It is ironical that while the Soviet Union has caught up with the United States in terms of military strength, its capacity to influence the course of developments in the third world has declined rather than increased. And, surprisingly enough, this has happened at a time when the West and Japan have had to cope with inflation, large payments deficits and rising unemployment.
Moscow does not admit this to be the case in so many words. On the contrary, it claims that the international power balance has shifted decisively in its favour and that of “forces of peace and anti-colonialism”. But indirectly it has been due to its inability to help its friends, as in the case of the coup in Bangladesh and the anti-communist campaign in Portugal. It has not even tried to hide its dismay over its virtual exclusion from the Egypt-Israeli negotiations.
No commentator so far has cared to establish that Sheikh Mujibur Rahman was acting or intending to act in a manner which was hurting or would have hurt vital American interests in the region. If anything, Bangladesh under the Sheikh had become so critically dependent on Western aid for mere survival that it was out of the question that he would adopt an anti-US stance.
Be that as it may, the larger problem is that the old concept regarding the role of the Soviet Union and other communist countries in the economic development of the third world has turned out to be unduly optimistic. This did not matter so long as politics was in command as in the ’fifties and early ’sixties. But increasingly the emphasis has shifted from politics to economics.
Exports
It is hardly necessary to recall that in the mid-’fifties when the Soviet Union decided to assist countries like India, Egypt, Indonesia and Ghana in a big way, it was widely believed that this would pave the way for extensive economic relations between it and them, help them overcome their economic backwardness, reduce their dependence on the West and establish a relationship of equality with it. No one will claim today that these expectations have been fulfilled. On the contrary, the third world’s dependence on the West has increased in the past two decades. Indeed, the point has been reached when third world countries address their demands almost exclusively to the West.
Irrespective of whether they want larger transfer of capital and technology, freer access to markets for their exports, higher and stable prices for their commodities and other raw materials, rescheduling and writing off of old debts or softer terms for future credits, they invariably approach the West. This applies as much to radical regimes like those of Algeria, Iraq, Syria and Tanzania as to moderate governments like those of India, Egypt and Indonesia. Similarly, whether the demands are formulated by UNCTAD or by a non-aligned conference, as the recent one in Lima, the addressees remain the same – Western capitals and Tokyo.
It is also incontestible that it is the Western governments and West-dominated institutions like the International Monetary Fund, the World Bank and its soft-lending affiliate, the International Development Agency, which have been concerned about the disastrous consequences of the sharp rise in oil prices for non-oil producing developing countries and are trying to ease their burden. It is the IMF which has set up the third window to enable the most adversely affected countries to borrow from it. Again, it is EEC which has agreed to allocate $3.5 billion for building buffer stocks of 10 primary commodities in order to stabilise their prices.
The West, as Mr McNamara, President of the World Bank, has been pointing out most forcefully, has not been doing enough for the developing countries. Its total aid amounts to only .33 per cent of its GNP against the one per cent target set up by the United Nations and it is likely to continue to fall and perhaps touch .28 per cent. The level of aid needs at least to be doubled if the poorest and middle income countries are to achieve tolerable growth rates of 3.2 and 3.8 per cent a year respectively.
Support
Even so, the fact remains that the World Bank proposes to raise its lending to the developing countries to $7 billion in the fiscal year ending June 1976 and approximately $40 billion over the next five years.
The Soviet Union’s role has by and large been confined to verbal support to third world countries in their efforts to secure better deals from the West. On its own, it has not agreed either to lower the interest rates or reschedule debts though on both these accounts its terms are much harsher than those of the West.
The Soviet Union and its allies are, of course, not responsible for the continued backwardness of friendly countries like India. The former can, in fact, legitimately claim that they have done a great deal to help the latter to establish basic industries and improve their bargaining position vis-a-vis the West. But the more pertinent point is that the capacity of the members of the Soviet bloc to assist others remains limited in absolute terms despite the growth of their own economies and, in relative terms, despite the disarray in the West.
Of critical importance, in this regard is the fact that the economic growth of the Soviet Union and East European countries itself has come to depend to some extent on the import of Western technology and capital. Whatever the reason, they are not able either to generate their own technology, specially in new and important fields like cybernetics and chemicals, or to export enough to the West to pay for their imports.
East Europe’s trade with the West, for instance, tripled between 1960 and 1971 – it rose from about $3 billion to $10 billion – and its indebtedness 12 times – from around £ 600 million to $7 billion – and it has been rising steadily ever since because the choice before the East European regimes has been between growing dependence on the West and slower rates of growth and what that implies by way of failure to satisfy the increasing demand for consumer goods at home, Soviet trade with the West similarly increased by around 10 per cent during 1967-71, 27 per cent in 1972 and 59 per cent in 1973. Indeed, the Soviet Union has been running substantial deficits year after year. The deficit amounted to 1.1 billion in 1973. Moscow has been financing these deficits partly through the sale of gold and party through credits which now stand around the East European level.
It is not sufficiently appreciated in this country that never before since the ’thirties has the Soviet government been so keen on economic co-operation with the West as now and that this is primarily the result of the awareness on the part of the Soviet leadership that the country needs Western technology and capital to overcome the backwardness which prevails in almost all those branches of the economy which produce consumer goods.
In the ’fifties and the ’sixties the Soviet economic growth came from big increases in labour force, which rose from 97 million in 1950 to 124 million in 1970, and the massive nine per cent growth in capital stock. Neither of these options is now open to Soviet planners, the first because there is no more semi-employed manpower to be drawn upon and the second because this would require, according to Abram Bergson, a leading Western expert, an investment of 40 to 50 per cent of the GNP. In plain terms, Moscow needs to draw heavily on Western capital and knowhow to sustain its economic growth. This may provide a sounder explanation for Mr Brezhnev’s policy of detente than all the references to Lenin.
Incomes
Also, with individual incomes has risen the demand for meat in the Soviet Union and with it the compulsion to import large amounts of grain. While from 1956 to 1962 it exported six million tonnes of grain on an average every year, it had to import six million tonnes in 1963 and again four million tonnes in 1965. The imports came to six million tonnes again in 1970-71, though the Soviet crop that year was the second largest on record. Following a sharp decline in food production in 1972, the net grain imports rose to 19 million tonnes and the same figure is likely to be reached this year.
Many realities like these constitute the substance of international relations and not empty ideological rhetoric. And it appears unlikely that these will change in the near future. The West as a whole and Japan seem to have overcome the crisis provoked by the sudden four-fold rise in oil prices in 1973 and are, on all accounts, well set on the road to recovery. In addition, the United States has staged a remarkable comeback in the world’s most contested region of West Asia – a strange result of a war fought on the Arab side with Soviet weapons.
The Times of India, 2 September 1974