Newspaper article The Christian Science Monitor

Kissinger, Investors Eye US-USSR Summit

Newspaper article The Christian Science Monitor

Kissinger, Investors Eye US-USSR Summit

Article excerpt

IT would have been unthinkable a year ago: a top economic adviser to President Mikhail Gorbachev saying the Soviet Union must turn to the West for massive financial and technical assistance!

Prof. Stanislav Shatalin, a member of Gorbachev's presidential council, spoke of this need for help in transforming the Soviet economy into a market-based system in an interview with the Financial Times of London on the eve of his departure with the Soviet leader to the summit with George Bush in Washington.

Commenting, former Secretary of State Henry Kissinger said the West doesn't have the massive resources to fix the problems of the Soviet Union, which are to do with "internal arrangements." But he did think the West might help in certain selected areas, such as consumer goods and technical training for management.

The talk of United States aid to its old political and military opponent reflects the dramatic changes in the world resulting from the collapse of communism.

Dr. Kissinger was in Boston for an investors conference, and some speakers at that gathering were speculating on the potential impact of the winding down of the cold war on investments.

For example, David Williamson, of David Williamson Associates Ltd., London, held that a revival of the Eastern economies should lead to "a takeoff" of base metal prices - such as copper, aluminum, lead, zinc, and nickel. He reasoned that the West will provide Eastern Europe, including the USSR, with an infusion of capital to modernize antiquated industry and run-down infrastructure. This will mean a huge increase in metal demand as factories, machinery, highways, and so on are rebuilt.

Western industrial democracies use 2.4 times on average as much aluminum per capita as those living in the Soviet Union, Bulgaria, Poland, Hungary, East Germany, and Romania, Williamson notes. This ratio for copper is 2.02, lead 1.6, zinc 1.31, and nickel 1.62.

During the next five years these Eastern countries might increase their metal demand by an average 5 percent a year as they attempt to catch up, Williamson suggests. That compares with growth in the Western world of 2 percent per annum for these base metals. …

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