

More than 80 percent of attempts at U.S.-Soviet joint ventures fail, and of those that are actually signed, less than 20 percent become operational. …