World The riddles of the rouble and international exchange MOSCOW — How much is a rouble worth? This is a major enigma, it seems, and one upon which a number of much more crucial questions hinge. It’s also the pretext for some extraordinary nonsense to be spread about. Theoretically, any currency should be worth the total sum of goods and services produced in the country, divided by the number of units of money. This holds true for the USSR as well, but any clear account- ing becomes deeply confused by the socie- ty’s system of centrally-determined prices: rent, utilities, transport, food and other bas- ics are set artificially low. Some things, such as medical care and education, are downright free. On the other hand, many commodities, particularly con- sumer goods, are priced artificially high. Sophisticated consumer goods and services usually can’t be had for any price in roubles. Exchange into other currencies presents more riddles: the official exchange rate (roughly two Canadian dollars for one rou- ble), would not seem to reflect reality. On the booming black market the going rate these days is upwards of 10 roubles for one dollar. Thus it is very difficult for even the most painstaking journalist to translate Soviet economic reality in any meaningful way to readers living in free-market societies. Some try to deal with this by scrupulously employ- ing the official rate. Last year’s Soviet state budget deficit, then, was 35 billion roubles ($70 billion). The average Soviet wage is 237 roubles per month ($475). And so on. Unfortunately, this tells us next to nothing. It is also possible to select black market examples, which seem to stress the worthlessness of the rouble: in the airport lounge in Gander, Newfoundland, for instance, it is actually possible to pay for your drink in roubles if you wish. A gin- VENDOR ON MOSCOW'S ARBAT ... what is the rouble really worth? shows the Soviet gross national product totalled (U.S.) $2.5 trillion, second in the world after the United States ($4.8 trillion), and well ahead of Japan ($1.7 trillion). The CIA performs a very complicated calculation, which attempts to employ equalized indexes of production and growth. Secretary Baker dismisses his own intelligence agency’s findings, apparently because they are all rooted somewhere in rouble-values, and therefore must be hyper- inflated. And where does he get this? The black market rate. : The black market is the only market dis- cernible in the USSR, and markets are always right, aren’t they? So, divide the CIA’s estimate by the black market rate Fred Weir and-tonic will cost about 35 roubles. All of this illustrates the very real difficul- ties facing anyone — Soviet economists included — trying to get a grip on the dynamics of the Soviet economy. But none of it excuses some of the malicious garbage, not to say disinformation, that sometimes comes charging into the discussion. The most egregious case in point is U.S. Secretary of State James Baker’s assertion before a Senate committee earlier this month that the United States has peren- nially overestimated the strength of the Soviet economy, and that its real size is probably “considerably less than what we had anticipated for a long time.” The context of this was the Bush admin- istration’s continued attempts to forestall the granting of “most favoured nation” trading status or any other economic con- cessions to the Soviet Union. Baker was trying to say that the Soviet economy is a paper tiger, and can’t deliver anything at all. How did he arrive at this conclusion? Well, in the U.S. the Central Intelligence Agency is responsible for making sense of the Soviet economy, a soldierly job which — despite some noted political distortions — they have generally done fairly well. The CIA estimate for 1988 8 Pacific Tribune, October 30, 1989 FROM MOSCOW ‘and, presto-chango, the Soviet economy is no longer second in the world but some- thing more on the order of, say, Belgium. I think we can demonstrate how ludi- crous this is. I drive a new Soviet-made car, a Moskvitch, for which I paid 9,600 roubles. It’s a very good car, and its export model, the Aleko, is said to be world-class. Now, I will be the first to agree this car is not worth its official exchange-rate equivalent of $19,200, but it would be far more absurd to suggest its actual worth is the black market — level: $960 dollars. I rent a flat in Moscow, with utilities, which costs an average Soviet rent of 20 roubles a month. That is ridiculously low enough, but will someone try to tell me I actually pay the real equivalent of just $2 ? Or that a loaf of good black bread is worth two cents in Moscow? At that rate,evena _ new colour TV is worth just $40. Such is the logical outcome of Baker’s methodology. The black market rate does reflect some- thing: goods which cannot be purchased for any number of roubles. You cannot get a home computer on the official market, nor ~ a VCR, nor many other electronic goods. You cannot travel outside the socialist community on roubles. Yet these are pre- cisely the things which Soviet consumers, getting their first whiff of affluence in his- tory, have a powerful hankering for. Hence there is intense black market~pressure on dollars and what can be bought with them. This is the paradox of the rouble, as seen through market-tinted glasses: if you’re pay- ing your rent, a rouble is a very hefty chunk of change; if you’re trying to procure a Pola- roid camera, it shrivels to almost nothing at all. Thus we confront the acute, and often baffling, unevennesses of the Soviet econ- omy. But only a fool — or a charlatan — would try to deny its fundamental size, power and potential. A few weeks ago the Tribune ran an editorial decrying the dou- ble standard applied by the Western estab- lishment and media when viewing trade union struggles in socialist and capitalist countries. The former are invariably “determined workers” while the latter tend to degenerate quickly into “angry mobs.” I would like to note that the double standard permeates every issue that is reported on, thus qualifying it as ideology rather than mere methodology. Consider for instance the way separatist movements are handled in Western coun- tries versus they way they’re regarded in socialist ones. Here is a thought exercise: examine the following sentences extracted from a recent Maclean’s magazine analysis of resurgent Quebec nationalism (Sept. 25), and try to imagine the tone applied to a Soviet context. “There is a growing sense ... that after appearing to win the pitched battles over unity, Canada is in danger of losing the peace. “Mutual incomprehension and distrust often sour the dialogue between Quebecers and their fellow Canadians .... Among Francophone Quebecers, (Meech Lake’s) distinct-society clause is seen as an affirma- tion of their right to the advances they have won over the past three decades — in par- ticular, the right to protect their language. “Canadians elsewhere, attuned to the demands for recognition of many cultures, tend to regard the clause as a threat to the rights to diversity guaranteed in the Char- ters Battles over unity? Soured dialogue? Mutual incomprehension? A multi-cultural vision versus a narrow national one? There are many extraordinary parallels to be made with the situation in the Soviet Baltic republics, but you will never find Maclean’s magazine discussing separatism in the USSR in terms even remotely similar to those. World News Pro-choice wins in Florida vote TALAHASSEE — Pro-choice sup- porters celebrated the Florida state legis- lature’s sweeping rejection of restrictive anti-abortion legislation last week, giving a boost to efforts for the national mobili- zation in Washington set for Nov.12. As well, in another victory for the right of women to choose, the U.S. House of Representatives voted 216 to 206 to allow federal funding of abortions for victims of rape and/or incest. Faced with a rising national pro-choice tide, 26 members who had previously opposed such funding, switched votes. World physicians meet for peace HIROSHIMA — More than 3,000 delegates travelled to Nagasaki to con- tinue the work of the 9th Congress of the International Physicians for the Preven- tion of Nuclear War after meeting here Oct. 7-10. Representing medical workers from 73 countries, they issued an appeal, stressing that until nuclear weapons are completely banned, humanity will remain their hostage and calling for an end to all testing. New Antarctic preserve urged PARIS — French Prime Minister Michel Rocard opened the 15th Antarc- tic Treaty meeting here Oct.9 with a call to the 39 signatory nations to turn the continent into a natural reserve free from drilling and mining. In 1988, 33 of the 39 parties to the 1959 Antarctic Treaty agreed to allow mining and oil drilling, but the agreement was nullified two months ago when France and Australia refused to sign. The Paris meeting was lobbied by several environmental groups. Nicaragua blasts U.S. interference MANAGUA — President Daniel Ortega charged last week that the U.S. is illegally interfering in his country’s elec- toral process by funnelling millions to opposition groups. Earlier this month, the U.S. Congress, in violation of Nica- raguan law, authorized $9 million for the United Nicaraguan Opposition’s cam- paign in the December vote. UN aid arrives in Afghanistan The first shipment of United Nations relief aid for Afghanistan, part of the program “Operation Peace,” arrived Oct. 17 at Khairaton Airport in Kabul. Foodstuffs and other vital goods valued at over $745,000 were brought in from Finland. At a mass rally at Khairaton, repre- sentatives of Afghan authorities and public organizations expressed the coun- try’s gratitude to the world comunity for the humanitarian aid.