Recent Structural Changes and Balance of Payments Adjustments in Soviet Foreign Trade.

by Oleg Hoeffding

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Based on official USSR statistics of its merchandise trade and U.S. statistics of world trade, an analysis is made of the means by which the USSR overcame its acute balance of payments problem of 1963-1965. Although the hard-currency trade deficit was small by U.S. or British standards--about half a billion dollars in the worst year, 1964--it was quite large relative to the size of Soviet hard-currency trade. To make up for large wheat purchases from Canada, Australia, and the United States, the Soviet Union managed to increase its trade balances with western Europe and Japan by 318 million rubles, to decrease its other imports from capitalist countries, and to change from an exporter to an importer of food from other Communist countries. Consumer austerity was not imposed. Producers goods bore the brunt of import restrictions. Sales of platinum, silver, and diamonds comprised nearly half of the total increase in hard-currency exports. The figures suggest that the USSR may systematically rely on the management of its commodity reserves rather than on gold and foreign exchange in balancing its external accounts. 36 pp. Ref.

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