Chapter I Introduction

International Monetary Fund
Published Date:
December 1991
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At the Houston Economic Summit in July 1990, the Heads of State and Government of the seven major industrial democracies and the President of the Commission of the European Communities requested that by the end of the year the IMF, the World Bank, the OECD and the designated president of the EBRD, in close consultation with the Commission of the European Communities, undertake a detailed study of the Soviet economy, make recommendations for its reform, and establish the criteria under which Western economic assistance could effectively support such reforms. The main findings and recommendations were incorporated in The Economy of the USSR: Summary and Recommendations, transmitted in December 1990 to the participants in the Houston Summit and published in January 1991. A series of background papers, pulling together the substantial amount of material that was collected and which underpins the views expressed in the summary report, are contained in these three volumes.

Members of the four organizations met with a wide variety of interlocutors at both the union and republican levels, and were received with much courtesy and helpfulness. The staffs of the Ministry of Foreign Affairs and the State Foreign Economic Commission of the Council of Ministers organized most of the discussions. The Gosbank, Goskomobrazovaniye, Goskomstat, Goskomtrud, Goskomtsen, Gossnab, Gosplan, Ministry of Finance, Ministry of Foreign Economic Relations, the State Commission for Economic Reform of the Council of Ministers, Vneshekonombank and many other organizations and individuals provided, at an already exceptionally busy time, unstinting assistance.

These background papers are based on discussions with Soviet officials and material obtained by the teams of the four organizations during visits to the USSR between August and December 1990 as well as sources available in the West. Economic policies are being rapidly modified in the USSR and it is possible that in some areas the situation as described in these papers may have already been overtaken by events. “Estimates” or “projections” refer to those made by the teams unless they are clearly noted as official estimates or projections.

The evaluation of economic developments is of necessity conditioned by the availability and quality of economic statistics. Soviet statistics are subject to well-known methodological problems, uncertainties of interpretation and systemic biases which may overstate economic performance. These limitations need to be kept in mind when reading these background papers. Nevertheless, it is the view of the four organizations that the statistical base was generally adequate to support the policy analysis and recommendations made in this study.

The background papers are divided into three volumes. The first volume contains chapters on general economic and reform developments (Part II) and macroeconomic policies and reform (Part III). Volume 2 deals with systemic reforms, including of prices, enterprises, foreign trade, foreign direct investment, the financial sector, labor market and social policies, and the legal system (Part IV). The third volume includes chapters on sectoral issues, including the environment, distribution, transport, telecommunications, agriculture, energy, metals and mining, manufacturing and housing (Part V), as well as a chapter on medium-term economic prospects (Part VI) and a bibliography (Part VII).

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