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Implications of the Decline

in Soviet Hard Currency Earnings

National Intelligence Estimate


this estimate is issued by the director of central intelligence.

the national foreign intelligence board concurs.

Tbe following intelligence organizations participated in tbe preparation of the Estimate:

The Control InteUigeevee Acrency, the Defense Intelligence Agency, the Nottonol Security Agency, theegonliolion of tfio Department of State.

Aha Participating;

the Ajsitfont OSief of Staff for Deportment of the Army The Director of No vol tnteWgence, Department ol the Novy The Aiiritont Chief of Staff, InleKgertce, Oeportment of the Ai- Force The Director ol InteeVgence, Heodqoorteri, Marine Corp*

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implications of the decline

in soviet hard currency earnings

InliiinuKon available at ol6 not uxrl in the pre-patalion ol thi* Etlinuic.pcvr/ied brlhe Nalional Fotda*Battel on that date.





Declining Export

Options and

Tbe Soviet

Gaugins the Import t


Foreitcn Policy


scope note

this estimate looks at the implications0 of thehard currency purchasing power of the soviet union. the key(a) the extent of the decline, (b) how gorbachev will deal withand (c) how gorbachev's tactics will affect foreigndomestic spendingajor variable is the price ofis assumed toer barrel throughout the period for theblend of soviet crude oil and refined product barrel for benchmark global crude oil pricessaudi light.

key judgments

We expect Soviet hard currency export earnings during theo average roughlyercent below those attained over the last severalfavorable raw material prices allowed the Soviets to import record quantities of agricultural goods and Western equipment and technology:

decline in Soviet purchasing power will be even greater, amountingpercent reduction compared to theecause of the lower value of the dollar, in which about two-thirds of Soviet exports are denominated.

In an attempt to limit the impact of these coming declines on the domestic economy and on Moscow's policiesEastern Europe and the USSR's Third WorldSoviets are cutting backide range of foreign purchases. The range and nature of the cuts indicates Moscow is still in the process of developing priorities for spending its limited earnings.

Should the drop in purchasing power of exports remain in fact on the order ofercent during the, we expect the Soviets to take some measures to improve earnings and graduallyet of priorities to allocate scarce hard currency among nonstrategic domestic needs:

will be likely to raise the inflow of hard currency by increasingillion perand boosting gold sales. These and other less significantwould onlymall portion of lost revenues, however, and import capacity would still drop by one-third from4 level.

the import side, nonstrategic purchases will be cut by:

expenditures on consumer goods and agricultural imports, the latter made easier by the continuing world grain glut that depresses world prices.

-Cutting imports of machinery and equipment deemed not vital to modernization.

back purchases of turnkey projects.

The Soviets also willajor effort to convince Western firms to accept more barter and buyback arrangements.

The impact of such cutbacks on broad gauge economic measures such as overall growth and labor productivity will not bt significant. Nevertheless, the foreign exchange limitationerious challenge for Corbachev both in terms of internal discussions over allocation of scarce resources andonstraint in responding to any other economic setbacks, at least some of which, in all probability, will take place in the next few years.

Each setback would require an offsetting, and. in some instances, painful response:

A resumption of the decline in oil output would compel Gorbachev to take some combination ofreduction in imports, additional cutbacks in oil deliveries to Eastern Europe, and/or reductions in oil deliveries to the domestic market. An alternative view, held by the Director. Defense Intelligence Agency, holds that the Soviets will not be forced to reduce oil consumption whether or not oil production declines or is maintained at current levels.omplete discussion of this view, seenf this Estimate These differences of view, however, do not materially affect the magnitude of the decline in Soviet purchasing power:

One or more poor harvests would force choices between badly needed Western machinery and grain imports.

Failure of the economy to deliver adequately the machinery for modernization would result in more piessurc to import,from Eastern Europe, to make up the deficiency.

We do not believe the hard currency constraint willajor shift in foreign policy or significant moves toward economic reform.he need for Western credits and high-technology goods will encourage Moscow to consider Western attitudes, particularly those of Western Europe and Japan, when formulating foreign policy, resulting in some new initiatives to improve relations. New initiatives toward China in hopes of promoting barter trade are also likely to occur. The hard currency constraint will force the leadership to make tough choices among resource claimants, will create problems in relations with Eastern Europe, and will undermine Gorbachev'sfactors" campaign by failing to improve living standards:

Brezhnev, who used hard currency to paper over agricultural failures. Gorbachev would have to ask consumers to sacrifice if facedad harvest in order to maintain important machinery imports.


Even (hough we do not expect substantial aidcts to key client states, the Soviets will be likely to become more niggardly in their aid programs and Corbachev will most likely call for improved economic performance on the part of the clients when the aid is not being well used.

Also, we can expect Gorbachev to be more demanding for machinery deliveries from Eastern Europe as setbacks to his modernization program occur.

The timing and seriousness of these pressures depend in large measure on factors beyond Gorbachev's control such as weather-related domestic agricultural problems and global oil and grain prices. Should oil prices decline once again and remain iner barrel range, deep cuts would be needed in imports of agricultural goods and machinery. On the other hand, events that would raise significantly the priceajor disruption of Persian Gulf oil supplies-could boost Moscow's import capacity substantially above our baseline projection and alleviate Soviet problems. Otherrelated to higher prices and increased demand for Soviet gold,metals, andalso boost Soviet import capacity substantially.

Although the hard currency dilemma is unlikely to cause Moscow to be conciliatory enough to achieve major breakthiouglu in East-West negotiations, the initiatives that Moscow is likely to undertake will have some impact on US policy interests:

This inforrnation is

Soviet attempts to maximize hard currency earnings,from arms sales, will resultore aggressive search for markets in Third World countries.

The Sovieis also will be tempted to supply more state-of-the-art weaponry to secureactic that will be likely to spur sharp Internal debate.

The Soviet desire to expand export markets and tap inlernatiou: al financial markets will lead them to press more aggressively for greater participation in the international economic arena, exemplified by recent overtures to CATT.

Added pressures on the East Europeans to aid Moscow will exacerbate economic, political, and social problems In the region.

Moscow's difficulties in earning hard currency raise thecosts of aiding its client states and may reduce prospects for new economic aid to non-Communist LDCs


Export Earnings

rom the4ubstantia] rise in hardearnings spurred bv high dollar pricesTheir foreign purchasing power wasby the decline ol the West Europeanagainst the US dollar in the latter port olMost hard currency imports are purchasedEurope at national currency prices, andol Soviet exports are told for doflarv Thathe Sovieis to import record amounts offood totring of poor harvests andWestern equipment and technology.hard currency position was one of thespots In an economic picture otherwiseslowing growth and low productivity, agap uilh the Wert,eavy

2 That strong position has changed radicallylast year. Moscow'i favorable trade positiondeterioratehe result of reducedboth oil exports (lower prices and lowerarms sales. We expect Soviet6 to total6eakillions energy priceslo remain depreased. The accident atwill add to the hard currency problem asare forced to use oil-fired power to makeelectricity shortages In peak demand periodscompensate for generating capacity lost over atnext year or two during shutdown andof other nuclear

lthough there naturally exists great uncertainty surroundlrut protections of international commodity and foreign exchangee believe that for the rest of the decadehard currency export earnings will average roughlyercent below the level of recent years

Se*oe en altertunk* aero keU by Ihe Director, Def em*twyJ

Surplus capacity in oil worldwide will keep downward pressure on prices throughout tbe rest ol.

Figure 1

USSR: Hard Currency

Hellion current US S

An increase In gas sales will only partiallyfor falling eel revenues because tbe price ofthat oflimit gas revenues.

Anns exports will also be likely to remain depressed as long as low oil prices limit the ability of oil exporters in the Middle East to import goods.

Attempts to increase exports of other nonoilas madilnery and equipment,and other rawlikely to have limited success given generally weak demand lor raw materials and Western resistance lo shoddy Soviel-nunufaclurcd Items.

Moreover, the low value of the dollaris other Western currencies will reduce the value of Soviet exports, because about two-thirds of tbeir exports are

dcnominiiled tn dollars, while roughlyercentimport* are purchased with other hardTrtii amount* toercent reductionpurctuuna power durioc the periodto thelt hooch there iiwithin the Community about theof Soviet oil production andhematerially do not affect the magnitude ofin Soviet purchasing power, which iiby price

Options ond Conslrairrts

4 The Sovietsariety of policy otdlons that could redocr the impact of the downward trend in export carnirop on their capacity to import, but numerouspolitical, andlimit (heir ability to exercise these options to mitigate the effect of the earnings decline. Moreover,

Aitumprioni Underlying Protections ot Soviet Hard Currency Bcaonce of Poymeolt

E.port Prelections

Oil exports fall6n alternative view holds that oilwill probably remain al6 level or be slightly higher for the remainder of the

Cas eaports rite fromillion cuUc metersoillion cubic meter,

Real armi sales show no growth during, the period 'J9"M>lia chopping an evlimatrder cent in IM

Real ncayenergr. roruroi eapotti are held coruUaf

Real net rarrurca from, invasihaea (eicfudirig inter-eat] ietnam

Price Protecttotii

The overall annual InSstion rate applkable to eiporti and Importser cent during tbe)

Neaauaul oil prioea oWbae from SIS pre barrel for the mu of crude aod petroleum producti nported to hard curreoo countrimS to an average of SIM per barrel

Nominal gat prlcce drop from3 level9 per thousand cubic meters to an average price.

The nominal gold price grows at the rate of inlatlon from its current price of0 per

Intefeet nOea averageerr***

Tharagi repayment period ia eight years on Writern government-bached credit! and 6ve yean on medium and long-term commercial credit!.

The dollar depreciatesercentilh much of tbe decline occurring in 19

i Tbe Meierfw" tie inretloe. Oe/ennvao| |

some measures will have only long-run benefit,little relief within the current five-yearcrucial testing period for Gorbadtevand his modernization program.

oscow is in an excellent position Io tapcredfl markets'. Tlie USSR isealthy financial


Oil Production ond Domaitie Demand*

The lulniuimal increase in investment in the oil industry it5 hei increased production, but this effort can increase output only temporirily Depiction and rtang retouror ccol* of SusUirarel production will outrun the capability to Introduce capacity, resultingecline in output, probably before the end of this decade The Barcnti Sea may hold comidrriblebut any ilrable commercial product tan from this area ish lo occur before. j-

DornestK demand for oil during tbeiek lo remain ckneillthough thereforularMutian of gas foi oii. morseasy chanee* heve already been

mamrm html hPHectw. Dtttia*

l-uKym,i |

USSR could put pressure on Faiternreduce further its imports of Soviet oil or toexports to the USSR above planned levels.changes of ike order of magnitude requiredsubstantial relief to the Soviets air not likely

Large cuts In oil deliveries, which force Eastern Europe lo look westward for supplies andwould run counter to Moscow's policy lo expand Inlra-Bloc trade

Such cuts also risk undermining the hard-won political stability achieved by these regimes in recent yean.

The Sovieti aho would find it diBiculi lo wrest substantial Increases in exports from Eastern Europe hecause falling oil prices will bring Soviet trade deficits with Ihe region toward the end of Ihe decade.

Moreover, most East European trade isto,ubstitute for. hard currency

of the Sovieti' other short- loare extremely limited- The Soviets willincrease arms sales, probably by offeringequipment, bul financial difitculties incountries will limit Moscow's ability toin this way. Moscow will be likely lolor increased deliveries of Libyan oil butwe expect Ihe amounts involved lo beMoscow also may increase its efforts toarrangements, particularly with tbe LDCi.agricultural commodities. Faced withof their own. tbe LDCs may becometo such Soviet overtures. The Sovietsadvantage of opportunities to expand theirgrain purchases with countries such asChina I

ove with longer term payoff, Moscow could allft the nature of its relationship ivith West' em firms In order lo enhance the effectiveness of imported technology and equipment Before ihe sharp downturn in oil earnings, Soviet officials had expressed interest in joint ventures entailing Western profit sharing and managerial presence- Abo considered were closer eeiginccririg and production comuluiiotu with Writrrn firms and the creation of more training farililim with Western participation. Traditional Soviet suspicionoreign presence and continued

'Seear aa elrrrnollce itn Ml by the tHitttor. Otfent ini'll'tti-te |

concern over US export controls will limit Soviet actions in these areas. Moreover. Western businessmen are likely to react cautiously to Soviet proposals calling for coproduction and profit sharing I

The Soviet Strategy

he Soviets have not yet implemented and most likely have not yet fullyong-termfor dealing with tbe decline in hard currency earnings. Moscow responded at firsteduced export earnings by increased borrowing and gold sales.5 it took advantage of favorable borrowingto build its assetsevel aboutillion higher than ator most of the year ilto negotiate and sign major contracts withfirms for projects lo be constructed during the. Then, in5 Soviet purchasing activity began to slow, and by6 there were sweeping cutbacks in purchases. The major emphasis so far has been on cutting and delaying equipment orders rather lhan reducing purchases of otheragricultural products and intermediateto meet current output and consumption targets.

e believe that over the nexl year or so the Soviets willonger range and relatively conservative strategy to minimize the impact of the decline in hard currency earnings. This strategy will Include elements of present ad hoc measures as well as some new initiatives The major elements of this strategy will be:

An aveiage annual Increase In Internationalof2 billion, which would raise the debt-service ratio from the presentoercent to aboutercent. This woulda somewhat less conservative strategy lhan in the past but would still allow room forloans lo cover events sucharvest disaster.

A drawdown in assets in Western banks by as much as S4 billion from therawdown of this magnitude would notjeopardize their liquidity position.

Increases in gold sales from recent levelsonsons annually. Sales of the magnitude seem possibleajor eHoct on gold prices.

F.Fforts to push the East Europeans loeduction in oil deliveries over the next few years, especially if world oil prices remain low. A

5-peicenl reduction in oil exports to Itsallies would enable Moscow to earn an additional Si billion over therom increased exports lo the West.

Efforts to maximize hard currency earnings from arms sales.

Attempts lo expand participation by Western firms In Soviet development projects, perhaps to include production-sharing arrangements

Under this strategy, we estimate that annual average hard currency import capacity will fallillion duringcut of one-third from4 level- The alternative assumption' on oil exports would yield an import capacityillion. In any case, the Soviets will need to continue selective reductions of Imports.!

do not believe thai, withinIhe Soviets will see major economicto improve economic efficiency as afor eventually reducing the need for imports.short run, decentralizing reforms that giveIhe power to make decisions onbe likely to increase the demand forihe political and economic ramificationssystemicof theeconomic dislocations, reduced control Overfor militaryseriouslyGorbachevs initiatives in this area.I

Gauging ihe Import Cuts

* Tlw hoUci ol (hu iHrui la Iht Diicttat. Dc/cnK InirUigernt

Consumer-related purchases are likely to be cut back theovici official recently remarked that consumer goods imports from the West would be practically eliminated this year. Spending forimports couldajor part of therelatively easily,cenario of average weather, improved agricultural practices, and aworld grain glut, which depresses agricultural pricesillion ton reduction in wheat imports saves the Soviet0 million at current prices. Assuming the value of total bard currency agricultural imports is cut by roughlyercent fromevel, some growth in farm products per capita would still be possible, although al rates below

Moscow will be extremely selective in reducing imports of machinery. Although hard currencyof machinery supply only aboutercent of

Soviet Dependence on Western Machiney

Although import) of Western machinery andaccount for only aboutercent of totalIn machinery and equipment, thesebeen carefully selected to meet the needssectors of the economy.the chemical, enemy, and metallurgical sectorslor almostercent ol total Soviet ordersand equipment

The Soviets often complain that they have been disappointed with the results of Western machinery, bul ibe decree of success In using such Imports often depends on whether they must be Interfaced with Soviet-built machines or can be usedtand-alone manner (for example, turnkeyhe latter have contributed substantially to growth in output andof technology in selected industries, notably chemicals, automotive and truck, pulp and paper, and several deferise-orienled machine-build in* Industries

Imparts of Western technology have helped the Soviets overcome some shortcomings in their

lo the steel sector, purchases of Westernfor rolling operations and pipe production have been particularly important.

In the chemical sector. Western imports have provided key technologies for Ihe production, handling, and storage ol fertilizers and forof plastics and synthetic fibers

In the oil and gas sectors, recent Imports of such items as Western pipe, plpclaycrs, offshore drilling equipment and tcchnologv, and well-completion equipment have provided substantial aid to Soviet oil and gas developmentew years ahead, the Soviets will be In the market for corrosion-resistant pipe and other production and processing equipment for Astrakhan, Karachi-ganak, and Tcngiz-

The acquisitionapanese drydock gave an added capability to Soviet ship-repair facilities.

total Investment, ihev are Important to keylo the modernization program (see box).top priority will be given lo importsnd advanced machineWestern imports, development of theoil basin would be further delayed, asand development ol the Arctic|

aftVmoifur uieu1 held bt/ ihe Director.

'Seeot an Detente Intelligent* Agency |

e believe Moscow will cul some machinery imports as long as Ihe cuts do not seriously jeopardize Corbaclwv's induslrlal modernization program. The Soviets have recently canceled or reduced fivefor large chemical complexes. Import cuts for the pulp and paper and cement industries also might be made. The Soviets couldariety of actions lhat would minimize the cuts in machinery Imports. For example, they will continue to push for more buy back and baiter arrangements. Expensive, turnkey projects will likely be scaled back, with the Soviets providing more of the civil engineering work and plant infrastructure themselves. The Soviets could save additional foreign exchange by selectively cutting imports of industrial materiak without causing serious

Soviet weapons producers will be relatively unaffected directly by ihe decline in import capacity, whatever its size. Soviet importi of Westernnent to help modernize their defense industrial base probably peaked in theo, and now established weapons plants will support the great majority of planned Soviet military procurement over the next decade. Moreover, weapons producers in most cases do not depend on Western product ionor components Most Soviet weapons industry acquisitions of such items from the West have been one-time, relatively small puichases rather than con tirrual or plant-scale purchases Moreover, the priority the Soviets traditionally accord Ibis sector wiH most likely protect defense-related imports.

Because trademall component of Soviet CNP and critical imports will not be sacrificed, we estimate that average annual CNP growth inlan would be reduced by about one-tenthercentage point out of our total protected growth rate ofercent pee year If the Soviets follow thb scenario Even so, Ihe cutbacks will be aproblem for Corbachev because they limitthe flexibility of Moscow lo respond to shortfalls in key sectors- Increased inputs of Western automated equipment, for example, would be useful in meeting Gorbachev's coals of improving efficiency inme and boosting productivity in (he SovietAbo. unlike Brer hoe v. Corbachev will not be able to use grain imports to Increase the availability of meat if hb program to improve- the- efficiency of livestock feeding falls short of

Alternative Scenarios

oil prices and/or adverse weatherthb picture dramatically, forcing the regimetough climcc* about the relative priorities of ils

figure 3

USSR: Average Annual GNP Growlh by Fire-Year Period"



a nil in rtcmcni im poca

ation andub Crude oil prices ofer barrel lor the rest of the decade could reduce Moscow'* annual hard currency2 billion versus our protection5 billion Weather uiiproximatina tlx* unfavorablethat clisted during theould slow growth in* farm output and raise agriculture import costs considerably. In this case, hard currency cutbacks could not fall largely on agricultural imports from the West without joopardl/inx per capita avail-ability of several quality foods such as meat, vegetable oil. and sugar. Moscow could only partially com pen-sate for this shortfall by importing more meat from such soft currency suppliers as Eastern Europe and Mongolia-1

ncreased cipenditures on drain could force deep cuts in machinery imports from tbe West and have serious coruwjuenccs for Gorbachev'sprogram The programs loftymatchedealistic assessment of the caiubtll ties of domestictltat some highly specialized imports from toe West for such sectors as energy, mkroclect ronics. and telecommunications must be continued, if not ixktcascd Similar cuts in other industry-related imports could exacerbatetaut production schedules, threatening other aspects of Gorbachevs plan to accelerateShortage* of needed intermediate goo.ltparts that have beru imported in the pastbonlenecks could slow or evenproduction in some enterprises. Imports ofparticular, are important lo asectors of the economy, Including machineaddition, some sectors of the chemicalImparts of key ingredients such as mi peracid Imported replacement parts areIn the energy ud mining sectors fot pipe laheavy carlhrnoviiig equipment

the otherubstantial rise Inmaterial prices could bolster Moscow's hardposition For example, if world oiles barrel. Moscow's annualwould be almostillion hbthet thanbillion protection. .Similarly,rade

position could he changed by effective sanctions on South Africa or internal disruptions there that would reduce the supply of gold, diamoncb. and platinum-group metal* on internaarkets. Wc estimate that the combined effect of higher prices and larger Soviet exports of these commodities, particularly gold, could boost Soviet Import capacity substantially over the projection" )

Foreign Policy Irrspkkotions

hard currencynly onepressing economic problems faced by tlteWe Itelievc that, at present, the Sovietdoes not view It as sufficiently important byIntractable enough to effect major chelatespolicy areas, nor does the situation providewith large opportunities for leverage.

oscow's economic problems are unlikely to cause the Soviets to act more aggressively abroad or, on the other hand, to be conciliatory enough to achieve rruuor break thiooaro in East-Westor to sismtfacaxitly pullback from commitments to client states. Soviet foreign policy will continue to be determined largely by strategic and geopolitical considerations, with economic factors playing arole. Nevertheless, the initiatives theare likely to take In response to the hard cur renev ssMtass* could have some impact on US foreign polio interests. The USSR's continued need for Westernin the high-tech areas that are most subject to COCOMinletesl in

i" til-

tn theutomated machinery

Consumer welfare

Productivity of the Soviet economy

Growth of CNP

i ai caprul

GortioxlW? Meaner* of Success

ercewt irv-reise inn relationship to prodratUx.

rnduetion of no- boosing,f meat, collective farm prices

Recirwal of capital itock and impiovemrnt in "human factors'" (reduced absenteeism, alcohol cceuumption. accident! at the workplace)

Coaletcent output growth with emphasis on key lectoii tueh as energy, machinery

ard Currency Input

Stack-we, for production lines. terWcgy

Agrtcultural imporb

Machinery and technology imports and continued imports of key consumer goods

equipment to aid production in Icy sectors

information Ir

concessionary trade terms to saveand the need for credits willto consider Western attitudes andihose of Western Europe and Japan,policy This might result in greaterby Moscow in some areas of armseichangr. and social interchange bulthe cost of abandonmc rriajor foreign policy

At the same time, Moscow will continue to exploit opportunities to split the Western alliance in an attempt to encourage greater opposilloei to the more hardline policies of the United States toward East-West Irade. West Germany and Japan seem likely to be targets for Moscow's efforts. The expectation that lower hard currency earnings might force Moscow to reduce the scope and nature of Its Irade with the West could make many Western governments andmore amenable to granting preferential trade terms in an attempt to beat out the competition.remains highat cm Europe, where the job-creallon benefits of East-West trade are an important political issue, and some West European plants rely almost exclusively on trade with the East

Soviet attempts lo maximize hard currency earnings, particularly from arms sales, will resultore agstresiive search for markets In the Third World This sales campaign will be concentrated on OPEC members and others thai have had large hard currency surpluses ertth the USSR such as Malaysia Despite declining oilew opportunities for expansion still eiia, and Moscow could decide to offer state-of-the-art arms as an incentive- Libya, fot one. apparently intends to give high priority loof Soviet arms Moscow also may increase its efforts to negotiate barter arrangement,the LDCt, for desired agriculturalwith financial problems ol their own, Ihebecome more receptive lo such Sovietsearch for alternatives lo hardwillactor behind its continued effortstrade lies lo China, particularly in light ofrecent successes io raising agriculturalgoods production

Moscow's interest In developing an export(or manufactured goods, combined wiih ihe need to use international financial markets to cover its hard currency shortfalls, probably will result in new, more aggressive, demarches to participate in theeconomic arena, as exemplified by Moscow's recent bid to join in the forthcoming GATTAlthough Moscow's stated objective is economic gain, it probably would exploit opportunities lo crealc dissension wilhio the West and between the developed West and Third World.

Increased pressure by Moscow on Eastern Europe to supply goods lhat will serve as substitutes for Imports from the West, particularly machinery and equipment, and to reduce iheir use of raw materials traditionally supplied by Moscow such as oil run tbe risk of overburdening their already tautly stretched economies. Economic stringencies could lead to declining living standards and popular discontent, whtcb could undermine existing popular support foe current resumes. Moscow'i attempts to transfer some of ils hard currency problems to Eastern Europe will also make the East European even more reluctant lo shoulder ihr burden of upgrading Warsaw Pact forces.

he hard currency shortage will raise thecost of Soviet aid to its client stales in tlie Third World. Evidence Indicates lhal Moscow will be even more insistent that these countries increase their exports to the USSR, pay their debts, and use Soviet aid more wisely. Some countries' difficulties in making debt repayments to Moscow already have become an important Irritant in relations (Libya, fot example).

Moscow probably will focus new economic assistance to non-Communist LDCs only on protects wiih large economic or political payoffs. Moscow has long in-curved criticism in the Third World for its meager economic assistance, and its increased scrutiny of potential projects will reinforce this judgment, further tarnishingmageole model forIn ihe eyes of the Third World, I



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